syndicated murabaha financing documentation · 2016-10-31 · page 6 of 87 (i) in a manner or to an...

Operation No: ITFC/1437/TF2/PAK/0011

SYNDICATED MURABAHA FINANCING

DOCUMENTATION

CONCERNING

PURCHASE OF CRUDE OIL AND REFINED PETROLEUM PRODUCTS

FOR SALE TO THE ISLAMIC REPUBLIC OF PAKISTAN

https://ecm.idbhq.org/alfresco/aos/Sites/legal-department/documentLibrary/03 Departments - Entities/ITFC/Operations/PAK/PAK-0011/PAK-0011 (SynDoc) (mudaraba).docx

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MUDARABA AGREEMENT

BETWEEN

INTERNATIONAL ISLAMIC TRADE FINANCE CORPORATION

(AS MUDARIB)

AND

THE BANKS AND FINANCIAL INSTITUTIONS

LISTED IN THE FIRST SCHEDULE (AS THE PARTICIPANTS)

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Contents

Section-1 Preamble and Schedules ............................................................................................................. 4 Section-2 Definitions.................................................................................................................................. 4 Section-3 Participation in the Mudaraba .................................................................................................... 8 Section-4 Murabaha Financing .................................................................................................................. 8 Section-5 ITFC and the Participants ........................................................................................................ 10 Section-6 Currency ................................................................................................................................... 13 Section-7 Notices ..................................................................................................................................... 13 Section-8 Remedies and Waiver .............................................................................................................. 13 Section-9 Amendment .............................................................................................................................. 13 Section-10 Assignment .............................................................................................................................. 13 Section-11 Severability of Provisions ........................................................................................................ 14 Section-12 Counterparts ............................................................................................................................. 14 Section-13 Language .................................................................................................................................. 14 Section-14 Governing Law, Settlement of Disputes .................................................................................. 14 Section-15 Confidentiality ......................................................................................................................... 15 Section-16 Miscellaneous .......................................................................................................................... 15 Execution Page For International Islamic Trade Finance Corporation ................................................................. 16 Annexes: First Schedule, Second Schedule, Third Schedule ................................................................... 42

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M U D A R A B A A G R E E M E N T

THIS AGREEMENT is made on ____/____/1437H corresponding to ____/____/2016G, between

INTERNATIONAL ISLAMIC TRADE FINANCE CORPORATION, an international financial

institution established pursuant to Articles of Agreement signed/ratified by its member countries,

having its headquarters in Jeddah, Kingdom of Saudi Arabia, in its capacity as the Mudarib (hereinafter

called “ITFC”) and the banks and financial institutions listed in the First Schedule to this Agreement, as

the participating banks and financial institutions (hereinafter called the “Participants”).

ITFC and the Participants are hereinafter referred to individually as “Party” and collectively as

“Parties”.

WHEREAS

ITFC proposes a Special Mudaraba arrangement to the Participants within the meanings of this Agreement

and the Participants are willing to participate by their individual Contributions to the Special Mudaraba for

the purpose of using such Contributions in a Murabaha Financing arrangement for the PURCHASE OF

CRUDE OIL AND REFINED PETROLEUM PRODUCTS (hereinafter called the “Goods”) in favour

of THE ISLAMIC REPUBLIC OF PAKISTAN, REPRESENTED BY THE MINISTRY OF

ECONOMIC AFFAIRS AND STATISTICS (hereinafter called the “Recipient”) with the PAK-ARAB

REFINERY LIMITED (PARCO) (hereinafter called “PARCO”) as executing agency in an aggregate

amount not exceeding USD478,000,000/- (UNITED STATES DOLLARS FOUR HUNDRED

SEVENTY-EIGHT MILLION) only.

THE PARTIES AGREE as follows:

Section-1 Preamble and Schedules

The Preamble and the Schedules to this Agreement form an integral part thereof.

Section-2 Definitions

2.01 The Parties hereto agree that for the purposes of this Agreement, the following terms shall have

the meanings indicated hereunder:

“AAOIFI”: the Accounting and Auditing Organization for Islamic Financial

Institutions.

“Accrued Expenses”: any expenses which are not related to the Purchase Price, but rather

to cover other expenses, for instance, fees related to legal

procedures to be taken in the event of the Recipient’s default.

“Approved Amount”: the amount of USD478,000,000/- to be made available (on best

effort basis) for the purchase of the Goods.

“Business Day”: a day on which banks are generally open in London, New York,

Vienna and Jeddah for the transaction of business of the nature

required by this Agreement.

“Contribution”: the amount of deposit to be made with ITFC by each Participant as its

participation share in the Mudaraba as per the First Schedule on the

Disbursement Date in order to be used for the purchase of the Goods.

“Disbursement”: actual payment of the Purchase Price.

“Disbursement Date”: the date on which payment of the Purchase Price is made in the

manner indicated in Section 4.02 hereof.

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“Documentary Letter

of Credit”:

shall have the meaning given to it in the UCP.

“Effective Date”: shall have the meaning given to it in Section 4.01(c).

“Executing Agency”: PAK-ARAB Refinery Limited (PARCO).

“First Operation”: the Operation to be carried out after the effectiveness of the

Murabaha Agreement.

“Goods”: Crude Oil and Refined Petroleum Products.

“Gross Profit”: in relation to a Transaction, the amount as determined in accordance

with Section 4.03(a)(i) hereof.

“Guarantee”: the guarantee covering the Contributions of the Participants in the

amount of USD478,000,000.00 plus the related Mark-up to be

provided by the Guarantor in the form provided in Appendix-IV to

the Murabaha Agreement.

“Guarantor”: the Ministry of Finance of the Government of the Islamic Republic of

Pakistan.

“Letter of Credit”: either a Standby Letter of Credit, a Sight Documentary Letter of

Credit, or a Usance Documentary Letter of Credit.

“Majority

Participants”:

the Participants having Contributions equal to 66.67% or more of

the aggregate amount of Contributions specified in the First

Schedule hereto.

“Mark-up”: in relation to a Transaction, the rate of return as determined in

accordance with Section 4.03 hereof.

“Material Adverse

Effect”:

in relation to any event or circumstance in whatsoever nature, the

occurrence of effect of which would, in the opinion of ITFC:

(a) constitute a force majeure;

(b) affect the PARCO, its assets and properties;

(c) impact the financial condition, business or operations of the

PARCO;

(d) affect the implementation of the Operation, the financial plan or

the carrying on of the PARCO’s business or operation;

(e) impair the ability of the Recipient or PARCO to perform or

comply with its obligations under this Agreement or any related

document;

(f) affect the enforceability of any provision under this Agreement

or any related document;

(g) cause the suspension, cancellation, revocation or termination of

this Agreement or any related document; or

(h) impact the socio-political, financial and/or economic

conditions of Pakistan, which would have adverse impact on

the domestic money, banking and/or capital markets.

and may do so:

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(i) in a manner or to an extent materially prejudicial to the rights

and/or remedies of ITFC under this Agreement or any related

agreement; or

(j) in a manner or to an extent which, is likely materially and

adversely to affect the Recipient’s and PARCO’s ability to

comply with any of its payment obligations under any agreement

to which it is a Party or to the Recipient’s or PARCO’s ability to

complete the Operation as a whole;

and references herein to an event or circumstance which “has” or

which “would have” a Material Adverse Effect shall be construed

accordingly.

“Mudaraba”: the fund in which Contributions made by the Participants are pooled

together for management by ITFC, (as the Mudarib) in accordance

with this Agreement.

“Mudarib's Share”: the Mudarib's share of the profit which shall be calculated as a

percentage of the Gross Profit in accordance with Section 4.03 (b)

hereof.

“Murabaha

Agreement”:

the agreement in the form provided in the Third Schedule hereto to

be entered into between ITFC and the Recipient.

“Murabaha

Financing”:

the financing to be made available to the Recipient in accordance

with this Agreement.

“Net Profit”: the portion of the Gross Profit minus the Mudarib's Share in

accordance with Section-4.03 (b) hereof and to be calculated in the

manner illustrated in the Second Schedule to this Agreement.

“Operation”: a number of Transactions to be carried out pursuant to the Murabaha

Agreement in a total sum that would not exceed the Approved

Amount.

“PARCO”: PAK-ARAB Refinery Limited (PARCO), the Executing Agency.

“Participant’s Share

of the Profit”:

the share of each Participant in the Net Profit, as determined in

accordance with Section 4.03 hereof.

“Purchase Contract”: the contract to be concluded by the Recipient, acting on behalf of

ITFC, with the Supplier for purchase of a quantity of the Goods

pursuant to the Murabaha Agreement.

“Purchase Price”: the price to be paid by ITFC for the purchase of the Goods.

“Rab-al-Mal”: an Islamic finance terminology for investor, which in this Agreement

refers to each and every Participant in the Murabaha Financing.

“Sale Price”: the price at which the Goods are to be sold by ITFC to the Recipient,

as determined in accordance with the Murabaha Agreement.

“Second Operation”: the Operation to be carried out in accordance with Section 4.05 & 4.06

hereof and Sections 2.2, 2.3 and 2.4 of the Murabaha Agreement after

the payment of the last Sale Price under the last Transaction of the

First Operation.

“Shari’a Standards”: the Shari’a Standards For Islamic Financial Institutions, published by

AAOIFI, as amended from time to time by AAOIFI.

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“Sight Documentary

Letter of Credit”:

a letter of credit where payment by the issuing bank would be made

to seller immediately upon presentation of the required documents,

and is not on deferred basis.

“Standby Letter of

Credit”:


“Supplier”: the person or entity from which the Goods are purchased by the

Recipient on behalf of ITFC under the Murabaha Agreement.

“Transaction”: purchase of a quantity of the Goods by the Recipient, on behalf of

ITFC, in a single shipment and sale of the same by ITFC to the

Recipient.

“UCP”: the Uniform Customs and Practice for Documentary Credit (2007

Revision), International Chamber of Commerce Publication No. 600

as promulgated, revised, and supplemented from time to time by the

International Chamber of Commerce and relevant Incoterms 2010.

“Usance Letter of

Credit”:

a letter of credit where payment by the issuing bank would not be

made to seller immediately upon presentation of the required

documents, but at a later time specifically defined in the letter of

credit.

“US Dollar”, “USD” or

“US$”:

the lawful currency of the United States of America.

2.02 Interpretation:

(a) unless the context does not so admit, the singular includes the plural and vice versa.

(b) the “Party” shall be construed so as to include its and any subsequent successors and

permitted transferees in accordance with the interest of ITFC.

(c) an “affiliate” of a Party shall be construed as a reference to its holding company,

subsidiary or another subsidiary of its holding company.

(d) an “appendix” shall, subject to any contrary indication, be construed as a reference to

an appendix of the agreement or document in which such reference appears.

(e) “assets” includes properties (movable and immovable), revenues and rights of every

description.

(f) “continuing”, in relation to an Event of Default, shall be construed as a reference to an

Event of Default which has not been waived or remedied in accordance with the terms

hereof.

(g) “including” shall be construed as a reference to “including, without limitation”.

(h) “indebtedness” shall be construed so as to include any obligation (whether incurred as

principal or as surety) for the payment or repayment of money, whether present or

future, actual or contingent.

(i) a “law” shall be construed as any law (including common or customary law), statute,

constitution, decree, judgment, treaty, regulation, directive, bye-law, order or any other

legislative measure of any relevant government, supranational, local government,

statutory or regulatory body or court.

(j) a “month” is a reference to a period starting on one day in a calendar month and ending

on the numerically corresponding day in the next succeeding calendar month save that,

where any such period would otherwise end on a day which is not a Business Day, it

shall end on the next succeeding Business Day, unless that day falls in the calendar

month succeeding that in which it would otherwise have ended, in which case it shall

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end on the immediately preceding Business Day, provided that, if a period starts on the

last Business Day in a calendar month or if there is no numerically corresponding day

in the month in which that period ends, that period shall end on the last Business Day

in that later month (and references to “months” shall be construed accordingly).

(k) a “successor” shall be construed so as to include an assignee or successor in title of

such Party and any person who under the laws of its jurisdiction of incorporation or

domicile has assumed the rights and obligations of such Party under this Agreement or

to which, under such laws, such rights and obligations have been transferred.

(l) the “winding-up”, “dissolution”, “liquidation”, “insolvency” or “reorganisation” of a

company or corporation and references to “liquidator”, “assignee”, “receiver”,

“manager” and “trustee” of a company or corporation shall be construed so as to

include any equivalent or analogous proceedings under the laws of Pakistan or any

jurisdiction in which such company or corporation carries on business including the

seeking of liquidation, winding-up, reorganisation, dissolution, arrangement,

adjustment, protection or relief of debtors.

(m) this Agreement or any other agreement or document shall be construed as a reference

to this Agreement or, as the case may be, such other agreement or document as the

same may have been, or may from time to time be, amended, varied, novated or

supplemented.

(n) “Section”, “paragraph” or “Appendix” shall, unless a contrary indication appears, be

construed as one in or to this Agreement, and any headings to any section, paragraph

or Appendix shall be for ease of reference only.

(o) “person” includes any person, firm, company, corporation, government, state or agency

of a state or any association, trust or partnership (whether or not having separate legal

personality) of two or more of the foregoing.

(p) a “regulation” includes any regulation, rule, official directive, request or guideline

(whether or not having the force of law) of any governmental, intergovernmental or

supranational body, agency, department or regulatory, self-regulatory or other authority

or organisation.

Section-3 Participation in the Mudaraba

3.01 Subject to the terms and conditions hereof, ITFC shall enter into the Operation with the Recipient.

The total amount to be made available for the Operation shall not exceed the Approved Amount.

3.02 Each Participant, subject to the terms and conditions of this Agreement, agrees to participate

severally in the Operation by its Contribution according to its share indicated in the First Schedule

and the signature of each Participant of this Agreement shall be deemed to represent its intention

and irrevocable commitment to provide, on the Disbursement Date, such part of its Contribution,

on pro rata basis, as ITFC may, from time to time, request in accordance with this Agreement.

Section-4 Murabaha Financing

4.01 Procedure of Financing:

(a) ITFC shall, as soon as practicable, enter into the Murabaha Agreement with the Recipient.

If ITFC is unable to enter into the Murabaha Agreement with the Recipient within 60

(Sixty) days from the date of this Agreement, this Agreement shall cease to be effective

and all parties hereto shall be released from their obligations.

(b) It is the understanding of all parties hereto that purchase of the Goods and the sale thereof

to the Recipient shall take place in several Transactions.

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(c) The obligation of each Participant as to the Contribution to be made by it hereunder is

subject to the condition that ITFC receives the documents mentioned in Section-13 of the

Murabaha Agreement (Effectiveness Documents), in a form and substance satisfactory to

ITFC.

(d) Payment of the Purchase Price shall be effected by means of Letters of Credit. Subject to

Section 4.01(c) hereof, ITFC shall arrange for the reimbursement of the relevant banks or

payment to any Suppliers, as the case may be, out of the funds made available to it by the

Participants in its account (the “Account”) indicated pursuant to Section 4.02(b) hereof.

4.02 Disbursement:

(a) Promptly after the receipt of the Effectiveness Documents, ITFC informs the Recipient

and the Guarantor of the availability of the Approved Amount to the Recipient. Thereafter

ITFC shall request the Recipient:

(i) to conclude Purchase Contract(s) with the Supplier(s);

(ii) to arrange for opening Documentary Letters of Credit, or, as the case may be,

Standby Letters of Credit, in accordance with the provisions of the Murabaha

Agreement.

(b) After the opening of each Documentary Letter of Credit, or Standby Letter of Credit, ITFC

shall determine the Disbursement Date and shall give notice thereof, at least 3 (Three)

Business Days before the Disbursement Date, to each Participant by telex, cable, SWIFT

message, fax, or email, and shall indicate the Account to which Contributions shall be

deposited. On the Disbursement Date, each Participant shall make its Contribution by

deposit to said Account.

(c) ITFC shall provide acknowledgement to each Participant of receipt of each Participant’s

Contribution, upon receiving confirmation from its correspondent bank of receipt of

payment from the Participant. On the Disbursement Date, ITFC shall cause the funds so

received, to be disbursed in accordance with the Murabaha Agreement.

4.03 Participant’s Share of the Sale Price:

(a) (i) Each Sale Price, as calculated in the manner illustrated in the Second Schedule,

shall consist of the corresponding Purchase Price and a fixed mark-up of 4.90%

(Four Point Nine Zero per cent) per annum.

(ii) Each Sale Price shall be due and payable 12 (Twelve) months from the Date of

Disbursement of the corresponding Purchase Price.

(b) ITFC shall be entitled to receive 15.00% (Fifteen Point Zero per cent) of the Gross

Profit as Mudarib's Share to be calculated in the manner illustrated in the Second

Schedule.

(c) A Participant’s Share of the Profit shall be its share in the Net Profit to be calculated in

the manner illustrated in the Second Schedule. A Participant’s Share of the Profit shall

be communicated to the Participant on the date of determination of the Sale Price.

(d) Net mark-up for the Participants shall be 4.165% per annum (Four Point One Six Five

per cent) and it shall be communicated to the Participant on the date of determination

of the Sale Price.

4.04 Subject to Section 5.03 hereof, ITFC shall credit, or cause to be credited, each Participant's

Share of the Profit, together with its actual Contribution to the Purchase Price in the

Transaction, along with any late payment charges accrued to each Participant in proportion to

its actual Contribution plus expenses, to the account designated by each Participant promptly

upon receipt of the Sale Price pursuant to the Murabaha Agreement.

4.05 ITFC agrees with the Recipient that, after:

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(a) the whole of the Sale Prices under each Transaction under the First Operation shall

have been paid in full on due dates;

(b) that no adverse change in the business, assets or financial condition of the Recipient or

the Guarantor has occurred or is likely to occur, which in the reasonable opinion of the

Majority Participants, would affect the ability of the Recipient or the Guarantor, or

both, to meet their respective obligations under the Murabaha Agreement or the

Guarantee; and

to make available the same Approved Amount for a Second Operation with the same terms and

conditions as applied to the First Operation, unless the Participants shall otherwise decide. ITFC

shall notify the same Participants listed in First Schedule 1 (One) month before due date for

payment of last Sale Price under the First Operation of its intention to enter into the Second

Operation, and each Participant, at its sole discretion expressed in writing, shall have the option

to confirm its participation for the Second Operation A Participant that accepts to enter into the

Second Operation at least 15 days of ITFC’s notification of its intention to enter into the Second

Operation.

