CONFORMED COPY

LOAN NUMBER 7963-AM

Loan Agreement

(E-Society and Innovation for Competitiveness Project)

between

REPUBLIC OF ARMENIA

and

INTERNATIONAL BANK FOR RECONSTRUCTION

AND DEVELOPMENT

Dated January 26, 2011

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 LOAN NUMBER 7963-AM

LOAN AGREEMENT

Agreement dated January 26, 2011, between REPUBLIC OF ARMENIA

(“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 twenty four million Dollars
($24,000,000), 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 the Reference Rate 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the Withdrawn Loan Balance remains unpaid when due and such non-payment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 days, then the interest payable by the Borrower
shall instead be calculated as provided in Section 3.02 (e) of the General
Conditions.
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2.05. The Payment Dates are January 15 and July 15 in each year.

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; and (ii) a change of the interest rate basis applicable to all or
any portion of the principal amount of the Loan withdrawn and
outstanding from a Variable Rate to a Fixed Rate, or vice versa, or from
a Variable Rate based on a Variable Spread to a Variable Rate based on a
Fixed Spread.

(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.

ARTICLE III — PROJECT

3.01. The Borrower declares its commitment to the objectives of the Project. To this
end, the Borrower shall carry out the Project through the MoE in accordance with
the provisions of Article V of the General Conditions.

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

4.01. The Additional Events of Suspension consist of the following, namely, that any
of the events specified in paragraphs (a) or (b) below shall have occurred and be
continuing:

(a) any action has been taken for the dissolution, disestablishment or
suspension of operations of the Seed and Early Stage Venture Fund.

(b) the Seed and Early Stage Venture Fund Bylaws have been amended,
suspended, abrogated, repealed or waived so as to affect materially and
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adversely, in the opinion of the Bank, the ability of the Seed and Early
Stage Venture Fund to perform any of its functions in a manner
acceptable to the Bank.

4.02. The Additional Event of Acceleration consists of the following, namely, that any
event specified in Section 4.01 (a) or (b) of this Agreement occurs.

ARTICLE - V TERMINATION

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 its Minister of Finance.

6.02. The Borrower’s Address is:

Ministry of Finance of the Republic of Armenia

1 Melik-Adamyan Street
Yerevan 0010
Republic of Armenia
Facsimile:

+374-10-524282

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)
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AGREED at Yerevan, Republic of Armenia, as of the day and year first above
written.

REPUBLIC OF ARMENIA

By /s/ Vache Gabrielyan

Authorized Representative

INTERNATIONAL BANK FOR

RECONSTRUCTION AND DEVELOPMENT

By /s/ Jean-Michel Happi

Authorized Representative
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SCHEDULE 1

Project Description

The objective of the Project is to address constraints to competitive e-Society and

enterprise innovation in the Republic of Armenia by strengthening the underlying
infrastructure and enabling environment.

The Project consists of the following parts:

Part A: E-Society Infrastructure Development

1. Nationwide Broadband Backbone and Government Network. (a) Technical

assistance to NCFA and training to develop a nationwide broadband backbone
and government network; and (b) provision of Broadband Networks Financing
to the Beneficiaries for development of nationwide broadband backbone and
government network.

2. Digital Citizen Program. (a) Technical assistance to EKENG to support the

establishment of the certification authority and support for independent testing
and verification of the e-identification and certification authority systems; and (b)
purchasing information technology goods and provision of services, Training and
Incremental Operating Costs for establishing the certification authority.

3. Computer for All Program. (a) Establishment and operation of a credit facility by
PFIs to finance the Computer for All Program Sub-projects submitted by the
Beneficiaries; and (b) technical assistance to EIF, including Training and
Incremental Operating Costs, to implement the Computer for All Program.

Part B: Fostering Enterprise Innovation

1. Financial Support for Innovation in Knowledge and Technology-intensive Firms.

(a) Provision of: (i) Ideas Generation Small Grants to Beneficiaries for developing
business plan and proof of concepts for innovative ideas; and (ii) provision of
Innovation Matching Grants Beneficiaries for product or processes adaptation,
improvement and development, both in accordance with the rules and principles,
eligibility criteria, selection procedures and implementation arrangements set
forth in the Grants Operational Manual.

(b) (i) Support for establishing of a Seed and Early Stage Venture
Fund, including financing of management team remuneration
and establishing an innovation brokerage team, in a manner and
on terms acceptable to the Bank (which shall include the
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establishment of Venture Fund Bylaws, and any other corporate

arrangement needed for the operation of the said fund); and

(ii) financing of the Seed and Early Stage Venture Fund Subprojects
to carry out technology innovation investments.

