**Exhibit 4.12**

 
| CONFORMED COPY |   | Operation  Number 36894/35648 |
|----------------|--------|-------------------------------|

 

Originally dated 8 December 2004 and

amended and restated with effect from theRelevant Date

 

 

**US$250,000,000**

 

**FACILITY AGREEMENT**

 

between

 

**MOBILE TELESYSTEMS OPEN JOINTSTOCK COMPANY**

 

as Borrower

 

and

 

**EUROPEAN BANK FORRECONSTRUCTION AND DEVELOPMENT**

 

as Lender

 

 

 

Paveletskayasq. 2, bld. 2

Moscow115054

 

Telephone(7-495) 797 9797

Facsimile(7-495) 797 9798

 

RefMIYB/TP

 

----

 

**CONTENTS**

 
| **CLAUSE**                                                     |   | **PAGE**                                |
|----------------------------------------------------------------|--------|-----------------------------------------|
|                                                           |   |                                    |   |   |
| SECTION 1 INTERPRETATION                                       |   | 1                                       |
|                                                           |   |                                    |   |   |
|                                                           | 1      | DEFINITIONS AND  INTERPRETATION         |   | 1 |
|                                                           |   |                                    |   |   |
| SECTION 2 THE FACILITY                                         |   | 11                                      |
|                                                           |   |                                    |   |   |
|                                                           | 2      | THE FACILITY                            |   | 11 |
|                                                           |   |                                    |   |   |
|                                                           | 3      | PURPOSE                                 |   | 11 |
|                                                           |   |                                    |   |   |
|                                                           | 4      | CONDITIONS OF UTILISATION               |   | 11 |
|                                                           |   |                                    |   |   |
| SECTION 3 UTILISATION                                          |   | 12                                      |
|                                                           |   |                                    |   |   |
|                                                           | 5      | UTILISATION                             |   | 12 |
|                                                           |   |                                    |   |   |
| SECTION 4 REPAYMENT,  PREPAYMENT AND CANCELLATION              |   | 13                                      |
|                                                           |   |                                    |   |   |
|                                                           | 6      | REPAYMENT                               |   | 13 |
|                                                           |   |                                    |   |   |
|                                                           | 7      | PREPAYMENT AND  CANCELLATION            |   | 13 |
|                                                           |   |                                    |   |   |
| SECTION 5 COSTS OF  UTILISATION                                |   | 16                                      |
|                                                           |   |                                    |   |   |
|                                                           | 8      | INTEREST                                |   | 16 |
|                                                           |   |                                    |   |   |
|                                                           | 9      | INTEREST PERIODS                        |   | 17 |
|                                                           |   |                                    |   |   |
|                                                           | 10     | CHANGES TO THE CALCULATION  OF INTEREST |   | 17 |
|                                                           |   |                                    |   |   |
|                                                           | 11     | FEES                                    |   | 18 |
|                                                           |   |                                    |   |   |
| SECTION 6 ADDITIONAL  PAYMENT OBLIGATIONS                      |   | 19                                      |
|                                                           |   |                                    |   |   |
|                                                           | 12     | TAX GROSS-UP AND  INDEMNITIES           |   | 19 |
|                                                           |   |                                    |   |   |
|                                                           | 13     | INCREASED COSTS                         |   | 21 |
|                                                           |   |                                    |   |   |
|                                                           | 14     | OTHER INDEMNITIES                       |   | 22 |
|                                                           |   |                                    |   |   |
|                                                           | 15     | MITIGATION BY THE LENDER                |   | 23 |
|                                                           |   |                                    |   |   |
|                                                           | 16     | COSTS AND EXPENSES                      |   | 23 |
|                                                           |   |                                    |   |   |
| SECTION 7 REPRESENTATIONS,  UNDERTAKINGS AND EVENTS OF DEFAULT |   | 24                                      |
|                                                           |   |                                    |   |   |
|                                                           | 17     | REPRESENTATIONS                         |   | 24 |
|                                                           |   |                                    |   |   |
|                                                           | 18     | INFORMATION UNDERTAKINGS                |   | 28 |
|                                                           |   |                                    |   |   |
|                                                           | 19     | FINANCIAL COVENANTS                     |   | 31 |
|                                                           |   |                                    |   |   |
|                                                           | 20     | GENERAL UNDERTAKINGS                    |   | 33 |
|                                                           |   |                                    |   |   |
|                                                           | 21     | EVENTS OF DEFAULT                       |   | 37 |
|                                                           |   |                                    |   |   |
| SECTION 8 CHANGES TO PARTIES                                   |   | 42                                      |
|                                                           |   |                                    |   |   |
|                                                           | 22     | CHANGES TO THE LENDER                   |   | 42 |
|                                                           |   |                                    |   |   |
|                                                           | 23     | CHANGES TO THE BORROWER                 |   | 43 |
|                                                           |   |                                    |   |   |
| SECTION 9 THE LENDER                                           |   | 44                                      |
|                                                           |   |                                    |

 

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|                                       |   |                               |   |   |
|--------------------------------------------|--------|------------------------------------|--------|--------|
|                                       | 24     | CONDUCT OF BUSINESS BY THE  LENDER |   | 44     |
|                                       |   |                               |   |   |
| SECTION 10 ADMINISTRATION                  |   | 45                                 |
|                                       |   |                               |   |   |
|                                       | 25     | PAYMENT MECHANICS                  |   | 45     |
|                                       |   |                               |   |   |
|                                       | 26     | SET-OFF                            |   | 46     |
|                                       |   |                               |   |   |
|                                       | 27     | NOTICES                            |   | 46     |
|                                       |   |                               |   |   |
|                                       | 28     | CALCULATIONS AND  CERTIFICATES     |   | 47     |
|                                       |   |                               |   |   |
|                                       | 29     | PARTIAL INVALIDITY                 |   | 47     |
|                                       |   |                               |   |   |
|                                       | 30     | REMEDIES AND WAIVERS               |   | 47     |
|                                       |   |                               |   |   |
|                                       | 31     | AMENDMENTS AND WAIVERS             |   | 48     |
|                                       |   |                               |   |   |
|                                       | 32     | COUNTERPARTS                       |   | 48     |
|                                       |   |                               |   |   |
| SECTION 11 GOVERNING LAW  AND ENFORCEMENT  |   | 49                                 |
|                                       |   |                               |   |   |
|                                       | 33     | GOVERNING LAW                      |   | 49     |
|                                       |   |                               |   |   |
|                                       | 34     | ARBITRATION AND  JURISDICTION      |   | 49     |
|                                       |   |                               |   |   |
|                                       | 35     | IMMUNITIES                         |   | 50     |
|                                       |   |                               |   |   |
| SCHEDULE 1 Conditions  precedent           |   | 51                                 |
|                                       |   |                               |   |   |
| SCHEDULE 2 Utilisation  Request            |   | 53                                 |
|                                       |   |                               |   |   |
| SCHEDULE 3 Form of  Compliance Certificate |   | 54                                 |

 

ii

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THISAGREEMENT is originally dated 8 December 2004 and amended and restated witheffect from the Relevant Date (as defined in the Amendment and RestatementAgreement referred to below) and made between:

 

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

 

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

 

ITIS AGREED as follows:

 

**SECTION****1****INTERPRETATION**

 

**1****                                     ****DEFINITIONS AND INTERPRETATION**

 

**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.

 

“**Amendmentand Restatement Agreement**” means the amendment and restatementagreement dated May 2006 and made between the Borrower and the Lender.

 

“**AvailabilityPeriod**” means the period from and including the Designated Date toand including 28 December 2006.

 

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

 

(a)                              the amountof 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.

 

“**Bitel**”means Bitel LLC, a limited liability company incorporated in the KyrgyzRepublic.

 

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

 

“**Break Costs**”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;

 

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exceeds:

 

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

 

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

 

“**Commitment**” means the aggregate of theOriginal Commitment and the New Commitment, to the extent suchcommitment is not cancelled or reduced in accordance with the terms of thisAgreement.

 

“**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.

 

“**DesignatedDate**” means the date of the Amendment and Restatement Agreement.

 

“**DueDiligence Materials**” means written information provided inconnection with the due diligence meeting between the Lender and the Borroweron 31 March 2006, including (without limitation) the terms of the SyndicatedFacility, the Borrower’s business plan as of March 2006 and the Borrower’s financialprojections for the period commencing 1 January 2006 and ending on 31 December2013, dated 28 March 2006.

 

“**EgyptLicence**” means the third licence (not issued as of the date of thisAgreement) to install, provide and operate a public land mobile network inEgypt.

 

“**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 orbelow ground);

 

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

 

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

 

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

 

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

 

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

 

“**Event ofDefault**” means any event or circumstance specified as such in Clause21 (*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.

 

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

 

“**Final MaturityDate**” means 15 June 2014.

 

“**FinanceDocument**” means this Agreement and any other document designated assuch by the Lender and the Borrower.

