**Exhibit 4.54**

EXECUTION VERSION

DATED  15 FEBRUARY 2005

 

 

$90,000,000

LOAN AGREEMENT

for

**OPEN JOINT STOCK COMPANY MOBILE TELESYSTEMS**

with

**BARCLAYS BANK PLC**

as Banker

and

**HER BRITANNIC MAJESTY’S SECRETARY OFSTATE**(acting by the **EXPORTCREDITS GUARANTEE DEPARTMENT**)

as ECGD

 

1

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Index of Clausesand Appendices
| Clause     | ** ** | **Heading**                                                                                         | ** ** | **Page  Number** |
|------------|------------|-----------------------------------------------------------------------------------------------------|------------|------------------|
| 1          |       | DEFINITIONS                                                                          |       | 2                |
| 2          |       | THE BANKER                                                                                |       | 19               |
| 3          |       | PURPOSE AND  LIMITS OF FINANCE                                        |       | 20               |
| 4          |       | REPAYMENT OF  LOAN AND PAYMENT OF INTEREST                                      |       | 21               |
| 5          |       | CONDITIONS  PRECEDENT TO ADVANCES                      |       | 26               |
| 6          |       | CONTRACTS  ELIGIBLE FOR FINANCING            |       | 30               |
| 7          |       | APPROVAL  PROCEDURE                               |       | 31               |
| 8          |       | REMIBURSEMENT  CLAIMS                                                 |       | 32               |
| 9          |       | ADVANCES AND  REIMBURSEMENT PROCEDURES                      |       | 32               |
| 10         |       | AMOUNTS DUE TO  BE PAID TO THE BORROWER           |       | 34               |
| 11         |       | DEFAULT                                                |       | 35               |
| 12         |       | UNDERTAKINGS COVENANTS  AND REPRESENTATIONS BY THE BORROWER                     |       | 40               |
| 13         |       | THE FUNDING AND  BENEFIT OF THE AGREEMENT                        |       | 49               |
| 14         |       | TAXES                                                                                          |       | 51               |
| 15         |       | INCREASED COSTS                                                       |       | 53               |
| 16         |       | EXPENSES                                                         |       | 55               |
| 17         |       | COMMISSIONS                                                                                    |       | 56               |
| 18         |       | FINANCE CHARGE                                                   |       | 56               |
| 19         |       | SUMS ON DEPOSIT                                                  |       | 57               |
| 20         |       | LAW                                                                             |       | 58               |
| 21         |       | ARBITRATION                                                                                    |       | 58               |
| 22         |       | JURISDICTION                                                                                   |       | 59               |
| 23         |       | ALTERATION TO  APPROVED CONTRACTS                           |       | 60               |
| 24         |       | NOTICES AND  DEMANDS                                   |       | 61               |
| 25         |       | MISCELLANEOUS                                               |       | 63               |
|       |       |                                                                                                |       |             |
| Appendices |       |                                                                                                |
| A          |       | Application for  Approval                                                                      |       | 65               |
| B          |       | Approval in  Principle                                           |       | 68               |
| C          |       | Notice of  Approval                                    |       | 70               |
| D          |       | Letter of  Instruction                                      |       | 72               |
| E(1)       |       | Reimbursement  Certificate (Eligible Goods and/or Eligible Services)       |       | 73               |
| E(2)       |       | Reimbursement  Certificate (ECGD Finance Charge/Additional Finance Charge)                     |       | 74               |
| F          |       | Specimen  Supplier’s Receipt                      |       | 76               |
| G          |       | Mandatory Cost  Formula                                                                        |       | 78               |
| H          |       | ECGD Finance  Charge/Additional Finance Charge Receipt                          |       | 80               |

 

i

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THIS AGREEMENT is made the         day of                          2005 BETWEEN

1                                         Barclays Bank PLC (“the Banker”) of54 Lombard Street, London, EC3P 3AH

2                                         HerBritannic Majesty’s Secretary of State acting by the Export Credits GuaranteeDepartment (“ECGD”)

3                                         OpenJoint Stock Company Mobile TeleSystems (“the Borrower”) established andexisting under the laws of the Russian Federation and having its registeredoffice at 4 Marksistskaya Street, 109147 Moscow, Russian Federation

WHEREAS

1                                        The Borrower wishes from time to time to enter intocontracts with Motorola Limited (“the Supplier”) of Midpoint, Alencon Link,Basingstoke, RG21 7PL for the supply of plant and equipment and/or for therendering of services and

2                                        The Borrower has entered into a contract dated 11 August 2004(“Contract No. 1”) with the Supplier which it wishes to finance under theLoan Facility as hereinafter defined and

3                                        The Banker has agreed on the terms and conditions of thisAgreement to advance to the Borrower the sum of $25,653,462.68 to assist thefinancing of Contract No. 1 and the Finance Charge referred to in Clause18.1.3 and an uncommitted additional facility of up to $64,346,537.32 to assistthe financing of the contracts referred to in Recital (1) and theAdditional Finance Charge and

4                                        ECGD has agreed to ensure that the Loan Facility ashereinafter defined shall be made available to the Borrower in thecircumstances 

1

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                                               herein mentioned and the Banker has agreed to act asECGD’s agent hereunder in accordance with Clause 2 hereof

NOW THEREFORE it isagreed as follows:

# **1****                                      DEFINITIONS**

1.1                             In this Agreement and the Appendices hereto unless thecontext otherwise requires
| “Additional Facility”       | means the additional uncommitted facility of up to  $64,346,537.32 (to the extent not cancelled or reduced in accordance with the  terms of this Agreement) |
|---------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                  |                                                                                                                                                        |
| “Additional Finance Charge” | means the finance charge payable to ECGD in respect  of an Approved Contract presented for financing under the Additional Facility                          |
|                                  |                                                                                                                                                        |
| “Advance”                   | means a sum of money calculated and made available  by way of loan by the Banker or by ECGD to the Borrower in accordance with  Clause 9                    |
|                                  |                                                                                                                                                        |
| “Affiliate”                 | means, in relation to any person, a Subsidiary of  that person or a Holding Company of that person or any other Subsidiary of  that Holding Company         |
|                                  |                                                                                                                                                        |
| “Application for Approval”  | means an application made in the form of Appendix A                                                                                                         |
|                                  |                                                                                                                                                        |
| “Approval in Principle”     | means a notice in the form of Appendix B                                                                                                                    |
|                                  |                                                                                                                                                        |
| “Approved Contract”         | means a contract in respect of which a Notice of  Approval has been issued                                                                                  |
|                                  |                                                                                                                                                        |
| “Approved Contract Loan”    | means the Loan which relates to an Approved Contract                                                                                                        |
|                                  |                                                                                                                                                        |

2

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| “Authorisation”           | means an authorisation consent approval resolution  licence exemption filing notarisation or registration                                                                                                                              |
|-------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                |                                                                                                                                                                                                                                   |
| “Availability Period”     | means the period from and including the date of this  Agreement to and including the date as specified in Clause 3.5 (or such later  date as may from time to time be notified by the Banker to the Borrower  pursuant to that Clause) |
|                                |                                                                                                                                                                                                                                   |
| “Banker’s Account”   | means the following account:                                                                                                                                                                                                           |
|                                |                                                                                                                                                                                                                                   |
|                                | Pay:   Barclays Bank PLC, New York (BARCUS33),  Chips UID 312842                                                                                                                                                             |
|                                |                                                                                                                                                                                                                                   |
|                                | For:   Account of Barclays Bank PLC Wholesale,  London (BARCGB5G)                                                                                                                                                            |
|                                |                                                                                                                                                                                                                                   |
|                                | Account Number:   280238433                                                                                                                                                                                                  |
|                                |                                                                                                                                                                                                                                   |
|                                | Attention:   Geoff Miall                                                                                                                                                                                                     |
|                                |                                                                                                                                                                                                                                   |
|                                | Reference:   MTS/STEF London                                                                                                                                                                                                 |
|                                |                                                                                                                                                                                                                                   |
|                                | or such other account as the Banker may from time to  time notify the Borrower and ECGD in writing                                                                                                                                     |
|                                |                                                                                                                                                                                                                                   |
| “Borrower’s Account” | means the following account:                                                                                                                                                                                                           |
|                                |                                                                                                                                                                                                                                   |
|                                | Mobile TeleSystems OJSC INN 7740000076                                                                                                                                                                                                 |
|                                | 4 Marksistskay str. Moscow 109147 Russia                                                                                                                                                                                               |
|                                |                                                                                                                                                                                                                                   |
|                                | Account Bank: Moscow Bank for Reconstruction and  Development, Moscow, Russia                                                                                                                                                          |
|                                |                                                                                                                                                                                                                                   |

3

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|                                          | Acct. No: 40702840300000000652                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                     | SWIFT Code: MBRD RU MM                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                     | or such other account as the Borrower may from time  to time notify the Banker in writing                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| “Borrower’s Signatory”    | means any person who is a director or other officer  of the Borrower whose name and specimens of whose signature have been supplied  from time to time to the Banker by the Borrower as being those of a person  authorised to sign Applications for Approval and the unqualified acceptances  referred to in Clause 7.3.1 and Reimbursement Certificates referred to in  Clause 8 provided that at the date of receipt of the relevant document by the  Banker no written notice of the revocation of such authorisation has been  received by the Banker |
|                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| “Borrower’s Total Assets” | means the book value of the consolidated total  assets of the Borrower as determined by reference to the Borrower’s most  recent annual consolidated balance sheet delivered in accordance with Clause  12.1.23.1*(Financial  statements)*                                                                                                                                                                                                                                                                                                            |
|                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| “Break Costs”                  | means the amount (if any) by which                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                     | a              the  interest (excluding the Margin) which the Banker should have received for the  period from the date of receipt of all or any part of the Advance or Unpaid  Sum to the last day of the current Interest Period in respect of that Advance  or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on  the last day of that Interest Period;                                                                                                         |
|                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |

4

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|                                       | exceeds                                                                                                                                                                                                                                                                                                                                                                                                                  |
|---------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                  | b              the  amount which the Banker would be able to obtain by placing an amount equal to  the principal amount or Unpaid Sum received by it on deposit with a leading  bank in the London interbank market for a period starting on the Business Day  following receipt or recovery and ending on the last day of the current  Interest Period |
|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                     |
| “Business Day”              | means a day except a Saturday or a Sunday on which  dealing in dollar deposits is carried on in the London interbank market and  (if payment is required to be made on such day) on which banks are open for  domestic and foreign exchange business in London, Moscow and New York City                                                                                                                                 |
|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                     |
| “Commitment”                | means the obligation of the Banker to make Advances  (other than Advances relating to the Additional Facility) under the terms of  this Agreement                                                                                                                                                                                                                                                                        |
|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                     |
| “Committed Facility Amount” | means $25,653,462.68 (to the extent not increased,  cancelled or reduced in accordance with the terms of this Agreement)                                                                                                                                                                                                                                                                                                 |
|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                     |
| “Default”                   | means an Event of Default or any event or  circumstance specified in Clause 11.1 which would (with the expiry of a grace  period, the giving of notice, the making of any determination hereunder or  any combination of any of the foregoing) be an Event of Default                                                                                                                                                    |
|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                     |

5

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| “Default Demand”                                         | means a demand in writing for the amount specified  in Clause 11.5 sent by the Banker to the Borrower pursuant to Clause 11.3                                                                                                                           |
|--------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                               |                                                                                                                                                                                                                                                    |
| “Default Interest Rate”                                  | means the rate which is 1% (one per cent) per annum  above the Interest Rate                                                                                                                                                                            |
|                                                               |                                                                                                                                                                                                                                                    |
| “Default Notice”                                         | means a notice in writing of the occurrence of an  Event of Default sent by the Banker to the Borrower pursuant to Clause 11.2                                                                                                                          |
|                                                               |                                                                                                                                                                                                                                                    |
| “Event of Default”                                       | means any event or circumstance specified as such in  Clause 11.1                                                                                                                                                                                       |
|                                                               |                                                                                                                                                                                                                                                    |
| “Early Repayment”                                        | means any whole or partial prepayment or  acceleration of the Loan whether pursuant to Clause 4.9 or Clause 11.5 or  otherwise                                                                                                                          |
|                                                               |                                                                                                                                                                                                                                                    |
| “ECGD Finance Charge/Additional Finance Charge  Receipt” | means a receipt in the form of Appendix H signed on  behalf of ECGD for sums received pursuant to Clause 18.1.2 (in respect of  Contract No.1) or Clause 18.2 (in respect of Supply Contracts placed under  the Additional Facility) as the case may be |
|                                                               |                                                                                                                                                                                                                                                    |
| “Eligible Bank”                                          | means any bank or other lending institution which is  approved by ECGD for the purposes of acquiring rights and benefits hereunder                                                                                                                      |
|                                                               |                                                                                                                                                                                                                                                    |
| “Eligible Goods”                                         | means UK Goods EU Goods US Goods, Third Country  Goods as may be approved by the Banker (with the prior written consent of  ECGD) for financing under this Agreement                                                                                    |
|                                                               |                                                                                                                                                                                                                                                    |

