**Exhibit 4.52**
| EXECUTION COPY                                                                                                                                                                                                                                                                                                     | Operation Number 35648 |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------|
| Dated 8  December 2004                                                                                                                                                                                                                                                                                        |
| ** **                                                                                                                                                                                                                                                                                                         |
| ** **                                                                                                                                                                                                                                                                                                         |
| ** **                                                                                                                                                                                                                                                                                                         |
| ** **                                                                                                                                                                                                                                                                                                         |
| **US$150,000,000**

** **

**FACILITY  AGREEMENT**

** **

between

** **

**MOBILE  TELESYSTEMS OPEN JOINT STOCK COMPANY**

** **

as Borrower

 

 

and

** **

**EUROPEAN  BANK FOR RECONSTRUCTION AND DEVELOPMENT**

** **

as Lender

 

 

 

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

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**CONTENTS**
| CLAUSE                                                         | ** ** | **PAGE**                                |
|----------------------------------------------------------------|------------|-----------------------------------------|
| SECTION 1  INTERPRETATION                                      |       | 1                                       |
|                                                           | 1          | DEFINITIONS AND  INTERPRETATION         |   | 1 |
| SECTION 2 THE FACILITY                                         |       | 10                                      |
|                                                           | 2          | THE FACILITY                            |   | 10 |
|                                                           | 3          | PURPOSE                                 |   | 10 |
|                                                           | 4          | CONDITIONS OF  UTILISATION              |   | 10 |
| SECTION 3 UTILISATION                                          |       | 11                                      |
|                                                           | 5          | UTILISATION                             |   | 11 |
| SECTION 4 REPAYMENT,  PREPAYMENT AND CANCELLATION              |       | 12                                      |
|                                                           | 6          | REPAYMENT                               |   | 12 |
|                                                           | 7          | PREPAYMENT AND  CANCELLATION            |   | 12 |
| SECTION 5 COSTS OF  UTILISATION                                |       | 15                                      |
|                                                           | 8          | INTEREST                                |   | 15 |
|                                                           | 9          | INTEREST PERIODS                        |   | 16 |
|                                                           | 10         | CHANGES TO THE  CALCULATION OF INTEREST |   | 16 |
|                                                           | 11         | FEES                                    |   | 17 |
| SECTION 6 ADDITIONAL  PAYMENT OBLIGATIONS                      |       | 18                                      |
|                                                           | 12         | TAX GROSS-UP AND  INDEMNITIES           |   | 18 |
|                                                           | 13         | INCREASED COSTS                         |   | 20 |
|                                                           | 14         | OTHER INDEMNITIES                       |   | 21 |
|                                                           | 15         | MITIGATION BY THE  LENDER               |   | 22 |
|                                                           | 16         | COSTS AND EXPENSES                      |   | 22 |
| SECTION 7  REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT |       | 23                                      |
|                                                           | 17         | REPRESENTATIONS                         |   | 23 |
|                                                           | 18         | INFORMATION  UNDERTAKINGS               |   | 27 |
|                                                           | 19         | FINANCIAL COVENANTS                     |   | 30 |
|                                                           | 20         | GENERAL UNDERTAKINGS                    |   | 31 |
|                                                           | 21         | EVENTS OF DEFAULT                       |   | 36 |
| SECTION 8 CHANGES TO  PARTIES                                  |       | 41                                      |
|                                                           | 22         | CHANGES TO THE LENDER                   |   | 41 |
|                                                           | 23         | CHANGES TO THE BORROWER                 |   | 42 |
| SECTION 9 THE LENDER                                           |       | 43                                      |

(i)

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|                                            | 24     | CONDUCT OF BUSINESS BY  THE LENDER |   | 43 |
|--------------------------------------------|--------|------------------------------------|--------|----|
| SECTION 10 ADMINISTRATION                  |   | 44                                 |
|                                       | 25     | PAYMENT MECHANICS                  |   | 44 |
|                                       | 26     | SET-OFF                            |   | 45 |
|                                       | 27     | NOTICES                            |   | 45 |
|                                       | 28     | CALCULATIONS AND  CERTIFICATES     |   | 46 |
|                                       | 29     | PARTIAL INVALIDITY                 |   | 46 |
|                                       | 30     | REMEDIES AND WAIVERS               |   | 46 |
|                                       | 31     | AMENDMENTS AND WAIVERS             |   | 47 |
|                                       | 32     | COUNTERPARTS                       |   | 47 |
| SECTION 11 GOVERNING  LAW AND ENFORCEMENT  |   | 48                                 |
|                                       | 33     | GOVERNING LAW                      |   | 48 |
|                                       | 34     | ARBITRATION AND  JURISDICTION      |   | 48 |
|                                       | 35     | IMMUNITIES                         |   | 49 |
| SCHEDULE 1 Conditions  precedent           |   | 50                                 |
| SCHEDULE 2 Utilisation  Request            |   | 52                                 |
| SCHEDULE 3 Form of  Compliance Certificate |   | 53                                 |

 

 

(ii)

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THIS AGREEMENT is dated 8 December 2004and made between:

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

**(2)****                              EUROPEAN BANK FOR RECONSTRUCTION ANDDEVELOPMENT**as lender****(the****“**Lender**”or “**EBRD**”).

IT IS AGREED as follows:

**SECTION 1INTERPRETATION**

**1**                                      DEFINITIONS ANDINTERPRETATION

**1.1**                            Definitions

In this Agreement:

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

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

“**AvailabilityPeriod**” means  the period fromand including the Signing Date to and including 30 November 2005.

“**AvailableCommitment**” means the Commitment minus:

(a)                                theamount of any outstanding Loans; and

(b)                               inrelation to any proposed Utilisation, the amount of any Loans that are due tobe made on or before the proposed Utilisation Date.

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

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

(a)                                theinterest (excluding the Margin) which the Lender should have received for theperiod from the date of receipt of all or any part of a Loan or Unpaid Sum tothe last day of the current Interest Period in respect of that Loan or UnpaidSum, had the principal amount or Unpaid Sum received been paid on the last dayof that Interest Period;

exceeds:

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

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

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“**Commitment**”means a commitment of $150,000,000, to the extent such commitment is notcancelled or reduced in accordance with the terms of this Agreement.

“**ComplianceCertificate**” means a certificate substantially in the form set outin Schedule 3 (*Form of ComplianceCertificate*).

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

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

“**DueDiligence Materials**” means written information provided inconnection with the due diligence meeting between the Lender and the Borroweron 10 November 2004 relating to Telecommunications Authorisations held bythe Borrower, capital expenditures by the Borrower in selected licence areas,the Borrower’s procurement procedures and certain insurances maintained by theBorrower.

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

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

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

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

(c)                                land(including land under water).

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

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

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

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

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

“**EUR**”means the lawful currency of the European Union for the time being.

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

“**FacilityOffice**” means the office of the Lender located at One ExchangeSquare, London EC2A 2JN, United Kingdom, or the office or offices notifiedby the Lender to the Borrower (by not less than 5 Business Days’ writtennotice) as the office or offices through which it will perform its obligationsunder this Agreement.

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“**Facility**”means the term loan facility made available under this Agreement as describedin  Clause 2 (*The Facility*).

“**FinalMaturity Date**” means 15 December 2011.

“**FinanceDocument**” means this Agreement and any other document designated as such by the Lender and theBorrower.

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

(a)                                moneysborrowed;

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

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

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

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

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

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

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

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

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

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

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

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

“**InformationMemorandum**” means the information memorandum prepared in relation tothe facility agreement dated 26 July 2004 between the Borrower, ING BankN.V., London Branch as Agent and the lenders named therein, and as provided tothe Lender by the Borrower prior to the Signing Date for the purpose of thisAgreement.