2. Gyumri Technology Center. Provision of works, goods and consulting services,

including Training and Incremental Operating Costs, for the establishment of a
technology center in Gyumri to provide technology support and incubation
services to local firms and entrepreneurs.

3. Support to Information Technology/Knowledge-intensive Industry Development.

(a) (i) Establishment of an information technology (IT) sales force representation
office for the information technology/knowledge-intensive industry; and (ii)
provision of managerial secondments; and (b) provision of technical assistance
and Training to firms in the IT/knowledge-intensive industry for skills
development, certification and productivity improvement.

Part C: Project Management

Provision of technical assistance, goods, Training and Incremental Operating

Costs to FFPMC, EKENG, EIF and NCFA and to assist in the Project
implementation, including Project audit and technical audit of the Broadband
Networks Beneficiaries, and financial management, monitoring and reporting.
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SCHEDULE 2

Project Execution

Section I. Implementation Arrangements

A. Institutional Arrangements.

1. Except as the Bank shall otherwise agree, the Borrower shall: (a) maintain, until
the completion of the Project, the FFPMC, and ensure that the FFPMC functions
at all times in a manner and with staffing and financial resources necessary and
appropriate for the Project implementation, and satisfactory to the Bank; and (b)
shall designate the FFPMC with the responsibility for the Project procurement,
disbursement, financial management, monitoring and reporting, and
implementation of internal financial controls, maintenance of Project accounts
and preparation of Project Reports.

2. The Borrower shall maintain the Operational Procedures and shall duly perform
all its obligations under it and shall not assign, amend, abrogate or waive the
Operational Procedures without obtaining the prior approval of the Bank.

3. The Borrower shall, within one month after the Project effectiveness, establish a
Project Steering Committee, consisting of the representatives from all entities
involved in the Project implementation, and maintain it until completion of the
Project which will provide policy guidance and coordination of the Project
activities implementation.

4. Except as the Bank shall otherwise agree, the Borrower shall maintain, until the
completion of the Project, the EKENG, EIF and NCFA and ensure that they
function at all times in a manner and with staffing and financial resources
necessary and appropriate for the Project implementation, and satisfactory to the
Bank.

5. The Borrower shall, one year after the establishment of the Sales Force
Representation Office, furnish to the Bank an evidence showing that a private
sector co-financing is available for Part B.3 (a) (i) of the Project on the terms and
conditions as set forth in the Sales Force Representation Office Operational
Manual. In case said covenant is not met by the Borrower, the Bank has a right to
suspend disbursement under Category (3) in the table of Section IV.4 of
Schedule 2 to this Agreement.

B. Anti-Corruption

The Borrower shall ensure that the Project is carried out in accordance with the
provisions of the Anti-Corruption Guidelines.
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C. Subsidiary Finance Agreements

1. To facilitate the carrying out of Part A.1 (b) and 3 and Part B.1 (a) and (b) of the
Project, the Borrower shall make a part of the proceeds of the Loan available to
the NCFA or PFIs or EIF or the Seed and Early Stage Venture Fund,
respectively, under subsidiary agreements to be entered into between the
Borrower and the NCFA or each PFI or the EIF or the Seed and Early Stage
Venture Fund, respectively, under terms and conditions approved by the Bank,
including those set forth in the Operational Procedures (“Subsidiary Finance
Agreement”) and Anti-Corruption Guidelines.

2. The Borrower shall exercise its rights under the Subsidiary Finance Agreements
in such manner as to protect the interests of the Borrower and the Bank and to
accomplish the purposes of the Loan. Except as the Bank shall otherwise agree,
the Borrower shall not assign, amend, abrogate or waive the Subsidiary Finance
Agreements or any of its provisions without prior approval of the Bank.

D. Sub-financing (Broadband Networks Financing, Computer for All Program

Sub-loan, Ideas Generation Grant, Innovation Matching Grant and Seed
and Early Stage Venture Fund Sub-financing)

1. The Borrower shall ensure that the NCFA or PFIs or the EIF or the Seed and
Early Stage Venture Fund make Sub-financing to Beneficiaries in accordance
with terms and conditions, eligibility criteria and procedures set forth in the
Operational Procedures.