6

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| “Eligible Services”       | means UK Services, EU Services, US Services and  Third Country Services as may be approved by the Banker (with the prior  written consent of ECGD) for financing under this Agreement |
|-------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                |                                                                                                                                                                                  |
| “Eligible Value”          | means the amount specified as such in an Approval in  Principle                                                                                                                       |
|                                |                                                                                                                                                                                  |
| “EU”                      | means the states taken together that are from time to time members of the European Union                                                                                              |
|                                |                                                                                                                                                                                  |
| “EU Goods”                | means goods produced or manufactured in the EU  (excluding the UK)                                                                                                                    |
|                                |                                                                                                                                                                                  |
| “EU Services”             | means services rendered by persons ordinarily  resident or ordinarily carrying on business in the EU (excluding the UK)                                                               |
|                                |                                                                                                                                                                                  |
| “Finance Party”           | means the Banker or ECGD save that ECGD is not a  Finance Party for the purposes of Clause 14                                                                                         |
|                                |                                                                                                                                                                                  |
| “Final Date for Drawings” | means the date specified in Clause 3.5 or such later  date as may from time to time be notified by the Banker to the Borrower  pursuant to that Clause                                |
|                                |                                                                                                                                                                                  |
| “Finance Charge”          | means the sum of $2,180,544.33 payable to ECGD in  respect of Contract No. 1                                                                                                     |
|                                |                                                                                                                                                                                  |
| “Financed Percentage”     | means in relation to any contract the percentage of  the Eligible Value thereof specified in the Approval in Principle relating  thereto                                              |
|                                |                                                                                                                                                                                  |

7

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| “Financial Indebtedness” | means any indebtedness for or  in respect of                                                                                                                                                                                                                                                                                                 |
|------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                               |                                                                                                                                                                                                                                                                                                                                         |
|                               | a              moneys borrowed                                                                                                                                                                                                                                              |
|                               |                                                                                                                                                                                                                                                                                                                                         |
|                               | b              any  amount raised by acceptance under any acceptance credit facility or  dematerialised equivalent                                                                                                                                                          |
|                               |                                                                                                                                                                                                                                                                                                                                         |
|                               | c              any  amount raised pursuant to any note purchase facility or the issue of bonds  notes debentures loan stock or any similar instrument                                                                                                                       |
|                               |                                                                                                                                                                                                                                                                                                                                         |
|                               | d              the  amount of any liability in respect of any lease or hire purchase contract  which would in accordance with GAAP be treated as a finance or capital lease                                                                                                 |
|                               |                                                                                                                                                                                                                                                                                                                                         |
|                               | e              receivables  sold or discounted (other than any receivables to the extent they are sold on  a non-recourse basis)                                                                                                                                            |
|                               |                                                                                                                                                                                                                                                                                                                                         |
|                               | f              any  amount raised under any other transaction (including any forward sale or  purchase agreement) having the commercial effect of a borrowing                                                                                                               |
|                               |                                                                                                                                                                                                                                                                                                                                         |
|                               | g              any derivative transaction entered into in connection  with protection against or benefit from fluctuation in any rate or price (and  when calculating the value of any derivative transaction only the marked to  market value shall be taken into account) |
|                               |                                                                                                                                                                                                                                                                                                                                         |
|                               | h              any counter-indemnity obligation in respect of a  guarantee, indemnity, bond, standby or documentary letter of credit or any  other instrument issued by a bank or financial institution and                                                                 |
|                               |                                                                                                                                                                                                                                                                                                                                         |
|                               | i               the  amount of any liability in respect of any guarantee or indemnity for any of  the items referred to in paragraphs (a) to (h) above                                                                                                       |
|                               |                                                                                                                                                                                                                                                                                                                                         |
| “GAAP”                   | means generally accepted accounting principles,  standards and practices in the United States of America                                                                                                                                                                                                                                     |
|                               |                                                                                                                                                                                                                                                                                                                                         |
| “Group”                  | means the Borrower and its Subsidiaries for the time being                                                                                                                                                                                                                                                                                   |
|                               |                                                                                                                                                                                                                                                                                                                                         |

8

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| “Holding Company”   | means, in relation to a  person, any other person in respect of which it is a Subsidiary                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|-------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| “Interest Due Date” | means either the 15th day of January or the 15th day of July in each year or both such  days in each year (as the context may require)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| “Interest Period”   | means the period from and including an Interest Due  Date to but excluding the next succeeding Interest Due Date EXCEPT THAT the  Interest Period in relation to an Advance shall be the period from and  including the date such Advance is made up to the next Interest Due Date or  if such an Advance is made within a period of 15 days prior to an Interest  Due Date to the next succeeding Interest Due Date                                                                                                                                                                                                                                                                                                                                                                                                  |
|                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| “Interest Rate”     | means in respect of each Approved Contract the rate  per annum equal to the sum of LIBOR,  the Margin and the Mandatory  Cost (if any) EXCEPT THAT if by reason of circumstances affecting the  London interbank market it is not possible to ascertain LIBOR for the  relevant Interest Period or other selected period the Interest Rate shall  mean the rate per annum equal to the sum of the Margin, the Mandatory Cost (if any) and the actual cost (including any  extra costs incurred from a switch of funding) to the Banker and/or ECGD of  making Advances and/or maintaining the Loan for that Interest Period or that  other selected period from whatever other source the Banker, ECGD and the Borrower may agree.  Such cost shall be notified by  the Banker to the Borrower as soon as practicable |
|                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

9

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| “Kuban GSM” | means CJSC Kuban GSM a joint-stock company organised  under the laws of the Russian Federation that is a Subsidiary of the Borrower                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|-----------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| “LIBOR”     | means                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                  | a              for  the purpose of calculating the Interest Rate chargeable in relation to any  Advance or Loan for any Interest Period the rate per annum at which deposits  in dollars equivalent to such Advance or Loan for that Interest Period  appears on the Reuters Screen LIBOR01 page for that Interest Period at  11 am London time on the date two Business Days before the commencement of  that Interest Period EXCEPT THAT if on such day the Reuters Screen LIBOR01  page is not functioning or a rate is not available for that Interest  Period LIBOR shall mean the rate of interest equal to the arithmetic mean of  the rates (rounded upwards to four decimal places) at which deposits in  dollars equivalent to the Advance or Loan are offered to the Reference Banks  for the relevant Interest Period by prime banks in the London Interbank  Market at 11 am London time on the date two Business Days before the  commencement of that Interest Period or |
|                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                  | b              for  the purpose of calculating the Interest Rate chargeable under Clause 4.5 or  11.6 the rate of interest at which deposits in dollars equivalent to the  amount due to the Banker and/or ECGD for such period as the Banker (with the  prior written consent of ECGD) shall have selected appears on the Reuters  Screen LIBOR01 page at 11 am London time on the first day of that period  EXCEPT THAT if on such day the Reuters Screen LIBOR01 page is not  functioning or a rate is not available for such period LIBOR shall mean the  rate of interest                                                                                                                                                                                                                                                                                                                                                                                                          |

10

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|                                     | equal to the arithmetic mean of the rates (rounded  upwards to four decimal places) at which deposits in dollars equivalent to  the amount due to the Banker and/or ECGD are offered to the Reference Banks  for such period as the Banker (with the prior written consent of ECGD) shall  have selected by prime banks in the London Interbank Market at or about 11 am  London time on the day on which quotations would ordinarily be given between  prime banks in the London Interbank Market for deposits in dollars for  delivery on the first day of that period |
|-------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| “Loan”                    | means at any time in relation to the Banker or ECGD  the amount of principal owing to the Banker or ECGD hereunder at that time                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| “Loan Facility”           | means the sum of $25,653,462.68 and the Additional  Facility                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| “Loan Value”              | means the aggregate of the Loans of the Banker and  ECGD                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| “Mandatory Cost”          | means the percentage rate per annum calculated by  the Banker in accordance with Appendix G                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| “Margin”                  | means the sum of 15 basis points per annum and any  increase to the Margin pursuant to Clause 15.4                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| “Material Adverse Effect” | means a material adverse effect on or a material  adverse change in                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                | a              the  financial condition operations assets prospects or business of the Borrower  or the consolidated                                                                                                                                                                                                                                                                                                                                                                                    |

11

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|                                | financial condition operations assets prospects or  business of the Group                                                                                                                                                                                                                                                                                                                                                                       |
|--------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                           |                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                           | b              the  ability of the Borrower to perform and comply with its obligations under this  Agreement or                                                                                                                                                                                                                                                                |
|                           |                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                           | c              the  validity legality or enforceability of this Agreement or the rights or  remedies of any Finance Party hereunder                                                                                                                                                                                                                                            |
|                           |                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| “Notice of Approval” | means a notice in the form of Appendix C                                                                                                                                                                                                                                                                                                                                                                                                        |
|                           |                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| “Party”              | means a party to this Agreement                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                           |                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| “Permitted Security” | means                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                           |                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                           | a              any  Security on any assets of any corporation existing at the time such  corporation is merged or consolidated with or into the Borrower or any  Subsidiary of the Borrower or becomes a Subsidiary of the Borrower and not  created in contemplation of such event provided that no such Security shall  extend to any other assets                           |
|                           |                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                           | b              any  Security existing on any assets prior to the acquisition thereof by the  Borrower or any Subsidiary of the Borrower and not created in contemplation  of such acquisition provided that no such Security shall extend to any other  assets                                                                                                                 |
|                           |                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                           | c              any  Security on any assets securing Financial Indebtedness of the Borrower or  Financial Indebtedness of any Subsidiary of the Borrower incurred or assumed  for the purpose of financing all or part of the cost of acquiring, repairing  or refurbishing such assets provided that (i) no such Security shall  extend to any other assets (ii) the |

12

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|        | aggregate principal amount of all Financial  Indebtedness secured by such Security on such assets shall not exceed the  lower of (x) the purchase price of such assets and (y) the fair  market value of such assets at the time of acquisition repair or refurbishing  and (iii) such Security attaches to such assets concurrently with the  repair or refurbishing thereof or within 90 days after the acquisition  thereof as the case may be                                                         |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | d              any  Security arising by operation of law including any Security (i) arising  in the ordinary course of business with respect to amounts not yet delinquent  or being contested by the Borrower or a Subsidiary of the Borrower in good  faith in appropriate proceedings or (ii) for taxes assessments  government charges or claims including without limitation those in favour of  Russian governmental fiscal authorities |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | e              any  Security on the assets of any Subsidiary of the Borrower securing  intercompany Financial Indebtedness of such Subsidiary owing to the Borrower  or another Subsidiary of the Borrower                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | f              any  netting or set-off arrangement entered into by a member of the Group with a  bank or any other financial institution in the normal course of its banking  arrangements for the purpose of netting or setting off its debit and credit  facilities with that bank or financial institution                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | g              easements  rights-of-way restrictions and any other similar charges or encumbrances  incurred in the ordinary course of business and not interfering in any  material respect with the business of the Borrower or the business of any  Subsidiary of the Borrower including any encumbrance or restriction with  respect to an equity interest of any joint venture pursuant to a joint  venture agreement                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

13

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|                                       | h              any  extension renewal or replacement of any Security described in paragraphs  (a) to (g) above provided that (i) such extension renewal or  replacement shall be no more restrictive in any material respect than the  original Security (ii) the amount of Financial Indebtedness secured by  such Security is not increased and (iii) if the assets securing the  Financial Indebtedness subject to such Security are changed in connection  with such refinancing extension or replacement the fair market value of the  property or assets is not increased and |
|---------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                  | i               any  other Security (excluding any Security described in paragraphs (a) to  (h) (inclusive) above) provided that immediately after giving effect to  such Security the aggregate amount of all secured Financial Indebtedness of  the Group does not exceed 10% of the Borrower’s Total Assets                                                                                                                                                                                                                                                                           |
|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| “Qualifying Lender”         | means a Finance Party which is situated for tax  purposes in the Russian Federation or in a Tax Treaty Jurisdiction                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| “Reference Banks”           | means the  principal London offices of Barclays Bank PLC, ABN AMRO BANK N.V., HSBC  Bank plc, ING Bank N.V.,  Raiffeisen Zentralbank Oesterreich AG or the principal London offices of such other banks as may be  agreed between the Banker (with the prior written consent of ECGD) and the  Borrower from time to time                                                                                                                                                                                                                                                                                                                                                |
|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| “Reimbursement Certificate” | means a certificate in the form of Appendix  E(1) or Appendix E(2) as appropriate or such other form as may be  agreed between the Banker (with the prior written consent of ECGD) and the  Borrower submitted in accordance with Clause 8                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |

14

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| “Reimbursement Claim”    | means a claim made by the Borrower on the Banker in  accordance with Clause 8                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| “Security”               | means a mortgage charge lien pledge or other  interest securing any obligations of any person or any other agreement or  arrangement having a similar effect                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| “Significant Subsidiary” | means                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                               | a              UMC  (unless pursuant to the UMC Litigation any or all of the Borrower’s shares in  UMC are transferred to a person that is not a member of the Group with the  result that UMC ceases to be a member of the Group)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                               | b              Telecom  XXI                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                               | c              Kuban  GSM                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                               | d              any  Subsidiary of the Borrower to which (i) the Borrower UMC Telecom XXI or  Kuban GSM sells leases or otherwise transfers its GSM 900 or 1800 licences or  (ii) any such licence is re-issued and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                               | e              any  Subsidiary of the Borrower (i) whose total assets (or where such  Subsidiary prepares consolidated accounts whose total consolidated assets)  have a book value (as determined by reference to the most recent management  accounts of that Subsidiary prepared in accordance with GAAP) equal to or  exceeding 10% of the Borrower’s Total Assets or (ii) whose gross annual  revenues (or where such Subsidiary prepares consolidated accounts whose gross  annual consolidated revenues) (as determined by reference to the most recent  management accounts of that Subsidiary prepared in accordance with GAAP) are  equal to or exceed 10% of the Borrower’s gross annual consolidated revenues  in the |