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

“**InterestPeriod**” means, in relation to a Loan, each period determined inaccordance with Clause 9 (*InterestPeriods*) and, in relation to an Unpaid Sum, each period determinedin accordance with Clause 8.3 (*Defaultinterest*).

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“**InvestmentPeriod**” means the period commencing on 22 October 2004 andending on the date falling 12 Months after the first Utilisation Date.

“**Investments**”means investments, local works, capital expenditures not covered by exportcredit agency financing, working capital and acquisitions by members of theGroup in the Russian Federation with an emphasis on regions other than Moscowand St. Petersburg (including any fees relating thereto, and anyrefinancing or recapitalisation in connection therewith, in whole or in part).

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

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

(a)                                theapplicable Screen Rate; or

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

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

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

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

“**LondonBusiness Day**” means a day (other than a Saturday or Sunday) on whichbanks are open for general business in London.

“**Mandate Letter**”means the letter agreement dated 19 October 2004 between the Lender andthe Borrower.

“**Margin**”means 3.10 per cent per annum.

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

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

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

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

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

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

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

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

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

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

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

“**PermittedSecurity**” means:

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

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

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

(d)                               anySecurity arising by operation of law, including any Security (i) arisingin the ordinary course of business with respect to amounts not yet delinquent orbeing contested by the Borrower or a Subsidiary of the Borrower in good faithin appropriate proceedings or (ii) for taxes, assessments, governmentcharges or claims, including without limitation those in favour of Russiangovernmental fiscal authorities;

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

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

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

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                                              FinancialIndebtedness subject to such Security are changed in connection with suchrefinancing, extension or replacement, the fair market value of the property orassets is not increased; and

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

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

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

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

“**ReferenceBanks**” means in relation to LIBOR the principal London offices ofABN AMRO Bank N.V., ING Bank N.V., HSBC Bank Plc, Raiffeisen ZentralbankÖsterreich AG and Citibank, N.A.

“**RelevantContract**” means a contract:

(a)                                relatingto an Investment;

(b)                               witha value in excess of EUR1,000,000 (or the equivalent thereof in anothercurrency at the rate of exchange on the date of that contract); and

(c)                                whichis awarded either by the Borrower or by another member of the Group establishedunder the laws of the Russian Federation.

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

“**RepaymentDate**” means 15 December 2005, 15 June 2006, 15 December 2006,15 June 2007, 15 December 2007, 15 June 2008, 15 December 2008,15 June 2009, 15 December 2009, 15 June 2010, 15 December 2010,15 June 2011 and the Final Maturity Date.

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

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

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

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

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

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“**SignificantSubsidiary**” means:

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

(b)                               TelecomXXI;

(c)                                KubanGSM;

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

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

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

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

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

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

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

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

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

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

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“**UMCLitigation**” means any of the claims, proceedings (present or future)and causes of action involving the Borrower and/or any of its Affiliates(including UMC) relating to or arising out of the sale of UMC to the Borroweror the acquisition, reorganisation or ownership of UMC by the Borrower.

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

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

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

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

“**UtilisationRequest**” means a notice substantially in the form set out inSchedule 2 (*Utilisation**Request*).

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

**1.2**                            Construction

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

(i)                                   the“**Lenders**”, 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 agreement or instrument is a reference to that Finance Document orother agreement or instrument as amended or novated;

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

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

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

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

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

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

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

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

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**1.3**                            Third Party Rights

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

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**SECTION 2THE FACILITY**

**2**                                      THE FACILITY

Subject to the terms of thisAgreement, the Lender makes available to the Borrower a term loan facility inDollars in an aggregate amount equal to the Commitment.

**3**                                      PURPOSE

(a)                               TheBorrower shall apply all amounts borrowed by it under the Facility towards theInvestments, and shall use its best efforts to complete such process by the endof the Investment Period.

(b)                              TheBorrower shall use its best efforts to make Investments in regions in which itdid not have operations prior to the start of the Investment Period. However,nothing in this Agreement shall oblige the Borrower to make any Investmentwhich would not be, in the opinion of the Borrower, in its best interests.

**4**                                      CONDITIONS OFUTILISATION

**4.1**                            Initial conditions precedent

The Borrower may not deliver thefirst Utilisation Request unless the Lender has received all of the documentsand other evidence listed in Schedule 1 (*Conditionsprecedent*) in form and substance satisfactory to the Lender. TheLender shall notify the Borrower promptly upon being so satisfied.

**4.2**                            Further conditions precedent

The Lender will only be obliged tocomply with Clause 5.4 (*Availability ofLoans*) if on the date of the Utilisation Request and on the proposedUtilisation Date:

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

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

**4.3**                            Suspension and cancellation

From time to time, EBRD may, bynotice to the Borrower, suspend or cancel the right of the Borrower to make anyUtilisation if the Board of Governors of EBRD has decided in accordance with Article 8,paragraph 3, of the Agreement Establishing the European Bank of Reconstructionand Development that access by the Russian Federation to EBRD resources shouldbe suspended or otherwise modified.

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**SECTION 3UTILISATION**

**5**                                      UTILISATION

**5.1**                            Delivery of a Utilisation Request

The Borrower may utilise the Facilityby delivery to the Lender of a duly completed Utilisation Request not laterthan 5:00 p.m. on the day falling 6 London Business Days before theproposed Utilisation Date.

**5.2**                            Completion of a Utilisation Request

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

(i)                                   theproposed Utilisation Date is a Business Day within the Availability Period;

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

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

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

**5.3**                            Currency and amount

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

(b)                              Theamount of the proposed Loan must be:

(i)                                   aminimum of $30,000,000 or, if less, the Available Commitment; or

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

**5.4**                            Availability of Loans

If the conditions set out in thisAgreement have been met, the Lender shall make each Loan available by theUtilisation Date through its Facility Office.

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**SECTION 4REPAYMENT, PREPAYMENT AND CANCELLATION**

**6**                                      REPAYMENT

**6.1**                            Repayment of  Loans

(a)                               TheBorrower shall repay the Loans in 13 equal instalments, by paying on eachRepayment Date an amount equal to one thirteenth of the amount of the Loansoutstanding at the close of business on the last day of the AvailabilityPeriod.

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

**7**                                      PREPAYMENT ANDCANCELLATION

**7.1**                            Illegality

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

(a)                                theLender shall promptly notify the Borrower upon becoming aware of that event;

(b)                               uponthe Lender notifying the Borrower, the Commitment will be immediatelycancelled; and

(c)                                theBorrower shall repay the Loans on the last day of the Interest Period for eachLoan occurring after the Lender has notified the Borrower or, if earlier, thedate specified by the Lender in the notice delivered to the Borrower (being noearlier than the last day of any applicable grace period permitted by law).

**7.2**                            Voluntary cancellation

The Borrower may, if it gives theLender not less than 10 Business Days’ (or such shorter period as the Lender mayagree) prior written notice, cancel the whole or any part (being a minimumamount of $10,000,000) of the Available Commitment.

**7.3**                            Voluntary prepayment of Loans

(a)                               TheBorrower may, if it gives the Lender not less than 10 Business Days’ (or suchshorter period as the Lender may agree) prior written notice, prepay the wholeor any part of any Loan (but, if in part, being an amount that reduces the Loanby a minimum amount of $10,000,000).

(b)                              ALoan may only be prepaid after the last day of the Availability Period (or, ifearlier, the day on which the Available Commitment is zero).

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

**7.4**                            Mandatory Prepayment — Change ofControl

(a)                               Inthis Clause 7.4, “**Change of Control**”means any of the following events or circumstances: any person or group ofpersons acting in concert or under an express or implied agreement orunderstanding, directly or through one or more intermediaries, shall (x) acquireultimate beneficial or legal ownership of, or control over, more than 50% ofthe issued shares of the Borrower; (y) 

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                                             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 notexercised) to elect not less than half of the directors of the Borrower;(provided, however, that any acquisition by Sistema JSFC, T-MobileInternational AG or any of their respective Subsidiaries that results in the50% threshold in paragraphs (x) and (y) above being exceeded, or inthe power referred to in paragraph (z) above being obtained, will not be aChange of Control).

