Page 1 CONFORMED COPY LOAN NUMBER 7705-CN Loan Agreement (Shanxi Coal Bed Methane Development and Utilization Project) between PEOPLE’S REPUBLIC OF CHINA and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Dated July 2, 2009 Page 2 LOAN AGREEMENT AGREEMENT dated July 2, 2009, between PEOPLE’S REPUBLIC OF CHINA (“Borrower”) and INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT (“Bank”). The Borrower and the Bank hereby agree as follows: ARTICLE I – GENERAL CONDITIONS; DEFINITIONS 1.01. The General Conditions (as defined in the Appendix to this Agreement) constitute an integral part of this Agreement. 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 Appendix to this Agreement. ARTICLE II – LOAN 2.01. The Bank agrees to lend to the Borrower, on the terms and conditions set forth or referred to in this Agreement, the amount of eighty million Dollars ($80,000,000), as such amount may be converted from time to time through a Currency Conversion in accordance with the provisions of Section 2.07 of this Agreement (“Loan”), to assist in financing the project described in Schedule 1 to this Agreement (“Project”). 2.02. The Borrower may withdraw the proceeds of the Loan in accordance with Section IV of Schedule 2 to this Agreement. 2.03. The Front-end Fee payable by the Borrower shall be equal to one quarter of one percent (0.25%) of the Loan amount. 2.04. The interest payable by the Borrower for each Interest Period shall be at a rate equal to LIBOR for the Loan Currency plus the Variable Spread; provided, that upon a Conversion of all or any portion of the principal amount of the Loan, the interest payable by the Borrower during the Conversion Period on such amount shall be determined in accordance with the relevant provisions of Article IV of the General Conditions. Notwithstanding the foregoing, if any amount of the Withdrawn Loan Balance remains unpaid when due and such non-payment continues for a period of thirty (30) days, then the interest payable by the Borrower shall instead be calculated as provided in Section 3.02(d) of the General Conditions. 2.05. The Payment Dates are March 15 and September 15 in each year. Page 3 2 2.06. The principal amount of the Loan shall be repaid in accordance with the amortization schedule set forth in Schedule 3 to this Agreement. 2.07. (a) The Borrower may at any time request any of the following Conversions of the terms of the Loan in order to facilitate prudent debt management: (i) a change of the Loan Currency of all or any portion of the principal amount of the Loan, withdrawn or unwithdrawn, to an Approved Currency; (ii) a change of the interest rate basis applicable to all or any portion of the principal amount of the Loan from a Variable Rate to a Fixed Rate, or vice versa; and (iii) the setting of limits on the Variable Rate applicable to all or any portion of the principal amount of the Loan withdrawn and outstanding by the establishment of an Interest Rate Cap or Interest Rate Collar on the Variable Rate. (b) Any conversion requested pursuant to paragraph (a) of this Section that is accepted by the Bank shall be considered a “Conversion”, as defined in the General Conditions, and shall be effected in accordance with the provisions of Article IV of the General Conditions and of the Conversion Guidelines. (c) Promptly following the Execution Date for an Interest Rate Cap or Interest Rate Collar for which the Borrower has requested that the premium be paid out of the proceeds of the Loan, the Bank shall, on behalf of the Borrower, withdraw from the Loan Account and pay to itself the amounts required to pay any premium payable in accordance with Section 4.05(c) of the General Conditions up to the amount allocated from time to time for the purpose in the table in Section IV of Schedule 2 to this Agreement. ARTICLE III – PROJECT 3.01. The Borrower declares its commitment to the objectives of the Project. To this end, the Borrower shall cause the Project Implementing Entity to carry out the Project in accordance with the provisions of Article V of the General Conditions and the Project Agreement. 3.02. Without limitation upon the provisions of Section 3.01 of this Agreement, and except as the Borrower and the Bank shall otherwise agree, the Borrower shall ensure that the Project is carried out in accordance with the provisions of Schedule 2 to this Agreement. ARTICLE IV – REMEDIES OF THE BANK Page 4 3 4.01. The Additional Events of Suspension consists of the following, namely, that: (a) any party to the Subsidiary Loan Agreement shall have failed to perform any of its obligations thereunder; and (b) SECBMIH’s charter has been amended or suspended so as to affect materially and adversely the ability of SECBMIH to perform any of its obligations under the Subsidiary Loan Agreement. ARTICLE V – EFFECTIVENESS 5.01. The Effectiveness Deadline is the date ninety (90) days after the date of this Agreement. ARTICLE VI – REPRESENTATIVE; ADDRESSES 6.01. The Borrower’s Representative is the Borrower’s Minister of Finance. 