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|                                       | year for which the Borrower’s most recent consolidated  financial statements were prepared                                                                                                                                                                                                                                                                                                                                                                                                     |
|---------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| “Subsidiary”                | means an entity from time to time of which a person  has direct or indirect control or owns directly or indirectly more than 50  per cent of the share capital or similar right of ownership                                                                                                                                                                                                                                                                                                        |
|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| “Supplier’s Receipt”   | means a receipt in the form of Appendix F signed by  the Supplier’s Signatory for sums paid to the Supplier by the Borrower in the  manner provided for in Clause 8                                                                                                                                                                                                                                                                                                                            |
|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| “Supplier’s Signatory” | means any person who is a director or other officer  of the Supplier whose name and specimens of whose signature have been  supplied from time to time to the Banker by the Supplier as being those of a  person authorised to sign Supplier’s Receipts referred to in Clause 8 on  behalf of that Supplier provided that at the date of receipt of the relevant  Reimbursement Claim by the Banker no written notice of the revocation of such  authorisation has been received by the Banker |
|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| “Supply Contract”           | means a contract between the Borrower and the  Supplier for the supply of plant and equipment and/or for the rendering of  services                                                                                                                                                                                                                                                                                                                                                                 |
|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| “Tax”                       | means any tax levy impost duty or other charge or  withholding of a similar nature (including any penalty or interest payable in  connection with any failure to pay or any delay in paying any of the same)                                                                                                                                                                                                                                                                                        |
|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| “Tax Credit”                | means a credit against relief or remission for or  repayment of any Tax                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

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| “Tax Deduction”                     | means a deduction or withholding for or on account  of Tax from a payment under this Agreement                                                                                                                                                                                                                                                                        |
|-----------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                          |                                                                                                                                                                                                                                                                                                                                                                  |
| “Tax Payment”                       | means an increased payment made by the Borrower to a  Finance Party under Clause 14.3 or a payment under Clause 14.2                                                                                                                                                                                                                                                  |
|                                          |                                                                                                                                                                                                                                                                                                                                                                  |
| “Tax Treaty Jurisdiction”           | means a jurisdiction which has in force a double tax  treaty with the Russian Federation (or with the Union of Soviet Socialist  Republics to which the Russian Federation has succeeded) which provides for  full exemption from Russian withholding tax on interest derived from a source  within the Russian Federation payable to a resident of such jurisdiction |
|                                          |                                                                                                                                                                                                                                                                                                                                                                  |
| “Telecom XXI”                       | means Telecom XXI an open joint stock company that  is a wholly-owned Subsidiary of the Borrower                                                                                                                                                                                                                                                                      |
|                                          |                                                                                                                                                                                                                                                                                                                                                                  |
| “Telecommunications  Authorisation” | means any Authorisation from any governmental or  other regulatory authority necessary in order for each of the Borrower and  its Significant Subsidiaries to maintain, operate and conduct its business as  it is being conducted in accordance with Telecommunications Laws.                                                                                        |
|                                          |                                                                                                                                                                                                                                                                                                                                                                  |
| “Telecommunications Laws”           | means (a) all laws and regulations which relate  to telecommunications and/or the business of providing mobile telephone  services and (b) all rules, guidelines, policies and regulations made  thereunder, that are applicable to each of the Borrower and its Significant  Subsidiaries and/or the business carried on by it.                            |
|                                          |                                                                                                                                                                                                                                                                                                                                                                  |
| “Third Country Goods”               | means goods produced or manufactured in a place other than the EU or the US                                                                                                                                                                                                                                                                                           |
|                                          |                                                                                                                                                                                                                                                                                                                                                                  |

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| “Third Country Services” | means services rendered by persons ordinarily  resident or ordinarily carrying on business in a place other than the EU  or the US                                                                                                                                                      |
|------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                               |                                                                                                                                                                                                                                                                                    |
| “UK”                     | means the United Kingdom of Great Britain and  Northern Ireland and includes the Channel Islands and the Isle of Man                                                                                                                                                                    |
|                               |                                                                                                                                                                                                                                                                                    |
| “UK Goods”               | means goods  produced or manufactured in the UK                                                                                                                                                                                                                                         |
|                               |                                                                                                                                                                                                                                                                                    |
| “UK Services”            | means services rendered by persons ordinarily  resident or ordinarily carrying on business in the UK                                                                                                                                                                                    |
|                               |                                                                                                                                                                                                                                                                                    |
| “UMC”                    | means CJSC “Ukrainian Mobile Communications”                                                                                                                                                                                                                                  |
|                               |                                                                                                                                                                                                                                                                                    |
| “UMC Litigation”         | means any of the claims proceedings (present or  future) and causes of action involving the Borrower and/or any of its Affiliates (including UMC) relating  to or arising out of the sale of UMC to the Borrower or the acquisition  reorganisation or ownership of UMC by the Borrower |
|                               |                                                                                                                                                                                                                                                                                    |
| “Unpaid Sum”             | means for the purposes of calculating Break Costs  any sum due and payable but unpaid by the Borrower under this Agreement                                                                                                                                                              |
|                               |                                                                                                                                                                                                                                                                                    |
| “US”                     | means the United States of America                                                                                                                                                                                                                                                      |
|                               |                                                                                                                                                                                                                                                                                    |
| “US Goods”               | means goods produced or manufactured in the US                                                                                                                                                                                                                                          |
|                               |                                                                                                                                                                                                                                                                                    |
| “US Services”            | means services rendered by persons ordinarily  resident or ordinarily carrying on business in the US                                                                                                                                                                                    |
|                               |                                                                                                                                                                                                                                                                                    |

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| “$” and “dollars” | mean the lawful currency of the United States of  America |
|---------------------------------------|-----------------------------------------------------------|
|                                  |                                                      |

1.2                               All references to interest shall be to interestaccruing from day to day and calculated on the basis of actual days elapsed anda year of 360 days

1.3                               Where the context of this Agreement so allows wordsimporting the singular include the plural and vice versa

1.4                            Unless otherwise indicated reference to a specifiedClause Recital or Appendix shall be construed as a reference to that specifiedClause of Recital to or Appendix to this Agreement

1.5                            Clause and Appendix headings are for ease of referenceonly and do not form part of this Agreement

1.6                               Unless otherwise indicated reference to “the Banker”, “ECGD”,“the Borrower” and any “Party” shall be construed so as to include itssuccessors in title, permitted assigns and permitted transferees

1.7          Any reference in this Agreement to aprovision of law is a reference to that provision as amended or re-enacted

# **2****                                         THEBANKER**

Every reference herein to the Bankershall be construed as a reference to Barclays Bank PLC as principal andliability to make Advances and rights remedies and powers hereunder in relationto any Advances so made shall be those of Barclays Bank PLC as such principal

2.1                            the foregoing shall not apply and references to theBanker shall be construed as references to Barclays Bank PLC as agent for ECGD

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2.1.1       where presentation ofa Reimbursement Claim is made after the termination of the Commitment and ECGDshall be liable to make the relevant Advance or

2.1.2       where ECGD makes anyAdvance or

2.1.3       where ECGD byassignment under Clause 13.4 becomes entitled to the rights remedies and powersconferred hereby in relation to any Advance or interest thereon or other moneysattributable thereto

2.2                            If Clause 2.1.1, 2.1.2 or 2.1.3 applies the rightsremedies and powers hereunder shall be those of ECGD but may be exercised bythe Banker as agent for ECGD

2.3                            The Banker hereby warrants that it has full power toenter into this Agreement and to perform all its obligations hereunder

# **3****                                      PURPOSEAND LIMITS OF FINANCE**

3.1                               Toassist the Borrower in making payments to the Supplier in respect of EligibleGoods to be supplied and/or Eligible Services to be rendered in accordance withContract No.1 and in meeting the Finance Charge theBanker agrees subject to the terms and conditions herein contained to makeAdvances up to the Committed FacilityAmountof which not more than

3.1.1                     $23,800,000 shall be advanced in respect of EligibleGoods and Eligible Services; and

3.1.2                     $1,853,462.68 shall be advanced in respect of theFinance Charge

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3.2                               If the Banker has advanced $25,653,462.68 to theBorrower under this agreement then the Borrower may request additional drawingsunder the Additional Facility up to $64,346,537.32 for the purposes offinancing additional Supply Contracts and the Additional Finance Charge due inrespect thereof. The Borrower shall not consider the Banker to be under anyobligation to lend funds under the Additional Facility. Any drawing agreedthereunder shall be at the sole discretion of the Banker

3.3                               Each Advance shall be deemed to be made to theBorrower at the time the amount thereof is made available by the Banker or byECGD pursuant to Clause 9.2 or 9.3 or 9.6

3.4                             Advances madeshall be disbursed in dollars direct to the Borrower from time to time by theBanker to reimburse the Borrower for sums paid by the Borrower to the Supplierand ECGD

3.5                               No Advance shall be made after the close of businessin New York City on 31st day of July 2007 unless and then only tothe extent that the Banker (with the prior written consent of ECGD) shallotherwise notify the Borrower in writing

3.6                               The Borrower hereby irrevocably andunconditionally (1) authorises the Banker to issue notices pursuant toClause 3.5 to extend the Final Date for Drawings on such occasions as theBanker may think fit (including without limitation for the purpose ofaccommodating delays in performance of an Approved Contract) and (2) agreesthat any such notice may be given and will be effective notwithstanding thatthe Final Date for Drawings which exists immediately prior to the date on whichthat notice is served may have already occurred

# **4****                                      REPAYMENTOF LOAN AND PAYMENT OF INTEREST**

4.1                            Subject to Clause 4.3 the Borrower agrees to repay onconsecutive Interest Due Dates the amount to be advanced in respect of eachApproved 

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                Contract in the semi-annualinstalments specified in the relevant Approval in Principle

4.2                            In relation to each Approved Contract the first suchinstalment shall become due and payable on the Interest Due Date next followinga period of 3 months from whichever of the following dates is applicable tothat Approved Contract

4.2.1                      whereeach item of the plant or equipment to be supplied is usable on delivery thedate by which it is estimated in the Application for Approval that 50% by valueof the Eligible Goods will have been delivered

4.2.2                      wherethe Approved Contract is in respect of services only the date by which it isestimated in the Application for Approval that 50% by value of the EligibleServices will have been rendered

4.2.3                      wherethe plant or equipment to be supplied is usable only on delivery of all of thesame the date on which it is estimated in the Application for Approval that thefinal delivery of plant or equipment will be made

4.2.4                      wherethe Supplier is responsible for the installation of the plant or equipment tobe supplied the date on which it is estimated in the Application for Approvalthat the installation will be completed or the date 12 months after theestimated date for the final delivery of plant or equipment**,** whichever is the earlier

4.3                            If on the earlier of the day on which the Borrowerconfirms to the Banker that there are no further Reimbursement Claims to bemade in respect of an Approved Contract and the date given in Clause 3.5 orsuch later date as may be notified by the Banker pursuant to that Clause thesum of the relevant Approved Contract Loan and the aggregate amount of anyinstalments paid in accordance with Clauses 4.1 and 4.2 in respect of that 

22

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ApprovedContract is less than the amount of the Financed Percentage of that ApprovedContract an amount (“the shortfall”) equal to the difference between the saidsum and the amount represented by the said Financed Percentage shall bededucted from as many of the instalments specified in the relevant Approval inPrinciple and taken in the reverse order of the due dates for payment thereofas are necessary to extinguish the shortfall

4.4                               The Borrower further agrees to pay interest on eachApproved Contract Loan at the Interest Rate. Such interest shall be due andpayable semi-annually on the Interest Due Dates EXCEPT THAT the interest whichaccrues on any Advance made within a period of 15 days prior to an Interest DueDate shall not be payable on that due date but shall be due on the nextsucceeding Interest Due Date

4.5                               Ifany amount of

4.5.1                     any instalment payable inaccordance with Clauses 4.1 and 4.2 and/or

4.5.2                     interest payable in accordancewith Clause 4.4

 is not paid onthe due date for payment thereof the Borrower shall pay interest on such amountat the Default Interest Rate. Such interest shall accrue from day to day fromthe due date for payment of such amount to the date of receipt by the Banker ofsuch amount and shall be due and payable without further notice or demand ofany kind

4.6                            The liability of the Borrower to pay in full any sumdue under this Agreement on the due date for payment thereof is in no wayconditional upon performance of any Approved Contract by the Supplier nor shallsuch liability be affected in any way by reason of any claim which the Borrowermay have or may consider that it has against the Supplier

23

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4.7                            Save where this Agreement expressly provides otherwiseall payments to be made by the Borrower shall be made to the Banker for its ownaccount****and/or that of ECGD inaccordance with their respective entitlements and shall be payable on the duedate in New York City in freely transferable dollars that are available for immediateuse by the parties entitled thereto or are “same-day funds” in the New YorkClearing House Interbank Payment System (or in such other immediately availablefunds as may at the time of payment be customary in New York for the same-daysettlement of international banking transactions in dollars) to the Banker’sAccount

4.8                            All amounts received by the Banker for the account ofECGD shall be paid to ECGD by the Banker as soon as is practicable followingreceipt in the manner in which ECGD shall from time to time instruct the Bankerin writing

4.9                            The Borrower may on giving written notice to theBanker not less than 15 Business Days (or such shorter period as the Banker mayagree in writing) prior to an Interest Due Date prepay on that Interest DueDate in addition to any other sums then due the whole or any part of anyApproved Contract Loan in accordance with and subject to the followingconditions:-

4.9.1                      noEvent of Default shall have occurred and remain unremedied

4.9.2                      partialprepayments hereunder made subsequent to the Final Date for Drawings should beapplied in or towards satisfaction of the instalments remaining to be paid inaccordance with Clauses 4.1 and 4.2 in respect of the relevant ApprovedContract in the reverse order of the due dates for payment thereof

4.9.3                      oncenotice of prepayment under this Clause 4.9 is given to the Banker the Borrowershall be irrevocably bound to make such prepayment

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4.9.4 amounts so prepaid shall not be re-advanced