4.06 ITFC shall, upon receipt of the last Sale Price of the First Operation, promptly inform the

Recipient and the Guarantor that the Approved Amount will be made available to the Recipient

for the Second Operation. Such decision of ITFC shall be binding on all Participants that have

notified of their willingness to enter into the Second Operation.

4.07 (a) If ITFC receives payment that is insufficient to discharge all the amounts then due and

payable by the Recipient under the Murabaha Agreement, ITFC shall apply that

payment towards the obligations of the Recipient thereunder in the following order:

(i) first, in or towards payment pro rata of any accrued expenses due but unpaid

provided that such accrued expenses to be approved by the Majority

Participants;

(ii) secondly, in or towards payment pro rata of each Participant’s Share of the

Profit and Contribution due but unpaid; and

(iii) thirdly, in or towards payment pro rata of any other sum due but unpaid.

(b) For the purposes of Section-4.07 (a) hereof, amounts to be distributed by ITFC include,

without limitation, any amount received by ITFC by virtue of its being entitled to a set

off, banker’s lien, counterclaim or other similar rights and actually applied by it or

towards satisfaction of amounts payable by the Recipient pursuant to the Murabaha

Agreement.

Section-5 ITFC and the Participants

5.01 (a) Each Participant authorizes ITFC to exercise on its behalf the powers specifically

delegated to ITFC herein and all other powers required to enable it to fulfil its

obligations and to complete the Transactions contemplated hereunder.

(b) Without prejudice to the generality of Paragraph (a) hereof, ITFC shall be authorized to

sign the Murabaha Agreement with the Recipient and any of its designated entities, and to

appoint an agent or agents (including the Recipient) for the purchase of the Goods on

ITFC’s behalf on an undisclosed agency basis. ITFC shall also be authorized to sell the

Goods to the Recipient on Murabaha basis, and to perform any other function or activity

required or permitted to be assumed or taken by ITFC.

(c) ITFC may make such amendments to the Murabaha Agreement, as may be dictated by

the exigencies of the Transaction. Any such amendment shall not reduce or diminish

any of the Participants’ rights, privileges or prerogatives.

Notwithstanding the above, ITFC shall not agree to any amendment, modification,

supplementation or waiver of any provision of this Agreement, the Murabaha

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Agreement, or the Guarantee, without obtaining the unanimous consent of all the

Participants, if the effect of such amendment, modification, supplementation or waiver

would be to:

(i) change the currency of payment under the Murabaha Agreement, this

Agreement, or the Guarantee;

(ii) extend or defer the date of payment of any amount payable by the Recipient or

the Guarantor;

(iii) increase the amount of any Participant’s Contribution;

(iv) amend, vary, waive or release any security interest or any document creating a

security interest;

(v) amend Section 4.03 hereof or this Section 5.01(c);

(vi) amend, vary or waive any of the provisions of Sections 8, 13, 15, 16, 17, 18,

or 19 of the Murabaha Agreement;

(vii) modify the definition of Majority Participants;

(viii) extend the availability period;

(ix) extend the tenor;

(x) suspend a grace period for any due payments;

(xi) restructure any debt; or

(xii) appoint any external counsel or other external advisers in connection with

Section 14 of the Mudaraba Agreement.

(d) The relationship between ITFC and the Participants is that of a Mudarib and Rab-al-

Mal in accordance with the Principles of Islamic Shariah. ITFC, or any of its directors,

officers, employees or agents shall not have any responsibility, unless, in each case,

arising from ITFC’s misfeasance, negligence or default, for exercising any powers

beyond the powers initially granted to it by the Participants, for (i) any failure on the

part of the Recipient or the Guarantor, (ii) the truth of any information or the authenticity

of any document given by the Recipient or the Guarantor, (iii) the enforceability of the

Murabaha Agreement or the Guarantee against the Recipient or the Guarantor, or (iv)

exercising any necessary powers required to enable it to perform its obligations under

this Agreement beyond the powers initially granted to it by the Majority Participants.

(e) None of ITFC or any of its executives, officers, employees or agents shall have any

responsibility for any action taken or omitted to be taken in connection with this

Agreement or any related documents except in the case of misfeasance or negligence or

default.

(f) ITFC shall be entitled to rely, in good faith, on any document believed by it to be genuine

and to have been sent or signed by the proper person and on the opinions and statements

of any legal counsel or other professional advisor selected by it and shall not be liable to

any other party for any consequence of such reliance except in the case of misfeasance or

default.

(g) Each Participant has made such investigation and evaluation of the credit-worthiness of

the Recipient and the Guarantor as it has judged appropriate and prudent in connection

with the making of its Contribution to the Mudaraba for the purpose of using such

Contribution for Murabaha Financing in accordance with this Agreement.

(h) ITFC shall promptly (i) transmit, or cause to be transmitted, to each Participant each notice

or other document received by it from the Recipient or the Guarantor which ITFC

reasonably thinks may have an adverse bearing on the status of the Murabaha Financing,

(ii) forward, or cause to be forwarded, to the Participants, as soon as practicable, copies

of the Murabaha Agreement, any amendment made pursuant to Paragraph (c) hereof and

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any other documents received from the Recipient in connection with the Murabaha

Financing, for its record.

(i) ITFC hereby confirms that it holds all rights held by it under the Murabaha Agreement

and the Guarantee (save to the extent that it has any such rights solely in its capacity as a

Participant) for the benefit of the Participants and accordingly, save as specified herein to

the contrary, amounts recovered from the Recipient under the Murabaha Agreement, or

from the Guarantor under the Guarantee, shall be for the account of the Participants, shall

be kept in a separate account or accounts and under no circumstances shall become

available to any creditor of ITFC or be used for any purpose save for distribution to the

Participants.

(j) ITFC undertakes that, at all times, the rights of each Participant under this Agreement will

rank pari passu with the rights of each of the other Participants.

(k) In the event of default or breach of any of the terms of the Murabaha Agreement by the

Recipient, or any of the terms of the Guarantee by the Guarantor, ITFC shall be authorized

to take such action under the Murabaha Agreement and/or the Guarantee, as the Majority

Participants may agree.

(l) In the event of any permanent default or major breach by ITFC of any of its obligations

under this Mudaraba Agreement, ITFC shall compensate the Participants for any actual,

direct and proven damages or losses suffered as a result of such default or breach.

(m) ITFC hereby undertakes and confirms that it will at all times thoroughly examine the

Letter of Credit along with its associated requirements/documents in respect of each

Transaction. ITFC accepts full responsibility for the validity, completeness, presentation

and forms of documentation in relation thereto.

5.02 Covenant to Reimburse:

Each Participant shall reimburse ITFC (to the extent not reimbursed by the Recipient or any person

responsible for it) on pro rata basis for all expenses reasonably incurred by ITFC, to be approved by the

Majority Participants, in the exercise of its responsibilities as the Mudarib incurred in connection with

enforcement of this Agreement, the Murabaha Agreement and all related documents and the transactions

contemplated herein and therein.

5.03 Non-receipt of Sale Price from the Recipient or Contributions from Participants:

(a) In case the Recipient fails, for any reason whatsoever, to pay any Sale Price to ITFC on

the due date pursuant to the Murabaha Agreement, ITFC shall in no way be under any

obligation to make available to each Participant the payment referred to in Section 4.04

hereof, until the said Sale Price is received by ITFC. However, if partial payment of the

Sale Price is made, ITFC shall distribute the amount of payment so received pro rata

among the Participants.

(b) The Obligation of ITFC to pay the Participants any amount payable pursuant to the terms

of this Agreement is conditional upon it having received the corresponding payment from

the Recipient pursuant to the terms of the Murabaha Agreement, and the Participants shall

have no recourse to ITFC in the event of any failure by the Recipient to make such

payment, except if such a failure by the Recipient is caused by gross negligence or wilful

default of ITFC.

(c) On the Disbursement Date, ITFC shall be entitled to assume that each Participant has

made funds available to ITFC as required by Section 4.02(b) hereof, and ITFC, acting in

reliance upon that assumption, may (but shall not be required to) pay such funds in

accordance with the terms of the Murabaha Agreement in relation to the Goods. If any

Participant fails to make funds available as required by Section 4.02(b) hereof, and ITFC

has paid an amount as aforesaid in reliance on such assumption, ITFC shall, subject to the

Principles of Islamic Shariah, be entitled to compensation for damages to cover the actual

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expenses, if any, for the amount of Contribution unpaid from that Participant, ITFC may,

at its sole discretion, cancel such Participant's right to make its full Contribution at a later

date and may itself make that Participant's Contribution and take for itself all ensuing

profit.

Section-6 Currency

All Contributions as per the First Schedule are payable by the Participants in United States Dollars. To the

fullest extent permitted by applicable law, the obligation of the Participants and ITFC in respect of any

amount due under this Agreement, including, but not only limited to, any expenses incurred by ITFC in a

currency other than US Dollars, shall, notwithstanding any payment in any other currency (whether

pursuant to an award, judgment or otherwise), be discharged only to the extent of that amount in US Dollars

that the party entitled to receive that payment may, in accordance with normal banking procedures,

purchase with the sum paid in that other currency (after any premium and costs of exchange) on a Business

Day in New York, the principal financial centre of the country of such other currency and the country of

the relevant party hereunder, immediately following the day on which that party receives that payment. The

obligations of the parties under this Section are separate and distinct from the other obligations under this

Agreement and shall survive the giving or making of any judgment or order or award in relation to all or

any such other obligations.

Section-7 Notices

7.01 Issue of Notices: Except as otherwise expressly provided herein, all notices in connection with this

Agreement shall be in writing, hand-delivered, sent by registered airmail, facsimile transmission,

telex, or authenticated SWIFT message. All such notices shall be sent to the address specified for

the intended recipient in the First Schedule, hereto or to such other address as that recipient may

have last specified by notice to ITFC. All such notices shall be effective upon receipt.

7.02 Transmission Errors: Without prejudice to Section 7.01, ITFC shall not be held liable for

damage resulting from cable, telephone, telex, fax, SWIFT messages, email, or other

transmission errors or malfunction, nor for delays, mis-routings or losses by post offices,

railroads or air carriers except in the case of evident misfeasance or default by ITFC.

Section-8 Remedies and Waiver

No failure or delay on the part of any party hereto, in exercising any right hereunder, shall operate as a

waiver of, or impair, any such right. No single or partial exercise of any such right shall preclude any other

or further exercise thereof or the exercise of any other right. No waiver of any such right shall be effective

unless given in writing. No waiver of any such right shall be deemed a waiver of any other right hereunder.

Section-9 Amendment

This Agreement may be amended by an instrument in writing, executed by all the parties. However, if

ITFC and all Participants so agree, certain amendments may be made by exchange of tested telexes, SWIFT

messages or fax messages between ITFC and each Participant.

Section-10 Assignment

10.01 This Agreement shall be binding upon and inure to the benefit of ITFC and each Participant and

their respective successors and assigns.

10.02 Each Participant may, in accordance with the Principles of Islamic Shariah, at any time assign or

otherwise transfer any of its rights or obligations hereunder so long as, to the extent that it assigns

any right, the assignee has undertaken to ITFC and the other Participants that it shall be under the

same obligations (matching the rights assigned) towards each of them as it would have been under

if it had been a party to this Agreement. ITFC and the Participants shall not be obliged to recognize

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any assignee as having rights against any of them until such undertaking is obtained from the

assignee.

10.03 If, for any reason, ITFC becomes incapable of performing its obligations hereunder as the Mudarib,

it may and, if unanimously agreed by the Participants shall, assign all its rights and obligations to

such third party as it, or as the case may be, the Participants may unanimously decide; provided

that if ITFC decides to assign its rights and obligations hereunder, the assignee shall be acceptable

to all Participants. Such assignment shall not be effective until such assignee has agreed in writing

with ITFC and the Participants that it has assumed the obligations of the Mudarib; thereupon ITFC

shall be released from all its obligations hereunder.

Section-11 Severability of Provisions

Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to that

jurisdiction, be ineffective to the extent of that prohibition or un-enforceability, without invalidating the

remaining provisions hereof or affecting the validity or enforceability of that provision in any other

jurisdiction.

Section-12 Counterparts

This Agreement may be executed in any number of counterparts, and all the counterparts taken together

shall be deemed to constitute one and the same agreement.

Section-13 Language

Each document to be delivered by all parties with respect to this Agreement shall be in English language

or shall be accompanied by an English translation thereof certified by the concerned party to be complete

and correct.

Section-14 Governing Law, Settlement of Disputes

14.01 This Agreement shall be governed by and construed in accordance with Islamic Shariah (as set out

in the Shari’a Standards published by the Accounting and Auditing Organization for Islamic

Financial Institutions and as interpreted by the Islamic Fiqh Academy of the Organization of

Islamic Cooperation or Islamic Development Bank Group Shariah Committee).

14.02 Any dispute between the Parties to this Agreement, and any claim by any such Party against the

other Party arising under this Agreement, which is not resolved by agreement of the Parties within

30 (Thirty) days from the date of notice by one Party to the other Party, shall be finally decided by

an arbitration panel in accordance with the rules and procedures of the International Islamic Centre

for Reconciliation and Arbitration in Dubai, UAE.

14.03 The provisions for arbitration set forth in Section 14.02 shall be in lieu of any other procedure for

the determination of disputes between the Parties to this Agreement or any claim by such Party

against the other Party arising thereunder.

14.04 If within 30 (Thirty) days after counterparts of the award shall have been delivered to the Parties,

the award is not complied with, any Party may enter judgment upon, or institute a proceeding to

enforce the award, in any court of competent jurisdiction against any other Party, may enforce such

judgment by execution or may pursue any other appropriate remedy against the other Party for the

enforcement of the award or the provisions of this Agreement.

14.05 Service of any notice or process in connection with any proceedings under this Section or in

connection with any proceedings to enforce any award rendered pursuant to this Section may be

made in the manner provided in Section 7.01 of this Agreement. The parties to this Agreement

waive any and all other requirements for the service of any such notice or process.

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Section-15 Confidentiality

Each of the Parties will at all times during the continuance of this Agreement and thereafter keep

confidential the terms and conditions of this Agreement and information acquired for approval purposes

and in consequence of this Agreement except for information which either of them may be bound to

disclose under compulsion of law, rules and procedure, to their professional advisers where reasonably

necessary for the performance of their professional services, or to counterparties where necessary for

approval purpose or carrying into effect of the purposes of this Agreement, provided that this obligation

to maintain confidentiality shall not apply in relation to any information once that information has

entered the public domain otherwise than in breach of this Agreement. All third parties to whom

confidential information is disclosed as permitted by this Section shall be informed of the confidential

nature of the information so disclosed and be obliged to keep such information confidential.

Section-16 Miscellaneous

16.01 The headings in this Agreement are for convenience only and are not intended, and shall not be

construed, to alter, limit, or enlarge in any way the scope or meaning of the language contained

in this Agreement.

16.02 The Recitals and the Appendices form an integral part of this Agreement.

16.03 This Agreement contains the entire agreement of the parties relating to the subject matter hereof

and supersedes all oral statements and prior writings with respect thereto, except the fax

message in correspondence specifically mentioned referred to herein.

16.04 The person signing this Agreement on behalf of each Party hereby represents and warrants to

the other Party that he or she has the requisite legal power and authority to execute this

Agreement on behalf of the Party and bind the Party to the obligations herein.

16.05 This Agreement binds and benefits the respective successors and assignees of the Parties.

16.06 This Agreement may be executed in several counterparts, each of which is an original, but all

of which constitute the same agreement.

16.07 The date of this Agreement shall, for all purposes of this Agreement, be that appearing in the

Preamble hereto.

[END OF CLAUSES]

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Execution Page

For International Islamic Trade Finance Corporation

IN WITNESS WHEREOF, the International Islamic Trade Finance Corporation through its duly

authorized representative has signed this Mudaraba Agreement relating to Syndicated Murabaha Financing

Operation No.ITFC/1437H/TF2/PAK/0011 for the Purchase of Crude Oil and Refined Petroleum Products

in an amount not exceeding USD478,000,000/- on date first written above.

FOR AND ON BEHALF OF


_____________________________________

Name:

Title:

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Execution Page

For National Commercial Bank (NCB)

IN WITNESS WHEREOF, National Commercial Bank (NCB) through its duly authorized

representative has signed this Mudaraba Agreement relating to Syndicated Murabaha Financing

Operation No.ITFC/1437H/TF2/PAK/0011 for the Purchase of Crude Oil and Refined Petroleum

Products in an amount not exceeding USD478,000,000/- on date first written above.


NATIONAL COMMERCIAL BANK (NCB)

_____________________________________

Name:

Title:

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Execution Page

For Barwa Bank

IN WITNESS WHEREOF, Barwa Bank through its duly authorized representative has signed this

Mudaraba Agreement relating to Syndicated Murabaha Financing Operation

No.ITFC/1437H/TF2/PAK/0011 for the Purchase of Crude Oil and Refined Petroleum Products in an

amount not exceeding USD478,000,000/- on date first written above.


BARWA BANK

_____________________________________

Name:

Title:

of 87

Execution Page

For Emirates National Bank of Dubai

IN WITNESS WHEREOF, Emirates National Bank of Dubai through its duly authorized





EMIRATES NATIONAL BANK OF DUBAI

_____________________________________

Name:

Title:

of 87

Execution Page

For Allied Bank Limited

IN WITNESS WHEREOF, Allied Bank Limited through its duly authorized representative has signed

this Mudaraba Agreement relating to Syndicated Murabaha Financing Operation




ALLIED BANK LIMITED

_____________________________________

Name:

Title:

of 87

Execution Page

For OPEC Fund for International Development (OFID)

IN WITNESS WHEREOF, OPEC Fund for International Development (OFID) through its duly

authorized representative has signed this Mudaraba Agreement relating to Syndicated Murabaha

Financing Operation No.ITFC/1437H/TF2/PAK/0011 for the Purchase of Crude Oil and Refined

Petroleum Products in an amount not exceeding USD478,000,000/- on date first written above.


