CONFORMED COPY




                                               LOAN NUMBER 8077-HR




        Guarantee Agreement

(Additional Financing for Trade and Transport Integration Project)



                             between


                   REPUBLIC OF CROATIA



                               and



     INTERNATIONAL BANK FOR RECONSTRUCTION
                AND DEVELOPMENT



                    Dated September 14, 2011
                                                             LOAN NUMBER 8077-HR

                                GUARANTEE AGREEMENT

        AGREEMENT, dated September 14, 2011, entered into between REPUBLIC OF
CROATIA (“Guarantor�) and INTERNATIONAL BANK FOR RECONSTRUCTION
AND DEVELOPMENT (“Bank�) (“Guarantee Agreement�) in connection with the Loan
Agreement of same date between the Bank and PORT OF PLOCE AUTHORITY
(“Borrower�) (“Loan Agreement�). The Guarantor and the Bank hereby agree as
follows:

             ARTICLE I – GENERAL CONDITIONS; DEFINITIONS

      Section 1.01. The General Conditions (as defined in the Appendix to the Loan
Agreement) constitute an integral part of this Agreement.

        Section 1.02. Unless the context requires otherwise, the capitalized terms used in
this Agreement have the meanings ascribed to them in the General Conditions or in the
Loan Agreement.

              ARTICLE II – GUARANTEE; PROVISION OF FUNDS

        Section 2.01. The Guarantor declares its commitment to the objectives of the
Project. To this end, without limitation or restriction upon any of its other obligations
under the Guarantee Agreement, the Guarantor hereby unconditionally guarantees, as
primary obligor and not as surety merely, the due and punctual payment of all Loan
Payments payable by the Borrower pursuant to the Loan Agreement, and the punctual
performance of all the other obligations of the Borrower set forth or referred to in the
Loan Agreement.

        Section 2.02. Without limitation or restriction upon the provisions of Section
2.01 of this Agreement, the Guarantor specifically undertakes, whenever there is
reasonable cause to believe that the funds available to the Borrower will be inadequate to
meet the estimated expenditures required for the carrying out of the Project, promptly to
provide the Borrower with the funds needed to meet such expenditures.

         Section 2.03. The Guarantor shall implement the actions set forth in the Letter of
Development Policy in accordance with the time table set forth in said letter, including,
but not limited to, the following undertakings:

        (a)     the Guarantor shall take all necessary measures to reduce the state
ownership in Luka Ploce to no more than twenty percent (20%), in accordance with its
existing laws and regulations and in consultation with the Bank. This process shall be
based on fair market value principles and be completed in due time to enable Luka Ploce
                                          -2-


to secure sufficient financing, on commercial terms, for the purchase of equipment for the
new terminals to be constructed under Part A of the Original Project.

         (b)     The Guarantor shall provide financing, through adequate budgetary
allocations during Project implementation, for upgrading railway infrastructure in Ploce
in accordance with the plan agreed upon with the Bank.

        Section 2.04. The Guarantor’s obligations stipulated in Section (f) of the Letter
of Development Policy are extended to cover the Project implementation period until the
Closing Date.

                 ARTICLE III –REPRESENTATIVE; ADDRESSES

        Section 3.01. The Guarantor’s Representative is its Minister of Finance.

        Section 3.02. The Guarantor’s Address is:

                Minister of Finance
                Ministry of Finance
                KatanÄ?ićeva 5
                Zagreb, Republic of Croatia

                Telex:                  Facsimile:

                862-21215
                862-21833               (385-1) 4922-598

        Section 3.03. The Bank’s Address is:

                International Bank for
                 Reconstruction and Development
                1818 H Street, N.W.
                Washington, D.C. 20433
                United States of America

                Cable:                  Telex:                   Facsimile:

                INTBAFRAD               248423 (MCI) or          (202) 477-6391
                Washington, D.C.         64145 (MCI)
                               -3-


       AGREED at Zagreb, Republic of Croatia, as of the day and year first
above written.


                             REPUBLIC OF CROATIA




                             By /s/ Martina Dalic
                                                    Authorized Representative


                             INTERNATIONAL BANK FOR
                              RECONSTRUCTION AND DEVELOPMENT




                             By /s/ Hongjoo Hahm
                                                    Authorized Representative