(b)                              Ifthere is a Change of Control:

(i)                                   theBorrower shall promptly notify the Lender upon becoming aware of that event;

(ii)                                theBorrower may not make a Utilisation; and

(iii)                             ifthe Lender (in its sole discretion) so requires, it may, within 5 Business Daysof its receipt of the Borrower’s notification under sub-clause (i) above,direct the Borrower to repay the Loans (together with accrued interest) in fullon the day (the “**Early Repayment Date**”)falling 30 days after 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 theLender’s rights and obligations under this Agreement to another reputableinternational bank or financial institution nominated by the Borrower inaccordance with Clause 22 (*Changes to theLender*). If no such transfer has been effected on or before theEarly Repayment Date, then (x) the Borrower shall repay the Loans(together with accrued interest) in full on the Early Repayment Date and (y) theCommitment shall be reduced to zero on that date.

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

If:

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

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

the Borrower may, whilst the circumstancegiving rise to the requirement or indemnification continues, give the Lendernotice of cancellation of the Commitment and its intention to procure therepayment of  the Loans on the last dayof the Interest Period ending after the date of such notice (or, if earlier, onsuch other date as specified by the Borrower in that notice) (the “**Cancellation Date**”). Before theCancellation Date, the Lender and the Borrower shall consult with each otherfor a period of 5 Business Days with respect to the transfer of the Lender’srights and obligations under this Agreement to another reputable internationalbank or financial institution nominated by the Borrower in accordance withClause 22 (*Changes to the Lender*).If no such transfer has been effected on or before the Cancellation Date, then (x) theBorrower shall repay the Loans (together with accrued interest) in full on theCancellation Date and (y) the Commitment shall be reduced to zero on thatdate.

**7.6**                            Restrictions

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

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

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

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

(e)                               Noamount of the Commitment cancelled under this Agreement may be subsequentlyreinstated.

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**SECTION 5COSTS OF UTILISATION**

**8**                                      INTEREST

**8.1**                            Calculation of interest

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

(a)                                theMargin; and

(b)                               LIBOR.

**8.2**                            Payment of interest

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

**8.3**                            Default interest

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

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

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

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

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

**8.4**                            Notification of rates of interest

The Lender shall promptly notify theBorrower of the determination of a rate of interest under this Agreement.

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**9**                                      INTEREST PERIODS

**9.1**                            Duration of Interest Periods

(a)                               Saveas otherwise provided herein, each Interest Period shall have a duration of 6Months (or such other period as may be agreed between the Borrower and theLender) and shall commence on the day on which the preceding Interest Periodexpires.

(b)                              Thefirst Interest Period for the first Loan shall begin on the Utilisation Datefor that Loan and shall have a duration of 6 Months, and the first InterestPeriod for each Loan made thereafter shall begin on the Utilisation Date forthat Loan and end on the last day of the Interest Period applicable to thatfirst Loan. At the end of the first Interest Period for each Loan, such Loanshall be consolidated with all other Loans (if any) then outstanding such thatall Loans under shall then be treated as a single Loan.

(c)                               NoInterest Period shall extend beyond a Repayment Date, and if an Interest Periodwould otherwise overrun a Repayment Date, such Interest Period shall beshortened so that it ends on that Repayment Date.

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

**9.2**                            Non-Business Days

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

**10**                               CHANGES TO THECALCULATION OF INTEREST

**10.1**                     Absence of quotations

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

**10.2**                     Market disruption

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

(i)                                   theMargin; and

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

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

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

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(ii)                                beforeclose of business in London on the Quotation Day for the relevant InterestPeriod, the Borrower receives notification from the Lender that the cost to itof obtaining matching deposits in the London interbank market would be inexcess of LIBOR.

**10.3**                     Alternative basis of interest orfunding

(a)                               Ifa Market Disruption Event occurs and the Lender or the Borrower so requires,the Lender and the Borrower shall enter into negotiations (for a period of notmore than 30 days) with a view to agreeing a substitute basis for determiningthe rate of interest.

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

**10.4**                     Break Costs

(a)                               TheBorrower shall, within three Business Days of demand by the Lender, pay to theLender its Break Costs attributable to all or any part of a Loan or Unpaid Sumbeing paid by the Borrower on a day other than the last day of an InterestPeriod for that Loan or Unpaid Sum.

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

**11**                                FEES

**11.1**                      Commitment fee

(a)                               TheBorrower shall pay to the Lender a commitment fee in respect of the Facility,calculated on a daily basis at the rate of 0.50 per cent. per annum of theAvailable Commitment.

(b)                              Thecommitment fee will accrue from the Signing Date and is payable in arrears onthe last day of each Interest Period, on the last day of the AvailabilityPeriod and, if the Commitment is cancelled in full, on the cancelled amount ofthe Available Commitment at the time the cancellation is effective.

**11.2**                      Front-end commission

The Borrower shall pay to the Lendera front-end commission, in the amount of 1 per cent. of the Commitment($1,500,000). Such front-end commission shall be due and payable on the earlierof (i) the first Utilisation Date and (ii) the date falling 15 daysafter the Signing Date.

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**SECTION 6ADDITIONAL PAYMENT OBLIGATIONS**

**12**                               TAX GROSS-UP ANDINDEMNITIES

**12.1**                     Definitions

(a)                               Inthis Agreement:

“**QualifyingLender**” means a Lender which is situated for tax purposes in theRussian Federation or in a Tax Treaty Jurisdiction, or is otherwise entitled toreceive interest free and clear of Russian withholding tax from a source withinthe Russian Federation.

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

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

“**TaxPayment**” means an increased payment made by the Borrower to theLender under Clause 12.2 (*Tax gross-up*)or a payment under Clause 12.3 (*Taxindemnity*).

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

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

**12.2**                     Tax gross-up

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

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

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

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

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

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

**12.3**                     Tax indemnity

(a)                               Ifthe Lender is or will be subject to any liability, or required to make anypayment, for or on account of Tax in relation to a sum received or receivable(or any sum deemed for the purposes of Tax to be received or receivable) undera Finance Document, the Borrower shall (within three Business Days of demand bythe Lender) pay to the Lender an amount equal to the loss, liability or costwhich the Lender determines has been suffered for or on account of Tax by theLender  in respect of a Finance Document.

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

(i)                                   withrespect to any Tax assessed on the Lender:

(A)                           underthe law of the jurisdiction in which that the Lender is incorporated or, ifdifferent, the jurisdiction (or jurisdictions) in which that the Lender istreated as resident for tax purposes; or

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

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

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

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

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

(c)                               Ifthe Lender makes, or intends to make,  aclaim under paragraph (a) above, it shall promptly notify the Borrower ofthe event which will give, or has given, rise to the claim.

**12.4**                     Tax Credit

If the Borrower makes a Tax Paymentand the Lender determines that:

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

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

the Lender shall pay promptly anamount to the Borrower which the Lender determines will leave it (after thatpayment) in the same after-Tax position as it would have been in had the TaxPayment not been made by the Borrower.

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**12.5**                     Stamp taxes

The Borrower shall pay and, withinthree Business Days of demand, indemnify the Lender  against any cost, loss or liability theLender incurs in relation to all stamp duty, registration and other similarTaxes payable in respect of any Finance Document.

**12.6**                     Value added tax

(a)                               Allconsideration expressed to be payable under a Finance Document by any Party tothe Lender shall be deemed to be exclusive of any VAT. If VAT is chargeable onsuch consideration, that Party shall pay to the Lender (or directly to theappropriate tax authority, if so required by law) (in addition to and at thesame time as paying the consideration) an amount equal to the amount of theVAT.