OPEC FUND FOR INTERNATIONAL DEVELOPMENT (OFID)

_____________________________________

Name:

Title:

of 87

Execution Page

For Ajman Bank, PJSC

IN WITNESS WHEREOF, Ajman Bank, PJSC through its duly authorized representative has signed





AJMAN BANK, PJSC

_____________________________________

Name:

Title:

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Execution Page

For National Bank of Pakistan (NBP-Bahrain)

IN WITNESS WHEREOF, National Bank of Pakistan (NBP-Bahrain) through its duly authorized





NATIONAL BANK OF PAKISTAN (NBP-BAHRAIN)

_____________________________________

Name:

Title:

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Execution Page

For SAMBA Financial Group

IN WITNESS WHEREOF, SAMBA Financial Group through its duly authorized representative has

signed this Mudaraba Agreement relating to Syndicated Murabaha Financing Operation




SAMBA FINANCIAL GROUP

_____________________________________

Name:

Title:

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Execution Page

For Commercial Bank of Dubai

IN WITNESS WHEREOF, Commercial Bank of Dubai through its duly authorized representative has





COMMERCIAL BANK OF DUBAI

_____________________________________

Name:

Title:

of 87

Execution Page

For United Bank Ltd.

IN WITNESS WHEREOF, United Bank Ltd. through its duly authorized representative has signed





UNITED BANK LTD.

_____________________________________

Name:

Title:

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Execution Page

For Union De Banques Arabes et Francaises (UBAF)

IN WITNESS WHEREOF, Union De Banques Arabes et Francaises (UBAF) through its duly





UNION DE BANQUES ARABES ET FRANCAISES (UBAF)

_____________________________________

Name:

Title:

of 87

Execution Page

For Bank Al Falah Limited

IN WITNESS WHEREOF, Bank Al Falah Limited through its duly authorized representative has





BANK AL FALAH LIMITED

_____________________________________

Name:

Title:

of 87

Execution Page

For MCB Bank Limited (Bahrain)

IN WITNESS WHEREOF, MCB Bank Limited (Bahrain) through its duly authorized representative

has signed this Mudaraba Agreement relating to Syndicated Murabaha Financing Operation




MCB BANK LIMITED (BAHRAIN)

_____________________________________

Name:

Title:

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Execution Page

For Jeddah Chamber of Commerce and Industry

IN WITNESS WHEREOF, Jeddah Chamber of Commerce and Industry through its duly authorized





JEDDAH CHAMBER OF COMMERCE AND INDUSTRY

_____________________________________

Name:

Title:

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Execution Page

For Bank Al Habib Ltd. (Bahrain)

IN WITNESS WHEREOF, Bank Al Habib Ltd. (Bahrain) through its duly authorized representative





BANK AL HABIB LTD. (BAHRAIN)

_____________________________________

Name:

Title:

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Execution Page

For Federated Investors (UK) LLP (Federated Project and Trade Finance Core Fund)

IN WITNESS WHEREOF, Federated Investors (UK) LLP (Federated Project and Trade Finance Core

Fund) through its duly authorized representative has signed this Mudaraba Agreement relating to

Syndicated Murabaha Financing Operation No.ITFC/1437H/TF2/PAK/0011 for the Purchase of Crude

Oil and Refined Petroleum Products in an amount not exceeding USD478,000,000/- on date first written

above.


FEDERATED INVESTORS (UK) LLP

(FEDERATED PROJECT AND TRADE FINANCE CORE FUND)

_____________________________________

Name:

Title:

of 87

Execution Page

For Sharjah Islamic Bank

IN WITNESS WHEREOF, Sharjah Islamic Bank through its duly authorized representative has





SHARJAH ISLAMIC BANK

_____________________________________

Name:

Title:

of 87

Execution Page

For Islamic Development Bank (Fael Khair Program)

IN WITNESS WHEREOF, Islamic Development Bank (Fael Khair Program) through its duly





ISLAMIC DEVELOPMENT BANK (FAEL KHAIR PROGRAM)

_____________________________________

Name:

Title:

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Execution Page

For Bank Al Habib Ltd (Malaysia)

IN WITNESS WHEREOF, Bank Al Habib Ltd (Malaysia) through its duly authorized representative





BANK AL HABIB LTD (MALAYSIA)

_____________________________________

Name:

Title:

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Execution Page

For MCB Bank Limited (Dubai)

IN WITNESS WHEREOF, MCB Bank Limited (Dubai) through its duly authorized representative





MCB BANK LIMITED (DUBAI)

_____________________________________

Name:

Title:

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Execution Page

For Jordan Islamic Bank

IN WITNESS WHEREOF, Jordan Islamic Bank through its duly authorized representative has signed





JORDAN ISLAMIC BANK

_____________________________________

Name:

Title:

of 87

Execution Page

For National Bank of Pakistan (Germany)

IN WITNESS WHEREOF, National Bank of Pakistan (Germany) through its duly authorized





NATIONAL BANK OF PAKISTAN (GERMANY)

_____________________________________

Name:

Title:

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Execution Page

For Federated Investors (UK) LLP (Azzad Wise Capital Fund)

IN WITNESS WHEREOF, Federated Investors (UK) LLP (Azzad Wise Capital Fund) through its

duly authorized representative has signed this Mudaraba Agreement relating to Syndicated Murabaha





(AZZAD WISE CAPITAL FUND)

_____________________________________

Name:

Title:

of 87

Execution Page

For National Bank of Pakistan (France)

IN WITNESS WHEREOF, National Bank of Pakistan (France) through its duly authorized





NATIONAL BANK OF PAKISTAN (FRANCE)

_____________________________________

Name:

Title:

of 87

Execution Page

For Anfaal Capital

IN WITNESS WHEREOF, Anfaal Capital through its duly authorized representative has signed this

Mudaraba Agreement relating to Syndicated Murabaha Financing Operation




ANFAAL CAPITAL

_____________________________________

Name:

Title:

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Annexes: First Schedule, Second Schedule, Third Schedule

Schedule Title No of Pages

First Schedule LIST OF PARTICIPANTS WITH THEIR RESPECTIVE

CONTRIBUTIONS

03 Pages

Second Schedule ILLUSTRATIVE EXAMPLE OF DETERMINING

SHARES OF THE MUDARIB AND PARTICIPANT(S)

IN THE PROFIT

01 Page

Third Schedule MURABAHA AGREEMENT 39 Pages

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First Schedule List of Participants with their Respective Contributions

ITFC's Pakistan Syndication: PAK-011-USD 478 MM

# INSTITUTION COUNTRY

US$ MM

01

INTERNATIONAL ISLAMIC TRADE FINANCE CORPORATION (ITFC) ISLAMIC DEVELOPMENT BANK Group P O Box # 55335 JEDDAH 21534, SAUDI ARABIA Tel. (+966-12) 646 8418

Fax (+966-12) 637 10 64

SAUDI ARABIA 24.5

02

NATIONAL COMMERCIAL BANK (NCB) – Financial Institutions Department Corporate Banking Group P. O. Box # 3555 Jeddah 21481 Saudi Arabia Tel: +966 12 610 7083 Fax. + 966-12-263 1146

SAUDI ARABIA 100.0

03

BARWA BANK Head Office 1st Floor, Grand Hamad Street

P.O.Box 27778 Doha – Qatar Tel. +974-444-88-235 Fax. +974-444-88-508

QATAR 61.0

04

EMIRATES NBD (EMIRATES NATIONAL BANK OF DUBAI) Head Office Next to SHERATON CREEK Baniyas Road, Deira P O Box # 777 DUBAI, UNITED ARAB EMIRATES Telephone # (00-971-4) 201 2603 Fax # (00-971-4) 234 1970

UNITED ARAB EMIRATES

40.0

05

ALLIED BANK LIMITED Office 52, Al Rossais Tower, Building # 283, Road 1704, Area - 317, Diplomatic Area Kingdom of Bahrain Tel. 00-973 1700 3480 Fax. +973 1700 3481

BAHRAIN 30.0

06

OPEC FUND FOR INTERNATIONAL DEVELOPMENT (OFID) Parkring 8 – P O Box # 995 A-1010 VIENNA, AUSTRIA Telephone # (00-43-1) 515 64-239

AUSTRIA 25.0

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Fax # (00-43-1) 513 92 38

07

AJMAN BANK, PJSC P.O. Box: 7770 Ajman, UAE Tel: +971-6-7018587 Fax: +971-6-7018253


25.0

08

NATIONAL BANK OF PAKISTAN (NBP-BAHRAIN) Off-shore Banking Unit 51 MANAMA CENTER Government Avenue P. O. Box # 775 Manama, Bahrain T. +973-17-224 191 F. +973-17-224 4 11

BAHRAIN 25.0

09

SAMBA FINANCIAL GROUP P.O.Box 833 , Riyadh-11421 l Kingdom of Saudi Arabia Tel: +966 (0) 11 2117424

SAUDI ARABIA 20.0

10

COMMERCIAL BANK OF DUBAI P.O.Box 2668, Al Ittihad Street, Dubai, UAE Tel : + 971 4 2121827 / 828 Fax: + 971 4 2121870 / 2050148


15.0

11

UNITED BANK LTD. Park Place 17th Floor, Sheikh Zayed Road P. O. Box 1367, Dubai - UNITED ARAB EMIRATES T : +971 4 7093741 / 35 F : +971 4 3297040


15.0

12

UNION DE BANQUES ARABES ET FRANCAISES (UBAF) 190 Avenue Charles De Gaulle 92523 Neuilly Cedex FRANCE Telephone # (00-33-1) 4640 61 10 Fax # (00-33-1) 4640 65 16 / 4640 65 17

FRANCE 10.0

13

BANK AL FALAH LIMITED Bahrain Operations, “Bahrain Financial Harbour” West Tower, Level # 13 P O Box # 1375 MANAMA, BAHRAIN Telephone # (00-973-17) 2031 00 Ext. 108/ 203 108 Fax # (00-973-17) 22 43 00 /

BAHRAIN 10.0

14 MCB BANK LIMITED BAHRAIN 10.0

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Wholesale Banking Branch 3rd Floor, BKIC Building Diplomatic Area P O Box # 10164 MANAMA, BAHRAIN Telephone # (00-973-17) 53 33 06 / 53 39 77 Fax # (00-973-17) 53 33 08

15

JEDDAH CHAMBER OF COMMERCE AND INDUSTRY P.O.Box 1264 Jeddah 21431 Kingdom of Saudi Arabia T : +966-2-651-5111 Ext : 1050 F : +966-2-650-3600 / 651 – 7373

SAUDI ARABIA 10.0

16

BANK AL HABIB LTD. ALMOAYYED TOWER, AL SEEF DISTRICT P.O.BOX:50786, MANAMA, KINGDOM OF BAHRAIN Tel # 00973-17-564-044-1302

BAHRAIN 10.0

17

FEDERATED INVESTORS (UK) LLP Federated Project and Trade Finance Core Fund 1001 Liberty Avenue Pittsburgh, PA 15222 T: 001-412.288.2292 F: 001-412.992 4351

U.S.A 10.0

18

SHARJAH ISLAMIC BANK P.O. Box 4, Sharjah - United Arab Emirates Tel.: +971 6 599 9158


10.0

19

ISLAMIC DEVELOPMENT BANK Fael Khair Program Special Assistance Department P O Box # 5925 JEDDAH 21432, SAUDI ARABIA Telephone # (00-966-2) 646 67 44 Fax # (00-966-2) 646 78 31

SAUDI ARABIA 9.0

20

BANK AL HABIB LTD Kuala Lumpur, Johor Bahru & Labuan, Malaysia Mobile +60 17 8302011 Tel : +603 2298 7142

MALAYSIA 5.0

21

MCB BANK LIMITED Dubai Branch Al Reem Residency Building-


4.0

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Ground Floor, Zabeel Road P.O.Box. 6481, Al karama, Dubai, United Arab Emirates Tel: 00971-4 396-4472 EXT 215 Fax: 00971-4 -396-3210

22

JORDAN ISLAMIC BANK P.O. Box 926225, Amman Hashemite Kingdom of Jordan Tel : +962 6 5677377 Fax : +962 6 5666326

JORDAN 3.0

23

NATIONAL BANK OF PAKISTAN Filiale Frankfurt Frankfurt Branch Holzgraben 31 60313 Frankfurt am Main Germany Tel: +49 - (0)69 - 97 57 12 11 Fax: +49 - (0)69 - 97 40 91 71

GERMANY 2.5

24


Azzad Wise Capital Fund 1001 Liberty Avenue Pittsburgh, PA 15222 T: 001-412.288.2292 F: 001-412.992 4351

U.S.A 2.0

25

National Bank of Pakistan 128 Boulevard Haussmann 75008 Paris Tél. : +33 1 42 56 25 38 Fax : +33 1 45 63 66 04

FRANCE 1.5

26

Anfaal Capital P.O.Box 126575 Jeddah 21352 T : 966-9200-234-23 Ext. 142 F : 966-12-606-8787

SAUDI ARABIA 0.5

TOTAL AMOUNT:

478.0 Million

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Second Schedule Illustrative Example of determining Shares of the Mudarib and

Participant(s) in the Profit

ITFC’s Pakistan Syndication: ITFC-1437-TF2-PAK-011 - USD 478mn

Schedule 2

Illustrative Example of Profit Calculation

A Aggregate Financing Amount (USD) 478,000,000

B Financing Tenor (Months) 12

C Gross Mark-up (% p.a.) 4.900%

D Gross Mark-up (USD) 23,422,000

E Aggregate Financing Amount + Gross Markup (USD) 501,422,000

F ITFC's Mudarib Fee (%) 15.000%

G ITFC's Mudarib Fee (USD) 3,513,300

H Net Mark-up for Participants (USD) 19,908,700

I Net Mark-up for Participants (% p.a.) 4.165%

A As a portion of the drawdown amount to be paid to the supplier.

B From the date of drawdown to date of repayment by Beneficiary.

C Gross Profit percentage applied on the drawdown amont.

D [ = A * B/12 * C ]

E [ = A + D ]

F Fee to be deducted by ITFC.

G [ = D * F ]

H [ = D - G ]

I [ = C - C * F ]

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Third Schedule Murabaha Agreement

Ref. Operation No. ITFC/1437H/TF2/PAK/0011

MURABAHA AGREEMENT

BETWEEN


AND

(1)

THE ISLAMIC REPUBLIC OF PAKISTAN

(REPRESENTED BY THE MINISTRY OF ECONOMIC AFFAIRS AND STATISTICS)

(2)

PAK-ARAB REFINERY LIMITED (PARCO)

(AS EXECUTING AGENCY)

CONCERNING

PURCHASE OF CRUDE OIL AND REFINED PETROLEUM PRODUCTS

FOR SALE TO THE ISLAMIC REPUBLIC OF PAKISTAN

https://ecm.idbhq.org/alfresco/aos/Sites/legal-department/documentLibrary/03 Departments - Entities/ITFC/Operations/PAK/PAK-0011/PAK-0011 (SynMurb).docx

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Contents SECTION-1 DEFINITIONS ......................................................................................................................... 50 SECTION-2 UTILIZATION OF THE APPROVED AMOUNT ................................................................. 55 SECTION-3 PROCUREMENT OF THE GOODS ...................................................................................... 56 SECTION-4 INSURANCE ........................................................................................................................... 57 SECTION-5 DELIVERY.............................................................................................................................. 58 SECTION-6 PAYMENT OF THE PURCHASE PRICE BY ITFC ............................................................. 58 SECTION-7 PROMISE BY THE RECIPIENT TO PURCHASE THE GOODS FROM ITFC................... 59 SECTION-8 SALE PRICE OF THE GOODS SOLD TO RECIPIENT ....................................................... 59 SECTION-9 SALE OF THE GOODS TO THE RECIPIENT WITHOUT RESPONSIBILITY OF ITFC FOR

DEFECTS ................................................................................................................................ 60 SECTION-10 DENOMINATION OF THE SALE PRICE ............................................................................ 60 SECTION-11 PAYMENT OF THE SALE PRICE ........................................................................................ 60 SECTION-12 MANNER OF PAYMENT OF THE SALE PRICE BY THE RECIPIENT............................ 60 SECTION-13 EFFECTIVENESS ................................................................................................................... 61 SECTION-14 DELAY IN THE EXERCISE OF RIGHTS ............................................................................. 61 SECTION-15 CANCELLATION AND SUSPENSION OF THE APPROVED AMOUNT ......................... 61 SECTION-16 REPRESENTATIONS AND WARRANTIES ........................................................................ 63 SECTION-17 EVENTS OF DEFAULT ......................................................................................................... 65 SECTION-18 INDEMNITY ........................................................................................................................... 66 SECTION-19 GOVERNING LAW-SETTLEMENT OF DISPUTES ........................................................... 68 SECTION-20 NOTICES- REQUESTS .......................................................................................................... 68 SECTION-21 CONFIDENTIALITY .............................................................................................................. 69 SECTION-22 MISCELLANEOUS ................................................................................................................ 69 Execution Page For the Government of the Islamic Republic of Pakistan ........................................................... 71 Execution Page For the International Islamic Trade Finance Corporation ........................................................... 70 Execution Page For PAK-ARAB Refinery Limited (PARCO) ............................................................................ 72 Appendix-I LIST OF PARTICIPANTS WITH THEIR RESPECTIVE CONTRIBUTION ....................... 73 Appendix-II FORM OF OFFER FROM THE RECIPIENT ........................................................................ 77 Appendix-III FORM OF ACCEPTANCE BY ITFC ..................................................................................... 78 Appendix-IV FORM OF GUARANTEE ....................................................................................................... 79 Appendix-V FORM OF OPINION OF COUNSEL TO THE GOVERNMENT OF THE ISLAMIC

REPUBLIC OF PAKISTAN.................................................................................................... 85

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MURABAHA AGREEMENT

THIS AGREEMENT is made on ____/____/1437H corresponding to ____/____/2016G, between the

INTERNATIONAL ISLAMIC TRADE FINANCE CORPORATION (hereinafter referred to as

“ITFC”) and the Islamic Republic of Pakistan, REPRESENTED BY THE MINISTRY OF

ECONOMIC AFFAIRS AND STATISTICS (hereinafter referred to as the “Recipient”).

