**Exhibit 4.46**

 

EXECUTIONCOPY

 

Dated21 April 2006

 

**US$1,330,000,000**

**FACILITYAGREEMENT**

for

**MOBILETELESYSTEMS OPEN JOINT STOCK COMPANY**

arrangedby

**THE BANK OF TOKYO - MITSUBISHI UFJ,LTD.BAYERISCHE LANDESBANK********HSBC BANK PLC********ING BANK N.V.********RAIFFEISEN ZENTRALBANKOESTERREICH AG**

**SUMITOMO MITSUI BANKING CORPORATIONEUROPE LIMITED**

asMandated Lead Arrangers

and

**INGBANK N.V., LONDON BRANCH**

actingas Agent

 

 

 

Paveletskaya sq. 2, bld. 2Moscow 115054

Telephone (7-495) 797 9797Facsimile (7-495) 797 9798

Ref Mark Kirsh/Elena Mikhailova

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**CONTENTS**
| CLAUSE                                                        | ** ** | ** **                             | ** ** | **PAGE** | ** ** |
|---------------------------------------------------------------|------------|----------------------------------------|------------|----------|------------|
| SECTION 1 INTERPRETATION                                      |       | 1                                      |       |
| 1                                                             |       | DEFINITIONS AND INTERPRETATION         |       | 1        |       |
| SECTION 2 THE FACILITY                                        |       | 12                                     |       |
| 2                                                             |       | THE FACILITIES                         |       | 12       |       |
| 3                                                             |       | PURPOSE                                |       | 12       |       |
| 4                                                             |       | CONDITIONS OF UTILISATION              |       | 13       |       |
| SECTION 3 UTILISATION                                         |       | 14                                     |       |
| 5                                                             |       | UTILISATION                            |       | 14       |       |
| SECTION 4 REPAYMENT, PREPAYMENT AND CANCELLATION              |       | 15                                     |       |
| 6                                                             |       | REPAYMENT                              |       | 15       |       |
| 7                                                             |       | PREPAYMENT AND CANCELLATION            |       | 15       |       |
| SECTION 5 COSTS OF UTILISATION                                |       | 19                                     |       |
| 8                                                             |       | INTEREST                               |       | 19       |       |
| 9                                                             |       | INTEREST PERIODS                       |       | 20       |       |
| 10                                                            |       | CHANGES TO THE CALCULATION OF INTEREST |       | 20       |       |
| 11                                                            |       | FEES                                   |       | 21       |       |
| SECTION 6 ADDITIONAL PAYMENT OBLIGATIONS                      |       | 23                                     |       |
| 12                                                            |       | TAX GROSS-UP AND INDEMNITIES           |       | 23       |       |
| 13                                                            |       | INCREASED COSTS                        |       | 25       |       |
| 14                                                            |       | OTHER INDEMNITIES                      |       | 26       |       |
| 15                                                            |       | MITIGATION BY THE LENDERS              |       | 27       |       |
| 16                                                            |       | COSTS AND EXPENSES                     |       | 28       |       |
| SECTION 7 REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT |       | 29                                     |       |

 

(i)

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| 17                                       |   | REPRESENTATIONS                                   |   | 29 |   |
|------------------------------------------|--------|---------------------------------------------------|--------|----|--------|
| 18                                       |   | INFORMATION UNDERTAKINGS                          |   | 32 |   |
| 19                                       |   | FINANCIAL COVENANTS                               |   | 35 |   |
| 20                                       |   | GENERAL UNDERTAKINGS                              |   | 36 |   |
| 21                                       |   | EVENTS OF DEFAULT                                 |   | 41 |   |
| SECTION 8 CHANGES TO PARTIES             |   | 46                                                |   |
| 22                                       |   | CHANGES TO THE LENDERS                            |   | 46 |   |
| 23                                       |   | CHANGES TO THE BORROWER                           |   | 48 |   |
| SECTION 9 THE FINANCE PARTIES            |   | 49                                                |   |
| 24                                       |   | ROLE OF THE AGENT AND THE MANDATED LEAD ARRANGERS |   | 49 |   |
| 25                                       |   | CONDUCT OF BUSINESS BY THE FINANCE PARTIES        |   | 53 |   |
| 26                                       |   | SHARING AMONG THE FINANCE PARTIES                 |   | 53 |   |
| SECTION 10 ADMINISTRATION                |   | 55                                                |   |
| 27                                       |   | PAYMENT MECHANICS                                 |   | 55 |   |
| 28                                       |   | SET-OFF                                           |   | 57 |   |
| 29                                       |   | NOTICES                                           |   | 57 |   |
| 30                                       |   | CALCULATIONS AND CERTIFICATES                     |   | 58 |   |
| 31                                       |   | PARTIAL INVALIDITY                                |   | 59 |   |
| 32                                       |   | REMEDIES AND WAIVERS                              |   | 59 |   |
| 33                                       |   | AMENDMENTS AND WAIVERS                            |   | 59 |   |
| 34                                       |   | COUNTERPARTS                                      |   | 60 |   |
| SECTION 11 GOVERNING LAW AND ENFORCEMENT |   | 61                                                |   |
| 35                                       |   | GOVERNING LAW                                     |   | 61 |   |
| 36                                       |   | ARBITRATION                                       |   | 61 |   |
| 37                                       |   | JURISDICTION                                      |   | 61 |   |

 

(ii)

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|        |   | SCHEDULE 1 The Original Lenders            |   | 63 |   |
|--------|--------|--------------------------------------------|--------|----|--------|
|   |   | SCHEDULE 2 Conditions precedent            |   | 64 |   |
|   |   | SCHEDULE 3 Utilisation Request             |   | 66 |   |
|   |   | SCHEDULE 4 Selection Notice                |   | 67 |   |
|   |   | SCHEDULE 5 Mandatory Cost formula          |   | 68 |   |
|   |   | SCHEDULE 6 Form of Transfer Certificate    |   | 70 |   |
|   |   | SCHEDULE 7 Form of  Compliance Certificate |   | 72 |   |

 

(iii)

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THISAGREEMENT is dated 21 April 2006 and made between:

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

**(2)****                             ****THE BANK OF TOKYO-MITSUBISHI UFJ LTD, BAYERISCHE LANDESBANK, HSBC BANKPLC,****ING BANK N.V., RAIFFEISENZENTRALBANK OESTERREICH AG, SUMITOMO MITSUI BANKING CORPORATION EUROPE LIMITED**asmandated lead arrangers (the “**Mandated LeadArrangers**”);

**(3)****                             ****THE FINANCIAL INSTITUTIONS** listed in Schedule 1 as lenders (the “**Original Lenders**”); and

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

IT ISAGREED as follows:

**SECTION 1INTERPRETATION**

**1**                                      DEFINITIONS AND INTERPRETATION

**1.1**                            Definitions

In thisAgreement:

“**Additional Cost Rate**” has the meaning givento it in Schedule 5 (*Mandatory Cost**formula*).

“**Affiliate**” means, in relation to anyperson, a Subsidiary of that person or a Holding Company of that person or anyother Subsidiary of that Holding Company.

“**Agency Fee Letter**” means the Fee Letter to be entered intobetween the Borrower and the Agent on the same date as this Facility Agreementin accordance with Clause 11.4.

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

“**Availability Period**” means:

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

(b)                               (subject tothe provisions of the Syndication Side Letter) in relation to Facility 2, theperiod from and including the Signing Date to and including 31 December 2007.

“**Available Commitment**” means, in relation toa Facility, a Lender’s Commitment under that Facility minus:

(a)                                the amountof its participation in any outstanding Loans under that Facility; and

(b)                               in relationto any proposed Utilisation, the amount of its participation in any Loans thatare due to be made under that Facility on or before the proposed UtilisationDate.

“**Available Facility**” means, in relation to aFacility, the aggregate for the time being of each Lender’s AvailableCommitment in relation to that Facility.

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“**Bitel**” means Bitel LLC, a limited liability companyincorporated in Kirghizia.

“**Bitel Litigation**” means any of the claims, proceedings(present or future) and causes of action involving the Borrower and/or any ofits Affiliates (including Bitel) relating to or arising out of the acquisition,reorganisation or ownership of Bitel by the Borrower (whether directly orthrough any of its Affiliates).

“**Break Costs**” means the amount (if any) bywhich:

(a)                                the interest(excluding the Margin) which a Lender should have received for the period fromthe date of receipt of all or any part of its participation in a Loan or UnpaidSum to the last day of the current Interest Period in respect of that Loan orUnpaid Sum, had the principal amount or Unpaid Sum received been paid on thelast day of that Interest Period;

exceeds:

(b)                               the amountwhich that Lender would be able to obtain by placing an amount equal to theprincipal amount or Unpaid Sum received by it on deposit with a leading bank inthe London interbank market for a period starting on the Business Day followingreceipt or recovery and ending on the last day of the current Interest Period.

“**Business Day**” means a day (other than aSaturday or Sunday) on which banks are open for general business in Amsterdam,London, Moscow and New York City.

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

“**Compliance Certificate**” means a certificatesubstantially in the form set out in Schedule 7 (*Form of Compliance Certificate*).

“**Confidentiality Undertaking**” means a confidentialityundertaking substantially in a recommended form of the LMA or in any other formagreed between the Borrower and the Agent.

“**Default**” means an Event of Default or anyevent or circumstance specified in Clause 21 (*Eventsof Default*) which would (with the expiry of a grace period, thegiving of notice, the making of any determination under the Finance Documentsor any combination of any of the foregoing) be an Event of Default.

“**Egypt Licence**” means the third licence (not issued as of thedate of this Agreement) to install, provide and operate a public land mobilenetwork in Egypt.

“**Environment**” means living organismsincluding the ecological systems of which they form part and the followingmedia:

(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).

“**Environmental Law**” means all laws andregulations of any relevant jurisdiction which:

(a)                                have as apurpose or effect the protection of, and/or prevention of harm or damage to,the Environment;

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

(c)                                relate toany 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 

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Environmentor a nuisance to any person or that may make the use or ownership of any affectedland or property more costly or health and safety matters.

“**Environmental Licence**” means anyAuthorisation required at any time under Environmental Law.

“**Event of Default**” means any event orcircumstance specified as such in Clause 21 (*Eventsof Default*).

“**Existing Facility**” means the loan facilitymade available pursuant to a syndicated Facility Agreement dated 26 July 2004,as amended by an Amendment and Transfer Agreement dated 30 September 2004,between the Borrower and, after amendment, *inter alios*,ABN AMRO Bank N.V., HSBC Bank plc, ING Bank N.V., Raiffeisen ZentralbankOesterreich AG, Bank Austria Creditanstalt AG, Commerzbank Aktiengesellschaftand Barclays Capital.

“**Facilities**” means Facility 1 and Facility 2and “**Facility**” means either ofthem.

“**Facility Office**” means the office oroffices notified by a Lender to the Agent in writing on or before the date itbecomes a Lender (or, following that date, by not less than five Business Days’written notice) as the office or offices through which it will perform itsobligations under this Agreement.

“**Facility 1**” means the term loan facilitymade available under this Agreement as described in paragraph (a) ofClause 2.1 (*The Facilities*).

“**Facility 1 Commitment**” means:

(a)                                in relationto an Original Lender, the amount set opposite its name under the heading “Facility1 Commitment” in Schedule 1 (*The OriginalLenders*) and the amount of any other Facility 1 Commitmenttransferred to it under this Agreement; and

(b)                               in relationto any other Lender, the amount of any Facility 1 Commitment transferred to itunder this Agreement,

to theextent not cancelled, reduced or transferred by it under this Agreement.

“**Facility 1 FinalMaturity Date**” means the Facility 1 Repayment Date.

“**Facility 1 Loan**” means a loan made or to bemade under Facility 1 or the principal amount outstanding for the time being ofthat loan.

“**Facility 1 Margin**”means 0.80 per cent. per annum.

“**Facility 1 Repayment Date**” means the datefalling three years and one day after the date of the final Utilisation ofFacility 1.

