**Exhibit 4.55**
| EXECUTION COPY                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  

Dated 26 July 2004                                                                                                                                                                                                                                                                                                                                                                                                                 |
|  

**US$500,000,000**

**FACILITY AGREEMENT**

for

**MOBILE  TELESYSTEMS OPEN JOINT STOCK COMPANY**

arranged by

**ABN AMRO BANK N.V. ****HSBC  BANK PLC ****ING BANK N.V.****RAIFFEISEN ZENTRALBANK OESTERREICH AG**

as Original Mandated Lead Arrangers

and

**BANK AUSTRIA  CREDITANSTALT AG  COMMERZBANK AKTIENGESELLSCHAFT**

as New Mandated Lead  Arrangers

with

**ING  BANK N.V., LONDON BRANCH**

acting as Agent |
|                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |
| Paveletskaya sq. 2,  bld. 2  Moscow 115054                                                                                                                                                                                                                                                                                                                                                                                                      |   |
| Telephone (7-095) 797 9797  Facsimile (7-095) 797 9798                                                                                                                                                                                                                                                                                                                                                                                          |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |
| Ref MIYB                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |

 

----

** **

**CONTENTS**
| **CLAUSE**                                                     | ** ** | **PAGE**                                |
|----------------------------------------------------------------|------------|-----------------------------------------|
| SECTION 1  INTERPRETATION                                      |       | 1                                       |
|                                                           | 1          | DEFINITIONS AND  INTERPRETATION         |   | 1 |
| SECTION 2 THE FACILITY                                         |       | 11                                      |
|                                                           | 2          | THE FACILITIES                          |   | 11 |
|                                                           | 3          | PURPOSE                                 |   | 11 |
|                                                           | 4          | CONDITIONS OF  UTILISATION              |   | 11 |
| SECTION 3 UTILISATION                                          |       | 13                                      |
|                                                           | 5          | UTILISATION                             |   | 13 |
| SECTION 4 REPAYMENT,  PREPAYMENT AND CANCELLATION              |       | 14                                      |
|                                                           | 6          | REPAYMENT                               |   | 14 |
|                                                           | 7          | PREPAYMENT AND  CANCELLATION            |   | 14 |
| SECTION 5 COSTS OF  UTILISATION                                |       | 17                                      |
|                                                           | 8          | INTEREST                                |   | 17 |
|                                                           | 9          | INTEREST PERIODS                        |   | 18 |
|                                                           | 10         | CHANGES TO THE  CALCULATION OF INTEREST |   | 18 |
|                                                           | 11         | FEES                                    |   | 19 |
| SECTION 6 ADDITIONAL  PAYMENT OBLIGATIONS                      |       | 21                                      |
|                                                           | 12         | TAX GROSS-UP AND  INDEMNITIES           |   | 21 |
|                                                           | 13         | INCREASED COSTS                         |   | 23 |
|                                                           | 14         | OTHER INDEMNITIES                       |   | 24 |
|                                                           | 15         | MITIGATION BY THE  LENDERS              |   | 25 |
|                                                           | 16         | COSTS AND EXPENSES                      |   | 25 |
| SECTION 7  REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT |       | 27                                      |

 

(i)

----

 
|                                           | 17     | REPRESENTATIONS                                    |   | 27 |
|-------------------------------------------|--------|----------------------------------------------------|--------|----|
|                                      | 18     | INFORMATION  UNDERTAKINGS                          |   | 30 |
|                                      | 19     | FINANCIAL COVENANTS                                |   | 33 |
|                                      | 20     | GENERAL UNDERTAKINGS                               |   | 34 |
|                                      | 21     | EVENTS OF DEFAULT                                  |   | 38 |
| SECTION 8 CHANGES TO  PARTIES             |   | 44                                                 |
|                                      | 22     | CHANGES TO THE LENDERS                             |   | 44 |
|                                      | 23     | CHANGES TO THE BORROWER                            |   | 46 |
| SECTION 9 THE FINANCE  PARTIES            |   | 47                                                 |
|                                      | 24     | ROLE OF THE AGENT AND  THE MANDATED LEAD ARRANGERS |   | 47 |
|                                      | 25     | CONDUCT OF BUSINESS BY  THE FINANCE PARTIES        |   | 51 |
|                                      | 26     | SHARING AMONG THE  FINANCE PARTIES                 |   | 51 |
| SECTION 10  ADMINISTRATION                |   | 53                                                 |
|                                      | 27     | PAYMENT MECHANICS                                  |   | 53 |
|                                      | 28     | SET-OFF                                            |   | 55 |
|                                      | 29     | NOTICES                                            |   | 55 |
|                                      | 30     | CALCULATIONS AND  CERTIFICATES                     |   | 56 |
|                                      | 31     | PARTIAL INVALIDITY                                 |   | 57 |
|                                      | 32     | REMEDIES AND WAIVERS                               |   | 57 |
|                                      | 33     | AMENDMENTS AND WAIVERS                             |   | 57 |
|                                      | 34     | COUNTERPARTS                                       |   | 58 |
| SECTION 11 GOVERNING  LAW AND ENFORCEMENT |   | 59                                                 |
|                                      | 35     | GOVERNING LAW                                      |   | 59 |
|                                      | 36     | ARBITRATION                                        |   | 59 |
|                                      | 37     | JURISDICTION                                       |   | 60 |

 

(ii)

----

 
| SCHEDULE 1 The Original  Lenders          |   | 61 |
|-------------------------------------------|--------|----|
| SCHEDULE 2 Conditions  precedent          |   | 62 |
| SCHEDULE 3 Utilisation  Request           |   | 64 |
| SCHEDULE 4 Mandatory  Cost formula        |   | 65 |
| SCHEDULE 5 Form of  Transfer Certificate  |   | 67 |
| SCHEDULE 6 Form of Compliance Certificate |   | 69 |

 

 

 

(iii)

----

 

THIS AGREEMENT is dated 26 July 2004and made between:

**(1)****                              MOBILE TELESYSTEMS OPEN JOINT STOCK COMPANY**,an open joint stock company established and existing under the laws of theRussian Federation and having its registered address at 4 Marksistskaya Street,109147 Moscow, Russian Federation, as borrower (the “**Borrower**”);

**(2)****                              ABN AMRO BANK N.V., HSBC BANK PLC,****ING BANK N.V.**and**RAIFFEISEN ZENTRALBANK OESTERREICH AG**asoriginal mandated lead arrangers (the “**OriginalMandated Lead Arrangers**”) and **BANKAUSTRIA CREDITANSTALT AG**and**COMMERZBANK AKTIENGESELLSCHAFT**as new mandated lead arrangers (the “**New Mandated Lead Arrangers**”) (togetherwith the Original Mandated Lead Arrangers, the “**Mandated Lead****Arrangers**”);

**(3)****                              THE FINANCIAL INSTITUTIONS** listedin Schedule 1 as lenders (the “**OriginalLenders**”); and

**(4)****                              ING BANK N.V., LONDON BRANCH** asagent of the other Finance Parties (the “**Agent**”).

IT IS AGREED as follows:

**SECTION 1INTERPRETATION**

**1**                                      DEFINITIONS ANDINTERPRETATION

**1.1**                            Definitions

In this Agreement:

“**AdditionalCost Rate**” has the meaning given to it in Schedule 4 (*Mandatory Cost**formula*).

“**Affiliate**”means, in relation to any person, a Subsidiary of that person or a HoldingCompany of that person or any other Subsidiary of that Holding Company.

“**Authorisation**”means an authorisation, consent, approval, resolution, licence, exemption,filing, notarisation or registration.

“**AvailabilityPeriod**” means:

(a)                                inrelation to Facility 1, the period from and including the Signing Date to andincluding the date which is 30 days after the Signing Date; and

(b)                               inrelation to Facility 2, the period from and including 1 October 2004 toand including the date which is 80 days after 1 October 2004.

“**AvailableCommitment**” means, in relation to a Facility, a Lender’s Commitmentunder that Facility minus:

(a)                                theamount of its participation in any outstanding Loans under that Facility; and

(b)                               inrelation to any proposed Utilisation, the amount of its participation in anyLoans that are due to be made under that Facility on or before the proposedUtilisation Date.

“**AvailableFacility**” means, in relation to a Facility, the aggregate for thetime being of each Lender’s Available Commitment in relation to that Facility.

1

----

 

“**Borrowings**”has the meaning given to it in Clause 19 (*FinancialCovenants*).

“**BreakCosts**” means the amount (if any) by which:

(a)                                theinterest (excluding the Margin) which a Lender should have received for theperiod from the date of receipt of all or any part of its participation in aLoan or Unpaid Sum to the last day of the current Interest Period in respect ofthat Loan or Unpaid Sum, had the principal amount or Unpaid Sum received beenpaid on the last day of that Interest Period;

exceeds:

(b)                               theamount which that Lender would be able to obtain by placing an amount equal tothe principal amount or Unpaid Sum received by it on deposit with a leadingbank in the London interbank market for a period starting on the Business Dayfollowing receipt or recovery and ending on the last day of the currentInterest Period.

“**BusinessDay**” means a day (other than a Saturday or Sunday) on which banksare open for general business in Amsterdam, London, Moscow and New York City.

“**Commitment**”means a Facility 1 Commitment or a Facility 2 Commitment.

“**ComplianceCertificate**” means a certificate substantially in the form set outin Schedule 6 (*Form of ComplianceCertificate*).

“**ConfidentialityUndertaking**” means a confidentiality undertaking substantially in arecommended form of the LMA or in any other form agreed between the Borrowerand the Agent.

 “**Default**”means an Event of Default or any event or circumstance specified in Clause 21 (*Events of Default*) which would (with theexpiry of a grace period, the giving of notice, the making of any determinationunder the Finance Documents or any combination of any of the foregoing) be anEvent of Default.

“**EBITDA**”has the meaning given to it in Clause 19 (*FinancialCovenants*).

“**Environment**”means living organisms including the ecological systems of which they form partand the following media:

(a)                                air(including air within natural or man-made structures, whether above or belowground);

(b)                               water(including territorial, coastal and inland waters, water under or within landand water in drains and sewers); and

(c)                                land(including land under water).

“**EnvironmentalLaw**” means all laws and regulations of any relevant jurisdictionwhich:

(a)                                haveas a purpose or effect the protection of, and/or prevention of harm or damageto, the Environment;

(b)                               provideremedies or compensation for harm or damage to the Environment; or

(c)                                relateto any waste, pollutant, contaminant or other substance (including any liquid,solid, gas, ion, living organism or noise) that may be harmful to human healthor other life or the Environment or a nuisance to any person or that may makethe use or ownership of any affected land or property more costly or health andsafety matters.

2

----

 

“**EnvironmentalLicence**” means any Authorisation required at any time underEnvironmental Law.

“**Eventof Default**” means any event or circumstance specified as such inClause 21 (*Events of Default*).

“**Facilities**”means Facility 1 and Facility 2 and “**Facility**”means either of them.

“**FacilityOffice**” means the office or offices notified by a Lender to theAgent in writing on or before the date it becomes a Lender (or, following thatdate, by not less than five Business Days’ written notice) as the office oroffices through which it will perform its obligations under this Agreement.

“**Facility1**” means the term loan facility made available under this Agreementas described in paragraph (a) of Clause 2.1 (*The Facilities*).

“**Facility1 Commitment**” means:

(a)                                inrelation to an Original Lender, the amount set opposite its name under theheading “Facility 1 Commitment” in Schedule 1 (*TheOriginal Lenders*) and the amount of any other Facility 1 Commitmenttransferred to it under this Agreement; and

(b)                               inrelation to any other Lender, the amount of any Facility 1 Commitmenttransferred to it under this Agreement,

to the extent not cancelled, reduced or transferred byit under this Agreement.

“**Facility 1 Loan**”means a loan made or to be made under Facility 1 or the principal amountoutstanding for the time being of that loan.

“**Facility1 Repayment Date**” means the date falling 12 Months after the SigningDate, the date falling 18 Months after the Signing Date, the date falling 24Months after the Signing Date, the date falling 30 Months after the SigningDate and the Final Maturity Date.

“**Facility2**” means the term loan facility made available under this Agreementas described in paragraph (b) of Clause 2.1 (*The Facilities*).

“**Facility2 Commitment**” means:

(a)                                inrelation to an Original Lender, the amount set opposite its name under theheading “Facility 2 Commitment” in Schedule 1 (*TheOriginal Lenders*) and the amount of any other Facility 2 Commitmenttransferred to it under this Agreement; and

(b)                               inrelation to any other Lender, the amount of any Facility 2 Commitmenttransferred to it under this Agreement,

to the extent not cancelled, reduced or transferred byit under this Agreement.

“**Facility2 Loan**” means a loan made or to be made under Facility 2 or theprincipal amount outstanding for the time being of that loan.

“**Facility2 Repayment Date**” means the date falling 15 Months after the SigningDate, the date falling 21 Months after the Signing Date, the date falling 27Months after the Signing Date and the Final Maturity Date.

“**FeeLetters**” means each of the letters dated 2 July 2004 betweenthe Original Mandated Lead Arrangers and the Borrower (or the Agent and theBorrower) setting out the fees referred to in Clause 11 (*Fees*).

3

----

 

“**FinalMaturity Date**” means the date which is three years plus one dayafter the Signing Date.

“**FinanceDocument**” means this Agreement, any Fee Letter, the Mandate Letter,the Syndication Side Letter and any other document designated as such by theAgent and the Borrower.

“**FinanceParty**” means the Agent, the Mandated Lead Arrangers or a Lender.

“**Financial Indebtedness**”means any indebtedness for or in respect of:

(a)                                moneysborrowed;

(b)                               anyamount raised by acceptance under any acceptance credit facility ordematerialised equivalent;

(c)                                anyamount raised pursuant to any note purchase facility or the issue of bonds,notes, debentures, loan stock or any similar instrument;

(d)                               theamount of any liability in respect of any lease or hire purchase contract whichwould, in accordance with GAAP, be treated as a finance or capital lease;

(e)                                receivablessold or discounted (other than any receivables to the extent they are sold on anon-recourse basis);

(f)                                  anyamount raised under any other transaction (including any forward sale orpurchase agreement) having the commercial effect of a borrowing;

(g)                               anyderivative transaction entered into in connection with protection against orbenefit from fluctuation in any rate or price (and, when calculating the valueof any derivative transaction, only the marked to market value shall be takeninto account);

(h)                               shareswhich are expressed to be redeemable at the option of the holder on or prior tothe Final Maturity Date (but excluding any accrued dividends);

(i)                                   anycounter-indemnity obligation in respect of a guarantee, indemnity, bond,standby or documentary letter of credit or any other instrument issued by abank or financial institution; and

(j)                                   theamount of any liability in respect of any guarantee or indemnity for any of theitems referred to in paragraphs (a) to (i) above.

“**GAAP**”means generally accepted accountingprinciples, standards and practices in the United States of America.

“**Group**”means the Borrower and its Subsidiaries for the time being.

“**HoldingCompany**” means, in relation to a person, any other person in respectof which it is a Subsidiary.

“**InformationMemorandum**” means the document in the form approved by the Borrowerconcerning the Group which, at the Borrower’s request and on its behalf, wasprepared in relation to this transaction and distributed by the Mandated LeadArrangers to selected financial institutions before the Signing Date.

“**InterestExpense**” has the meaning given to it in Clause 19 (*Financial Covenants*).

“**InterestPeriod**” means, in relation to a Loan, each period determined inaccordance with Clause 9 (*Interest Periods*)and, in relation to an Unpaid Sum, each period determined in accordance withClause 8.3 (*Default interest*).

4

----

 

“**KubanGSM**” means CJSC Kuban GSM, ajoint-stock company organized under the laws of the Russian Federation that isa Subsidiary of the Borrower.

“**Lender**”means:

(a)                                anyOriginal Lender; and

(b)                               anybank, financial institution, trust, fund or other entity which has become aParty in accordance with Clause 22 (*Changesto the Lenders*),

which in each case has not ceased tobe a Party in accordance with the terms of this Agreement.

“**LIBOR**”means, in relation to any Loan:

(a)                                theapplicable Screen Rate; or

(b)                               (ifno Screen Rate is available for Dollars or the Interest Period of that Loan)the arithmetic mean of the rates (rounded upwards to four decimal places) assupplied to the Agent at its request quoted by the Reference Banks to leadingbanks in the London interbank market,

as of 11:00 a.m. on theQuotation Day for the offering of deposits in Dollars for a period comparableto the Interest Period for that Loan.

“**LMA**”means the Loan Market Association.

“**Loan**”means a Facility 1 Loan or Facility 2 Loan.

“**MajorityLenders**” means:

(a)                                ifthere are no Loans then outstanding, a Lender or Lenders whose Commitmentsaggregate more than 662/3% of theTotal Commitments (or, if the Total Commitments have been reduced to zero,aggregated more than 662/3% of theTotal Commitments immediately prior to the reduction); or

(b)                               atany other time, a Lender or Lenders whose participations in the Loans thenoutstanding aggregate more than 662/3% of all the Loans then outstanding.

“**MandateLetter**” means the letter agreement dated 5 July 2004 betweenthe Original Mandated Lead Arrangers and the Borrower.

“**MandatoryCost**” means the percentage rate per annum calculated by the Agent inaccordance with Schedule 4 (*Mandatory Costformula*).

“**Margin**”means 2.50 per cent. per annum.

“**MaterialAdverse Effect**” means a material adverse effect on or materialadverse change in:

(a)                                thefinancial condition, operations, assets, prospects or business of the Borroweror the consolidated financial condition, operations, assets, prospects orbusiness of the Group;

(b)                               theability of the Borrower to perform and comply with its obligations under anyFinance Document; or

(c)                                thevalidity, legality or enforceability of any Finance Document, or the rights orremedies of any Finance Party thereunder.

“**Month**”means a period starting on one day in a calendar month and ending on thenumerically corresponding day in the next calendar month, except that:

5

----

 

(a)                                ifthe numerically corresponding day is not a Business Day, that period shall endon the next Business Day in that calendar month in which that period is to endif there is one, or if there is not, on the immediately preceding Business Day;and

(b)                               ifthere is no numerically corresponding day in the calendar month in which thatperiod is to end, that period shall end on the last Business Day in thatcalendar month.

The above rules will only applyto the last Month of any period.

“**OriginalFinancial Statements**” means the audited consolidated financialstatements of the Group for the financial year ended 31 December 2003.

“**ParticipatingMember State**” means any member state of the European Communitiesthat adopts or has adopted the euro as its lawful currency in accordance withlegislation of the European Community relating to Economic and Monetary Union.

“**Party**”means a party to this Agreement.