ITFC and the Recipient are hereinafter referred to individually as “Party” and collectively as “Parties”.

WHEREAS,

A. The Recipient has requested ITFC to purchase CRUDE OIL AND REFINED PETROLEUM

PRODUCTS (hereinafter referred to as the “Goods”) and sell the same at a profit to the

Recipient on Murabaha basis;

B. The banks and financial institutions listed in Appendix-I hereto (hereinafter referred to as the

“Participants”) have agreed, on the basis of a proposal made to them by ITFC, to finance the

purchase of the Goods in an amount not exceeding USD478,000,000/- (UNITED STATES

DOLLARS FOUR HUNDRED SEVENTY-EIGHT MILLION) (hereinafter referred to as

the “Approved Amount”) and to sell the Goods to the Recipient against the security of a

guarantee (the “Guarantee”) from the MINISTRY OF FINANCE OF THE

GOVERNMENT OF THE ISLAMIC REPUBLIC OF PAKISTAN (hereinafter referred to

as the “Guarantor”) subject to the terms and conditions of this Agreement;

C. The Recipient has designated PAK-ARAB REFINERY LIMITED (hereinafter referred to as

“PARCO”) as the Executing Agency for the purchase of the Goods and taking delivery thereof

on behalf of the Recipient;

D. The terms and conditions referred to in (B) above have been communicated to the Recipient by

a fax message No.69/76728 dated 13/07/2016G the Recipient has accepted the said terms and

conditions by its letters No. ……….. dated ….G and No……. dated………….

E. The Participants have authorized ITFC to enter into this Agreement with the Recipient and

ITFC has promised to use its best endeavors to make the Approved Amount available to the

Recipient for the Operation, as defined hereunder; and

F. ITFC has agreed, subject to the terms and conditions of this Agreement, to authorize the

Recipient, as an agent of ITFC, and to the extent of the Approved Amount, to negotiate with a

supplier, or suppliers, and to conclude a contract, or contracts, for the purchase of the Goods

NOW IT IS HEREBY AGREED as follows:

SECTION-1 DEFINITIONS

1.1 Except where the context otherwise requires, each of the following terms shall have the

meaning assigned to it hereunder wherever used in this Agreement:

“AAOIFI”: the Accounting and Auditing Organization for Islamic

Financial Institutions headquartered in Bahrain.

“Administrative Fee”: the fee to be paid/or payable in accordance with Section 2.3 to

this Agreement.

“Approved Amount”: as defined in Recital-B of this Agreement.

“Business Day”: a day on which banks are generally open in London, New York,

Vienna and Jeddah for the business of the nature required by

this Agreement.

“Disbursement”: actual payment of the Purchase Price.

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“Disbursement Date”: the date on which payment of the Purchase Price is made.

“Documentary Letter of

Credit”:


“Effective Date”: the date on which this Agreement shall enter into effect as

provided in Section-13 hereof.

“Event of Default” the occurrence of any of the events set out in Section 17 hereof.

“Executing Agency”: PAK-ARAB Refinery Limited (PARCO).

“First Operation”: the Operation to be carried out after the effectiveness of the

Murabaha Agreement.

“Goods”: Crude Oil and Refined Petroleum Products, which ITFC has

agreed to purchase and sell to the Recipient under this

Agreement.

“Guarantee”: the guarantee covering the Contributions of the Participants in

the amount of USD478,000,000.00 plus the related Mark-up to

be provided by the Guarantor in the form provided in

Appendix-IV to the Murabaha Agreement.

“Guarantor”: the Ministry of Finance of the Government of the Islamic

Republic of Pakistan.

“Irrevocable

Commitment to

Reimburse”:

with respect to a Letter of Credit established under any

Transaction hereunder, means an irrevocable undertaking by

ITFC to reimburse the Issuing Bank, the confirming or the

negotiating bank (as the case may be) for payments made under

Documentary Letter of Credit, or to pay to the Supplier under a

Standby Letter of Credit.

“Issuing Bank”: the Bank, which issued or is acting as an advising bank/agent

of the bank, which issued the Letter of Credit.

“Letter of Credit”: either a Standby Letter of Credit, a Sight Documentary Letter

of Credit, or a Usance Documentary Letter of Credit.

“Market Disruption

Event”:

at or about noon on the quotation day of the relevant Sale Price,

the Reuters screen rate is not available or this rate is zero or

negative.

“Material Adverse

Effect”:

in relation to any event or circumstance in whatsoever nature,

the occurrence of effect of which would, in the opinion of ITFC:

(a) constitute a force majeure;

(b) affect the PARCO, its assets and properties;

(c) impact the financial condition, business or operations of the

PARCO;

(d) affect the implementation of the Operation, the financial

plan or the carrying on of the PARCO’s business or

operation;

(e) impair the ability of the Recipient or PARCO to perform

or comply with its obligations under this Agreement or any

related document;

(f) affect the enforceability of any provision under this

Agreement or any related document;

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(g) cause the suspension, cancellation, revocation or

termination of this Agreement or any related document; or

(h) impact the socio-political, financial and/or economic

conditions of Pakistan, which would have adverse impact

on the domestic money, banking and/or capital markets.

and may do so:

(i) in a manner or to an extent materially prejudicial to the

rights and/or remedies of ITFC under this Agreement or

any related agreement; or

(j) in a manner or to an extent which, is likely materially and

adversely to affect the Recipient’s and PARCO’s ability to

comply with any of its payment obligations under any

agreement to which it is a Party or to the Recipient’s or

PARCO’s ability to complete the Operation as a whole;

and references herein to an event or circumstance which “has”

or which “would have” a Material Adverse Effect shall be

construed accordingly.

“Member Country”: a country, which is a member of the Organization of Islamic

Cooperation (OIC).

“Non Member Country”: a country, which is not a member of the Organization of Islamic

Cooperation (OIC).

“Operation”: a number of Transactions to be carried out pursuant to the

Murabaha Agreement in a total sum that would not exceed the

Approved Amount.

“PARCO”: PAK-ARAB Refinery Limited (PARCO), the Executing

Agency.

“Procurement Procedures

of ITFC”:

the Guidelines for Procurement of Goods and Services under

the Islamic Development Bank’s Financing.

“Purchase Contract”: the contract to be concluded, on behalf of ITFC, by the

Recipient with a Supplier for purchase of a quantity of the

Goods pursuant to this Agreement.

“Purchase Price”: the price paid, or payable, by ITFC to a Supplier for each

shipment of the Goods inclusive of any Taxes, insurance

premium, banking or other fees (except fees for confirmation of

Letters of Credit) borne by ITFC in connection with the

shipment of the Goods to Pakistan.

“Reference Banks”: the principal London offices of the JPMorgan Chase, Citibank

N.A. and HSBC and/or any other bank appointed by ITFC in

substitution for any of the foregoing banks.

“Sale Contract”: the contract to be concluded between ITFC and the Recipient,

in the manner indicated in Section 7 hereof, for sale of the

Goods to the Recipient.

“Sale Price”: the price at which ITFC sells the Goods to the Recipient, as

determined in accordance with Section 8 hereof.

“Sanctionable Practices”: any of Corrupt practice, Coercive practice, Collusive practice,

Fraudulent practice or Obstructive practice:

(i) Corrupt Practice: the offering, giving, receiving, or

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soliciting, directly or indirectly, anything of value to

influence improperly the actions of another Party;

(ii) Coercive Practice: any act or omission impairing or

harming, or threatening to impair or harm, directly or

indirectly, any Party or the property of the Party to

influence improperly the actions of a Party.

(iii) Collusive Practice: an arrangement between two or more

parties designed to achieve an improper purpose,

including influencing improperly the actions of another

Party.

(iv) Fraudulent Practice: any act or omission, including a

misrepresentation, that knowingly or recklessly misleads,

or attempts to mislead, a Party to obtain a financial or

other benefit or to avoid an obligation.

(v) Obstructive Practice:

(a) deliberately destroying, falsifying, altering or

concealing of evidence material to the investigation

or making of false statements to investigators, in

order to materially impede ITFC investigation into

allegations of a Corrupt, Fraudulent, Coercive or

Collusive practice, and/or threatening, harassing or

intimidating any Party to prevent it from disclosing

its knowledge of matters relevant to the investigation

or from pursuing the investigation, or

(b) acts intended to materially impede the exercise of

ITFC’s access to contractually required information

in connection with ITFC’s investigation into

allegations of a Corrupt, Fraudulent, Coercive or

Collusive practice.

“Sight Documentary

Letter of Credit”: a letter of credit where payment by the issuing bank would

be made to seller immediately upon presentation of the

required documents, and is not on deferred basis.

“Standby Letter of

Credit”:


“Second Operation”: the Operation to be carried out in accordance with Section 3.02

of the Mudaraba Agreement and Sections 2.2, 2.3 and 2.4 of the

Murabaha Agreement after the payment of the last Sale Price

under the last Transaction of the First Operation

“Supplier”: the person or entity from which the Goods are purchased by the

Recipient on behalf of ITFC under this Agreement.

“Tax”: includes imposts, levies, fees and duties of any nature, whether

in effect on the Effective Date of this Agreement, or thereafter

imposed.

“Term Sheet”: terms and conditions communicated to the Recipient on

13/07/2016G and duly accepted signed by the Recipient on

…………..G.

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“Transaction”: purchase of a quantity of the Goods by the Recipient, on behalf

of ITFC, in a single shipment and sale of the same by ITFC to

the Recipient in accordance with this Agreement.

“UCP”: the Uniform Customs and Practice for Documentary Credit

(2007 Revision), International Chamber of Commerce

Publication No. 600 as promulgated, revised, and supplemented

from time to time by the International Chamber of Commerce

and relevant Incoterms 2010.

“Usance Letter of

Credit”:

a letter of credit where payment by the issuing bank would not

be made to seller immediately upon presentation of the required

documents, but at a later time specifically defined in the letter

of credit.

“US Dollar”, “USD” or

“US$”:

the lawful currency of the United States of America.

1.2 Interpretation:

(a) unless the context does not so admit, the singular includes the plural and vice versa.

(b) the “Party” shall be construed so as to include its and any subsequent successors and

permitted transferees in accordance with the interest of ITFC.

(c) an “affiliate” of a Party shall be construed as a reference to its holding company,

subsidiary or another subsidiary of its holding company.

(d) an “appendix” shall, subject to any contrary indication, be construed as a reference to

an appendix of the agreement or document in which such reference appears.

(e) “assets” includes properties (movable and immovable), revenues and rights of every

description.

(f) “continuing”, in relation to an Event of Default, shall be construed as a reference to an

Event of Default which has not been waived or remedied in accordance with the terms

hereof.

(g) “including” shall be construed as a reference to “including, without limitation”.

(h) “indebtedness” shall be construed so as to include any obligation (whether incurred as

principal or as surety) for the payment or repayment of money, whether present or

future, actual or contingent.

(i) a “law” shall be construed as any law (including common or customary law), statute,

constitution, decree, judgment, treaty, regulation, directive, bye-law, order or any other

legislative measure of any relevant government, supranational, local government,

statutory or regulatory body or court.

(j) a “month” is a reference to a period starting on one day in a calendar month and ending

on the numerically corresponding day in the next succeeding calendar month save that,

where any such period would otherwise end on a day which is not a Business Day, it

shall end on the next succeeding Business Day, unless that day falls in the calendar

month succeeding that in which it would otherwise have ended, in which case it shall

end on the immediately preceding Business Day, provided that, if a period starts on the

last Business Day in a calendar month or if there is no numerically corresponding day

in the month in which that period ends, that period shall end on the last Business Day

in that later month (and references to “months” shall be construed accordingly).

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(k) a “successor” shall be construed so as to include an assignee or successor in title of

such Party and any person who under the laws of its jurisdiction of incorporation or

domicile has assumed the rights and obligations of such Party under this Agreement or

to which, under such laws, such rights and obligations have been transferred.

(l) the “winding-up”, “dissolution”, “liquidation”, “insolvency” or “reorganization” of a

company or corporation and references to “liquidator”, “assignee”, “receiver”,

“manager” and “trustee” of a company or corporation shall be construed so as to

include any equivalent or analogous proceedings under the laws of the Republic of

Pakistan or any jurisdiction in which such company or corporation carries on business

including the seeking of liquidation, winding-up, reorganization, dissolution,

arrangement, adjustment, protection or relief of debtors.

(m) this Agreement or any other agreement or document shall be construed as a reference

to this Agreement or, as the case may be, such other agreement or document as the

same may have been, or may from time to time be amended, varied, novated or

supplemented.

(n) “Section”, “paragraph” or “Appendix” shall, unless a contrary indication appears, be

construed as one in or to this Agreement, and any headings to any section, paragraph

or Appendix shall be for ease of reference only.

(o) “person” includes any person, firm, company, corporation, government, state or agency

of a state or any association, trust or partnership (whether or not having separate legal

personality) of two or more of the foregoing.

(p) a “regulation” includes any regulation, rule, official directive, request or guideline

(whether or not having the force of law) of any governmental, intergovernmental or

supranational body, agency, department or regulatory, self-regulatory or other authority

or organization.

SECTION-2 UTILIZATION OF THE APPROVED AMOUNT

2.1 ITFC shall, upon effectiveness of this Agreement in accordance with Section 13 hereof, make

the Approved Amount available to the Recipient for the First Operation.

2.2 Without prejudice to Section 2.1 above ITFC may by sending written notice to the Recipient,

effective immediately on the date of sending, suspend all or some of Disbursements not yet

made by ITFC pursuant to Section 6 hereunder upon the occurrence of any exceptional

circumstances which adversely affect ITFC's access to the capital markets (all as determined

by ITFC in its sole discretion). Any such suspension will continue until notification in writing

from ITFC to the Recipient of the end of this suspension or until ITFC cancels the relevant

Disbursements which are subject to such suspension pursuant to Section 2.3.

2.3 The Recipient shall pay to ITFC an Administrative Fee amounting to US$500,000.00 (US

Dollars Five Hundred Thousand). Half of this Administrative Fee shall be paid as a condition

of effectiveness and the remaining amount shall be paid at the earlier of six months from

payment of first installment or utilization of 50% of the financing.

2.4 The Recipient shall start withdrawal of the Approved Amount within 60 (Sixty) days from the

Effective Date.

2.5 ITFC shall use its best endeavors to make the Approved Amount, such part thereof as may be

provided by the Participants, available for the Recipient for the Second Operation; on the

following conditions:

(a) that the whole of the Sale Prices under each Transaction under the First Operation shall

have been paid in full on due dates;

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(b) that the Goods to be financed under the Second Operation shall be the same kind of

Goods as in the First Operation, while, however, the quantity of the Goods under the

Second Operation may differ from the quantity of the First Operation;

(c) that no adverse change in the business, assets or financial condition of the Recipient,

or the Guarantor, as well as the market and the relevant country, shall have occurred,

or is likely to occur, which in the reasonable opinion of the Participants would affect

the ability of the Recipient or the Guarantor to meet their respective obligations under

this Agreement.

2.6 The Second Operation shall revolve within the availability of the exposure of the Approved

Amount.

2.7 All costs and expenses reasonably incurred in relation to the Murabaha facility granted under

this Agreement, including legal fees, shall be borne and paid by the Recipient.

2.8 The decision of ITFC whether or not to enter into the Second Operation shall be notified by

ITFC to the Recipient, PARCO and the Guarantor within 30 (Thirty) days after the date of

payment of the last Sale Price under the First Operation.

2.9 Unless the Participants shall otherwise decide, the Second Operation shall be subject to the

same terms and conditions as applied to the First Operation.

SECTION-3 PROCUREMENT OF THE GOODS

3.1 The total amount of the Purchase Prices for the Transactions executed as per this Agreement

shall not exceed the Approved Amount.

3.2 The Recipient as well as the PARCO undertakes to provide ITFC as soon as possible with a

schedule demonstrating the quantities of Goods to be purchased as per the Purchase Contract.

The above schedule should clearly state the dates of shipments and the Purchase Price for each

Transaction.

3.3 For the avoidance of doubts, it is well understood between the Parties that the Recipient as well

as the PARCO will purchase the Goods on behalf of ITFC in order to repurchase the same on

Murabaha basis from ITFC in accordance with the terms of this Agreement.

3.4 It is agreed between the Parties hereto that the Recipient is authorized to purchase the Goods,

either directly or through the PARCO, for and on behalf of ITFC, from OIC Member Countries.

Procurement shall be in accordance with the Procurement Procedures of ITFC or any other

procedure to which ITFC may in writing agree and shall be subject to such terms and conditions

as ITFC may determine.

3.5 The Recipient as well as the PARCO undertakes to ensure that the Supplier is not on the List

of the United Nations and the Organization of the Islamic Cooperation concerning any

restrictive measure, embargo, or sanction.

3.6 The Recipient covenants that, when acting as agent, it shall act as an undisclosed agent of ITFC

and it shall not disclose that it is acting as an agent of ITFC to any third party. PARCO

acknowledges and accepts such undisclosed agency arrangement and covenants not to do, or

omit to be done, anything, which could result in this, undisclosed agency arrangement being

breached. The Recipient and the PARCO agree that any act or omission of the PARCO under

or pursuant to this Agreement shall have the same effect as though the act or omission had been

the act of the Recipient. No act or omission by the PARCO shall relieve, impair or prejudice

the obligations and duties of the Recipient under or pursuant to this Agreement.