“**Facility 2**” means the term loan facilitymade available under this Agreement as described in paragraph (b) ofClause 2.1 (*The Facilities*).

“**Facility 2 Commitment**” means:

(a)                                in relationto an Original Lender, the amount set opposite its name under the heading “Facility2 Commitment” in Schedule 1 (*The OriginalLenders*) and the amount of any other Facility 2 Commitmenttransferred to it under this Agreement; and

(b)                               in relationto any other Lender, the amount of any Facility 2 Commitment transferred to itunder this Agreement,

to the extent notcancelled, reduced or transferred by it under this Agreement.

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“**Facility 2 FinalMaturity Date**” means the date falling five years after the SigningDate.

“**Facility 2 Loan**” means a loan made or to bemade under Facility 2 or the principal amount outstanding for the time being ofthat loan.

“**Facility 2 Margin**” means:

(a)                                in respectof the period starting from the Signing Date until the date falling 36 Monthsafter the Signing Date, 1.00 per cent. per annum; and

(b)                               in respectof the period starting on and from the date falling one day after the datefalling 36 Months after the Signing Date until all amounts under this Agreementhave been paid or repaid, 1.15 per cent. per annum.

“**Facility 2 Repayment Date**” means the datefalling 24 Months after the Signing Date, the date falling 27 Months after theSigning Date, the date falling 30 Months after the Signing Date, the datefalling 33 Months after the Signing Date, the date falling 36 Months after theSigning Date, the date falling 39 Months after the Signing Date, the datefalling 42 Months after the Signing Date, the date falling 45 Months after theSigning Date, the date falling 48 Months after the Signing Date, the datefalling 51 Months after the Signing Date, the date falling 54 Months after theSigning Date, the date falling 57 Months after the Signing Date, the datefalling 60 Months after the Signing Date.

“**Fee Letters**” means each of the lettersdated  21 April 2006 between theAgent and the Borrower setting out the fees payable by reference to this Agreement.

“**Final Maturity Date**” means the Facility 1Final Maturity Date or the Facility 2 Final Maturity Date.

“**Finance Document**” means this Agreement, anyFee Letter, the Mandate Letter, the Syndication Side Letter and any otherdocument designated as such by the Agent and the Borrower.

“**Finance Party**” means the Agent, theMandated Lead Arrangers or a Lender.

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

(a)                                moneysborrowed;

(b)                               any amountraised by acceptance under any acceptance credit facility or dematerialisedequivalent;

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

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

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

(f)                                  any amountraised under any other transaction (including any forward sale or purchaseagreement) 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)                               shares whichare expressed to be redeemable at the option of the holder on or prior to theFacility 2 Final Maturity Date (but excluding any accrued dividends);

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(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)                                   the amountof any liability in respect of any guarantee or indemnity for any of the itemsreferred to in paragraphs (a) to (i) above.

“**GAAP**” means generally accepted accounting principles, standards and practices inthe United States of America.

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

“**Holding Company**” means, in relation to aperson, any other person in respect of which it is a Subsidiary.

“**HSBC Facility**” means the loan facility of$100,000,000 made available pursuant to a bilateral facility agreement dated 23January 2006 between HSBC Bank plc and the Borrower.

“**Information Memorandum**” means the documentin the form approved by the Borrower concerning the Group which, at theBorrower’s request and on its behalf, was prepared in relation to thistransaction and distributed by the Mandated Lead Arrangers to selectedfinancial institutions before the Signing Date.

“**Interest Expense**” has the meaning given toit in Clause 19 (*Financial Covenants*).

“**Interest Period**” means, in relation to aLoan, each period determined in accordance with Clause 9 (*Interest Periods*) and, in relation to anUnpaid Sum, each period determined in accordance with Clause 8.3 (*Default interest*).

“**Lender**” means:

(a)                                any OriginalLender; and

(b)                               any bank,financial institution, trust, fund or other entity which has become a Party inaccordance with Clause 22 (*Changes to theLenders*),

whichin each case has not ceased to be a Party in accordance with the terms of thisAgreement.

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

(a)                                theapplicable Screen Rate; or

(b)                               (if noScreen Rate is available for Dollars or the Interest Period of that Loan) thearithmetic 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 of11:00 a.m. on the Quotation Day for the offering of deposits in Dollarsfor a period comparable to the Interest Period for that Loan.

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

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

“**Majority Lenders**” means:

(a)                                if there areno Loans then outstanding, a Lender or Lenders whose Commitments aggregate morethan 662/3% of the Total Commitments (or, if theTotal Commitments have been reduced to zero, aggregated more than 662/3% of the Total Commitments immediatelyprior to the reduction); or

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(b)                               at any othertime, a Lender or Lenders whose participations in the Loans then outstandingaggregate more than 662/3% of all the Loans then outstanding.

“**Mandate Letter**” means the letter agreementdated 24 March 2006 and accepted and agreed to by the Borrower on 27 March 2006between the Mandated Lead Arrangers and the Borrower.

“**Mandatory Cost**” means the percentage rateper annum calculated by the Agent in accordance with Schedule 5 (*Mandatory Cost formula*).

“**Material Adverse Effect**” means a materialadverse effect on or material adverse 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)                               the abilityof the Borrower to perform and comply with its obligations under any FinanceDocument; or

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

providedthat for the purpose of paragraph (a) above any losses incurred by anymember of the Group after the date of this Agreement as a consequence of anadverse determination of any or all of the Bitel Litigation, such losses notexceeding US$330,000,000 or its equivalent in any other currency (includinglegal fees and associated expenses) in aggregate shall be disregarded.

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

(a)                                if thenumerically corresponding day is not a Business Day, that period shall end onthe next Business Day in that calendar month in which that period is to end ifthere is one, or if there is not, on the immediately preceding Business Day;and

(b)                               if there isno numerically corresponding day in the calendar month in which that period isto end, that period shall end on the last Business Day in that calendar month.

Theabove rules will only apply to the last Month of any period.

“**MTF Facility**” means the facility madeavailable to Mobile Telesystems Finance S.A. pursuant to a Facility Agreementdated 16 November 2005 between Mobile Telesystems Finance S.A. and INGBank N.V.

“**OIBDA**” has the meaning given to it inClause 19 (*Financial Covenants*).

“**Original Financial Statements**” means theaudited consolidated financial statements of the Group for the financial yearended 31 December 2005.

“**Participating Member State**” means any memberstate of the European Communities that adopts or has adopted the euro as itslawful currency in accordance with legislation of the European Communityrelating to Economic and Monetary Union.

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

“**Permitted Security**” means:

(a)                                any Securityon any assets of any corporation existing at the time such corporation ismerged 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;

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(b)                               any Securityexisting on any assets prior to the acquisition thereof by the Borrower or anySubsidiary of the Borrower and not created in contemplation of suchacquisition, provided that no such Security shall extend to any other assets;

(c)                                any Securityon any assets securing Financial Indebtedness of the Borrower or FinancialIndebtedness of any Subsidiary of the Borrower incurred or assumed for thepurpose 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)                               any Securityarising by operation of law, including any Security (i) arising in theordinary course of business with respect to amounts not yet delinquent or beingcontested by the Borrower or a Subsidiary of the Borrower in good faith inappropriate proceedings or (ii) for taxes, assessments, government chargesor claims, including without limitation those in favour of Russian governmentalfiscal authorities;

(e)                                any Securityon the assets of any Subsidiary of the Borrower securing intercompany FinancialIndebtedness of such Subsidiary owing to the Borrower or another Subsidiary ofthe Borrower;

(f)                                  any nettingor set-off arrangement entered into by a member of the Group with a bank or anyother financial institution in the normal course of its banking arrangementsfor the purpose of netting or setting off its debit and credit facilities withthat 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 with the business of the Borrower or the business of any Subsidiary ofthe Borrower, including any encumbrance or restriction with respect to anequity interest of any 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)                                   any otherSecurity (excluding any Security described in (a)-(h) above) providedthat, immediately after giving effect to such Security, the aggregate amount ofall secured Financial Indebtedness of the Group does not exceed 10% of theBorrower’s Total Assets.

“**Qualifying Lender**” has the meaning given toit in Clause 12 (*Tax gross-up andindemnities*).

“**Quotation Day**” means, in relation to anyperiod for which an interest rate is to be determined, two Business Days beforethe first day of that period unless market practice differs in the Londoninterbank market, in which case the Quotation Day will be determined by theAgent in accordance with market practice in the London interbank market (and ifquotations for that currency and period 

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wouldnormally be given by leading banks in the London interbank market on more thanone day, the Quotation Day will be the last of those days).

“**RAS**” means generally accepted accountingprinciples, standards and practices in the Russian Federation.

“**Reference Banks**” means in relation to LIBORand Mandatory Cost the principal London offices of the Mandated Lead Arrangers(other than Raiffeisen Zentralbank Oesterreich AG) or such other banks as maybe designated by the Agent as agreed with the Borrower.

“**Relevant Period**” has the meaning given toit in Clause 19 (*Financial Covenants*).

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

“**Repeating Representations**” means each ofthe representations set out in Clauses 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 currency of the Russian Federation forthe time being.

“**RussianInsolvency Law**” means the Federal Law of the Russian Federation No. 127-FZof 26 October 2002 “On Insolvency (Bankruptcy)”.

“**Screen Rate**” means the British BankersAssociation Interest Settlement Rate for Dollars for the relevant period displayedon the appropriate page of the Telerate screen. If the agreed page isreplaced or service ceases to be available, the Agent may specify another page orservice displaying the appropriate rate after consultation with the Borrowerand the Lenders.

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

“**Selection Notice**” means a notice substantially in the formset out in Schedule 4 (*Selection Notice*)given in accordance with Clause 9 (*Interest Periods*).

“**Significant Subsidiary**” means:

(a)                                UMC (unless,pursuant to the UMC Litigation, any or all of the Borrower’s shares in UMC aretransferred to a person that is not a member of the Group, with the result thatUMC ceases to be a member of the Group);

(b)                               anySubsidiary of the Borrower to which (i) the Borrower or UMC sells, leasesor otherwise transfers its GSM 900 or 1800 licences or (ii) any suchlicence is re-issued; and

(c)                                any Subsidiaryof the Borrower (i) whose total assets (or, where such Subsidiary preparesconsolidated accounts, whose total consolidated assets) have a book value (asdetermined by reference to the most recent management accounts of thatSubsidiary prepared in accordance with GAAP) equal to or exceeding 10% of theBorrower’s Total Assets or (ii) whose gross annual revenues (or, wheresuch Subsidiary prepares consolidated accounts, whose gross annual consolidatedrevenues) (as determined by reference to the most recent management accounts ofthat Subsidiary prepared in accordance with GAAP) are equal to or exceed 10% ofthe Borrower’s gross annual consolidated revenues in the year for which theBorrower’s most recent consolidated financial statements were prepared.

“**Signing Date**” means the date of thisAgreement.

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“**Subsidiary**” means an entity from time totime of which a person has direct or indirect control or owns directly orindirectly more than 50% of the share capital or similar right of ownership.

“**Syndication Date**” means (unless otherwiseagreed by the Borrower and the Mandated Lead Arrangers) the day specified bythe Mandated Lead Arrangers as the day on which primary syndication of theFacilities is completed.

“**Syndication Side Letter**” means the letteragreement dated on or about the Signing Date between the Borrower and, *inter alios*, the Mandated Lead Arrangers in relation to thesyndication of the Facilities.

“**Tax**” means any tax, levy, impost, duty orother charge or withholding of a similar nature (including any penalty orinterest payable in connection with any failure to pay or any delay in payingany of the same).

“**Telecommunications Authorisation**”****means anyAuthorisation from any governmental or other regulatory authority necessary inorder for each of the Borrower and its Significant  Subsidiaries to maintain, operate and conductits business as it is being conducted in accordance with TelecommunicationsLaws.

“**Telecommunications Laws**”****means (a) all laws and regulations which relate totelecommunications and/or the business of providing mobile telephone servicesand (b) all rules, guidelines, policies and regulations made thereunder,that are applicable to each of the Borrower and its Significant Subsidiariesand/or the business carried on by it.