 

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

 

(a)                                moneys borrowed;

 

(b)                               any amount raised by acceptance under anyacceptance credit facility or dematerialised equivalent;

 

(c)                                any amount raised pursuant to any notepurchase facility or the issue of bonds, notes, debentures, loan stock or anysimilar instrument;

 

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

 

(e)                                receivables sold or discounted (other thanany receivables to the extent they are sold on a non-recourse basis);

 

(f)                                  any amount raised under any other transaction(including any forward sale or purchase agreement) having the commercial effectof a borrowing;

 

(g)                               any derivative transaction entered into inconnection with protection against or benefit from fluctuation in any rate orprice (and, when calculating the value of any derivative transaction, only themarked to market value shall be taken into account);

 

(h)                               shares which are expressed to be redeemableat the option of the holder on or prior to the Final Maturity Date (butexcluding any accrued dividends);

 

(i)                                   any counter-indemnity obligation inrespect of a guarantee, indemnity, bond, standby or documentary letter ofcredit or any other instrument issued by a bank or financial institution; and

 

(j)                                   the amount of any liability in respect of anyguarantee or indemnity for any of the items referred to in paragraphs (a) to(i) above.

 

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

 

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

 

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

 

“**InformationMemorandum**” means the Original Information Memorandum or the RevisedInformation Memorandum.

 

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

 

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

 

“**InvestmentPeriod**” means the period commencing on Relevant Date and ending onthe date falling 12 Months after the first Utilisation Date following theRelevant Date.

 

“**Investments**”means:

 

(a)                               expansion by members of the Group into theregions of the Russian Federation (other than Moscow and St. Petersburg) andthe countries constituting the Commonwealth of Independent States by way of networkdevelopment and/or acquisitions; and

 

(b)                             the technological upgrade of itsSubsidiaries,

 

in each case including any fees relatingthereto, and any refinancing or recapitalisation in connection therewith, inwhole or in part.

 

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

 

(a)                              theapplicable Screen Rate; or

 

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

 

as of 11:00 a.m. on the Quotation Day for theoffering of deposits in Dollars for a period comparable to the Interest Periodfor that Loan.

 

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

 

“**Loan**”means a loan made or to be made under the Facility (including, for theavoidance of doubt, a Loan made under the Original Facility Agreement) or theprincipal amount for the 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.

 

“**MandateLetter**” means the letter agreement dated 20 March 2006 between theLender and the Borrower.

 

“**Margin**”means 1.51 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)                             the abilityof the Borrower to perform and comply with its obligations under any FinanceDocument; or

 

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

 

provided that for the purpose of paragraph (a)above any losses incurred by any member of the Group after the date of thisAgreement as a consequence of an adverse determination of any or all of theBitel Litigation, such losses not exceeding $330,000,000 or its equivalent inany other currency (including legal fees and associated expenses) in aggregate,shall be disregarded.

 

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

 

(b)                               if thereis no numerically corresponding day in the calendar month in which that periodis to end, that period shall end on the last Business Day in that calendarmonth.

 

The above rules will only apply to the lastMonth of any period.

 

“**NewCommitment**” means a commitment of $111,538,461.

 

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

 

“**Original****Commitment**” means a commitment of$138,461,539 ($150,000,000 less the $11,538,461 repaid by the Borrower on 15 December 2005).

 

“**OriginalFacility Agreement**” has the meaning given to it in the Amendment andRestatement Agreement.

 

“**OriginalFinancial Statements**” means the audited consolidated financialstatements of the Group for the financial year ended 31 December 2005.

 

“**OriginalInformation Memorandum**” means the information memorandum prepared inrelation to the facility agreement dated 26 July 2004 between the Borrower, INGBank N.V., London Branch as Agent and the lenders named therein, and asprovided to the Lender by the Borrower prior to the Signing Date for thepurpose of this Agreement.

 

“**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

 

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that (i) no such Security shall extend to anyother assets; (ii) the aggregate principal amount of all Financial Indebtednesssecured by such Security on such assets shall not exceed the lower of (x) thepurchase price of such assets and (y) the fair market value of such assets atthe time of acquisition, repair or refurbishing; and (iii) such Securityattaches to such assets concurrently with the repair or refurbishing thereof orwithin 90 days after the acquisition thereof, as the case may be;

 

(d)                               anySecurity arising by operation of law, including any Security (i) arising in theordinary course of business with respect to amounts not yet delinquent or beingcontested by the Borrower or a Subsidiary of the Borrower in good faith inappropriate proceedings or (ii) for taxes, assessments, government charges orclaims, including without limitation those in favour of Russian governmentalfiscal 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 witha bank 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 orencumbrances incurred in the ordinary course of business and not interfering inany material respect with the business of the Borrower or the business of anySubsidiary of the Borrower, including any encumbrance or restriction withrespect to an equity interest of any joint venture pursuant to a joint ventureagreement;

 

(h)                               anyextension, renewal or replacement of any Security described in clauses (a) to(g) above, provided that (i) such extension, renewal or replacement shall be nomore restrictive in any material respect than the original Security; (ii) theamount of Financial Indebtedness secured by such Security is not increased; and(iii) if the assets securing the Financial Indebtedness subject to suchSecurity are changed in connection with such refinancing, extension orreplacement, the fair market value of the property or assets is not increased;and

 

(i)                                   any otherSecurity (excluding any Security described in (a)-(h) above) providedthat, immediately after giving effect to such Security, the aggregate amount ofall secured Financial Indebtedness of the Group does not exceed 10% of theBorrower’s Total Assets.

 

“**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 ofING Bank N.V., HSBC Bank Plc and Raiffeisen Zentralbank Österreich AG.

 

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“**Relevant Contract**”means a contract:

 

(a)                                relatingto an Investment;

 

(b)                               with avalue in excess of EUR1,000,000 (or the equivalent thereof in another currencyat the rate of exchange on the date of that contract); and

 

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

 

“**RelevantDate**” has the meaning given to it in the Amendment and RestatementAgreement.

 

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

 

“**RepaymentDate**” means 15 June 2007, 15 December 2007, 15 June 2008, 15December 2008, 15 June 2009, 15 December 2009, 15 June 2010, 15 December 2010,15 June 2011, 15 December 2011, 15 June 2012, 15 December 2012, 15 June 2013,15 December 2013 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*).

 

“**RevisedInformation Memorandum**” means the information memorandum prepared inrelation to the Syndicated Facility, and as provided to the Lender by theBorrower prior to the Designated Date for the purpose of this Agreement.

 

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

 

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

 

“**Screen Rate**”means the British Bankers Association Interest Settlement Rate for Dollars forthe relevant period displayed on the appropriate page of the Telerate screen.If the agreed page is replaced or service ceases to be available, the Lendermay specify another page or service displaying the appropriate rate afterconsultation 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.

 

“**SignificantSubsidiary**” means:

 

(a)                                UMC (unless, pursuant to the UMC Litigation,any or all of the Borrower’s shares in UMC are transferred to a person that isnot a member of the Group, with the result that UMC ceases to be a member ofthe Group);

 

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

 

(c)                                any Subsidiary of the Borrower (i) whosetotal assets (or, where such Subsidiary prepares consolidated accounts, whosetotal consolidated assets) have a book value (as determined by reference to themost recent management accounts of that Subsidiary prepared in accordance withGAAP) equal to or exceeding 10% of the Borrower’s Total Assets or (ii) whosegross annual revenues (or, where such Subsidiary prepares consolidatedaccounts, whose gross annual consolidated revenues) (as determined by 

 

7

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referenceto the most recent management accounts of that Subsidiary prepared inaccordance with GAAP) are equal to or exceed 10% of the Borrower’s gross annualconsolidated revenues in the year for which the Borrower’s most recentconsolidated financial statements were prepared.

 

“**Signing Date**”means 8 December 2004.

 

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

 

“**SyndicatedFacility**” means the $1,330,000,000 facility agreement dated 21 April2006 between (amongst others) the Borrower, The Bank of Tokyo-MitsubishiUFJ, Ltd, Bayerische Landesbank, HSBC Bank plc, ING Bank N.V., RaiffeisenZentralbank Oesterreich AG and Sumitomo Mitsui Banking Corporation EuropeLimited as mandated lead arrangers and ING Bank N.V., London Branch as agent.

 

“**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).

 

“**TelecommunicationsAuthorisation**”****meansany Authorisation from any governmental or other regulatory authority necessaryin order for each of the Borrower and its Significant Subsidiaries to maintain,operate and conduct its business as it is being conducted in accordance withTelecommunications Laws.

 

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

 

“**TelecommunicationsLicence**” means any Authorisation required at any time underTelecommunications Laws.

 

 “**Total Assets**” meansthe book value of the consolidated total assets of the Borrower as determinedby reference to the Borrower’s most recent annual consolidated balance sheetdelivered in accordance with paragraph (a) of Clause 18.1 (*Financial statements*) or, prior to thefirst delivery, to the Original Financial Statements.

 

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

 

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

 

 “**UMC Litigation**” meansany of the claims, proceedings (present or future) and causes of action involvingthe Borrower and/or any of its Affiliates (including UMC) relating to orarising out of the sale of UMC to the Borrower or the acquisition,reorganisation or ownership of UMC by the Borrower.