(b)                              Wherea Finance Document requires any Party to reimburse the Lender for any costs orexpenses, that Party shall also at the same time pay and indemnify theLender  against all VAT incurred by theLender in respect of the costs or expenses to the extent that the Lenderreasonably determines that neither it nor any other member of the group ofwhich it is a member for VAT purposes is entitled to credit or repayment fromthe relevant tax authority in respect of the VAT.

**13**                               INCREASED COSTS

**13.1**                     Increased costs

(a)                               Subjectto Clause 13.3 (*Exceptions*) theBorrower shall, within three Business Days of a demand by the Lender, pay theamount of any Increased Costs incurred by the Lender or any of its Affiliatesas a result of (i) the introduction of or any change in (or in theinterpretation, administration or application of) any law or regulation or (ii) compliancewith any law or regulation made after the Signing Date.

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

(i)                                   areduction in the rate of return from the Facility or on the Lender’s (or itsAffiliate’s) overall capital;

(ii)                                anadditional or increased cost; or

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

which is incurred or suffered by theLender or any of its Affiliates to the extent that it is attributable to theLender having entered into the Commitment or funding or performing itsobligations under any Finance Document.

**13.2**                     Increased cost claims

(a)                               Ifthe Lender intends to make a claim pursuant to Clause 13.1 (*Increased costs*), it shall notify theBorrower of the event giving rise to the claim.

(b)                              TheLender shall, as soon as practicable after a demand by the Borrower, provide acertificate confirming the amount of its Increased Costs.

**13.3**                     Exceptions

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

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

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(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); or

(iii)                             attributableto the wilful breach by the Lender or its Affiliates of any law or regulation.

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

**14**                               OTHER INDEMNITIES

**14.1**                     Currency indemnity

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

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

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

the Borrower shall as an independentobligation, within three Business Days of demand, indemnify the Lender againstany cost, loss or liability arising out of or as a result of the conversionincluding any discrepancy between (A) the rate of exchange used to convertthat Sum from the First Currency into the Second Currency and (B) the rateor rates of exchange available to that person at the time of its receipt ofthat Sum.

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

**14.2**                     Other indemnities

The Borrower shall, within threeBusiness Days of demand, indemnify the Lender against any cost, loss orliability incurred by the Lender as a result of:

(a)                                theoccurrence of any Event of Default;

(b)                               afailure by the Borrower to pay any amount due under a Finance Document on itsdue date;

(c)                                funding,or making arrangements to fund, a Loan requested by the Borrower in aUtilisation Request but not made by reason of the operation of any one or moreof the provisions of this Agreement (other than by reason of default ornegligence by the Lender alone); or

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

**14.3**                     Indemnity to the Lender

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

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

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

**15**                               MITIGATION BY THE LENDER

**15.1**                     Mitigation

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

**15.2**                     Limitation of liability

(a)                               TheBorrower shall indemnify the Lender for all costs and expenses reasonablyincurred by the Lender as a result of steps taken by it under Clause 15.1 (*Mitigation*).

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

**16**                               COSTS AND EXPENSES

**16.1**                     Transaction expenses

The Borrower shall promptly on demandpay the Lender the amount of all reasonable out-of-pocket costs and legalexpenses incurred by any of them in connection with the negotiation,preparation and execution of:

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

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

subject to the terms of the Mandate Letter.

**16.2**                     Amendment costs

If (a) the Borrower requests anamendment, waiver or consent or (b) an amendment is required pursuant toClause 25.6 (*Change of currency*),the Borrower shall, within three Business Days of demand, reimburse the Lenderfor the amount of all costs and expenses (including legal fees) reasonablyincurred by the Lender in responding to, evaluating, negotiating or complyingwith that request or requirement.

**16.3**                     Enforcement costs

The Borrower shall, within threeBusiness Days of demand, pay to the Lender the amount of all costs and expenses(including legal fees) incurred by the Lender in connection with theenforcement of, or the preservation of any rights under, any Finance Document.

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

**17**                               REPRESENTATIONS

The Borrower makes therepresentations and warranties set out in this Clause 17 to the Lender on thedate of this Agreement.

**17.1**                     Status

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

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

**17.2**                     Binding obligations

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

**17.3**                     Non-conflict with other obligations

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

(a)                                anylaw or regulation applicable to it;

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

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

**17.4**                     Power and authority

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

**17.5**                     Validity and admissibility inevidence

All Authorisations required:

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

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

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

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

**17.6**                     Governing law and enforcement

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

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

**17.7**                     No bankruptcy proceedings

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

**17.8**                     Deduction of Tax

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

**17.9**                     No filing or stamp taxes

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

**17.10**              Payment of Taxes

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

**17.11**               No default

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

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

**17.12**              No misleading information

(a)                               Thefactual information contained in the Information Memorandum was true andaccurate in all material respects as at 26 July 2004.

(b)                              Thefinancial projections contained in the Information Memorandum were prepared onthe basis of recent historical information and on the basis of reasonableassumptions.

(c)                               Anywritten factual information (other than that contained in the InformationMemorandum) provided by or on behalf of any member of the Group to the Lenderfor the purposes of the Due Diligence Materials was true and accurate in allmaterial respects as at the date it was provided or as at the date (if any) atwhich it is stated.

(d)                              Nothinghas occurred or been omitted from the Due Diligence Materials and noinformation has been given or withheld that results in the informationcontained in the Due Diligence Materials being untrue or misleading in anymaterial respect.

**17.13**              Financial statements

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

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

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

**17.14**              *Pari passu* ranking

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

**17.15**              No proceedings pending or threatened

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

**17.16**              Environmental laws and licences

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

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

(b)                               obtainedall Environmental Licences required in connection with its business wherefailure to do so would be reasonably likely to have a Material Adverse Effect;and

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(c)                                compliedwith the terms of those Environmental Licences where failure to do so would bereasonably likely to have a Material Adverse Effect.

**17.17**              Telecommunications laws and licences

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

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

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

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

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

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

**17.18**              Compliance with laws

(a)                               Neitherthe Borrower, nor any of its Significant Subsidiaries, is in material violationof any law presently in effect that is applicable or relevant to it.

(b)                              TheBorrower and each of its Significant Subsidiaries is in compliance with allapplicable laws concerning money laundering (other than where non-compliance iscaused by administrative or technical error and is remedied within a reasonabletime from the Borrower or the relevant Significant Subsidiary becoming aware ofsuch non-compliance).

(c)                               Neitherthe Borrower nor any of its Significant Subsidiaries, nor (to the best of theBorrower’s knowledge after due and careful enquiry in accordance with theBorrower’s internal procedures from time to time) any of the officers,directors or authorised employees, agents or representatives of the Borrower orany of its Significant Subsidiaries has:

(i)                                   paid,promised to pay or offered to pay, or authorized the payment of, anycommission, bribe, pay-off or kickback related to any Investment (each a “**Bribe**”), which Bribe violates anyapplicable law; or

(ii)                                enteredinto any agreement pursuant to which any Bribe may or will at any time be paidand which violates any applicable law; or

(iii)                             offeredor given any thing of value to influence the action of a public official, orthreatened injury to person, property or reputation, in connection with anyInvestment, in order to obtain or retain business or other improper advantagein the conduct of business.

**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 

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                                             doneand performed for private and commercial purposes (rather than public andgovernmental purposes).

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

**17.20**              Repetition

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

**18**                               INFORMATION UNDERTAKINGS

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

**18.1**                     Financial statements

The Borrower shall supply to theLender:

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

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

**18.2**                     Compliance Certificate

(a)                               TheBorrower shall supply to the Lender with each set of financial statementsdelivered pursuant 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.