“**Telecommunications Licence**” means any Authorisation requiredat any time under Telecommunications Laws.

“**Total Assets**” means the book value of theconsolidated total assets of the Borrower as determined by reference to theBorrower’s most recent annual consolidated balance sheet delivered inaccordance with paragraph (a) of Clause 18.1 (*Financial statements*) or, prior to the first delivery, tothe Original Financial Statements.

“**Total Commitments**” means the aggregate ofthe Total Facility 1 Commitments and the Total Facility 2 Commitments, being$1,330,000,000 at the Signing Date.

“**Total Debt**” has the meaning given to it inClause 19 (*Financial Covenants*).

“**Total Facility 1 Commitments**” means theaggregate of the Facility 1 Commitments, being $630,000,000 at the SigningDate.

“**Total Facility 2 Commitments**” means theaggregate of the Facility 2 Commitments, being $700,000,000 at the SigningDate.

“**Transfer Certificate**” means a certificatesubstantially in the form set out in Schedule 6 (*Form of Transfer Certificate*) or any other form agreedbetween the Agent and the Borrower.

“**Transfer Date**” means, in relation to atransfer, the later of:

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

(b)                               the date onwhich the Agent executes the Transfer Certificate.

“**UMC**” means Closed Joint Stock Company “Ukrainian Mobile Communications” inUkraine.

“**UMC Litigation**” means any of the claims,proceedings (present or future) and causes of action involving the Borrowerand/or any of its Affiliates (including UMC) relating to or arising out of the 

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sale ofUMC to the Borrower or the acquisition, reorganization or ownership of UMC bythe Borrower.

“**Unpaid Sum**” means any sum due and payablebut unpaid by the Borrower under the Finance Documents.

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

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

“**Utilisation Date**” means the date of aUtilisation, being the date on which the relevant Loan is to be made.

“**Utilisation Request**” means a noticesubstantially in the form set out in Schedule 3 (*Utilisation**Request*).

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

**1.2**                            Construction

(a)                               Unless acontrary 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;

(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 agreementor instrument is a reference to that Finance Document or other agreement orinstrument 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 ofa state or any association, trust or partnership (whether or not havingseparate legal personality) or two or more of the foregoing;

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

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

(ix)                              a time of dayis a reference to London time.

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

(c)                               Unless acontrary 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)                              A Default(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.

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**1.3**                            Third Party Rights

Aperson who is not a Party has no right under the Contracts (Rights of ThirdParties) Act 1999 to enforce or to enjoy the benefit of any term of thisAgreement.

 

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**SECTION 2**TheFacility

**2**                                     THE FACILITIES

**2.1**                         The Facilities

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

(a)                               a term loan facility in Dollars to bedesignated “**Facility 1**” in anaggregate amount equal to the Total Facility 1 Commitments; and 

(b)                               a term loan facility in Dollars to bedesignated “**Facility 2**” in anaggregate amount equal to the Total Facility 2 Commitments.

**2.2**                               FinanceParties’ rights and obligations

(a)                              The obligations of each Finance Party under theFinance Documents are several. Failure by a Finance Party to perform itsobligations under the Finance Documents does not affect the obligations of anyother Party under the Finance Documents. No Finance Party is responsible forthe obligations of any other Finance Party under the Finance Documents.

(b)                              The rights of each Finance Party under or inconnection with the Finance Documents are separate and independent rights andany debt arising under the Finance Documents to a Finance Party from theBorrower shall be a separate and independent debt.

(c)                              A Finance Party may, except as otherwise statedin the Finance Documents, separately enforce its rights under the FinanceDocuments.

**3**                                     PURPOSE

**3.1**                         Purpose

(a)                              The Borrower shall apply all amounts borrowedby it under the Facilities towards its general corporate purposes, includingmaking acquisitions and repaying or prepaying the indebtedness as furtherdescribed in paragraph (b) of this Clause.

(b)                              The Borrower shall apply amounts borrowed by itunder the Facilities to:

(i)                                   prepay $60,000,000 under the HSBC Facility;

(ii)                                repay all amounts outstanding under theExisting Facility; and

(iii)                             enable MOBILE TELESYSTEMS FINANCE S.A. to repayall amounts outstanding under the MTF Facility,

bythe dates set out in Schedule 2 (*Conditions precedent*).

**3.2**                         Monitoring

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

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**4**                                     CONDITIONS OF UTILISATION

**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 paragraphs 1 to 4 of Schedule 2 (*Conditions precedent*) in form andsubstance satisfactory to the Agent. The Agent shall notify the Borrower andthe Lenders promptly (within one Business Day) upon being so satisfied.

**4.2**                         Further conditions precedent

(a)                               The Lenders will only be obliged to comply withClause 5.4 (*Lenders’ participation*)if on the date of the Utilisation Request and on the proposed Utilisation Date:

(i)                                  no Default is continuing or would result fromthe proposed Loan; and

(ii)                               the Repeating Representations to be made by theBorrower are true in all material respects.

(b)                               The Borrower may only deliver a UtilisationRequest for Utilisation of Facility 2 in accordance with the terms of theSyndication Side Letter.  The Agent shallnotify the Borrower and the Lenders promptly (within one Business Day) that theconditions precedent required under paragraph 5 of Schedule 2 (*Other documents and evidence prior to the first Utilisation request forUtilisation of Facility 2*) have been satisfied in accordance withthe Syndication Side Letter.

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**SECTION 3**UTILISATION

**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 proposed UtilisationDate (or, in relation to the first Utilisation Request, not later than 10:00a.m. on the day falling 2 Business Days before the proposed Utilisation Date).

**5.2**                         Completion of a Utilisation Request

(a)                              Each Utilisation Request is irrevocable andwill not be regarded as having been duly completed unless:

(i)                                   it identifies the Facility to be utilised;

(ii)                                the proposed Utilisation Date is a Business Daywithin the Availability Period applicable to that Facility;

(iii)                             the currency and amount of the Utilisationcomply with Clause 5.3 (*Currency and amount*);and

(iv)                              it specifies the account and bank to which theproceeds of the Utilisation are to be credited.

(b)                              Only one Loan may be requested in eachUtilisation Request.

**5.3**                         Currency and amount

(a)                              The currency specified in a Utilisation Requestmust be Dollars.

(b)                              The amount of the proposed Loan must be:

(i)                                   a minimum of $50,000,000 or, if less, theAvailable Facility; or

(ii)                                in any event such that it is less than or equalto the Available Facility.

**5.4**                         Lenders’ participation

(a)                              If the conditions set out in this Agreementhave been met, each Lender shall make its participation in each Loan availableby the Utilisation Date through its Facility Office.

(b)                              The amount of each Lender's participation ineach Loan will be equal to the proportion borne by its Available Commitment tothe Available Facility immediately prior to making the Loan.

(c)                              The Agent shall notify each Lender of theamount of each Loan and the amount of its participation in that Loan not laterthan 3:00 p.m. on the day falling 3 Business Days before the relevantUtilisation Date (or, in relation to the first Loan, not later than 11:00 a.m.on the day falling 2 Business Days before the first Utilisation Date).

(d)                              The obligation of the Lenders to make theFacilities available to the Borrower under this Agreement is subject to theterms of the Syndication Side Letter.

 

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**SECTION 4**REPAYMENT, PREPAYMENT AND CANCELLATION

**6**                                     REPAYMENT

**6.1**                         Repayment of Facility 1 Loans

(a)                              The Borrower shall repay the Facility 1 Loansin full on the Facility 1 Repayment Date. 

(b)                              The Borrower may not reborrow any part of Facility1 which is repaid.

**6.2**                         Repayment of Facility 2 Loans

(a)                              The Borrower shall repay the Facility 2 Loansin 13 equal instalments, by paying on each Facility 2 Repayment Date an amountequal to one thirteenth of the amount of the Facility 2 Loans outstanding atthe close of business on the last day of the Availability Period for Facility2. 

(b)                              The Borrower may not reborrow any part ofFacility 2 which is repaid.

**7**                                     PREPAYMENT AND CANCELLATION

**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)                               that Lender shall promptly notify the Agentupon becoming aware of that event;

(b)                               upon the Agent notifying the Borrower, theCommitment of that Lender will be immediately cancelled; and 

(c)                               the Borrower shall repay that Lender'sparticipation in the Loans on the later of the last day of the Interest Periodfor each Loan occurring, and the date falling 20 days after the Agent hasnotified the Borrower (but in any event no longer than any grace periodpermitted by law) or, if earlier, the date specified by the Lender in thenotice delivered to the Agent (being no earlier than the last day of anyapplicable grace 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 $25,000,000) 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)                              The Borrower may, if it gives the Agent notless than 10 Business Days’ (or such shorter period as the Majority Lenders mayagree) prior written notice, prepay the whole or any part of any Loan (but, ifin part, being an amount that reduces the Loan by a minimum amount of$25,000,000).

(b)                              A Loan in respect of a Facility may only beprepaid after the last day of the Availability Period for that Facility (or, ifearlier, the day on which the relevant Available Facility is zero). 

(c)                              Each prepayment shall be applied insatisfaction of the Borrower’s obligations under Clause 6 (*Repayment*) in the inverse order ofmaturity of the Loans (or, at the option of the Borrower, *pro rata* to the remaining principalinstalments thereof).

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**7.4**                         Mandatory Prepayment – Change ofControl

(a)                              In this Clause 7.4, “**Change of Control**” means any of the following events orcircumstances: any person or group of persons acting in concert or under anexpress or implied agreement or understanding, directly or through one or moreintermediaries, shall (x) acquire ultimate beneficial or legal ownership of, orcontrol over, more than 50% of the issued shares of the Borrower; (y) acquireownership of or control over more than 50% of the voting interests in the sharecapital of the Borrower; or (z) obtain the power (whether or not exercised) toelect not less than half of the directors of the Borrower; (provided, however,that any acquisition by Sistema JSFC or any of its Subsidiaries that results inthe 50% threshold in paragraphs (x) and (y) above being exceeded, or in thepower referred to in paragraph (z) above being obtained, will not be a Changeof Control). 

(b)                              If there is a Change of Control:

(i)                                   the Borrower shall promptly notify each Lender(through the Agent) upon becoming aware of that event;

(ii)                                the Borrower may not make a Utilisation; and

(iii)                             if any Lender (in its sole discretion) sorequires, it may, within 5 Business Days of its receipt of the Borrower’snotification under sub-clause (i) above, direct the Agent to send a notice tothe Borrower requiring the Borrower to repay that Lender’s participations inthe Loans (together with accrued interest) in full on the day (the “**Early Repayment Date**”) falling 30 daysafter the date of the Borrower’s notification under sub-clause (i) above.Before the Early Repayment Date, the Lender and the Borrower shall consult witheach other for a period of 5 Business Days with respect to the transfer of thatLender’s rights and obligations under this Agreement to another reputableinternational bank or financial institution nominated by the Borrower (but whichis not an Affiliate of the Borrower) in accordance with Clause 22.5 (*Procedure for transfer*). If no suchtransfer has been effected on or before the Early Repayment Date, then (x) theBorrower shall repay that Lender’s participations in the Loans (together withaccrued interest) in full on the Early Repayment Date and (y) the Commitmentsof that Lender shall be reduced to zero on that date.