3.7 The Recipient as well as the PARCO shall submit through the most expeditious mode of

communication the terms and conditions of the draft Purchase Contract for the approval of

ITFC before it concludes it. Any reference to the Purchase Contract shall be taken as a reference

to such contract after the approval of its terms and conditions by ITFC and its conclusion by

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the Recipient on ITFC's behalf. Once approved by ITFC, no material amendment to or waiver

or cancellation of the Purchase Contract shall be made or agreed by the Recipient without the

prior written consent of ITFC.

3.8 The Recipient as well as the PARCO shall ensure that the purchase of the Goods and the

signature of the Purchase Contract will be done without the assistance or intervention whether

direct, indirect of any middleman or a commission agent or a similar person, or party.

3.9 In acting as an agent of ITFC, the Recipient as well as the PARCO shall endeavor to act as if

acting for its own account and shall take all necessary measures to protect ITFC’s rights and

interests and will not do or omit to do anything, which will be inconsistent with its obligations

and responsibilities under the Agreement.

3.10 The Recipient as well as the PARCO undertakes to select the Goods and to exercise as much

care in satisfying itself as to matters of quality and quantity of the Goods and title thereto and

of performance by the Supplier as if it were purchasing the Goods for its own account directly

from the Supplier.

3.11 The Recipient as well as the PARCO shall be fully and solely responsible for the quality,

condition, selection and specifications of the Goods and for deciding the need for, and the extent

and the manner of, the Transaction and storage thereof.

3.12 The Recipient as well as the PARCO shall ensure that all necessary permits, exchange control

approvals, import licenses and all other consents required in connection with the import of the

Goods are obtained.

3.13 The Recipient as well as the PARCO shall, on behalf of ITFC, do all things and observe and

perform all obligations falling to be done or observed under the Purchase Contract as if the

Goods are purchased by ITFC directly from the Supplier.

3.14 The Recipient as well as the PARCO shall not engage itself or through any person acting on its

behalf, in any Sanctionable Practices in connection with its business and operations, including

the procurement or the execution of any contract relating to the Operation.

SECTION-4 INSURANCE

4.1 The Recipient shall ensure that the Goods are insured by the Supplier at all times, including

marine transit until title to the Goods and all risks pass to the Recipient under the Sale Contract,

with reputable insurers and in an amount acceptable to ITFC to the full Purchase Price of the

Goods, against such risks as are normally insured by persons transporting goods in the same

manner and of the same kind as the Goods including, without limitation, all environmental

pollution risks. The Recipient shall ensure that a term of such insurance will be that the

insurance proceeds shall be payable to ITFC in US Dollars. The Recipient shall comply with

the terms and conditions of the insurance and shall not perform or omit, consent or permit any

act or omission, which might invalidate or render unenforceable the whole or any part of such

insurance.

4.2 Where the draft Purchase Contract does not provide for the insurance of the Goods by the

Supplier in the manner specified in Section 4.1 hereof, the Recipient shall, at the time of

submitting the terms and conditions of the draft Purchase Contract for the approval of ITFC in

accordance with Section 3.7 hereof, advise ITFC of the arrangements it has made, or will make,

to insure the Goods in the aforesaid manner in order to obtain ITFC's approval for the same. In

this case the insurance cost shall be paid by ITFC and added to the Purchase Price.

4.3 The Recipient shall provide ITFC with a copy of the insurance policy entered into by the

Supplier in relation to the Goods subject to Section 4.1 hereof or a conformed copy of any

insurance contract or agreement concluded directly or indirectly by PARCO in the manner

specified in Section 4.2 hereof.

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SECTION-5 DELIVERY

The Recipient shall ensure that the Purchase Contract provides for the delivery of the Goods directly to

the Recipient or to its order, and the Recipient shall be responsible for checking their quality, quantity,

specifications and all other matters relating thereto. For the avoidance of doubt, delivery is achieved

when the Recipient takes actual or constructive possession of the Goods in its capacity as agent of ITFC.

SECTION-6 PAYMENT OF THE PURCHASE PRICE BY ITFC

6.1 Unless ITFC otherwise agrees in writing, payment of the Purchase Price of all Goods shipped

pursuant to this Agreement, shall be made by Letters of Credit.

6.2 Subject to Section 6.1 hereof and where payment of the Purchase Price is to be effected by a

Documentary Letter of Credit, the Recipient or PARCO shall, on behalf of ITFC, open a

Documentary Letter of Credit in the manner required by the Purchase Contract in favor of the

Supplier. Each and every Documentary Letter of Credit established under this Agreement shall

contain, inter alia, the following particulars:

(a) The number of the Documentary Letter of Credit;

(b) The name of the issuing bank;

(c) The name of the applicant for the Credit;

(d) The name of the Recipient of the Credit;

(e) Description and quantity of the Goods;

(f) Origin of the Goods;

(g) The amount;

(h) Insurance cover;

(i) The expiry date;

(j) The latest shipment date;

(k) The name of the paying bank or the negotiating bank;

(l) That the Credit will be available by sight/deferred payment or on usance terms; and

(m) That the Letter of Credit is subject to the UCP.

6.3 Where the payment of the Purchase Price is required to be made directly to the Supplier, the

Recipient or PARCO shall open a Standby Letter of Credit in the form specified by the Supplier.

6.4 The Recipient or PARCO shall communicate to ITFC, by tested telex or authenticated SWIFT

message, the full text of the Documentary Letter of Credit or, as the case may be, the Standby

Letter of Credit. Provided that the terms and conditions of the Letter of Credit or, as the case

may be, the Standby Letter of Credit, are acceptable to ITFC, ITFC will, on receipt of the said

telex or message, issue an Irrevocable Commitment to Reimburse.

6.5 (a) Where a Documentary Letter of Credit is opened hereunder, ITFC will arrange

reimbursement against a receipt of a certificate from the relevant bank that all the

relevant terms of such Documentary Letter of Credit have been fully and properly

complied with.

(b) Where a Standby Letter of Credit is opened, ITFC will pay directly to the Supplier

upon receipt of notification from the Recipient or PARCO. A claim of payment to the

Supplier shall be notified by the Recipient or PARCO through its bank, to ITFC at least

4 (Four) Business Days before the value date of payment to the Supplier, indicating the

exact amount, value date and details of the account to which payment is required to be

made.

6.6 Amendments of any Documentary Letter of Credit relating to the matters specified in Section

6.2 hereof shall be subject to the approval of ITFC. Any other amendment could be made by

agreement of the parties to the Letter of Credit without reverting to ITFC provided that such

amendment is consistent with the general terms and conditions of this Agreement and that

Recipient or PARCO shall be solely responsible for damages or risks associated with such

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amendments. However, PARCO shall promptly notify ITFC of any amendment and shall be

solely responsible for any damage or risk associated with any amendment.

6.7 The first Letter of Credit hereunder shall be opened: (i) within 60 (Sixty) days from the

Effective Date for the First Operation and (ii) within 60 (Sixty) days from the date ITFC notifies

the Recipient, the PARCO and the Guarantor of the availability of the Approved Amount, or

any part thereof, to the Recipient for the Second Operation. If the Recipient or PARCO fails

to open the first Letter of Credit within the periods specified herein, and ITFC is not satisfied

with the justification for such failure, ITFC may, by notice to the Recipient, terminate this

Agreement and may cancel the Operation.

6.8 It is agreed by the parties hereto that the whole of the Approved Amount under each of the two

Operations shall be disbursed within a period of 7 (Seven) months from the date of first

Disbursement under the Operation. Unless ITFC otherwise agrees, such part of the Approved

Amount as may remain un-disbursed after the expiry of the period specified herein, will be

considered cancelled.

6.9 In the event of termination or cancellation as mentioned in Sections 6.7 and 6.8 hereof, all costs

and expenses arising from such termination and cancellation shall be born jointly by the

Recipient and PARCO without prejudice to Participants’ rights to any rights and remedies that

may have accrued to Participants prior to termination or that may arise from termination.

6.10 The Purchase Price shall be paid in the currency specified in the Letter of Credit, to be

calculated and credited to the Recipient in USD as per the dollar exchange rate prevailing on

the date of payment.

6.11 All payments to be made hereunder by the Recipient shall be made on the due dates of such

payments free from, clear off and without deduction for any taxes; provided, however, if the

Recipient shall at any time be compelled by law to withhold or deduct any taxes from any

amounts payable to ITFC , then the Recipient shall pay such additional amounts as may be

necessary in order that the net amounts received after withholding or deduction shall equal the

amounts which would have been received if such withholding or deduction were not required.

6.12 All disbursements shall be conditional upon timely payments under the existing ITFC facilities.

SECTION-7 PROMISE BY THE RECIPIENT TO PURCHASE THE GOODS FROM ITFC

7.1 The Recipient undertakes to purchase the Goods from ITFC immediately upon taking delivery

thereof (as provided in Section 5) on behalf of ITFC and on the terms specified in Section 7.2

hereof to Section 22 of this Agreement.

7.2 The Sale Contract shall be concluded on the Disbursement Date by an exchange of tested

telexes or fax messages as soon as the Goods are delivered as provided in Section 5 at the port

of destination in Pakistan. The said exchange will consist of an offer from the Recipient in the

form provided in Appendix-II hereto, and an acceptance from ITFC in the form provided in

Appendix-III hereto. If the Recipient fails to communicate with ITFC for the finalization of the

conclusion of the Sale Contract after the Recipient has bought and taken delivery of the Goods

on behalf of ITFC, the Recipient shall be liable to ITFC for any and all damages, costs, expenses

and losses suffered by ITFC and/or the Participants as a result of the breach of the Recipient’s

undertaking to conclude the Sale Contract in the manner indicated herein.

SECTION-8 SALE PRICE OF THE GOODS SOLD TO RECIPIENT

8.1 Each Sale Price payable by the Recipient to ITFC hereunder shall consist of the corresponding

Purchase Price and a fixed mark-up rate of 4.90% (Four Point Nine Zero per cent) per annum.

The Sale Price shall be determined two Business Days prior to the Disbursement Date of the

corresponding Purchase Price and shall be communicated to the Recipient on the date of such

determination.

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8.2 The mark-up amount will be computed from the Disbursement Date (inclusive) until due date

of the Sale Price (exclusive).

SECTION-9 SALE OF THE GOODS TO THE RECIPIENT WITHOUT RESPONSIBILITY

OF ITFC FOR DEFECTS

As the Recipient will select the Goods relying solely on its own skill and judgment, it is expressly

agreed between ITFC and the Recipient that the Recipient shall purchase the Goods from ITFC “As - Is”

on delivery without responsibility on the part of ITFC for any defect therein whether in relation to

quality or otherwise. When the Recipient takes delivery of the Goods and the Sale Contract is concluded

in accordance with Section 7 hereof, the Recipient shall acknowledge that it would examine the Goods

and that it would satisfy itself as to their quality quantity, and all other relevant specifications. However,

if any defect appears in the Goods, ITFC undertakes to assign to the Recipient, or to its nominee, the

rights and warranties to which ITFC may be entitled under the Purchase Contract, together with any

other rights and warranties, which may be implied by law or custom in favor of a purchaser.

SECTION-10 DENOMINATION OF THE SALE PRICE

Each Sale Price shall be denominated and payable in US Dollars.

SECTION-11 PAYMENT OF THE SALE PRICE

11.1 The Recipient shall pay to ITFC the Sale Price Twelve (12) months from the date of the

corresponding Disbursement effected by ITFC.

11.2 If any payment becomes due on a day on which the banks are not officially open for business

in the place where payment is to be effected by the Recipient in the currency concerned, such

payment shall be made on the next following day on which such banks are open for business.

11.3 If the Recipient fails to pay any amount payable hereunder when it is due in accordance with

the terms of this Agreement, then in addition to paying such amount, the Recipient shall pay

ITFC a Late Payment Charge in respect of the overdue amount, in accordance with the

Principles of Islamic Shariah, and any such Late Payment Charge shall be calculated and

applied as follows:

(i) a sum determined by ITFC after applying the formula indicated below:

A×B×C

360

Where: “A” means the unpaid amount;

“B” a sum in aggregate equal to 4.90% per annum;

“C” means the number of days from and including such due

date to, and, including the date of actual payment (whether before or

after judgment).

(ii) all reasonable costs and expenses (including, without limitation, any legal, or collecting

agent’s costs and expenses) incurred by ITFC as a result of delay in payment to ITFC.

11.4 The Recipient shall, after deduction of all costs and expenses incurred and demanded by ITFC,

pay any amount received pursuant to this Section 11.3 to the International Islamic Trade

Finance Corporation’s Account No.241150120215 with the Arab Banking Corporation

(B.S.C.), P.O. Box 5698, Manama, Kingdom of Bahrain, Tel: +973 17 543000, Fax: +973 17

533163, Swift BIC:ABCOBHBM (IBAN:BH58ABCOUS241150120215). Amounts equal to

all reasonable costs and expenses incurred by ITFC and the Participants shall be paid to ITFC

as Mudarib under Mudaraba Agreement No____ of even date. It should be noted that this

account is a special account set up by ITFC solely for charitable purposes in accordance with

the Principles of Islamic Shariah.

SECTION-12 MANNER OF PAYMENT OF THE SALE PRICE BY THE RECIPIENT

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12.1 The Recipient shall pay each Sale Price to ITFC by SWIFT message, telex, cable, fax, or email

to such bank account as ITFC shall specify to the Recipient, or in such other manner as ITFC

may direct from time to time.

12.2 Without prejudice to the generality of Section 12.1, all payments due hereunder shall be deemed

to be duly paid when the following bank confirms to ITFC the receipt of such payment in ITFC's

account with it:

Account Name. IDB-ITFC-OPERATIONS

Account No. GB93SINT60928000159152

Gulf International Bank (UK) Limited

One Knightsbridge London SW1X 7XS

United Kingdom

SWIFT CODE: SINTGB2LXXX

12.3 All charges and expenses in connection with any payment by the Recipient to ITFC hereunder

shall be paid by and shall be for the account of the Recipient.

12.4 All payments by the Recipient to ITFC hereunder shall be made without any set-off or

counterclaim and free and clear of all taxes, charges, deductions or withholdings of whatever

nature, all of which shall be for the account of the Recipient.

SECTION-13 EFFECTIVENESS

13.1 This Agreement shall not be effective until the Recipient furnishes ITFC with a full set of

original documents as listed below:

(a) A Guarantee from the Guarantor, covering the Contributions of the Participants in the

amount of USD 478,000,000.00 (United States Dollars Four Hundred Seventy-Eight

Million) plus the related mark-up, in the Form provided in Appendix-IV hereto.

(b) A Legal Opinion issued by the authorized Legal Counsel of the Recipient stating that

the provisions of this Agreement as well as the Guarantee constitute enforceable

binding obligations upon the Recipient substantially in the form provided in Appendix-

V hereto.

(c) A Letter issued by the Ministry of Finance of the Islamic Republic of Pakistan to ITFC,

confirming that the concerned department or unit charged with servicing external debt

has been instructed to make payment of the Sale Price instalments on due dates.

(d) The payment to ITFC of the half of the total amount of the Administrative Fee specified

in Section 2.3 to this Agreement.

(e) Receipt of documents certifying the names and true signatures of the officers

authorized to sign legal and disbursement documents.

(f) A Tentative Disbursement Schedule.

13.2 If this Agreement shall not have entered into effect within 45 (Forty-Five) days from the date

of signature first above mentioned, this Agreement and all obligations of the Parties thereunder

shall terminate, unless ITFC after consideration of the reasons for the delay shall, subject to the

consent of the Majority Participants, establish a later date for the purposes of this Section.

SECTION-14 DELAY IN THE EXERCISE OF RIGHTS

No delay, forbearance or other indulgence on the part of ITFC in exercising any rights, which it may

have against the other party, shall constitute a waiver thereof.

SECTION-15 CANCELLATION AND SUSPENSION OF THE APPROVED AMOUNT

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Unless a commitment has been made with a third party by, or on behalf of, ITFC:

15.1 The Recipient may request ITFC to cancel the Approved Amount or any part thereof provided

that the Recipient shall compensate ITFC and the Participants for all costs and expenses

resulting from such cancellation.

15.2 ITFC may, by notice to the Recipient, suspend payment of the Purchase Price or any part thereof

in any of the following cases:

(a) Failure of the Recipient, or the Guarantor, to discharge its obligations to pay any

amount due to ITFC or to any other affiliated body to ITFC, under any agreement other

than this Agreement.

(b) The Recipient, or the Guarantor, shall have failed to perform any obligation under this

Agreement or the Guarantee, respectively.

(c) The Guarantee shall have, for any reason, ceased to be in full force and effect as the

legal, valid and binding obligation of the Guarantor.

(d) The Recipient, or the Guarantor, shall have declared a moratorium on the payment of

its indebtedness.

(e) In case of a Material Adverse Effect.

(f) In case of an Event of Default.

(g) In case of a Market Disruption Event.

(h) Any action shall have been taken or legal proceedings shall have been started for the

winding up, dissolution or reorganization of the PARCO or the Guarantor (otherwise

than for the purposes of an amalgamation or reconstruction while solvent on terms

approved by ITFC in writing) or for the appointment of a receiver, trustee or similar

officer of the Recipient or of any or all revenues and assets of the Recipient.

(i) An extraordinary situation shall have arisen which (i) shall make it, in the opinion of

ITFC, improbable that the Operation can be carried out by the Recipient, or (ii) shall

prevent the attainment of the purposes for which this Agreement is entered into.

(j) A representation made by the Recipient, the PARCO, or the Guarantor, or any

statement furnished and intended to be relied upon by ITFC in processing the Operation

for approval or for entering into this Agreement, shall have been incomplete or

incorrect in any material respect.

Payment of the Purchase Price by ITFC shall continue to be suspended in whole or in part, as

the case may be, until the event or events which gave rise to such suspension shall have ceased

to exist before the expiry of the time limit indicated in Section 15.3 or until ITFC shall have

notified the Recipient that the undertaking of ITFC to pay the Purchase Price has been restored,

whichever is earlier, provided, however, that in the case of any such notice of restoration, the

undertaking to pay the Purchase Price shall be restored only to the extent and subject to the

conditions specified in such notice, and no such notice shall affect or impair any right, power

or remedy of ITFC in respect of any other or subsequent event described in this Section.