4.10                     If the Borrower makes any payment of moneys intendedto be used in accordance with the provisions of Clause 4.9 the Banker shallhold such prepayment until the next Interest Due Date after receipt thereofwhen such prepayment shall be applied in the manner described in Clause 4.9

4.11                        The Borrower shall, within 3Business Days of demand by the Banker, pay to the Banker its Break Costsattributable to all or any part of an Advance or Unpaid Sum being paid by theBorrower on a day other than the last day of an Interest Period for thatAdvance or Unpaid Sum. Any such demand by the Banker shall be accompanied by acertificate confirming the amount of its Break Costs for any Interest Period inwhich they accrue and setting out reasonable details thereof

4.12                        Savein the case of manifest error a certificate issued by the Banker pursuant toClause 4.11 shall be conclusive evidence of the amount due from the Borrower tothe Banker pursuant to that Clause

4.13                     All payments made by the Borrower hereunder shall bemade free and clear of and without deduction for any set-off or counter-claim

4.14                        The Borrower may on giving written notice to theBanker not less than 15 Business Days (or such shorter period as the Banker mayagree) cancel the whole or any part of the Commitments. Any notice of cancellationshall be irrevocable and no part of the Loan Facility which has been cancelledshall be capable of being drawn

4.15                        The Borrower shall not repay or prepay all or any partof the Loan or cancel all or any part of the Commitments except at the timesand in the manner expressly provided for in this Agreement

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4.16                        Any EarlyRepayment shall be made together with accrued interest on the amount prepaidand without premium or penalty

4.17                        Any payment to be made by the Borrower which wouldotherwise fall due on a day which is not a Business Day shall instead fall dueon the next Business Day

# **5****                                      CONDITIONSPRECEDENT TO ADVANCES**

5.1                                NoAdvance shall be made until the Banker has despatched to the Borrower notice inwriting that the following conditions have been fulfilled to the satisfactionof the Banker (which satisfaction shall only be notified to the Borrower by theBanker with the prior consent in writing of ECGD). Such conditions must havebeen fulfilled within 90 days of the signature of this Agreement or within suchother longer period as the Banker (with the prior consent in writing of ECGD)may otherwise agree. Any such agreement by the Banker may be conditional uponthe Borrower accepting revised terms for this Agreement.

5.2                                Theconditions set out in Clauses 5.1 and 5.5 are for the benefit of the Banker andECGD and the Banker may in its sole and absolute discretion (but subject alwaysto its obtaining the prior written consent of ECGD) waive any or all of thoseconditions in whole or in part and decide when and if each of those conditionshas been fulfilled to its satisfaction

26

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5.3                             The Borrower shall have:

5.3.1                      taken allnecessary corporate actions to authorise the entry into and the performance ofits obligations under this Agreement

5.3.2                      obtained allconsents licences permits and authorisations and fulfilled all conditions ofall governmental and other authorities necessary to enable the Borrower toenter into this Agreement and to make payment of all sums in dollars in NewYork which become due from the Borrower to the Banker under this Agreement

5.3.3                      satisfiedthe Banker that no authorisations or consents of any governmental or otherauthority in the Russian Federation are necessary for ECGD to make any Advanceor for any assignment of rights and benefits contemplated by Clause 13 to bemade during the period of this Agreement

5.3.4                      suppliedto the Banker evidence of the authority and specimens of the signature of theBorrower’s Signatory

5.3.5                      paidto the Banker the commission referred to in Clause 1**7**

5.3.6                     madeto ECGD the payment due in respect of Contract No. 1 as required by Clause18.1.1

5.4                               Baker & McKenzie-CIS Limited of SadovayaPlaza 11th Floor 7 Dolgorukovskaya Street Moscow 127006Russian Federation shall have given an opinion as to matters of Russian law inform and substance satisfactory to ECGD confirming:-

5.4.1       that the individualswho have signed                                           thisAgreement on behalf of the Borrower were duly authorised so to sign

27

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5.4.2       that as so signed thisAgreement imposes legally valid and binding obligations enforceable in theRussian Federation in accordance with its terms on the Borrower on whose behalfit has been signed which the Borrower is fully qualified and empowered toundertake in conformity with the law of the Russian Federation

5.4.3       that all consentslicences permits and authorisations have been obtained and all other conditionsof all governmental and other authorities in the Russian Federation have beenfulfilled to enable the Borrower to enter into this Agreement and to makepayment in dollars in New York of all sums which may become due from theBorrower under this Agreement

5.4.4       that no authorisationsor consents of any governmental or other authority in the Russian Federationare necessary for ECGD to make any Advance or for any assignment of rights andbenefits contemplated by Clause 13 to be made during the period of thisAgreement

5.5                            In addition to the conditions specified in Clauses 5.3and 5.4 before a Notice of Approval is issued in respect of any contract andbefore any Advances shall be made hereunder in respect thereof

5.5.1                     the Borrower shall have

5.5.1.1              provided the Banker with an irrevocable letter ofinstruction in the form set out in Appendix D

5.5.1.2              obtained all consents licences permits and authorisationsand fulfilled all conditions of all governmental and other authorities in theRussian Federation in respect of the purchase and import of the goods to besupplied and the services to be rendered to the Borrower in accordance with the

28

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termsof the Supply Contract and the payment therefor in dollars in New York

5.5.1.3              made to ECGD the payment due in respect of ContractNo.1 as required by Clause 18.1.2 or (for contracts other than Contract No.1)the Additional Finance Charge

5.5.2       the Supplier shall have (within 90 daysof the date of the relevant Approval in Principle issued in respect of itscontract or within such other period as the Banker (with the prior consent inwriting of ECGD) may otherwise agree)

5.5.2.1                                 confirmed to the Bankerin writing that the contract provides for cash payments on each delivery and onthe performance of each item of service (if any) as envisaged by Clause 6.7

5.5.2.2                                   provided the Bankerwith evidence of the authority and specimens of the signature of the Supplier’sSignatory

5.5.2.3                                 provided the Bankerwith written confirmation that all necessary approvals including any exportlicences in respect of all the UK Goods and/or UK Services and other goodsand/or services to be supplied and/or rendered in accordance with the relevant SupplyContract have been obtained and have not been withdrawn and together with suchconfirmation the Supplier shall have provided a certified true copy of therelevant export licences

5.5.2.4                                   confirmed to theBanker in writing that it has provided all of the information, representations,warranties and undertakings required by the relevant UK government authorities

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5.5.3                                ECGD shall have

5.5.3.1 confirmed to the Banker in writing that it hasreceived from the Supplier (in a form to be agreed by ECGD and the Supplier)all undertakings customarily required by ECGD in transactions of this nature

5.5.3.2 confirmed to the Banker by the submission ofan ECGD Finance Charge/Additional Finance Charge Receipt in the form ofAppendix H that it has received from the Borrower the Finance Charge or (forcontracts other than Contract No.1) the Additional Finance Charge

5.5.4                                no Event of Defaultshall have occurred and remain unremediedor would occur as a result of the Advance being made

5.5.5                                allrepresentations and warranties made by the Borrower in this Agreement are trueand correct in all material respects

# **6****                                      CONTRACTSELIGIBLE FOR FINANCING**

All contracts to be financedhereunder shall

6.1                               be made between the Borrower and the Supplier

6.2                               be for the supply of Eligible Goods and/or EligibleServices (if any) with a contract value of at least $20,000

6.3                               be denominated and payable in dollars

6.4                               have been entered into not later than 24 months fromthe date of signature of this Agreement

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6.5                               be those in respect of which Approvals in Principlehave been issued not later than 26 months from the date of signature of thisAgreement

6.6                               be those in respect of which the conditions specifiedherein in relation to that Approved Contract have been fulfilled not later than90 days after the expiration of the period specified in Clause 6.4 or suchlater date as the Banker may (with the prior written consent of ECGD) notifythe Borrower in writing

6.7                            provide for periodic payments in cash by the Borrowerto the Supplier calculated by reference to the invoice value of Eligible Goodsdelivered to the Borrower and/or Eligible Services (if any) rendered on orbefore each delivery or performance of each item of service (as the case maybe)

6.8                            contain no provision which requires the goods to besupplied to be shipped in ships registered in any particular country or whichdiscriminates against ships registered in the UK

# **7****                                      APPROVALPROCEDURE**

7.1                             In respect of each contract that the Borrower wishesto be financed hereunder the Borrower shall send to the Banker an Applicationfor Approval signed by the Borrower’s Signatory

7.2                            If the Banker agrees that such contract shall be sofinanced they will send to the Borrower and the Supplier an Approval inPrinciple

7.3                            A Notice of Approval shall then be sent by the Bankerto the Borrower and the Supplier after

7.3.1                      theBanker has received the Borrower’s unqualified acceptance in writing signed bya Borrower’s Signatory of the terms of the relevant Approval in Principle and

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7.3.2                      theconditions specified in Clause 5.5 have been fulfilled to the satisfaction ofthe Banker

7.4                            Following the issuance of a Notice of Approval inrelation to a new Supply Contract (which for the avoidance of doubt shallexclude Contract No. 1):

7.4.1                     the Committed Facility Amount shall automatically beincreased by the Financed Percentage of (i) the amount of such SupplyContract and (ii) the amount of any Additional Finance Charge in respectthereof (together, the “Additional Committed Facility Amount”) and

7.4.2 theAdditional Facility shall automatically be reduced by the Additional CommittedFacility Amount

PROVIDEDTHAT nothing in this Agreement shall cause the Committed Facility Amount toexceed $90,000,000 at any time. The Borrower shall pay to the Banker the feesdescribed in Clauses 17.2 and 17.3 and to ECGD the Additional Finance Chargedescribed in Clause 18.2 with respect to any increase in the Committed FacilityAmount

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# **8****                                         REIMBURSEMENTCLAIMS**

8.1                                From time to time the Borrower maypresent claims to the Banker by the submission of a Reimbursement Certificatesigned by a Borrower’s Signatory and accompanied by either a Supplier’s Receiptfor payments made in respect of Eligible Goods delivered and/or EligibleServices rendered (if any) or an ECGD Finance Charge/Additional Finance ChargeReceipt for payments made pursuant to Clauses 18.1.2 or 18.2 as the case may bePROVIDED THAT the first such claim for all sums paid to the Supplier referredto in this Clause 8 prior to the date of loan effectiveness is received by theBanker within 45 Business Days of the date of the Banker serving notice on theBorrower confirming loan effectiveness in accordance with Clause 5 and that allsubsequent claims for sums paid to the Supplier or ECGD referred to in thisClause 8 are received by the Banker within 45 Business Days of the date ofreceipt of payment by the Supplier or ECGD specified in the relevant Supplier’sReceipt or ECGD Finance Charge/Additional Finance Charge Receipt

8.2                                Reimbursement Claims may be made only in respect of (i) theEligible Value of an Approved Contract or (ii) the Finance Charge orAdditional Finance Charge payable to ECGD in respect thereof

# **9****                                      ADVANCESAND REIMBURSEMENT PROCEDURES**

9.1                             The Banker shall open and maintain records in accordancewith its usual practices into which the Banker shall promptly enter from timeto time details of the aggregate amount of all Advances made and of allrepayments and prepayments thereof the aggregate amount of interest falling dueand of all payments thereof and the aggregate amount of all amounts ofcommissions and fees falling due and of all payments thereof together withdetails of any other amounts payable by the Borrower and of all paymentsthereof

9.2                               The Banker shall make the first Advance immediatelyupon notifying the Borrower that the conditions set out in Clause 5 have beenfulfilled

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9.3                               If the Borrower wishes to use the Additional Facilityto assist the financing of further contracts entered into with the Supplierpursuant to Recital (1) the Banker shall make the first Advance in respectof the relevant contract immediately after notifying the Borrower that theconditions set out in Clause 5.5 have been fulfilled in respect of thatcontract

9.4                            Subject to the provisions of this Agreement as soon aspracticable after receipt of a Reimbursement Claim the Banker shall make anAdvance hereunder by way of disbursement in dollars to the Borrower inaccordance with Clause 9.6 of the amount of such Reimbursement Claim

9.5                            Where ECGD is required to make an Advance by virtue ofthe provisions of Clause 9.8 ECGD shall not more than 10 Business Days afterreceipt of notification from the Banker to that effect make its Advanceavailable to the Banker by payment in New York City in freely transferable dollarsthat are available for immediate use by the Banker or are “same-day funds” inthe New York Clearing House Interbank Payment System (or in such otherimmediately available funds as may at the time of payment be customary in NewYork for the same-day settlement of international banking transactions indollars) to the Banker’s Account and the Banker shall as soon as practicableafter the Advance is made by ECGD disburse such amount to the Borrower inaccordance with Clause 9.6

9.6                            Advances made in accordance with Clauses 9.4 and 9.5 shallbe disbursed to the Borrower by payment in dollars to the Borrower’s Account

9.7                              Notwithstandingany other provisions of this Clause 9 no Advance (other than the first Advancemade hereunder) shall be made in accordance with Clauses 9.4 and 9.5 before theBusiness Day next following a period of 5 Business Days from the date of theprevious Advance

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9.8                            ECGD hereby undertakes that if the Commitment isterminated under the provisions of Clause 13.1 or 13.2 ECGD will subject to theterms and conditions of this Agreement make the Advances which the Banker wouldotherwise have made

# 10                                  AMOUNTSDUE TO BE PAID TO THE BORROWER

10.1                        Allamounts received or retained by the Banker by virtue of any letter ofinstruction given in the terms set out in Appendix D or by virtue of accrual ofinterest on any sum held on deposit in accordance with Clause 19 shall be applied as the Borrowermay direct EXCEPT THAT if any of the circumstances referred to in Clause 10.2shall occur before the application by the Banker of any such amounts inaccordance with such direction the Banker shall apply such amounts as ECGD maydirect in writing in or towards satisfaction of any sum to be paid by theBorrower under this Agreement