6.02. The Borrower’s Address is: Ministry of Finance Sanlihe Beijing 100820 People’s Republic of China Facsimile: (86-10) 6855-1125 6.03. 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 address: Telex: Facsimile: INTBAFRAD 248423(MCI) or 1-202-477-6391 Washington, D.C. 64145(MCI) Page 5 4 AGREED at Beijing, People’s Republic of China, as of the day and year first above written. PEOPLE’S REPUBLIC OF CHINA By /s/ Zheng Xiaosong Authorized Representative INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ David Dollar Authorized Representative Page 6 5 SCHEDULE 1 Project Description The objective of the Project is to assist Shanxi Province in increasing the production and utilization of CBM/CMM to replace coal as a fuel for thermal use and to reduce GHGs and local air pollutants associated with coal combustion. The Project consists of the following parts: Part A: CBM and LNG Development 1. Exploration and development of about 350 vertical CBM production wells with an estimated annual production capacity of about 250 million Nm3. 2. Construction of about 135 kilometers (km) gas collection pipelines, about 3 CBM gathering stations, and about 16 km of gas transmission pipelines. 3. Construction of a LNG plant consisting of four (4) modular with individual production capacity of about 50,000 tons per year. Part B: Institutional Strengthening and Capacity Building 1. Strengthening the capacity of SECBMIH in constructing and operating the facilities under the Project efficiently and safely and expanding its business activities in the area of CBM/CMM development. 2. Strengthening the capacity of Shanxi Province in developing and implementing policies to scale up the CBM/CMM industry in Shanxi Province. Page 7 6 SCHEDULE 2 Project Execution Section I. Implementation Arrangements Financing Arrangements 1 . The Borrower shall make available the proceeds of the Loan to the Project Implementing Entity, under the following principal terms: (a) The principal amount shall be made available in Dollars. (b) The principal amount so made available, including an amount equal to the Front-end Fee paid pursuant to Section 2.03 of this Agreement, shall be recovered over a period of twenty (20) years, inclusive of a grace period of five (5) years. (c) Interest shall be charged on such principal amount withdrawn and outstanding from time to time at a rate equal to the rate of interest applicable from time to time to the Loan pursuant to Section 2.04 of this Agreement. (d) A Front-end Fee shall be charged at a rate equal to the rate paid by the Borrower to the Bank pursuant to Section 2.03 of this Agreement. Anti-Corruption 2. The Borrower shall ensure that the Project is carried out in accordance with the provisions of the Anti-Corruption Guidelines. Section II. Project Monitoring Reporting and Evaluation A. Project Reports 1. The Borrower shall monitor and evaluate the progress of the Project and prepare Project Reports in accordance with the provisions of Section 5.08 of the General Conditions and on the basis of the indicators set forth in Annex B to the Schedule of the Project Agreement. Each Project Report shall cover the period of one calendar semester, and shall be furnished to the Bank not later than forty-five (45) days after the end of the period covered by such report. Page 8 7 B. Financial Management, Financial Reports and Audits 1. The Borrower shall maintain or cause to be maintained a financial management system in accordance with the provisions of Section 5.09 of the General Conditions. 2. Without limitation on the provisions of Part A of this Section, the Borrower shall prepare and furnish, or cause to be prepared and furnished, to the Bank as part of the Project Report after the end of each calendar semester, interim unaudited financial reports for the Project covering the semester, in form and substance satisfactory to the Bank. 3. The Borrower shall have its Financial Statements audited in accordance with the provisions of Section 5.09(b) of the General Conditions. Each audit of the Financial Statements shall cover the period of one (1) fiscal year of the Borrower. The audited Financial Statements for each such period shall be furnished to the Bank not later than six (6) months after the end of such period. Section III. Procurement A. General 1. Goods and Works . All goods and works required for the Project and to be financed out of the proceeds of the Loan shall be procured in accordance with the requirements set forth or referred to in Section I of the Procurement Guidelines, and with the provisions of this Section. 2. Consultants’ Services . All consultants’ services required for the Project and to be financed out of the proceeds of the Loan shall be procured in accordance with the requirements set forth or referred to in Sections I and IV of the Consultant Guidelines and with the provisions of this Section. 