 

“**Unpaid Sum**”means any sum due and payable but unpaid by the Borrower under the FinanceDocuments.

 

“**US Dollars**”,“**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.

 

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“**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)                               Unless acontrary indication appears, any reference in this Agreement to:

 

(i)                                   the “**Lenders**”, the “**Borrower**” and any “**Party**”shall be construed so as to include its successors in title, permitted assignsand 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 ororganisation;

 

(viii)                      thesingular shall include references to the plural and vice versa;

 

(ix)                              aprovision of law is a reference to that provision as amended or re-enacted;and

 

(x)                                 a time ofday is a reference to London time.

 

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

 

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

 

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

 

**1.3****                           ****Third Party Rights**

 

A person who is not a Party has no right underthe Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy thebenefit of any term of this Agreement.

 

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**SECTION****2****THE FACILITY**

 

**2****                                     ****THE FACILITY**

 

Subject to the terms of this Agreement, theLender makes available to the Borrower a term loan facility in Dollars in anaggregate 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 the regions of theRussian Federation (other than Moscow and St. Petersburg) and in the countriesconstituting the Commonwealth of Independent States. However, nothing in thisAgreement shall oblige the Borrower to make any Investment which would not be,in the opinion of the Borrower, in its best interests.

 

**4****                                     ****CONDITIONS OF UTILISATION**

 

**4.1****                           ****Initial conditions precedent**

 

The Lender has received all of the documentsand other evidence listed in Schedule 1 (*Conditionsprecedent*) in form and substance satisfactory to the Lender, and hasnotified the Borrower that it is so satisfied.

 

**4.2****                           ****Further conditions precedent**

 

The Lender will only be obliged to comply withClause 5.4 (*Availability of Loans*)if on the date of the Utilisation Request and on the proposed Utilisation Date:

 

(i)                                   no Defaultis 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, by notice to theBorrower, suspend or cancel the right of the Borrower to make any Utilisationif the Board of Governors of EBRD has decided in accordance with Article 8, paragraph3, of the Agreement Establishing the European Bank of Reconstruction andDevelopment that access by the Russian Federation to EBRD resources should besuspended or otherwise modified.

 

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**SECTION****3****UTILISATION**

 

**5****                                     ****UTILISATION**

 

**5.1****                           ****Delivery of a Utilisation Request**

 

The Borrower may utilise the Facility bydelivery to the Lender of a duly completed Utilisation Request not later than5:00 p.m. on the day falling 6 London Business Days before the proposedUtilisation Date.

 

**5.2****                           ****Completion of a Utilisation Request**

 

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

 

(i)                                   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)                              Only oneLoan may be requested in each Utilisation Request.

 

**5.3****                           ****Currency and amount**

 

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

 

(b)                              The amountof the proposed Loan must be:

 

(i)                                   a minimumof $30,000,000 or, if less, the Available Commitment; or

 

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

 

**5.4****                           ****Availability of Loans**

 

If the conditions set out in this Agreementhave been met, the Lender shall make each Loan available by the UtilisationDate through its Facility Office.

 

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**SECTION****4****REPAYMENT, PREPAYMENT AND CANCELLATION**

 

**6****                                     ****REPAYMENT**

 

**6.1****                           ****Repayment of Loans**

 

(a)                               TheBorrower made a repayment of the Loan under the Original Facility Agreement inthe principal amount of US$11,538,461 on 15December 2005.

 

(b)                              TheBorrower shall repay the Loans in 15 further instalments, by paying on eachRepayment Date an amount equal to one fifteenth of the amount of the Loansoutstanding at the close of business on the last day of the AvailabilityPeriod. For the avoidance of doubt, the Loans outstanding shall consist of (i)the amount of the Loan outstanding under the Original Facility Agreement (being$138,461,539 immediately prior to the Designated Date) and (ii) Loans made inrespect of the New Commitment, which in each case are outstanding on the lastday of the Availability Period.

 

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

 

**7****                                     ****PREPAYMENT AND CANCELLATION**

 

**7.1****                           ****Illegality**

 

If it becomes unlawful in any applicablejurisdiction for the Lender to perform any of its obligations as contemplatedby this Agreement or to fund or maintain any Loan:

 

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

 

(b)                               upon theLender notifying the Borrower, the Commitment will be immediately cancelled;and

 

(c)                                theBorrower shall repay the Loans on the later of the last day of the InterestPeriod for each Loan occurring, and the date falling 20 days after the Lenderhas notified the Borrower (but in any event no longer than any grace periodpermitted by law) or, if earlier, the date specified by the Lender in thenotice delivered to the Borrower (being no earlier than the last day of anyapplicable grace period permitted by law).

 

**7.2****                           ****Voluntary cancellation**

 

The Borrower may, if it gives the Lender notless than 10 Business Days’ (or such shorter period as the Lender may agree)prior written notice, cancel the whole or any part (being a minimum amount 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)                              A Loan mayonly be prepaid after the last day of the Availability Period (or, if earlier,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).

 

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**7.4****                           ****Mandatory Prepayment – Change of Control**

 

(a)                               In thisClause 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)acquire ultimate beneficial or legal ownership of, or control over, more than50% of the issued shares of the Borrower; (y) acquire ownership of or controlover more than 50% of the voting interests in the share capital of the Borrower;or (z) obtain the power (whether or not exercised) to elect not less than halfof the directors of the Borrower (provided, however, that any acquisition bySistema JSFC or any of its Subsidiaries that results in the 50% threshold inparagraphs (x) and (y) above being exceeded, or in the power referred to inparagraph (z) above being obtained, will not be a Change of Control).

 

(b)                                 If thereis 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)                           if theLender (in its sole discretion) so requires, it may, within 5 Business Days ofits 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 shallconsult with each other for a period of 5 Business Days with respect to thetransfer of the Lender’s rights and obligations under this Agreement to anotherreputable international bank or financial institution nominated by the Borrower(but which is not an Affiliate of the Borrower) in accordance with Clause 22 (*Changes to the Lender*). If no suchtransfer has been effected on or before the Early Repayment Date, then (x) theBorrower shall repay the Loans (together with accrued interest) in full on theEarly Repayment Date and (y) the Commitment shall be reduced to zero on thatdate.

 

**7.5****                           ****Right of repayment and cancellation in relation to a single Lender**

 

If:

 

(a)                              any sumpayable to the Lender by the Borrower is required to be increased underparagraph (c) of Clause 12.2 (*Tax gross-up*);or

 

(b)                             the Lenderclaims 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 day of the Interest Period ending after thedate of such notice (or, if earlier, on such other date as specified by theBorrower in that notice) (the “**CancellationDate**”). Before the Cancellation Date, the Lender and the Borrowershall consult with each other for a period of 5 Business Days with respect tothe transfer of the Lender’s rights and obligations under this Agreement toanother reputable international bank or financial institution nominated by theBorrower (but which is not an Affiliate of the Borrower) in accordance withClause 22 (*Changes to the Lender*).If no such transfer has been effected on or before the Cancellation Date, then(x) the Borrower shall repay the Loans (together with accrued interest) in fullon the Cancellation Date and (y) the Commitment shall be reduced to zero onthat date.

 

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**7.6****                           ****Restrictions**

 

(a)                               Any noticeof cancellation or prepayment given by any Party under this Clause 7 shall beirrevocable and, unless a contrary indication appears in this Agreement, shallspecify the date or dates upon which the relevant cancellation or prepayment isto be made and the amount of that cancellation or prepayment.

 

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

 

(c)                               TheBorrower may not reborrow any part of 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)                               No amountof the Commitment cancelled under this Agreement may be subsequentlyreinstated.

 

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**SECTION****5****COSTS OF UTILISATION**

 

**8****                                     ****INTEREST**

 

**8.1****                           ****Calculation of interest**

 

The rate of interest on each Loan for eachInterest Period is the percentage rate per annum which is the aggregate of:

 

(a)                                theMargin; and

 

(b)                               LIBOR.

 

**8.2****                           ****Payment of interest**

 

The Borrower shall pay accrued interest on eachLoan on the last day of each Interest Period (and, if the Interest Period islonger than 6 Months, on the date falling at six monthly intervals after thefirst day of the Interest Period).

 

**8.3****                           ****Default interest**

 

(a)                               If theBorrower fails to pay any amount payable by it under a Finance Document on itsdue date, interest shall accrue on the overdue amount from the due date up tothe 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 rate whichwould have been payable if the overdue amount had, during the period of non-payment,constituted a Loan in the currency of the overdue amount for successiveInterest 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)                              If anyoverdue 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)                                 the firstInterest Period for that overdue amount shall have a duration equal to theunexpired portion of the current Interest Period relating to that Loan; and

 

(ii)                              the rateof interest applying to the overdue amount during that first Interest Periodshall be the sum of 2 per cent. and the rate which would have applied if theoverdue 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 the Borrowerof the determination of a rate of interest under this Agreement.