10.2                        Thecircumstances referred to in Clause 10.1 are as follows:

10.2.1              \the Supplier or the Borrower hasnotified the Banker that the Supply Contract has been terminated or

10.2.2              the Supplier or the Borrower has notifiedthe Banker that arbitration has been initiated under the Supply Contract or

10.2.3            an Event of Default has occurred and remains unremedied

10.3                        Wherethe Banker is directed by ECGD to apply an amount referred to in Clause 10.1 inor towards repayment of the Loan Value and such amount is received or retainedby the Banker on a date other than an Interest Due Date the Banker shall holdsuch amount on deposit until the next Interest Due Date and shall then apply itas directed

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# **11****                               DEFAULT**

11.1                     For the purposes of this Agreement there shall be anEvent of Default:-

11.1.1              ifthe Borrower fails to pay in full in accordance with Clause 4.7 on the due datefor payment thereof

11.1.1.1        anyinstalment due in accordance with Clauses 4.1  and 4.2 or

11.1.1.2        anyinterest due under this Agreement

unless such failure to pay iscaused by administrative or technical error and payment is made within 3Business Days of the due date

11.1.2               if the Borrower fails in theperformance or observance of any of its other obligations hereunder

### 11.1.3

(a)                                  if any Financial Indebtedness of anymember of the Group is not paid when due nor within any originally applicablegrace period

(b)                                  if any Financial Indebtedness of anymember of the Group is declared to be or otherwise becomes due and payableprior to its specified maturity as a result of an event of default (howeverdescribed)

(c)                                 if any commitment for any FinancialIndebtedness of any member of the Group is cancelled or suspended by a creditorof any member of the Group as a result of an event of default (howeverdescribed)

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(d)                                  if any creditor of any member of theGroup becomes entitled to declare any Financial Indebtedness of any member ofthe Group due and payable prior to its specified maturity as a result of anevent of default (however described)

provided that no Event of Defaultwill occur under this Clause 11.1.3 unless the events described in paragraphs (a) to(d) above occur either (1) in respect of any single item of FinancialIndebtedness or single commitment for Financial Indebtedness in an amount exceeding$10,000,000 (or its equivalent in any other currency or currencies), or (2) wherethe aggregate of unpaid amounts in respect of Financial Indebtedness andwithdrawn commitments for Financial Indebtedness is in excess of $35,000,000(or its equivalent in any other currency or currencies)

11.1.4     if any action orproceedings are taken or instituted for the dissolution or disestablishment ofthe Borrower or for the suspension of its operations or any measures are takenwhich would prevent or impede the Borrower from or in carrying on itsoperations or any substantial part thereof provided that no Event of Default will occur under this Clause 11.1.4 inrespect of any action, proceeding or measure which is - in the sole discretionof the Banker - frivolous or vexatious and is withdrawn or rejected within 30calendar days from the date of commencement

11.1.5     if any order is made ora resolution is passed to wind up the Borrower or the Borrower becomes insolventor makes any arrangement for the benefit of its creditors generally or admits in writing itsinability to pay its debts as they become due or commits any act substantiallyequivalent thereto or any analogous procedure or step is taken in anyjurisdiction

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11.1.6     if a receiver ormanager is appointed in respect of theBorrower or any of its assets for the benefit of debenture holders orother creditors of the Borrower

11.1.7                if any representation or warranty ofthe Borrower or any statement deemed to be made by the Borrower in thisAgreement or in any other certificate or notice delivered by the Borrower inconnection with this Agreement proves to have been inaccurate incomplete ormisleading in any material respect at the time it was made or deemed to havebeen made and such representationwarranty or statement is not rendered accurate complete and not misleadingwithin 10 Business Days of notice in writing by the Banker or ECGD tothe Borrower

11.1.8                if any governmental authorisationnecessary for the performance of any obligation of the Borrower under thisAgreement ceases to be in full force and effect

11.1.9     ifthere is a seizure compulsory acquisition expropriation nationalisation orrenationalisation in each case without appropriate compensation by or understate authority of all or part of theassets of the Borrower (the book value of which is 15 per cent. or more of the book valueof the Borrower’s total assetsimmediately prior thereto) PROVIDED THAT this Clause 11.1.9 shall not apply tothe transfer of any or all of the Borrower’s shares in UMC pursuant to the UMCLitigation to a person that is not an Affiliate of the Borrower

11.1.10        if the Borrower ceases (or proposes to cease) to carry on all or any substantial part ofits business PROVIDED THAT this Clause 11.1.10 shall not apply to the transferof all or any of the Borrower’s shares in UMC pursuant to the UMC Litigation

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11.1.11        if any law regulation or order or any change inany law or regulation does or purports to vary suspend terminate or excuse performanceby the Borrower of any of its obligations under this Agreement or a moratoriumon the payment of interest or principal under this Agreement is announced

11.1.12        if a MaterialAdverse Effect occurs or

11.1.13        if the UMC Litigation is adversely determinedand in the reasonable opinion of the Banker such adverse determination has oris reasonably likely to have a Material Adverse Effect

11.2                     If an Event of Default occurs a Default Notice may besent by the Banker to the Borrower

11.3                     If an Event of Default occurs and is continuing unremedied a Default Demandmay be sent by the Banker to the Borrower

11.3.1                                                            in the case of an Event of Default specified in Clause11.1.1.1 or 11.1.3 with the Default Notice or at any time thereafter

11.3.2                                                            in the case of an Event of Default specified in Clause11.1.1.2 not less than 7 days after the sending of the Default Notice

11.3.3                                                            in the case of any other Event of Default not lessthan 14 days after the sending of the Default Notice

11.4                     On the occurrence of any of the events of defaultreferred to in Clause 11.1 the obligation of the Banker and/or ECGD to makeAdvances 

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shallimmediately cease but the Banker shall continue to make Advances if and for solong as ECGD so directs and ECGD may continue to make Advances withoutprejudice to the right of the Banker and/or ECGD to receive payment of any sumsdue to them but only until the sending of a Default Demand PROVIDED THAT if noDefault Demand has been sent by the Banker and if the Event of Default is suchan event as is referred to in Clause 11.1.1.2 and such Event of Default isremedied within 10 days or in Clause 11.3.3 and such Event of Default isremedied within 30 days the Banker and ECGD shall thereupon again be bound bytheir obligations as if such Event of Default had not occurred

11.5                     Upon the sending of the Default Demand there shallforthwith become due and payable by the Borrower in respect of each ApprovedContract the aggregate of the Approved Contract Loans and all interest accruedand unpaid in respect thereof calculated up to the date of the Default Demandtogether with any unpaid amount which has accrued under the provisions ofClause 4.5 up to that date

11.6                     In lieu of the interest referred to in Clauses 4.4 and4.5 which shall cease to accrue from the date of the Default Demand theBorrower shall pay without further notice or demand of any kind from day to dayinterest at the relevant Default Interest Rate on each amount payable underClause 11.5 until such amount is paid to the Banker in accordance with Clause4.7

11.7                     If late or partial payment is received of any amountpayable under this Agreement the Borrower hereby waives any rights which it may**have to make any appropriation thereofand the amount so received shall be applied at the written direction of ECGD bythe Banker in or towards satisfaction of the amounts which are due or overduefor payment

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# **12 UNDERTAKINGSCOVENANTS AND REPRESENTATIONS BY THE BORROWER**

General Undertakings

12.1                           Theundertakings in this Clause 12.1 remain in force from the date of thisAgreement for so long as any amount is outstanding under this Agreement

Authorisations

**12.1.1**                                          The Borrower shall promptly:

12.1.1.1  obtaincomply with and do all that is necessary to maintain in full force and effectand

12.1.1.2  supply certified copies to the Banker of

any Authorisation required under any law orregulation of its jurisdiction of incorporation to enable it to perform itsobligations under this Agreement and to ensure the legality validityenforceability or admissibility in evidence in its jurisdiction ofincorporation of this Agreement

Compliance withlaws

12.1.2               The Borrower shall comply in allrespects with all laws to which it may be subject if failure so to comply wouldmaterially impair its ability to perform its obligations under this Agreement

Maintenance ofexistence

12.1.3               The Borrower shall maintain itscorporate existence

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**Negative pledge**

12.1.4                                            TheBorrower shall not (and the Borrower shall ensure that no other member of theGroup will) create or permit to subsist any Security over any of its assets

12.1.5                                            TheBorrower shall not (and the Borrower shall ensure that no other member of theGroup will)

12.1.5.1                                   sell transfer orotherwise dispose of any of its assets on terms whereby they are or may beleased to or re-acquired by the Borrower or any other member of the Group

12.1.5.2            selltransfer or otherwise dispose of any of its receivables on recourse terms

12.1.5.3            enterinto any arrangement under which money or the benefit of a bank or otheraccount may be applied set-off or made subject to a combination of accounts or

12.1.5.4           enter into any other preferentialarrangement having a similar effect

in circumstances where the arrangement or transactionis entered into primarily as a method of raising Financial Indebtedness or offinancing the acquisition of an asset

12.1.6                                            Clauses12.1.4 and 12.1.5 above do not apply to Permitted Security

**Disposals**

12.1.7                                            TheBorrower shall not (and shall ensure that no other member of the Group will)enter into a single transaction or a series of transactions

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(whetherrelated or not and whether voluntary or involuntary) to sell, lease, transferor otherwise dispose of any asset

12.1.8                                            Clause12.1.7 above does not apply to any sale lease transfer or other disposal

12.1.8.1                                   madein the ordinary course of trading of the disposing entity

12.1.8.2                                   of assets inexchange for other assets comparable or superior as to type value and quality

12.1.8.3                                   made from one memberof the Group (other than the Borrower) to another member of the Group

12.1.8.4                                   ofcash or cash equivalents for cash or cash equivalents

12.1.8.5                                   where the book valueof such asset (when aggregated with the book value of each other asset disposedof under this Clause 12.1.8.5) (in each case as calculated in accordance withGAAP) does not exceed (x) 10% of the Borrower’s Total Assets in anyfinancial year of the Borrower and (y) 25% of the Borrower’s Total Assetsduring the period starting on the date of this Agreement and ending on the datethat all amounts outstanding under this Agreement have been paid in full. Atthe request of the Banker (any such request to be made no more than once percalendar quarter unless a Default is continuing) the Borrower shall provide acertificate to the Banker setting out in reasonable detail the book value ofany assets disposed of under this Clause 12.1.8.5 (calculated in accordancewith GAAP) or

12.1.8.6                                 involvingthe transfer of any or all of the Borrower’s shares in UMC pursuant to the UMCLitigation to a person that is not a member of the Group (provided that thisClause 12.1.8.6 shall not in any way prejudice the rights of the FinanceParties under Clause 11.1.13 (*UMC Litigation*)).

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When calculating theBorrower’s Total Assets under Clause 12.1.8.5 above if the annual consolidatedbalance sheet of the Borrower for the immediately preceding financial year ofthe Borrower is not available the Borrower’s Total Assets shall be calculatedby reference to the draft audit report then available for that financial yearand any other evidence reasonably requested by and reasonably satisfactory tothe Banker

**Merger**

12.1.9                                            TheBorrower shall not enter into or become subject to any consolidation orreorganisation whether by way of merger (*sliyaniyeobschestva*) company accession (*prisoedinyeniye**obschestva*) company division (*razdelenie**obschestva*) company separation (*vydelyeniye**obschestva*)company transformation (*preobrazovaniye**obschestva*) company liquidation (*likvidatisya obschestva*) or any other company reorganisation(*reorgnizatsiya**obschestva*) (as these terms are construed by applicableRussian law) or otherwise, or any analogous transaction in any jurisdictionother than a consolidation or merger with one of its Subsidiaries where theBorrower is the surviving entity

12.1.10                                     The Borrower shallensure that no Significant Subsidiary will enter into or become subject to anyconsolidation or reorganisation whether by way of merger (*sliyaniye obschestva*) company accession (*prisoedinyeniye obschestva*) companydivision (*razdeleyeniey obschestva*)company separation (*vydelyeniye obschestva*)company transformation (*preobrazovaniye**obschestva*) company liquidation (*likvidatsiya obschestva*) or any othercompany reorganisation (*reorganizatsiyaobschestva*) (as these terms are construed by applicable Russian law)or otherwise or any analogous transaction in any jurisdiction if suchreorganisation or transaction would in the opinion of the Banker (actingreasonably) have a Material Adverse Effect.

**Changeof business**

12.1.11          The Borrower shallprocure that no substantial change is made to the general nature of thebusiness of the Borrower or the Group from that carried on at the date of thisAgreement

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**Conductof business**

12.1.12          The Borrower shall andshall procure that each of its Significant Subsidiaries will conduct itsbusiness in all material respects in accordance with

12.1.12.1  all Telecommunications Laws towhich it is or may become subject

12.1.12.2                                              allrequirements of the telecommunications regulators of the Russian FederationUkraine and any other jurisdiction where it conducts its business and

12.1.12.3                                              theterms of all relevant Telecommunications Authorisations.