15.3 If (a) the undertaking to pay the Purchase Price shall have been suspended with

respect to any part of the Approved Amount for a continuous period of 30

(Thirty) days or

(b) at any time ITFC determines, after consultation with the Recipient, that any

part of the Approved Amount will not be required to finance the Operation.

ITFC may give notice to the Recipient terminating the undertaking by ITFC to disburse such

part. That part of the Approved Amount shall be considered cancelled upon delivery of such

notice.

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SECTION-16 REPRESENTATIONS AND WARRANTIES

16.1 The Recipient represents and warrants to ITFC and acknowledges that ITFC has agreed to this

Agreement in reliance on the following representations and warranties:

(a) The Recipient has power to enter into this Agreement and to perform its obligations

hereunder and all action required to authorize the execution of this Agreement and the

performance by the Recipient of its obligations hereunder has been duly taken;

(b) the obligations expressed to be assumed by the Recipient in this Agreement are legal

and valid obligations binding on the Recipient in accordance with the terms;

(c) the execution of this Agreement and the Recipient’s performance of its obligations

hereunder do not constitute and will not result in any breach of any agreement, treaty

or law;

(d) all acts, conditions and things (including exchange control consents) required by the

laws of Pakistan to be done, have been fulfilled and performed in order:

(i) to enable the Recipient lawfully to enter into and perform the obligations

expressed to be assumed by it in this Agreement;

(ii) to ensure that the obligations expressed to be assumed by it in this Agreement

are legal, valid and enforceable; and

(iii) to make this Agreement admissible in evidence in Pakistan without further

steps or formalities have been done, fulfilled and performed in strict

compliance with the laws and Constitution of Pakistan.

(e) no action or administrative proceeding of or before any court or agency which might

have a material adverse effect on the financial condition of the Recipient has been

initiated or threatened;

(f) under the laws of Pakistan in force at the date of this Agreement, the claims of ITFC

against the Recipient under this Agreement will rank at least pari passu with the claims

of all other similar secured creditors for any external indebtedness of the Recipient.

16.2 The PARCO represents and warrants to ITFC and acknowledges that ITFC has agreed to this

Agreement in reliance on the following representations and warranties:

(a) the PARCO is duly established and validly existing under the laws of Pakistan and has

the corporate power and has obtained all required authorizations to own its assets,

conduct its business as presently conducted and to enter into, and comply with its

obligations under, this Agreement and the Transaction to which it is a party or will, in

the case of any Transaction document not executed as at the date of this Agreement,

when that Transaction document is executed, have the corporate power to enter into,

and comply with its obligations under, that Transaction document.

(b) each Transaction document to which the PARCO is a party has been, or will be, duly

authorized and executed by the PARCO and constitutes, or will when executed

constitute, a valid and legally binding obligation of the PARCO, enforceable in

accordance with its terms and the PARCO is not, nor will it be, a party to any agreement

other than the Transaction documents, and none of the Transaction documents has

been, or will be, amended or modified except as permitted under this Agreement.

(c) neither the making of any Transaction document to which the PARCO is a party nor

the compliance with its terms will conflict with or result in a breach of any of the terms,

conditions or provisions of, or constitute a default or require any consent under, any

indenture, mortgage, agreement or other instrument or arrangement to which the

PARCO is a party or which it is bound, or violate any of the terms or provisions of the

PARCO’s constitutive documents or any authorization, judgment, decree or order or

any statute, rule or regulation applicable to the PARCO.

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(d) (i) to the best of the PARCO’s knowledge, after due inquiry all the authorizations

(other than authorizations that are of a routine nature and are obtained in the

ordinary course of business) needed by the PARCO to conduct its business,

carry out the Transactions and execute, and comply with its obligations under,

this Agreement and each of the other Transaction documents to which it is a

party; and

(ii) except for rights that can reasonably be expected to be obtained on

commercially reasonable terms at the time required, the Transaction

documents contain all rights that are necessary for the conduct of the

obligations of the PARCO as contemplated under this Agreement.

(e) except for amendments reflecting capital increases, the PARCO’s constitutive

documents have not been amended since 31/12/2015G.

(f) neither the PARCO nor any of its property enjoys any right of immunity from set-off,

suit or execution with respect to its assets or its obligations under any Transaction

document.

(g) since 31/12/2015G, the PARCO:

(i) has not suffered any change that has a material adverse effect or incurred any

substantial loss or liability that is continuing; and

(ii) has not undertaken or agreed to undertake any substantial obligation that will

affect the PARCO’s ability to perform its obligations under this agreement.

(h) the financial statements of the PARCO for the period ending on 31/12/2015G:

(i) have been prepared in accordance with the accounting standards, and give a

true and fair view of the financial condition of the PARCO as of the date as of

which they were prepared and the results of the Recipient's operations during

the period then ended; and

(ii) disclose all liabilities (contingent or otherwise) of the PARCO or and the

reserves, if any, for such liabilities and all unrealized or anticipated liabilities

and losses arising from commitments entered into by the Recipient (whether

or not such commitments have been disclosed in such financial statements).

(i) the PARCO has good title to all of the assets purported to be owned by it, in all cases

free and clear of all liens that will affect the PARCO’s ability to perform its obligations

under this Agreement, other than permitted liens and no contracts or arrangements,

conditional or unconditional, exist for the creation by the PARCO of any lien;

(j) all tax returns and reports of the PARCO required by law to be filed have been duly

filed and all taxes, obligations, fees and other governmental charges upon the PARCO,

or its properties, or its income or assets, which are due and payable or to be withheld,

have been paid or withheld, other than those presently payable without penalty.

(k) the PARCO is not engaged in, to the best of its knowledge, after due inquiry, nor

threatened by, any litigation, arbitration or administrative proceedings, the outcome of

which could reasonably be expected to have a material adverse effect.

(l) no judgment or order has been issued which has or may reasonably be expected to have

a material adverse effect.

(m) to the best of its knowledge and belief after due inquiry, the PARCO is not in violation

of any statute or regulation of any authority.

(n) there are no ongoing, to the best knowledge of the PARCO after due inquiry, or

threatened, strikes, slowdowns or work stoppages by employees of the PARCO or any

contractor with respect to this Agreement.

(o) none of the representations and warranties in this Section omits any matter the omission

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of which makes any of such representations and warranties untrue or misleading in any

material respect.

(p) the PARCO shall not engage, through any person acting on its behalf, in any

Sanctionable Practices in connection with its business and operations, including the

procurement or the execution of any contract relating to this Agreement.

16.3 The Recipient and PARCO represent that they have not relied on any representation made by

ITFC as to the Sharia compliance of the Operation contemplated by this Agreement and have

independently made their own assessment as to such Sharia compliance.

16.4 Each representation and warranty is deemed to be repeated by the Recipient and PARCO on

the date of each Disbursement. It is deemed to be made by reference to the circumstances

existing at the time of the representation or warranty.

16.5 The Recipient further represents that necessary arrangements have been made with the State

Bank of Pakistan to remit currency and the State Bank of Pakistan has been instructed to make

payment of the Sale Price installments on due dates.

SECTION-17 EVENTS OF DEFAULT

17.1 If any of the events specified in this Section (Events of Default) shall have happened and be

continuing, ITFC may, by notice to the Recipient and the Guarantor, declare all the outstanding

Sale Price(s) due, and the same shall immediately be, due and payable (anything in this

Agreement notwithstanding) without any further notice:

(a) any default by the Recipient, or as the case may be by the Guarantor, shall have

occurred in the payment of any amount due hereunder, or otherwise, to ITFC and the

Participants, any of its affiliates, or any of the Participants, and such default shall have

continued for a period of 5 (Five) days.

(b) any default other than the default specified in (a) above shall have occurred in the

performance of any obligation of the Recipient, or the Guarantor, and any such default

shall have continued for a period of 10 (Ten) days.

(c) any representation or warranty confirmed or made by the Recipient, or the Guarantor,

in connection with the execution and delivery of this Agreement, the Guarantee, any

document provided hereunder or thereunder or in connection with any request for

Disbursement hereunder, shall be found to have been incorrect in any material respect

and shall continue to be incorrect for a period of 15 (Fifteen) days after notice thereof

shall have been given by ITFC to the Recipient and/or Guarantor.

(d) the Guarantor shall have convened a meeting, or shall have taken any action, for the

purpose of making any arrangement or composition with its creditors.

(e) the Guarantor shall have ceased temporarily or permanently, or shall have threatened

to cease, for any reason whatsoever, to carry on their business or any substantial part

thereof.

(f) the Recipient, or the Guarantor, shall have created or permitted to subsist any

encumbrances in respect of its external indebtedness without the consent of ITFC.

(g) the Recipient, or the Guarantor, shall have declared a moratorium upon its indebtedness

or any suspension in its payment obligations to any third party.

(h) the Recipient, or the Guarantor, shall have become unable to pay its debts as they fall

due, or if any indebtedness of the Recipient, or Guarantor, is declared to be due and

payable prior to its specified maturity or shall have become unable to make available

foreign currency required to pay foreign debts or shall otherwise have either of them

become insolvent; or any encumbrance shall have lawfully taken possession or a

receiver or trustee shall have been appointed of the whole or any part of the undertaking

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or assets of the Guarantor, or a distress or execution (or analogous process) shall have

been levied or enforced upon or issued out against any of the chattels or property of the

Guarantor and such distress or execution shall not have been discharged within 15

(Fifteen) days; or an order shall have been made or an effective resolution passed or

analogous proceedings taken for the Guarantor’s winding up, bankruptcy or

dissolution; or any other event shall have occurred which under any applicable law

would have an effect analogous to any of those events mentioned in this paragraph;

(i) any provision of this Agreement, or the Guarantee, becomes invalid or unenforceable.

(j) any event or circumstance shall have occurred, which ITFC believes might have a

material adverse effect on the ability of the Recipient, or the Guarantor, to perform or

comply with its obligations hereunder or under the Guarantee.

(k) if the Recipient ceases to be member in good standing or becomes ineligible to use the

resources of the International Monetary Fund.

(l) at any time, during the life of this Agreement, ITFC determines that any person or entity

has engaged in Sanction able Practices, without the Recipient having taken timely and

appropriate action satisfactory to ITFC to remedy the situation or to address such

practices when they occur.

17.2 If any Event of Default or any event, which with lapse of time or notice and lapse of time,

would become an Event of Default shall have happened, the Recipient shall immediately give

ITFC notice thereof by telex or facsimile, specifying the nature of such Event of Default and

any steps the Recipient is taking to remedy the same.

17.3 No course of dealing, and no delay in exercising, or omission to exercise, any right, power or

remedy accruing to ITFC and the Participants upon any Default hereunder or any other

agreement shall impair any such right, power or remedy or be construed to be a waiver thereof

or an acquiescence therein; nor shall the action of ITFC in respect of any such Default, or any

acquiescence by it therein, affect or impair any right, power or remedy of ITFC and the

Participants in respect of any other default.

SECTION-18 INDEMNITY

18.1 The Recipient hereby undertakes to indemnify ITFC (hereinafter referred to as “Indemnitee”),

on a full and grossed-up basis against, and agrees to protect, save and keep harmless, the

Indemnitee from any, and all obligations, fees, liabilities, losses, damages, penalties, demands,

actions, judgments and expenses, including reasonable legal fees and expenses (including such

legal fees and expenses incurred in connection with the enforcement of this Agreement), of

every kind and nature whatsoever imposed on, incurred by, or asserted against an Indemnitee

arising out of:

(a) ownership, possession, use, documentation, removal, return, or other applications or

dispositions of the Goods, including such as may arise from:

(i) any loss or damage to any property or death or injury to any person;

(ii) defects in the Goods which could have been discovered by a reasonable

inspection;

(iii) any claims based on strict liability in tort or otherwise;

(iv) any claims based on liability arising under the applicable environmental laws

or environmental approvals;

(v) any claim regarding title to the Goods;

(vi) any claim or dispute relating to any Purchase Contract concluded by the

Recipient on behalf of ITFC hereunder or any Letter of Credit established

pursuant to this Agreement; and

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(b) the occurrence of any default or any other failure on the part of the Recipient to perform

or comply with any term of this Agreement, or any document, agreement or contract

entered into in relation hereto or otherwise in relation to the Goods, but excluding any

claim based upon any failure on the part of ITFC to comply with its obligations under

this Agreement or any document, agreement or contract entered into by ITFC in

relation hereto or otherwise in relation to the Goods;

(c) the receipt of any payment from the Recipient otherwise than on a due date thereof; or

(d) any claims, encumbrances, security interests, and liens or legal processes regarding

ITFC’s title to or interests in the Goods.

18.2 The Recipient shall give ITFC prompt notice of any occurrence or condition known to the

Recipient as a consequence of which an Indemnitee is or is reasonably likely to be entitled to

indemnification. The indemnification provided in Section 18.1 above shall specifically apply

to and include claims or actions brought by or on behalf of any third party against ITFC and

the Participants, and the Recipient hereby expressly waives, as against the Indemnitee, any

immunity to which the Recipient might otherwise be entitled under any applicable laws. The

Recipient shall promptly upon request by the Indemnitee (but in any event within 15 (Fifteen)

days of such request) reimburse the Indemnitee for amounts expended by it in connection with

any of the foregoing or pay such amounts directly. The Recipient shall be subrogated to the

Indemnitee’s rights in any matter with respect to which the Recipient has actually reimbursed

the Indemnitee for amounts expended by it or has actually paid such amounts directly pursuant

to Section 18.1 or this Section 18.2. In case any action or proceeding is brought against an

Indemnitee in connection with any indemnified claim, the Indemnitee will, after receipt of

notice of the commencement of such action or proceeding, notify the Recipient thereof,

enclosing a copy of all papers served upon the Indemnitee. The Recipient may, and upon the

Indemnitee’s request, will resist and defend such action or proceeding at the Recipient’s

expense, or cause the same to be resisted or defended by counsel selected by the Recipient and

reasonably satisfactory to the Indemnitee. In the event of any failure by the Recipient to do so,

the Recipient shall pay all costs and expenses (including reasonable attorney’s fees and

expenses) incurred by the Indemnitee in connection with such action or proceeding.

18.3 The provisions of Sections 18.1 and 18.2 shall apply to the use of the Goods from the date of

the execution of this Agreement, and this Section 18.3 shall survive the expiry or earlier

termination of this Agreement and all documents, agreements and contracts entered into in

relation hereto or otherwise in relation to the Goods and are expressly made for the benefit of,

and are enforceable by the Indemnitee.

18.4 If any sum due from the Recipient under this Agreement or any award, order or judgment given

or made in relation hereto has to be converted from the currency (the “first currency”) in which

the same is payable under this Agreement or under such award, order or judgment into another

currency (the “second currency”) for the purpose:

(a) making or filing a claim or proof against the Recipient;

(b) obtaining an award, order or judgment in any court or tribunal or

(c) enforcing any award, order or judgment given or made in relation to this Agreement;

The Recipient shall indemnify and hold harmless the Indemnitee from and against any loss

suffered as a result of any difference between:

(i) the rate of exchange used for such purpose to convert the sum in question from the first

currency into the second currency; and

(ii) the rate or rates of exchange at which ITFC may in the ordinary course of business

purchase the first currency with the second currency upon receipt of a sum paid to it in

satisfaction, in whole or in part, of any such order, judgment, claim or proof.

Any amount due from the Recipient under this Section 18.4, shall be due as a separate debt,

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and shall not be affected by judgment being obtained for any other sums due under or in respect

of this Agreement, and the term “rate of exchange” includes any premium and costs of exchange

payable in connection with the purchase of the first currency with the second currency.

18.5 Payments pursuant to the Recipient’s obligations under this Section shall be made on demand.

SECTION-19 GOVERNING LAW-SETTLEMENT OF DISPUTES

19.1 This Agreement shall be governed by and construed in accordance with Islamic Sharia (as set

out in Sharia’s Standards published by the Accounting and Auditing Organization for Islamic

Financial Institutions and as interpreted by the Islamic Fiqh Academy of the Organization of

Islamic Cooperation or Islamic Development Bank Group Sharia Committee).

19.2 Any dispute between the Parties to this Agreement, and any claim by any such Party against

the other Party arising under the Agreement, which is not resolved by agreement of the Parties

within 30 (Thirty) days from the date of notice by one Party to the other Party, shall be finally

decided by an arbitration panel in accordance with the rules and procedures of the International

Islamic Centre for Reconciliation and Arbitration in Dubai, UAE.

19.3 The provisions for arbitration set forth in Section-19.2 shall be in lieu of any other procedure

for the determination of disputes between the Parties to this Agreement or any claim by such

Party against the other Party arising thereunder.

19.4 If within 30 (Thirty) days after counterparts of the award shall have been delivered to the

Parties, the award is not complied with, any Party may enter judgment upon, or institute a

proceeding to enforce the award, in any court of competent jurisdiction against the other Party,

may enforce such judgment by execution or may pursue any other appropriate remedy against

the other Party for the enforcement of the award or the provisions of this Agreement.

19.5 Service of any notice or process in connection with any proceedings under Section-19.2 or in

connection with any proceedings to enforce any award rendered pursuant to Section-19.2 may

be made in the manner provided in Section-20 to this Agreement. The Parties to this Agreement

waive any and all other requirements for the service of any such notice or process.

19.6 To the extent that the Recipient may in any jurisdiction claim for itself or its assets immunity

from suit, execution, attachment (whether in aid or execution, before award or judgment or

otherwise) or other legal process or to the extent that in any such jurisdiction there may be

attributed to itself or its assets such immunity (whether or not claimed), the Recipient hereby

irrevocably agrees not to claim and hereby irrevocably waives such immunity.