“**PermittedSecurity**” means:

(a)                                anySecurity on any assets of any corporation existing at the time such corporationis merged or consolidated with or into the Borrower or any Subsidiary of theBorrower or becomes a Subsidiary of the Borrower and not created incontemplation of such event, provided that no such Security shall extend to anyother assets;

(b)                               anySecurity existing on any assets prior to the acquisition thereof by theBorrower or any Subsidiary of the Borrower and not created in contemplation ofsuch acquisition, provided that no such Security shall extend to any otherassets;

(c)                                anySecurity on any assets securing Financial Indebtedness of the Borrower orFinancial Indebtedness of any Subsidiary of the Borrower incurred or assumedfor the purpose of financing all or part of the cost of acquiring, repairing orrefurbishing such assets, provided that (i) no such Security shall extendto any other assets; (ii) the aggregate principal amount of all FinancialIndebtedness secured by such Security on such assets shall not exceed the lowerof (x) the purchase price of such assets and (y) the fair marketvalue of such assets at the time of acquisition, repair or refurbishing; and (iii) suchSecurity attaches to such assets concurrently with the repair or refurbishingthereof or within 90 days after the acquisition thereof, as the case may be;

(d)                               anySecurity arising by operation of law, including any Security (i) arisingin the ordinary course of business with respect to amounts not yet delinquentor being contested by the Borrower or a Subsidiary of the Borrower in goodfaith in appropriate proceedings or (ii) for taxes, assessments,government charges or claims, including without limitation those in favour ofRussian governmental fiscal authorities;

(e)                                anySecurity on the assets of any Subsidiary of the Borrower securing intercompanyFinancial Indebtedness of such Subsidiary owing to the Borrower or anotherSubsidiary of the Borrower;

(f)                                  anynetting or set-off arrangement entered into by a member of the Group with abank or any other financial institution in the normal course of its bankingarrangements for the purpose of netting or setting off its debit and creditfacilities with that bank or financial institution;

(g)                               easements,rights-of-way, restrictions and any other similar charges or encumbrancesincurred in the ordinary course of business and not interfering in any materialrespect 

6

----

 

                                              withthe business of the Borrower or the business of any Subsidiary of the Borrower,including any encumbrance or restriction with respect to an equity interest ofany joint venture pursuant to a joint venture agreement;

(h)                               anyextension, renewal or replacement of any Security described in clauses (a) to(g) above, provided that (i) such extension, renewal or replacementshall be no more restrictive in any material respect than the originalSecurity; (ii) the amount of Financial Indebtedness secured by suchSecurity is not increased; and (iii) if the assets securing the FinancialIndebtedness subject to such Security are changed in connection with suchrefinancing, extension or replacement, the fair market value of the property orassets is not increased; and

(i)                                   anyother Security (excluding any Security described in (a)-(h) above)provided that, immediately after giving effect to such Security, the aggregateamount of all secured Financial Indebtedness of the Group does not exceed 10%of the Borrower’s Total Assets.

“**QualifyingLender**” has the meaning given to it in Clause 12 (*Tax gross-up and indemnities*).

“**QuotationDay**” means, in relation to any period for which an interest rate isto be determined, two Business Days before the first day of that period unlessmarket practice differs in the London interbank market, in which case theQuotation Day will be determined by the Agent in accordance with marketpractice in the London interbank market (and if quotations for that currencyand period would normally be given by leading banks in the London interbankmarket on more than one day, the Quotation Day will be the last of those days).

“**RAS**”means generally accepted accounting principles, standards and practices in theRussian Federation.

“**ReferenceBanks**” means in relation to LIBOR and Mandatory Cost the principalLondon offices of the Original Mandated Lead Arrangers or such other banks asmay be appointed by the Agent in consultation with the Borrower.

“**RelevantPeriod**” has the meaning given to it in Clause 19 (*Financial Covenants*).

“**RepaymentDate**” means a Facility 1 Repayment Date or a Facility 2 RepaymentDate.

“**RepeatingRepresentations**” means each of the representations set out inClauses 17.1 (*Status*), 17.2 (*Binding obligations*), 17.3 (*Non-conflict with other obligations*), 17.4(*Power and authority*), 17.6 (*Governing law and enforcement*), 17.11 (*No default*), 17.14 (*Pari Passu Ranking*), 17.15 (*No proceedings pending or threatened*),17.16 (*Environmental laws and licences*)and 17.17 (*Telecommunications law andlicences*).

“**Roubles**”or “**RUR**” means the lawful currencyof the Russian Federation for the time being.

“**Russian Insolvency Law**” means the FederalLaw of the Russian Federation No. 127-FZ of 26 October 2002 “OnInsolvency (Bankruptcy)”.

“**ScreenRate**” means the British Bankers Association Interest Settlement Ratefor Dollars for the relevant period displayed on the appropriate page ofthe Telerate screen. If the agreed page is replaced or service ceases tobe available, the Agent may specify another page or service displaying theappropriate rate after consultation with the Borrower and the Lenders.

“**Security**”means a mortgage, charge, lien, pledge or other security interest securing anyobligations of any person or any other agreement or arrangement having asimilar effect.

7

----

 

“**SignificantSubsidiary**” means:

(a)                                UMC(unless, pursuant to the UMC Litigation, any or all of the Borrower’s shares inUMC are transferred to a person that is not a member of the Group, with theresult that UMC ceases to be a member of the Group);

(b)                               TelecomXXI;

(c)                                KubanGSM;

(d)                               anySubsidiary of the Borrower to which (i) the Borrower, UMC, Telecom XXI orKuban GSM sells, leases or otherwise transfers its GSM 900 or 1800 licences or (ii) anysuch licence is re-issued; and

(e)                                anySubsidiary of the Borrower (i) whose total assets (or, where suchSubsidiary prepares consolidated accounts, whose total consolidated assets)have a book value (as determined by reference to the most recent managementaccounts of that Subsidiary prepared in accordance with GAAP) equal to orexceeding 10% of the Borrower’s Total Assets or (ii) whose gross annualrevenues (or, where such Subsidiary prepares consolidated accounts, whose grossannual consolidated revenues) (as determined by reference to the most recentmanagement accounts of that Subsidiary prepared in accordance with GAAP) areequal to or exceed 10% of the Borrower’s gross annual consolidated revenues inthe year for which the Borrower’s most recent consolidated financial statementswere prepared.

“**SigningDate**” means the date of this Agreement.

“**Subsidiary**”means an entity from time to time of which a person has direct or indirectcontrol or owns directly or indirectly more than 50% of the share capital orsimilar right of ownership.

“**SyndicationDate**” means (unlesss otherwise agreed by the Borrower and theOriginal Mandated Lead Arrangers) the day specified by the Original MandatedLead Arrangers as the day on which primary syndication of the Facilities iscompleted.

“**SyndicationSide Letter**” means the letter agreement dated on or about theSigning Date between the Borrower and the Original Mandated Lead Arrangers inrelation to the syndication of the Facilities.

“**Tax**”means any tax, levy, impost, duty or other charge or withholding of a similarnature (including any penalty or interest payable in connection with anyfailure to pay or any delay in paying any of the same).

“**TelecomXXI**” means Telecom XXI, an openjoint stock company that is a wholly-owned Subsidiary of the Borrower.

“**Telecommunications Authorisation**”****means any Authorisation from anygovernmental or other regulatory authority necessary in order for each of theBorrower and its Significant Subsidiaries to maintain, operate and conduct its business as it isbeing conducted in accordance with Telecommunications Laws.

“**Telecommunications Laws**”****means (a) alllaws and regulations which relate to telecommunications and/or the business ofproviding mobile telephone services and (b) all rules, guidelines,policies and regulations made thereunder, that are applicable to each of theBorrower and its Significant Subsidiaries and/or the business carried on by it.

8

----

 

“**TotalAssets**” means the book value of the consolidated total assets of theBorrower as determined by reference to the Borrower’s most recent annualconsolidated balance sheet delivered in accordance with paragraph (a) ofClause 18.1 (*Financial statements*)or, prior to the first delivery, to the Original Financial Statements.

“**TotalCommitments**” means the aggregate of the Total Facility 1 Commitmentsand the Total Facility 2 Commitments, being $500,000,000 at the Signing Date.

“**TotalFacility 1 Commitments**” means the aggregate of the Facility 1Commitments, being $200,000,000 at the Signing Date.

“**TotalFacility 2 Commitments**” means the aggregate of the Facility 2Commitments, being $300,000,000 at the Signing Date.

“**TransferCertificate**” means a certificate substantially in the form set outin Schedule 5 (*Form of TransferCertificate*) or any other form agreed between the Agent and theBorrower.

“**TransferDate**” means, in relation to a transfer, the later of:

(a)                                theproposed Transfer Date specified in the Transfer Certificate; and

(b)                               thedate on which the Agent executes the Transfer Certificate.

“**UMC**”means Ukrainian-German-Dutch-Danish JointVenture “Ukrainian Mobile Communications” in Ukraine.

“**UMCLitigation**” 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 Borroweror the acquisition, reorganization or ownership of UMC by the Borrower.

“**UnpaidSum**” means any sum due and payable but unpaid by the Borrower under theFinance Documents.

“**USDollars**”, “**Dollars**”, “**USD**” and “**$**”denote the lawful currency of the United States of America.

“**Utilisation**”means a utilisation of a Facility.

“**UtilisationDate**” means the date of a Utilisation, being the date on which therelevant Loan is to be made.

“**UtilisationRequest**” means a notice substantially in the form set out inSchedule 3 (*Utilisation**Request*).

“**VAT**”means value added tax and any other tax of a similar nature.

**1.2**                            Construction

(a)                               Unlessa contrary indication appears, any reference in this Agreement to:

(i)                                   the“**Agent**”, any “**Mandated Lead Arranger**”, any “**Finance****Party**”,any “**Lender**”, the “**Borrower**” and any “**Party**” shall be construed so as to includeits successors in title, permitted assigns and permitted transferees;

(ii)                                “**assets**” includes present and futureproperties, revenues and rights of every description;

9

----

 

(iii)                             “**control**” means the possession, directly orindirectly, of the power to direct or cause the direction of the managementpolices of a person, whether through the ownership of voting securities, bycontract or credit arrangement, as trustee or executor, or otherwise;

(iv)                            a “**Finance****Document**”or any other agreement or instrument is a reference to that Finance Document orother agreement or instrument as amended or novated;

(v)                               “**indebtedness**” includes any obligation(whether incurred as principal or as surety) for the payment or repayment ofmoney, whether present or future, actual or contingent;

(vi)                            a “**person**” includes any person, firm, company,corporation, government, state or agency of a state or any association, trustor partnership (whether or not having separate legal personality) or two ormore of the foregoing;

(vii)                         a “**regulation**” includes any regulation, rule,official directive, request or guideline (whether or not having the force oflaw) of any governmental, intergovernmental or supranational body, agency,department or regulatory, self-regulatory or other authority or organisation;

(viii)                      a provisionof law is a reference to that provision as amended or re-enacted; and

(ix)                              atime of day is a reference to London time.

(b)                              Section,Clause and Schedule headings are for ease of reference only.

(c)                               Unlessa contrary indication appears, a term used in any other Finance Document or inany notice given under or in connection with any Finance Document has the samemeaning in that Finance Document or notice as in this Agreement.

(d)                              ADefault (other than an Event of Default) is “**continuing**”if it has not been remedied or waived and an Event of Default is “**continuing**” if it has not been waived.

**1.3**                            Third Party Rights

A person who is not a Party has noright under the Contracts (Rights of Third Parties) Act 1999 to enforce or toenjoy the benefit of any term of this Agreement.

10

----

 

**SECTION 2THE FACILITY**

**2**                                      THE FACILITIES

**2.1**                            The Facilities

Subject to the terms of thisAgreement, the Lenders make available to the Borrower:

(a)                                aterm loan facility in Dollars to be designated “**Facility 1**” in an aggregate amount equal to the Total Facility1 Commitments; and

(b)                               a termloan facility in Dollars to be designated “**Facility2**” in an aggregate amount equal to the Total Facility  2 Commitments.

**2.2**                            Finance Parties’ rights andobligations

(a)                               Theobligations of each Finance Party under the Finance Documents are several. Failureby a Finance Party to perform its obligations under the Finance Documents doesnot affect the obligations of any other Party under the Finance Documents. NoFinance Party is responsible for the obligations of any other Finance Partyunder the Finance Documents.

(b)                              Therights of each Finance Party under or in connection with the Finance Documentsare separate and independent rights and any debt arising under the FinanceDocuments to a Finance Party from the Borrower shall be a separate andindependent debt.

(c)                               AFinance Party may, except as otherwise stated in the Finance Documents,separately enforce its rights under the Finance Documents.

**3**                                      PURPOSE

**3.1**                            Purpose

The Borrower shall apply all amountsborrowed by it under the Facilities towards its general corporate purposes,including towards the refinancing of its existing indebtedness.

**3.2**                            Monitoring

No Finance Party is bound to monitoror verify the application of any amount borrowed pursuant to this Agreement.

**4**                                      CONDITIONS OFUTILISATION

**4.1**                            Initial conditions precedent

The Borrower may not deliver thefirst Utilisation Request unless the Agent has received all of the documentsand other evidence listed in Schedule 2 (*Conditionsprecedent*) in form and substance satisfactory to the Agent. TheAgent shall notify the Borrower and the Lenders promptly upon being sosatisfied.

**4.2**                            Further conditions precedent

The Lenders will only be obliged tocomply with Clause 5.4 (*Lenders’participation*) if on the date of the Utilisation Request and on theproposed Utilisation Date:

11

----

 

(i)                                   noDefault is continuing or would result from the proposed Loan; and

(ii)                                theRepeating Representations to be made by the Borrower are true in all materialrespects.

12

----

 

**SECTION 3UTILISATION**

**5**                                      UTILISATION

**5.1**                            Delivery of a Utilisation Request

The Borrower may utilise a Facilityby delivery to the Agent of a duly completed Utilisation Request not later than10:00 a.m. on the day falling 3 Business Days before the proposedUtilisation Date (or, in relation to the first Utilisation Request, not laterthan 10:00 a.m. on the day falling 2 Business Days before the proposedUtilisation Date).

**5.2**                            Completion of a Utilisation Request

(a)                               EachUtilisation Request is irrevocable and will not be regarded as having been dulycompleted unless:

(i)                                   itidentifies the Facility to be utilised;

(ii)                                theproposed Utilisation Date is a Business Day within the Availability Periodapplicable to that Facility;

(iii)                             thecurrency and amount of the Utilisation comply with Clause 5.3 (*Currency and amount*); and

(iv)                            itspecifies the account and bank to which the proceeds of the Utilisation are tobe credited.

(b)                              Onlyone Loan may be requested in each Utilisation Request.

**5.3**                            Currency and amount

(a)                               Thecurrency specified in a Utilisation Request must be Dollars.

(b)                              Theamount of the proposed Loan must be:

(i)                                   aminimum of $50,000,000 or, if less, the Available Facility; or

(ii)                                inany event such that it is less than or equal to the Available Facility.

**5.4**                            Lenders’ participation

(a)                               Ifthe conditions set out in this Agreement have been met, each Lender shall makeits participation in each Loan available by the Utilisation Date through itsFacility Office.

(b)                              Theamount of each Lender’s participation in each Loan will be equal to theproportion borne by its Available Commitment to the Available Facilityimmediately prior to making the Loan.

(c)                               TheAgent shall notify each Lender of the amount of each Loan and the amount of itsparticipation in that Loan not later than 5:00 p.m. on the day falling 3Business Days before the relevant Utilisation Date (or, in relation to thefirst Loan, not later than 11:00 a.m. on the day falling 2 Business Daysbefore the first Utilisation Date).

13

----

 

**SECTION 4REPAYMENT, PREPAYMENT AND CANCELLATION**

**6**                                      REPAYMENT

**6.1**                            Repayment of Facility 1 Loans

(a)                               TheBorrower shall repay the Facility 1 Loans in five equal instalments, by payingon each Facility 1 Repayment Date an amount equal to one fifth of the amount ofthe Facility 1 Loans outstanding at the close of business on the last day ofthe Availability Period for Facility 1.

(b)                              TheBorrower may not reborrow any part of Facility 1 which is repaid.

**6.2**                            Repayment of Facility 2 Loans

(a)                               TheBorrower shall repay the Facility 2 Loans in four equal instalments, by payingon each Facility 2 Repayment Date an amount equal to one quarter of the amountof the Facility 2 Loans outstanding at the close of business on the last day ofthe Availability Period for Facility 2.

(b)                              TheBorrower may not reborrow any part of Facility 2 which is repaid.

**7**                                      PREPAYMENT ANDCANCELLATION

**7.1**                            Illegality

If it becomes unlawful in anyapplicable jurisdiction for a Lender to perform any of its obligations ascontemplated by this Agreement or to fund or maintain its participation in anyLoan:

(a)                                thatLender shall promptly notify the Agent upon becoming aware of that event;

(b)                               uponthe Agent notifying the Borrower, the Commitment of that Lender will beimmediately cancelled; and

(c)                                theBorrower shall repay that Lender’s participation in the Loans on the last dayof the Interest Period for each Loan occurring after the Agent has notified theBorrower or, if earlier, the date specified by the Lender in the noticedelivered to the Agent (being no earlier than the last day of any applicablegrace period permitted by law).

**7.2**                            Voluntary cancellation

The Borrower may, if it gives theAgent not less than 10 Business Days’ (or such shorter period as the MajorityLenders may agree) prior written notice, cancel the whole or any part (being aminimum amount of $10,000,000) of an Available Facility. Any cancellation underthis Clause 7.3 shall reduce the Commitments of the Lenders rateably under thatFacility.

**7.3**                            Voluntary prepayment of Loans

(a)                               TheBorrower may, if it gives the Agent not less than 10 Business Days’ (or suchshorter period as the Majority Lenders may agree) prior written notice, prepaythe whole or any part of any Loan (but, if in part, being an amount thatreduces the Loan by a minimum amount of $10,000,000).

(b)                              ALoan in respect of a Facility may only be prepaid after the last day of theAvailability Period for that Facility (or, if earlier, the day on which therelevant Available Facility is zero).

14

----

 

(c)                               Eachprepayment shall be applied in satisfaction of the Borrower’s obligations underClause 6 (*Repayment*) in the inverseorder of maturity of the Loans (or, at the option of the Borrower, *pro rata* to the remaining principalinstalments thereof).

**7.4**                            Mandatory Prepayment — Change ofControl

(a)                               Inthis Clause 7.4, “**Change of Control**”means any of the following events or circumstances: any person or group ofpersons acting in concert or under an express or implied agreement orunderstanding, directly or through one or more intermediaries, shall (x) acquireultimate beneficial or legal ownership of, or control over, more than 50% ofthe issued shares of the Borrower; (y) acquire ownership of or controlover more than 50% of the voting interests in the share capital of theBorrower; or (z) obtain the power (whether or not exercised) to elect notless than half of the directors of the Borrower; (provided, however, that anyacquisition by Sistema JSFC, T-Mobile International AG or any of theirrespective Subsidiaries that results in the 50% threshold in paragraphs (x) and(y) above being exceeded, or in the power referred to in paragraph (z) abovebeing obtained, will not be a Change of Control).

(b)                              Ifthere is a Change of Control:

(i)                                   theBorrower shall promptly notify each Lender (through the Agent) upon becomingaware of that event;

(ii)                                theBorrower may not make a Utilisation; and

(iii)                             ifany Lender (in its sole discretion) so requires, it may, within 5 Business Daysof its receipt of the Borrower’s notification under sub-clause (i) above,direct the Agent to send a notice to the Borrower requiring the Borrower torepay that Lender’s participations in the Loans (together with accruedinterest) in full on the day (the “**EarlyRepayment Date**”) falling 30 days after the date of the Borrower’snotification under sub-clause (i) above. Before the Early Repayment Date,the Lender and the Borrower shall consult with each other for a period of 5Business Days with respect to the transfer of that Lender’s rights andobligations under this Agreement to another reputable international bank orfinancial institution nominated by the Borrower (but which is not an Affiliateof the Borrower) in accordance with Clause 22.5 (*Procedure for transfer*). If no such transfer has beeneffected on or before the Early Repayment Date, then (x) the Borrowershall repay that Lender’s participations in the Loans (together with accruedinterest) in full on the Early Repayment Date and (y) the Commitments ofthat Lender shall be reduced to zero on that date.