**Assetmaintenance**

12.1.13          The Borrower shall andshall procure that each of its Significant Subsidiaries will have and maintaingood and marketable title to or valid leases or licences of or rights of userelating to all assets necessary to maintain develop and operate and otherwiseconduct its business as then being conducted by it and in each case wherefailure to do so might reasonably be expected to have a Material Adverse Effect

**Insurance**

12.1.14          The Borrower shall (andshall ensure that each other member of the Group will) maintain insurances onand in relation to its business and assets with reputable underwriters orinsurance companies against those risks and to the extent usually insuredagainst by prudent companies located in the same or a similar location andcarrying on a similar business

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**Transactions with Related Parties**

12.1.15        The Borrower shall not(and the Borrower shall ensure that no other member of the Group will) directlyor indirectly enter into or permit to exist any intercompany loan with, or forthe benefit of any Related Party unless

12.1.15.1                                              the termsof such intercompany loan are no less favourable to such member of the Groupthan those that could be obtained in a comparable arm’s-length transaction orseries of related transactions with a person that is not a Related Party or

12.1.15.2                                              suchintercompany loan is made pursuant to a contract or contracts existing on thedate of this Agreement (excluding any amendments or modifications thereto afterthe date of this Agreement),

provided that theaggregate outstanding amount of all such intercompany loans described inClauses 12.1.15.1 and 12.1.15.2 above does not at any time exceed $100,000,000

12.1.16        Clause 12.1.15 above doesnot apply to

12.1.16.1                                              compensationor employee benefit arrangements with any officer or director of any member ofthe Group arising out of any employment contract entered into in the ordinarycourse of business or

12.1.16.2                                              transactionsbetween members of the Group

12.1.17        For the purposes ofClauses 12.1.15 and 12.1.16 only a “Related Party” means with respect to anyspecified person

12.1.17.1  any other person directly orindirectly controlling or controlled by or under direct or indirect commoncontrol with such specified person or

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12.1.17.2        any other person who is a director or executiveofficer of (a) such specified person or (b) any person described inClause 12.1.17.1 above

For purposes of thedefinition of “**Related Party**”only, “**control**” (including withcorrelative meanings the terms “**controlling**”“**controlled by**” and “**under common control with**”) as used withrespect to any person shall mean the possession directly or indirectly of thepower to direct or cause the direction of the management or policies of suchperson whether through the ownership of voting securities by agreement orotherwise; provided that beneficial ownership of 10 per cent. or more of anyclass or any series of any class of equity securities of a person whether ornot voting shall be deemed to be control

**Restrictionon acquisitions**

12.1.18          The Borrower shall notestablish or acquire any Subsidiary or invest in any other entity without theconsent of the Banker (such consent not to be unreasonably withheld) providedthat this Clause 12.1.18 shall not apply to any such acquisition orinvestment where

12.1.18.1  such acquisition or investment relates to aSubsidiary or entity whose principal business is telecommunications or theprovision of data services or related or ancillary businesses and

12.1.18.2  the consideration paid by the Borrower in relation tosuch acquisition or investment, when aggregated with the consideration paid bythe Borrower in relation to each other acquisition or investment permittedunder this Clause 12.1.18.2 does not exceed 20 per cent. of the Borrower’sTotal Assets in any financial year of the Borrower

**Promptpayment of Taxes**

12.1.19      The Borrower shall (andshall ensure that each Significant Subsidiary will) duly pay all Taxes payableby it other than (a) those taxes 

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which are being contestedin good faith and by appropriate proceedings and in respect of which adequatereserves or other appropriate provisions have been made or (b) whoseamount does not exceed $25,000,000 (or its equivalent in any other currencies)

**Pari passu**

12.1.20          The Borrower shall procurethat its obligations under this Agreement rank at least *pari passu* with all its other unsecuredunsubordinated obligations save where such other obligations are mandatorilypreferred by law

**Loansand guarantees**

12.1.21          TheBorrower shall not (and the Borrower shall ensure that no member of the Groupwill)

12.1.21.1  make any loan, or provide any form of credit orfinancial accommodation, to any person (including without limitation itsemployees shareholders another member of the Group and any Affiliate) or

12.1.21.2  give or issue any guarantee indemnity bond or letterof credit to or for the benefit of or in respect of liabilities or obligationsof any other person or voluntarily assume any liability (whether actual orcontingent) of any other person (including, in each case and without limitationits employees shareholders another member of the Group and any Affiliate)

12.1.22                               The restrictions inClause 12.1.21 above do not apply to (i) loans credits financialaccommodation guarantees indemnities bonds and letters of credit expresslypermitted by this Agreement (if any) or for normal trade credit on arm’s lengthterms and in the ordinary course of business or granted by a member of theGroup to another member of the Group provided that the aggregate amount of suchloans credits financial accommodation guarantees indemnities bonds and lettersof credit does not at any time exceed 10 per cent. of the Borrower’s TotalAssets (ii) guarantees by the Borrower in relation to the obligations ofany other member of the Group or (iii) the arrangements 

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permitted under Clauses 12.1.15 and 12.1.16 (*Transactions with Related Parties*)

Financial statements

12.1.23                                                      The Borrower shall supply to the Banker and ECGD

12.1.23.1                                          as soon as the same becomes available but in any eventwithin 180 days after the end of each of its financial years its auditedconsolidated and non-consolidated financial statements for that financial yearand

12.1.23.2                                          as soon as the same becomes available but in any eventwithin 45 days after the end of each of its financial quarters its unauditedconsolidated and non-consolidated financial statements for that financialquarter

12.1.24    The Borrower undertakes promptly upon the occurrenceof an Event of Default as specified in Clauses 11.1.3 to 11.1.13 to notify theBanker thereof specifying all relevant details

12.2                               The Borrower hereby covenants and agrees that theBorrower shall and shall procure that the Supplier shall obtain all necessaryconsents licences permits and authorisations and fulfil all conditions of allgovernmental and other authorities in the Russian Federation in respect of thepurchase and import of the Eligible Goods to be supplied and the EligibleServices to be rendered to the Borrower in accordance with the terms of therelevant Approved Contract and the payment therefor in dollars in New York. TheBorrower further agrees that the liability of the Borrower to make payment tothe Banker under this Agreement is in no way conditional upon the performanceby the Borrower (or any agent appointed by it, including the Moscow Bank for Reconstructionand Development) of its undertaking or obligations under the law of the RussianFederation to obtain such authorisation (including any deal passport that maybe required)

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12.3  The Borrowerrepresents that it is not required under the law of the Russian Federation tomake any deduction for or on account of Tax from any payment it may make underthis Agreement to a Qualifying Lender

12.4                                  The Borrower represents that neither it nor any of itsSignificant Subsidiaries has overdue tax liabilities other than tax liabilities(a) whose amount applicability or validity is being contested in goodfaith by appropriate proceedings and for which adequate reserves or otherappropriate provision has been made or (b) whose amount together with allsuch other unpaid or undischarged taxes does not exceed in aggregate exceed$25,000,000 (or its equivalent in any other currencies)

12.5                                  The Borrower makes the representations set out inClauses 12.3 and 12.4 on the date of this Agreement. Such representations are alsodeemed to be made by the Borrower by reference to the facts and circumstancesthen existing on each date that an Application for Approval is submitted to theBanker by the Borrower in relation to a Supply Contract (other than Contract No. 1)

# **13****                               THEFUNDING AND BENEFIT OF THE AGREEMENT**

13.1                     The Commitment shall terminate if the introduction ofa new law or regulation or a change in any applicable law or regulation or inthe interpretation thereof by a court or tribunal or by any authority chargedwith the administration thereof shall make it illegal for the Banker to fulfilits obligations hereunder

13.2                     ECGD may at any time terminate the Commitment by givingto the Banker notice in writing of such termination specifying the date onwhich the Commitment shall terminate and thereafter the Banker shall have nofurther liability to make Advances

13.3                     The Banker may at any time (with the prior writtenconsent of ECGD and subject to Clause 13.6 the Borrower (such consent not to be 

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unreasonablywithheld or delayed)) assign to any Eligible Bank all or any part of its rightsand benefits hereunder. Any such assignment shall be in a minimum amount of$5,000,000 (except in the case of an assignment which has the effect ofreducing the Banker’s participation in the Loan Facility to zero). The Borrower’sconsent to an assignment or transfer by the Banker shall not be required ifsuch transfer or assignment is to an Affiliate of the Banker

13.4                         The Banker may at any time (with theprior written consent of ECGD) assign to ECGD all part of its rights andbenefits hereunder

13.5                     ECGD may at any time assign all or any part of itsrights and benefits hereunder to any Eligible Bank

13.6                        The Borrower hereby authorises the Banker to accept onits behalf notice in writing of any assignment of rights and benefits made inaccordance with Clause 13.5

13.7                        The consent of the Borrower to an assignment of rightsunder Clause 13.3 shall not be required if an Event of Default shall haveoccurred and remains unremedied

13.8                     ECGD shall be entitled to make whatever arrangementsit shall deem appropriate to procure dollars to enable it to fulfil itsobligations but any such arrangements shall not affect the rights benefits andobligations of the Borrower

13.9                     If the Commitment shall terminate in accordance withClause 13.1 or 13.2 or if there shall be any assignment of the rights orbenefits of the Banker to ECGD or any assignment of the rights and benefits ofECGD to an Eligible Bank the Banker shall inform the Borrower thereof but theBorrower shall notwithstanding having received such information continue tomake payment of all sums due under this Agreement through the Banker in themanner provided hereunder and any failure by the Banker to inform 

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theBorrower thereof shall not in any way affect the rights benefits or obligationsof any person hereunder

13.10              The Borrower shall not assign or transfer any of itsrights benefits or obligations hereunder

# **14****                                  TAXES**

14.1                      Allpayments to be made by the Borrower hereunder shall be made without any Tax Deduction, unless a Tax Deduction is requiredby law

14.2                      TheBorrower agrees to pay or cause to be paid directly to the appropriategovernmental authority and reimburse the Banker and/or ECGD for the cost of anyand all present and future Taxeslevied or imposed by that authority on or in respect of any right obligation oraction granted imposed or undertaken pursuant to this Agreement

14.3                         If theBorrower is prohibited by operation of law from making payments without any Tax Deduction pursuant to Clause 14.1 or from paying causing to be paidor reimbursing any Finance Partyfor the cost of all Taxespursuant to Clause 14.2 then the payment due to such Finance Party under this Agreementshall be increased to ensure that after such Tax Deduction or payment of such Taxes that Finance Party receivesa**net sum equal to the sum whichit would have received and to which it would have been entitled had no such Tax Deduction or payment been required

14.4                      Ifthe Borrower must make payments for Taxas provided for in this Clause 14then the Borrower shall confirm to the Banker and/or ECGD that all such Taxes have been paid by forwarding tothe Banker and/or ECGD within 30 days after payment an official receipt or suchother documentary evidence as is acceptable to the Banker and/or ECGD actingreasonably

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14.5                        Clause 14.2shall not apply:

14.5.1               with respect to any Tax assessed on a Finance Party

14.5.1.1     underthe law of the jurisdiction in which that Finance Party is incorporated or ifdifferent the jurisdiction (or jurisdictions) in which that Finance Party istreated as resident for tax purposes or

14.5.1.2     underthe law of the jurisdiction in which that Finance Party’s facility office islocated in respect of amounts received or receivable in that jurisdiction

ifthat Tax is imposed on or calculated by reference to the net income received orreceivable (but not any sum deemed to be received or receivable) by thatFinance Party or

14.5.2                                   to the extent a loss liability or cost

14.5.2.1      iscompensated for by an increased payment under Clause 14.3 or

14.5.2.2      wouldhave been compensated for by an increased payment under Clause 14.3 but was not so compensated solelybecause one of the exclusions in Clause 14.5 applied

14.6                        The Borrower is not required to make an increasedpayment to a Finance Party under Clause 14.3 if on the date on which the payment falls due the Borrowercould have made such a payment to that Finance Party without a Tax Deduction ifthat Finance Party was a Qualifying Lender but on that date that Finance Partyis not or has ceased to be a Qualifying Lender (other than as a result of anychange after the date it became a Finance Party in (or in the interpretationadministration or application of) any 

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lawor treaty or any published practice or concession of any relevant taxingauthority)

14.7                        If the Borrower makes a Tax Payment and the relevantFinance Party determines that:

14.7.1.           a Tax Credit is attributable to that Tax Payment and

14.7.2.           that Finance Party has obtained utilised and retainedthat Tax Credit

thatFinance Party shall promptly pay an amount to the Borrower which that FinanceParty determines will leave the Finance Party (after that payment) in the sameafter-Tax position as it would have been in had the Tax Payment not been madeby the Borrower

14.8                         ECGD is not a Finance Party for thepurposes of Clauses 14.5 to 14.7 inclusive

**15****                                 ****INCREASED COSTS**

15.1                        If after the date of this Agreement a Finance Partyincurs or becomes aware that it will in the immediate future incur an increasein the cost of making Advances and/or maintaining the Loan as a result of:

15.1.1                         theintroduction of or any change in or in the interpretation of any law orregulation and/or

15.1.2                         compliancewith a request from any central bank or other fiscal or monetary authority

(an“Increased Cost”)

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theBorrower shall upon receipt of written notice from the Banker on behalf ofitself or ECGD specifying the event giving rise to such increase and estimatingthe amount of such increase in respect of any Advances to be made by the Bankeror ECGD and/or in respect of maintaining the Loan pay as hereinafter providedthe amount of the increase in costs incurred by the Banker or ECGD in makingAdvances and/or maintaining the Loan

15.2                        The Banker on behalf of itself or ECGD shall as soonas practicable certify to the Borrower the amount of such increase in costsincurred for the period from and including the date on which such increase incosts was first incurred to the Interest Due Date following the receipt by theBorrower of a notice in accordance with Clause 15.1 and supply with each suchcertificate a copy of the calculations made by itself or ECGD to determine theamount specified

15.3                        Notwithstanding the Borrower’s obligation to pay theBanker or ECGD pursuant to this Clause the Banker shall within a reasonabletime after it has become aware of the same consult with the Borrower and ECGDwith a view to exploring possible ways to minimise such increased costs

15.4                        On the Interest Due Date specified in Clause 15.2 andon each subsequent Interest Due Date the Borrower shall pay to the Banker by anincrease to the Margin the amount of such increase in costs certified as aforesaid.If any certificate is received by the Borrower less than 15 days before anInterest Due Date the amount certified shall not be paid until the Interest DueDate next following that Interest Due Date

15.5                        Clause 15.1 does not apply to the extent that anyIncreased Cost is:

15.5.1                             attributable to a Tax Deduction required by law to bemade by the Borrower

15.5.2                              compensated for by Clause 15.2 (or would have beencompensated for under Clause 15.2 but was not so compensated 

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solelybecause any of the exclusions in Clause 15.5 applied)

15.5.3         compensated for by thepayment of the Mandatory Cost; or

15.5.4         attributable to the wilful breach by the Banker or itsAffiliates of any law or regulation

15.6                              The Banker shall,in consultation with the Borrower, take all reasonable steps to mitigate anycircumstances which arise and which would result in any amount becoming payableunder or pursuant to Clause 14 or Clause 15, including (but not limited to)transferring its rights and obligations under this Agreement to anotherAffiliate or facility office. This Clause 15.6 does not in any way limit theobligations of the Borrower under this Agreement

15.7                        TheBorrower shall indemnify the Banker for all costs and expenses reasonablyincurred by the Banker as a result of steps taken by it under Clause 15.6

15.8                        The Bankeris not obliged to take any steps under Clause 15.6 if in the opinion of theBanker(acting reasonably), to do so might be prejudicial to it.