19.7 The Recipient as well as the Guarantor agrees that any arbitration award or judgment rendered

pursuant to this Agreement against it may be executed against its funds (assets) in any

jurisdiction. The Recipient as well as the Guarantor hereby irrevocably waives any objection it

may have to any suit, action or proceeding arising out of or relating to the enforcement of an

arbitration award under this Agreement, whether brought in any jurisdiction in which it has

funds (assets), and hereby further irrevocably waives any claim that any such suit, action or

proceeding brought in any jurisdiction has been brought in any inconvenient forum.

SECTION-20 NOTICES- REQUESTS

20.1 Any notice or request required to be given or made under this Agreement to either party shall

be in writing. Such notice or request shall be deemed to have been duly given or made when it

shall be delivered by hand, mail, cable, telex, fax or authenticated SWIFT message to the

address to which it is required or permitted to be given or made to such party at its address

specified in Section 20.2 hereof or at such other address which such addressee shall have

designated by notice to the party giving such notice or making such request.

20.2 For purposes of Section 20.1 above, each party hereto has given its addresses as follows:

For the International Islamic Trade Finance Corporation:

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P.O. Box: 55335, Jeddah-21534

Kingdom of Saudi Arabia

Telex: 601137 ISDB SJ

Tel: +966 12 636 1400

Fax: +966 12 637 1064

Email: [email protected]

For the Government of the Islamic Republic of Pakistan:

Ministry of Economic Affairs and Statistics (Economics Affairs Division)

Ministry of Economic Affairs and Statistics

Pak-Secretariat, Block C, Room 435

Islamabad, Pakistan

For the PAK-ARAB Refinery Limited (PARCO):

Corporate Headquarters, Korangi Creek Road

P.O. Box 12243, Karachi-75190, Pakistan

Tel: +92 21 35090100-25

Fax: +92 21 35090625

SECTION-21 CONFIDENTIALITY

Each of the Parties will at all times during the continuance of this Agreement and thereafter keep

confidential the terms and conditions of this Agreement and information acquired for approval purposes

and in consequence of this Agreement except for information which either of them may be bound to

disclose under compulsion of law, rules and procedure, to their professional advisers where reasonably

necessary for the performance of their professional services, or to counterparties where necessary for

approval purpose or carrying into effect of the purposes of this Agreement, provided that this obligation

to maintain confidentiality shall not apply in relation to any information once that information has

entered the public domain otherwise than in breach of this Agreement. All third parties to whom

confidential information is disclosed as permitted by this Section shall be informed of the confidential

nature of the information so disclosed and be obliged to keep such information confidential.

SECTION-22 MISCELLANEOUS

22.1 The headings in this Agreement are for convenience only and are not intended, and shall not be

construed, to alter, limit, or enlarge in any way the scope or meaning of the language contained

in this Agreement.

22.2 The Recitals and the Appendices form an integral part of this Agreement.

22.3 The person signing this Agreement on behalf of each Party hereby represents and warrants to

the other Party that he or she has the requisite legal power and authority to execute this

Agreement on behalf of the Party and bind the Party to the obligations herein.

22.4 This Agreement binds and benefits the respective successors and assignees of the Parties,

provided that neither of them may assign this Agreement in whole or in part without the prior

written consent of the other.

22.5 This Agreement may be executed in several counterparts, each of which is an original, but all

of which constitute the same agreement.

22.6 The date of this Agreement shall, for all purposes of this Agreement, be that appearing in the

Preamble hereto.

[END OF SECTIONS]

mailto:[email protected]

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Execution Page

For the International Islamic Trade Finance Corporation

IN WITNESS WHEREOF, the International Islamic Trade Finance Corporation through its duly

authorized representative has signed this Murabaha Agreement relating to Syndicated Murabaha





_____________________________________

Name:

Title:

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Execution Page

For the Government of the Islamic Republic of Pakistan

IN WITNESS WHEREOF, the Government of the Islamic Republic of Pakistan through its duly

authorized representative has signed this Murabaha Agreement relating to Syndicated Murabaha




THE ISLAMIC REPUBLIC OF PAKISTAN (REPRESENTED BY THE MINISTRY OF ECONOMIC AFFAIRS AND STATISTICS)

_____________________________________

Name:

Title:

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Execution Page

For PAK-ARAB Refinery Limited (PARCO)

IN WITNESS WHEREOF, PAK-ARAB Refinery Limited (PARCO) through its duly authorized

representative has signed this Murabaha Agreement relating to Syndicated Murabaha Financing




PAK-ARAB REFINERY LIMITED (PARCO)

_____________________________________

Name:

Title:

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Appendix-I LIST OF PARTICIPANTS WITH THEIR RESPECTIVE CONTRIBUTION

ITFC's Pakistan Syndication: PAK-011-USD 478 MM

# INSTITUTION COUNTRY

US$ MM

01

INTERNATIONAL ISLAMIC TRADE FINANCE CORPORATION (ITFC) ISLAMIC DEVELOPMENT BANK Group P O Box # 55335 JEDDAH 21534, SAUDI ARABIA Tel. (+966-12) 646 8418

Fax (+966-12) 637 10 64

SAUDI ARABIA 24.5

02

NATIONAL COMMERCIAL BANK (NCB) – Financial Institutions Department Corporate Banking Group P. O. Box # 3555 Jeddah 21481 Saudi Arabia Tel: +966 12 610 7083 Fax. + 966-12-263 1146

SAUDI ARABIA 100.0

03

BARWA BANK Head Office 1st Floor, Grand Hamad Street

P.O.Box 27778 Doha – Qatar Tel. +974-444-88-235 Fax. +974-444-88-508

QATAR 61.0

04

EMIRATES NBD (EMIRATES NATIONAL BANK OF DUBAI) Head Office Next to SHERATON CREEK Baniyas Road, Deira P O Box # 777 DUBAI, UNITED ARAB EMIRATES Telephone # (00-971-4) 201 2603 Fax # (00-971-4) 234 1970


40.0

05

ALLIED BANK LIMITED Office 52, Al Rossais Tower, Building # 283, Road 1704, Area - 317, Diplomatic Area Kingdom of Bahrain Tel. 00-973 1700 3480 Fax. +973 1700 3481

BAHRAIN 30.0

06

OPEC FUND FOR INTERNATIONAL DEVELOPMENT (OFID) Parkring 8 – P O Box # 995 A-1010 VIENNA, AUSTRIA

AUSTRIA 25.0

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Telephone # (00-43-1) 515 64-239 Fax # (00-43-1) 513 92 38

07

AJMAN BANK, PJSC P.O. Box: 7770 Ajman, UAE Tel: +971-6-7018587 Fax: +971-6-7018253


25.0

08

NATIONAL BANK OF PAKISTAN (NBP-BAHRAIN) Off-shore Banking Unit 51 MANAMA CENTER Government Avenue P. O. Box # 775 Manama, Bahrain T. +973-17-224 191 F. +973-17-224 4 11

BAHRAIN 25.0

09

SAMBA FINANCIAL GROUP P.O.Box 833 , Riyadh-11421 l Kingdom of Saudi Arabia Tel: +966 (0) 11 2117424

SAUDI ARABIA 20.0

10

COMMERCIAL BANK OF DUBAI P.O.Box 2668, Al Ittihad Street, Dubai, UAE Tel : + 971 4 2121827 / 828 Fax: + 971 4 2121870 / 2050148


15.0

11

UNITED BANK LTD. Park Place 17th Floor, Sheikh Zayed Road P. O. Box 1367, Dubai - UNITED ARAB EMIRATES T : +971 4 7093741 / 35 F : +971 4 3297040


15.0

12

UNION DE BANQUES ARABES ET FRANCAISES (UBAF) 190 Avenue Charles De Gaulle 92523 Neuilly Cedex FRANCE Telephone # (00-33-1) 4640 61 10 Fax # (00-33-1) 4640 65 16 / 4640 65 17

FRANCE 10.0

13

BANK AL FALAH LIMITED Bahrain Operations, “Bahrain Financial Harbour” West Tower, Level # 13 P O Box # 1375 MANAMA, BAHRAIN Telephone # (00-973-17) 2031 00 Ext. 108/ 203 108 Fax # (00-973-17) 22 43 00 /

BAHRAIN 10.0

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14

MCB BANK LIMITED Wholesale Banking Branch 3rd Floor, BKIC Building Diplomatic Area P O Box # 10164 MANAMA, BAHRAIN Telephone # (00-973-17) 53 33 06 / 53 39 77 Fax # (00-973-17) 53 33 08

BAHRAIN 10.0

15

JEDDAH CHAMBER OF COMMERCE AND INDUSTRY P.O.Box 1264 Jeddah 21431 Kingdom of Saudi Arabia T : +966-2-651-5111 Ext : 1050 F : +966-2-650-3600 / 651 – 7373

SAUDI ARABIA 10.0

16

BANK AL HABIB LTD. ALMOAYYED TOWER, AL SEEF DISTRICT P.O.BOX:50786, MANAMA, KINGDOM OF BAHRAIN Tel # 00973-17-564-044-1302

BAHRAIN 10.0

17

FEDERATED INVESTORS (UK) LLP Federated Project and Trade Finance Core Fund 1001 Liberty Avenue Pittsburgh, PA 15222 T: 001-412.288.2292 F: 001-412.992 4351

U.S.A 10.0

18

SHARJAH ISLAMIC BANK P.O. Box 4, Sharjah - United Arab Emirates Tel.: +971 6 599 9158


10.0

19

ISLAMIC DEVELOPMENT BANK Fael Khair Program Special Assistance Department P O Box # 5925 JEDDAH 21432, SAUDI ARABIA Telephone # (00-966-2) 646 67 44 Fax # (00-966-2) 646 78 31

SAUDI ARABIA 9.0

20

BANK AL HABIB LTD Kuala Lumpur, Johor Bahru & Labuan, Malaysia Mobile +60 17 8302011 Tel : +603 2298 7142

MALAYSIA 5.0

21 MCB BANK LIMITED Dubai Branch


4.0

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Al Reem Residency Building- Ground Floor, Zabeel Road P.O.Box. 6481, Al karama, Dubai, United Arab Emirates Tel: 00971-4 396-4472 EXT 215 Fax: 00971-4 -396-3210

22

JORDAN ISLAMIC BANK P.O. Box 926225, Amman Hashemite Kingdom of Jordan Tel : +962 6 5677377 Fax : +962 6 5666326

JORDAN 3.0

23

NATIONAL BANK OF PAKISTAN Filiale Frankfurt Frankfurt Branch Holzgraben 31 60313 Frankfurt am Main Germany Tel: +49 - (0)69 - 97 57 12 11 Fax: +49 - (0)69 - 97 40 91 71

GERMANY 2.5

24


Azzad Wise Capital Fund 1001 Liberty Avenue Pittsburgh, PA 15222 T: 001-412.288.2292 F: 001-412.992 4351

U.S.A 2.0

25

National Bank of Pakistan 128 Boulevard Haussmann 75008 Paris Tél. : +33 1 42 56 25 38 Fax : +33 1 45 63 66 04

FRANCE 1.5

26

Anfaal Capital P.O.Box 126575 Jeddah 21352 T : 966-9200-234-23 Ext. 142 F : 966-12-606-8787

SAUDI ARABIA 0.5

TOTAL AMOUNT:

478.0 Million

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Appendix-II FORM OF OFFER FROM THE RECIPIENT

[TO BE PRINTED AND PROVIDED ON THE LETTERHEAD]

International Islamic Trade Finance Corporation

P.O. Box: 55335

Jeddah-21534


OFFER

We, [insert Name of the Counterparty] (the “Recipient”), in conformity with the Murabaha Agreement

(the “Agreement”) concluded by us with International Islamic Trade Finance Corporation (“ITFC”) on

[insert the Agreement Date] in accordance with Section-7 of the Agreement, offer to buy the Goods of

which we have taken delivery on behalf of ITFC on the terms and conditions provided for in Section-

7.2 to Section-22 inclusive) of the Agreement:

(i) Quantity and general description: ___________

(ii) Name and address of Supplier: ___________

(iii) L/C No. (if any): ___________

(iv) Country of origin: ___________

(v) Delivery Date: ___________

(vi) Purchase Price: ___________

(vii) Sale Price: ___________

(viii) Due Date of Sale Price: ___________

FOR [insert the Name of the Recipient]

[Signature]

[Insert Name of the Signatory]

[Insert Title of the Signatory]

**********

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Appendix-III FORM OF ACCEPTANCE BY ITFC

[TO BE PRINTED AND PROVIDED ON THE LETTERHEAD]

[Insert Name of the Recipient]

[Insert Complete Address]

ACCEPTANCE

The International Islamic Trade Finance Corporation (ITFC) in response to [insert Name of the

Counterparty] (the Recipient)’s Offer communicated through your telex/fax number [insert ref.no. and

date], accepts the offer and hereby sells to the Recipient, on the terms and conditions provided for in

Section-7.2 to Section-22 (inclusive) of the Murabaha Agreement concluded between ITFC and the

Recipient on [insert the Agreement Date] the following Goods of which the Recipient has taken delivery

on behalf of ITFC:

(i) Quantity and general description: ___________

(ii) Name and address of Supplier: ___________

(iii) L/C No. (if any): ___________

(iv) Country of origin: ___________

(v) Delivery Date: ___________

(vi) Purchase Price: ___________

(vii) Sale Price: ___________

(viii) Due Date of Sale Price: ___________

For International Islamic Trade Finance Corporation

[Signature]

[Insert Name of the Signatory]

[Insert Title of the Signatory]

**********

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Appendix-IV FORM OF GUARANTEE

[TO BE PRINTED ON THE LETTERHEAD]

THIS GUARANTEE is executed on ___/___/____H (corresponding to ___/___/____G) by the

Ministry of Finance of the Government of the Islamic Republic of Pakistan (hereinafter referred to as

the “Guarantor”) in favor of the International Islamic Trade Finance Corporation (hereinafter referred

to as “ITFC”) in its capacity as the Mudarib of the USD478,000,000/- Syndicated Murabaha Financing

extended to the Government of the Islamic Republic of Pakistan (hereinafter referred to as “the

Recipient”).

WHEREAS,

A. Pursuant to the terms of a Murabaha Agreement (the “Agreement”) dated ____/____/______,

made between ITFC and the Recipient under which ITFC has agreed to purchase crude oil and

Refined Petroleum Products (the Goods) for an approved amount of USD478,000,000/-

(United States Dollars Nine Hundred Million) and to sell the same to the Recipient.

B. It is a condition precedent to the effectiveness of the Agreement that the Guarantor irrevocably

and unconditionally guarantees the performance by the Recipient of its obligations under the

Agreement up to the amount of USD478,000,000/- (United States Dollars Nine Hundred

Million) covering the Contributions of the Participants plus the related Mark-up.

NOW IT IS HEREBY AGREED AS FOLLOWS:

1) Definitions

In this Guarantee:

(a) unless otherwise defined herein and unless the context otherwise requires, the terms

defined in the Agreement shall have the same meaning herein,

(b) the Section headings are for ease of reference only, and;

(c) “External Indebtedness” means indebtedness of the Guarantor, which is or may be

payable or repayable in a currency other than the currency of Pakistan and/or to a

person resident or whose principal place of business or registered office is situated

outside Pakistan.

2) Representations and Warranties

The Guarantor represents and warrants that:

(a) it has power to enter into this Guarantee and to perform its obligations hereunder and

thereunder and all actions required to authorize the execution of this Guarantee, and

the performance by the Guarantor of its obligations hereunder and thereunder has been

duly taken;

(b) the Guarantor is not in breach of or default under any agreement to which it is a party

or which is binding on it or any of its assets to an extent or in a manner which might

have a material adverse effect on its financial condition;

(c) no action or administrative proceeding of or before any court or agency, which might

have a material adverse effect on the financial condition of the Guarantor currently

exists, has been started or threatened;

(d) no encumbrance given in respect of External Indebtedness exists over all or any of the

present or future revenues or assets of the Guarantor;

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(e) the execution of this Guarantee and the Guarantor's performance of its obligations

hereunder and thereunder (1) constitute legal, valid, binding and enforceable

obligations and (2) will not result in the existence of or oblige the Guarantor to create

any encumbrance over any of its present or future revenues or assets;

(f) the execution of this Guarantee and the Guarantor's performance of its obligations

hereunder do not constitute and will not result in any breach of any agreement, treaty

or law;

(g) under the laws of Pakistan in force at the date hereof, the Guarantor will not be required

to make any deduction or withholding from any payment it may make hereunder;

(h) under the laws of Pakistan in force at the date hereof, the claims of ITFC against the

Guarantor under this Guarantee will rank at least pari passu with the claims of all other

similar secured creditors for any External Indebtedness of the Guarantor;

(i) all acts, conditions and things (including exchange control consents) required by the

laws and Constitution of Pakistan to be done, fulfilled and performed in order (i) to

enable the Guarantor lawfully to enter into and perform the obligations expressed to be

assumed by it in this Guarantee, (ii) to ensure that the obligations expressed to be

assumed by it in this Guarantee are legal, valid and enforceable and (iii) to make this

Guarantee admissible in evidence in Pakistan without further steps or formalities have

been done, fulfilled and performed in strict compliance with the laws and Constitution

of Pakistan;

(j) the obligations expressed to be assumed by the Guarantor in this Guarantee constitute

legal, valid, binding and enforceable obligations binding on the Guarantor in

accordance with the terms hereof;

(k) the execution of this Guarantee constitutes, and the Guarantor's performance of its

obligations hereunder will constitute commercial acts done and performed for private

and commercial purposes;

(l) the Guarantor is not entitled to claim privilege or immunity from suit, execution,

attachment or other legal process in Pakistan;

(m) in any proceeding taken in Pakistan for the enforcement of this Guarantee the choice

of English Law (subject to the Principles of Islamic Sharia) as the governing law of

this Guarantee will be recognized and any judgment or award hereon will be enforced

under the laws of Pakistan;

The representations and warranties set out above are made on the date of this Guarantee and

are deemed to be repeated by the Guarantor (with reference to the facts and circumstances then

existing) on each day until ITFC certifies to the Guarantor that its obligations hereunder are

discharged in full.