**7.5**                            Right of repayment and cancellationin relation to a single Lender

If:

(a)                                anysum payable to any Lender by the Borrower is required to be increased underparagraph (c) of Clause 12.2 (*Taxgross-up*); or

(b)                               anyLender claims indemnification from the Borrower under Clause 12.3 (*Tax indemnity*) or Clause 13 (*Increased Costs*),

the Borrower may, whilst the circumstancegiving rise to the requirement or indemnification continues, give the Agentnotice of cancellation of the Commitments of that Lender and its intention toprocure the repayment of that Lender’s participation in the Loans on the lastday of the Interest Period ending after the date of such notice (or, ifearlier, on such other date as specified by the Borrower in that notice) (the “**Cancellation Date**”). Before theCancellation 

15

----

 

Date, the Lender and the Borrowershall consult with each other for a period of 5 Business Days with respect tothe transfer of that Lender’s rights and obligations under this Agreement toanother reputable international bank or financial institution nominated by theBorrower (but which is not an Affiliate of the Borrower) in accordance withClause 22.5 (*Procedure for transfer*).If no such transfer has been effected on or before the Cancellation Date, then (x) theBorrower shall repay that Lender’s participations in the Loans (together withaccrued interest) in full on the Cancellation Date and (y) the Commitmentsof that Lender shall be reduced to zero on that date.

**7.6**                            Restrictions

(a)                               Anynotice of cancellation or prepayment given by any Party under this Clause 7shall be irrevocable and, unless a contrary indication appears in thisAgreement, shall specify the date or dates upon which the relevant cancellationor prepayment is to be made and the amount of that cancellation or prepayment.

(b)                              Anyprepayment under this Agreement shall be made together with accrued interest onthe amount prepaid and, subject to any Break Costs, without premium or penalty.

(c)                               TheBorrower may not reborrow any part of a Facility which is prepaid.

(d)                              TheBorrower shall not repay or prepay all or any part of the Loans or cancel allor any part of the Commitments except at the times and in the manner expresslyprovided for in this Agreement.

(e)                               Noamount of the Total Commitments cancelled under this Agreement may besubsequently reinstated.

(f)                                 Ifthe Agent receives a notice under this Clause 7 it shall promptly forward acopy of that notice to either the Borrower or the affected Lender, asappropriate.

16

----

 

**SECTION 5COSTS OF UTILISATION**

**8**                                      INTEREST

**8.1**                            Calculation of interest

The rate of interest on each Loan foreach Interest Period is the percentage rate per annum which is the aggregate ofthe applicable:

(a)                                Margin;

(b)                               LIBOR;and

(c)                                MandatoryCost, if any.

**8.2**                            Payment of interest

The Borrower shall pay accruedinterest on each Loan on the last day of each Interest Period (and, if theInterest Period is longer than 6 Months, on the date falling at six monthlyintervals after the first day of the Interest Period).

**8.3**                            Default interest

(a)                               Ifthe Borrower fails to pay any amount payable by it under a Finance Document onits due date, interest shall accrue on the overdue amount from the due date upto the date of actual payment (both before and after judgment) at a rate which,subject to paragraph (b) below, is the sum of 2 per cent. and the ratewhich would have been payable if the overdue amount had, during the period ofnon-payment, constituted a Loan in the currency of the overdue amount forsuccessive Interest Periods, each of a duration selected by the Agent (actingreasonably). Any interest accruing under this Clause 8.3 shall be immediatelypayable by the Borrower on demand by the Agent.

(b)                              Ifany overdue amount consists of all or part of a Loan which became due on a daywhich was not the last day of an Interest Period relating to that Loan:

(i)                                   thefirst Interest Period for that overdue amount shall have a duration equal tothe unexpired portion of the current Interest Period relating to that Loan; and

(ii)                                therate of interest applying to the overdue amount during that first InterestPeriod shall be the sum of 2 per cent. and the rate which would have applied ifthe overdue amount had not become due.

(c)                               Defaultinterest (if unpaid) arising on an overdue amount will be compounded with theoverdue amount at the end of each Interest Period applicable to that overdueamount but will remain immediately due and payable.

**8.4**                            Notification of rates of interest

The Agent shall promptly notify theLenders and the Borrower of the determination of a rate of interest under thisAgreement.

17

----

 

**9**                                      INTEREST PERIODS

**9.1**                            Duration of Interest Periods

(a)                               Saveas otherwise provided herein, each Interest Period shall have a duration of 6Months (or such other period as may be agreed between the Borrower and theLenders) and shall commence on the day on which the preceding Interest Periodexpires (provided that the last Interest Period under Facility 1 shall have aduration of 6 Months plus one day and the last Interest Period under Facility 2shall have a duration of 9 Months plus one day).

(b)                              Thefirst Interest Period for the first Loan made under a Facility shall begin on theUtilisation Date for that Loan and shall have a duration of 6 Months, and thefirst Interest Period for each Loan made thereafter under that Facility shallbegin on the Utilisation Date for that Loan and end on the last day of theInterest Period applicable to that first Loan. At the end of the first InterestPeriod for each Loan under a Facility, such Loan shall be consolidated with allother Loans (if any) then outstanding under that Facility such that all Loansunder that Facility shall then be treated as a single Loan.

(c)                               NoInterest Period shall extend beyond a Repayment Date for the relevant Facility,and if an Interest Period would otherwise overrun a Repayment Date for therelevant Facility, such Interest Period shall be shortened so that it ends onthat Repayment Date.

(d)                              AnInterest Period for a Loan shall not extend beyond the Final Maturity Date.

(e)                               Priorto the earlier of (i) the Syndication Date and (ii) 31 October 2004,each Interest Period shall have a duration of one Month (or such other durationas is necessary to ensure that such Interest Period shall end on theSyndication Date).

**9.2**                            Non-Business Days

If an Interest Period would otherwiseend on a day which is not a Business Day, that Interest Period will instead endon the next Business Day in that calendar month (if there is one) or thepreceding Business Day (if there is not).

**10**                               CHANGES TO THECALCULATION OF INTEREST

**10.1**                     Absence of quotations

Subject to Clause 10.2 (*Market disruption*), if LIBOR is to bedetermined by reference to the Reference Banks but a Reference Bank does notsupply a quotation by 11:00 a.m. on the Quotation Day, the applicableLIBOR shall be determined on the basis of the quotations of the remainingReference Banks.

**10.2**                     Market disruption

(a)                               Ifa Market Disruption Event occurs in relation to a Loan for any Interest Period,then the rate of interest on each Lender’s share of that Loan for the InterestPeriod shall be the rate per annum which is the sum of:

(i)                                   theMargin;

(ii)                                therate notified to the Agent by that Lender as soon as practicable and in anyevent before interest is due to be paid in respect of that Interest Period, tobe that which expresses as a percentage rate per annum the cost to that Lenderof funding its participation in that Loan from whatever source it mayreasonably select; and

18

----

 

(iii)                             theMandatory Cost, if any, applicable to that Lender’s participation in the Loan.

(b)                              Inthis Agreement “**Market Disruption Event**”means:

(i)                                   ator about noon on the Quotation Day for the relevant Interest Period the ScreenRate is not available and none or only one of the Reference Banks supplies arate to the Agent to determine LIBOR for Dollars for the relevant InterestPeriod; or

(ii)                                beforeclose of business in London on the Quotation Day for the relevant InterestPeriod, the Agent receives notifications from a Lender or Lenders (whoseparticipations in a Loan exceed 35 per cent. of that Loan) that the cost to itof obtaining matching deposits in the London interbank market would be inexcess of LIBOR.

**10.3**                     Alternative basis of interest orfunding

(a)                               Ifa Market Disruption Event occurs and the Agent or the Borrower so requires, theAgent and the Borrower shall enter into negotiations (for a period of not morethan 30 days) with a view to agreeing a substitute basis for determining therate of interest.

(b)                              Anyalternative basis agreed pursuant to paragraph (a) above shall, with theprior consent of all the Lenders and the Borrower, be binding on all Parties.

**10.4**                     Break Costs

(a)                               TheBorrower shall, within three Business Days of demand by a Finance Party, pay tothat Finance Party its Break Costs attributable to all or any part of a Loan orUnpaid Sum being paid by the Borrower on a day other than the last day of anInterest Period for that Loan or Unpaid Sum.

(b)                              EachLender shall, as soon as reasonably practicable after a demand by the Agent,provide a certificate confirming the amount of its Break Costs for any InterestPeriod in which they accrue.

**11**                                FEES

**11.1**                      Commitment fee

(a)                               TheBorrower shall pay to the Agent (for the account of each Lender) a commitmentfee in respect of Facility 2, calculated on a daily basis, at the rate of:

(i)                                   fromthe Signing Date until (and including) 1 October 2004, 0.25 per cent. perannum of the Total Facility 2 Commitments; and

(ii)                                from(but excluding) 1 October 2004 until the last day of the AvailabilityPeriod for Facility 2, 0.50 per cent. per annum of the Available Commitment forFacility 2.

(b)                              Thecommitment fee will accrue from the Signing Date, is payable in arrears on thelast day of each successive period of three Months, on the last day of theAvailability Period for Facility 2 and, if cancelled in full, on the cancelledamount of the relevant Lender’s Facility 2 Commitment at the time thecancellation is effective.

**11.2**                      Arrangement fee

The Borrower shall pay to theMandated Lead Arrangers an arrangement fee in the amount and at the timesagreed in a Fee Letter.

19

----

 

**11.3**                      Agency fee

The Borrower shall pay to the Agent(for its own account) an agency fee in the amount and at the times agreed in aFee Letter.

20

----

 

**SECTION 6ADDITIONAL PAYMENT OBLIGATIONS**

**12**                               TAX GROSS-UP ANDINDEMNITIES

**12.1**                     Definitions

(a)                               Inthis Agreement:

“**ProtectedParty**” means a Finance Party which is or will be subject to anyliability, or required to make any payment, for or on account of Tax inrelation to a sum received or receivable (or any sum deemed for the purposes ofTax to be received or receivable) under a Finance Document.

“**QualifyingLender**” means a Lender which is situated for tax purposes in theRussian Federation or in a Tax Treaty Jurisdiction.

“**TaxCredit**” means a credit against, relief or remission for, orrepayment of any Tax.

“**TaxDeduction**” means a deduction or withholding for or on account of Taxfrom a payment under a Finance Document.

“**TaxPayment**” means an increased payment made by the Borrower to aFinance Party under Clause 12.2 (*Taxgross-up*) or a payment under Clause 12.3 (*Tax indemnity*).

“**TaxTreaty Jurisdiction**” means a jurisdiction which has in force adouble tax treaty with the Russian Federation (or with the Union of SovietSocialist Republics to which the Russian Federation has succeeded) whichprovides for full exemption from Russian withholding tax on interest derivedfrom a source within the Russian Federation payable to a resident of suchjurisdiction.

(b)                              Unlessa contrary indication appears, in this Clause 12 a reference to “**determines**” or “**determined**” means a determination made in the absolutediscretion of the person making the determination.

**12.2**                     Tax gross-up

(a)                               TheBorrower shall make all payments to be made by it without any Tax Deduction,unless a Tax Deduction is required by law.

(b)                              TheBorrower shall promptly upon becoming aware that it must make a Tax Deduction(or that there is any change in the rate or the basis of a Tax Deduction)notify the Agent accordingly. Similarly, a Lender shall notify the Agent onbecoming so aware in respect of a payment payable to that Lender. If the Agentreceives such notification from a Lender, it shall notify the Borrower.

(c)                               Subjectto paragraph (d) below, if a Tax Deduction is required by law to be madeby the Borrower, the amount of the payment due from the Borrower shall beincreased to an amount which (after making any Tax Deduction) leaves an amountequal to the payment which would have been due if no Tax Deduction had beenrequired.

(d)                              TheBorrower is not required to make an increased payment to a Lender underparagraph (c) above if, on the date on which the payment falls due, theBorrower could have made such a payment to that Lender without a Tax Deductionif that Lender was a Qualifying Lender, but on that date that Lender is not, orhas ceased to be, a Qualifying Lender (other than as a result of any changeafter the date it became a Lender under this Agreement in (or in theinterpretation, 

21

----

 

                                             administration,or application of) any law or treaty, or any published practice or concessionof any relevant taxing authority).

(e)                               Ifthe Borrower is required to make a Tax Deduction, it shall make that TaxDeduction and any payment required in connection with that Tax Deduction withinthe time allowed and in the minimum amount required by law.

(f)                                 Within30 days of making either a Tax Deduction or any payment required in connectionwith that Tax Deduction, the Borrower shall deliver to the Agent for theFinance Party entitled to the payment an original receipt (or certified copythereof) demonstrating that the Tax Deduction has been made or (as applicable)any appropriate payment paid to the relevant taxing authority.

**12.3**                     Tax indemnity

(a)                               TheBorrower shall (within three Business Days of demand by the Agent) pay to aProtected Party an amount equal to the loss, liability or cost which thatProtected Party determines has been suffered for or on account of Tax by thatProtected Party in respect of a Finance Document.

(b)                              Paragraph(a) above shall not apply:

(i)                                   withrespect to any Tax assessed on a Finance Party:

(A)                           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

(B)                             underthe law of the jurisdiction in which that Finance Party’s Facility Office islocated in respect of amounts received or receivable in that jurisdiction,

if that Tax is imposed on orcalculated by reference to the net income received or receivable (but not anysum deemed to be received or receivable) by that Finance Party; or

(ii)                                tothe extent a loss, liability or cost:

(A)                           iscompensated for by an increased payment under Clause 12.2 (*Tax gross-up*); or

(B)                             wouldhave been compensated for by an increased payment under Clause 12.2 (*Tax gross-up*) but was not so compensatedsolely because one of the exclusions in paragraph (d) of Clause 12.2(*Tax gross-up*) applied.

(c)                               AProtected Party making, or intending to make, a claim under paragraph (a) aboveshall promptly notify the Agent of the event which will give, or has given,rise to the claim, following which the Agent shall notify the Borrower.

(d)                              AProtected Party shall, on receiving a payment from the Borrower under thisClause 12.3, notify the Agent.

**12.4**                     Tax Credit

If the Borrower makes a Tax Paymentand the relevant Finance Party determines that:

(a)                                aTax Credit is attributable to that Tax Payment; and

(b)                               thatFinance Party has obtained, utilised and retained that Tax Credit,

22

----

 

the Finance Party shall pay promptlyan amount to the Borrower which that Finance Party determines will leave theFinance Party (after that payment) in the same after-Tax position as it wouldhave been in had the Tax Payment not been made by the Borrower.

**12.5**                     Stamp taxes

The Borrower shall pay and, withinthree Business Days of demand, indemnify each Finance Party against any cost,loss or liability that Finance Party incurs in relation to all stamp duty,registration and other similar Taxes payable in respect of any FinanceDocument.

**12.6**                     Value added tax

(a)                               Allconsideration expressed to be payable under a Finance Document by any Party toa Finance Party shall be deemed to be exclusive of any VAT. If VAT ischargeable on such consideration, that Party shall pay to the Finance Party (ordirectly to the appropriate tax authority, if so required by law) (in additionto and at the same time as paying the consideration) an amount equal to theamount of the VAT.

(b)                              Wherea Finance Document requires any Party to reimburse a Finance Party for anycosts or expenses, that Party shall also at the same time pay and indemnify theFinance Party against all VAT incurred by the Finance Party in respect of thecosts or expenses to the extent that the Finance Party reasonably determinesthat neither it nor any other member of the group of which it is a member forVAT purposes is entitled to credit or repayment from the relevant tax authorityin respect of the VAT.

**12.7**                     Tax forms

(a)                               Atleast 10 Business Days prior to the date of the first scheduled payment ofinterest under this Agreement, and within 20 Business Days from the beginningof each calendar year falling after the Signing Date, each Qualifying Lendershall use its reasonable efforts to provide to the Borrower a document issuedby the relevant government authority in its jurisdiction of residenceconfirming that it is a resident of that jurisdiction.

(b)                              Atthe request of the Borrower (acting reasonably), each Lender shall use itsreasonable efforts to provide any other documentation or information to theBorrower that may be reasonably necessary for the Borrower to establish acomplete exemption from Russian withholding tax in relation to payments ofinterest under this Agreement.

**13**                               INCREASED COSTS

**13.1**                     Increased costs

(a)                               Subjectto Clause 13.3 (*Exceptions*) theBorrower shall, within three Business Days of a demand by the Agent, pay forthe account of a Finance Party the amount of any Increased Costs incurred bythat Finance Party or any of its Affiliates as a result of (i) theintroduction of or any change in (or in the interpretation, administration orapplication of) any law or regulation or (ii) compliance with any law orregulation made after the Signing Date.

(b)                              Inthis Agreement “**Increased Costs**”means:

(i)                                   areduction in the rate of return from the Facility or on a Finance Party’s (orits Affiliate’s) overall capital;

(ii)                                anadditional or increased cost; or

23

----

 

(iii)                             areduction of any amount due and payable under any Finance Document,

which is incurred or suffered by aFinance Party or any of its Affiliates to the extent that it is attributable tothat Finance Party having entered into its Commitment or funding or performingits obligations under any Finance Document.

**13.2**                     Increased cost claims

(a)                               AFinance Party intending to make a claim pursuant to Clause 13.1 (*Increased costs*) shall notify the Agent ofthe event giving rise to the claim, following which the Agent shall promptlynotify the Borrower.

(b)                              EachFinance Party shall, as soon as practicable after a demand by the Agent,provide a certificate confirming the amount of its Increased Costs.

**13.3**                     Exceptions

(a)                               Clause13.1 (*Increased costs*) does notapply to the extent any Increased Cost is:

(i)                                   attributableto a Tax Deduction required by law to be made by the Borrower;

(ii)                                compensatedfor by Clause 12.3 (*Tax indemnity*)(or would have been compensated for under Clause 12.3 (*Tax indemnity*) but was not so compensatedsolely because any of the exclusions in paragraph (b) of Clause 12.3 (*Tax indemnity*) applied);

(iii)                             compensatedfor by the payment of the Mandatory Cost; or

(iv)                            attributableto the wilful breach by the relevant Finance Party or its Affiliates of any lawor regulation.

(b)                              Inthis Clause 13.3, a reference to a “**TaxDeduction**” has the same meaning given to the term in Clause 12.1 (*Definitions*).