# **16   EXPENSES**

The Borrower shall pay ondemand to the Banker in the currency and in the manner specified by the Banker:-

16.1                        all amounts whatsoever which the Banker or ECGD mayexpend or become liable for in demanding suing for recovering and receivingpayment of any sum due to the Banker or ECGD hereunder and under any documentsexecuted pursuant hereto and

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16.2 thelegal charges reasonably and properly incurred in the UK by the Banker inconnection with the preparation and due execution of this Agreement and alldocuments executed hereunder and in connection with the fulfilment of theconditions specified in Clause 5 (subject to an aggregate cap of $15,000)

# **17   COMMISSIONS**

17.1                The Borrower shall pay theBanker an arrangement fee of 0.40% flat on the original Committed FacilityAmount with a minimum fee of $85,000 payable on the date of this agreement

17.2                The Borrowershall pay the Banker an additional arrangement fee of 0.40% flat on each AdditionalCommitted Facility Amount within 5 Business Days from the issuance of a Noticeof Approval in relation to the relevant Supply Contract PROVIDED THAT suchadditional arrangement fee shall be payable only once in relation to eachAdditional Committed Facility Amount

17.3                The Borrowershall pay the Banker a commitment fee of 0.175% per annum payable quarterly inarrear during the Availability Period and on the last day of the AvailabilityPeriod on the undrawn portion of the Committed Facility Amount

**18****                                 ****FINANCE CHARGE**

18.1                  The Borrower shall pay to ECGD the sum of$2,180,544.33 due in respect of Contract No. 1 as follows

18.1.1 $10,000on signature of this Agreement which will constitute an administrative chargewhich will not be refunded in any event

18.1.2 $2,170,544.33representing the balance of the Finance Charge due in respect of Contract No. 1within the validity period of the 

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Approvalin Principle and before the first Advance is made in accordance with Clause 9.2

18.2  If the Borrower wishes to use the AdditionalFacility to assist the financing of further contracts entered into with theSupplier pursuant to Recital (1) then the Borrower shall pay an AdditionalFinance Charge in respect of each Approved Contract. The amount of suchAdditional Finance Charge shall be notified by the Banker to the Borrower inthe relevant Approval in Principle and be paid to ECGD within the validityperiod of such Approval in Principle and before the first Advance is made in relationthereto in accordance with Clause 9.3

18.3  All amounts payable to ECGD under this Clause18 shall be paid in dollars to

Account Number:                    000142794

Account Name:                             Export Credits GuaranteeDept

SWIFT Address:                          MRMDUS33

Federal Reserve Routing Number: 021001088

Bank Name and Address:

HSBC Bank USA 452 Fifth Avenue New York, NY 10005

Quoting reference                   “ECGD - Premium BD1/RUSSIA/18367/1”

# **19********                               SUMSON DEPOSIT**

19.1                        All moneys held by the Banker under the terms of thisAgreement which are not to be applied by the Banker in accordance with suchterms within one day of the date of their receipt shall be placed by the Bankeron deposit as soon as possible after receipt and interest shall be payablethereon at the Banker’s usual rate from time to time for deposits of a similaramount and nature. The interest accruing on all moneys held on deposit underthis Agreement shall be applied in the manner specified in Clause 10.1

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19.2                        If any amounts to be held and applied by the Bankerunder the terms of this Agreement are received in a currency other than dollarssuch amounts shall be sold for dollars by the Banker in the London foreignexchange market as soon as practicable after receipt by the Banker

# **20****                               LAW**

This Agreement shall be governed by and construed inaccordance with English law

# **21****                               ARBITRATION**

21.1                        Subject to Clause 21.7, any dispute arising out ofor in connection with this Agreement (including a dispute regarding theexistence, validity or termination of this Agreement) (a “Dispute”) shall bereferred to and finally resolved by arbitration under the Arbitration Rules (the“Rules”) of the London Court of International Arbitration (the “LCIA Court”).

21.2                        The arbitral tribunal shall consist of threearbitrators. The claimant(s), irrespective of number, shall nominate jointlyone arbitrator; the respondent(s), irrespective of number, shall nominatejointly the second arbitrator; and a third arbitrator, who shall serve asChairman (who shall be a lawyer currently qualified in England and Wales and beadmitted to the Bar of England and Wales), shall be appointed by the LCIA Courtwithin 15 days of the appointment of the second arbitrator.

21.3                        In the event the claimant(s) or the respondent(s) shallfail to nominate an arbitrator within the time limits specified in the Rules,such arbitrator shall be appointed by the LCIA Court within 15 days of suchfailure. In the event that both the claimant(s) and the respondent(s) failto nominate an arbitrator within the time limits specified in the Rules, allthree arbitrators shall be appointed by the LCIA Court within 15 days of suchfailure who shall designate one of them as chairman.

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21.4                        If all the parties to an arbitration so agree, thereshall be a sole arbitrator appointed by the LCIA Court within 15 days of suchagreement.

21.5                        The seat of arbitration shall be London, England andthe language of the arbitration shall be English.

21.6                        Save as provided in Clause 21.7, the parties excludethe jurisdiction of the courts under Sections 45 and 69 of the Arbitration Act1996.

21.7                        Before an arbitrator has been appointed by a FinanceParty to determine a Dispute, the Banker may (and, if so instructed by ECGD,shall) by notice in writing to the Borrower require that all Disputes or aspecific Dispute be heard by a court of law. If the Banker gives such notice,the Dispute to which such notice refers shall be determined in accordance withClause 22.

# **22****                               JURISDICTION**

22.1                        The Borrower hereby agrees that any legal action orproceedings arising out of or in connection with this Agreement may be broughtin the High Court of Justice in England and the Borrower irrevocably submits tothe jurisdiction of such court and agrees that any writ judgement or othernotice of legal process shall be sufficiently served in connection with proceedingsin England if delivered to Law Debenture Corporate Services Limited of FifthFloor, 100 Wood Street, London EC2V 7EX or any other person in England duly authorisedby the Borrower to receive the same

22.2                        Submission to such jurisdiction shall not prevent theBanker or ECGD or either of them from taking proceedings against the Borrowerin whatever jurisdiction it or they shall think fit nor shall the taking ofproceedings in one or more jurisdictions preclude the taking of proceedings inany other jurisdiction whether concurrently or not

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22.3                        If in any jurisdiction in which proceedings are beingtaken in connection with this Agreement the Borrower has the power to claim foritself or its assets immunity from suit or other legal process or if the courtmay of its own motion grant such immunity to the Borrower or its assets theBorrower hereby irrevocably undertakes not to claim and hereby irrevocablywaives such immunity and consents generally to the giving of any relief or theissue of any process in connection with such proceedings including withoutlimitation the making enforcement or execution against any property whatever ofany order or judgement which may be made or given in such proceedings

22.4                        If for the purpose of obtaining or enforcing judgementin any court it is necessary to convert a sum due hereunder in dollars intoanother currency (“the second currency”) the rate of exchange which shall beapplied shall be that at which in accordance with normal banking procedures theBanker could purchase dollars with the second currency on the Business Daypreceding that on which final judgement is given. The obligation of theBorrower in respect of any such sum due hereunder shall notwithstanding anyjudgement in the second currency and notwithstanding the rate of exchangeactually applied in giving such judgement be discharged only to the extent thaton the Business Day following receipt by the Banker of any sum adjudged to bedue hereunder in the second currency the Banker may in accordance with normalbanking procedures purchase wherever the Banker shall deem appropriate dollarswith the amount of the second currency so received and if the dollars so purchasedfall short of the sum originally due in dollars the Borrower agrees as aseparate obligation and notwithstanding any such judgement to indemnify theBanker and/or ECGD as the case may be in accordance with their respectiveentitlements against such deficiency

# **23****                               ALTERATIONTO APPROVED CONTRACTS**

23.1                        Unless ECGD shall otherwise elect the obligation ofthe Banker and/or ECGD to make Advances hereunder in respect of any Approved 

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Contract shall cease if any alteration of or amendmentto or departure from the terms of that Approved Contract is made or agreedwithout the consent in writing of the Banker the Borrower and ECGD

23.2                        For the purposes hereof the expression “alteration ofor amendment to or departure from the terms of that Approved Contract” shallnot include any variation of the technical specifications or scope of EligibleGoods to be supplied or in the scope of Eligible Services to be rendered underthe Approved Contract unless such variation would increase the total amountpayable under that Approved Contract or would involve a material change in thescope or objects of that Approved Contract or a change in the details of thatApproved Contract as described in the Application for Approval

# **24****                               NOTICESAND DEMANDS**

24.1                        In addition to the modes of service of documentsprescribed by the laws of the country of the addressee notices and demands tobe given or made to or of any party hereto may be sent by telex facsimiletransmission internationally recognised courier acceptable to the Banker orfirst class prepaid mail (registered airmail if overseas) and shall beaddressed:-

If to the Borrower as follows:-

Open Joint Stock CompanyMobile TeleSystems

Ul. Vorontsovskaya 5, Bldg. 2

109147 Moscow

Russian Federation

Fax: +007 (095) 911 6531

Attention: TatianaEvtoushenkova/Elena Zharikova

If tothe Banker as follows:-

BarclaysCapital

5 TheNorth Colonnade

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Canary WharfLondon E14 4BBFax: +44 (0) 2077731831

Attention: Roger Wright

If to ECGD as follows:-

The ManagerGuarantee & Policy Administration DivisionECGD, PO Box 22002 Exchange TowerHarbour Exchange SquareLondon E14 9GSFax: 020 7512

orto such other address facsimile or telex number as such party designates inwriting

24.2                        In the case of notices and demands sent by telex orfacsimile transmission a copy thereof shall be sent by first class prepaid mail(registered airmail if overseas) addressed as aforesaid not later than thefirst business day in the country of the sender following the day on which suchtelex or facsimile transmission was sent

24.3                        Notices and demands and copies thereof shall be deemedto have been received in the case of telex or facsimile transmission or inlandmail one business day in the country of the addressee and in the case ofcourier or registered airmail 7 business day(s) in the country of theaddressee after they have been sent

24.4                        Any facsimile or telex instructions received by theBanker purporting to be given by an authorised officer of the Borrower andbelieved by the 

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Bankerto be genuine shall have the same validity as a written instruction duly signedby an authorised officer of the Borrower

# **25****                               MISCELLANEOUS**

25.1                        If at any time any provisionof this Agreement is or becomes illegal invalid or unenforceable in any respectunder the law of any jurisdiction neither the legality validity orenforceability of the remaining provisions hereof nor the legality validity orenforceability of such provision under the law of any other jurisdiction shallin any way be affected or impaired thereby

25.2                         For the avoidance of doubt the parties tothis Agreement do not intend that any of the terms of this Agreement should beenforceable by virtue of the Contracts (Rights of Third Parties) Act 1999 byany person who is not a party to this Agreement

25.3                              This Agreement may be executed inany number of counterparts and all such counterparts taken together shall bedeemed to constitute one and the same instrument.