2. The Borrower shall ensure that the NCFA or PFIs or the EIF or the Seed and
Early Stage Venture Fund, respectively, make each Sub-financing under a Sub–
financing Agreement with each Beneficiary on terms and conditions set forth in
the Operational Procedures, including the right to:

(i) suspend or terminate the right of the Beneficiary to use the

proceeds of the Sub-financing, or declare to be immediately due
and payable all or any part of the amount of the Sub-financing
then withdrawn, upon the Beneficiary’s failure to perform any of
its obligations under the sub-financing agreement;

(ii) require each Beneficiary to:

(A) carry out its Sub-project: (aa) with due diligence and
efficiency and in accordance with sound technical,
economic, financial, managerial, environmental, health
and social standards and practices, satisfactory to the
Bank; and (bb) in accordance with the provisions of the
 -9-

Anti-Corruption Guidelines applicable to recipients of

loan proceeds other than the Borrower;

(B) procure the goods and works and to be financed out of

the Sub-financing in accordance with the provisions of
Section III of Schedule 2 to this Agreement;

(C) enable the Borrower and the Bank to inspect the Sub-project,
its operation and any relevant records and documents;
and

(D) prepare and furnish to the Borrower and the Bank all such
information as the Borrower shall reasonably request
relating to the foregoing.

E. Safeguards. The Borrower shall implement the Project in accordance

with the provisions of the environmental framework which is an integral part of the
Operational Procedures.

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 acceptable to the Bank. Each Project
Report shall cover the period of one year, and shall be furnished to the Bank not
later than one month after the end of the period covered by such report.

2. For purposes of Section 5.08 (c) of the General Conditions, the report on the
execution of the Project and related plan required pursuant to that Section shall
be furnished to the Bank not later than six months after the Closing Date of the
Project.

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. The Borrower shall prepare and furnish to the Bank not later than forty five days
after the end of each calendar quarter, interim unaudited financial reports for the
Project covering the quarter, in form and substance satisfactory to the Bank.
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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 fiscal year of the Borrower,
commencing with the fiscal year in which the first withdrawal was made under
the Preparation Advance for the Project. The audited Financial Statements for
each such period shall be: (i) furnished to the Bank not later than six months after
the end of such period; and (ii) made publicly available in a timely fashion and in
a manner acceptable to the Bank.

4. Without limitation to the provisions of Section II. B. 3 of this Schedule, the

Borrower shall, one year after the first deposit into the Seed and Early Stage
Venture Fund commercial account mentioned in Section IV.A.2 of this Schedule
is made either by the Seed and Early Stage Venture Fund or the private investors,
and every year thereafter, cause the Seed and Early Stage Venture Fund to carry
out an annual independent external audit in accordance with consistently applied
auditing standards and auditors acceptable to the Bank, with respect to the Seed
and Early Stage Venture Fund financial statements in order to ensure the proper
use of Loan Proceeds. The audited Venture Fund Financial Statements for each
such period shall be: (i) furnished to the Bank not later than six months after the
end of such period; and (ii) made publicly available in a timely fashion and in a
manner acceptable to the Bank.
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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.

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 of the Borrower may be used for

procurement of goods and works for the Project, provided that the
following provisions are complied with:

(i) entities in which the Republic of Armenia owns a majority

shareholding shall not be invited to participate in tenders for the
Government unless they are, and can be shown to be, legally
and financially autonomous and operate under commercial law;

(ii) pre-qualification shall be conducted for large and complex

works projects;
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(iii) pre- and post-qualification criteria shall only pertain to past

contract performance, financial, managerial and technical
capabilities of bidders;

(iv) joint venture partners shall be jointly and severally liable for
their obligations;

(v) no bids shall be rejected at bid opening;

(vi) bids can be cancelled and new bids invited, only if the
conditions of clauses 2.61 and 2.64 of the Procurement
Guidelines are met;

(vii) all bid evaluation criteria shall be quantifiable in monetary

terms or expressed as a pass/fail criteria;

(viii) advance Bank approval is required for any substantial

modifications in the contract scope/conditions during
implementation; and

(ix) the Borrower shall use standard bidding documents satisfactory

to the Bank.

(b) Shopping

(c) Direct Contracting

(d) Loans to Financial Intermediaries

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.

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.
 - 13 -

Procurement Method

(a) Fixed Budget Selection

(b) Single Source Selection
(c) Consultant’s Qualifications
(d) Least Cost Selection
(e) Selection Based on Individual Consultants
(f) Selection of Consultants through Commercial Practices

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.