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

If:

(a)                               any sum payable to any Lender by the Borroweris required to be increased under paragraph (c) of Clause 12.2 (*Tax gross-up*); or

(b)                               any Lender claims indemnification from theBorrower under Clause 12.3 (*Tax indemnity*)or Clause 13 (*Increased Costs*),

the Borrower may, whilst thecircumstance giving rise to the requirement or indemnification continues, givethe Agent notice of cancellation of the Commitments of that Lender and itsintention to procure the repayment of that Lender's participation in the Loanson the last day of the Interest Period ending after the date of such notice(or, if earlier, on such other date as specified by the Borrower in thatnotice) (the “**Cancellation Date**”).Before the Cancellation Date, the Lender and the Borrower shall consult witheach other for a period of 5 Business Days with respect to the transfer of thatLender’s rights and obligations under this Agreement to another reputableinternational bank or financial institution nominated by the Borrower (butwhich is not an Affiliate of the Borrower) in accordance with Clause 22.5 (*Procedure for transfer*). If no suchtransfer has been effected on or before the Cancellation Date, then (x) theBorrower shall repay

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that Lender’s participations in theLoans (together with accrued interest) in full on the Cancellation Date and (y)the Commitments of that Lender shall be reduced to zero on that date.

**7.6**                         Replacementof a Lender

(a)                              If at any time a Lenderbecomes a Non Consenting Lender then the Borrower may, on ten Business Days’prior written notice to the Agent and that Non Consenting Lender, replace thatNon Consenting Lender by causing it to (and that Non Consenting Lender shall)transfer pursuant to this Clause 7.6 all of its rights and obligations underthis agreement to a Lender or other person being a reputable bank or financialinstitution active in the international syndicated loan market selected by theBorrower and acceptable to the Agent (acting reasonably) for a purchase priceequal to the outstanding principal amount of such Non Consenting Lender's participationin the outstanding Loans and all accrued interest and fees and other amountspayable under this Agreement.

(b)                              The Borrower shall have no right to replacea Mandated Lead Arranger or the Agent and none of the foregoing nor any Lendershall have any obligation to the Borrower to find a replacement Lender.  The Borrower shall not make any payment orassume any obligation (whether by way of fees, expenses or otherwise) to or onbehalf of the replacement Lender as an inducement for the replacement Lender tobecome a Lender.

(c)                              No Lender replaced under this Clause 7.6 maybe required to pay or surrender to that replacement Lender or other entity anyfees received by it.

(d)                              For the purposes of this Clause 7.6 a **“Non Consenting Lender”** is a Lender who does not agree to aconsent or amendment where:

(i)                                   the Borrower or theAgent has requested the Lenders to consent to a departure from or waiver of anyprovision of the Finance Documents or to agree to any amendment thereto;

(ii)                                the consent or amendment in questionrequires the agreement of all Lenders;

(iii)                             a period of not less than 14 days haselapsed from the date the consent or amendment was requested;

(iv)                              Majority Lenders have agreed to such consentor amendment; and 

(v)                                 the Borrower hasnotified the Lender (through the Agent) it will treat it as a Non ConsentingLender.

**7.7**                         Restrictions

(a)                              Any notice of cancellation or prepayment givenby any Party under this Clause 7 shall be irrevocable and, unless a contraryindication appears in this Agreement, shall specify the date or dates uponwhich the relevant cancellation or prepayment is to be made and the amount ofthat cancellation or prepayment.

(b)                              Any prepayment under this Agreement shall bemade together with accrued interest on the amount prepaid and, subject to anyBreak Costs, without premium or penalty.

(c)                              The Borrower may not reborrow any part of aFacility which is prepaid.

(d)                              The Borrower shall not repay or prepay all orany part of the Loans or cancel all or any part of the Commitments except atthe times and in the manner expressly provided for in this Agreement.

(e)                              No amount of the Total Commitments cancelledunder this Agreement may be subsequently reinstated. 

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(f)                                  If the Agent receives a notice under thisClause 7 it shall promptly forward a copy of that notice to either the Borroweror the affected Lender, as appropriate. 

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**SECTION 5**COSTS 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)                               Mandatory Cost, 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)                              If the Borrower fails to pay any amount payableby it under a Finance Document on its due date, interest shall accrue on theoverdue amount from the due date up to the date of actual payment (both beforeand after judgment) at a rate which, subject to paragraph (b) below, is the sumof 2 per cent. and the rate which would have been payable if the overdue amounthad, during the period of non-payment, constituted a Loan in the currency ofthe overdue amount for successive Interest Periods, each of a duration selectedby the Agent (acting reasonably). Any interest accruing under this Clause 8.3shall be immediately payable by the Borrower on demand by the Agent. 

(b)                              If any overdue amount consists of all or partof a Loan which became due on a day which was not the last day of an InterestPeriod relating to that Loan: 

(i)                                   the first Interest Period for that overdueamount shall have a duration equal to the unexpired portion of the currentInterest Period relating to that Loan; and 

(ii)                                the rate of interest applying to the overdueamount during that first Interest Period shall be the sum of 2 per cent. andthe rate which would have applied if the overdue amount had not become due.

(c)                              Default interest (if unpaid) arising on anoverdue amount will be compounded with the overdue amount at the end of eachInterest Period applicable to that overdue amount but will remain immediatelydue 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. 

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**9**                                     INTEREST PERIODS

**9.1**                         Duration of Interest Periods

(a)                              Prior to the SyndicationDate each Interest Period shall have a duration of one Month (or such otherduration as is necessary to ensure that such Interest Period shall end on theSyndication Date).

(b)                              The first Interest Period for the first Loanmade under a Facility shall begin on the Utilisation Date for that Loan and endon the last day of the Interest Period applicable to that first Loan.  At the end of the first Interest Period foreach Loan under a Facility, such Loan shall be consolidated with all otherLoans (if any) then outstanding under that Facility such that all Loans underthat Facility shall then be treated as a single Loan.

(c)                              Subject to Clause 9.1(a)and Clause 9.1(b), the Borrower may select an Interest Period for the Loan inthe Utilisation Request or (if the Loan has already been borrowed) in aSelection Notice.  The Borrower may select an Interest Period with a durationof one, two, three or six Months or any other period agreedbetween the Borrower and the Agent (acting on the instructions of all theLenders).

(d)                              Each Selection Notice forthe Loan is irrevocable and must be delivered to the Agent by the Borrower notlater than 11:00 a.m. one Business Day before the Quotation Day.

(e)                              If the Borrower fails todeliver a Selection Notice to the Agent in accordance with paragraph (c) above,the relevant Interest Period will be six Months.

(f)                                  AnInterest Period shall not extend beyond a Repayment Date or Final Maturity Datefor the relevant Facility, andif an Interest Period would otherwise overrun a Repayment Date or FinalMaturity Date for the relevant Facility, such Interest Period shall beshortened so that it ends on that Repayment Date or Final Maturity Date.

(g)                              EachInterest Period shall start on the Utilisation Date or (if the Loan is alreadymade) on the last day of its preceding Interest Period.

**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 the precedingBusiness Day (if there is not).

**10**                             CHANGES TO THE CALCULATION 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 applicable LIBORshall be determined on the basis of the quotations of the remaining ReferenceBanks.

**10.2**                 Market disruption

(a)                              If a Market Disruption Event occurs in relationto a Loan for any Interest Period, then the rate of interest on each Lender'sshare of that Loan for the Interest Period shall be the rate per annum which isthe sum of:

(i)                                   the Margin;

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(ii)                                the rate notified to the Agent by that Lenderas soon as practicable and in any event before interest is due to be paid inrespect of that Interest Period, to be that which expresses as a percentagerate per annum the cost to that Lender of funding its participation in thatLoan from whatever source it may reasonably select; and

(iii)                             the Mandatory Cost, if any, applicable to thatLender's participation in the Loan.

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

(i)                                   at or about noon on the Quotation Day for therelevant Interest Period the Screen Rate is not available and none or only oneof the Reference Banks supplies a rate to the Agent to determine LIBOR forDollars for the relevant Interest Period; or

(ii)                                before close of business in London on theQuotation Day for the relevant Interest Period, the Agent receivesnotifications from a Lender or Lenders (whose participations in a Loan exceed35 per cent. of that Loan) that the cost to it of obtaining matching depositsin the London interbank market would be in excess of LIBOR.

**10.3**                 Alternative basis of interest orfunding

(a)                              If a Market Disruption Event occurs and theAgent or the Borrower so requires, the Agent and the Borrower shall enter intonegotiations (for a period of not more than 30 days) with a view to agreeing asubstitute basis for determining the rate of interest.

(b)                              Any alternative basis agreed pursuant toparagraph (a) above shall, with the prior consent of all the Lenders and theBorrower, be binding on all Parties.

**10.4**                 Break Costs

(a)                              The Borrower shall, within three Business Daysof demand by a Finance Party, pay to that Finance Party its Break Costsattributable to all or any part of a Loan or Unpaid Sum being paid by theBorrower on a day other than the last day of an Interest Period for that Loanor Unpaid Sum.

(b)                              Each Lender shall, as soon as reasonablypracticable after a demand by the Agent, provide a certificate confirming theamount of its Break Costs for any Interest Period in which they accrue.

**11**                              FEES

**11.1**                  Commitment fee

(a)                              The Borrower shall pay to the Agent (for theaccount of each Lender) a commitment fee in respect of Facility 2, calculatedon a daily basis, at the rate of 0.40 per cent. per annum of the undrawn,uncancelled Total Facility 2 Commitments.

(b)                              The commitment fee will accrue from 1 June2006, is payable in arrears on the last day of each successive period of threeMonths, on the last day of the Availability Period for Facility 2 and, ifcancelled in full, on the cancelled amount of the relevant Lender's Facility 2Commitment at the time the cancellation is effective.

**11.2**                  Arrangement and documentation fee

The Borrower shall pay to the Agentan arrangement and documentation fee in the amount and at the times agreed in aFee Letter.

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**11.3**                  Underwriting fee

The Borrower shall pay to the Agentfor the account of the Mandated Lead Arrangers an underwriting fee in theamount and at the times agreed in a Fee Letter.

**11.4**                  Agency fee

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

 

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**SECTION 6ADDITIONAL PAYMENT OBLIGATIONS**

**12**                               TAX GROSS-UP AND INDEMNITIES

**12.1**                     Definitions

(a)                               In thisAgreement:

“**Protected Party**” means a Finance Partywhich is or will be subject to any liability, or required to make any payment,for or on account of Tax in relation to a sum received or receivable (or anysum deemed for the purposes of Tax to be received or receivable) under aFinance Document.

“**Qualifying Lender**” means a Lender which issituated for tax purposes in the Russian Federation or in a Tax TreatyJurisdiction.

“**Tax Credit**” means a credit against, reliefor remission for, or repayment of any Tax.

“**Tax Deduction**” means a deduction orwithholding for or on account of Tax from a payment under a Finance Document.

“**Tax Payment**” means an increased paymentmade by the Borrower to a Finance Party under Clause 12.2 (*Tax gross-up*) or a payment underClause 12.3 (*Tax indemnity*).

“**Tax Treaty Jurisdiction**” means ajurisdiction which has in force a double tax treaty with the Russian Federation(or with the Union of Soviet Socialist Republics to which the RussianFederation has succeeded) which provides for full exemption from Russianwithholding tax on interest derived from a source within the Russian Federationpayable to a resident of such jurisdiction.

(b)                              Unless acontrary 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**                     Taxgross-up

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

(b)                              The Borrowershall promptly upon becoming aware that it must make a Tax Deduction (or thatthere is any change in the rate or the basis of a Tax Deduction) notify the Agentaccordingly. Similarly, a Lender shall notify the Agent on becoming so aware inrespect of a payment payable to that Lender. If the Agent receives suchnotification from the Borrower or a Lender, it shall respectively notify theLender and the Borrower.

(c)                               Subject toparagraph (d) below, if a Tax Deduction is required by law to be made bythe 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)                              The Borroweris not required to make an increased payment to a Lender under paragraph (c) aboveif, on the date on which the payment falls due, the Borrower could have madesuch a payment to that Lender without a Tax Deduction if that Lender was aQualifying Lender, but on that date that Lender is not, or has ceased to be, aQualifying Lender (other than as a result of any change after the date itbecame a Lender under this Agreement in (or in the interpretation,administration, or application of) any law or treaty, or any published practiceor concession of any relevant taxing authority).

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(e)                               If theBorrower is required to make a Tax Deduction, it shall make that Tax Deductionand any payment required in connection with that Tax Deduction within the timeallowed and in the minimum amount required by law.