3. Definitions . The capitalized terms used below in this Section to describe particular procurement methods or methods of review by the Bank of particular contracts refer to the corresponding method described in the Procurement Guidelines, or Consultant Guidelines, as the case may be. B. Particular Methods of Procurement of Goods and Works 1. International Competitive Bidding . Except as otherwise provided in paragraph 2 below, goods and works shall be procured under contracts awarded on the basis of International Competitive Bidding procedures. The provisions of paragraphs 2.55 and 2.56 of the Guidelines and Appendix 2 thereto shall apply to goods manufactured in the territory of the Borrower (other than goods Page 9 8 manufactured in the Hong Kong Special Administrative Region or the Macau Special Administrative Region of the Borrower). 2. Other Methods of Procurement of Goods and Works . The following table specifies the methods of procurement, other than International Competitive Bidding, which may be used for goods and works. The Procurement Plan shall specify the circumstances under which such methods may be used. Procurement Method (a) National Competitive Bidding. In addition, the procedures to be followed for National Competitive Bidding shall be those set forth in the Law on Tendering and Bidding of the Pe ople’s Republic of China promulgated by Order No.21 of the President of the People’s Republic of China on August 30, 1999, with the following clarifications required for compliance with the Procurement Guidelines: (i) All invitations to prequalify or to bid shall be advertised in a newspaper of national circulation in the Borrower’s country, except for civil works contracts that are estimated cost less than $2,000,000 equivalent each and for goods contracts that are estimated to cost less than $300,000 equivalent each, which may be advertised in a provincial daily newspaper. Such advertisement shall be made in sufficient time for prospective bidders to obtain prequalification or bidding documents and prepare and submit their responses. In any event, a minimum of thirty (30) days shall be given to bidders between the date of advertisement in such newspaper and the deadline for submission of bids, and the advertisement and bidding documents shall specify the deadline for such submission. (ii) Qualification requirements of bidders and the method of evaluating the qualification of each bidder shall be specified in detail in the bidding documents. (iii) All bidders that meet the qualification criteria set out in the pre- qualification document shall be allowed to bid and there shall be no limit on the number of pre-qualified bidders. (iv) All bidders shall be required to provide security in an amount sufficient to protect the Borrower or the Project Implementing Entity, as the case may be, in case of breach of contract by the contractor, and the bidding documents shall specify the required form and amount of such security. Page 10 9 (v) Bidders will be allowed to submit bids by mail or by hand. The time for opening of all bids shall be the same as the deadline for receipt of such bids. (vi) All bids shall be opened in public; all bidders shall be offered an opportunity to be present (either in person or through their representatives) at the time of bid opening, but bidders shall not be required to be present at the bid opening. (vii) All bid evaluation criteria shall be disclosed in the bidding documents and quantified in monetary terms or expressed in the form of pass/fail requirements. (viii) No bid may be rejected solely on the basis that the bid price falls outside any standard contract estimate, or margin or bracket of average bids established by the Borrower or the Project Implementing Entity, as the case may be. (ix) Each contract shall be awarded to the lowest evaluated responsive bidder, that is, the bidder who meets the appropriate standards of capability and resources and whose bid has been determined: (A) to be substantially responsive to the bidding documents; and (B) to offer the lowest evaluated cost. The winning bidder shall not be required, as a condition of award, to undertake responsibilities for work not stipulated in the bidding documents or otherwise to modify the bid as originally submitted. (x) Each contract financed with the proceeds of the Loan shall provide that the suppliers and contractors shall permit the Bank, at its request, to inspect their accounts and records relating to the performance of the contract and to have said accounts and records audited by auditors appointed by the Bank. (xi) Government owned enterprises in the Borrower ’s country may be permitted to bid or submit a proposal of goods and works if they can establish that they: (i) are legally and financially autonomous; (ii) operate under commercial law; and (iii) are not a dependent agency of the agency conducting the procurement. (xii) Re-bidding should not be allowed solely because the number of bids is less than three (3), and rejection of all bids or rebidding shall not take place without