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. Without limitation to the provisions of paragraph 1 of this Section, Section

IV.B.1 (e) of this Schedule, and Section 2.04 of the General Conditions, and
pursuant to the provisions of the Disbursement Letter:

(a) the Bank may, upon the Borrower’s request, and presentation to the Bank
of evidence acceptable to the Bank showing that: (i) the Seed and Early
Stage Venture Fund has been created as provided in Part B.1 (b) of the
Project; (ii) a financial management assessment of the Seed and Early
Stage Venture Fund has been carried out in a manner acceptable to the
Bank; and (iii) the manager for the Seed and Early Stage Venture Fund
has been selected in a manner acceptable to the Bank, deposit into the
Second Designated Account, an advance of the proceeds of the Loan up
to an amount not to exceed $1,000,000 (the Authorized Advance) to
finance Eligible Expenditures under Category (2) (d);

(b) subsequent withdrawals of Authorized Advances to replenish the Second

Designated Account, may be authorized by the Bank, provided that the
 - 14 -

Borrower, through MoF, shall have furnished to the Bank: (i) a request or
requests for deposit into the Second Designated Account of an amount or
amounts which do not exceed the Authorized Advance or the total
aggregate amount mentioned herein; and (ii) evidence, acceptable to the
Bank, showing that the private investors have made contributions to the
Seed and Early Stage Venture Fund in an amount equal to 100% of each
amounts requested for a subsequent advance immediately preceding said
replenishment, and that said amount has been deposited into a
commercial account to be opened and maintained by the Seed and Early
Stage Venture Fund in a financial institution acceptable to the Bank, and
on terms and conditions acceptable to the Bank, for the exclusive use of
financing of the Seed and Early Stage Venture Fund Subprojects. The
total amount of Authorized Advances shall not exceed $3,000,000 in the
aggregate; and

(c) the Borrower may withdraw, from time to time, from the Second
Designated Account an amount equal to 100% of each amounts
requested for a subsequent advance and deposit the same into the
commercial account mentioned in (b) (ii) above for the exclusive use of
financing the Seed and Early Stage Venture Fund Subprojects.

3. Notwithstanding the provisions of paragraphs 1 and 2 above, the Borrower,

through the MoF, shall refund to the Bank, in a manner and on terms acceptable
to the Bank, any amount of the Authorized Advances (mentioned in paragraph 2
above) not used to finance Eligible Expenditures under said Category (2) (d), or
the use of which is not accounted for, or reported by, the Closing Date.

4. 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:

Amount of the Percentage of

Category Loan Allocated Expenditures to be
(expressed in USD) Financed (exclusive of
taxes)

(1) Goods, works, consultants’ 5,940,000 100%

services, Training and
Incremental Operating Costs for
the Project
(2) Sub-financing:

(a) under the Part A.1(b) of 7,500,000 100%

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Amount of the Percentage of

Category Loan Allocated Expenditures to be
(expressed in USD) Financed (exclusive of
taxes)

the Project (Nationwide

Broadband Backbone and
Government Network)

(b) under the Part A.3 of the 3,000,000 100%

Project (Computer for All
Program)

(c) under the Part B.1 (a) of 900,000 100%

the Project (Ideas
Generation Grants and
Innovation Matching
Grants)
3,000,000 50%
(d) for Sub-projects under
Part B.1 (b) of the Project
(Seed and Early Stage
Venture Fund)
(3) Consultants’ services and 600,000 100%
Training under the Part B.3 (a)
(i) of the Project
(4) Refund of the Preparation 3,000,000 Amount payable
Advance pursuant to Section 2.07
(a) of the General
Conditions
(5) Front-end Fee 60,000 Amount payable
pursuant to Section2.03
of this Agreement in
accordance with Section
2.07 (b) of the General
Conditions
TOTAL AMOUNT 24,000,000

B. Withdrawal Conditions; Withdrawal Period

1. Notwithstanding the provisions of Part A of this Section, no withdrawal shall be

made:
 - 16 -

(a) for payments made prior to the date of this Agreement, except that
withdrawals up to an aggregate amount not to exceed $1,228,000
equivalent may be made for payments made prior to this date but on or
after September 2, 2010 (but in no case more than one year prior to the
date of this Agreement) for Eligible Expenditures under the Category (1)
in the table, provided that the pertinent obligations and/or conditions set
forth in this Agreement, in respect of the relevant Eligible Expenditure,
have been complied with or met;