(b)                              EachCompliance Certificate shall be signed by an authorised officer of the Borrowerand, if required to be delivered with the financial statements deliveredpursuant to paragraph (a) of Clause 18.1 (*Financialstatements*), shall be reported on by the Borrower’s auditors in theform set out in Schedule 3 (*Form ofCompliance Certificate*).

**18.3**                     Requirements as to financialstatements

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

(b)                              TheBorrower shall procure that each set of consolidated financial statementsdelivered pursuant to Clause 18.1 (*Financialstatements*) is prepared using GAAP****accounting practices and financial reference periods consistent withthose applied in the preparation of the Original Financial 

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                                             Statementsunless, in relation to any set of financial statements, it notifies the Lenderthat there has been a change in GAAP, the accounting practices or referenceperiods and its auditors deliver to the Lender:

(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 Lender,to enable the Lender to determine whether Clause 19 (*Financial covenants*) has been complied with and make anaccurate comparison between the financial position indicated in those financialstatements and that the Original Financial Statements.

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

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

**18.4**                     Implementation report

(a)                               TheBorrower shall, within 60 days after the end of the Investment Period, provideto the Lender a report, in the form agreed between the Borrower and the Lenderbefore the date hereof, and in substance satisfactory to the Lender, concerningthe Investments made during the Investment Period.

(b)                              Untilsuch time as the aggregate amount of Investments made is equal to the principalamount of all outstanding Loans, in relation to each Relevant Contract theBorrower shall provide to the Lender information as to the identity andnationality of the contractor and the amount and date of such RelevantContract.

**18.5**                     Environmental health and safetyreport

As soon as available but, in anyevent, within 60 days after the end of each financial year, the Borrower shallfurnish to the Lender a report, in form and in substance satisfactory to theLender (acting reasonably), on environmental, health and safety issues arisingin relation to the Borrower or the Investments during such financial year, including:

(a)                                informationon compliance by the Borrower with applicable Environmental Law and withapplicable environmental standards, including the status of any EnvironmentalLicences required for the Borrower’s operations, the results of any inspectionscarried out by environmental authorities, any material violations of applicableEnvironmental Law by the Borrower and remedial action relating thereto and anyfines imposed for any such violations;

(b)                               asummary of any material notices, reports and other communications onenvironmental matters submitted by the Borrower to any environmentalauthorities;

(c)                                informationon the health and safety record of the Borrower, including the rate ofaccidents which are likely to have a material adverse effect on health andsafety (as referred to in Clause 18.6 (*Notificationof accident*)) and any initiatives in relation to health and safetymatters which have been implemented or planned by the Borrower;

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(d)                               asummary of any changes in applicable Environmental Law which may have amaterial adverse effect on the Borrower’s operations; and

(e)                                copiesof environmental information periodically submitted by the Borrower to itsshareholders or the general public.

**18.6**                     Notification of accident

Promptly following the occurrence ofany incident or accident relating to the Borrower which is likely to have amaterial adverse effect on the environment, health or safety, the Borrowershall give the Lender notice thereof by facsimile transmission or telexspecifying the nature of such incident or accident and any steps the Borroweris taking to remedy the same. Without limiting the generality of the foregoing,an incident or accident is deemed to be likely to have a material adverseeffect on the environment, health or safety if any applicable law requiresnotification of such incident or accident to any governmental authority, suchincident or accident involves fatality or multiple serious injuries requiringhospitalisation or such incident or accident has become public knowledge(whether through media coverage or otherwise) and the Borrower is aware that ithas become public knowledge.

**18.7**                     Information: miscellaneous

The Borrower shall supply to theLender:

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

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

(c)                                promptly,such information as may be reasonably requested by the Lender (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 the Lender may reasonably request.

**18.8**                     Notification of Default

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

(b)                              Promptlyupon a request by the Lender, the Borrower shall supply to the Lender 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).

**18.9**                     Know your customer checks

If:

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

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

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(c)                                aproposed assignment or transfer by the Lender of any of its rights andobligations under this Agreement,

obliges the Lender (or, in the caseof paragraph (c) above, any prospective new Lender) to comply with “knowyour customer” or similar identification procedures in circumstances where thenecessary information is not already available to it, the Borrower shallpromptly upon the request of the Lender supply, or procure the supply of, suchdocumentation and other evidence as is reasonably requested by the Lender (foritself or, in the case of the event described in paragraph (c) above, onbehalf of any prospective new Lender) in order for the Lender or, in the caseof the event described in paragraph (c) above, any prospective new Lenderto carry out and be satisfied it has complied with all necessary “know yourcustomer” or other similar checks under all applicable laws and regulationspursuant to the transactions contemplated in the Finance Documents.

**19**                               FINANCIAL COVENANTS

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

**19.1**                     Financial condition

The Borrower shall ensure that:

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

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

**19.2**                     Financial covenant calculations

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

**19.3**                     Definitions

In this Clause 19.3:

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

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

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

(a)                                beforetaking into account:

(i)                                  InterestExpense;

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(ii)                               Tax;

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

(iv)                           extraordinaryand exceptional items; and

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

*multiplied by two*,

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

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

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

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

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

adjusted (but without doublecounting) by:

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

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

*multiplied by two*,

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

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

**20**                               GENERAL UNDERTAKINGS

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

**20.1**                     Authorisations

The Borrower shall promptly:

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

(ii)                                supplycertified copies to the Lender of,

any Authorisation required under anylaw or regulation of its jurisdiction of incorporation to enable it to performits obligations under the Finance Documents and to ensure the legality,validity, 

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enforceability or admissibility inevidence in its jurisdiction of incorporation of any Finance Document.

**20.2**                     Compliance with laws

The Borrower shall comply in all respects with alllaws to which it may be subject, if failure so to comply would materiallyimpair its ability to perform its obligations under the Finance Documents.

**20.3**                     Maintenance of existence

The Borrower shall maintain itscorporate existence.

**20.4**                     Negative pledge

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

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

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

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

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

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

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

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

**20.5**                     Disposals

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

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

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

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

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

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

(v)                               wherethe book value of such asset (when aggregated with the book value of each otherasset disposed of under this sub-clause (v)) (in each case as calculated 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 Lender (any such request to be made no more than once percalendar quarter, unless a Default is continuing), the 

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                                              Borrowershall provide a certificate to the Lender setting out in reasonable detail thebook value of any assets disposed of under this sub-clause (v) (calculatedin accordance with GAAP); or

(vi)                            involvingthe transfer of any or all of the Borrower’s shares in UMC pursuant to the UMCLitigation to a person that is not a member of the Group (provided that thissub-clause (vi) shall not in any way prejudice the rights of the Lenderunder Clause 21.18 (*UMC Litigation*)).

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

**20.6**                     Merger

(a)                               TheBorrower shall not enter into or become subject to any consolidation orreorganisation, whether by way of merger (*sliyaniyeobschestva*), company accession (*prisoedinyeniye**obschestva*), company division (*razdelenie**obschestva*), company separation (*vydelyeniye**obschestva*),company transformation (*preobrazovaniye**obschestva*), company liquidation(*likvidatisya obschestva*) or any othercompany reorganisation (*reorgnizatsiya**obschestva*) (as these terms areconstrued by applicable Russian law) or otherwise, or any analogous transactionin any jurisdiction, other than a consolidation or merger with one of itsSubsidiaries where the Borrower is the surviving entity.

(b)                              TheBorrower shall ensure that no Significant Subsidiary will enter into or becomesubject to any consolidation or reorganisation, whether by way of merger (*sliyaniye obschestva*), company accession (*prisoedinyeniye obschestva*), companydivision (*razdeleyeniey obschestva*),company separation (*vydelyeniye obschestva*),company transformation (*preobrazovaniye**obschestva*), company liquidation(*likvidatsiya obschestva*) or anyother company reorganisation (*reorganizatsiyaobschestva*) (as these terms are construed by applicable Russian law)or otherwise, or any analogous transaction in any jurisdiction if suchreorganisation or transaction would, in the opinion of the Lender (actingreasonably), have a Material Adverse Effect.