the Bank’s prior written concurrence. Page 11 10 (xiii) The results of bid evaluation and contract award shall be published in the national press or provincial press (as provided under sub-paragraph (i) above) or official gazette or a free and open access website and shall identify the name and offered price of the winning bidder, as well as the duration and summary scope of the awarded contract. (xiv) Shanxi shall have in place provisions for bidders to protest. (b) Shopping C. Particular Methods of Procurement of Consultants’ Services 1. Quality- and Cost-based Selection . Except as otherwise provided in paragraph 2 below, consultants’ services shall be procured under contracts awarded on the basis of Quality- and Cost-based Selection. For purposes of paragraph 2.7 of the Consultant Guidelines, the short list of consultants for services estimated to cost less than $300,000 equivalent per contract may comprise entirely national consultants. 2. Other Methods of Procurement of Consultants’ Services . The following table specifies the methods of procurement, other than Quality- and Cost-based Selection, which may be used for consultants’ services. The Procurement Plan shall specify the circumstances under which such methods may be used. Procurement Method (a) Quality-based Selection (b) Selection based on Consultants’ Qualifications (c) Single-source Selection (d) Procedures set forth in paragraphs 5.2 and 5.3 of the Consultant Guidelines for the Selection of Individual Consultants D. Review by the Bank of Procurement Decisions The Procurement Plan shall set forth those contracts which shall be subject to the Bank’s Prior Review. All other contracts shall be subject to Post Review by the Bank. Page 12 11 Section IV. Withdrawal of Loan Proceeds A. General 1. The Borrower may withdraw the proceeds of the Loan in accordance with the provisions of Article II of the General Conditions, this Section, and such additional instructions as the Bank shall specify by notice to the Borrower (including the “World Bank Disbursement Guidelines for Projects” dated May 2006, as revised from time to time by the Bank and as made applicable to this Agreement pursuant to such instructions), to finance Eligible Expenditures as set forth in the table in paragraph 2 below. 2. The following table specifies the categories of Eligible Expenditures that may be financed out of the proceeds of the Loan (“Category”), the allocation of the amounts of the Loan to each Category, and the percentage of expenditures to be financed for Eligible Expenditures in each Category. Category Amount of the Loan Allocated (expressed in USD) Percentage of Expenditures to be financed (inclusive of Taxes) (1) Goods and civil works 78,600,000 100% (2) Consultants services, training, and workshops 1,200,000 100% (3) Front-end Fee 200,000 Amount payable pursuant to Section 2.03 of this Agreement in accordance with Section 2.07(b) of the General Conditions (4) Premium for Interest Rate Cap or Interest Rate Collar 0 Amount payable pursuant to Section 2.07(c) of this Agreement and Section 4.05(c) of the General Conditions TOTAL AMOUNT 80,000,000 B. Withdrawal Conditions; Withdrawal Period 1. Notwithstanding the provisions of Part A of this Section, no withdrawal shall be made for: Page 13 12 (a) payments made prior to the date of this Agreement, except that withdrawals up to an aggregate amount not to exceed $16,000,000 equivalent may be made for payments made prior to this date but on or after April 1, 2009, for Eligible Expenditures; and (b) expenditures under Categories (1) and (2) unless: (i) the Subsidiary Loan Agreement has been executed on behalf of the Project Implementing Entity and SECBMIH; and (ii) a legal opinion, satisfactory to the Bank, from counsel acceptable to the Bank has been provided to the Bank showing that the Subsidiary Loan Agreement has been duly authorized or ratified by the Project Implementing Entity and SECBMIH and is legally binding upon the Project Implementing Entity and SECBMIH in accordance with its terms. 2. The Closing Date is December 31, 2014. Page 14 13 SCHEDULE 3 Amortization Schedule 1. The following table sets forth the Principal Payment Dates of the Loan and the percentage of the total principal amount of the Loan payable on each Principal Payment Date ( “Installment Share”). If the proceeds of the Loan have been fully withdrawn as of the first Principal Payment Date, the principal amount of the Loan repayable by the Borrower on each Principal Payment Date shall be determined by the Bank by multiplying: (a) Withdrawn Loan Balance as of the first Principal Payment Date; by (b) the Installment Share for each Principal Payment Date, such repayable amount to be adjusted, as necessary, to deduct any amounts referred to in paragraph 4 of this Schedule, to which a Currency Conversion applies. Principal Payment Date Installment Share (Expressed as a Percentage) September 15, 2014 2.28% March 15, 2015 2.34% September 15, 2015 2.40% March 15, 2016 