(b) for payments made to finance the Broadband Networks Subprojects

under Category (2) (a), unless: (i) the NCFA Subsidiary Finance
Agreement has been executed on behalf of the Borrower and the NCFA,
satisfactory to the Bank; (ii) the Broadband Networks Financing
Operational Manual, satisfactory to the Bank, has been approved by the
Borrower; and (iii) the relevant Beneficiary has met the criteria set forth
in the Broadband Networks Operational Manual, which criteria shall
include, inter alia, that the corresponding Broadband Networks
Financing Agreement has been signed by the respective parties thereto;

(c) for payments made to finance the Computer for All Program Subproject
under Category (2) (b), unless: (i) the PFI Subsidiary Finance Agreement
has been executed on behalf of the Borrower and PFI/s, satisfactory to
the Bank; (ii) the Computer for All Program Operational Manual,
satisfactory to the Bank, has been approved by the Borrower; (iii) the
Borrower has selected vendor/s in accordance with the procedures
established in the said Manual; and (iv) the relevant Beneficiary has met
the criteria set forth in the Computer for All Program Operational
Manual, which criteria shall include, inter alia, that the corresponding
Computer for All Program Sub-loan Agreement has been signed by the
respective parties thereto;

(d) for payments made to finance any Ideas Generation Subproject or any
Innovation Matching Subproject under Category (2) (c), unless: (i) the
EIF Subsidiary Finance Agreement has been executed on behalf of the
Borrower and the EIF, satisfactory to the Bank; (ii) the Grants
Operational Manual, satisfactory to the Bank, has been approved by the
Borrower; and (iii) the relevant Beneficiary has met the criteria set forth
in the Grants Operational Manual, which criteria shall include, inter alia,
that the corresponding Ideas Generation Grant Agreement or Innovation
Matching Grant Agreement, respectively, has been signed by the
respective parties thereto;

(e) for payments made to finance any Venture Fund Subproject under
Category (2) (d), unless: (i) the Seed and Early Stage Venture Fund
 - 17 -

Subsidiary Finance Agreement has been executed on behalf of the

Borrower and the Seed and Early Stage Venture Fund, satisfactory to the
Bank; (ii) the conditions/obligations referred to in Section IV.A 2 of this
Schedule have been complied with, in a manner acceptable to the Bank;
(iii) the Seed and Early Stage Venture Fund Operational Manual,
satisfactory to the Bank, has been approved by the management of the
company; and (iv) the Beneficiary has met the criteria set forth in the
Seed and Early Stage Venture Fund Operational Manual, which criteria
shall include, inter alia, that the corresponding Venture Fund Sub-
financing Agreement has been signed by the respective parties thereto;
and

(f) for payments made under Category (3), unless: (i) an evidence is
furnished to the Bank that a management company for the office has
been selected on a competitive basis, satisfactory to the Bank; and (ii) the
Sales Force Representation Office Operational Manual has been
approved by the Borrower, through EIF, satisfactory to the Bank.

2. The Closing Date is December 31, 2014.

 - 18 -

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.

Installment Share
Principal Payment Date (Expressed as a Percentage)

On each January15 and July15

Beginning January 15, 2021

through January 15, 2035 3.33%

On July 15, 2035 3.43%

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
 - 19 -

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
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.
 - 20 -

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 with the modifications set forth in
Section II of this Appendix.

2. “Beneficiary” means an individual or entity eligible, in accordance with the

criteria set forth in the Operational Procedures, to receive Sub-financing under
Part A.1 (b) and 3 and Part B.1 (a) and (b) of the Project.

3. “Broadband Networks Financing” means any financing made or proposed to be

made by the NCFA to a Beneficiary out of the proceeds of the Broadband
Networks Financing under Part A. 1 (b) for carrying out of the Broadband
Networks Subprojects, also referred to as “Sub-financing”.

4. “Broadband Networks Financing Agreement” ” means the agreement to be

entered into between the NCFA, and the Beneficiary on the terms and conditions
set forth in the Broadband Networks Financing Operational Manual, also referred
to as “Sub-financing Agreement”.

5. “Broadband Networks Financing Operational Manual” means the manual to

be prepared and approved by the Borrower pursuant to Section IV.B.1 (b) (ii),
setting forth the operational and administrative procedures, including the
environmental framework, in respect of the preparation, eligibility, selection,
environmental screening, approval, financial management, disbursement and
implementation and supervision of Sub-projects under Part A.1 (b) of the Project.