 

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**9****                                     ****INTEREST PERIODS**

 

**9.1****                           ****Duration of Interest Periods**

 

(a)                               Save asotherwise 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)                              The firstInterest Period for the first Loan shall begin on the Utilisation Date for thatLoan and shall have a duration of 6 Months, and the first Interest Period foreach Loan made thereafter shall begin on the Utilisation Date for that Loan andend on the last day of the Interest Period applicable to that first Loan. Atthe end of the first Interest Period for each Loan, such Loan shall beconsolidated with all other Loans (if any) then outstanding such that all Loansunder 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 otherwise end on aday which is not a Business Day, that Interest Period will instead end on thenext Business Day in that calendar month (if there is one) or the precedingBusiness Day (if there is not).

 

**10****                              ****CHANGES TO THE CALCULATION OF INTEREST**

 

**10.1****                    ****Absence of quotations**

 

Subject to Clause 10.2 (*Market disruption*), if LIBOR is to bedetermined by reference to the Reference Banks but a Reference Bank does not supplya quotation by 11:00 a.m. on the Quotation Day, the applicable LIBOR shall bedetermined on the basis of the quotations of the remaining Reference Banks.

 

**10.2****                    ****Market disruption**

 

(a)                               If aMarket 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)                              the ratenotified to the Borrower by the Lender as soon as practicable and in any eventbefore interest is due to be paid in respect of that Interest Period, to bethat which expresses as a percentage rate per annum the cost to the Lender offunding that Loan from whatever source it may reasonably select.

 

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

 

(i)                                 at orabout 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 or funding**

 

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

 

(b)                              Anyalternative basis agreed pursuant to paragraph (a) above shall, with the priorconsent 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)                              The Lendershall, 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**

 

The Borrower shall pay to the Lender commitmentfees and front-end commission in accordance with Clause 5 (*Fees*) of the Amendment and RestatementAgreement.

 

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**SECTION****6****ADDITIONAL PAYMENT OBLIGATIONS**

 

**12****                              ****TAX GROSS-UP AND INDEMNITIES**

 

**12.1****                    ****Definitions**

 

(a)                               In thisAgreement:

 

“**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.

 

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

 

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

 

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

 

“**Tax TreatyJurisdiction**” means a jurisdiction which has in force a double taxtreaty with the Russian Federation (or with the Union of Soviet SocialistRepublics to which the Russian Federation has succeeded) which provides forfull exemption from Russian withholding tax on interest derived from a sourcewithin the Russian Federation payable to a resident of such jurisdiction.

 

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

 

**12.2****                    ****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)                               Subject toparagraph (d) below, if a Tax Deduction is required by law to be made by theBorrower, the amount of the payment due from the Borrower shall be increased toan amount which (after making any Tax Deduction) leaves an amount equal to thepayment which would have been due if no Tax Deduction had been required.

 

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

 

(f)                                 Within 30days of making either a Tax Deduction or any payment required in connectionwith that Tax Deduction, the Borrower shall deliver to the Lender an originalreceipt (or certified copy thereof) demonstrating that the Tax Deduction hasbeen made or (as applicable) any appropriate payment paid to the relevanttaxing authority.

 

**12.3****                    ****Tax indemnity**

 

(a)                               If theLender is or will be subject to any liability, or required to make any payment,for or on account of Tax in relation to a sum received or receivable (or anysum deemed for the purposes of Tax to be received or receivable) under aFinance Document, 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)                           under thelaw 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)                             under thelaw of the jurisdiction in which that the Lender’s Facility Office is locatedin respect of amounts received or receivable in that jurisdiction,

 

if that Tax is imposed on or calculated byreference to the net income received or receivable (but not any sum deemed tobe received or receivable) by the Lender; or

 

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

 

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

 

(B)                             would havebeen compensated for by an increased payment under Clause 12.2 (*Tax gross-up*) but was not socompensated solely because one of the exclusions in paragraph (d) ofClause 12.2 (*Tax gross-up*)applied.

 

(c)                               If theLender makes, or intends to make,  aclaim under paragraph (a) above, it shall promptly notify the Borrower of theevent which will give, or has given, rise to the claim.

 

**12.4****                    ****Tax Credit**

 

If the Borrower makes a Tax Payment and theLender determines that:

 

(a)                                a TaxCredit is attributable to that Tax Payment; and

 

(b)                               that the Lenderhas obtained, utilised and retained that Tax Credit,

 

the Lender shall pay promptly an amount to theBorrower which the Lender determines will leave it (after that payment) in thesame after-Tax position as it would have been in had the Tax Payment notbeen made by the Borrower.

 

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**12.5****                    ****Stamp taxes**

 

The Borrower shall pay and, within threeBusiness Days of demand, indemnify the Lender against any cost, loss orliability the Lender incurs in relation to all stamp duty, registration andother similar Taxes 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)                              Where aFinance Document requires any Party to reimburse the Lender for any costs orexpenses, that Party shall also at the same time pay and indemnify the Lender againstall VAT incurred by the Lender in respect of the costs or expenses to theextent that the Lender reasonably determines that neither it nor any othermember of the group of which it is a member for VAT purposes is entitled tocredit or repayment from the relevant tax authority in respect of the VAT.

 

**13****                              ****INCREASED COSTS**

 

**13.1****                    ****Increased costs**

 

(a)                               Subject toClause 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 as a result of (i) theintroduction of or any change in (or in the interpretation, administration orapplication of) any law or regulation or (ii) compliance with any law orregulation made after the Signing Date.

 

(b)                              In thisAgreement “**Increased Costs**” means:

 

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

 

(ii)                                anadditional or increased cost; or

 

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

 

which is incurred or suffered by the Lender tothe extent that it is attributable to the Lender having entered into theCommitment or funding or performing its obligations under any Finance Document.

 

**13.2****                    ****Increased cost claims**

 

(a)                               If theLender 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)                              The Lendershall, 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)                              In this Clause13.3, a reference to a “**Tax Deduction**”has the same meaning given to the term in Clause 12.1 (*Definitions*).

 

**14****                              ****OTHER INDEMNITIES**

 

**14.1****                    ****Currency indemnity**

 

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

 

(i)                                   making orfiling a claim or proof against the Borrower;

 

(ii)                                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 convert thatSum from the First Currency into the Second Currency and (B) the rate or ratesof exchange available to that person at the time of its receipt of that Sum.

 

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

 

**14.2****                    ****Other indemnities**

 

The Borrower shall, within three Business Daysof demand, indemnify the Lender against any cost, loss or liability incurred bythe Lender as a result of:

 

(a)                                theoccurrence of any Event of Default;

 

(b)                               a failureby the Borrower to pay any amount due under a Finance Document on its due 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)                               a Loan (orpart of a Loan) not being prepaid in accordance with a notice of prepaymentgiven by the Borrower.

 

**14.3****                    ****Indemnity to the Lender**

 

The Borrower shall promptly indemnify the Lenderagainst any cost, loss or liability incurred by the Lender (acting reasonably)as a result of:

 

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

 

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

 

**15****                              ****MITIGATION BY THE LENDER**

 

**15.1****                    ****Mitigation**

 

(a)                               The Lendershall, in consultation with the Borrower, take all reasonable steps to mitigateany circumstances which arise and which would result in any amount becomingpayable under or pursuant to, or cancelled pursuant to, any of Clause 7.1 (*Illegality*), Clause 12 (*Tax gross-up and indemnities*) orClause 13.1 (*Increased costs*)including (but not limited to) transferring its rights and obligations underthe Finance Documents to another Affiliate or Facility Office.

 

(b)                              Paragraph(a) above does not in any way limit the obligations of the Borrower under theFinance 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)                              The Lenderis not obliged to take any steps under Clause 15.1 (*Mitigation*) if, in the opinion of the Lender (actingreasonably), to do so might be prejudicial to it.

 

**16****                              ****COSTS AND EXPENSES**

 

**16.1****                    ****Transaction expenses**

 

The Borrower shall promptly on demand pay theLender the amount of all reasonable out-of-pocket costs and legal expensesincurred by any of them in connection with the negotiation, preparation andexecution of:

 

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

 

(b)                               any otherFinance 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 an amendment,waiver or consent or (b) an amendment is required pursuant to Clause 25.6 (*Change of currency*), the Borrower shall,within three Business Days of demand, reimburse the Lender for the amount ofall costs and expenses (including legal fees) reasonably incurred by the Lenderin responding to, evaluating, negotiating or complying with that request orrequirement.

 

**16.3****                    ****Enforcement costs**

 

The Borrower shall, within three Business Daysof demand, pay to the Lender the amount of all costs and expenses (includinglegal fees) incurred by the Lender in connection with the enforcement of, orthe preservation of any rights under, any Finance Document.

 

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

 

**17****                              ****REPRESENTATIONS**

 

The Borrower makes the representations andwarranties set out in this Clause 17 to the Lender on the date of thisAgreement.

 

**17.1****                    ****Status**

 

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

 

(b)                              It andeach of its Significant Subsidiaries has the power to own its assets and carryon its business as it is being conducted.

 

**17.2****                    ****Binding obligations**

 

The obligations expressed to be assumed by itin each Finance Document are legal, valid, binding and enforceable obligations,subject to insolvency and other laws affecting creditors’ rights generally andprinciples of equity.