**20.7**                     Change of business

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

**20.8**                     Conduct of business

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

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

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

(c)                                theterms of all relevant Telecommunications Authorisations.

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**20.9**                     Asset maintenance

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

**20.10**              Insurance

The Borrower shall (and shall ensurethat each other member of the Group will) maintain insurances on and inrelation to its business and assets with reputable underwriters or insurancecompanies against those risks, and to the extent, usually insured against byprudent companies located in the same or a similar location and carrying on asimilar business.

**20.11**               Transactions with Related Parties

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

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

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

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

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

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

(ii)                                transactionsbetween members of the Group.

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

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

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

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

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**20.12**              Restriction on acquisitions

The Borrower shall not establish oracquire any Subsidiary or invest in any other entity without the consent of theLender (such consent not to be unreasonably withheld), provided that thisClause 20.12 shall not apply to any such acquisition or investment where:

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

(b)                               theconsideration paid by the Borrower in relation to such acquisition orinvestment, when aggregated with the consideration paid by the Borrower inrelation to each other acquisition or investment permitted under this paragraph(b), does not exceed (i) 20 per cent. of the Borrower’s Total Assets inthe financial year of the Borrower ending 31 December 2004; and (ii) 15per cent. (or such higher amount not exceeding 20 per cent. as the Lender mayagree (acting reasonably)) of the Borrower’s Total Assets in any otherfinancial year of the Borrower.

**20.13**              Prompt payment of Taxes

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

**20.14**              *Paripassu*

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

**20.15**              Loans and guarantees

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

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

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

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

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**20.16**              Environment, health and safety

The Borrower shall conduct itsbusiness with due regard to the environment and public and occupational healthand safety. The Borrower shall conduct its business in accordance withapplicable Environmental Law and with environmental standards existing in theEuropean Union on the date hereof (or, in the event that such standards do notexist in the European Union, as set forth in the applicable environmentalguidelines of the World Bank Group).

**21**                               EVENTS OF DEFAULT

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

**21.1**                     Non-payment

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

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

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

**21.2**                     Financial covenants

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

**21.3**                     Other obligations

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

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

**21.4**                     Misrepresentation

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

**21.5**                     Cross default

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

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

(c)                               Anysingle commitment for any Financial Indebtedness of any member of the Group inan amount exceeding $10,000,000 (or its equivalent in any other currency orcurrencies) is cancelled or 

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                                             suspendedby a creditor of any member of the Group as a result of an event of default(however described).

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

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

**21.6**                     Insolvency

(a)                               TheBorrower or a Significant Subsidiary is unable or admits its inability to payits debts as they fall due, suspends making payments on its debts generally or,by reason of actual or anticipated financial difficulties, commences negotiationswith one or more of its creditors with a view to rescheduling its indebtednessgenerally.

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

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

**21.7**                     Insolvency proceedings

Any corporate action or legalproceedings are taken in relation to:

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

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

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

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

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

or any analogous procedure or step istaken in any jurisdiction.

**21.8**                     Creditors’ process

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

**21.9**                     Judgment

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

**21.10**              Loss of Licence

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

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

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

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

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

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

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

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

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

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

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

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

**21.11**               Cessation of Business

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

**21.12**              Expropriation

(a)                               Byor under the authority of any government:

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

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

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

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

**21.13**              Russian Foreign Exchange Restrictions

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

**21.14**              Moratorium

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

**21.15**              The Russian Federation

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

**21.16**              Unlawfulness

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

**21.17**              Repudiation

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

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**21.18**              UMC Litigation

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

**21.19**              Material adverse change

The Lender determines that a MaterialAdverse Effect exists, has occurred or is reasonably likely to occur.

**21.20**              Acceleration

On and at any time after theoccurrence of an Event of Default which is continuing the Lender may,  by notice to the Borrower:

(a)                                cancelthe Commitment whereupon it shall immediately be cancelled;

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

(c)                                declarethat all or part of the Loans be payable on demand, whereupon they shallimmediately become payable on demand by the Lender.

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**SECTION 8CHANGES TO PARTIES**

**22**                               CHANGES TO THE LENDER

**22.1**                     Assignments and transfers by theLender

(a)                               Subjectto this Clause 22, the Lender (the “**Existing****Lender**”) may sell, transfer,assign, novate or otherwise dispose of all or part of its rights or obligationsunder this Agreement and the other Finance Documents to another bank orfinancial institution or to a trust, fund or other entity which is regularlyengaged in or established for the purpose of making, purchasing or investing inloans, securities or other financial assets (the “**New Lender**”).

(b)                              Unlessan Event of Default has occurred, any assignment or transfer shall require theconsent of the Borrower, provided that (1) such consent shall not beunreasonably withheld or delayed; and (2) unless the Borrower has notifiedthe Lender to the contrary within 5 Business Days of receiving notice of theintended assignment or transfer, the Borrower will be deemed to have given itsconsent to that assignment or transfer.

**22.2**                     Conditions of assignment or transfer

If:

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

(ii)                                asa result of circumstances existing at the date the assignment, transfer orchange occurs, the Borrower would be obliged to make a payment to the NewLender or Lender acting through its new Facility Office under Clause 12 (*Tax gross-up and indemnities*) or Clause13.1 (*Increased Costs*),

then the New Lender or Lender actingthrough its new Facility Office is only entitled to receive payment under thoseClauses to the same extent as the Existing Lender or Lender acting through itsprevious Facility Office would have been if the assignment, transfer or changehad not occurred.

**22.3**                     Disclosure of information

The Lender may disclose to any of itsAffiliates and any other person:

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

(b)                               with(or through) whom the 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)                                towhom, and to the extent that, information is required to be disclosed by anyapplicable law or regulation,

any information about the Borrower,the Group and the Finance Documents as the Lender shall consider appropriateif, in relation to paragraphs (a) and (b) above, the person to whomthe information is to be given has entered into a Confidentiality Undertaking.This Clause supersedes any previous agreement relating to the confidentialityof this information.

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**22.4**                     Limitation of responsibility ofExisting Lenders

(a)                               Unlessexpressly agreed to the contrary, the Existing Lender makes no representationor warranty 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)                            theaccuracy of any statements (whether written or oral) made in or in connectionwith any Finance Document or any other document,

and any representations or warrantiesimplied by law are excluded.

(b)                              EachNew Lender confirms to the Existing Lender that it:

(i)                                   hasmade (and shall continue to make) its own independent investigation andassessment of the financial condition and affairs of the Borrower and itsrelated entities in connection with its participation in this Agreement and hasnot relied exclusively on any information provided to it by the Existing Lenderin connection 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 the Commitment is in force.

(c)                               Nothingin any Finance Document obliges the Existing Lender to:

(i)                                   accepta re-transfer from a New Lender of any of the rights and obligations assignedor transferred under this Clause 22; or

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

**23**                               CHANGES TO THE BORROWER

The Borrower may not assign any ofits rights or transfer any of its rights or obligations under the FinanceDocuments without the prior written consent of the Lender.

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**SECTION 9THE LENDER**

**24**                               CONDUCT OF BUSINESS BYTHE LENDER

No provision of this Agreement will:

(a)                                interferewith the right of the Lender to arrange its affairs (tax or otherwise) inwhatever manner it thinks fit;

(b)                               obligethe Lender to investigate or claim any credit, relief, remission or repaymentavailable to it or the extent, order and manner of any claim; or

(c)                                obligethe Lender to disclose any information relating to its affairs (tax orotherwise) or any computations in respect of Tax.