(f)                                 Within 30days 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**                     Taxindemnity

(a)                               The Borrowershall (within three Business Days of demand by the Agent) pay to a ProtectedParty an amount equal to the loss, liability or cost which that Protected Partydetermines has been suffered for or on account of Tax by that Protected Partyin respect of a Finance Document.

(b)                              Paragraph (a) aboveshall not apply:

(i)                                   with respectto any Tax assessed on a Finance Party:

(A)                           under the law of the jurisdiction inwhich that Finance Party is incorporated or, if different, the jurisdiction (orjurisdictions) in which that Finance Party is treated as resident for taxpurposes; or

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

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

(ii)                                to theextent a loss, liability or cost:

(A)                           is compensated for by an increasedpayment under Clause 12.2 (*Tax gross-up*);or

(B)                             would havebeen 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)                               A ProtectedParty 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)                              A ProtectedParty shall, on receiving a payment from the Borrower under thisClause 12.3, notify the Agent.

**12.4**                     Tax Credit

If theBorrower makes a Tax Payment and the relevant Finance Party determines that:

(a)                                a Tax Creditis attributable to that Tax Payment; and

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

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

**12.5**                     Stamptaxes

TheBorrower shall pay and, within three Business Days of demand, indemnify eachFinance Party against any cost, loss or liability that Finance Party incurs inrelation to all stamp duty, registration and other similar Taxes payable inrespect of any Finance Document.

**12.6**                     Valueadded 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)                              Where aFinance Document requires any Party to reimburse a Finance Party for any costsor 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)                               At least 10Business Days prior to the date of the first scheduled payment of interestunder this Agreement, and within 20 Business Days from the beginning of eachcalendar year falling after the Signing Date, each Qualifying Lender shallprovide to the Borrower a document issued by the relevant government authorityin its jurisdiction of residence confirming that it is a resident of thatjurisdiction. That document shall be apostilled by each Qualifying Lender ifrequested by the Borrower (pursuant to a requirement of the Russian taxauthorities). The Borrower shall pay to each Qualifying Lender an amount equalto the costs that the Qualifying Lender has incurred in apostilling any suchdocument.

(b)                              At therequest 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**                     Increasedcosts

(a)                               Subject toClause 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 its Holding Company 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)                              In thisAgreement “**Increased Costs**” means:

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(i)                                   a reductionin the rate of return from the Facility or on a Finance Party’s (or itsAffiliate’s) overall capital;

(ii)                                anadditional or increased cost; or

(iii)                             a reductionof any amount due and payable under any Finance Document,

whichis incurred or suffered by a Finance Party or its Holding Company to the extentthat it is attributable to that Finance Party having entered into itsCommitment or funding or performing its obligations under any Finance Document.

**13.2**                     Increasedcost claims

(a)                               A FinanceParty 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)                              Each FinanceParty shall, as soon as practicable after a demand by the Agent, provide acertificate confirming the amount of its Increased Costs.

**13.3**                     Exceptions

(a)                               Clause 13.1(*Increased costs*) does not applyto 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)                            attributable to the wilful breach by therelevant Finance Party or its Affiliates of any law or regulation.

(b)                              In thisClause 13.3, a reference to a “**Tax Deduction**”has the same meaning given to the term in Clause 12.1 (*Definitions*).

**14**                               OTHER INDEMNITIES

**14.1**                     Currencyindemnity

(a)                               If any sumdue 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)                                   making orfiling a claim or proof against the Borrower;

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

theBorrower shall as an independent obligation, within three Business Days ofdemand, indemnify each Finance Party to whom that Sum is due against any cost,loss or liability arising out of or as a result of the conversion including anydiscrepancy between (A) the rate of exchange used to convert that Sum fromthe First Currency into the Second Currency and (B) the rate or rates ofexchange available to that person at the time of its receipt of that Sum.

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(b)                              The Borrowerwaives any right it may have in any jurisdiction to pay any amount under theFinance Documents in a currency or currency unit other than that in which it isexpressed to be payable.

**14.2**                     Otherindemnities

TheBorrower shall, within three Business Days of demand, indemnify each FinanceParty against any cost, loss or liability incurred by that Finance Party as aresult of:

(a)                                theoccurrence of any Event of Default;

(b)                               a failure bythe Borrower to pay any amount due under a Finance Document on its due date,including without limitation, any cost, loss or liability arising as a resultof Clause 26 (*Sharing among the FinanceParties*);

(c)                                funding, or makingarrangements to fund, its participation in a Loan requested by the Borrower ina Utilisation Request but not made by reason of the operation of any one ormore of the provisions of this Agreement (other than by reason of default ornegligence by that Finance Party alone); or

(d)                               a Loan (orpart of a Loan) not being prepaid in accordance with a notice of prepaymentgiven by the Borrower.

**14.3**                     Indemnityto the Agent

TheBorrower shall promptly indemnify the Agent against any cost, loss or liabilityincurred by the Agent (acting reasonably) as a result of:

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

(b)                               acting orrelying on any notice, request or instruction which it reasonably believes tobe genuine, correct and appropriately authorised.

**15**                               MITIGATION BY THE LENDERS

**15.1**                     Mitigation

(a)                               Each FinanceParty shall, in consultation with the Borrower, take all reasonable steps tomitigate any circumstances which arise and which would result in any amountbecoming payable under or pursuant to, or cancelled pursuant to, any of Clause7.1 (*Illegality*), Clause 12 (*Tax gross-up and indemnities*) or Clause13.1 (*Increased costs*) including(but not limited to) transferring its rights and obligations under the FinanceDocuments to another Affiliate or Facility Office.

(b)                              Paragraph (a) abovedoes not in any way limit the obligations of the Borrower under the FinanceDocuments.

**15.2**                     Limitationof liability

(a)                               The Borrowershall indemnify each Finance Party for all costs and expenses reasonablyincurred by that Finance Party as a result of steps taken by it under Clause15.1 (*Mitigation*).

(b)                              A FinanceParty 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.

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**16**                               COSTS AND EXPENSES

**16.1**                     Transactionexpenses

TheBorrower shall promptly on demand pay the Agent and the Mandated Lead Arrangersthe amount of all reasonable out-of-pocket costs and legal expenses (subject tothe terms of the Mandate Letter) incurred by any of them in connection with thenegotiation, preparation and execution of:

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

(b)                               any otherFinance Documents executed after the date of this Agreement.

**16.2**                     Amendmentcosts

If (a) theBorrower requests an amendment, waiver or consent or (b) an amendment isrequired pursuant to Clause 27.9 (*Change ofcurrency*), the Borrower shall, within three Business Days of demand,reimburse the Agent for the amount of all costs and expenses (including legalfees) reasonably incurred by the Agent in responding to, evaluating,negotiating or complying with that request or requirement.

**16.3**                     Enforcementcosts

TheBorrower shall, within three Business Days of demand, pay to each Finance Partythe amount of all costs and expenses (including legal fees) incurred by thatFinance Party in connection with the enforcement of, or the preservation of anyrights under, any Finance Document.

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

**17**                               REPRESENTATIONS

TheBorrower makes the representations and warranties set out in this Clause 17 toeach Finance Party on the date of this Agreement.

**17.1**                     Status

(a)                               It is anopen joint stock company, duly established, registered and validly existingunder the laws of the Russian Federation.

(b)                              It and eachof its Significant Subsidiaries has the power to own its assets and carry onits business as it is being conducted.

**17.2**                     Bindingobligations

Theobligations expressed to be assumed by it in each Finance Document are legal,valid, binding and enforceable obligations, subject to insolvency and otherlaws affecting creditors’ rights generally and principles of equity.

**17.3**                     Non-conflictwith other obligations

Theentry into and performance by it of, and the transactions contemplated by, theFinance Documents do not and will not conflict with:

(a)                                any law orregulation applicable to it;

(b)                               its or anyof 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**                     Powerand authority

It hasthe power to enter into, perform and deliver, and has taken all necessaryaction to authorise its entry into, performance and delivery of, the FinanceDocuments and the transactions contemplated by those Finance Documents.

**17.5**                     Validityand admissibility in evidence

AllAuthorisations required:

(a)                                to enable itlawfully to enter into, exercise its rights and comply with its obligations inthe Finance Documents;

(b)                               for it andits Significant Subsidiaries to carry on its and their business; and

(c)                                to make theFinance Documents admissible in evidence in the general jurisdiction courts orcommercial courts (*arbitrazhniye sudi*)of the Russian Federation in an original action or action to enforce a foreignarbitral award, provided that authenticated and notarised Russian texts aremade available to such courts at that time and any other procedures andformalities regarding presentation of documents to a Russian court are compliedwith,

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havebeen obtained or effected and are in full force and effect (except, in relationto paragraph (b) above, where the failure to obtain such Authorisations(excluding any Telecommunications Authorisations) is not reasonably likely tohave a Material Adverse Effect).

**17.6**                     Governinglaw and enforcement

(a)                               The choiceof English law as the governing law of the Finance Documents will be recognisedand 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**                     Nobankruptcy proceedings

Neitherthe Borrower nor any of its Significant Subsidiaries has taken any corporateaction nor have any other steps been taken or legal proceedings been startedor, to the best of its knowledge and belief (after due inquiry), threatenedagainst it or any of its Significant Subsidiaries for (a) its liquidationor bankruptcy or the appointment of a liquidation commission (*likvidatsionnaya komissiya*) or a similarofficer of it or any of its Significant Subsidiaries; (b) the institutionof supervision (*nablyudeniye*), financialrehabilitation (*finansovoe ozdorovlenie*),external management (*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**                     Deductionof Tax

It isnot required under the law of the Russian Federation to make any deduction foror on account of Tax from any payment it may make under any Finance Document toa Qualifying Lender provided that it has received the documentation specifiedin paragraph (a) of Clause 12.7 (*Tax forms*).

**17.9**                     Nofiling or stamp taxes

Underthe law of the Russian Federation it is not necessary that the FinanceDocuments be filed, recorded or enrolled with any court or other authority inthe Russian Federation or that any stamp, registration or similar tax be paidon or in relation to the Finance Documents or the transactions contemplated bythe Finance Documents, except for court registration fees in connection withany enforcement proceedings in such court.

**17.10**              Paymentof Taxes

Neitherit nor any of its Significant Subsidiaries has overdue tax liabilities, otherthan tax liabilities (a) whose amount, applicability or validity is beingcontested in good faith by appropriate proceedings and for which adequatereserves or other appropriate provision has been made or (b) whose amount,together with all such other unpaid or undischarged taxes, does not inaggregate exceed $25,000,000 (or its equivalent in any other currency orcurrencies).

**17.11**               Nodefault

(a)                               No Defaultor Event of Default is continuing or might reasonably be expected to resultfrom the making of any Utilisation.

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(b)                              No event orcircumstance is outstanding which constitutes a default under any otheragreement or instrument which is binding on it or any of its Subsidiaries or towhich its (or any of its Subsidiaries’) assets are subject which is reasonablylikely to have a Material Adverse Effect.

**17.12**              Nomisleading information

(a)                               Any factualinformation 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)                               Nothing hasoccurred or been omitted from the Information Memorandum and no information hasbeen given or withheld that results in the information contained in the InformationMemorandum being untrue or misleading in any material respect.

**17.13**              Financialstatements

(a)                               Its OriginalFinancial Statements were prepared in accordance with GAAP consistentlyapplied.

(b)                              Its OriginalFinancial Statements fairly represent its, and its consolidated, financialcondition and operations as at the end of and for the relevant financial year.

(c)                               There hasbeen no material adverse change in its business or financial condition (or thebusiness or consolidated financial condition of the Group) since the date ofits unaudited consolidated financial statements for the financial year ended 31December 2005.

(d)                              There willbe no material difference between the unaudited consolidated financialstatements of the Group for the financial year ended 31 December 2005 andthe Original Financial Statements.

**17.14**              *Pari passu* ranking

Itspayment obligations under the Finance Documents rank at least *pari passu* with the claims of all itsother unsecured and unsubordinated creditors, except for obligations mandatorilypreferred by law applying to companies generally.