**14**                               OTHER INDEMNITIES

**14.1**                     Currency indemnity

(a)                               Ifany sum due from the Borrower under the Finance Documents (a “**Sum**”), or any order, judgment or awardgiven or made in relation to a Sum, has to be converted from the currency (the “**First Currency**”) in which that Sum ispayable into another currency (the “**SecondCurrency**”) for the purpose of:

(i)                                   makingor filing a claim or proof against the Borrower;

(ii)                                obtainingor enforcing an order, judgment or award in relation to any litigation orarbitration proceedings,

the Borrower shall as an independentobligation, within three Business Days of demand, indemnify each Finance Partyto whom that Sum is due against any cost, loss or liability arising out of oras a result of the conversion including any discrepancy between (A) therate of exchange used to convert that Sum from the First Currency into theSecond Currency and (B) the rate or rates of exchange available to thatperson at the time of its receipt of that Sum.

(b)                              TheBorrower waives any right it may have in any jurisdiction to pay any amountunder the Finance Documents in a currency or currency unit other than that inwhich it is expressed to be payable.

24

----

 

**14.2**                     Other indemnities

The Borrower shall, within threeBusiness Days of demand, indemnify each Finance Party against any cost, loss orliability incurred by that Finance Party as a result of:

(a)                                theoccurrence of any Event of Default;

(b)                               afailure by the Borrower to pay any amount due under a Finance Document on itsdue date, including without limitation, any cost, loss or liability arising asa result of Clause 26 (*Sharing among theFinance Parties*);

(c)                                funding,or making arrangements to fund, its participation in a Loan requested by theBorrower in a Utilisation Request but not made by reason of the operation ofany one or more of the provisions of this Agreement (other than by reason ofdefault or negligence by that Finance Party alone); or

(d)                               aLoan (or part of a Loan) not being prepaid in accordance with a notice ofprepayment given by the Borrower.

**14.3**                     Indemnity to the Agent

The Borrower shall promptly indemnifythe Agent against any cost, loss or liability incurred by the Agent (actingreasonably) as a result of:

(a)                                investigatingany event which it reasonably believes is a Default; or

(b)                               actingor relying on any notice, request or instruction which it reasonably believesto be genuine, correct and appropriately authorised.

**15**                               MITIGATION BY THELENDERS

**15.1**                     Mitigation

(a)                               EachFinance Party shall, in consultation with the Borrower, take all reasonablesteps to mitigate any circumstances which arise and which would result in anyamount becoming payable under or pursuant to, or cancelled pursuant to, any ofClause 7.1 (*Illegality*), Clause12 (*Tax gross-up and indemnities*)or Clause 13.1 (*Increased costs*)including (but not limited to) transferring its rights and obligations underthe Finance Documents to another Affiliate or Facility Office.

(b)                              Paragraph(a) above does not in any way limit the obligations of the Borrower underthe Finance Documents.

**15.2**                     Limitation of liability

(a)                               TheBorrower shall indemnify each Finance Party for all costs and expensesreasonably incurred by that Finance Party as a result of steps taken by itunder Clause 15.1 (*Mitigation*).

(b)                              AFinance Party is not obliged to take any steps under Clause 15.1 (*Mitigation*) if, in the opinion of thatFinance Party (acting reasonably), to do so might be prejudicial to it.

**16**                               COSTS AND EXPENSES

**16.1**                     Transaction expenses

The Borrower shall promptly on demandpay the Agent and the Original Mandated Lead Arrangers the amount of allreasonable out-of-pocket costs and legal expenses incurred by any of them inconnection with the negotiation, preparation and execution of:

25

----

 

(a)                                thisAgreement and any other documents referred to in this Agreement; and

(b)                               anyother Finance Documents executed after the date of this Agreement,

subject to the terms of theSyndication Side Letter.

**16.2**                     Amendment costs

If (a) the Borrower requests anamendment, waiver or consent or (b) an amendment is required pursuant toClause 27.9 (*Change of currency*),the Borrower shall, within three Business Days of demand, reimburse the Agentfor the amount of all costs and expenses (including legal fees) reasonablyincurred by the Agent in responding to, evaluating, negotiating or complyingwith that request or requirement.

**16.3**                     Enforcement costs

The Borrower shall, within threeBusiness Days of demand, pay to each Finance Party the amount of all costs andexpenses (including legal fees) incurred by that Finance Party in connectionwith the enforcement of, or the preservation of any rights under, any FinanceDocument.

26

----

 

**SECTION 7REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT**

**17**                               REPRESENTATIONS

The Borrower makes therepresentations and warranties set out in this Clause 17 to each Finance Partyon the date of this Agreement.

**17.1**                     Status

(a)                               Itis an open joint stock company, duly established, registered and validlyexisting under the laws of the Russian Federation.

(b)                              Itand each of its Significant Subsidiaries has the power to own its assets andcarry on its business as it is being conducted.

**17.2**                     Binding obligations

The obligations expressed to beassumed by it in each Finance Document are legal, valid, binding andenforceable obligations, subject to insolvency and other laws affectingcreditors’ rights generally and principles of equity.

**17.3**                     Non-conflict with other obligations

The entry into and performance by itof, and the transactions contemplated by, the Finance Documents do not and willnot conflict with:

(a)                                anylaw or regulation applicable to it;

(b)                               itsor any of its Subsidiaries’ constitutional documents; or

(c)                                anyagreement or instrument binding upon it or any of its Subsidiaries or any ofits or any of its Subsidiaries’ assets.

**17.4**                     Power and authority

It has the power to enter into,perform and deliver, and has taken all necessary action to authorise its entryinto, performance and delivery of, the Finance Documents and the transactionscontemplated by those Finance Documents.

**17.5**                     Validity and admissibility inevidence

All Authorisations required:

(a)                                toenable it lawfully to enter into, exercise its rights and comply with itsobligations in the Finance Documents;

(b)                               forit and its Significant Subsidiaries to carry on its and their business; and

(c)                                tomake the Finance Documents admissible in evidence in the general jurisdictioncourts or commercial courts (*arbitrazhniyesudi*) of the Russian Federation in an original action or action toenforce a foreign arbitral award, provided that authenticated and notarisedRussian texts are made available to such courts at that time and any otherprocedures and formalities regarding presentation of documents to a Russiancourt are complied with,

27

----

 

have been obtained or effected andare in full force and effect (except, in relation to paragraph (b) above,where the failure to obtain such Authorisations (excluding anyTelecommunications Authorisations) is not reasonably likely to have a MaterialAdverse Effect).

**17.6**                     Governing law and enforcement

(a)                               Thechoice of English law as the governing law of the Finance Documents will berecognised and enforced in the Russian Federation.

(b)                              Anyarbitration award obtained in England in relation to a Finance Document will berecognised and enforced in the Russian Federation in accordance with the 1958New York Convention on Recognition and Enforcement of Foreign Arbitral Awards.

**17.7**                     No bankruptcy proceedings

Neither the Borrower nor any of itsSignificant Subsidiaries has taken any corporate action nor have any othersteps been taken or legal proceedings been started or, to the best of itsknowledge and belief (after due inquiry), threatened against it or any of itsSignificant Subsidiaries for (a) its liquidation or bankruptcy or theappointment of a liquidation commission (*likvidatsionnayakomissiya*) or a similar officer of it or any of its SignificantSubsidiaries; (b) the institution of supervision (*nablyudeniye*), financial rehabilitation (*finansovoe ozdorovlenie*), externalmanagement (*vneshniy upravlayucshiy*)or the appointment of a bankruptcy manager (*konkursniyupravlayuschiy*) or similar officer of it or any of its SignificantSubsidiaries; (c) the convening of a meeting of creditors for the purposesof considering an amicable settlement (as defined in the Russian InsolvencyLaw); or (d) any analogous act in respect of it or any of its SignificantSubsidiaries in any jurisdiction.

**17.8**                     Deduction of Tax

It is not required under the law ofthe Russian Federation to make any deduction for or on account of Tax from anypayment it may make under any Finance Document to a Qualifying Lender.

**17.9**                     No filing or stamp taxes

Under the law of the RussianFederation it is not necessary that the Finance Documents be filed, recorded orenrolled with any court or other authority in the Russian Federation or thatany stamp, registration or similar tax be paid on or in relation to the FinanceDocuments or the transactions contemplated by the Finance Documents, except forcourt registration fees in connection with any enforcement proceedings in suchcourt.

**17.10**              Payment of Taxes

Neither it nor any of its SignificantSubsidiaries has overdue tax liabilities, other than tax liabilities (a) whoseamount, applicability or validity is being contested in good faith byappropriate proceedings and for which adequate reserves or other appropriateprovision has been made or (b) whose amount, together with all such otherunpaid or undischarged taxes, does not in aggregate exceed $25,000,000 (or itsequivalent in any other currency or currencies).

**17.11**               No default

(a)                               NoDefault or Event of Default is continuing or might reasonably be expected toresult from the making of any Utilisation.

28

----

 

(b)                              Noevent or circumstance is outstanding which constitutes a default under anyother agreement or instrument which is binding on it or any of its Subsidiariesor to which its (or any of its Subsidiaries’) assets are subject which isreasonably likely to have a Material Adverse Effect.

**17.12**              No misleading information

(a)                               Anyfactual information provided by or on behalf of any member of the Group for thepurposes of the Information Memorandum was true and accurate in all materialrespects as at the date it was provided or as at the date (if any) at which itis stated.

(b)                              Thefinancial projections contained in the Information Memorandum have beenprepared on the basis of recent historical information and on the basis ofreasonable assumptions.

(c)                               Nothinghas occurred or been omitted from the Information Memorandum and no informationhas been given or withheld that results in the information contained in theInformation Memorandum being untrue or misleading in any material respect.

**17.13**              Financial statements

(a)                               ItsOriginal Financial Statements were prepared in accordance with GAAPconsistently applied.

(b)                              ItsOriginal Financial Statements fairly represent its, and its consolidated,financial condition and operations as at the end of and for the relevant financialyear.

(c)                               Therehas been no material adverse change in its business or financial condition (orthe business or consolidated financial condition of the Group) since the dateof its Original Financial Statements.

**17.14**              *Pari passu* ranking

Its payment obligations under theFinance Documents rank at least *pari passu*with the claims of all its other unsecured and unsubordinated creditors, exceptfor obligations mandatorily preferred by law applying to companies generally.

**17.15**              No proceedings pending or threatened

Other than the UMC Litigation, nolitigation, arbitration or administrative proceedings of or before any court,arbitral body or agency (including but not limited to, investigativeproceedings) have, to the best of its knowledge and belief (after due inquiry),been started or threatened against it or any of its Significant Subsidiarieswhich, if adversely determined would be reasonably likely to have a MaterialAdverse Effect.

**17.16**              Environmental laws and licences

Except as disclosed in writing to theAgent before the date hereof, it and each of its Subsidiaries has:

(a)                                compliedwith all Environmental Laws to which it may be subject;

(b)                               obtainedall Environmental Licences required in connection with its business; and

(c)                                compliedwith the terms of those Environmental Licences,

in each case where failure to do sowould be reasonably likely to have a Material Adverse Effect.

**17.17**              Telecommunications laws and licences

(a)                               Eachof the Borrower and its Significant Subsidiaries has:

29

----

 

(i)                                   compliedin all material respects with all Telecommunications Laws to which it may besubject;

(ii)                                obtainedall material Telecommunications Authorisations necessary to conduct itsbusiness; and

(iii)                             compliedin all material respects with the terms of those TelecommunicationAuthorisations,

in each case other than where failureto do so would not reasonably be expected to have a Material Adverse Effect.

(b)                              Therehas been no act, omission or event which might reasonably be expected to giverise to the material amendment, revocation, suspension, cancellation,withdrawal or termination of any provision of any TelecommunicationsAuthorisation. To the best of its knowledge and belief (after due inquiry), noTelecommunications Authorisation is the subject of any pending or threatenedproceedings which, if adversely determined, would reasonably be expected tohave a Material Adverse Effect.

**17.18**              Compliance with laws

Each of the Borrower and itsSignificant Subsidiaries is conducting its business and operations incompliance with all laws and regulations and all directives of any governmentagency having legal force applicable or relevant to it, excluding any suchnon-compliance which would not reasonably be expected to have a MaterialAdverse Effect.

**17.19**              No Immunity

(a)                               Theexecution by the Borrower of the Finance Documents constitutes, and itsexercise of its rights and performance of its obligations thereunder willconstitute, private and commercial activities done and performed for privateand commercial purposes (rather than public and governmental purposes).

(b)                              Inany proceedings taken in the Russian Federation in relation to the FinanceDocuments, the Borrower will not be entitled to claim for itself or any of itsassets immunity from suit, execution, attachment or other legal process.

**17.20**              Repetition

The Repeating Representations aredeemed to be made by the Borrower by reference to the facts and circumstancesthen existing on the date of each Utilisation Request and the first day of eachInterest Period (provided that whenever the representation in paragraph (c) ofClause 17.3 is deemed to be made on a date other than the Signing Date or aUtilisation Date, the statement “except where the same would not be reasonablylikely to have a Material Adverse Effect” shall qualify the representation insaid paragraph (c)).

**18**                               INFORMATION UNDERTAKINGS

The undertakings in this Clause 18remain in force from the date of this Agreement for so long as any amount isoutstanding under the Finance Documents or any Commitment is in force.

**18.1**                     Financial statements

The Borrower shall supply to theAgent in sufficient copies for all the Lenders:

30

----

 

(a)                                assoon as the same become available, but in any event within 180 days after theend of each of its financial years, its audited consolidated andnon-consolidated financial statements for that financial year; and

(b)                               assoon as the same become available, but in any event within 45 days after theend of each of its financial quarters, its unaudited consolidated andnon-consolidated financial statements for that financial quarter.

**18.2**                     Compliance Certificate

(a)                               TheBorrower shall supply to the Agent with each set of financial statementsdelivered pursuant to Clause 18.1 (*Financialstatements*), a Compliance Certificate setting out (in reasonable detail)computations as to compliance with Clause 19 (*FinancialCovenants*) as at the date as at which those financial statementswere drawn up.

(b)                              EachCompliance Certificate shall be signed by an authorised officer of the Borrowerand, if required to be delivered with the financial statements deliveredpursuant to paragraph (a) of Clause 18.1 (*Financialstatements*), shall be reported on by the Borrower’s auditors in theform set out in Schedule 6 (*Form ofCompliance Certificate*).

**18.3**                     Requirements as to financialstatements

(a)                               Eachset of financial statements delivered by the Borrower pursuant to Clause 18.1 (*Financial statements*) shall be certifiedby an authorised officer of the Borrower as fairly representing its (or, as thecase may be, its consolidated) financial condition and operations as at the endof and for the period in relation to which those financial statements weredrawn up.

(b)                              TheBorrower shall procure that each set of consolidated financial statementsdelivered pursuant to Clause 18.1 (*Financialstatements*) is prepared using GAAP****accounting practices and financial reference periods consistent withthose applied in the preparation of the Original Financial Statements unless,in relation to any set of financial statements, it notifies the Agent thatthere has been a change in GAAP, the accounting practices or reference periodsand its auditors deliver to the Agent:

(i)                                   adescription of any change necessary for those financial statements to reflectthe GAAP, accounting practices and reference periods upon which the OriginalFinancial Statements were prepared; and

(ii)                                sufficientinformation, in form and substance as may be reasonably required by the Agent,to enable the Lenders to determine whether Clause 19 (*Financial covenants*) has been compliedwith and make an accurate comparison between the financial position indicatedin those financial statements and that the Original Financial Statements.

(c)                               Anyreference in this Agreement to those financial statements shall be construed asa reference to those financial statements as adjusted to reflect the basis uponwhich the Original Financial Statements were prepared.

(d)                              TheBorrower shall procure that each set of non-consolidated financial statementsdelivered pursuant to Clause 18.1 (*Financialstatements*) is prepared using RAS accounting practices and financialreference periods.

**18.4**                     Information: miscellaneous

The Borrower shall supply to theAgent (in sufficient copies for all the Lenders, if the Agent so requests):

31

----

 

(a)                                alldocuments dispatched by the Borrower to its shareholders (or any class of them)or its creditors generally at the same time as they are dispatched;

(b)                               promptlyupon becoming aware of them, the details of any litigation, arbitration oradministrative proceedings which are current, threatened or pending against anymember of the Group, and which would, if adversely determined, be reasonablylikely to have a Material Adverse Effect;

(c)                                promptly,such information as may be reasonably requested by the Agent (includingrelevant figures from management accounts) to ascertain whether any Subsidiaryof the Borrower falls within paragraph (e) of the definition of “SignificantSubsidiary”; and

(d)                               promptly,such further information regarding the financial condition, business andoperations of any member of the Group as any Finance Party (through the Agent)may reasonably request.

**18.5**                     Notification of Default

(a)                               TheBorrower shall notify the Agent of any Default (and the steps, if any, beingtaken to remedy it) promptly upon becoming aware of its occurrence.

(b)                              Promptlyupon a request by the Agent, the Borrower shall supply to the Agent acertificate signed by two of its directors or senior officers on its behalfcertifying that no Default is continuing (or if a Default is continuing, specifyingthe Default and the steps, if any, being taken to remedy it).

**18.6**                     Know your customer checks

(a)                               If:

(i)                                   theintroduction of or any change in (or in the interpretation, administration orapplication of) any law or regulation made after the date of this Agreement;

(ii)                                anychange in the status of the Borrower after the date of this Agreement; or

(iii)                             aproposed assignment or transfer by a Lender of any of its rights andobligations under this Agreement to a party that is not a Lender prior to suchassignment or transfer,

obliges the Agent or any Lender (or,in the case of paragraph (iii) above, any prospective new Lender) tocomply with “know your customer” or similar identification procedures incircumstances where the necessary information is not already available to it,the Borrower shall promptly upon the request of the Agent or any Lender supply,or procure the supply of, such documentation and other evidence as isreasonably requested by the Agent (for itself or on behalf of any Lender) orany Lender (for itself or, in the case of the event described in paragraph (iii) above,on behalf of any prospective new Lender) in order for the Agent, such Lenderor, in the case of the event described in paragraph (iii) above, anyprospective new Lender to carry out and be satisfied it has complied with allnecessary “know your customer” or other similar checks under all applicablelaws and regulations pursuant to the transactions contemplated in the FinanceDocuments.

(b)                              EachLender shall promptly upon the request of the Agent supply, or procure thesupply of, such documentation and other evidence as is reasonably requested bythe Agent (for itself) in order for the Agent to carry out and be satisfied ithas complied with all necessary “know your customer” or other similar checksunder all applicable laws and regulations pursuant to the transactionscontemplated in the Finance Documents.

32

----

 

**19**                               FINANCIAL COVENANTS

The financial undertakings in thisClause 19 shall remain in force from the Signing Date for so long as any amountis outstanding under the Finance Documents or any Commitment is in force.

**19.1**                     Financial condition

The Borrower shall ensure that:

(a)                                Theratio of Borrowings as at the end of any Relevant Period to EBITDA in respectof such Relevant Period will not exceed 3:1; and

(b)                               theratio of EBITDA to Interest Expense in respect of any Relevant Period will notbe less than 5:1.

**19.2**                     Financial covenant calculations

Borrowings, EBITDA and InterestExpense shall be calculated and interpreted on a consolidated basis inaccordance with the GAAP applicable to the Original Financial Statements of theBorrower and shall be expressed in Dollars.

**19.3**                     Definitions

In this Clause 19.3:

“**Borrowings**”means, as at any particular time, the aggregate outstanding principal, capitalor nominal amount (and any fixed or minimum premium payable on prepayment orredemption) of the Financial Indebtedness of members of the Group (other thanany indebtedness referred to in paragraph (g) of the definition ofFinancial Indebtedness and any guarantee or indemnity in respect of thatindebtedness).