2.46% September 15, 2016 2.52% March 15, 2017 2.58% September 15, 2017 2.64% March 15, 2018 2.71% September 15, 2018 2.78% March 15, 2019 2.85% September 15, 2019 2.92% March 15, 2020 2.99% September 15, 2020 3.07% March 15, 2021 3.14% September 15, 2021 3.22% March 15, 2022 3.30% September 15, 2022 3.39% March 15, 2023 3.47% September 15, 2023 3.56% March 15, 2024 3.65% September 15, 2024 3.74% March 15, 2025 3.83% September 15, 2025 3.93% March 15, 2026 4.02% September 15, 2026 4.12% March 15, 2027 4.23% September 15, 2027 4.33% Page 15 14 March 15, 2028 4.44% September 15, 2028 4.55% March 15, 2029 4.54% 2. If the proceeds of the Loan have not been fully withdrawn as of the first Principal Payment Date, the principal amount of the Loan repayable by the Borrower on each Principal Payment Date shall be determined as follows: (a) To the extent that any proceeds of the Loan have been withdrawn as of the first Principal Payment Date, the Borrower shall repay the Withdrawn Loan Balance as of such date in accordance with paragraph 1 of this Schedule. (b) Any amount withdrawn after the first Principal Payment Date shall be repaid on each Principal Payment Date falling after the date of such withdrawal in amounts determined by the Bank by multiplying the amount of each such withdrawal by a fraction, the numerator of which is the original Installment Share specified in the table in paragraph 1 of this Schedule for said Principal Payment Date ( “Original Installment Share”) and the denominator of which is the sum of all remaining Original Installment Shares for Principal Payment Dates falling on or after such date, such amounts repayable to be adjusted, as necessary, to deduct any amounts referred to in paragraph 4 of this Schedule, to which a Currency Conversion applies. 3. (a) Amounts of the Loan withdrawn within two calendar months prior to any Principal Payment Date shall, for the purposes solely of calculating the principal amounts payable on any Principal Payment Date, be treated as withdrawn and outstanding on the second Principal Payment Date following the date of withdrawal and shall be repayable on each Principal Payment Date commencing with the second Principal Payment Date following the date of withdrawal. (b) Notwithstanding the provisions of sub-paragraph (a) of this paragraph, if at any time the Bank adopts a due date billing system under which invoices are issued on or after the respective Principal Payment Date, the provisions of such sub-paragraph shall no longer apply to any withdrawals made after the adoption of such billing system. 4. Notwithstanding the provisions of paragraphs 1 and 2 of this Schedule, upon a Currency Conversion of all or any portion of the Withdrawn Loan Balance to an Approved Currency, the amount so converted in the Approved Currency that is repayable on any Principal Payment Date occurring during the Conversion Period, shall be determined by the Bank by multiplying such amount in its currency of denomination immediately prior to the Conversion by either: (i) the Page 16 15 exchange rate that reflects the amounts of principal in the Approved Currency payable by the Bank under the Currency Hedge Transaction relating to the Conversion; or (ii) if the Bank so determines in accordance with the Conversion Guidelines, the exchange rate component of the Screen Rate. 5. If the Withdrawn Loan Balance is denominated in more than one Loan Currency, the provisions of this Schedule shall apply separately to the amount denominated in each Loan Currency, so as to produce a separate amortization schedule for each such amount. Page 17 16 APPENDIX Section I. Definitions (1) “Anti-Corruption Guidelines” means the “Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants”, dated October 15, 2006. (2) “Category” means a category set forth in the table in Section IV of Schedule 2 to this Agreement. (3) “CBM” means coal bed methane. (4) “CMM” means coal mine methane. (5) “Consultant Guidelines” means the “Guidelines: Selection and Employment of Consultants by World Bank Borrowers” published by the Bank in May 2004 and revised in October 2006. (6) “Displaced Persons” means persons who, on account of the execution of the Project and the Related Activities, have experienced or would experience direct economic and social impacts caused by: (a) the involuntary taking of land, resulting in: (i) relocation or loss of shelter; (ii) loss of assets or access to assets; or (iii) loss of income sources or means of livelihood, whether or not such persons must move to another location; or (b) the involuntary restriction of access to legally designated parks and protected areas, resulting in adverse impacts on the livelihood of such persons; and a “Displaced Person” means any of such Displaced Persons. (7) “Environmental Management Plans” and the acronym “EMPs” mean, collectively, the following plans, which set out the environmental protection measures in respect of the Project and the Related Activities, as well as administrative