**17.15**              Noproceedings pending or threatened

Otherthan the UMC Litigation, no litigation, arbitration or administrativeproceedings of or before any court, arbitral body or agency (including but notlimited to, investigative proceedings) have, to the best of its knowledge andbelief (after due inquiry), been started or threatened against it or any of itsSignificant Subsidiaries which, if adversely determined would be reasonablylikely to have a Material Adverse Effect.

**17.16**              Environmentallaws and licences

Exceptas disclosed in writing to the Agent before the date hereof, it and each of itsSignificant Subsidiaries has:

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

(b)                               obtained allEnvironmental Licences required in connection with its business; and

(c)                                compliedwith the terms of those Environmental Licences,

in eachcase where failure to do so would be reasonably likely to have a MaterialAdverse Effect.

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**17.17**              Telecommunicationslaws and licences

(a)                               Each of theBorrower and its Significant Subsidiaries has:

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

(ii)                                obtained allmaterial Telecommunications Authorisations necessary to conduct its business;and

(iii)                             complied inall material respects with the terms of those Telecommunication Authorisations,

in eachcase other than where failure to do so would not reasonably be expected to havea Material Adverse Effect.

(b)                              There has beenno act, omission or event which might reasonably be expected to give rise tothe material amendment, revocation, suspension, cancellation, withdrawal ortermination of any provision of any Telecommunications Authorisation. To thebest of its knowledge and belief (after due inquiry), no TelecommunicationsAuthorisation is the subject of any pending or threatened proceedings which, ifadversely determined, would reasonably be expected to have a Material AdverseEffect.

**17.18**              Compliancewith laws

Each ofthe Borrower and its Significant Subsidiaries is conducting its business andoperations in compliance with all laws and regulations and all directives ofany government agency having legal force applicable or relevant to it,excluding any such non-compliance which would not reasonably be expected tohave a Material Adverse 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)                              In anyproceedings 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

TheRepeating Representations are deemed to be made by the Borrower by reference tothe facts and circumstances then existing on the date of each UtilisationRequest and the first day of each Interest Period (provided that whenever therepresentation in paragraph (c) of Clause 17.3 is deemed to be made on adate other than the Signing Date or a Utilisation Date, the statement “exceptwhere the same would not be reasonably likely to have a Material Adverse Effect”shall qualify the representation in said paragraph (c)).

**18**                               INFORMATION UNDERTAKINGS

Theundertakings in this Clause 18 remain in force from the date of this Agreementfor so long as any amount is outstanding under the Finance Documents or anyCommitment is in force.

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**18.1**                     Financialstatements

TheBorrower shall supply to the Agent in sufficient copies for all the Lenders:

(a)                                as soon asthe same become available, but in any event within 180 days after the end ofeach of its financial years, its audited consolidated and non-consolidatedfinancial statements for that financial year; and

(b)                               as soon asthe same become available, but in any event within (i) 60 days after theend of each of its first, second and third financial quarters and (ii) 90days after the end of its fourth financial quarter, its unaudited consolidatedand non-consolidated financial statements for that financial quarter.

**18.2**                     ComplianceCertificate

(a)                               The Borrowershall supply to the Agent with each set of financial statements deliveredpursuant to Clause 18.1 (*Financialstatements*), a Compliance Certificate setting out (in reasonabledetail) computations as to compliance with Clause 19 (*Financial Covenants*) as at the date as atwhich those financial statements were drawn up. Each Compliance Certificateshall be signed by an authorised officer of the Borrower.

(b)                              Where aCompliance Certificate is required to be delivered with the financialstatements delivered pursuant to paragraph (a) of Clause 18.1 (*Financial statements*), it shall beaccompanied by a report from the Borrower’s auditors using a form acceptable tothose auditors.

**18.3**                     Requirementsas to financial statements

(a)                               Each set offinancial 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)                              The Borrowershall procure that each set of consolidated financial statements deliveredpursuant 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)                              The Borrowershall procure that each set of non-consolidated financial statements deliveredpursuant to Clause 18.1 (*Financialstatements*) is prepared using RAS accounting practices and financialreference periods.

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**18.4**                     Information:miscellaneous

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

(a)                                alldocuments dispatched by the Borrower to its shareholders (or any class of them)or its creditors generally promptly after 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**                     Notificationof Default

(a)                               The Borrowershall notify the Agent of any Default (and the steps, if any, being taken toremedy 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,specifying the Default and the steps, if any, being taken to remedy it).

**18.6**                     Knowyour 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)                                any changein the status of the Borrower after the date of this Agreement; or

(iii)                             a proposedassignment or transfer by a Lender of any of its rights and obligations underthis Agreement to a party that is not a Lender prior to such assignment ortransfer,

obligesthe Agent or any Lender (or, in the case of paragraph (iii) above, anyprospective new Lender) to comply with “know your customer” or similaridentification procedures in circumstances where the necessary information isnot already available to it, the Borrower shall promptly upon the request ofthe Agent or any Lender supply, or procure the supply of, such documentationand other evidence as is reasonably requested by the Agent (for itself or onbehalf of any Lender) or any Lender (for itself or, in the case of the eventdescribed in paragraph (iii) above, on behalf of any prospective newLender) in order for the Agent, such Lender or, in the case of the eventdescribed in paragraph (iii) above, any prospective new Lender to carryout and be satisfied it has complied with all necessary “know your customer” orother similar checks under all applicable laws and regulations pursuant to thetransactions contemplated in the Finance Documents.

(b)                              Each Lendershall promptly upon the request of the Agent supply, or procure the supply of,such documentation and other evidence as is reasonably requested by the Agent(for itself) in order for the Agent to carry out and be satisfied it hascomplied with all necessary “know your customer” or 

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othersimilar checks under all applicable laws and regulations pursuant to thetransactions contemplated in the Finance Documents.

**19**                               FINANCIAL COVENANTS

Thefinancial undertakings in this Clause 19 shall remain in force from the SigningDate for so long as any amount is outstanding under the Finance Documents orany Commitment is in force.

**19.1**                     Financialcondition

TheBorrower shall ensure that:

(a)                                The ratio ofTotal Debt as at the end of any Relevant Period to OIBDA in respect of suchRelevant Period will not exceed 3:1; and

(b)                               the ratio ofOIBDA to Interest Expense in respect of any Relevant Period will not be lessthan 5:1.

**19.2**                     Financialcovenant calculations

TotalDebt, OIBDA and Interest Expense shall be calculated and interpreted on aconsolidated basis in accordance with the GAAP applicable to the OriginalFinancial Statements of the Borrower and shall be expressed in Dollars.

**19.3**                     Definitions

In thisClause 19.3:

“**Total Debt**” means, as at any particulartime, the aggregate outstanding principal, capital or nominal amount (and anyfixed or minimum premium payable on prepayment or redemption) of the FinancialIndebtedness of members of the Group (other than any indebtedness referred toin paragraph (g) of the definition of Financial Indebtedness and anyguarantee or indemnity in respect of that indebtedness).

Forthis purpose, any amount outstanding or repayable in a currency other thanDollars shall on that day be taken into account in its Dollars equivalent atthe rate of exchange that would have been used had an audited consolidatedbalance sheet of the Group been prepared as at that day in accordance with theGAAP applicable to the Original Financial Statements of the Borrower.

“**OIBDA**” means, in relation to any RelevantPeriod, the total consolidated net income of the Group for that RelevantPeriod:

(a)                                beforetaking into account the charge or credit to the profit and loss account inrespect of:

(i)                                  minorityinterests;

(ii)                               income tax;

(iii)                            non-operating income less non-operatingexpenses;

(iv)                           the Group’s share in the net income (orloss) of any associated companies or undertakings;

(v)                              InterestExpense;

(vi)                           interest income and

(vii)                        currency exchange and translation(gains)/losses

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(b)                               after addingback all amounts provided for depreciation and amortisation for that RelevantPeriod,

*multiplied by two*,

asdetermined (except as needed to reflect the terms of this Clause 19) from thefinancial statements of the Group and Compliance Certificates delivered underClause 18.1 (*Financial statements*)and Clause 18.2 (*Compliance Certificate*).

“**Interest Expense**” means, in relation to anyRelevant Period, the aggregate amount of interest and any other finance charges(whether or not paid, payable or capitalised) accrued by the Group in thatRelevant Period in respect of Total Debt including:

(a)                                the interestelement of leasing and hire purchase payments;

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

(c)                                amounts inthe nature of interest payable in respect of any shares other than equity sharecapital,

adjusted(but without double counting) by:

(i)                                   adding backthe net amount payable (or deducting the net amount receivable) by members ofthe Group in respect of that Relevant Period under any interest or (so far asthey 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*,

asdetermined (except as needed to reflect the terms of this Clause 19) from thefinancial statements of the Group and Compliance Certificates delivered underClause 18.1 (*Financial statements*)and Clause 18.2 (*Compliance Certificate*).

“**Relevant Period**” means each period of 6consecutive Months ending on the last day of each financial year and financialquarter of the Borrower.

**20**                               GENERAL UNDERTAKINGS

Theundertakings in this Clause 20 remain in force from the date of this Agreementfor so long as any amount is outstanding under the Finance Documents or anyCommitment is in force.

**20.1**                     Authorisations

TheBorrower 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,

anyAuthorisation required under any law or regulation of its jurisdiction ofincorporation to enable it to perform its obligations under the FinanceDocuments and to ensure the legality, validity, enforceability or admissibilityin evidence in its jurisdiction of incorporation of any Finance Document.

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**20.2**                     Compliancewith laws

TheBorrower shall comply in all respects with all laws to which it may be subject,if failure so to comply would materially impair its ability to perform itsobligations under the Finance Documents.

**20.3**                     Maintenanceof existence

TheBorrower shall maintain its corporate existence.

**20.4**                     Negativepledge

(a)                               The Borrowershall not (and the Borrower shall ensure that no other member of the Group will)create or permit to subsist any Security over any of its assets.

(b)                              The Borrowershall not (and the Borrower shall ensure that no other member of the Groupwill):

(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)                             enter intoany arrangement under which money or the benefit of a bank or other account maybe applied, set-off or made subject to a combination of accounts; or

(iv)                            enter into any other preferentialarrangement having a similar effect,

incircumstances where the arrangement or transaction is entered into primarily asa method of raising Financial Indebtedness or of financing the acquisition ofan asset.

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

**20.5**                     Disposals

(a)                               The Borrowershall not (and shall ensure that no other member of the Group will) enter intoa single transaction or a series of transactions (whether related or not andwhether voluntary or involuntary) to sell, lease, transfer or otherwise disposeof any asset.

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

(i)                                   made in theordinary course of trading of the disposing entity;

(ii)                                of assets inexchange for other assets comparable or superior as to type, value and quality;

(iii)                             made fromone member of the Group (other than the Borrower) to another member of the Group;

(iv)                            of cash or cash equivalents for cash orcash equivalents;

(v)                               where thebook 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 inaccordance with GAAP) does not exceed (x) 10% of the Borrower’s TotalAssets in any financial year of the Borrower and (y) 25% of the Borrower’sTotal Assets during the period starting on the Signing Date and ending on thedate that all amounts outstanding under this Agreement have been paid in full.At the request of the Agent (any such request to be made no more than once percalendar quarter, 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

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(vi)                            involving the transfer of any or all ofthe Borrower’s shares in UMC pursuant to the UMC Litigation to a person that isnot a member of the Group (provided that this sub-clause (vi) shall not inany way prejudice the rights of the Finance Parties under Clause 21.18 (*UMC Litigation*)).

Whencalculating the Borrower’s Total Assets under sub-clause (v) above, if theannual consolidated balance sheet of the Borrower for the immediatelypreceeding financial year of the Borrower is not available, the Borrower’sTotal Assets shall be calculated by reference to the draft audit report thenavailable for that financial year and any other evidence reasonably requestedby, and reasonably satisfactory to, the Agent.