 

**17.3****                    ****Non-conflict with other obligations**

 

The entry into and performance by it of, andthe transactions contemplated by, the Finance Documents do not and will notconflict with:

 

(a)                             any law orregulation applicable to it;

 

(b)                            its or anyof its Subsidiaries’ constitutional documents; or

 

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

 

**17.4****                    ****Power and authority**

 

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

 

**17.5****                    ****Validity and admissibility in evidence**

 

All Authorisations required:

 

(a)                             to enableit lawfully to enter into, exercise its rights and comply with its obligationsin the Finance Documents;

 

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

 

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

 

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have been obtained or effected and are in fullforce and effect (except, in relation to paragraph (b) above, where the failureto obtain such Authorisations (excluding any Telecommunications Authorisations)is not reasonably likely to have a Material Adverse Effect).

 

**17.6****                    ****Governing law and enforcement**

 

(a)                               The choiceof English law as the governing law of the Finance Documents will be recognisedand enforced in the Russian Federation.

 

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

 

**17.7****                    ****No bankruptcy proceedings**

 

Neither the Borrower nor any of its SignificantSubsidiaries has taken any corporate action nor have any other steps been takenor legal proceedings been started or, to the best of its knowledge and belief(after due inquiry), threatened against it or any of its SignificantSubsidiaries for (a) its liquidation or bankruptcy or the appointment of aliquidation 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 purposes ofconsidering an amicable settlement (as defined in the Russian Insolvency Law);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 of the RussianFederation to make any deduction for or on account of Tax from any payment itmay make under any Finance Document to a Qualifying Lender.

 

**17.9****                    ****No filing or stamp taxes**

 

Under the law of the Russian Federation it isnot necessary that the Finance Documents be filed, recorded or enrolled withany court or other authority in the Russian Federation or that any stamp,registration or similar tax be paid on or in relation to the Finance Documentsor the transactions contemplated by the Finance Documents, except for courtregistration fees in connection with any enforcement proceedings in such court.

 

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

 

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

 

**17.12****             ****No misleading information**

 

(a)                               Thefactual information contained in the Original Information Memorandum was trueand accurate in all material respects as at 26 July 2004, and the factualinformation contained in the Revised Information Memorandum was true andaccurate in all material respects as at April 2006.

 

(b)                              Thefinancial projections contained in the Due Diligence Materials and eachInformation Memorandum were prepared on the basis of recent historicalinformation and on the basis of reasonable assumptions.

 

(c)                               Anywritten factual information (other than that contained in each 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 or the RevisedInformation Memorandum and no information has been given or withheld thatresults in the information contained in the Due Diligence Materials or theRevised Information Memorandum being untrue or misleading in any materialrespect.

 

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

 

(d)                              There willbe no material difference between the unaudited consolidated financial statementsof the Group for the financial year ended 31 December 2005 and the OriginalFinancial Statements.

 

**17.14****             *****Pari passu*****ranking**

 

Its payment obligations under the FinanceDocuments 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**

 

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

 

**17.16****             ****Environmental laws and licences**

 

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

 

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

 

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

 

(c)                             compliedwith the terms of those Environmental Licences,

 

in each case where failure to do so would bereasonably likely to have a Material Adverse Effect.

 

**17.17****             ****Telecommunications laws and licences**

 

(a)                               Each ofthe 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 failure to do sowould not reasonably be expected to have a Material Adverse Effect.

 

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

 

**17.18****             ****Compliance with laws**

 

(a)                               Neither the Borrower, nor any of itsSignificant Subsidiaries, is in material violation of any law presently ineffect that is applicable or relevant to it.

 

(b)                              The Borrower and each of its SignificantSubsidiaries is in compliance with all applicable laws concerning moneylaundering (other than where non-compliance is caused by administrativeor technical error and is remedied within a reasonable time from the Borroweror the relevant Significant Subsidiary becoming aware of such non-compliance).

 

(c)                               Neither the Borrower nor any of itsSignificant Subsidiaries, nor (to the best of the Borrower’s knowledge afterdue and careful enquiry in accordance with the Borrower’s internal proceduresfrom time to time) any of the officers, directors or authorised employees,agents or representatives of the Borrower or any of its SignificantSubsidiaries has:

 

(i)                                paid, promised to pay or offered to pay, orauthorized the payment of, any commission, bribe, pay-off or kickbackrelated to any Investment (each a “**Bribe**”),which Bribe violates any applicable law; or

 

(ii)                             entered into any agreement pursuant to whichany Bribe may or will at any time be paid and which violates any applicablelaw; or

 

(iii)                          offered or given any thing of value toinfluence the action of a public official, or threatened injury to person,property or reputation, in connection with any Investment, in order to obtainor retain business or other improper advantage in the conduct of business.

 

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**17.19****             ****No Immunity**

 

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

 

(b)                              In anyproceedings taken in the Russian Federation in relation to the Finance Documents,the Borrower will not be entitled to claim for itself or any of its assetsimmunity from suit, execution, attachment or other legal process.

 

**17.20****             ****Repetition**

 

The Repeating Representations are deemed to bemade by the Borrower by reference to the facts and circumstances then existingon the date of each Utilisation Request and the first day of each InterestPeriod (provided that whenever the representation in paragraph (c) of Clause17.3 is deemed to be made on a date other than the Signing Date or a UtilisationDate, the statement “except where the same would not be reasonably likely tohave a Material Adverse Effect” shall qualify the representation in saidparagraph (c)).

 

**18****                              ****INFORMATION UNDERTAKINGS**

 

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

 

**18.1****                    ****Financial statements**

 

The Borrower shall supply to the Lender:

 

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

 

(b)                             as soon asthe same become available, but in any event within (i) 60 days after the end ofeach of its first, second and third financial quarters and (ii) 90 days afterthe end of its fourth financial quarter, its unaudited consolidated and non-consolidatedfinancial 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. Each Compliance Certificateshall be signed by an authorised officer of the Borrower

 

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

 

**18.3****                    ****Requirements as to financial statements**

 

(a)                               Each setof 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,

 

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as the case may be, its consolidated) financialcondition and operations as at the end of and for the period in relation towhich those financial statements were drawn up.

 

(b)                              TheBorrower shall procure that each set of consolidated financial statementsdelivered pursuant to Clause 18.1 (*Financialstatements*) is prepared using GAAP****accounting practices and financial reference periods consistent withthose applied in the preparation of the Original Financial Statements unless,in relation to any set of financial statements, it notifies the Lender thatthere has been a change in GAAP, the accounting practices or reference periodsand 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 financialstatements delivered pursuant to Clause 18.1 (*Financial statements*) is prepared using RAS accountingpractices and financial reference 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)                              Until suchtime 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 andsafety report**

 

As soon as available but, in any event, within60 days after the end of each financial year, the Borrower shall furnish to theLender a report, in form and in substance satisfactory to the Lender (actingreasonably), on environmental, health and safety issues arising in relation tothe 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)                             a summaryof any material notices, reports and other communications on environmentalmatters submitted by the Borrower to any environmental authorities;

 

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(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;

 

(d)                             a summaryof any changes in applicable Environmental Law which may have a materialadverse effect on the Borrower’s operations; and

 

(e)                              copies ofenvironmental information periodically submitted by the Borrower to itsshareholders or the general public.

 

**18.6****                    ****Notification of accident**

 

Promptly following the occurrence of anyincident 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 the Lender:

 

(a)                              alldocuments dispatched by the Borrower to its shareholders (or any class of them)or its creditors generally promptly after they are dispatched;

 

(b)                             promptly uponbecoming 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:

 

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(a)                             the introduction of or any change in (or in theinterpretation, administration or application of) any law or regulation madeafter the date of this Agreement;

 

(b)                            any changein the status of the Borrower after the date of this Agreement; or

 

(c)                             a proposedassignment or transfer by the Lender of any of its rights and obligations underthis Agreement,

 

obligesthe Lender (or, in the case of paragraph (c) above, any prospective new Lender)to comply with “know your customer” or similar identification procedures incircumstances where the necessary information is not already available to it,the Borrower shall promptly upon the request of the Lender supply, or procurethe supply of, such documentation and other evidence as is reasonably requestedby the Lender (for itself or, in the case of the event described in paragraph(c) above, on behalf of any prospective new Lender) in order for the Lender or,in the case of the event described in paragraph (c) above, any prospective newLender to carry out and be satisfied it has complied with all necessary “knowyour customer” or other similar checks under all applicable laws andregulations pursuant to the transactions contemplated in the Finance Documents.

 

**19****                              ****FINANCIAL COVENANTS**

 

The financial undertakings in this Clause 19shall remain in force from the Signing Date for so long as any amount isoutstanding under the Finance Documents or any Commitment is in force.

 

**19.1****                    ****Financial condition**

 

The Borrower shall ensure that:

 

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

 

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

 

**19.2****                    ****Financial covenant calculations**

 

Total Debt, OIBDA and Interest Expense shall becalculated and interpreted on a consolidated basis in accordance with the GAAPapplicable to the Original Financial Statements of the Borrower and shall beexpressed in Dollars.