For this purpose, any amountoutstanding or repayable in a currency other than Dollars shall on that day betaken into account in its Dollars equivalent at the rate of exchange that wouldhave been used had an audited consolidated balance sheet of the Group beenprepared as at that day in accordance with the GAAP applicable to the OriginalFinancial Statements of the Borrower.

“**EBITDA**”means, in relation to any Relevant Period, the total consolidated operatingprofit of the Group for that Relevant Period:

(a)                                beforetaking into account:

(i)                                  InterestExpense;

(ii)                               Tax;

(iii)                            anyshare of the profit of any associated company or undertaking, except fordividends received in cash by any member of the Group; and

(iv)                           extraordinaryand exceptional items; and

(b)                               afteradding back all amounts provided for depreciation and amortisation for thatRelevant Period,

*multiplied by two*,

33

----

 

as determined (except as needed toreflect the terms of this Clause 19) from the financial statements of the Groupand Compliance Certificates delivered under Clause 18.1 (*Financial statements*) and Clause 18.2 (*Compliance Certificate*).

“**InterestExpense**” means, in relation to any Relevant Period, the aggregateamount of interest and any other finance charges (whether or not paid, payableor capitalised) accrued by the Group in that Relevant Period in respect ofBorrowings including:

(a)                                theinterest element of leasing and hire purchase payments;

(b)                               commitmentfees, commissions, arrangement fees and guarantee fees; and

(c)                                amountsin the nature of interest payable in respect of any shares other than equityshare capital,

adjusted (but without doublecounting) by:

(i)                                   addingback the net amount payable (or deducting the net amount receivable) by membersof the Group in respect of that Relevant Period under any interest or (so faras they relate to interest) currency hedging arrangements; and

(ii)                                deductinginterest income of the Group in respect of that Relevant Period to the extentfreely payable in cash,

*multiplied by two*,

as determined (except as needed toreflect the terms of this Clause 19) from the financial statements of the Groupand Compliance Certificates delivered under Clause 18.1 (*Financial statements*) and Clause 18.2 (*Compliance Certificate*).

“**RelevantPeriod**” means each period of 6 consecutive Months ending on the lastday of each financial year and financial quarter of the Borrower.

**20**                               GENERAL UNDERTAKINGS

The undertakings in this Clause 20remain in force from the date of this Agreement for so long as any amount isoutstanding under the Finance Documents or any Commitment is in force.

**20.1**                     Authorisations

The Borrower shall promptly:

(i)                                   obtain,comply with and do all that is necessary to maintain in full force and effect;and

(ii)                                supplycertified copies to the Agent of,

any Authorisation required under anylaw or regulation of its jurisdiction of incorporation to enable it to performits obligations under the Finance Documents and to ensure the legality,validity, enforceability or admissibility in evidence in its jurisdiction ofincorporation of any Finance Document.

**20.2**                     Compliance with laws

The Borrower shall comply in allrespects with all laws to which it may be subject, if failure so to complywould materially impair its ability to perform its obligations under theFinance Documents.

34

----

 

**20.3**                     Maintenance of existence

The Borrower shall maintain itscorporate existence.

**20.4**                     Negative pledge

(a)                               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.

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

(i)                                   sell,transfer or otherwise dispose of any of its assets on terms whereby they are ormay  be leased to or re-acquired by theBorrower or any other member of the Group;

(ii)                                sell,transfer or otherwise dispose of any of its receivables on recourse terms;

(iii)                             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

(iv)                            enterinto any other preferential arrangement having a similar effect,

in circumstances where thearrangement or transaction is entered into primarily as a method of raisingFinancial Indebtedness or of financing the acquisition of an asset.

(c)                               Paragraphs(a) and (b) above do not apply to Permitted Security.

**20.5**                     Disposals

(a)                               TheBorrower shall not (and shall ensure that no other member of the Group will)enter into a single transaction or a series of transactions (whether related ornot and whether voluntary or involuntary) to sell, lease, transfer or otherwisedispose of any asset.

(b)                              Paragraph(a) above does not apply to any sale, lease, transfer or other disposal:

(i)                                   madein the ordinary course of trading of the disposing entity;

(ii)                                ofassets in exchange for other assets comparable or superior as to type, valueand quality;

(iii)                             madefrom one member of the Group (other than the Borrower) to another member of theGroup;

(iv)                            ofcash or cash equivalents for cash or cash equivalents;

(v)                               wherethe book value of such asset (when aggregated with the book value of each otherasset disposed of under this sub-clause (v)) (in each case as calculated in accordancewith GAAP) 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 Signing Date and ending on the date that allamounts outstanding under this Agreement have been paid in full. At the requestof the Agent (any such request to be made no more than once per calendarquarter, unless a Default is continuing), the Borrower shall provide acertificate to the Agent setting out in reasonable detail the book value of anyassets disposed of under this sub-clause (v) (calculated in accordancewith GAAP); or

(vi)                            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 thissub-clause (vi) shall not in any way prejudice the rights of the FinanceParties under Clause 21.18 (*UMC Litigation*)).

35

----

 

When calculating the Borrower’s TotalAssets under sub-clause (v) above, if the annual consolidated balancesheet of the Borrower for the immediately preceeding financial year of theBorrower is not available, the Borrower’s Total Assets shall be calculated byreference to the draft audit report then available for that financial year andany other evidence reasonably requested by, and reasonably satisfactory to, theAgent.

**20.6**                     Merger

(a)                               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 othercompany reorganisation (*reorgnizatsiya**obschestva*) (as these terms areconstrued by applicable Russian law) or otherwise, or any analogous transactionin any jurisdiction, other than a consolidation or merger with one of itsSubsidiaries where the Borrower is the surviving entity.

(b)                              TheBorrower shall ensure that no Significant Subsidiary will enter into or becomesubject to any consolidation 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 anyother company 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 Agent (actingreasonably), have a Material Adverse Effect.

**20.7**                     Change of business

The Borrower shall procure that nosubstantial change is made to the general nature of the business of theBorrower or the Group from that carried on at the Signing Date.

**20.8**                     Conduct of business

The Borrower shall, and shall procurethat each of its Significant Subsidiaries will, conduct its business in allmaterial respects in accordance with:

(a)                                allTelecommunications Laws to which it is or may become subject;

(b)                               allrequirements of the telecommunications regulators of the Russian Federation,Ukraine and any other jurisdiction where it conducts its business; and

(c)                                theterms of all relevant Telecommunications Authorisations.

**20.9**                     Asset maintenance

The Borrower shall, and shall procurethat each of its Significant Subsidiaries will, have and maintain good andmarketable title to or valid leases or licences of, or rights of use relatingto, all assets necessary to maintain, develop and operate and otherwise conductits business as then being conducted by it and in each case where failure to doso might reasonably be expected to have a Material Adverse Effect.

**20.10**              Insurance

The Borrower shall (and shall ensurethat each other member of the Group will) maintain insurances on and inrelation to its business and assets with reputable underwriters or insurance 

36

----

 

companies against those risks, and tothe extent, usually insured against by prudent companies located in the same ora similar location and carrying on a similar business.

**20.11**               Transactions with Related Parties

(a)                               TheBorrower shall not (and the Borrower shall ensure that no other member of theGroup will), directly or indirectly, enter into or permit to exist anyintercompany loan with, or for the benefit of, any Related Party, unless:

(i)                                   theterms of such intercompany loan are no less favourable to such member of theGroup than those that could be obtained in a comparable arm’s-lengthtransaction or series of related transactions with a person that is not aRelated Party; or

(ii)                                suchintercompany loan is made pursuant to a contract or contracts existing on theSigning Date (excluding any amendments or modifications thereto after theSigning Date),

provided that the aggregateoutstanding amount of all such intercompany loans described in sub-clauses (i) and(ii) above does not, at any time, exceed $100,000,000.

(b)                              Paragraph(a) above does not apply to:

(i)                                   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

(ii)                                transactionsbetween members of the Group.

(c)                               Forthe purposes of this Clause 20.11 only, a “**RelatedParty**” means, with respect to any specified person:

(i)                                   anyother person directly or indirectly controlling or controlled by or underdirect or indirect common control with such specified person; or

(ii)                                anyother person who is a director or executive officer of (a) such specifiedperson or (b) any person described in (i) above.

For purposes of the definition of “**Related Party**” only, “**control**” (including, with correlativemeanings, the terms “**controlling**,”“**controlled by**” and “**under common control with**”), as used withrespect to any person, shall mean the possession, directly or indirectly, ofthe power to direct or cause the direction of the management or policies ofsuch person, whether through the ownership of voting securities, by agreementor otherwise; 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.

**20.12**              Restriction on acquisitions

The Borrower shall not establish oracquire any Subsidiary or invest in any other entity without the consent of theMajority Lenders (such consent not to be unreasonably withheld), provided thatthis Clause 20.12 shall not apply to any such acquisition or investmentwhere:

(a)                                suchacquisition or investment relates to a Subsidiary or entity whose principalbusiness is telecommunications or the provision of data services or related orancillary businesses; and

(b)                               theconsideration paid by the Borrower in relation to such acquisition orinvestment, when aggregated with the consideration paid by the Borrower inrelation to each other 

37

----

 

                                              acquisitionor investment permitted under this paragraph (b), does not exceed (i) 20per cent. of the Borrower’s Total Assets in the financial year of the Borrowerending 31 December 2004; and (ii) 15 per cent. (or such higher amountnot exceeding 20 per cent. as the Majority Lenders may agree (actingreasonably)) of the Borrower’s Total Assets in any other financial year of theBorrower.

**20.13**              Prompt payment of Taxes

The Borrower shall (and shall ensurethat each Significant Subsidiary will) duly pay all Taxes payable by it, otherthan (a) those taxes which are being contested in good faith and byappropriate proceedings and in respect of which adequate reserves or otherappropriate provisions have been made; or (b) whose amount does not exceed$25,000,000 (or its equivalent in any other currencies).

**20.14**              *Paripassu*

The Borrower shall, and shall procurethat each member of the Group will, procure that its obligations under theFinance Documents rank at least *pari passu*with all its other unsecured, unsubordinated obligations save where such otherobligations are mandatorily preferred by law.

**20.15**              Loans and guarantees

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

(i)                                   makeany loan, or provide any form of credit or financial accommodation, to anyperson (including, without limitation, its employees, shareholders, anothermember of the Group and any Affiliate); or

(ii)                                giveor issue any guarantee, indemnity, bond or letter of credit to or for thebenefit of, or in respect of liabilities or obligations of, any other person orvoluntarily assume any liability (whether actual or contingent) of any otherperson (including, in each case and without limitation, its employees,shareholders, another member of the Group and any Affiliate).

(b)                              Therestrictions in paragraph (a) above do not apply to (i) loans,credits, financial accommodation, guarantees, indemnities, bonds and letters ofcredit expressly permitted by the Finance Documents or for normal trade crediton arm’s length terms and in the ordinary course of business or granted by amember of the Group to another member of the Group, provided that the aggregateamount of such loans, credits, financial accommodation, guarantees,indemnities, bonds and letters of credit does not at any time exceed 10 percent. of the Borrower’s Total Assets; (ii) guarantees by the Borrower inrelation to the obligations of any other member of the Group; or (iii) thearrangements permitted under Clause 20.11 (*Transactionswith Related Parties*).

**21**                               EVENTS OF DEFAULT

Each of the events or circumstancesset out in Clause 21 is an Event of Default.

**21.1**                     Non-payment

The Borrower does not pay on the duedate any amount payable pursuant to a Finance Document at the place at and inthe currency in which it is expressed to be payable unless:

(a)                                itsfailure to pay is caused by administrative or technical error; and

38

----

 

(b)                               paymentis made within three Business Days of its due date.

**21.2**                     Financial covenants

Any requirement of Clause 19 (*Financial Covenants*) is not satisfied.

**21.3**                     Other obligations

(a)                               TheBorrower does not comply with any provision of the Finance Documents (otherthan those referred to in Clause 21.1 (*Non-payment*)and Clause 21.2 (*Financial Covenants*)).

(b)                              NoEvent of Default under paragraph (a) above will occur if the failure tocomply is capable of remedy and is remedied within 10 Business Days of theAgent giving notice to the Borrower or the Borrower becoming aware of thefailure to comply.

**21.4**                     Misrepresentation

Any representation or statement madeor deemed to be made by the Borrower in the Finance Documents or any otherdocument delivered by or on behalf of the Borrower under or in connection withany Finance Document is or proves to have been incorrect or misleading in anymaterial respect when made or deemed to be made, and such representation orstatement shall not have been rendered correct and not misleading within 10Business Days of the Agent giving notice to the Borrower or the Borrowerbecoming aware of the same.

**21.5**                     Cross default

(a)                               Anysingle item of Financial Indebtedness of any member of the Group in an amountexceeding $10,000,000 (or its equivalent in any other currency or currencies)is not paid when due nor within any originally applicable grace period.

(b)                              Anysingle item of Financial Indebtedness of any member of the Group in an amountexceeding $10,000,000 (or its equivalent in any other currency or currencies)is declared to be or otherwise becomes due and payable prior to its specifiedmaturity as a result of an event of default (however described).

(c)                               Anysingle commitment for any Financial Indebtedness of any member of the Group inan amount exceeding $10,000,000 (or its equivalent in any other currency orcurrencies) is cancelled or suspended by a creditor of any member of the Groupas a result of an event of default (however described).

(d)                              Anycreditor of any member of the Group becomes entitled to declare any single itemof Financial Indebtedness of any member of the Group in an amount exceeding$10,000,000 (or its equivalent in any other currency or currencies) due andpayable prior to its specified maturity as a result of an event of default(however described).

(e)                               Anyof the events described in paragraphs (a) to (d) above occurs inrelation to any Financial Indebtedness or commitment for Financial Indebtednessof any amount (including, for the avoidance of doubt, any amount that is lessthan $10,000,000 (or its equivalent in any other currency or currencies)), andthe aggregate amount of all such Financial Indebtedness and commitments forFinancial Indebtedness is in excess of $35,000,000 (or its equivalent in anyother currency or currencies).

**21.6**                     Insolvency

(a)                               TheBorrower or a Significant Subsidiary is unable or admits its inability to payits debts as they fall due, suspends making payments on its debts generally or,by reason of actual or anticipated 

39

----

 

                                             financialdifficulties, commences negotiations with one or more of its creditors with aview to rescheduling its indebtedness generally.

(b)                              Thevalue of the assets of the Borrower or a Significant Subsidiary is less thanits liabilities (taking into account contingent and prospective liabilities).

(c)                               Amoratorium is declared in respect of the indebtedness of the Borrower or aSignificant Subsidiary.

**21.7**                     Insolvency proceedings

Any corporate action or legalproceedings are taken in relation to:

(a)                                thebankruptcy, winding-up, insolvency, dissolution, administration, reorganisationor liquidation of the Borrower or a Significant Subsidiary, including, but notlimited to, institution of supervision (*nablyudenie*),financial rehabilitation (*finansovoeozdorovlenie*), external management (*vneshneyeupravlenie*) or bankruptcy management (*konkursnoye upravlenie*) (and such legal proceedings continuefor at least 14 days);

(b)                               thesuspension of payments or a moratorium of any indebtedness of the Borrower or aSignificant Subsidiary (and such suspension continues for at least 14 days);

(c)                                thepresentation or filing of a petition (or similar document) in respect of theBorrower or a Significant Subsidiary in any court, state arbitration court (*arbitrazhnyi sud*) or before any otherauthority in respect of the bankruptcy, winding-up, insolvency, dissolution,administration, reorganisation or liquidation of the Borrower or a SignificantSubsidiary (and such petition has not been discharged within 14 days);

(d)                               theappointment of a liquidator (*likvidator*)or a liquidation commission (*likvidatsionnayakomissiya*), temporary manager (*vremenniyupravlaushiy*), administrative manager (*administrativniy upravlaushiy*), external manager (*vneshniy upravlaushiy*), bankruptcy manager(*konkursniy upravlaushiy*),receiver, administrator, administrative receiver, compulsory manager or othersimilar officer in respect of the Borrower or a Significant Subsidiary or anyof its assets (and such appointment continues for at least 14 days); or

(e)                                theenforcement of any Security over any asset or assets of the Borrower or aSignificant Subsidiary (unless such enforcement is stayed within 14 days),

or any analogous procedure or step istaken in any jurisdiction.

**21.8**                     Creditors’ process

Any expropriation, attachment,sequestration, distress or execution affects any asset or assets of theBorrower or a Significant Subsidiary with a value in excess of $10,000,000 (orits equivalent in any other currency or currencies) and is not discharged orstayed within 30 days.

**21.9**                     Judgment

The rendering against the Borrower orany Subsidiary of the Borrower of a judgment, decree or order for the paymentof money in an amount in excess of $10,000,000 (or its equivalent in any othercurrency or currencies) and the continuance of any such judgment, decree ororder unsatisfied and in effect for any period of 60 consecutive days without astay of execution.

40

----

 

**21.10**              Loss of Licence

(a)                                  Anyaction results in the suspension for more than 30 days or the loss, revocationor termination of any of:

(i)                                   theBorrower’s GSM 900 or 1800 licences for the Moscow licence area;

(ii)                                TelecomXXI’s GSM 900 or 1800 licences for the St. Petersburg licence area;

(iii)                             KubanGSM’s GSM 900 or 1800 licences for the Krasnodar licence area; or

(iv)                            UMC’sGSM 900 or 1800 licences for the Ukraine licence area,

except where, within 30 days of anysuch event, the relevant licence is re-issued on substantially the same termsto any member of the Group and during the period falling before suchre-issuance there is no material interruption to, or other material adverseeffect on, the operations permitted by such licence as a direct result of suchprior loss, revocation or termination.

(b)                              Anyof the Borrower’s, Telecom XXI’s, Kuban GSM’sor UMC’s GSM 900 or 1800 licences are amended (or any conditions areimposed with respect to any such licence) in a manner that, in the reasonableopinion of the Majority Lenders, has or is reasonably likely to have a MaterialAdverse Effect.

(c)                               Anyof the Borrower’s, Telecom XXI’s, Kuban GSM’sor UMC’s assigned spectrum allocations are reassigned to other users(other than a Significant Subsidiary of the Borrower), cancelled or otherwiselost, and such event, in the reasonable opinion of the Majority Lenders, has oris reasonably likely to have a Material Adverse Effect.

(d)                              TheBorrower sells, leases or otherwise transfers any of its GSM 900 or 1800licences for the Moscow licence area.

(e)                               Anyof the Borrower’s GSM 900 or 1800 licences (other than its GSM 900 and 1800licences for the Moscow licence area) is sold, leased or transferred to anyperson that is not (directly or indirectly) a wholly-owned Subsidiary of theBorrower.

(f)

(i)                                   Anyof the GSM 900 or 1800 licences of Telecom XXI, Kuban GSM or UMC is sold,leased or transferred to any person that is not (directly or indirectly) awholly-owned Subsidiary of the Borrower.

(ii)                                Sub-clause(i) above does not apply to the transfer of the GSM 900 or 1800 licencesof UMC pursuant to the UMC Litigation (provided that this sub-clause (ii) shallnot in any way prejudice the rights of the Finance Parties under Clause 21.18 (*UMC Litigation*)).