3) Covenants

(a) The Guarantor shall:

(i) promptly inform ITFC of the occurrence of any event which is or may cause

(with the passage of time, the giving of notice or both) default of the

Guarantor's obligations hereunder including anything constituting a

misrepresentation under Section 2 above and upon receipt of a written request

to that effect from ITFC, confirm to ITFC that save as previously notified to

ITFC no such event has occurred; and

(ii) ensure that at all times the claims of ITFC against the Guarantor under this

Guarantee rank at least pari passu with the claims of all other similar secured

creditors for any External Indebtedness of the Guarantor.

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(b) The Guarantor shall not create or permit to subsist any encumbrance in respect of its

External Indebtedness over all or any of its present or future revenues or assets.

4) Guarantee

In consideration of ITFC making funds available to the Recipient under the Transaction

pursuant to the Agreement:

(a) The Guarantor hereby irrevocably and unconditionally guarantees to ITFC and/or its

successors, assignees and the Participants punctual payment of all amounts due and to

become due from the Recipient under or pursuant to the Agreement as and when the

same shall become due and payable in accordance with the terms thereof and agrees

that if and whenever the Recipient shall fail to pay any such sum the Guarantor shall

forthwith on written demand by ITFC pay an amount equal to such sum to ITFC for

account of the person or persons entitled thereto in the currency and in the manner

required of the Recipient by the Agreement.

(b) This Guarantee shall be a primary obligation in respect of sums due from the Recipient

and accordingly no person for whose benefit this Guarantee is given shall be obliged

before enforcing this Guarantee to make any demand of or to take any proceedings

against the Recipient or to enforce any other security held by it in respect of the

obligations of the Recipient under the Agreement.

(c) The Guarantor hereby agrees that its obligations hereunder shall not be in any way

discharged or impaired by any time or indulgence granted to the Recipient in relation

to all or any of the obligations assumed by the Recipient in the Agreement or any

variation of any provision thereof (whether or not the Guarantor shall be cognizant of

the same) or by any other circumstance which would or might (but for this provision)

constitute a legal or equitable discharge or defense of a guarantor.

(d) This Guarantee shall continue in full force and effect irrespective of the legality,

validity and enforceability of any provision of the Agreement and notwithstanding any

change in the status of the Recipient until all moneys at any time owed by the Recipient

under the Agreement and by the Guarantor hereunder have been paid and shall be in

addition to and not in substitution for or derogation of any other security held by any

person for whose benefit this Guarantee is given in respect of the obligations of the

Recipient under the Agreement.

(e) The Guarantor agrees that so long as any sums are or may be owed by the Recipient

under the Agreement, any rights which the Guarantor may at any time have by reason

of performance by the Guarantor of its obligations (i) to be indemnified by the

Recipient and/or (ii) to take the benefit (in whole or in part) of any security taken

pursuant to the Agreement by all or any of the persons for whose benefit this Guarantee

is given or otherwise to be subrogated to its rights against the Recipient shall be

exercised by the Guarantor in such manner and upon such terms as ITFC may require

(and in the meantime shall not be exercised) and further agrees to hold any moneys at

any time received by it as a result of the exercise of any such rights for and on behalf

and to the order of ITFC for application in or towards payment of any sums at any time

owed by the Recipient under the Agreement.

(f) A certificate delivered by ITFC to the Guarantor certifying the amount due from the

Recipient under the Agreement at the date of such certificate together with an extract

from the accounts maintained by ITFC under the Agreement of the amounts due from

the Recipient, shall be prima facie evidence of the amount due from the Recipient

thereunder.

(g) This Guarantee shall constitute a separate obligation of the Guarantor in respect of the

moneys due and to become due to each Participant through ITFC by the Recipient

under or pursuant to the Agreement and/or any related document.

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(h) Any settlement or discharge between ITFC and the Guarantor shall be conditional upon

no security or payment to ITFC on behalf of the Recipient or any other person being

avoided or reduced for any reason whatsoever and if any such security or payment is

so avoided or reduced, ITFC shall be entitled to recover the value or amount of any

such security or payment from the Guarantor subsequently as if such settlement or

discharge had not occurred.

(i) Without prejudice to ITFC's rights against the Recipient as the principal obligor, the

Guarantor shall as between ITFC on the one hand, and the Guarantor on the other be

deemed principal obligor in respect of its obligations hereunder and not merely surety.

Accordingly, the Guarantor shall not be discharged nor shall its liability be discharged

or impaired by any act, thing, omission or means whatsoever whereby its liability

would have been discharged if it had been merely a secondary obligor. This Guarantee

shall remain binding on the Guarantor notwithstanding that, all or any of the Recipient's

obligations under the Agreement may not for any reason be valid and binding or

capable of enforcement.

(j) The Guarantor hereby irrevocably agrees to indemnify and to keep ITFC indemnified

against all expenses, which ITFC may incur in proceeding against the Recipient and/or

the Guarantor, until such time as the Guarantor shall have discharged all its obligations

hereunder.

(k) The Agreement shall be binding on the Guarantor as though the Guarantor were a party

to the Agreement.

5) General

(a) The Guarantor hereby irrevocably and unconditionally agrees:

(i) to make available all US Dollar amounts needed by the Recipient to make any

payment due to ITFC under the Agreement,

(ii) that this undertaking shall become valid from the date hereof and shall continue

in full force and effect until all amounts owed by the Recipient to ITFC under

the Agreement shall have been paid in full in US Dollars,

(b) If (i) the Guarantor is required by law to make any deduction or withholding

from any sum payable by the Guarantor to any person hereunder or,

(ii) any person or ITFC on its behalf is required by law to make any

payment, on account of tax (other than tax on its overall net income)

or otherwise, on or in relation to any amount received or receivable by

such person hereunder, then the sum payable by the Guarantor in

respect of which such deduction, withholding or payment is required

to be made shall be increased to the extent necessary to ensure that,

after the making of such deduction, withholding or payment, such

person receives and retains (free from any liability in respect of any

such deduction, withholding or payment) a net sum equal to the sum

which it would have received and so retained had no such deduction,

withholding or payment been made.

(c) (i) If at any time the Guarantor is required by law to make any deduction or

withholding from any sum payable by it hereunder (or if thereafter there is any

change in the rates at which or the manner in which such deductions or

withholdings are calculated) the Guarantor shall promptly notify ITFC.

(ii) The Guarantor shall deliver to ITFC within 30 (Thirty) days after it has made

any payment from which it is required by law to make any deduction or

withholding a receipt issued by the applicable tax or other authorities

evidencing the deduction or withholding of all amounts required to be deducted

or withheld from such payment.

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(d) (i) The United States Dollar (the Dollar) is the currency of account and payment

for each and every sum at any time due from the Guarantor hereunder

(ii) If any sum due from the Guarantor under this Guarantee or any order, award

or judgment given or made in relation hereto has to be converted from a

currency (the “First Currency”) in which the same is payable hereunder or

under such order, award or judgment into another currency (the “Second

Currency”) for the purpose of:

(I) making or filing a claim or proof against the Guarantor,

(II) obtaining an order or judgment in any court or other tribunal, or

(III) enforcing any order, award or judgment given or made in relation

hereto, the Guarantor shall indemnify and hold harmless ITFC from

and against any loss suffered as a result of any discrepancy between:

(1) the rate of exchange used for such purpose to convert the sum

in question from the First Currency into the Second Currency

and

(2) the rate or rates of exchange at which ITFC may in the

ordinary course of business purchase the First Currency with

the Second Currency upon receipt of a sum paid to it in

satisfaction, in whole or in part, of any such order, award,

judgment, claim or proof.

(e) On each date on which an amount is due from the Guarantor hereunder the Guarantor

shall make the same available to ITFC by payment in US Dollars to such account as

may be designated by ITFC, each such payment to be made in time for value the same

day.

(f) All payments made by the Guarantor hereunder shall be made free and clear of and

without any deduction for or on account of (i) any set-off or counterclaim or (ii) any

tax or other matter.

(g) If at any time any provision hereof is or becomes illegal, invalid or unenforceable in

any respect under the law of any jurisdiction, neither the legality, validity or

enforceability of the remaining provisions hereof nor the legality, validity or

enforceability of such provision under the law of any other jurisdiction shall in any way

be affected or impaired thereby.

(h) (i) Each communication to be made hereunder shall be made in writing but, unless

otherwise stated, may be made by telex or telefax.

(ii) Any communication or document to be made or delivered by one party to the

other pursuant to this Guarantee shall (unless that party has by fifteen days'

written notice specified another address) be made or delivered to that other

party at the address identified below or (as the case may be) in the Agreement

and shall be deemed to have been made or delivered (in the case of any

communication by telex or telefax) on the date of dispatch or (in the case of

communication by letter) ten days after being deposited in the post first class

airmail postage prepaid in an envelope addressed to it at that address, Provided

that any communication or document to be made or delivered by the Guarantor

to or care of ITFC shall be effective only when received by ITFC.

(iii) Each communication and document made or delivered by one party to the other

pursuant to this Guarantee shall be in the English language.

(i) (i) This Guarantee shall be binding upon and inure to the benefit of each party

hereto and its successors and assigns.

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(ii) The Guarantor shall not assign or transfer all or any of its rights, benefits and

obligations hereunder.

(iii) ITFC may at any time assign to any one or more of the Participants or other

institutions or persons all or any part of its rights and benefits hereunder and in

that event, the assignee shall have the same rights against the Guarantor as it

would have had if it had been a party hereto.

(iv) ITFC may disclose to a potential assignee or to any person, who may otherwise

enter into contractual relations with ITFC in relation to this Guarantee, such

information about the Guarantor, as ITFC shall consider appropriate.

(j) (i) The Guarantor hereby consents generally in respect of any legal action or

proceedings arising out of or in connection with this Guarantee to the giving

of any relief or the issue of any process in connection with such action or

proceedings including, without limitation, the making, enforcement or

execution against any property whatsoever (irrespective of its use or intended

use) of any order, award or judgment which may be made or given in such

action or proceedings.

(ii) to the extent that the Guarantor may in any jurisdiction claim for itself or its

assets immunity from suit, execution, attachment (whether in aid or execution,

before award or judgment or otherwise) or other legal process or to the extent

that in any such jurisdiction there may be attributed to itself or its assets such

immunity (whether or not claimed), the Guarantor hereby irrevocably agrees

not to claim and hereby irrevocably waives such immunity.

(k) This Guarantee shall be governed by and construed in accordance with English Law in

so far as English Law is not contrary to the Principles of Islamic Sharia (as set out in

Sharia Standards published by the Accounting and Auditing Organization of Islamic

Financial Institutions and as interpreted by the Islamic Fiqh Academy of the

Organization of Islamic Cooperation). If any provisions of English Law is applicable

to this Guarantee is contrary to the Principles of Islamic Sharia, the Principles of

Islamic Sharia shall prevail.

(l) Any dispute relating to this Guarantee, which is not settled amicably within 30 (Thirty)

days, shall be referred to arbitration. For this purpose, all provisions of Sections 19.2,

19.3, 19.4 and 19.6 of the Agreement shall apply as if specifically incorporated herein.

By Name: _____________________

Designation: _____________________

Signature: _____________________

***********

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Appendix-V FORM OF OPINION OF COUNSEL TO THE GOVERNMENT OF THE

ISLAMIC REPUBLIC OF PAKISTAN

[TO BE PRINTED ON THE LETTERHEAD]

International Islamic Trade Finance Corporation

P.O. Box: 55335

Jeddah-21534


Dear Sirs:

In my official capacity as Counsel to the Government of the Islamic Republic of Pakistan (the

“Recipient”) , I have examined originals (or copies) certified or otherwise identified to my satisfaction

of the following documents relating to the Murabaha Agreement dated ___/___/____H (corresponding

to ___/___/____G), (the “Agreement”) providing for Murabaha financing in an approved amount of

USD478,000,000 (U.S. Dollars Four Hundred Seventy-Eight Million) (the “Murabaha Financing”) for

the purchase of Crude Oil and Refined Petroleum Products (the “Goods”) to the Recipient as specified

in the Agreement with the Guarantee of the Ministry of Finance of the Government of the Islamic

Republic of Pakistan (the “Guarantor”);

(i) The Agreement;

(ii) Guarantee by the Guarantor (the “Guarantee”) in Appendix-IV to the Agreement;

(iii) Such other documents as I have deemed necessary or appropriate as a basis for the

opinions expressed herein.

The opinions expressed herein are limited to questions arising under the laws of Pakistan and its political

subdivisions and I do not purport to express an opinion on any question arising under the laws of any

other jurisdiction.

All terms defined in the Agreement and used but not defined herein have the meanings assigned to them

in the Agreement.

Subject to the foregoing, it is my opinion that:

(a) The Recipient and the Guarantor have the power and authority to own their property,

to conduct their business as currently conducted and to consummate the transactions

contemplated in the Agreement and the Guarantee.

(b) The Recipient and the Guarantor have taken all necessary actions, to authorize the

execution and delivery of the Agreement, the Guarantee, and all other documents to be

executed and delivered by them in connection with the Agreement and the Guarantee,

the performance of their obligations under the Agreement and the Guarantee and the

consummation of the transactions contemplated in the Agreement and the Guarantee.

(c) The Agreement has been duly executed and delivered by the Recipient and constitutes

a legal, valid and binding obligation of the Recipient enforceable against the Recipient

in accordance with its terms.

(d) The Guarantee has been duly executed and delivered by the Guarantor and constitutes

legal, valid and binding obligations of the Guarantor, enforceable against the Guarantor

in accordance with the terms thereof irrespective of the legality, validity or

enforceability of any provision of the Agreement.

(e) All corporate and governmental authorizations and actions of any kind necessary to

authorize or required for the validity or enforceability of the obligations contemplated

under the Agreement and the Guarantee against the Recipient and the Guarantor,

respectively, have been obtained or performed and are valid and subsisting in full force

and effect.

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(f) The PAK-ARAB Refinery Limited (PARCO) has the power and authority to conduct

its business as currently conducted and to consummate the transactions contemplated

in the Agreement.

(g) PARCO has taken all necessary action, to authorize the execution and delivery of the

Agreement and all other documents to be executed and delivered by it in connection

with the Agreement, the performance of its obligations under the Agreement and the

consummation of the transactions contemplated in the Agreement.

(h) No event has occurred, and is continuing, that constitutes, or that with the giving of

notice or the lapse of time or both, would constitute a default under any agreement or

instrument evidencing any obligation of the Recipient, and no such event will occur

upon the making of any disbursement under the Agreement.

(i) No event has occurred and is continuing that constitutes, or that, with the giving of

notice or the lapse of time or both, would constitute, a default under any agreement or

instrument evidencing any obligation of the Guarantor, and no such event will occur

upon the execution by the Guarantor of the Guarantee.

(j) No consent of, approval of, or notice to, any creditor of the Recipient or the Guarantor,

is required by the terms of any agreement, or instrument evidencing any obligations of

the Recipient or the Guarantor, for the execution or delivery of, or the performance of

the obligations of the Recipient or the Guarantor under the Agreement and the

Guarantee or the consummation of the transactions contemplated in the Agreement and

the Guarantee, and that execution, delivery, performance and consummation will not

result in any breach or violation of, or constitute a default under, the Constitution of

the Islamic Republic of Pakistan or any agreement, instrument, judgment or order

known to me, or any statute, rule, regulation or law, applicable to the Recipient or to

any of its property.

(k) No further governmental consents are required for remittance of the proceeds under the

Guarantee.

(l) There are no actions or proceedings pending or, to my knowledge, threatened, the

adverse determination of which might have a materially adverse effect on the financial

condition of the Recipient or the Guarantor or impair the ability of the Recipient or the

Guarantor to perform their obligations under, or affect the validity or enforceability of,

the Agreement and the Guarantee.

(m) The Recipient and the Guarantor have good title to their property free and clear of all

liens and other encumbrances, and its obligations under the Agreement and the

Guarantee rank at least pari passu with all their other similar secured creditors for any

external indebtedness.

(n) The execution and delivery of the Agreement and the Guarantee are not subject to any

tax, duty, fee or other charge, including, without limitation, any registration or transfer

tax, stamp duty or similar levy, imposed by or within Pakistan or any political

subdivision or taxing authority thereof or therein.

(o) Neither the Recipient, nor the Guarantor, nor their property have any right of immunity

on grounds of sovereignty or otherwise from jurisdiction, attachment (before or after

judgment) or execution in respect of any action or proceeding relating in any way to

the Agreement and the Guarantee that may be brought in the courts of Pakistan.

(p) The execution and delivery of the Agreement and the Guarantee by the Recipient and

the Guarantor, respectively, and performance of their obligations thereunder constitute

commercial transactions.

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(q) The choice by the parties to the Agreement of the Islamic Sharia as governing law, and

the agreement of the parties to settle disputes arising under the Agreement by

Arbitration, is legal, valid and binding on the Recipient.

(r) The governing law stated in the Guarantee is legal, valid and binding.

(s) It is not necessary to ensure the legality, validity, enforceability or admissibility in

evidence of the Agreement or the Guarantee, in the courts of Pakistan, that they be

filed, recorded, registered or enrolled with any court or government agency of or in

Pakistan or stamped with any stamp or similar transaction tax.

(t) It is not necessary, under the laws and Constitution of Pakistan in order to enable ITFC

to enforce its rights under the Agreement and the Guarantee or by reason of the

execution of the Agreement and the Guarantee or the performance by ITFC of its

obligations thereunder that ITFC should be licensed, qualified or entitled to carry on

business in Pakistan.

(u) ITFC will not be deemed to be resident, domiciled, to carry on business or subject to

taxation in Pakistan by reason only of the execution, performance and/or enforcement

of the Agreement or the Guarantee, the purchase of the Goods by ITFC and the sale

thereof to the Recipient pursuant to the Agreement, and no withholding taxes will be

imposed on any amounts otherwise receivable by ITFC under the Agreement.

(v) Any award given, or any decision made by an Arbitration Tribunal with respect to the

Agreement or the Guarantee shall be enforceable in Pakistan.

This opinion may be relied upon by ITFC and each Participant, its successors and assigns.

Very truly yours,

[Name| Title| Signature]

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