IN WITNESS WHEREOFthis Agreement has been signed on behalf of the parties hereto by persons dulyauthorised in that behalf the day and year first above written

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**SIGNATUREPAGE**

The Borrower

**OPENJOINT STOCK COMPANY MOBILE TELESYSTEMS**

 
| By:    | .      |   | By:    | .                |   |
|--------|--------|--------|--------|------------------|--------|
| Name:  |   |   | Name:  | R. Kolomiets     |   |
| Title: |   |   | Title: | Chief Accountant |   |
|   |   |   |   |             |   |

 

The Banker

**BARCLAYSBANK PLC**
| By:    | .      |   | By:    | .                |   |
|--------|--------|--------|--------|------------------|--------|
| Name:  |   |   | Name:  | R. Kolomiets     |   |
| Title: |   |   | Title: | Chief Accountant |   |
|   |   |   |   |             |   |

 

ECGD

**HERBRITANNIC MAJESTY’S SECRETARY OF STATE**(acting by the **EXPORT CREDITS GUARANTEE DEPARTMENT**)
| By:    | .      |   | By:    | .                |   |
|--------|--------|--------|--------|------------------|--------|
| Name:  |   |   | Name:  | R. Kolomiets     |   |
| Title: |   |   | Title: | Chief Accountant |   |
|   |   |   |   |             |   |

 

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** APPENDIX A**
| o: The Banker |   | Date: |   |
|---------------|--------|-------|--------|

[Address ]

 

Serial No:

Dear Sirs,

APPLICATION FORAPPROVAL OF A CONTRACT FOR FINANCING UNDER LOAN AGREEMENT BETWEEN US AND ECGDDATED [ ]

1              We give you below

a              details of a contract/contractunder negotiation*

b              revised details of acontract/contract under negotiation* (previously notified on our Serial No. [])

andinvite you to agree that the contract shall be financed under the terms of theabove-mentioned Loan Agreement

2              Thedetails of the said contract are as follows:-

a                                         Name and address of UK Supplier

b                                          Detaileddescription of UK Goods

c                                           Description of UK Services

d                                          Contract price of UK Goods                                                                                                                                        $

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e                                           Contract price of UK Services                                                                                                                               $

f                                            Total of d and e                                                                                                                                                                                                         $

g                                           Detailed description of non-UK Goods

h                                          Description of non-UK Services

i                                              Contract price of non-UK Goods                                                                                                               $

j                                             Contract price of non-UK Services                                                                                                      $

k                                          Total of i and j                                                                                                                                                                                                               $

l Terms ofPayment:-

m Estimatedprogramme of delivery of goods and performance of services

| UK Goods | **Non-UK Goods** | **UK Services** | **Non-UK Services** |
|----------|------------------|-----------------|---------------------|

 

CommenceComplete

3         We understand that:

*a            thegoods to be supplied under this contract will be usable on delivery and the dateby which it is estimated that 50 per cent. by value of the Eligible Goods willhave been supplied is [    ]

*b            theplant or equipment will not be usable until final delivery of all the partsthereof

*c            the Supplieris responsible for installation of the goods and completion of installation is estimated at [    ]months from contract

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*d the date by which it is estimated that 50 per cent.by value of the Eligible Services will have been rendered is [   ]]

4              We propose that ReimbursementClaims in respect of the Eligible Value of the contract shall be made by us toyou in the form set out in Appendix E(1) to the Loan Agreement

5              Wepropose that Reimbursement Claims in respect of the Finance Charge orAdditional Finance Charge shall be made by us to you in the form set out inAppendix E(2) to the Loan Agreement

6              We confirm that all contract pricesare denominated in dollars and the figures quoted above are the offer prices andare not derived from the conversion by us of any other currency into dollars

 

Yours faithfully

 

 

For and on behalf of[the Borrower]

 

 

Borrower’sSignatory

----

* delete orcomplete as appropriate

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**APPENDIX B**

APPROVALIN PRINCIPLE
| To: The Borrower |   | Date: |   |
|------------------|--------|-------|--------|

 

Copied to:             [The Supplier]

Dear Sirs

1              We refer to your Application forApproval Serial No                 dated

2              The contract described in yourapplication is provisionally approved by us for financing under the LoanAgreement made between us and ECGD on [                    2005]and we are willing to make available a total sum of $[  ] subject tothe conditions of Clause 5 of the Loan Agreement having been fulfilled

3              The Eligible Value of the contractis $

4              TheFinance Charge/Additional Finance Charge* is $

5              TheFinanced Percentage is                                           85                                  per cent.

6              The repayment terms acceptable tous are as follows:

Amountof each Semi-annual    DueDate of each Semi-annual                     Instalment                                     Instalment

7                                         TheReimbursement Claims in respect of the Eligible Value of the contract shall bemade by you to us in the form set out in Appendix E(1) to the LoanAgreement

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8                                         TheReimbursement Claims in respect of the Finance Charge or Additional FinanceCharge shall be made by you to us in the form set out in Appendix E(2) tothe Loan Agreement

9              Upon receipt of your unqualifiedacceptance in writing of the terms of this Approval in Principle and upon thefulfilment to our satisfaction of the conditions specified by Clause 5.5 of theLoan Agreement we will send you a Notice of Approval

10           This Approval in Principle will lapseon the date which is 90 days after the date hereof or 27 months from the dateof signature of the Loan Agreement whichever is the earlier unless a Notice ofApproval has by then been issued or unless otherwise agreed by us in writing

Yours faithfully

 

For and on behalf of [the Banker]

----

* delete as appropriate

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**APPENDIXC**

NOTICEOF APPROVAL
| To: The Borrower |   | Date: |   |
|------------------|--------|-------|--------|

 

[*Address*]

 

 

copied to [the Supplier]

LOAN AGREEMENT DATED

Reference - Serial No:

Contractbetween [Supplier] and [Borrower]

Eligible Value: $

Financed Percentage                                85%

1              Notice is hereby given that thecontract specified above is**approvedby us in accordance with the provisions of Clause 7.3 of the above mentionedLoan Agreement the conditions set out in Clause 5.5 thereof in relation to thatcontract having been fulfilled to our satisfaction

2              We confirm that againstpresentation of your Reimbursement Claim referred to in Clause 8 of the aboveLoan Agreement we shall make payments to you in accordance with the terms of thatLoan Agreement

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Yours faithfully

 

 

For and on behalf of [the Banker]

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**APPENDIX D**

LETTER OFINSTRUCTION

(dated)

[Addressed to theSupplier]

 

Dear Sirs

Untilyou shall have been informed in writing by [name of the Banker] that allAdvances made in accordance with the terms of the Loan Agreement made between [theBanker] and [the Borrower] and ECGD dated the                                day of  as amended from time to time havebeen repaid with interest that no Advance remains to be made and that no sumremains to be paid in accordance with the terms of the said Loan Agreement wehereby irrevocably instruct you to pay to [name of the Banker] all sums whichyou may become due to pay to us in connection with the contract approved by theBanker for financing under Approval in Principle serial number [                                                                                       ]dated [           ]

 

 

 

For and on behalf of[Borrower]

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**APPENDIX E (1)**

REIMBURSEMENT CERTIFICATE (ELIGIBLE GOODS AND/ORELIGIBLE SERVICES)

TO:                           [theBanker]

Serial No:

Loan Agreementdated:

Supply Contractbetween                                                                 [Borrower] and  [Supplier] dated [                 ] (“the Supply Contract”)

1                                         Wecertify that [further] payments totalling $ have been made to the above Supplier under the above Supply Contract andattach the Supplier’s Receipt(s) in respect of Eligible Goods deliveredand/or associated Eligible Services rendered*(Note:   the figures provided should clearlydifferentiate between amounts claimed for goods and those relating to services)*

2                                         Theamount due to be reimbursed under the terms of the Loan Agreement and for whichwe hereby claim is $                           being 85% of the payments specified in paragraph 1 above. The amount to bereimbursed hereby when added to any previous amounts reimbursed in respect ofthis Supply Contract will not exceed the Loan Facility

3                                         Theamount claimed in paragraph 2 above does not include any sum which is not permittedto be financed using the Loan Facility

SignedFor and on behalf of the Borrower

 

[Borrower’sSignatory]

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**APPENDIX E(2)**

REIMBURSEMENT CERTIFICATE (ECGD FINANCE

CHARGE/ADDITIONALFINANCE CHARGE)

To:                             [Addressed to the Banker]Copied to ECGD

Serial No:

Loan Agreement dated:

Supply Contract between ourselves and [Supplier] dated [  ] (“the Supply Contract”)

###### 1                                         Wecertify that we have paid to ECGD the sum of$[            ]being [the balance of the Finance Charge]* [the Additional Finance Charge]* duein respect of the above Supply Contract and which is payable pursuant to[Clause 18.1.2]*[Clause 18.2]* of the Loan Agreement.

2                                         We understand that upon your receiving from ECGDa duly completed ECGD Finance Charge/Additional Finance Charge Receipt inrespect of the sum specified at paragraph 1 above you will make a correspondingAdvance to us of 85% of such amount in accordance with Clause 9.5 of the LoanAgreement

3                                         We hereby claim reimbursement of 85% of the sumspecified in paragraph 1 above and confirm that:

3.1                               the amount to be reimbursed hereby when added toany amounts already reimbursed in respect of Approved Contracts will not exceedthe Loan Facility and

3.2                               the amount claimed above does not include any sumin respect of the direct payment referred to in Clause 18.1.1 of the LoanAgreement

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SignedFor and on behalf of the Borrower

 

 

[Borrower’s Signatory]

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* delete as appropriate

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**APPENDIX F**

SPECIMEN SUPPLIER’S RECEIPT

To: [Borrower]

[*Date*]

Serial No:

Supply Contractbetween ourselves and                                                                                          [Borrower] dated

We acknowledge thereceipt of the following payment(s) from you in respect of sums due to usunder the terms of the above mentioned Supply Contract. The payments are inrespect of delivered goods that have been produced or manufactured in theUnited Kingdom of Great Britain and Northern Ireland or the Channel Islands orthe Isle of Man or in respect of services rendered by persons ordinarilyresident or ordinarily carrying on business in those territories and/or suchother goods and services as have been approved by the Banker for financing

| Dates of            | ** ** | ** **         | ** ** | ** ** | ** ** |
|--------------------------|------------|--------------------|------------|------------|------------|
| **Payment Receipt** | ** ** | **Goods/Services** | ** ** | **Amount** | ** ** |
|                     |       |               |       | $          |       |   |
|                          |       |               |       | $          |       |   |
|                     |       |               |       | $          |       |   |
|                          |       | TOTAL              |       | $          |       |   |

###  

(*Note: the figures provided should clearlydifferentiate between amounts claimed for goods and those relating to servicesand the date of each individual payment received should be shown*)

We hereby warrantthat all necessary approvals (if any) including export licences in respect ofthe UK Goods and/or the UK Services supplied and/or rendered in accordance withthe Supply Contract have been obtained in the UK and have not been withdrawnand that all necessary approvals (if any) including export 

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licences inrespect of other goods and/or services supplied and/or rendered in accordancewith the Supply Contract have been obtained in the country of origin of thosegoods and/or services and have not been withdrawn

YoursfaithfullyFor and on behalf of[The Supplier]

[Supplier’sSignatory]

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** **

**APPENDIX G**

MANDATORY COSTFORMULA

1.                                      The Mandatory Cost is an addition to theinterest rate to compensate the Banker for the cost of compliance with (a) therequirements of the Bank of England and/or the Financial Services Authority(or, in either case, any other authority which replaces all or any of itsfunctions) or (b) the requirements of the European Central Bank.

2.                                      On the first day of each Interest Period(or as soon as possible thereafter) the Banker shall calculate, as a percentagerate, a rate (the “**Additional Cost Rate**”)in accordance with the paragraphs set out below.

3.                                      The Additional Cost Rate for the Bankerif lending from a Facility Office in a Participating Member State will be thepercentage notified by the Banker to the Borrower as being its reasonabledetermination of the cost of complying with the minimum reserve requirements ofthe European Central Bank in respect of Loans made from that Facility Office.

4.                                      The Additional Cost Rate of the Banker iflending from a Facility Office in the United Kingdom will be calculated by theBanker as follows:

Where:

A                                       is designed to compensate the Banker foramounts payable under the Fees Rules and is calculated as the rate ofcharge payable by the Banker to the Financial Services Authority pursuant tothe Fees Rules in respect of the relevant financial year of the FinancialServices Authority (calculated for this purpose, by the Banker as being theaverage of the Fee Tariffs applicable to the Banker for that financial year)and expressed in pounds per £1,000,000 of the Tariff Base of the Banker.

5.                                      For the purposes of this Schedule:

(a)                                 “**Fees Rules**”means the rules on periodic fees contained in the FSA Supervision Manualor such other law or regulation as may be in force from time to time in respectof the payment of fees for the acceptance of deposits;

(b)                                 “**Fee Tariffs**”means the fee tariffs specified in the Fees Rules under the activity groupA.1 Deposit acceptors (ignoring any minimum fee or zero rated fee requiredpursuant to the Fees Rules but taking into account any applicable discountrate); and

(c)                                  “**Tariff Base**”has the meaning given to it in the Fees Rules.

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6.                                      In application of the above formula, theresulting figures shall be rounded to four decimal places.

7.                                      The Banker may from time to time, afterconsultation with the Borrower, determine and notify to all Parties anyamendments which are required to be made to this Schedule in order to comply withany change in law, regulation or any requirements from time to time imposed bythe Bank of England, the Financial Services Authority or the European CentralBank (or, in any case, any other authority which replaces all or any of itsfunctions) and any such determination shall, in the absence of manifest error,be conclusive and binding on all Parties.

8.                                      The Mandatory Cost shall not apply to anyLoans made by ECGD.

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**APPENDIX H**

**SPECIMEN ECGDFINANCE CHARGE/ADDITIONAL FINANCE CHARGE RECEIPT**
| To: [Addressed to the Banker] |   | [Date] |   |
|-------------------------------|--------|--------|--------|

 

For the attention of

Serial No:

ECGD reference no:BD1/RUSSIA/18367/1

Dear Sirs

***Loan Agreemententered into between OJSC Mobile TeleSystems, Barclays Bank PLC and ExportCredits Guarantee Department dated the***           **dayof**

[Supply Contract details]

1                                         Werefer to the Approval in Principle dated                      ,Serial No:[       ], issued by the Banker inrespect of [Contract No.1]* [a Supply Contract approved for financing under theAdditional Facility]*

2                                         Wehereby acknowledge receipt of the amount of $[           ]on [date of payment receipt] representing [the balance of the Finance Chargedue in accordance with Clause 18.1.2]* [the Additional Finance Charge due inaccordance with Clause 18.2]* in respect of the Approved Contract

 

Yours faithfullyFor the EXPORT CREDITS GUARANTEE DEPARTMENT

 

 

[name and title ofunderwriter]

 

 

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