 

**19.3****                    ****Definitions**

 

In this Clause 19.3:

 

“**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 ofTotal Debt including:

 

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

 

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

 

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

 

adjusted (but without double counting) by:

 

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(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 to reflect theterms of this Clause 19) from the financial statements of the Group andCompliance Certificates delivered under Clause 18.1 (*Financial statements*) and Clause 18.2 (*Compliance Certificate*).

 

“**OIBDA**”means, in relation to any Relevant Period, the total consolidated net income ofthe Group for that Relevant Period:

 

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

 

(i)                                  minorityinterests;

 

(ii)                               incometax;

 

(iii)                            non-operatingincome less non-operating expenses;

 

(iv)                           the Group’sshare in the net income (or loss) of any associated companies or undertakings;

 

(v)                              InterestExpense;

 

(vi)                           Interestincome; and

 

(vii)                        Currencyexchange and translation (gains)/losses

 

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

 

*multiplied by two*,

 

as determined (except as needed to reflect theterms of this Clause 19) from the financial statements of the Group andCompliance 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.

 

“**Total Debt**”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 of Financial Indebtednessand any guarantee or indemnity in respect of that indebtedness).

 

For this purpose, any amount outstanding orrepayable in a currency other than Dollars shall on that day be taken intoaccount in its Dollars equivalent at the rate of exchange that would have beenused had an audited consolidated balance sheet of the Group been prepared as atthat day in accordance with the GAAP applicable to the Original FinancialStatements of the Borrower.

 

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**20****                              ****GENERAL UNDERTAKINGS**

 

The undertakings in this Clause 20 remain inforce from the date of this Agreement for so long as any amount is outstandingunder 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 any law orregulation of its jurisdiction of incorporation to enable it to perform itsobligations under the Finance Documents and to ensure the legality, validity,enforceability or admissibility in evidence in its jurisdiction ofincorporation of any Finance Document.

 

**20.2****                    ****Compliance with laws**

 

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

 

**20.3****                    ****Maintenance of existence**

 

The Borrower shall maintain its corporateexistence.

 

**20.4****                    ****Negative pledge**

 

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

 

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

 

(i)                                sell, transfer or otherwise dispose of any ofits assets on terms whereby they are or may be leased to or re-acquiredby the Borrower or any other member of the Group;

 

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

 

(iii)                          enter into any arrangement under which moneyor the benefit of a bank or other account may be applied, set-off or madesubject to a combination of accounts; or

 

(iv)                         enter into any other preferential arrangementhaving a similar effect,

 

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

 

(c)                               Paragraphs (a) and (b) above do not apply toPermitted 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)                                made inthe ordinary course of trading of the disposing entity;

 

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(ii)                             of assetsin exchange for other assets comparable or superior as to type, value andquality;

 

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

 

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

 

(v)                            where thebook value of such asset (when aggregated with the book value of each otherasset disposed of under this sub-clause (v)) (in each case as calculatedin accordance with GAAP) does not exceed (x) 10% of the Borrower’s Total Assetsin any financial year of the Borrower and (y) 25% of the Borrower’s TotalAssets during the period starting on the Signing Date and ending on the datethat all amounts outstanding under this Agreement have been paid in full. Atthe request of the Lender (any such request to be made no more than once percalendar quarter, unless a Default is continuing), the Borrower shall provide acertificate to the Lender setting out in reasonable detail the book value ofany assets disposed of under this sub-clause (v) (calculated in accordancewith GAAP); or

 

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

 

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

 

**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 anyother company 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 no substantialchange is made to the general nature of the business of the Borrower or theGroup from that carried on at the Signing Date.

 

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**20.8****                    ****Conduct of business**

 

The Borrower shall, and shall procure that eachof its Significant Subsidiaries will, conduct its business in all materialrespects in accordance with:

 

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

 

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

 

(c)                                the termsof all relevant Telecommunications Authorisations.

 

**20.9****                    ****Asset maintenance**

 

The Borrower shall, and shall procure that eachof its Significant Subsidiaries will, have and maintain good and marketabletitle to or valid leases or licences of, or rights of use relating to, allassets necessary to maintain, develop and operate and otherwise conduct itsbusiness as then being conducted by it and in each case where failure to do somight reasonably be expected to have a Material Adverse Effect.

 

**20.10****             ****Insurance**

 

The Borrower shall (and shall ensure that eachother member of the Group will) maintain insurances on and in relation to itsbusiness and assets with reputable underwriters or insurance companies againstthose risks, and to the extent, usually insured against by prudent companieslocated in the same or a similar location and carrying on a similar business.

 

**20.11****             ****Transactions with Related Parties**

 

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

 

(i)                                the termsof such intercompany loan are no less favourable to such member of the Groupthan those that could be obtained in a comparable arm’s-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 aggregate outstanding amountof 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)                               For thepurposes of this Clause 20.11 only, a “**RelatedParty**” means, with respect to any specified person:

 

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

 

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

 

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

 

**20.12****             ****Restriction on acquisitions**

 

The Borrower shall not establish or acquire anySubsidiary, acquire any Telecommunications Licence or invest in any otherentity without the consent of the Lender (such consent not to be unreasonablywithheld), provided that this Clause 20.12 shall not apply to any suchacquisition or investment where such acquisition or investment relates to aSubsidiary or entity whose principal business is telecommunications or theprovision of data services or related or ancillary businesses; and either:

 

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

 

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

 

**20.13****             ****Prompt payment of Taxes**

 

The Borrower shall (and shall ensure that eachSignificant Subsidiary will) duly pay all Taxes payable by it, other than (a)those taxes which are being contested in good faith and by appropriateproceedings and in respect of which adequate reserves or other appropriateprovisions have been made; or (b) whose amount does not exceed $25,000,000 (orits equivalent in any other currencies).

 

**20.14****             *****Pari passu***

 

The Borrower shall, and shall procure that eachmember of the Group will, procure that its obligations under the FinanceDocuments 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)                                make anyloan, or provide any form of credit or financial accommodation, to any person(including, without limitation, its employees, shareholders, another member ofthe Group and any Affiliate); or

 

(ii)                             give orissue any guarantee, indemnity, bond or letter of credit to or for the benefitof, or in respect of liabilities or obligations of, any other person orvoluntarily assume any liability

 

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(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 of creditexpressly permitted by the Finance Documents or for normal trade credit on arm’slength terms and in the ordinary course of business or granted by a member ofthe Group to another member of the Group, provided that the aggregate amount ofsuch loans, credits, financial accommodation, guarantees, indemnities, bondsand letters of credit does not at any time exceed 10 per cent. of the Borrower’sTotal Assets; (ii) guarantees by the Borrower in relation to the obligations ofany other member of the Group; or (iii) the arrangements permitted under Clause20.11 (*Transactions with Related Parties*).

 

**20.16****             ****Environment, health andsafety**

 

TheBorrower shall conduct its business with due regard to the environment andpublic and occupational health and safety. The Borrower shall conduct itsbusiness in accordance with applicable 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 circumstances set out inClause 21 is an Event of Default.

 

**21.1****                    ****Non-payment**

 

The Borrower does not pay on the due date anyamount payable pursuant to a Finance Document at the place at and in thecurrency in which it is expressed to be payable unless:

 

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

 

(b)                               payment ismade 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)                              No Eventof Default under paragraph (a) above will occur if the failure to comply iscapable of remedy and is remedied within 10 Business Days of the Lender givingnotice to the Borrower or the Borrower becoming aware of the failure to comply.

 

**21.4****                    ****Misrepresentation**

 

Any representation or statement made or deemedto be made by the Borrower in the Finance Documents or any other document deliveredby or on behalf of the Borrower under or in connection with any FinanceDocument is or proves to have been incorrect or misleading in any materialrespect when made or deemed to be made, and such representation or statementshall not have been rendered correct and not misleading within 10 Business Daysof the Lender giving notice to the Borrower or the Borrower becoming aware ofthe same.

 

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**21.5****                    ****Cross default**

 

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

 

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

 

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

 

(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)                               Any of the events described in paragraphs (a)to (d) above occurs in relation to any Financial Indebtedness or commitment forFinancial Indebtedness of any amount (including, for the avoidance of doubt,any amount that is less than $10,000,000 (or its equivalent in any othercurrency or currencies)), and the aggregate amount of all such FinancialIndebtedness and commitments for Financial Indebtedness is in excess of$35,000,000 (or its equivalent in any other 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, commencesnegotiations with one or more of its creditors with a view to rescheduling itsindebtedness generally.

 

(b)                              The valueof the assets of the Borrower or a Significant Subsidiary is less than itsliabilities (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 legal proceedings aretaken in relation to:

 

(a)                              thebankruptcy, winding-up, insolvency, dissolution, administration,reorganisation or liquidation of the Borrower or a Significant Subsidiary,including, but not limited to, institution of supervision (*nablyudenie*), financial rehabilitation (*finansovoe ozdorovlenie*), externalmanagement (*vneshneye upravlenie*)or bankruptcy management (*konkursnoyeupravlenie*) (and such legal proceedings continue for at least 14days);

 

(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

 

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other authority in respect of the bankruptcy,winding-up, insolvency, dissolution, administration, reorganisation orliquidation of the Borrower or a Significant Subsidiary (and such petition hasnot been discharged within 14 days);

 

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

 

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

 

or any analogous procedure or step is taken inany jurisdiction.