**21.11**               Cessation of Business

The Borrower or any SignificantSubsidiary suspends, ceases or threatens to suspend or cease to carry on all ora substantial part of its business.

**21.12**              Expropriation

(a)                               Byor under the authority of any government:

(i)                                   anyseizure, compulsory acquisition, expropriation, nationalisation orrenationalisation is made after the Signing Date of all or any material part ofthe assets or shares of (or other ownership interest in) any member of theGroup;

41

----

 

(ii)                                themanagement of any member of the Group is wholly or partially displaced or theauthority of any member of the Group in the conduct of its business is whollyor partially curtailed; or

(iii)                             anymember of the Group is otherwise deprived of, or prevented from exercisingownership or control of, its material business or assets.

(b)                              Paragraph(a) above does not apply to the transfer of any or all of the Borrower’sshares in UMC pursuant to the UMC Litigation to a person that is not a memberof the Group (provided that this paragraph (b) shall not in any wayprejudice the rights of the Finance Parties under Clause 21.18 (*UMC Litigation*)).

**21.13**              Russian Foreign Exchange Restrictions

Any foreign exchange law is enactedor introduced in the Russian Federation which has the effect of prohibiting,restricting or delaying any payment by the Borrower or any member of the Groupunder the Finance Documents.

**21.14**              Moratorium

Any moratorium is declared on thepayment of any external indebtedness of the Russian Federation or of Russianresidents generally.

**21.15**              The Russian Federation

The political or economic situationin the Russian Federation deteriorates or an act of war or hostilities,invasion, armed conflict or act of a foreign enemy, revolution, insurrection orinsurgency occurs in, or involves, the Russian Federation and such event, inthe reasonable opinion of the Majority Lenders, has or is reasonably likely tohave a Material Adverse Effect.

**21.16**              Unlawfulness

It is or becomes unlawful for theBorrower to perform any of its obligations under the Finance Documents.

**21.17**              Repudiation

The Borrower repudiates a FinanceDocument or evidences an intention to repudiate a Finance Document.

**21.18**              UMC Litigation

The UMC Litigation is adverselydetermined and, in the reasonable opinion of the Majority Lenders, such adversedetermination has or is reasonably likely to have  a Material Adverse Effect.

**21.19**              Material adverse change

The Majority Lenders determine that aMaterial Adverse Effect exists, has occurred or is reasonably likely to occur.

**21.20**              Acceleration

On and at any time after theoccurrence of an Event of Default which is continuing the Agent may, and shallif so directed by the Majority Lenders, by notice to the Borrower:

(a)                                cancelthe Total Commitments whereupon they shall immediately be cancelled;

42

----

 

(b)                               declare that all or part ofthe Loans, together with accrued interest, and all other amounts accrued oroutstanding under the Finance Documents be immediately due and payable,whereupon they shall become immediately due and payable; and

(c)                                declare that all or part ofthe Loans be payable on demand, whereupon they shall immediately become payableon demand by the Agent on the instructions of the Majority Lenders.

** **

43

----

  

**SECTION 8CHANGES TO PARTIES**

**22**                               CHANGES TO THE LENDERS

**22.1**                     Assignmentsand transfers by the Lenders

(a)                               Subject tothis Clause 22, a Lender (the “**Existing****Lender**”) may:

(i)                                   assign anyof its rights; or

(ii)                                transfer bynovation any of its rights and obligations,

toanother bank or financial institution or to a trust, fund or other entity whichis regularly engaged in or established for the purpose of making, purchasing orinvesting in loans, securities or other financial assets (the “**New Lender**”).

(b)                              Unless (i) theassignment or transfer is to an Affiliate of the Existing Lender or to anotherLender or (ii) an Event of Default has occurred, any assignment ortransfer occurring after the Syndication Date shall require the consent of theBorrower, provided that (1) such consent shall not be unreasonablywithheld or delayed; and (2) unless the Borrower has notified the Agent tothe contrary within 5 Business Days of receiving notice of the intendedassignment or transfer, the Borrower will be deemed to have given its consentto that assignment or transfer.

**22.2**                     Conditionsof assignment or transfer

(a)                               Anassignment will only be effective on:

(i)                                   receipt bythe Agent of written confirmation from the New Lender (in form and substancesatisfactory to the Agent) that the New Lender will assume the same obligationsto the other Finance Parties as it would have been under if it was an OriginalLender; and

(ii)                                performanceby the Agent of all “know your customer” or other checks relating to any personthat it is required to carry out in relation to such assignment to a NewLender, the completion of which the Agent shall promptly notify to the ExistingLender and the New Lender.

(b)                              A transferwill only be effective if the procedure set out in Clause 22.5 (*Procedure for transfer*) is complied with.

(c)                               Anyassignment or transfer by an Existing Lender to a New Lender shall only beeffective if it transfers or assigns the Existing Lender’s share of eachFacility pro rata.

(d)                              If:

(i)                                   a Lenderassigns or transfers any of its rights or obligations under the FinanceDocuments or changes its Facility Office; and

(ii)                                as a resultof circumstances existing at the date the assignment, transfer or changeoccurs, the Borrower would be obliged to make a payment to the New Lender orLender acting through its new Facility Office under Clause 12 (*Tax gross-up and indemnities*) or Clause13.1 (*Increased Costs*),

thenthe New Lender or Lender acting through its new Facility Office is onlyentitled to receive payment under those Clauses to the same extent as theExisting Lender or Lender acting 

44

----

  

 

throughits previous Facility Office would have been if the assignment, transfer orchange had not occurred.

**22.3**                     Assignmentor transfer fee

The NewLender shall, on the date upon which an assignment or transfer takes effect,pay to the Agent (for its own account) a fee of $1,000.

**22.4**                     Limitationof responsibility of Existing Lenders

(a)                               Unlessexpressly agreed to the contrary, an Existing Lender makes no representation orwarranty and assumes no responsibility to a New Lender for:

(i)                                   thelegality, validity, effectiveness, adequacy or enforceability of the FinanceDocuments or any other documents;

(ii)                                thefinancial condition of the Borrower;

(iii)                             theperformance and observance by the Borrower of its obligations under the FinanceDocuments or any other documents; or

(iv)                            the accuracy of any statements (whetherwritten or oral) made in or in connection with any Finance Document or anyother document,

and anyrepresentations or warranties implied by law are excluded.

(b)                              Each NewLender confirms to the Existing Lender and the other Finance Parties that it:

(i)                                   has made(and shall continue to make) its own independent investigation and assessmentof the financial condition and affairs of the Borrower and its related entitiesin connection with its participation in this Agreement and has not reliedexclusively on any information provided to it by the Existing Lender inconnection with any Finance Document; and

(ii)                                willcontinue to make its own independent appraisal of the creditworthiness of theBorrower and its related entities whilst any amount is or may be outstandingunder the Finance Documents or any Commitment is in force.

(c)                               Nothing inany Finance Document obliges an Existing Lender to:

(i)                                   accept a re-transferfrom a New Lender of any of the rights and obligations assigned or transferredunder this Clause 22; or

(ii)                                support anylosses directly or indirectly incurred by the New Lender by reason of thenon-performance by the Borrower of its obligations under the Finance Documentsor otherwise.

**22.5**                     Procedurefor transfer

(a)                               Subject tothe conditions set out in Clause 22.2 (*Conditionsof assignment or transfer*) a transfer is effected in accordance withparagraph (c) below when the Agent executes an otherwise duly completedTransfer Certificate delivered to it by the Existing Lender and the New Lender.The Agent shall, subject to paragraph (b) below, as soon as reasonablypracticable after receipt by it of a duly completed Transfer Certificateappearing on its face to comply with the terms of this Agreement and deliveredin accordance with the terms of this Agreement, execute that TransferCertificate.

45

----

  

 

(b)                              The Agentshall only be obliged to execute a Transfer Certificate delivered to it by theExisting Lender and the New Lender once it is satisfied it has complied withall necessary “know your customer” or other similar checks under all applicablelaws and regulations in relation to the transfer to such New Lender.

(c)                               On theTransfer Date:

(i)                                   to the extentthat in the Transfer Certificate the Existing Lender seeks to transfer bynovation its rights and obligations under the Finance Documents the Borrowerand the Existing Lender shall be released from further obligations towards oneanother under the Finance Documents and their respective rights against oneanother under the Finance Documents shall be cancelled (being the “**Discharged Rights and Obligations**”);

(ii)                                the Borrowerand the New Lender shall assume obligations towards one another and/or acquirerights against one another which differ from the Discharged Rights andObligations only insofar as the Borrower and the New Lender have assumed and/oracquired the same in place of the Borrower and the Existing Lender;

(iii)                             the Agent,the Mandated Lead Arrangers, the New Lender and other Lenders shall acquire thesame rights and assume the same obligations between themselves as they wouldhave acquired and assumed had the New Lender been an Original Lender with therights and/or obligations acquired or assumed by it as a result of the transferand to that extent the Agent, the Mandated Lead Arrangers and the ExistingLender shall each be released from further obligations to each other under theFinance Documents; and

(iv)                            the New Lender shall become a Party as a “Lender”.

**22.6**                     Disclosureof information

AnyLender may disclose to any of its Affiliates and any other person:

(a)                                to (orthrough) whom that Lender assigns or transfers (or may potentially assign ortransfer) all or any of its rights and obligations under this Agreement;

(b)                               with (orthrough) whom that Lender enters into (or may potentially enter into) anysub-participation in relation to, or any other transaction under which paymentsare to be made by reference to, this Agreement or the Borrower; or

(c)                                to whom, andto the extent that, information is required to be disclosed by any applicablelaw or regulation,

anyinformation about the Borrower, the Group and the Finance Documents as thatLender shall consider appropriate if, in relation to paragraphs (a) and (b) above,the person to whom the information is to be given has entered into aConfidentiality Undertaking. This Clause supersedes any previous agreementrelating to the confidentiality of this information.

**23**                               CHANGES TO THE BORROWER

TheBorrower may not assign any of its rights or transfer any of its rights orobligations under the Finance Documents.

46

----

  

 

**SECTION 9THE FINANCE PARTIES**

**24**                               ROLE OF THE AGENT AND THE MANDATED LEADARRANGERS

**24.1**                     Appointmentof the Agent

(a)                               Each otherFinance Party appoints the Agent to act as its agent under and in connectionwith the Finance Documents.

(b)                              Each otherFinance Party authorises the Agent to exercise the rights, powers, authoritiesand discretions specifically given to it under or in connection with the FinanceDocuments together with any other incidental rights, powers, authorities anddiscretions.

**24.2**                     Dutiesof the Agent

(a)                               The Agentshall promptly forward to a Party the original or a copy of any document whichis delivered to the Agent for that Party by any other Party.

(b)                              Except wherea Finance Document specifically provides otherwise, the Agent is not obliged toreview or check the adequacy, accuracy or completeness of any document itforwards to another Party.

(c)                               If the Agentreceives notice from a Party referring to this Agreement, describing a Defaultand stating that the circumstance described is a Default, it shall promptlynotify the Finance Parties.

(d)                              If the Agentis aware of the non-payment of any principal, interest, commitment fee or otherfee payable to a Finance Party (other than the Agent or the Mandated LeadArrangers) under this Agreement it shall promptly notify the other FinanceParties.

(e)                               The Agent’sduties under the Finance Documents are solely mechanical and administrative in nature.

**24.3**                     Role ofthe Mandated Lead Arrangers

Exceptas specifically provided in the Finance Documents, the Mandated Lead Arrangershave no obligations of any kind to any other Party under or in connection withany Finance Document.

**24.4**                     Nofiduciary duties

(a)                               Nothing inthis Agreement constitutes the Agent or the Mandated Lead Arrangers as atrustee or fiduciary of any other person.

(b)                              Neither theAgent nor any Mandated Lead Arranger shall be bound to account to any Lenderfor any sum or the profit element of any sum received by it for its ownaccount.

**24.5**                     Businesswith the Group

TheAgent and the Mandated Lead Arrangers may accept deposits from, lend money toand generally engage in any kind of banking or other business with any memberof the Group.

47

----

  

 

**24.6**                     Rightsand discretions of the Agent

(a)                               The Agentmay rely on:

(i)                                   anyrepresentation, notice or document believed by it to be genuine, correct andappropriately authorised; and

(ii)                                anystatement made by a director, authorised signatory or employee of any personregarding any matters which may reasonably be assumed to be within hisknowledge or within his power to verify.

(b)                              The Agentmay assume, unless it has received notice to the contrary in its capacity asagent for the Lenders, that:

(i)                                   no Defaulthas occurred (unless it has actual knowledge of a Default arising under Clause21.1 (*Non-payment*)); and

(ii)                                any right,power, authority or discretion vested in any Party or the Majority Lenders hasnot been exercised.

(c)                               The Agentmay engage, pay for and rely on the advice or services of any lawyers,accountants, surveyors or other experts.

(d)                              The Agentmay act in relation to the Finance Documents through its personnel and agents.

(e)                               The Agentmay disclose to any other Party any information it reasonably believes it hasreceived as agent under this Agreement.

(f)                                 Notwithstandingany other provision of any Finance Document to the contrary, neither the Agentnor any Mandated Lead Arranger is obliged to do or omit to do anything if itwould or might in its reasonable opinion constitute a breach of any law orregulation or a breach of a fiduciary duty or duty of confidentiality.

**24.7**                     MajorityLenders’ instructions

(a)                               Unless acontrary indication appears in a Finance Document, the Agent shall (i) exerciseany right, power, authority or discretion vested in it as Agent in accordancewith any instructions given to it by the Majority Lenders (or, if so instructedby the Majority Lenders, refrain from exercising any right, power, authority ordiscretion vested in it as Agent) and (ii) not be liable for any act (oromission) if it acts (or refrains from taking any action) in accordance with aninstruction of the Majority Lenders.

(b)                              Unless acontrary indication appears in a Finance Document, any instructions given bythe Majority Lenders will be binding on all the Finance Parties.

(c)                               The Agentmay refrain from acting in accordance with the instructions of the MajorityLenders (or, if appropriate, the Lenders) until it has received such securityas it may require for any cost, loss or liability (together with any associatedVAT) which it may incur in complying with the instructions.

(d)                              In theabsence of instructions from the Majority Lenders (or, if appropriate, theLenders), the Agent may act (or refrain from taking action) as it considers tobe in the best interest of the Lenders.

(e)                               The Agent isnot authorised to act on behalf of a Lender (without first obtaining thatLender’s consent) in any legal or arbitration proceedings relating to anyFinance Document.

**24.8**                     Responsibilityfor documentation

Neitherthe Agent nor any Mandated Lead Arranger:

48

----

  

 

(a)                                isresponsible for the adequacy, accuracy and/or completeness of any information(whether oral or written) supplied by the Agent, the Mandated Lead Arrangers, theBorrower or any other person given in or in connection with any FinanceDocument or the Information Memorandum; or

(b)                               isresponsible for the legality, validity, effectiveness, adequacy orenforceability of any Finance Document or any other agreement, arrangement ordocument entered into, made or executed in anticipation of or in connectionwith any Finance Document.

**24.9**                     Exclusionof liability

(a)                               Withoutlimiting paragraph (b) below, the Agent will not be liable for any actiontaken by it under or in connection with any Finance Document, unless directlycaused by its gross negligence or wilful misconduct.

(b)                              No Party(other than the Agent) may take any proceedings against any officer, employeeor agent of the Agent in respect of any claim it might have against the Agentor in respect of any act or omission of any kind by that officer, employee oragent in relation to any Finance Document and any officer, employee or agent ofthe Agent may rely on this Clause.

(c)                               The Agentwill not be liable for any delay (or any related consequences) in crediting anaccount with an amount required under the Finance Documents to be paid by it ifit has taken all necessary steps as soon as reasonably practicable to complywith the regulations or operating procedures of any recognised clearing orsettlement system used by it for that purpose.

(d)                              Nothing inthis Agreement shall oblige the Agent or the Mandated Lead Arrangers to carryout any “know your customer” or other checks in relation to any person onbehalf of any Lender and each Lender confirms to the Agent and the MandatedLead Arrangers that it is solely responsible for any such checks it is requiredto carry out and that it may not rely on any statement in relation to suchchecks made by the Agent or the Mandated Lead Arrangers.

**24.10**              Lenders’indemnity to the Agent

EachLender shall (in proportion to its share of the Total Commitments or, if theTotal Commitments are then zero, to its share of the Total Commitmentsimmediately prior to their reduction to zero) indemnify the Agent, within threeBusiness Days of demand, against any cost, loss or liability incurred by theAgent (otherwise than by reason of the Agent’s gross negligence or wilfulmisconduct) in acting as Agent under the Finance Documents (unless the Agenthas been reimbursed by the Borrower pursuant to a Finance Document).

**24.11**               Resignationof the Agent

(a)                               The Agentmay resign and appoint one of its Affiliates acting through an office in theUnited Kingdom as successor by giving notice to the other Finance Parties andthe Borrower.

(b)                              Alternativelythe Agent may resign by giving notice to the other Finance Parties and theBorrower, in which case the Majority Lenders (after consultation with theBorrower) may appoint a successor Agent.

(c)                               If theMajority Lenders have not appointed a successor Agent in accordance withparagraph (b) above within 30 days after notice of resignation was given,the Agent (after consultation with the Borrower) may appoint a successor Agent(acting through an office in the United Kingdom).

49

----

  

 

(d)                              The retiringAgent shall, at its own cost, make available to its successor such documentsand records and provide such assistance as its successor may reasonably requestfor the purposes of performing its functions as Agent under the FinanceDocuments.

(e)                               The Agent’sresignation notice shall only take effect upon the appointment of a successor.

(f)                                 Upon theappointment of a successor, the retiring Agent shall be discharged from anyfurther obligation in respect of the Finance Documents but shall remainentitled to the benefit of this Clause 24. Its successor and each of the otherParties shall have the same rights and obligations amongst themselves as theywould have had if such successor had been an original Party.

(g)                              Afterconsultation with the Borrower, the Majority Lenders may, by notice to theAgent, require it to resign in accordance with paragraph (b) above. Inthis event, the Agent shall resign in accordance with paragraph (b) above.

**24.12**              Confidentiality

(a)                               In acting asagent for the Finance Parties, the Agent shall be regarded as acting throughits agency division which shall be treated as a separate entity from any otherof its divisions or departments.

(b)                              Ifinformation is received by another division or department of the Agent, it maybe treated as confidential to that division or department and the Agent shallnot be deemed to have notice of it.

**24.13**              Relationshipwith the Lenders

(a)                               The Agentmay treat each Lender as a Lender, entitled to payments under this Agreementand acting through its Facility Office unless it has received not less thanfive Business Days prior notice from that Lender to the contrary in accordancewith the terms of this Agreement.

(b)                              Each Lendershall supply the Agent with any information required by the Agent in order tocalculate the Mandatory Cost in accordance with Schedule 4 (*Mandatory Cost**formula*).