6. “Broadband Networks Subproject” means a project eligible for financing

under Part A.1 (b) of the Project.

7. “Category” means a category set forth in the table in Section IV of Schedule

2 to this Agreement.

8. “Computer for All Program Operational Manual” means the manual for Part A. 3
of the Project, prepared and approved by the Borrower pursuant to Section
IV.B.1 (c) (ii), setting forth the operational and administrative procedures,
including the environmental framework, in respect of the preparation, eligibility,
selection, environmental screening, approval, financial management,
disbursement and implementation and supervision of Sub-loans under Part A.3 of
the Project.
 - 21 -

9. “Computer for All Program Sub-loan Agreement” means the agreement to be

entered into between the PFI and the Beneficiary on the terms and conditions set
forth in the Computer for All Program Operational Manual, also referred to as
“Sub-financing Agreement”.

10. “Computer for All Program Subproject” means a project eligible for
financing under Part A.3 (a) of the Project.

11. “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 and May 2010.

12. “Disbursement Letter” means the letter from the Bank to the Borrower of
even date herewith concerning the additional instructions that the Bank may issue
concerning the withdrawal of the proceeds of the Loan, and referred to in Section
IV.A of Schedule 2 to this Agreement, as said letter may be revised by the Bank
from time to time.

13. “EIF” means the Enterprise Incubator Foundation of the Borrower

established pursuant to a Decree # 1165 dated November 27, 2001 of the
Borrower’s Cabinet Minister.

14. “EKENG” means the open joint stock company, established by the
Borrower’s Cabinet Ministers Decree No. 494 N dated April 30, 2009 and
chaired by the Minister of Economy and responsible for E-governance
infrastructure projects.

15. “FFPMC” means the Foreign Financial Projects Management Center within
the Ministry of Finance of the Borrower established and operating pursuant to the
Minister of Finance and Economy’s Decree No. 37, dated March 29, 2000, which
will be responsible for the implementation of the Project, including the fiduciary
tasks under the Project.

16. “First Designated Account” means the Borrower’s account referred to in

Section II (vi) (i) of the Disbursement Letter into which the Bank may, at the
Borrower’s request, deposit the proceeds of the Loan assigned to finance Part A,
Part B.1 (a), 2 and 3 and Part C of the Project.

17. “General Conditions” means the “International Bank for Reconstruction and
Development General Conditions for Loans”, dated July 31, 2010.

18. “Grants Operational Manual” means the manual to be prepared and approved
by the Borrower pursuant to Section IV.B.1 (d) (ii), setting forth an amount,
terms and conditions, eligibility criteria and selection procedures and
 - 22 -

implementation, monitoring and reporting of respective Grants under Part B.1 (a)
(i) and (ii) of the Project.

19. “Ideas Generation Grant” means any grant made or proposed to be made by
the EIF to a Beneficiary out of the proceeds of the Ideas Generation Grant for the
carrying out of an Ideas Generation Subprojects, also referred to as “Sub-
financing”.

20. “Ideas Generation Grant Agreement” means the agreement to be entered into
between the EIF, and the Beneficiary on the terms and conditions set forth in the
Grants Operational Manual, also referred to as “Sub-financing Agreement”.

21. “Ideas Generation Subproject” means a project eligible for financing under
Part B.1 (a) (i) of the Project.

22. Incremental Operating Costs” means expenditures incurred on account of the

Project implementation by the FFPMC, EIF, EKENG and NCFA such as office
supplies, minor office equipment, vehicle rental, operation and maintenance,
costs for fuel, equipment and software maintenance, literature, and FFPMC, EIF,
EKENG and NCFA staff salaries (excluding Government officials’ salaries)
training, field trips, meetings, lodging, per diem and travel costs related to the
Project, communication costs, utilities, mass media and printing services,
reasonable banking charges and advertisement costs, and other expenses that may
be agreed with the Bank during the Project implementation.

23. “Innovation Matching Grant” means any grant made or proposed to be made
by the EIF to a Beneficiary out of the proceeds of the Innovation Matching Grant
for the carrying out of Innovation Matching Subprojects, also referred to as “Sub-
financing”.

24. “Innovation Matching Grant Agreement” means the agreement to be entered

into between the EIF and the Beneficiary on the terms and conditions set forth in
the Grant Operational Manual, also referred to as “Sub-financing Agreement”.

25. “Innovation Matching Subproject” means a project eligible for financing

under Part B.1 (a) (ii) of the Project.