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** **

**SECTION 10ADMINISTRATION**

**25**                               PAYMENT MECHANICS

**25.1**                     Payments to the Lender

(a)                               Oneach date on which the Borrower is required to make a payment under a FinanceDocument, the Borrower  shall make thesame available to the Lender (unless a contrary indication appears in a FinanceDocument) for value on the due date at the time and in such funds specified bythe Lender as being customary at the time for settlement of transactions in therelevant currency in the place of payment.

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

**25.2**                     Partial payments

(a)                               Ifthe Lender receives a payment that is insufficient to discharge all the amountsthen due and payable by the Borrower under the Finance Documents, the Lendershall apply that payment towards the obligations of the Borrower under theFinance Documents any order selected by the Lender.

(b)                              Paragraph(a) above will override any appropriation made by the Borrower.

**25.3**                     No set-off by the Borrower

All payments to be made by theBorrower under the Finance Documents shall be calculated and be made without(and free and clear of any deduction for) set-off or counterclaim.

**25.4**                     Business Days

(a)                               Anypayment which is due to be made on a day that is not a Business Day shall bemade on the next Business Day in the same calendar month (if there is one) orthe preceding Business Day (if there is not).

(b)                              Duringany extension of the due date for payment of any principal or Unpaid Sum underthis Agreement interest is payable on the principal or Unpaid Sum at the ratepayable on the original due date.

**25.5**                     Currency of account

(a)                               Subjectto paragraphs (b) to (e) below, Dollars is the currency of accountand payment for any sum due from the Borrower under any Finance Document.

(b)                              Arepayment of a Loan or Unpaid Sum or a part of a Loan or Unpaid Sum shall bemade in the currency in which that Loan or Unpaid Sum is denominated on its duedate.

(c)                               Eachpayment of interest shall be made in the currency in which the sum in respectof which the interest is payable was denominated when that interest accrued.

(d)                              Eachpayment in respect of costs, expenses or Taxes shall be made in the currency inwhich the costs, expenses or Taxes are incurred.

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(e)                               Anyamount expressed to be payable in a currency other than Dollars shall be paidin that other currency.

**25.6**                     Change of 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 Lender(after consultation with the Borrower); and

(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 Lender(acting reasonably).

(b)                              If achange in any currency of a country occurs, this Agreement will, to the extentthe Lender (acting reasonably and after consultation with the Borrower)specifies to be necessary, be amended to comply with any generally acceptedconventions and market practice in the London interbank market and otherwise toreflect the change in currency.

**26**                               SET-OFF

The Lender may set off any maturedobligation due from the Borrower under the Finance Documents (to the extentbeneficially owned by the Lender) against any matured obligation owed by theLender to the Borrower, regardless of the place of payment, booking branch orcurrency of either obligation. If the obligations are in different currencies,the Lender may convert either obligation at a market rate of exchange in itsusual course of business for the purpose of the set-off.

**27**                               NOTICES

**27.1**                     Communications in writing

Any communication to be made under orin connection with the Finance Documents shall be made in writing and, unlessotherwise stated, may be made by fax or letter.

**27.2**                     Addresses

The address and fax number (and thedepartment or officer, if any, for whose attention the communication is to bemade) of each Party for any communication or document to be made or deliveredunder or in connection with the Finance Documents is that identified with itsname below, or any substitute address, fax number or department or officer as aParty may notify to the other Party by not less than five Business Days’notice.

**27.3**                     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)                                   ifby way of fax, when received in legible form; or

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(ii)                                ifby way of letter, when it has been left at the relevant address or fiveBusiness Days after being deposited in the post postage prepaid in an envelopeaddressed to it at that address,

and, if a particular department orofficer is specified as part of its address details provided under Clause 27.2(*Addresses*), if addressed to thatdepartment or officer.

(b)                              Anycommunication or document to be made or delivered to the Lender will beeffective only when actually received by the Lender 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).

**27.4**                     English language

(a)                               Anynotice given under or in connection with any Finance Document must be inEnglish.

(b)                              Allother documents provided under or in connection with any Finance Document mustbe:

(i)                                   inEnglish; or

(ii)                                ifnot in English, and if so required by the Lender, accompanied by a certifiedEnglish translation and, in this case, the English translation will prevailunless the document is a constitutional, statutory or other official document.

**28**                               CALCULATIONS ANDCERTIFICATES

**28.1**                     Accounts

In any litigation or arbitrationproceedings arising out of or in connection with a Finance Document, theentries made in the accounts maintained by the Lender are prima facie evidenceof the matters to which they relate.

**28.2**                     Certificates and Determinations

Any certification or determination bythe Lender of a rate or amount under any Finance Document is, in the absence ofmanifest error, conclusive evidence of the matters to which it relates.

**28.3**                     Day count convention

Any interest, commission or feeaccruing under a Finance Document will accrue from day to day and is calculatedon the basis of the actual number of days elapsed and a year of  360 days or, in any case where the practicein the London interbank market differs, in accordance with that marketpractice.

**29**                               PARTIAL INVALIDITY

If, at any time, any provision of theFinance Documents is or becomes illegal, invalid or unenforceable in anyrespect under any law of any jurisdiction, neither the legality, validity orenforceability of the remaining provisions nor the legality, validity orenforceability of such provision under the law of any other jurisdiction willin any way be affected or impaired.

**30**                               REMEDIES AND WAIVERS

No failure to exercise, nor any delayin exercising, on the part of the Lender, any right or remedy under the FinanceDocuments shall operate as a waiver, nor shall any single or partial exerciseof any right or remedy prevent any further or other exercise or the exercise ofany other right or 

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remedy. The rights and remediesprovided in this Agreement are cumulative and not exclusive of any rights orremedies provided by law.

**31**                               AMENDMENTS AND WAIVERS

No term of the Finance Documents maybe amended or waived without the consent of the Lender and the Borrower and anysuch amendment or waiver will be binding on all Parties.

**32**                               COUNTERPARTS

Each Finance Document may be executedin any number of counterparts, and this has the same effect as if thesignatures on the counterparts were on a single copy of the Finance Document.

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**SECTION 11GOVERNING LAW AND ENFORCEMENT**

**33**                               GOVERNING LAW

This Agreement is governed by Englishlaw.

**34**                               ARBITRATION ANDJURISDICTION

**34.1**                     Arbitration

Any dispute, controversy or claimarising out of or relating to this Agreement, or the breach, termination orinvalidity hereof, shall be settled by arbitration in accordance with the UNCITRALArbitration Rules as in force on the Signing Date. There shall be onearbitrator and the appointing authority shall be the London Court ofInternational Arbitration. The seat and place of arbitration shall be London,England and the English language shall be used throughout the arbitralproceedings. The parties hereby waive any rights under the Arbitration Act 1996or otherwise to appeal any arbitration award to, or to seek determination of apreliminary point of law by, the courts of England. The arbitral tribunal shallnot be authorised to take or provide, and the Borrower agrees that it shall notseek from any judicial authority, any interim measures of protection orpre-award relief against EBRD, any provisions of the UNCITRAL Arbitration Rules notwithstanding.The arbitral tribunal shall have authority to consider and include in anyproceeding, decision or award any further dispute properly brought before it byEBRD (but no other party) insofar as such dispute arises out of any FinanceDocument, but, subject to the foregoing, no other parties or other disputesshall be included in, or consolidated with, the arbitral proceedings. In anyarbitral proceeding, the certificate of EBRD as to any amount due to it underany Finance Document shall, in the absence of manifest error, be prima facieevidence of such amount.