**24.14**              Creditappraisal by the Lenders

Withoutaffecting the responsibility of the Borrower for information supplied by it oron its behalf in connection with any Finance Document, each Lender confirms tothe Agent and the Mandated Lead Arrangers that it has been, and will continueto be, solely responsible for making its own independent appraisal andinvestigation of all risks arising under or in connection with any FinanceDocument including but not limited to:

(a)                                thefinancial condition, status and nature of each member of the Group;

(b)                               thelegality, validity, effectiveness, adequacy or enforceability of any FinanceDocument and any other agreement, arrangement or document entered into, made orexecuted in anticipation of, under or in connection with any Finance Document;

(c)                                whether thatLender has recourse, and the nature and extent of that recourse, against anyParty or any of its respective assets under or in connection with any FinanceDocument, the transactions contemplated by the Finance Documents or any otheragreement, arrangement or document entered into, made or executed inanticipation of, under or in connection with any Finance Document; and

(d)                               theadequacy, accuracy and/or completeness of the Information Memorandum and anyother information provided by the Agent, any Party or by any other person underor in 

50

----

  

 

                                              connectionwith any Finance Document, the transactions contemplated by the FinanceDocuments or any other agreement, arrangement or document entered into, made orexecuted in anticipation of, under or in connection with any Finance Document.

**24.15**              ReferenceBanks

If aReference Bank (or, if a Reference Bank is not a Lender, the Lender of which itis an Affiliate) ceases to be a Lender, the Agent shall (in consultation withthe Borrower) appoint another Lender or an Affiliate of a Lender to replacethat Reference Bank.

**24.16**              Deductionfrom amounts payable by the Agent

If anyParty owes an amount to the Agent under the Finance Documents the Agent may,after giving notice to that Party, deduct an amount not exceeding that amountfrom any payment to that Party which the Agent would otherwise be obliged tomake under the Finance Documents and apply the amount deducted in or towardssatisfaction of the amount owed. For the purposes of the Finance Documents thatParty shall be regarded as having received any amount so deducted.

**25**                               CONDUCT OF BUSINESS BY THE FINANCE PARTIES

Noprovision of this Agreement will:

(a)                                interferewith the right of any Finance Party to arrange its affairs (tax or otherwise)in whatever manner it thinks fit;

(b)                               oblige anyFinance Party to investigate or claim any credit, relief, remission orrepayment available to it or the extent, order and manner of any claim; or

(c)                                oblige anyFinance Party to disclose any information relating to its affairs (tax orotherwise) or any computations in respect of Tax.

**26**                               SHARING AMONG THE FINANCE PARTIES

**26.1**                     Paymentsto Finance Parties

If aFinance Party (a “**Recovering Finance Party**”)receives or recovers any amount from the Borrower other than in accordance withClause 27 (*Payment Mechanics*) andapplies that amount to a payment due under the Finance Documents then:

(a)                                theRecovering Finance Party shall, within three Business Days, notify details ofthe receipt or recovery to the Agent;

(b)                               the Agentshall determine whether the receipt or recovery is in excess of the amount theRecovering Finance Party would have been paid had the receipt or recovery beenreceived or made by the Agent and distributed in accordance with Clause 27 (*Payment Mechanics*), without taking accountof any Tax which would be imposed on the Agent in relation to the receipt,recovery or distribution; and

(c)                                the RecoveringFinance Party shall, within three Business Days of demand by the Agent, pay tothe Agent an amount (the “**Sharing Payment**”)equal to such receipt or recovery less any amount which the Agent determinesmay be retained by the Recovering Finance Party as its share of any payment tobe made, in accordance with Clause 27.5 (*Partialpayments*).

51

----

  

 

**26.2**                     Redistributionof payments

TheAgent shall treat the Sharing Payment as if it had been paid by the Borrowerand distribute it between the Finance Parties (other than the RecoveringFinance Party) in accordance with Clause 27.5 (*Partialpayments*).

**26.3**                     RecoveringFinance Party’s rights

(a)                               On adistribution by the Agent under Clause 26.2 (*Redistributionof payments*), the Recovering Finance Party will be subrogated to therights of the Finance Parties which have shared in the redistribution.

(b)                              If and tothe extent that the Recovering Finance Party is not able to rely on its rightsunder paragraph (a) above, the Borrower shall be liable to the RecoveringFinance Party for a debt equal to the Sharing Payment which is immediately dueand payable.

**26.4**                     Reversalof redistribution

If anypart of the Sharing Payment received or recovered by a Recovering Finance Partybecomes repayable and is repaid by that Recovering Finance Party, then:

(a)                                each FinanceParty which has received a share of the relevant Sharing Payment pursuant toClause 26.2 (*Redistribution of payments*)shall, upon request of the Agent, pay to the Agent for account of thatRecovering Finance Party an amount equal to the appropriate part of its shareof the Sharing Payment (together with an amount as is necessary to reimbursethat Recovering Finance Party for its proportion of any interest on the SharingPayment which that Recovering Finance Party is required to pay); and

(b)                               thatRecovering Finance Party’s rights of subrogation in respect of anyreimbursement shall be cancelled and the Borrower will be liable to thereimbursing Finance Party for the amount so reimbursed.

**26.5**                     Exceptions

(a)                               This Clause26 shall not apply to the extent that the Recovering Finance Party would not,after making any payment pursuant to this Clause, have a valid and enforceableclaim against the Borrower.

(b)                              A RecoveringFinance Party is not obliged to share with any other Finance Party any amountwhich the Recovering Finance Party has received or recovered as a result oftaking legal or arbitration proceedings, if:

(i)                                   it notifiedthat other Finance Party of the legal or arbitration proceedings; and

(ii)                                that otherFinance Party had an opportunity to participate in those legal or arbitrationproceedings but did not do so as soon as reasonably practicable having receivednotice and did not take separate legal or arbitration proceedings.

52

----

  

 

**SECTION 10ADMINISTRATION**

**27**                               PAYMENT MECHANICS

**27.1**                     Paymentsto the Agent

(a)                               On each dateon which the Borrower or a Lender is required to make a payment under a FinanceDocument, the Borrower or Lender shall make the same available to the Agent(unless a contrary indication appears in a Finance Document) for value on thedue date at the time and in such funds specified by the Agent as beingcustomary at the time for settlement of transactions in the relevant currencyin the place of payment.

(b)                              Paymentshall be made to such account in the principal financial centre of the countryof that currency (or, in relation to euro, in the principal financial centre ina Participating Member State or London) with such bank as the Agent specifies.

**27.2**                     Distributionsby the Agent

Eachpayment received by the Agent under the Finance Documents for another Partyshall, subject to Clause 27.3 (*Distributionsto**the**Borrower*) and Clause 27.4 (*Clawback*), be made available by the Agentas soon as practicable after receipt to the Party entitled to receive paymentin accordance with this Agreement (in the case of a Lender, for the account ofits Facility Office), to such account as that Party may notify to the Agent bynot less than five Business Days’ notice with a bank in the principal financialcentre of the country of that currency.

**27.3**                     Distributionsto the Borrower

TheAgent may (with the Borrower’s consent or in accordance with Clause 28 (*Set-off*)) apply any amount received by itfor the Borrower in or towards payment (on the date and in the currency andfunds of receipt) of any amount due from the Borrower under the FinanceDocuments or in or towards purchase of any amount of any currency to be soapplied.

**27.4**                     Clawback

(a)                               Where a sumis to be paid to the Agent under the Finance Documents for another Party, the Agentis not obliged to pay that sum to that other Party (or to enter into or performany related exchange contract) until it has been able to establish to itssatisfaction that it has actually received that sum.

(b)                              If the Agentpays an amount to another Party and it proves to be the case that the Agent hadnot actually received that amount, then the Party to whom that amount (or theproceeds of any related exchange contract) was paid by the Agent shall ondemand refund the same to the Agent together with interest on that amount fromthe date of payment to the date of receipt by the Agent, calculated by theAgent to reflect its cost of funds.

**27.5**                     Partialpayments

(a)                               If the Agentreceives a payment that is insufficient to discharge all the amounts then dueand payable by the Borrower under the Finance Documents, the Agent shall applythat payment towards the obligations of the Borrower under the FinanceDocuments in the following order:

(i)                                   first, in ortowards payment pro rata of any unpaid fees, costs and expenses of the Agent orthe Mandated Lead Arrangers under the Finance Documents;

53

----

  

 

(ii)                                secondly, inor towards payment pro rata of any accrued interest, fee or commission due butunpaid under this Agreement;

(iii)                             thirdly, inor towards payment pro rata of any principal due but unpaid under thisAgreement; and

(iv)                            fourthly, in or towards payment pro rataof any other sum due but unpaid under the Finance Documents.

(b)                              The Agentshall, if so directed by the Majority Lenders, vary the order set out in paragraphs(a)(ii) to (iv) above.

(c)                               Paragraphs (a) and(b) above will override any appropriation made by the Borrower.

**27.6**                     Noset-off by the Borrower

Allpayments to be made by the Borrower under the Finance Documents shall becalculated and be made without (and free and clear of any deduction for)set-off or counterclaim.

**27.7**                     BusinessDays

(a)                               Any paymentwhich is due to be made on a day that is not a Business Day shall be made onthe next Business Day in the same calendar month (if there is one) or the precedingBusiness Day (if there is not).

(b)                              During anyextension of the due date for payment of any principal or Unpaid Sum under thisAgreement interest is payable on the principal or Unpaid Sum at the ratepayable on the original due date.

**27.8**                     Currencyof account

(a)                               Subject toparagraphs (b) to (e) below, Dollars is the currency of account andpayment for any sum due from the Borrower under any Finance Document.

(b)                              A repaymentof a Loan or Unpaid Sum or a part of a Loan or Unpaid Sum shall be made in thecurrency in which that Loan or Unpaid Sum is denominated on its due date.

(c)                               Each paymentof interest shall be made in the currency in which the sum in respect of whichthe interest is payable was denominated when that interest accrued.

(d)                              Each paymentin respect of costs, expenses or Taxes shall be made in the currency in whichthe costs, expenses or Taxes are incurred.

(e)                               Any amountexpressed to be payable in a currency other than Dollars shall be paid in thatother currency.

**27.9**                     Changeof currency

(a)                               Unlessotherwise prohibited by law, if more than one currency or currency unit are atthe same time recognised by the central bank of any country as the lawfulcurrency of that country, then:

(i)                                   anyreference in the Finance Documents to, and any obligations arising under theFinance Documents in, the currency of that country shall be translated into, orpaid in, the currency or currency unit of that country designated by the Agent(after consultation with the Borrower); and

54

----

  

 

(ii)                                anytranslation from one currency or currency unit to another shall be at theofficial rate of exchange recognised by the central bank for the conversion ofthat currency or currency unit into the other, rounded up or down by the Agent(acting reasonably).

(b)                              If a changein any currency of a country occurs, this Agreement will, to the extent theAgent (acting reasonably and after consultation with the Borrower) specifies tobe necessary, be amended to comply with any generally accepted conventions andmarket practice in the London interbank market and otherwise to reflect thechange in currency.

**28**                               SET-OFF

AFinance Party may set off any matured obligation due from the Borrower underthe Finance Documents (to the extent beneficially owned by that Finance Party)against any matured obligation owed by that Finance Party to the Borrower,regardless of the place of payment, booking branch or currency of eitherobligation. If the obligations are in different currencies, the Finance Partymay convert either obligation at a market rate of exchange in its usual courseof business for the purpose of the set-off.

**29**                               NOTICES

**29.1**                     Communicationsin writing

Anycommunication to be made under or in connection with the Finance Documentsshall be made in writing and, unless otherwise stated, may be made by fax orletter.

**29.2**                     Addresses

Theaddress and fax number (and the department or officer, if any, for whoseattention the communication is to be made) of each Party for any communicationor document to be made or delivered under or in connection with the FinanceDocuments is:

(a)                                in the caseof the Borrower, that identified with its name below;

(b)                               in the caseof each Lender, that notified in writing to the Agent on or prior to the dateon which it becomes a Party; and

(c)                                in the caseof the Agent, that identified with its name below,

or anysubstitute address, fax number or department or officer as the Party may notifyto the Agent (or the Agent may notify to the other Parties, if a change is madeby the Agent) by not less than five Business Days’ notice.

**29.3**                     Delivery

(a)                               Anycommunication or document made or delivered by one person to another under orin connection with the Finance Documents will only be effective:

(i)                                   if by way offax, when received in legible form; or

(ii)                                if by way ofletter, when it has been left at the relevant address or five Business Daysafter being deposited in the post postage prepaid in an envelope addressed toit at that address,

and, ifa particular department or officer is specified as part of its address details providedunder Clause 29.2 (*Addresses*), ifaddressed to that department or officer.

55

----

  

 

(b)                              Anycommunication or document to be made or delivered to the Agent will beeffective only when actually received by the Agent and then only if it isexpressly marked for the attention of the department or officer identified withits signature below (or any substitute department or officer as it shallspecify for this purpose).

(c)                               All noticesfrom or to the Borrower shall be sent through the Agent.

**29.4**                     Notificationof address and fax number

Promptlyupon receipt of notification of an address and fax number or change of addressor fax number pursuant to Clause 29.2 (*Addresses*)or changing its own address or fax number, the Agent shall notify the otherParties.

**29.5**                     Electroniccommunication

(a)                               Anycommunication to be made between the Agent and a Lender under or in connectionwith the Finance Documents may be made by electronic mail or other electronicmeans, if the Agent and the relevant Lender:

(i)                                   agree that,unless and until notified to the contrary, this is to be an accepted form ofcommunication;

(ii)                                notify eachother in writing of their electronic mail address and/or any other informationrequired to enable the sending and receipt of information by that means; and

(iii)                             notify eachother of any change to their address or any other such information supplied bythem.

(b)                              Anyelectronic communication made between the Agent and a Lender will be effectiveonly when actually received in readable form and in the case of any electroniccommunication made by a Lender to the Agent only if it is addressed in such amanner as the Agent shall specify for this purpose.

**29.6**                     Englishlanguage

(a)                               Any noticegiven under or in connection with any Finance Document must be in English.

(b)                              All otherdocuments provided under or in connection with any Finance Document must be:

(i)                                   in English;or

(ii)                                if not inEnglish, and if so required by the Agent, accompanied by a certified Englishtranslation and, in this case, the English translation will prevail unless thedocument is a constitutional, statutory or other official document.

**30**                               CALCULATIONS AND CERTIFICATES

**30.1**                     Accounts

In anylitigation or arbitration proceedings arising out of or in connection with aFinance Document, the entries made in the accounts maintained by a FinanceParty are prima facie evidence of the matters to which they relate.

56

----

  

 

**30.2**                     Certificatesand Determinations

Anycertification or determination by a Finance Party of a rate or amount under anyFinance Document is, in the absence of manifest error, conclusive evidence ofthe matters to which it relates.

**30.3**                     Daycount convention

Anyinterest, commission or fee accruing under a Finance Document will accrue fromday to day and is calculated on the basis of the actual number of days elapsedand a year of  360 days or, in any casewhere the practice in the London interbank market differs, in accordance withthat market practice.

**31**                               PARTIAL INVALIDITY

If, atany time, any provision of the Finance Documents is or becomes illegal, invalidor unenforceable in any respect under any law of any jurisdiction, neither thelegality, validity or enforceability of the remaining provisions nor thelegality, validity or enforceability of such provision under the law of anyother jurisdiction will in any way be affected or impaired.

**32**                               REMEDIES AND WAIVERS

Nofailure to exercise, nor any delay in exercising, on the part of any FinanceParty, any right or remedy under the Finance Documents shall operate as awaiver, nor shall any single or partial exercise of any right or remedy preventany further or other exercise or the exercise of any other right or remedy. Therights and remedies provided in this Agreement are cumulative and not exclusiveof any rights or remedies provided by law.

**33**                               AMENDMENTS AND WAIVERS

**33.1**                     Requiredconsents

(a)                               Subject toClause 33.2 (*Exceptions*) any termof the Finance Documents may be amended or waived only with the consent of theMajority Lenders and the Borrower and any such amendment or waiver will bebinding on all Parties.

(b)                              The Agentmay effect, on behalf of any Finance Party, any amendment or waiver permittedby this Clause.

**33.2**                     Exceptions

(a)                               An amendmentor waiver that has the effect of changing or which relates to:

(i)                                   thedefinition of “**Majority Lenders**”in Clause 1.1 (*Definitions*);

(ii)                                an extensionto the date of payment of any amount under the Finance Documents;

(iii)                             a reductionin the Margin or a reduction in the amount of any payment of principal,interest, fees or commission payable;

(iv)                            an increase in or an extension of anyCommitment;

(v)                               a change tothe Borrower;

(vi)                            any provision which expressly requiresthe consent of all the Lenders; or

57

----

  

 

(vii)                         Clause 2.2 (*Finance Parties’ rights and obligations*), Clause 22 (*Changes to the Lenders*), Clause 26 (*Sharing among the Finance Parties*) or thisClause 33,

shall not be madewithout the prior consent of all the Lenders.

(b)                              An amendmentor waiver which relates to the rights or obligations of the Agent or theMandated Lead Arrangers may not be effected without the consent of the Agent orthe Mandated Lead Arrangers.

**34**                               COUNTERPARTS

EachFinance Document may be executed in any number of counterparts, and this hasthe same effect as if the signatures on the counterparts were on a single copyof the Finance Document.

58

----

  

 

**SECTION 11GOVERNING LAW AND ENFORCEMENT**

**35**                               GOVERNING LAW

ThisAgreement is governed by English law.

**36**                               ARBITRATION

**36.1**                     Arbitration

Subjectto Clause 36.4 (*Agent’s option*),any dispute arising out of or in connection with this Agreement (including adispute regarding the existence, validity or termination of this Agreement) (a “**Dispute**”) shall be referred to and finally resolved byarbitration under the Arbitration Rules (the “**Rules**”) of the London Court of International Arbitration (the “**LCIA Court**”).

**36.2**                     Procedurefor arbitration

(a)                               The arbitraltribunal shall consist of three arbitrators. The claimant(s), irrespective ofnumber, shall nominate jointly one arbitrator; the respondent(s), irrespectiveof number, shall nominate jointly the second arbitrator; and a thirdarbitrator, who shall serve as Chairman (who shall be a lawyer currentlyqualified in England and Wales and be admitted to the Bar of England andWales), shall be appointed by the LCIA Court within 15 days of the appointment ofthe second arbitrator.

(b)                              In the eventthe claimant(s) or the respondent(s) shall fail to nominate anarbitrator within the time limits specified in the Rules, such arbitrator shallbe appointed by the LCIA Court within 15 days of such failure. In the eventthat both the claimant(s) and the respondent(s) fail to nominate anarbitrator within the time limits specified in the Rules, all three arbitratorsshall be appointed by the LCIA Court within 15 days of such failure who shalldesignate one of them as chairman.

(c)                               If all theparties to an arbitration so agree, there shall be a sole arbitrator appointedby the LCIA Court within 15 days of such agreement.

(d)                              The seat ofarbitration shall be London, England and the language of the arbitration shallbe English.

**36.3**                     Recourseto courts

Save asprovided in Clause 36.4 (*Agent’s option*),the parties exclude the jurisdiction of the courts under Sections 45 and 69 ofthe Arbitration Act 1996.

**36.4**                     Agent’soption

Beforean arbitrator has been appointed by a Finance Party to determine a Dispute, theAgent may (and, if so instructed by the Majority Lenders, shall) by notice inwriting to the Borrower require that all Disputes or a specific Dispute beheard by a court of law. If the Agent gives such notice, the Dispute to whichsuch notice refers shall be determined in accordance with Clause 37 (*Jurisdiction*).