**20.6**                     Merger

(a)                               The Borrowershall not enter into or become subject to any consolidation or reorganisation,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)                              The Borrowershall ensure that no Significant Subsidiary will enter into or become subjectto 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**                     Changeof business

TheBorrower shall procure that no substantial change is made to the general natureof the business of the Borrower or the Group from that carried on at theSigning Date.

**20.8**                     Conductof business

TheBorrower shall, and shall procure that each of its Significant Subsidiarieswill, conduct its business in all material 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)                                the terms ofall relevant Telecommunications Authorisations.

**20.9**                     Assetmaintenance

TheBorrower shall, and shall procure that each of its Significant Subsidiarieswill, have and maintain good and marketable title to or valid leases or licencesof, or rights of use relating to, all assets necessary to maintain, develop andoperate and otherwise conduct its business as then being conducted by it and ineach case where failure to do so might reasonably be expected to have aMaterial Adverse Effect.

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**20.10**              Insurance

TheBorrower shall (and shall ensure that each other member of the Group will)maintain insurances on and in relation to its business and assets withreputable underwriters or insurance companies against those risks, and to theextent, usually insured against by prudent companies located in the same or asimilar location and carrying on a similar business.

**20.11**               Transactionswith Related Parties

(a)                               The Borrowershall not (and the Borrower shall ensure that no other member of the Groupwill), directly or indirectly, enter into or permit to exist any intercompanyloan with, or for the benefit of, any Related Party, unless:

(i)                                   the terms ofsuch intercompany loan are no less favourable to such member of the Group thanthose that could be obtained in a comparable arm’s-length transaction or seriesof related transactions with a person that is not a Related 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),

providedthat the aggregate outstanding amount of all such intercompany loans describedin sub-clauses (i) and (ii) above does not, at any time, exceed$100,000,000.

(b)                              Paragraph (a) abovedoes 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)                               For thepurposes of this Clause 20.11 only, a “**RelatedParty**” means, with respect to any specified person:

(i)                                   any otherperson directly or indirectly controlling or controlled by or under direct orindirect common control with such specified person; or

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

Forpurposes of the definition of “**Related Party**”only, “**control**” (including, withcorrelative meanings, the terms “**controlling**,”“**controlled by**” and “**under common control with**”), as used withrespect to any person, shall mean the possession, directly or indirectly, 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

TheBorrower shall not establish or acquire any Subsidiary, acquire anyTelecommunications Licence or invest in any other entity without the consent ofthe Majority Lenders (such consent not to be unreasonably withheld), providedthat this Clause 20.12 shall not apply to any such acquisition orinvestment where such acquisition or investment relates to a Subsidiary orentity whose principal business is telecommunications or the provision of dataservices or related or ancillary businesses; and either:

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(a)                                theconsideration paid by the Borrower in relation to such acquisition orinvestment, when aggregated with the consideration paid by the Borrower inrelation to each other acquisition or investment in the same financial yearpermitted under this paragraph, does not exceed (i) 20 per cent. of theBorrower’s Total Assets in the financial year of the Borrower ending 31 December 2006;and (ii) 20 per cent. (or such higher amount not exceeding 25 per cent. asthe Majority Lenders may agree (acting reasonably)) of the Borrower’s TotalAssets in any other financial year of the Borrower; or

(b)                               theacquisition is of the Egypt Licence or any person holding the Egypt Licence(but no other asset).

**20.13**              Promptpayment of Taxes

TheBorrower shall (and shall ensure that each Significant Subsidiary will) dulypay all Taxes payable by it, other than (a) those taxes which are beingcontested in good faith and by appropriate proceedings and in respect of whichadequate reserves or other appropriate provisions have been made; or (b) whoseamount does not exceed $25,000,000 (or its equivalent in any other currencies).

**20.14**              *Pari passu*

TheBorrower shall, and shall procure that each member of the Group will, procurethat its obligations under the Finance Documents rank at least *pari passu* with all its other unsecured,unsubordinated obligations save where such other obligations are mandatorilypreferred by law.

**20.15**              Loansand guarantees

(a)                               The Borrowershall not (and the Borrower shall ensure that no member of the Group will):

(i)                                   make anyloan, or provide any form of credit or financial accommodation, to any person(including, without limitation, its employees, shareholders, another member ofthe Group and any Affiliate); or

(ii)                                give orissue any guarantee, indemnity, bond or letter of credit to or for the benefitof, 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*).

**20.16**              Purpose

TheBorrower shall apply the proceeds of the Facilities in accordance with Clause3.1 (*Purpose*).

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**20.17**              ExistingFacility

Subjectto the terms of the Syndication Side Letter, the Borrower shall repay in fullthe Existing Facility not later than the earlier of the date of the firstUtilisation of Facility 2 and the day falling 30 days from the SyndicationDate.

**21**                               EVENTS OF DEFAULT

Each ofthe events or circumstances set out in Clause 21 is an Event of Default.

**21.1**                     Non-payment

TheBorrower does not pay on the due date any amount payable pursuant to a FinanceDocument at the place at and in the currency in which it is expressed to bepayable unless:

(a)                                its failureto pay is caused by administrative or technical error; and

(b)                               payment ismade within three Business Days of its due date.

**21.2**                     Financialcovenants

Anyrequirement of Clause 19 (*FinancialCovenants*) is not satisfied.

**21.3**                     Otherobligations

(a)                               The Borrowerdoes not comply with any provision of the Finance Documents (other than thosereferred to in Clause 21.1 (*Non-payment*)and Clause 21.2 (*Financial Covenants*)).

(b)                              No Event ofDefault under paragraph (a) above will occur if the failure to comply iscapable of remedy and is remedied within 10 Business Days of the Agent givingnotice to the Borrower or the Borrower becoming aware of the failure to comply.

**21.4**                     Misrepresentation

Anyrepresentation or statement made or deemed to be made by the Borrower in theFinance Documents or any other document delivered by or on behalf of theBorrower under or in connection with any Finance Document is or proves to havebeen incorrect or misleading in any material respect when made or deemed to bemade, and such representation or statement shall not have been rendered correctand not misleading within 10 Business Days of the Agent giving notice to theBorrower or the Borrower becoming aware of the same.

**21.5**                     Crossdefault

(a)                               Any singleitem 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)                              Any singleitem 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)                               Any singlecommitment for any Financial Indebtedness of any member of the Group in anamount 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).

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(d)                              Any creditorof any member of the Group becomes entitled to declare any single item ofFinancial 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)                               Any of theevents described in paragraphs (a) to (d) above occurs in relation toany Financial Indebtedness or commitment for Financial Indebtedness of anyamount (including, for the avoidance of doubt, any amount that is less than$10,000,000 (or its equivalent in any other currency or currencies)), and theaggregate 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)                               The Borroweror a Significant Subsidiary is unable or admits its inability to pay its debtsas they fall due, suspends making payments on its debts generally or, by reasonof actual or anticipated financial difficulties, commences negotiations withone or more of its creditors with a view to rescheduling its indebtednessgenerally.

(b)                              The value ofthe assets of the Borrower or a Significant Subsidiary is less than itsliabilities (taking into account contingent and prospective liabilities).

(c)                               A moratoriumis declared in respect of the indebtedness of the Borrower or a SignificantSubsidiary.

**21.7**                     Insolvencyproceedings

Anycorporate action or legal proceedings 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 anyanalogous procedure or step is taken in any jurisdiction.

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**21.8**                     Creditors’process

Anyexpropriation, attachment, sequestration, distress or execution affects anyasset or assets of the Borrower or a Significant Subsidiary with a value inexcess of $10,000,000 (or its equivalent in any other currency or currencies)and is not discharged or stayed within 30 days.

**21.9**                     Judgment

Therendering against the Borrower or any Subsidiary of the Borrower of a judgment,decree or order for the payment of money in an amount in excess of $10,000,000(or its equivalent in any other currency or currencies) and the continuance ofany such judgment, decree or order unsatisfied and in effect for any period of60 consecutive days without a stay of execution.

**21.10**              Loss ofLicence

(a)                                  Any actionresults in the suspension for more than 30 days or the loss, revocation ortermination of any of:

(i)                                   the Borrower’sGSM 900 or 1800 licences for the Moscow licence area, the St.Petersburg licencearea and the Krasnodar licence area; or

(ii)                                UMC’s GSM900 or 1800 licences for the Ukraine licence area,

exceptwhere, within 30 days of any such event, the relevant licence is re-issued onsubstantially the same terms to any member of the Group and during the periodfalling before such re-issuance there is no material interruption to, or othermaterial adverse effect on, the operations permitted by such license as adirect result of such prior loss, revocation or termination.

(b)                              Any of theBorrower’s or UMC’s GSM 900 or 1800licences are amended (or any conditions are imposed with respect to any suchlicence) in a manner that, in the reasonable opinion of the Majority Lenders,has or is reasonably likely to have a Material Adverse Effect.

(c)                               Any of theBorrower’s or UMC’s assigned spectrumallocations are reassigned to other users (other than a Significant Subsidiaryof the Borrower), cancelled or otherwise lost, and such event, in thereasonable opinion of the Majority Lenders, has or is reasonably likely to havea Material Adverse Effect.

(d)                              The Borrowersells, leases or otherwise transfers any of its GSM 900 or 1800 licences forthe Moscow, St.Petersburg or Krasnodar licence areas.

(e)                               Any of theBorrower’s GSM 900 or 1800 licences (other than its GSM 900 and 1800 licencesfor the Moscow, St.Petersburg or Krasnodar licence areas) is sold, leased ortransferred to any person that is not (directly or indirectly) a wholly-ownedSubsidiary of the Borrower.

(f)

(i)                                   Any of theGSM 900 or 1800 licences of UMC is sold, leased or transferred to any personthat is not (directly or indirectly) a wholly-owned Subsidiary of the Borrower.

(ii)                                Sub-clause (i) abovedoes not apply to the transfer of the GSM 900 or 1800 licences of UMC pursuantto the UMC Litigation (provided that this sub-clause (ii) shall not in anyway prejudice the rights of the Finance Parties under Clause 21.18 (*UMC Litigation*)).

**21.11**               Cessationof Business

TheBorrower or any Significant Subsidiary suspends, ceases or threatens to suspendor cease to carry on all or a substantial part of its business.

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**21.12**              Expropriation

(a)                               By or underthe authority of any government:

(i)                                   any seizure,compulsory acquisition, expropriation, nationalisation or renationalisation ismade after the Signing Date of all or any material part of the assets or sharesof (or other ownership interest in) any member of the Group;

(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)                             any memberof the Group is otherwise deprived of, or prevented from exercising ownershipor control of, its material business or assets.

(b)                              Paragraph (a) abovedoes not apply to:

(i)                                   the transferof any or all of the Borrower’s shares in UMC pursuant to the UMC Litigation toa person that is not a member of the Group (provided that this paragraph (b)(i) shallnot in any way prejudice the rights of the Finance Parties under Clause 21.18 (*UMC Litigation*)) or

(ii)                                the transferof any or all of:

(a)                               the assets(including licences) held by Bitel; and/or

(b)                              the sharesin Bitel

pursuantto the Bitel Litigation, to a person that is not a member of the Group.

**21.13**              RussianForeign Exchange Restrictions

Anyforeign exchange law is enacted or introduced in the Russian Federation whichhas the effect of prohibiting, restricting or delaying any payment by theBorrower or any member of the Group under the Finance Documents.

**21.14**              Moratorium

Anymoratorium is declared on the payment of any external indebtedness of theRussian Federation or of Russian residents generally.

**21.15**              TheRussian Federation

Thepolitical or economic situation in the Russian Federation deteriorates or anact of war or hostilities, invasion, armed conflict or act of a foreign enemy,revolution, insurrection or insurgency occurs in, or involves, the RussianFederation and such event, in the reasonable opinion of the Majority Lenders,has or is reasonably likely to have a Material Adverse Effect.

**21.16**              Unlawfulness

It isor becomes unlawful for the Borrower to perform any of its obligations under theFinance Documents.