 

**21.8****                    ****Creditors’ process**

 

Any expropriation, attachment, sequestration,distress or execution affects any asset or assets of the Borrower or aSignificant Subsidiary witha value in excess of $10,000,000 (or its equivalent in any other currency orcurrencies) and is not discharged or stayed within 30 days.

 

**21.9****                    ****Judgment**

 

The rendering against the Borrower or anySubsidiary of the Borrower of a judgment, decree or order for the payment ofmoney in an amount in excess of $10,000,000 (or its equivalent in any other currency orcurrencies) 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)                               Any actionresults in the suspension for more than 30 days or the loss, revocation ortermination of any of:

 

(i)                                 theBorrower’s GSM 900 or 1800 licences for the Moscow licence area,  the St. Petersburg licence area or theKrasnodar licence area; or

 

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

 

except where, within 30 days of any such event,the relevant licence is re-issued on substantially the same terms to any member of the Group and duringthe period falling before such re-issuance there is no materialinterruption to, or other material adverse effect on, the operations permittedby such licence as a direct result of such prior loss, revocation ortermination.

 

(b)                              Any of theBorrower’s or 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)                               Any of theBorrower’s or 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, St. Petersburg or Krasnodar licence areas.

 

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

 

(f)

 

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

 

(ii)                              Sub-clause(i) above does not apply to the transfer of the GSM 900 or 1800 licences of UMCpursuant 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 Significant Subsidiarysuspends, ceases or threatens to suspend or cease to carry on all or asubstantial part of its business.

 

**21.12****             ****Expropriation**

 

(a)                               By or under the authority of any government:

 

(i)                                 any seizure, compulsory acquisition,expropriation, nationalisation or renationalisation is made after the SigningDate of all or any material part of the assets or shares of (or other ownershipinterest in) any member of the Group;

 

(a)                              the management of any member of the Group iswholly or partially displaced or the authority of any member of the Group inthe conduct of its business is wholly or partially curtailed; or

 

(b)                             any member of the Group is otherwise deprivedof, or prevented from exercising ownership or control of, its material businessor assets.

 

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

 

(i)                                 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 way prejudicethe rights of the Lender under Clause 21.18 (*UMCLitigation*)); or

 

(ii)                              the transfer of any or all of:

 

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

 

(b)                              the shares in Bitel

 

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

 

**21.13****             ****Russian Foreign Exchange Restrictions**

 

Any foreign exchange law is enacted orintroduced 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 the payment ofany external indebtedness of the Russian Federation or of Russian residentsgenerally.

 

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**21.15****             ****The Russian Federation**

 

The political or economic situation in the RussianFederation deteriorates or an act of war or hostilities, invasion, armedconflict or act of a foreign enemy, revolution, insurrection or insurgencyoccurs in, or involves, the Russian Federation and such event, in thereasonable opinion of the Lender, has or is reasonably likely to have aMaterial Adverse Effect.

 

**21.16****             ****Unlawfulness**

 

It is or becomes unlawful for the Borrower toperform any of its obligations under the Finance Documents.

 

**21.17****             ****Repudiation**

 

The Borrower repudiates a Finance Document or evincesan intention to repudiate a Finance Document.

 

**21.18****             ****UMC Litigation**

 

The UMC Litigation is adversely determined and,in the reasonable opinion of the Lender, such adverse determination has or isreasonably likely to have a Material Adverse Effect.

 

**21.19****             ****Material adverse change**

 

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

 

**21.20****             ****Acceleration**

 

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

 

(a)                              cancel theCommitment whereupon it shall immediately be cancelled;

 

(b)                             declarethat all or part of the Loans, together with accrued interest, and all otheramounts accrued or outstanding under the Finance Documents be immediately dueand 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****8****CHANGES TO PARTIES**

 

**22****                              ****CHANGES TO THE LENDER**

 

**22.1****                    ****Assignments and transfers by the Lender**

 

(a)                               Subject tothis 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)                              Unless anEvent 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 notified theLender 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)                                the Lenderassigns or transfers any of its rights or obligations under the FinanceDocuments or changes its Facility Office; and

 

(ii)                             as aresult of circumstances existing at the date the assignment, transfer or changeoccurs, the Borrower would be obliged to make a payment to the New Lender orLender acting through its new Facility Office under Clause 12 (*Tax gross-up and indemnities*) orClause 13.1 (*Increased Costs*),

 

then the New Lender or Lender acting throughits new Facility Office is only entitled to receive payment under those Clausesto the same extent as the Existing Lender or Lender acting through its previousFacility Office would have been if the assignment, transfer or change had notoccurred.

 

**22.3****                    ****Disclosure of information**

 

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

 

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

 

(b)                            with (orthrough) whom the Lender enters into (or may potentially enter into) any sub-participationin relation to, or any other transaction under which payments are to be made byreference to, this Agreement or the Borrower; or

 

(c)                             to whom,and to the extent that, information is required to be disclosed by anyapplicable law or regulation,

 

any information about the Borrower, the Groupand the Finance Documents as the Lender shall consider appropriate if, inrelation to paragraphs (a) and (b) above, the person to whom the information isto be given has entered into a Confidentiality Undertaking. This Clausesupersedes any previous agreement relating to the confidentiality of thisinformation.

 

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**22.4****                    ****Limitation of responsibility of Existing 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)                         the accuracyof any statements (whether written or oral) made in or in connection with anyFinance Document or any other document,

 

and any representations or warranties impliedby law are excluded.

 

(b)                              Each NewLender confirms to the Existing Lender that it:

 

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

 

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

 

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

 

(i)                                accept are-transfer from a New Lender of any of the rights and obligationsassigned or 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 FinanceDocuments or otherwise.

 

**23****                              ****CHANGES TO THE BORROWER**

 

The Borrower may not assign any of its rightsor transfer any of its rights or obligations under the Finance Documentswithout the prior written consent of the Lender.

 

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**SECTION****9****THE LENDER**

 

**24****                              ****CONDUCT OF BUSINESS BY THE 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)                            oblige theLender to investigate or claim any credit, relief, remission or repaymentavailable to it or the extent, order and manner of any claim; or

 

(c)                             oblige theLender to disclose any information relating to its affairs (tax or otherwise)or any computations in respect of Tax.

 

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**SECTION 10ADMINISTRATION**

** **

**25**                               PAYMENT MECHANICS

** **

**25.1**                     Payments to the Lender

** **

(a)                               On each date onwhich the Borrower is required to make a payment under a Finance Document, theBorrower shall make the same available to the Lender (unless a contraryindication appears in a Finance Document) for value on the due date at the timeand in such funds specified by the Lender as being customary at the time forsettlement of transactions in the relevant currency in the place of payment.

 

(b)                              Payment shallbe made to such account in the principal financial centre of the country ofthat currency (or, in relation to euro, in the principal financial centre in aParticipating Member State or London) with such bank as the Lender specifies.

 

**25.2**                     Partial payments

** **

(a)                               If the Lenderreceives a payment that is insufficient to discharge all the amounts then dueand payable by the Borrower under the Finance Documents, the Lender shall applythat payment towards the obligations of the Borrower under the FinanceDocuments 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

** **

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

 

**25.4**                     Business Days

** **

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

 

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

 

**25.5**                     Currency of account

** **

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

 

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

 

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

 

(d)                              Each payment inrespect of costs, expenses or Taxes shall be made in the currency in which thecosts, expenses or Taxes are incurred.

 

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(e)                               Any amountexpressed to be payable in a currency other than Dollars shall be paid in thatother 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)                                any referencein the Finance Documents to, and any obligations arising under the FinanceDocuments in, the currency of that country shall be translated into, or paidin, the currency or currency unit of that country designated by the Lender(after consultation with the Borrower); and

 

(ii)                             any translationfrom one currency or currency unit to another shall be at the official rate ofexchange recognised by the central bank for the conversion of that currency orcurrency unit into the other, rounded up or down by the Lender (actingreasonably).

 

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

 

**26**                               SET-OFF

** **

The Lendermay set off any matured obligation due from the Borrower under the FinanceDocuments (to the extent beneficially owned by the Lender) against any maturedobligation owed by the Lender to the Borrower, regardless of the place ofpayment, booking branch or currency of either obligation. If the obligationsare in different currencies, the Lender may convert either obligation at amarket rate of exchange in its usual course of business for the purpose of theset-off.

 

**27**                               NOTICES

** **

**27.1**                     Communications in writing

** **

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

 

**27.2**                     Addresses

** **

Theaddress and fax number (and the department or officer, if any, for whoseattention the communication is to be made) of each Party for any communicationor document to be made or delivered under or in connection with the FinanceDocuments is that identified with its name below, or any substitute address,fax number or department or officer as a Party may notify to the other Party bynot 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)                                   if by way offax, when received in legible form; or

 

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

 

and, if aparticular department or officer is specified as part of its address detailsprovided under Clause 27.2 (*Addresses*),if addressed to that department 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)                               Any noticegiven under or in connection with any Finance Document must be in English.