59

----

  

 

**37**                               JURISDICTION

**37.1**                     Jurisdictionof English courts

(a)                               The courtsof England have exclusive jurisdiction to settle all Disputes.

(b)                              The Partiesagree that the courts of England are the most appropriate and convenient courtsto settle Disputes and accordingly no Party will argue to the contrary.

(c)                               ThisClause 37.1 is for the benefit of the Finance Parties only. As a result,no Finance Party shall be prevented from taking proceedings relating to aDispute in any other courts with jurisdiction. To the extent allowed by law,the Finance Parties may take concurrent proceedings in any number ofjurisdictions.

**37.2**                     Serviceof process

Withoutprejudice to any other mode of service allowed under any relevant law, theBorrower:

(a)                                irrevocablyappoints Law Debenture Corporation, located at the date hereof at 5th Floor, 100 Wood Street, London EC2V 7EX,England, as its agent for service of process in relation to any proceedingscommenced in accordance with this Agreement; and

(b)                               agrees thatfailure by a process agent to notify the Borrower of the process will notinvalidate the proceedings concerned.

**37.3**                     Waiverof immunity

TheBorrower irrevocably agrees that, should any party take any proceedingsanywhere (whether for an injunction, specific performance, damages orotherwise), no immunity (to the extent that it may at any time exist, whetheron the grounds of sovereignty or otherwise) from those proceedings, from attachment(whether in aid of execution, before judgment or otherwise) of its assets orfrom execution of judgment shall be claimed by it or on behalf of it or withrespect to its assets, any such immunity being irrevocably waived. The Borrowerirrevocably agrees that it and its assets are, and shall be, subject to suchproceedings, attachment or execution in respect of its obligations under theFinance Documents.

**This Agreement has been enteredinto on the date stated at the beginning of this Agreement.**

60

----

  

 

**SCHEDULE 1The Original Lenders**

| Name of Original Lender | ** ** | **Facility 1  Commitment  (US$)** | ** **  | **Facility 2  Commitment  (US$)** | ** ** |
|----------------------------------------|------------|----------------------------------------|-------------|----------------------------------------|------------|
| ABN AMRO Bank  N.V.                    |       | $                                      | 35,000,000  |                                   | $          | 52,500,000 |   |
| Bank Austria  Creditanstalt AG         |       | $                                      | 30,000,000  |                                   | $          | 45,000,000 |   |
| Commerzbank  (Eurasija) SAO            |       | $                                      | 30,000,000  |                                   | $          | 45,000,000 |   |
| HSBC Bank plc                          |       | $                                      | 35,000,000  |                                   | $          | 52,500,000 |   |
| ING Bank N.V.                          |       | $                                      | 35,000,000  |                                   | $          | 52,500,000 |   |
| Raiffeisen  Zentralbank Oesterreich AG |       | $                                      | 19,000,000  |                                   | $          | 28,500,000 |   |
| ZAO  Raiffeisenbank Austria            |       | $                                      | 16,000,000  |                                   | $          | 24,000,000 |   |
| **TOTAL:**                             |       | $                                      | 200,000,000 |                                   | $          | 300,000,000 |   |

 

61

----

  

** **

**SCHEDULE 2Conditions precedent**

**1****                                     ****Finance Documents**

Executedoriginals of:

(a)                                thisAgreement;

(b)                               each FeeLetter;

(c)                                the MandateLetter; and

(d)                               theSyndication Side Letter.

**2****                                     ****The Borrower**

(a)                               Certifiedcopies of the Borrower’s duly registered constitutional documents andcertificates of registration.

(b)                              Certifiedcopies of all corporate resolutions necessary to authorise the Borrower toexecute and perform the Finance Documents and any documents referred to thereinand the transactions contemplated thereunder (including but not limited to anymajor transaction approvals or interested party transaction approvals, ifapplicable).

(c)                               Evidence ofthe authority of the relevant signatories of the Borrower (including, but notlimited to, its Chief Accountant) to execute each Finance Document to which itis a party and any documents referred to therein and the transactionscontemplated thereunder.

(d)                              A certifiedcopy of the most recent balance sheet of the Borrower by reference to the dateof each Finance Document.

(e)                               Acertificate executed on behalf of the Borrower:

(i)                                   certifyingthe sample signature and office of each person that signed the relevant FinanceDocument and any documents referred to therein and the transactionscontemplated thereunder on behalf of the Borrower and certifying that suchsignatories hold the positions in which capacity they executed such documents;and

(ii)                                certifyingthat each copy document relating to it specified in this Schedule 2 is correct,complete and in full force and effect as at a date no earlier than the date ofthis Agreement.

**3****                                     ****Legal opinions**

(a)                               A legalopinion of Linklaters as to matters of English law.

(b)                              A legalopinion of Linklaters CIS as to matters of Russian law.

(c)                               An in-houselegal opinion of the Borrower.

**4****                                     ****Other documents and evidence**

(a)                               Evidencethat the process agent referred to in Clause 37.2 (*Service of process*) has accepted its appointment.

(b)                              A copy ofany other Authorisation or other document, opinion or assurance which the Agentconsiders to be necessary or desirable (if it has notified the Borroweraccordingly) in connection 

62

----

  

 

                                             with theentry into and performance of the transactions contemplated by any FinanceDocument or for the validity and enforceability of any Finance Document.

(c)                               The OriginalFinancial Statements.

(d)                              Evidencethat the fees, costs and expenses then due from the Borrower pursuant to Clause11 (*Fees*) and 16 (*Costs and expenses*) have been paid or willbe paid by the first Utilisation Date.

(e)                               A copy ofthe *deal passport* of the Borrower(in the form established by Instruction No. 117-I of the CentralBank of the Russian Federation dated 15 June 2004) accepted and dulycertified by a Russian authorised bank and copies of all other documentssubmitted by the Borrower to the Russian authorised bank in accordance withapplicable Russian currency control regulations, as the Agent may reasonablyrequire (or evidence that all documents required to obtain such *deal passport*have been duly submitted toING Bank (Eurasia) ZAO by or on behalf of the Borrower).

(f)                                 Such otherdocuments or evidence which the Agent may reasonably require.

63

----

  

 

**SCHEDULE 3Utilisation Request**

From:                  Mobile TeleSystems Open Joint StockCompany

To:                               ING BankN.V., London Branch as Agent

Dated:

DearSirs

**Mobile TeleSystems Open JointStock Company — US$500,000,000 Facility Agreementdated [                   ](the “Agreement”)**

**1****                                     **We refer tothe Agreement. This is a Utilisation Request. Terms defined in the Agreementhave the same meaning in this Utilisation Request unless given a differentmeaning in this Utilisation Request.

**2****                                     **We wish toborrow a Loan on the following terms:
|   | Proposed Utilisation Date: | [                   ]  or, if that is not a Business Day, the next Business Day) |
|--------|----------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Facility to be  utilised   | [Facility 1]/[Facility 2](1)                                                                                                                                                    |
|   | Amount:                    | [                   ]  or, if less, the Available Facility                       |
|   |                       |                                                                                                                                                                            |

----

(1)             Deleteas appropriate

**3****                                     **We confirmthat each condition specified in Clause 4.2 (*Furtherconditions precedent*) is satisfied on the date of this UtilisationRequest.

**4****                                     **The proceedsof this Loan should be credited to [specify R-1-type special bankaccount of the Borrower, which must be an account with an authorised bank ofthe Russian Federation].

**5****                                     **ThisUtilisation Request is irrevocable.

MobileTeleSystems Open Joint Stock Company

 
| By:    |   |                                | By: |   |
|--------|--------|-------------------------------------|-----|--------|
| Name:  |   | Name:                               |
| Title: |   | Title:   Chief Accountant |

 

64

----

  

 

**SCHEDULE 4Mandatory Cost formula**

**1****                                     **TheMandatory Cost is an addition to the interest rate to compensate Lenders forthe cost of compliance with (a) the requirements of the Bank of Englandand/or the Financial Services Authority (or, in either case, any otherauthority which replaces all or any of its functions) or (b) therequirements of the European Central Bank.

**2****                                     **On the firstday of each Interest Period (or as soon as possible thereafter) the Agent shallcalculate, as a percentage rate, a rate (the “**AdditionalCost Rate**”) for each Lender, in accordance with the paragraphs setout below. The Mandatory Cost will be calculated by the Agent as a weightedaverage of the Lenders’ Additional Cost Rates (weighted in proportion to thepercentage participation of each Lender in the relevant Loan) and will beexpressed as a percentage rate per annum.

**3****                                     **TheAdditional Cost Rate for any Lender lending from a Facility Office in aParticipating Member State will be the percentage notified by that Lender tothe Agent. This percentage will be certified by that Lender in its notice tothe Agent to be its reasonable determination of the cost (expressed as apercentage of that Lender’s participation in all Loans made from that FacilityOffice) of complying with the minimum reserve requirements of the EuropeanCentral Bank in respect of loans made from that Facility Office.

**4****                                     **TheAdditional Cost Rate for any Lender lending from a Facility Office in theUnited Kingdom will be calculated by the Agent as follows:

 per cent.per annum.

Where:

E                                               is designedto compensate Lenders for amounts payable under the Fees Rules and iscalculated by the Agent as being the average of the most recent rates of chargesupplied by the Reference Banks to the Agent pursuant to paragraph 7 below andexpressed in pounds per £1,000,000.

**5****                                     **For thepurposes of this Schedule:

(a)                                “**Fees Rules**” means the rules onperiodic fees contained in the FSA Supervision Manual or such other law orregulation as may be in force from time to time in respect of the payment offees for the acceptance of deposits;

(b)                               “**Fee Tariffs**” means the fee tariffsspecified in the Fees Rules under the activity group A.1 Deposit acceptors(ignoring any minimum fee or zero rated fee required pursuant to the Fees Rules buttaking into account any applicable discount rate); and

(c)                                “**Tariff Base**” has the meaning given to itin, and will be calculated in accordance with, the Fees Rules.

**6****                                     **Theresulting figure shall be rounded to four decimal places.

**7****                                     **If requestedby the Agent, each Reference Bank shall, as soon as practicable afterpublication by the Financial Services Authority, supply to the Agent, the rateof charge payable by that Reference Bank to the Financial Services Authoritypursuant to the Fees Rules in respect of the relevant financial year ofthe Financial Services Authority (calculated for this purpose by that 

65

----

  

 

                                             ReferenceBank as being the average of the Fee Tariffs applicable to that Reference Bankfor that financial year) and expressed in pounds per £1,000,000 of the TariffBase of that Reference Bank.

**8****                                     **Each Lendershall supply any information required by the Agent for the purpose ofcalculating its Additional Cost Rate. In particular, but without limitation,each Lender shall supply the following information on or prior to the date onwhich it becomes a Lender:

(a)                                thejurisdiction of its Facility Office; and

(b)                               any otherinformation that the Agent may reasonably require for such purpose.

EachLender shall promptly notify the Agent of any change to the informationprovided by it pursuant to this paragraph.

**9****                                     **The rates ofcharge of each Reference Bank for the purpose of E above shall be determined bythe Agent based upon the information supplied to it pursuant to paragraphs 7and 8 above.

**10****                              **The Agentshall have no liability to any person if such determination results in anAdditional Cost Rate which over or under compensates any Lender and shall beentitled to assume that the information provided by any Lender or ReferenceBank pursuant to paragraphs 3, 7 and 8 above is true and correct in allrespects.

**11****                               **The Agentshall distribute the additional amounts received as a result of the MandatoryCost to the Lenders on the basis of the Additional Cost Rate for each Lenderbased on the information provided by each Lender and each Reference Bankpursuant to paragraphs 3, 7 and 8 above.

**12****                              **Anydetermination by the Agent pursuant to this Schedule in relation to a formula,the Mandatory Cost, an Additional Cost Rate or any amount payable to a Lendershall, in the absence of manifest error, be conclusive and binding on allParties.

**13****                              **The Agentmay from time to time, after consultation with the Borrower and the Lenders,determine and notify to all Parties any amendments which are required to bemade to this Schedule in order to comply with any change in law, regulation orany requirements from time to time imposed by the Bank of England, theFinancial Services Authority or the European Central Bank (or, in any case, anyother authority which replaces all or any of its functions) and any suchdetermination shall, in the absence of manifest error, be conclusive andbinding on all Parties.

66

----

  

 

**SCHEDULE 5Form of Transfer Certificate**

To:                               ING BankN.V., London Branch as Agent

From:                  [                   ](the “Existing Lender”) and [                   ](the “New Lender”)

Dated:

**Mobile TeleSystems Open JointStock Company — US$500,000,000 Facility Agreementdated [                   ](the “Agreement”)**

**1****                                     **We refer tothe Agreement. This is a Transfer Certificate. Terms defined in the Agreementhave the same meaning in this Transfer Certificate unless given a differentmeaning in this Transfer Certificate.

**2****                                     **We refer toClause 22.5 (*Procedure for transfer*):

(a)                                The ExistingLender and the New Lender agree to the Existing Lender transferring to the NewLender by novation all or part of the Existing Lender’s Commitment, rights andobligations referred to in the Schedule in accordance with Clause 22.5 (*Procedure for transfer*).

(b)                               The proposedTransfer Date is [                   ].

(c)                                The FacilityOffice and address, fax number and attention details for notices of the NewLender for the purposes of Clause 29.2 (*Addresses*)are set out in the Schedule.

**3****                                     **The NewLender expressly acknowledges the limitations on the Existing Lender’sobligations set out in paragraph (c) of Clause 22.4 (*Limitation of responsibility of Existing Lenders*).

**4****                                     **ThisTransfer Certificate may be executed in any number of counterparts and this hasthe same effect as if the signatures on the counterparts were on a single copyof this Transfer Certificate.

**5****                                     **ThisTransfer Certificate is governed by English law.

67

----

  

 

**THESCHEDULECommitment/rights and obligations to be transferred**

[insert relevant details]

[Facility Office address, fax number and attentiondetails for notices and account details for payments.]
| [Existing Lender] |   | [New Lender ] |
|-------------------|--------|---------------|
|              |   |          |
| By:               |   | By:           |
|              |   |          |
|              |   |          |

ThisTransfer Certificate is accepted by the Agent and the Transfer Date isconfirmed as [                   ].

ING BankN.V., London Branch

By:

68

----

  

 

**SCHEDULE 6Form of Compliance Certificate**

To:                                                                               ING BankN.V., London Branch as Agent

From:                                                                  MobileTeleSystems Open Joint Stock Company

Dated:

DearSirs

**Mobile TeleSystems Open JointStock Company — US$500,000,000 Facility Agreementdated [                   ](the “Agreement”)**

Werefer to the Agreement. This is a Compliance Certificate. Terms defined in theAgreement have the same meaning in this Compliance Certificate unless given adifferent meaning in this Compliance Certificate.

**1****                                     **[We confirmthat no Default is continuing.]*

----

*                    Ifthis statement cannot be made, the certificate should identify any Default thatis continuing and the steps, if any, being taken to remedy it.

**2****                                     **We confirmthat the ratio of Borrowings as at the end of the Relevant Period ending on[•] to EBITDA in respect of such Relevant Period, was [•].

**3****                                     **We confirmthat the ratio of EBITDA to Interest Expense for  the Relevant Period ending on [•], was[•].

 
| Signed:        ................................................

[Chief Financial  Officer] of  Mobile TeleSystems Open Joint Stock Company |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|

 

****insert applicable certification language*

We havereviewed the Facility Agreement and audited consolidated financial statementsof the Mobile TeleSystems Open Joint Stock Company for the year ended [                   ].

On thebasis of that review and audit, nothing has come to our attention which wouldrequire any modification to the confirmations in paragraphs 2 or 3 of the aboveCompliance Certificate.

..............................

for andon behalf of

*name of auditors of*MobileTeleSystems Open Joint Stock Company

69

----

  

 

**The Borrower**

**Mobile TeleSystems Open JointStock Company**

Address:                                   4Marksistskaya Street, 109147 Moscow, Russian Federation

Fax No:                                            +7 095 9116531

Attention:                           Tatiana EvtoushenkovaVice President for Investments andCorporate Development

 
| By:                                                                                                                                                                                 |   |                                                                                                                                                               | By: |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----|--------|
| Name:                Tatiana  Evtoushenkova                                                              |   | Name:                  R.Kolomiets                                            |
| Title:                    Vice President for Investments  and  Corporate Development |   | Title:                        Chief  Accountant |

 

**The Original Mandated LeadArrangers**

ABNAMRO Bank N.V.
| By:    |   |   |   |   |
|--------|--------|--------|--------|--------|
| Name:  |   |   |
| Title: |   |   |

 

HSBCBank plc
| By:    |   |   |   |   |
|--------|--------|--------|--------|--------|
| Name:  |   |   |
| Title: |   |   |

 

70

----

  

 

ING Bank N.V.
| By:    |   |   |   |   |
|--------|--------|--------|--------|--------|
| Name:  |   |   |
| Title: |   |   |

 

Raiffeisen ZentralbankOesterreich AG
| By:    |   |   |   |   |
|--------|--------|--------|--------|--------|
| Name:  |   |   |
| Title: |   |   |

 

**The New Mandated Lead Arrangers**

Bank Austria Creditanstalt AG
| By:    |   |   |   |   |
|--------|--------|--------|--------|--------|
| Name:  |   |   |
| Title: |   |   |

 

Commerzbank Aktiengesellschaft
| By:    |   |   |   |   |
|--------|--------|--------|--------|--------|
| Name:  |   |   |
| Title: |   |   |

 

71

----

  

 

**The Original Lenders**

ABN AMRO Bank N.V.
| By:    |   |   |   |   |
|--------|--------|--------|--------|--------|
| Name:  |   |   |
| Title: |   |   |

 

Bank Austria Creditanstalt AG
| By:    |   |   |   |   |
|--------|--------|--------|--------|--------|
| Name:  |   |   |
| Title: |   |   |

 

Commerzbank (Eurasija) SAO
| By:    |   |   |   |   |
|--------|--------|--------|--------|--------|
| Name:  |   |   |
| Title: |   |   |

 

HSBC Bank plc
| By:    |   |   |   |   |
|--------|--------|--------|--------|--------|
| Name:  |   |   |
| Title: |   |   |

 

72

----

  

 

ING Bank N.V.
| By:    |   |   |   |   |
|--------|--------|--------|--------|--------|
| Name:  |   |   |
| Title: |   |   |

 

Raiffeisen ZentralbankOesterreich AG
| By:    |   |   |   |   |
|--------|--------|--------|--------|--------|
| Name:  |   |   |
| Title: |   |   |

 

ZAO Raiffeisenbank Austria
| By:    |   |   |   |   |
|--------|--------|--------|--------|--------|
| Name:  |   |   |
| Title: |   |   |

 

73

----

  

 

**The Agent**

ING Bank N.V., London Branch

Address:           60 London WallLondon EC2M 5TQ

Fax: +44 207 767 7324

Attention:     David Hobbs/Craig BakerAgency Operations
| By:    |   |   |   |   |
|--------|--------|--------|--------|--------|
| Name:  |   |   |
| Title: |   |   |

 

74

----