**21.17**              Repudiation

TheBorrower repudiates a Finance Document or evinces an intention to repudiate aFinance Document.

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**21.18**              UMCLitigation

The UMCLitigation is adversely determined and, in the reasonable opinion of theMajority Lenders, such adverse determination has or is reasonably likely tohave a Material Adverse Effect.

**21.19**              Materialadverse change

TheMajority Lenders determine that a Material Adverse Effect exists, has occurredor is reasonably likely to occur.

**21.20**              Acceleration

On andat any time after the occurrence of an Event of Default which is continuing theAgent may, and shall if so directed by the Majority Lenders, by notice to theBorrower:

(a)                                cancel theTotal Commitments whereupon they shall immediately be cancelled;

(b)                               declare that all or part of the Loans, togetherwith accrued interest, and all other amounts accrued or outstanding under theFinance Documents be immediately due and payable, whereupon they shall becomeimmediately due and payable; and

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

 

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**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 may be made only after notice ofthe proposed assignment or transfer has been given to the Borrower.

**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 through its previous Facility Office wouldhave been if the assignment, transfer or change had not occurred.

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**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.

(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:

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(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.

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**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 innature.

**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.

**24.6**                     Rightsand discretions of the Agent

(a)                               The Agentmay rely on:

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(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:

(a)                                isresponsible for the adequacy, accuracy and/or completeness of any information(whether oral or written) supplied by the Agent, the Mandated Lead Arrangers,the 

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Borroweror any other person given in or in connection with any Finance Document or theInformation 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).

(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.

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(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 5 (*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 connection with any Finance Document, the transactions contemplated bythe Finance Documents or any other agreement, arrangement or document enteredinto, made or executed in anticipation of, under or in connection with anyFinance Document.

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**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*).

**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*).

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**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.

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**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)                              Payment shallbe made to such account in the principal financial centre of the country ofthat currency (or, in relation to euro, in the principal financial centre in aParticipating 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, theAgent is not obliged to pay that sum to that other Party (or to enter into orperform any related exchange contract) until it has been able to establish toits satisfaction 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;

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(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 inparagraphs (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 thepreceding Business 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

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(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 (actingreasonably).

(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 detailsprovided under Clause 29.2 (*Addresses*),if addressed to that department or officer.

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(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.

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**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

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(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 the MandatedLead Arrangers may not be effected without the consent of the Agent or theMandated 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.

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**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 LCIA.

**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 within 15 days of the appointment of thesecond 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 within 15 days of such failure. In the event that boththe claimant(s) and the respondent(s) fail to nominate an arbitratorwithin the time limits specified in the Rules, all three arbitrators shall beappointed by the LCIA within 15 days of such failure who shall designate one ofthem as chairman.

(c)                               If all theparties to an arbitration so agree, there shall be a sole arbitrator appointedby the LCIA 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*).

**37**                               JURISDICTION

**37.1**                     Jurisdictionof English courts

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

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(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 a Disputein any other courts with jurisdiction. To the extent allowed by law, theFinance Parties may take concurrent proceedings in any number of jurisdictions.

**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, fromattachment (whether in aid of execution, before judgment or otherwise) of itsassets or from execution of judgment shall be claimed by it or on behalf of itor with respect to its assets, any such immunity being irrevocably waived. TheBorrower irrevocably agrees that it and its assets are, and shall be, subjectto such proceedings, attachment or execution in respect of its obligationsunder the Finance Documents.

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

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**SCHEDULE 1The Original Lenders**

| Name of Original Lender              | ** ** | ** **  | ** ** | **Facility 1  Commitment** | ** ** | **Facility 2  Commitment** | ** ** |
|-----------------------------------------------------|------------|-------------|------------|---------------------------------|------------|---------------------------------|------------|
| ** **                                          | ** ** | **(US$)**   | ** ** | **(US$)**                       | ** ** |
| BTMU (Europe)  Limited                              |       | 105,000,000 |       | 116,666,666.66                  |       |
| Bayerische  Landesbank                              |       | 105,000,000 |       | 116,666,666.66                  |       |
| HSBC Bank plc                                       |       | 105,000,000 |       | 116,666,666.66                  |       |
| ING Bank N.V.,  Dublin Branch                       |       | 105,000,000 |       | 116,666,666.70                  |       |
| Raiffeisen  Zentralbank Oesterreich AG              |       | 93,000,000  |       | 103,666,666.66                  |       |
| ZAO  Raiffeisenbank Austria                         |       | 12,000,000  |       | 13,000,000.00                   |       |
| Sumitomo Mitsui  Banking Corporation Europe Limited |       | 105,000,000 |       | 116,666,666.66                  |       |
| **TOTAL:**                                          |       | 630,000,000 |       | 700,000,000.00                  |       |

** **

** **

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**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)                               Notarisedcopies of the Borrower’s duly registered constitutional documents (includingany amendments thereto), certificates of registration thereof and the Borrower’sregistration certificate(s) issued by the competent registrationauthority.

(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, if applicable).

(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 transactions contemplatedthereunder.

(d)                              An originalcertificate 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 transactions contemplatedthereunder on behalf of the Borrower and certifying that such signatories holdthe 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)                               Acertificate issued by the in-house legal counsel 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 

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

(c)                               Theunaudited consolidated financial statements of the Group for the financial yearended 31 December 2005.

(d)                              Certifiedcopy of the balance sheet, prepared under RAS, as of the latest reporting date(by reference to the date of each Finance Document and the date of eachcorporate resolution referred to in paragraph 2(b) above) for theBorrower.

(e)                               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.

(f)                                 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 or other applicablecurrency control laws and regulations, as the case may be) 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).

(g)                              Anirrevocable notice of repayment from the Borrower stating that it will repay$100,000,000 (together with all accrued interest and other amounts then owing)under the Existing Facility not later than on 26 April 2006.

(h)                              Evidencesatisfactory to the Agent in its reasonable discretion that the Borrower hasgiven instructions to its bank to prepay from the Borrower’s account allamounts outstanding under the HSBC Facility, and that the HSBC Facility will becancelled in full, not later than on 27 April 2006.

(i)                                  Evidencesatisfactory to the Agent in its reasonable discretion that:

(i)                                   MOBILETELESYSTEMS FINANCE S.A. has given instructions to its bank to repay from theaccount of MOBILE TELESYSTEMS FINANCE S.A. the amount of $75,000,000 (togetherwith all accrued interest and other amounts then owing) under the MTF Facilityno later than on 28 April 2006;

(ii)                                MOBILETELESYSTEMS FINANCE S.A. has given instructions to its bank to repay from theaccount of MOBILE TELESYSTEMS FINANCE S.A all amounts outstanding (after therepayment under sub-paragraph (i) above) under the MTF Facility no laterthan on 17 May 2006; and

(iii)                             the MTFFacility will be cancelled in full no later than on 17 May 2006.

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

**5****                                     ****Other documents and evidence prior to the first Utilisation Request forUtilisation of Facility 2**

(a)                               Subject tothe terms of the Syndication Side Letter, evidence satisfactory to the Agent inits reasonable discretion that the Borrower has given instructions to its bankto repay from the Borrower’s account all amounts outstanding (after theprepayment under paragraph 4 (g) above) under the Existing Facility, andthat the Existing Facility will be cancelled in full, not later than on theearlier of the first Utilisation Date of Facility 2 or the date falling 30 daysafter the Syndication Date.

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

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**SCHEDULE 3Utilisation Request**

From:                  Mobile TeleSystems Open Joint StockCompany

To:          ING Bank N.V., London Branch as Agent

Dated:

DearSirs

**Mobile TeleSystems Open JointStock Company — US$1,330,000,000 Facility Agreementdated 21 April 2006 (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                       |
|                       |                                                                                                                                                                            |
| First Interest  Period     | [1/2/3/6 Months]                                                                                                                                                                |

 

**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****                                     **This UtilisationRequest is irrevocable.

MobileTeleSystems Open Joint Stock Company
| By: __________________ |   | By: __________________  |
|------------------------|--------|-------------------------|
| Name:                  |   | Name:                   |
| Title:                 |   | Title: Chief Accountant |

 

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1                     Deleteas appropriate

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**SCHEDULE 4**Selection Notice

From:                                              MobileTeleSystems Open Joint-stock Company

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

Dated:

DearSirs

**Mobile TeleSystems Open JointStock Company - US$1,330,000,000 Facility Agreementdated 21 April 2006 (the “Agreement”)**

**1****                                     **We refer tothe Agreement. This is a Selection Notice. Terms defined in the Agreement havethe same meaning in this Selection Notice unless given a different meaning inthis Selection Notice.

**2****                                     **We refer tothe following [Loan[s] with an] Interest Period ending on [__________]*:

**3****                                     **We requestthat the next Interest Period for the [above] Loan is [__________].

**4****                                     **ThisSelection Notice is irrevocable.

Yours faithfully

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

for and on behalf ofMobile TeleSystems Open Joint-stock Company

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

 

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**SCHEDULE 5 Mandatory 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:
|        | Ex0.01 |   | per cent. per annum. |
|--------|--------|--------|----------------------|
|   | 300    |   |                 |

 

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 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.

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**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.

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**SCHEDULE 6Form of Transfer Certificate**

To:          ING Bank N.V., London Branch as Agent

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

Dated:

**Mobile TeleSystems Open JointStock Company — US$1,330,000,000 Facility Agreementdated 21 April 2006 (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.

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

[insert relevant details]

[Facility Office address, fax number andattention details 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 [                   ].

INGBank N.V., London Branch

By:

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**SCHEDULE 7Form of Compliance Certificate**
| To:   | ING Bank N.V., London Branch as Agent       |
|-------|---------------------------------------------|
| From: | Mobile TeleSystems Open Joint Stock Company |

Dated:

DearSirs

**Mobile TeleSystems Open JointStock Company — US$1,330,000,000 Facility Agreementdated 21 April 2006 (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 a differentmeaning in this Compliance Certificate.

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

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

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

 
| Signed: |   |
|---------|--------|

[Chief Financial Officer] ofMobile TeleSystems Open Joint Stock Company

 

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*                      If this statement cannot be made,the certificate should identify any Default that is continuing and the steps,if any, being taken to remedy it.

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**The Borrower**

**Mobile TeleSystems Open JointStock Company**

Address:                                   4Marksistskaya Street, 109147 Moscow, Russian Federation

Fax No:               +7 495 223 2168

Attention:                           Marina ZabolotnevaTreasury Director

 
| By: __________________    |   | By: __________________  |
|---------------------------|--------|-------------------------|
| Name: Marina  Zabolotneva |   | Name: Rauziya Kolomiets |
| Title: Treasury  Director |   | Title: Chief Accountant |

 

**The Mandated Lead Arrangers**

TheBank of Tokyo-Mitsubishi UFJ, Ltd.

By:__________________

Name:

Title:

BayerischeLandesbank

By:__________________

Name:

Title:

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HSBCBank plc

By:__________________

Name:

Title:

ING Bank N.V.

By: __________________

Name:

Title:

Raiffeisen Zentralbank Oesterreich AG

By: __________________

Name:

Title:

SumitomoMitsui Banking Corporation Europe Limited

By:__________________

Name:

Title:

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**The Original Lenders**

BTMU (Europe) Limited

By: __________________

Name:

Title:

Bayerische Landesbank

By: __________________

Name:

Title:

HSBC Bank plc

By: __________________

Name:

Title:

ING Bank N.V., Dublin Branch

By: __________________

Name:

Title:

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Raiffeisen Zentralbank Oesterreich AG

By: __________________

Name:

Title:

ZAO Raiffeisenbank Austria

By: __________________

Name:

Title:

Sumitomo Mitsui Banking Corporation EuropeLimited

By: __________________

Name:

Title:

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**The Agent**

INGBank N.V., London Branch

Address: 60 London WallLondon EC2M 5TQ

Fax:+44 207 767 7324

Attention: Sally Hayward/Craig BakerAgency Operations

By:__________________

Name:

Title

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