and monitoring arrangements to ensure the implementation of said plans, as said plans may be revised from time to time with the agreement of the Bank: (a) the environmental management plan dated April 10, 2008 prepared by SECBMIH for Part A.1 of the Project; (b) the environmental management plan dated April 10, 2008 prepared by SECBMIH for Part A.2 of the Project; (c) the environmental management plan prepared by SECBMIH for Part A.3 of the Project; and Page 18 17 (d) the environmental management plan dated September 13, 2007 prepared by NCBPC for the Related Activities. The acronym “EMP” means, individually, any such plan. (8) “Fiscal Year” means the fiscal year of SECBMIH, covering the period January 1 through December 31. (9) “General Conditions” means the “International Bank for Reconstruction and Development General Conditions for Loans”, dated July 1, 2005 (as amended through February 12, 2008). (10) “GHG” means greenhouse gases. (11) “LNG” means liquefied natural gas. (12) “NCBPC” means North China Branch of PetroChina Company Limited carrying out the Related Activities as defined hereunder. (13) “Procurement Guidelines” means the “Guidelines: Procurement under IBRD Loans and IDA Credits” published by the Bank in May 2004 and revised in October 2006. (14) “Procurement Plan” means the Borrower’s procurement plan for the Project, dated April 6, 2009 and referred to in paragraph 1.16 of the Procurement Guidelines and paragraph 1.24 of the Consultant Guidelines, as the same shall be updated from time to time in accordance with the provisions of said paragraphs. (15) “Project Implementing Entity” means Borrower’s Province of Shanxi, and any successor thereto. (16) “Related Activities” means, collectively: (a) the construction of a gas transmission pipeline through which the gas collected under the Project will be transported to the LNG plant constructed under the Project; (b) the construction of a gas treatment station where the CBM produced under the Project will be treated. The Related Activities will be carried out by North China Branch of PetroChina Company Limited (NCBPC) in Qinshui County, Shanxi Province. (17) “Resettlement Action Plan” and its acronym “RAP” mean the resettlement action plan, dated March 2008, which sets out the principles and procedures governing the acquisition of land and other assets, and the resettlement, compensation and rehabilitation of Displaced Persons on account of the execution of the Project and the Related Activities, as well as monitoring and reporting arrangements to ensure compliance with said plan, as the same may be revised from time to time with the prior agreement of the Bank. Page 19 18 (18) “Safety Management Plan” means the plan, dated March 24, 2008, which sets out the safety measures and emergency preparedness procedures for the production, transmission, and liquefaction of CBM and for the design, construction and operation of the LNG plant constructed under the Project, as well as administrative and monitoring arrangements to ensure the implementation of said plan, as said plan may be revised from time to time with the agreement of the Bank. (19) “SECBMIH” means Shanxi Energy Coal Bed Methane Investment Holding Company Ltd., the limited liability company established and operating pursuant to its Charter dated October 20, 2007 and Business License No.140191105002865 dated October 20, 2007, issued by Taiyuan Municipality Industry and Commerce Administrative Bureau, and any successor thereto. (20) “Subsidiary Loan Agreement” means the agreement to be entered into between the Project Implementing Entity and SECBMIH pursuant to Section I, paragraph 6(a) of the Schedule to the Project Agreement, as the same may be amended from time to time, and such term includes all schedules and supplements to said agreement. Section II. Modifications to the General Conditions 1. Paragraph (l) of Section 7.02 is modified to read as follows: “Section 7.02. Suspension by the Bank . . . . (l) Ineligibility . The Bank or the Association has declared the Borrower (other than the Member Country) or the Project Implementing Entity ineligible to receive proceeds of any financing made by the Bank or the Association or otherwise to participate in the preparation or implementation of any project financed in whole or in part by the Bank or the Association, as a result of a determination by the Bank or the Association that the Borrower or the Project Implementing Entity has engaged in fraudulent, corrupt, coercive or collusive practices in connection with the use of the proceeds of any financing made by the Bank or the Association.” 2. The definition of the term “Conversion Date” in the Appendix is modified to read as follows: “‘Conversion Date’ means, in respect of a Conversion, the Execution Date (as herein defined) or such other date as requested by the Borrower and accepted by the Bank, on which the Conversion enters into effect, and as further specified in the Conversion Guidelines.” Page 20 19