 

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

 

(i)                                in English; or

 

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

 

**28**                               CALCULATIONS AND CERTIFICATES

 

**28.1**                     Accounts

** **

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

 

**28.2**                     Certificates and Determinations

** **

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

 

**28.3**                     Day count convention

** **

Anyinterest, commission or fee accruing under a Finance Document will accrue fromday to day and is calculated on the basis of the actual number of days elapsedand a year of 360 days or, in any case where the practice in the Londoninterbank market differs, in accordance with that market practice.

 

**29**                               PARTIAL INVALIDITY

** **

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

 

**30**                               REMEDIES AND WAIVERS

** **

No failureto exercise, nor any delay in exercising, on the part of the Lender, any rightor remedy under the Finance Documents shall operate as a waiver, nor shall anysingle or partial exercise of any right or remedy prevent any further or otherexercise or the exercise of any 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 ofthe Finance Documents may be amended or waived without the consent of theLender and the Borrower and any such amendment or waiver will be binding on allParties.

 

**32**                               COUNTERPARTS

 

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

 

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**SECTION 11GOVERNING LAW AND ENFORCEMENT**

 

**33**                               GOVERNING LAW

** **

ThisAgreement is governed by English law.

 

**34**                               ARBITRATION AND JURISDICTION

** **

**34.1**                     Arbitration

** **

Anydispute, controversy or claim arising out of or relating to this Agreement, orthe breach, termination or invalidity hereof, shall be settled by arbitrationin accordance with the UNCITRAL Arbitration Rules as in force on the SigningDate. There shall be one arbitrator and the appointing authority shall be theLondon Court of International Arbitration. The seat and place of arbitrationshall be London, England and the English language shall be used throughout thearbitral proceedings. The parties hereby waive any rights under the ArbitrationAct 1996 or otherwise to appeal any arbitration award to, or to seekdetermination of a preliminary point of law by, the courts of England. Thearbitral tribunal shall not be authorised to take or provide, and the Borroweragrees that it shall not seek from any judicial authority, any interim measuresof protection or pre-award relief against EBRD, any provisions of theUNCITRAL Arbitration Rules notwithstanding. The arbitral tribunal shall haveauthority to consider and include in any proceeding, decision or award anyfurther dispute properly brought before it by EBRD (but no other party) insofaras such dispute arises out of any Finance Document, but, subject to theforegoing, no other parties or other disputes shall be included in, orconsolidated with, the arbitral proceedings. In any arbitral proceeding, thecertificate of EBRD as to any amount due to it under any Finance Documentshall, in the absence of manifest error, be prima facie evidence of such amount.

 

**34.2**                     Recourse to Courts

 

NotwithstandingClause 34.1 above, this Agreement and any other Finance Document, and anyrights of EBRD arising out of or relating to this Agreement or any otherFinance Document, may, at the option of EBRD, be enforced by EBRD in the courtsof England or in any other courts having jurisdiction. For the benefit of EBRD,the Borrower hereby irrevocably submits to the non-exclusive jurisdictionof the courts of England with respect to any dispute, controversy or claimarising out of or relating to this Agreement or any other Finance Document, orthe breach, termination or invalidity hereof or thereof. The Borrower herebyirrevocably designates, appoints and empowers Law Debenture Corporate ServicesLimited at its registered office (being, on the date hereof, at 5thfloor, 100 Wood Street, London EC2V 1EX, England) to act as its authorisedagent to receive service of process and any other legal summons in England forpurposes of any legal action or proceeding brought by EBRD in respect of anyFinance Document. The Borrower hereby irrevocably consents to the service ofprocess or any other legal summons out of such courts by mailing copies thereofby registered airmail postage prepaid to its address specified herein. TheBorrower covenants and agrees that, so long as it has any obligations underthis Agreement, it shall maintain a duly appointed agent to receive service ofprocess and any other legal summons in England for purposes of any legal actionor proceeding brought by EBRD in respect of any Finance Document and shall keepthe Lender advised of the identity and location of such agent. Nothing hereinshall affect the right of EBRD to commence legal actions or proceedings againstthe Borrower in any manner authorised by the laws of any relevant jurisdiction.The commencement by EBRD of legal actions or proceedings in one or morejurisdictions shall not

 

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preclude EBRD from commencinglegal actions or proceedings in any other jurisdiction, whether concurrently ornot. The Borrower irrevocably waives any objection it may now or hereafter haveon any grounds whatsoever to the laying of venue of any legal action orproceeding and any claim it may now or hereafter have that any such legalaction or proceeding has been brought in an inconvenient forum.

 

**35**                               IMMUNITIES

** **

**35.1**                     Privileges and Immunities of EBRD

** **

Nothing inthis Agreement shall be construed as a waiver, renunciation or othermodification of any immunities, privileges or exemptions of EBRD accorded underthe Agreement Establishing the European Bank for Reconstruction andDevelopment, international convention or any applicable law.

 

**35.2**                     Waiver of immunity

** **

TheBorrower irrevocably agrees that, should any party take any proceedingsanywhere (whether for an injunction, specific performance, damages orotherwise), no immunity (to the extent that it may at any time exist, whetheron the grounds of sovereignty or otherwise) from those proceedings, fromattachment (whether in aid of execution, before judgment or otherwise) of itsassets or from execution of judgment shall be claimed by it or on behalf of itor with respect to its assets, any such immunity being irrevocably waived. TheBorrower irrevocably agrees that it and its assets are, and shall be, subjectto such proceedings, attachment or execution in respect of its obligationsunder the Finance Documents.

 

**This Agreement has been entered into on the date stated at thebeginning of this Agreement.**

 

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**SCHEDULE 1Conditions precedent**

** **

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

 

Anexecuted original of this Agreement.

 

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

 

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

 

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

 

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

 

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

 

(e)                               A certificateexecuted on behalf of the Borrower:

 

(i)                                certifying thesample 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)                             certifying thateach 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****                                     ****Legal opinions**

 

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

 

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

 

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

 

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

 

(a)                               Evidence that theprocess agent referred to in Clause 34 (*Recourseto Courts*) has accepted its appointment.

 

(b)                              A copy of anyother Authorisation or other document, opinion or assurance which the Lenderconsiders to be necessary or desirable (if it has notified the Borroweraccordingly) 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)                               The OriginalFinancial Statements.

 

(d)                              Evidence thatthe fees, costs and expenses then due from the Borrower pursuant to Clause 11 (*Fees*) and 16 (*Costs and expenses*) have been paid by the first UtilisationDate.

 

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(e)                               A copy of the *deal passport* of the Borrower (in the formestablished by Instruction No. 117-I of the Central Bank of the RussianFederation dated 15 June 2004) accepted and duly certified by a Russianauthorised bank and copies of all other documents submitted by the Borrower tothe Russian authorised bank in accordance with applicable Russian currencycontrol regulations, as the Lender may reasonably require (or writtenconfirmation from ING Bank (Eurasia) ZAO that all documents required to obtainsuch *deal passport*have been dulysubmitted to it by or on behalf of the Borrower).

 

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

 

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**SCHEDULE 2Utilisation Request**

** **
| From:  |   | Mobile  TeleSystems Open Joint Stock Company      |
|--------|--------|---------------------------------------------------|
|   |   |                                              |
| To:    |   | European  Bank for Reconstruction and Development |

 

Dated:

 

Dear Sirs

 

**Mobile TeleSystems Open Joint Stock Company – US$250,000,000 FacilityAgreementoriginally dated 8 December 2004 and amended and restated on [                   ](the “Agreement”)**

 

**1****                                     **We refer to theAgreement. This is a Utilisation Request. Terms defined in the Agreement havethe same meaning in this Utilisation Request unless given a different meaningin this Utilisation Request.

 

**2****                                     **We wish toborrow a Loan on the following terms:

 
| Proposed  Utilisation Date: |   | [                   ]  or, if that is not a Business Day, the next Business Day |
|-----------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                        |   |                                                                                                                                                                           |
| Amount:                     |   | [                   ]  or, if less, the Available Commitment                    |

 

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

 

**4****                                     **The proceeds ofthis Loan should be credited to [specify bank account of the Borrower].

 

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

 

MobileTeleSystems Open Joint Stock Company

 

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

 

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**SCHEDULE 3Form of Compliance Certificate**

 
| To:    |   | European  Bank for Reconstruction and Development |
|--------|--------|---------------------------------------------------|
|   |   |                                              |
| From:  |   | Mobile  TeleSystems Open Joint Stock Company      |

 

Dated:

 

Dear Sirs

 

**Mobile TeleSystems Open Joint Stock Company – US$250,000,000 FacilityAgreementoriginally dated 8 December 2004 and amended and restated on [                   ](the “Agreement”)**

 

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

 

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

 

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

 

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

 

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

 

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(*)*insert applicable certification language*

 

•                           If thisstatement cannot be made, the certificate should identify any Default that iscontinuing and the steps, if any, being taken to remedy it.

 

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