26. “Management Fee” means the management team remuneration under Part B.
1 (b) (i) of the Project, as set forth in the Seed and Early Stage Venture Fund
Operational Manual.

27. “MoE” means the Ministry of Economy of the Borrower.

28. “MoF” means the Ministry of Finance of the Borrower.

 - 23 -

29. “NCFA” means the National Competitiveness Foundation of the Borrower

established by the Borrower’s Cabinet Ministers Decree No. 1324-A dated
November 8, 2007.

30. “Operational Procedures” means the Broadband Networks Operational

Manual or Computer for All Program Operational Manual or Grants Operational
Manual or Venture Fund Operational Manual, as the case may be, setting forth
eligibility criteria and procedures for selection, appraisal and approval of
Beneficiaries and Sub-projects to be financed under the Project, as well as the
procedures for administration and monitoring of implementation of Sub-projects.

31. “Procurement Guidelines” means the “Guidelines: Procurement under IBRD

Loans and IDA Credits” published by the Bank in May 2004 and revised in
October 2006 and May 2010.

32. “PFI” means a financial institution, selected by the Borrower and the Bank,
to participate in the Part A.3 of the Project in accordance with the eligibility
criteria and selection procedures set forth in the Computer for All Program
Operational Manual.

33. “Procurement Plan” means the Borrower’s procurement plan for the Project,
dated October 7, 2010 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.

34. “Project Steering Committee” means a Management Board to be established

by the Borrower pursuant to the Government Decree No. 765 dated December
27, 1999 and referred to in Section I.A.3 of Schedule 2 to this Agreement.

35. “Preparation Advance” means the advance referred to in Section 2.07 (a) of
the General Conditions, granted by the Bank to the Borrower pursuant to the
Letter Agreement (Preparation Advance No. P457-AM) signed on behalf of the
Bank on May 17, 2010 and on behalf of the Borrower on June 11, 2010.

36. “Sales Force Representation Office Operational Manual” means the manual
to be prepared and approved by the Borrower, setting forth the implementation
principles and administrative and financial management procedures for the office
operation.

37. “Second Designated Account” means the Borrower’s account referred to in

Section II. (vi) (ii) of the Disbursement Letter (as said term is defined above) into
which the Bank may, at the Borrower’s request, deposit the total amount of the
Authorized Advances referred to in Section IV.A.2 of Schedule 2 to this
Agreement on the terms provided in said Section IV.A.2.
 - 24 -

38. “Subsidiary Finance Agreement” means the NCFA Subsidiary Finance

Agreement or the PFI Subsidiary Finance Agreement or the EIF Subsidiary
Finance Agreement or the Seed and Early Stage Venture Fund Subsidiary
Finance Agreement to be entered into between the Borrower and the NCFA or
each PFI or the EIF or the Seed and Early Stage Venture Fund, respectively,
pursuant to Section I.C.1 of Schedule 2 to this Agreement, as the same may be
amended from time to time; and such term includes all schedules to the
Subsidiary Finance Agreement.

39. “Seed and Early Stage Venture Fund” means a venture fund to be established
in accordance with the Borrower’s corporations law, and governed by the Civil
Code of the Borrower No. HO239 dated 01/01/1999.

40. “Seed and Early Stage Venture Fund Bylaws” means the bylaws, acceptable
to the Bank that will govern the daily operation of the Seed and Early Stage
Venture Fund.

41. “Seed and Early Stage Venture Fund Sub-financing” means any financing in
the form of a loan, grant or equity investment made or proposed to be made by
the Seed and Early Stage Venture Fund to an eligible Beneficiary for a Seed and
Early Stage Venture Fund Sub-project, and to be financed out of the procedures
of the Loan.

42. “Seed and Early Stage Venture Fund Sub-financing Agreement” means any of
the agreement to be entered into between the Seed and Early Stage Venture Fund
and each Beneficiary on the terms and conditions set forth in the Seed and Early
Stage Venture Fund Operational Manual, also referred to as Sub-financing
Agreement.

43. “Seed and Early Stage Venture Fund Operational Manual” means the manual for
Part B.1 (b) (i) of the Project, prepared and approved by the Borrower pursuant to
Section IV.B.1 (e) (iii), setting forth the operational and administrative
procedures, including the environmental framework, in respect of the
preparation, eligibility, selection, environmental screening, approval, financial
management, disbursement and implementation and supervision of the Seed and
Early Stage Venture Fund Subprojects.