**34.2**                     Recourse to Courts

Notwithstanding Clause 34.1 above,this Agreement and the other Finance Document, and any rights of EBRD arisingout of or relating to this Agreement or any other Financing Agreement, may, atthe option of EBRD, be enforced by EBRD in the courts of England or in anyother courts having jurisdiction. For the benefit of EBRD, the Borrower herebyirrevocably submits to the non-exclusive jurisdiction of the courts of Englandwith respect to any dispute, controversy or claim arising out of or relating tothis Agreement or any other Finance Document, or the breach, termination orinvalidity hereof or thereof. The Borrower hereby irrevocably designates,appoints and empowers Law Debenture Corporate Services Limited at itsregistered office (being, on the date hereof, at 5th floor, 100 Wood Street, London EC2V 1EX,England) to act as its authorised agent to receive service of process and anyother legal summons in England for purposes of any legal action or proceedingbrought by EBRD in respect of any Finance Document. The Borrower herebyirrevocably consents to the service of process or any other legal summons outof such courts by mailing copies thereof by registered airmail postage prepaidto its address specified herein. The Borrower covenants and agrees that, solong as it has any obligations under this Agreement, it shall maintain a dulyappointed agent to receive service of process and any other legal summons inEngland for purposes of any legal action or proceeding brought by EBRD inrespect of any Finance Document and shall keep the Lender advised of theidentity and location of such agent. Nothing herein shall affect the right ofEBRD to commence legal actions or proceedings against the Borrower in anymanner authorised by the laws of any relevant jurisdiction. The commencement byEBRD of legal actions or proceedings in one or more jurisdictions shall not 

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preclude EBRD from commencing legalactions or proceedings in any other jurisdiction, whether concurrently or not.The Borrower irrevocably waives any objection it may now or hereafter have onany grounds whatsoever to the laying of venue of any legal action or proceedingand any claim it may now or hereafter have that any such legal action orproceeding has been brought in an inconvenient forum.

**35**                               IMMUNITIES

**35.1**                     Privileges and Immunities of EBRD

Nothing in this Agreement shall beconstrued as a waiver, renunciation or other modification of any immunities,privileges or exemptions of EBRD accorded under the Agreement Establishing theEuropean Bank for Reconstruction and Development, international convention orany applicable law.

**35.2**                     Waiver of immunity

The Borrower irrevocably agrees that,should any party take any proceedings anywhere (whether for an injunction,specific performance, damages or otherwise), no immunity (to the extent that itmay at any time exist, whether on the grounds of sovereignty or otherwise) fromthose proceedings, from attachment (whether in aid of execution, beforejudgment or otherwise) of its assets or from execution of judgment shall beclaimed by it or on behalf of it or with respect to its assets, any suchimmunity being irrevocably waived. The Borrower irrevocably agrees that it andits assets are, and shall be, subject to such proceedings, attachment orexecution in respect of its obligations under the Finance Documents.

**This Agreement has been entered into on the date stated atthe beginning of this Agreement.**

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**SCHEDULE1Conditions precedent**

**1****                                      FinanceDocuments**

An executed original of thisAgreement.

**2****                                      TheBorrower**

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

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

(c)                               Evidenceof the authority of the relevant signatories of the Borrower (including, butnot limited to, its Chief Accountant) to execute each Finance Document to whichit is a party and any documents referred to therein and the transactionscontemplated thereunder.

(d)                              Acertified copy of the most recent balance sheet of the Borrower by reference tothe date of each Finance Document.

(e)                               Acertificate executed on behalf of the Borrower:

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

(ii)                                certifyingthat each copy document relating to it specified in this Schedule 1 is correct,complete and in full force and effect as at a date no earlier than the date ofthis Agreement.

**3****                                      Legalopinions**

(a)                               Alegal opinion of Linklaters as to matters of English law.

(b)                              Alegal opinion of Linklaters CIS as to matters of Russian law.

(c)                               Anin-house legal opinion of the Borrower.

**4****                                      Otherdocuments and evidence**

(a)                               Evidencethat the process agent referred to in Clause 34 (*Recourse to Courts*) has accepted its appointment.

(b)                              Acopy of any other Authorisation or other document, opinion or assurance whichthe Lender considers to be necessary or desirable (if it has notified theBorrower accordingly) in connection with the entry into and performance of thetransactions contemplated by any Finance Document or for the validity andenforceability of any Finance Document.

(c)                               TheOriginal Financial Statements.

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

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(e)                               Acopy of the *deal passport* of theBorrower (in the form established by Instruction No. 117-I of theCentral Bank of the Russian Federation dated 15 June 2004) accepted andduly certified 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 Lender may reasonablyrequire (or written confirmation from ING Bank (Eurasia) ZAO that all documentsrequired to obtain such *deal passport*havebeen duly submitted to it by or on behalf of the Borrower).

(f)                                 Suchother documents or evidence which the Lender may reasonably require.

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**SCHEDULE2Utilisation Request**

From:                  MobileTeleSystems Open Joint Stock Company

To:         EuropeanBank for Reconstruction and Development

Dated:

Dear Sirs

**Mobile TeleSystems Open Joint Stock Company — US$150,000,000Facility Agreementdated [                   ](the “Agreement”)**

**1****                                     **Werefer to the Agreement. This is a Utilisation Request. Terms defined in theAgreement have the same meaning in this Utilisation Request unless given adifferent meaning in this Utilisation Request.

**2****                                     **Wewish to borrow a Loan on the following terms:
| Proposed Utilisation Date: | [                   ]  or, if that is not a Business Day, the next Business Day |
|----------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                       |                                                                                                                                                                           |
| Amount:                    | [                   ]  or, if less, the Available Commitment                    |

 

**3****                                     **Weconfirm that each condition specified in Clause 4.2 (*Further conditions precedent*) is satisfied on the date ofthis Utilisation Request.

**4****                                     **Theproceeds of this Loan should be credited to [specify bank account of theBorrower].

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

Mobile TeleSystems Open Joint StockCompany

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

 

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**SCHEDULE3Form of Compliance Certificate**

To:                        EuropeanBank for Reconstruction and Development

From:                    MobileTeleSystems Open Joint Stock Company

Dated:

Dear Sirs

**Mobile TeleSystems Open Joint Stock Company — US$150,000,000Facility Agreementdated [                   ](the “Agreement”)**

We refer to the Agreement. This is aCompliance Certificate. Terms defined in the Agreement have the same meaning inthis Compliance Certificate unless given a different meaning in this ComplianceCertificate.

**1****                                     **[Weconfirm that no Default is continuing.]*

**2****                                     **Weconfirm that the ratio of Borrowings as at the end of the Relevant Periodending on [•] to EBITDA in respect of such Relevant Period, was[•].

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

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

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

 

**insert applicable certification language*

We have reviewed the FacilityAgreement and audited consolidated financial statements of the MobileTeleSystems Open Joint Stock Company for the year ended [                   ].

On the basis of that review andaudit, nothing has come to our attention which would require any modificationto the confirmations in paragraphs 2 or 3 of the above Compliance Certificate.

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

for and on behalf of

*name of auditors of*Mobile TeleSystemsOpen 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 Joint Stock Company**

Address:                                   Ul.Vorontsovskaya 5, Bld. 2109147 MoscowRussian Federation

Fax No:               +7 095 911 6531

Attention:                           Tatiana EvtoushenkovaVice President for Investments andCorporate Development

 
| By:    |   |   | By:    |   |
|--------|--------|--------|--------|--------|
|   |   |   |   |   |
| Name:  |   |   | Name:  |   |
|   |   |   |   |   |
| Title: |   |   | Title: |   |
|   |   |   |   |   |

 

**The Lender**

**European Bank for Reconstruction and Development**

Address:                                   OneExchange Square

London EC2A 2JNUnited Kingdom

Fax No:               +44 20 7338 6100

Attention:                           Operation Administration Unit
| By:    |   |   |   |   |
|--------|--------|--------|--------|--------|
|   |   |   |   |   |
| Name:  |   |   |   |   |
|   |   |   |   |   |
| Title: |   |   |   |   |
|   |   |   |   |   |

 

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