44. “Seed and Early Stage Venture Fund Subproject” means a project eligible for
financing under Part B.1 (b) (i) of the Project.

45. “Sub-financing” means any financing in the form of a loan or grant or equity
investment made or proposed to be made by the NCFA or the PFI or the EIF or
the Seed and Early Stage Venture Fund, respectively, to an eligible Beneficiary
for a Sub-project, and to be financed out of the proceeds of the Loan.
 - 25 -

46. “Sub-financing Agreements” means collectively the Broadband Networks

Financing Agreement, the Computer for All Program Sub-loan Agreement, the
Ideas Generation Grant Agreement, the Innovation Matching Grant Agreement
and the Seed and Early Stage Venture Fund Sub-financing Agreement.

47. “Sub-project” means a specific project eligible for financing out of the
proceeds of the Loan in accordance with the criteria set forth in the Operational
Procedures to be carried out by a Beneficiary under Part A.1 (b) and 3 and Part
B.1 (a) and (b) of the Project using a Sub-financing.

48. “Training” means expenses incurred by the FFPMC, the EIF, EKENG and
the NCFA in connection with carrying out training activities under the Project,
including travel costs and per diem for local trainees and trainers, study tours and
workshops, rental of facilities and equipment and training materials and related
supplies.

Section II. Modifications to the Anti-Corruption Guidelines

The modifications to the Anti-Corruption Guidelines are as follows:

1. Section 5 is re-numbered as Section 5(a) and a new Section 5(b) is added to read
as follows:

“… (b) These Guidelines also provide for the sanctions and related actions to be
imposed by the Bank on Borrowers (other than the Member Country) and all
other individuals or entities who are recipients of Loan proceeds, in the event that
the Borrower or the individual or entity has been debarred by another financier as
a result of a determination by such financier that the Borrower or the individual
or entity has engaged in fraudulent, corrupt, coercive or collusive practices in
connection with the use of the proceeds of a financing made by such financier.”

2. Section 11(a) is modified to read as follows:

“… (a) sanction in accordance with prevailing Bank’s sanctions policies and

procedures (fn13) a Borrower (other than a Member Country) (fn 14) or an
individual or entity, including (but not limited to) declaring such Borrower,
individual or entity ineligible publicly, either indefinitely or for a stated period of
time: (i) to be awarded a Bank-financed contract; (ii) to benefit from a Bank-
financed contract, financially or otherwise, for example as a sub-contractor; and
(iii) to otherwise participate in the preparation or implementation of the project or
any other project financed, in whole or in part, by the Bank, if at any time the
Bank determines (fn 15) that such Borrower, individual or entity has engaged in
corrupt, fraudulent, collusive, coercive or obstructive practices in connection
with the use of loan proceeds, or if another financier with which the Bank has
 - 26 -

entered into an agreement for the mutual enforcement of debarment decisions has
declared such person or entity ineligible to receive proceeds of financings made
by such financier or otherwise to participate in the preparation or implementation
of any project financed in whole or in part by such financier as a result of a
determination by such financier that the Borrower or the individual or entity has
engaged in fraudulent, corrupt, coercive or collusive practices in connection with
the use of the proceeds of a financing made by such financier.”

Footnotes:

“13. An individual or entity may be declared ineligible to be awarded a Bank

financed contract upon completion of sanctions proceedings pursuant to the
Bank’s sanctions policies and procedures, or under the procedures of temporary
suspension or early temporary suspension in connection with an ongoing
sanctions proceeding, or following a sanction by another financier with whom the
Bank has entered into a cross debarment agreement, as a result of a determination
by such financier that the firm or individual has engaged in fraudulent, corrupt,
coercive or collusive practices in connection with the use of the proceeds of a
financing made by such financier.”

“14. Member Country includes officials and employees of the national

government or of any of its political or administrative subdivisions, and
government owned enterprises and agencies that are not eligible to bid under
paragraph 1.8(b) of the Procurement Guidelines or participate under paragraph
1.11(c) of the Consultant Guidelines.”

“15. The Bank has established a Sanctions Board, and related procedures, for the
purpose of making such determinations. The procedures of the Sanctions Board
sets forth the full set of sanctions available to the Bank. In addition, the Bank has
adopted an internal protocol outlining the process to be followed in implementing
debarments by other financiers, and explaining how cross-debarments will be
posted on the Bank’s website and otherwise be made known to staff and other
stakeholders.”