Document:

Exhibit 10.2

 

GUARANTEE AGREEMENT

 

TIDELANDS BANCSHARES, INC.

 

Dated as of June 20,
2008

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
  ARTICLE I DEFINITIONS
  AND INTERPRETATION

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  SECTION 1.1

  	
   

  	
  Definitions and Interpretation

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II POWERS,
  DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE

  	
   

  	
  4

  
	
   

  	
   

  	
   

  
	
  SECTION 2.1

  	
   

  	
  Powers and Duties of the Guarantee Trustee

  	
   

  	
  4

  
	
  SECTION 2.2

  	
   

  	
  Certain Rights of the Guarantee Trustee

  	
   

  	
  5

  
	
  SECTION 2.3

  	
   

  	
  Not Responsible for Recitals or Issuance of
  Guarantee

  	
   

  	
  7

  
	
  SECTION 2.4

  	
   

  	
  Events of Default; Waiver

  	
   

  	
  7

  
	
  SECTION 2.5

  	
   

  	
  Events of Default; Notice

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III THE
  GUARANTEE TRUSTEE 

  	
   

  	
  8

  
	
   

  	
   

  	
   

  
	
  SECTION 3.1

  	
   

  	
  The Guarantee Trustee; Eligibility

  	
   

  	
  8

  
	
  SECTION 3.2

  	
   

  	
  Appointment, Removal and Resignation of the
  Guarantee Trustee

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV GUARANTEE 

  	
   

  	
  9

  
	
   

  	
   

  	
   

  
	
  SECTION 4.1

  	
   

  	
  Guarantee

  	
   

  	
  9

  
	
  SECTION 4.2

  	
   

  	
  Waiver of Notice and Demand

  	
   

  	
  10

  
	
  SECTION 4.3

  	
   

  	
  Obligations Not Affected

  	
   

  	
  10

  
	
  SECTION 4.4

  	
   

  	
  Rights of Holders

  	
   

  	
  11

  
	
  SECTION 4.5

  	
   

  	
  Guarantee of Payment

  	
   

  	
  11

  
	
  SECTION 4.6

  	
   

  	
  Subrogation

  	
   

  	
  11

  
	
  SECTION 4.7

  	
   

  	
  Independent Obligations

  	
   

  	
  12

  
	
  SECTION 4.8

  	
   

  	
  Enforcement

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V LIMITATION OF
  TRANSACTIONS; SUBORDINATION

  	
   

  	
  12

  
	
   

  	
   

  	
   

  
	
  SECTION 5.1

  	
   

  	
  Limitation of Transactions

  	
   

  	
  12

  
	
  SECTION 5.2

  	
   

  	
  Ranking

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI TERMINATION

  	
   

  	
  13

  
	
   

  	
   

  	
   

  
	
  SECTION 6.1

  	
   

  	
  Termination

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII
  INDEMNIFICATION

  	
   

  	
  13

  
	
   

  	
   

  	
   

  
	
  SECTION 7.1

  	
   

  	
  Exculpation

  	
   

  	
  13

  
	
  SECTION 7.2

  	
   

  	
  Indemnification

  	
   

  	
  14

  
	
  SECTION 7.3

  	
   

  	
  Compensation; Reimbursement of Expenses

  	
   

  	
  15

  
							

 

i

 

	
  ARTICLE VIII
  MISCELLANEOUS

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.1

  	
   

  	
  Successors and Assigns

  	
   

  	
  15

  
	
  SECTION 8.2

  	
   

  	
  Amendments

  	
   

  	
  16

  
	
  SECTION 8.3

  	
   

  	
  Notices

  	
   

  	
  16

  
	
  SECTION 8.4

  	
   

  	
  Benefit

  	
   

  	
  16

  
	
  SECTION 8.5

  	
   

  	
  Governing Law

  	
   

  	
  16

  
	
  SECTION 8.6

  	
   

  	
  Counterparts

  	
   

  	
  17

  

 

ii

 

GUARANTEE AGREEMENT

 

This GUARANTEE AGREEMENT (the “Guarantee”), dated as
of June 20, 2008, is executed and delivered by Tidelands Bancshares, Inc.,
a bank holding company incorporated in South Carolina (the “Guarantor”), and
Wilmington Trust Company, a Delaware banking corporation, as trustee (the “Guarantee
Trustee”), for the benefit of the Holders (as defined herein) from time to time
of the Capital Securities (as defined herein) of Tidelands Statutory Trust II,
a Delaware statutory trust (the “Issuer”).

 

WHEREAS, pursuant to an Amended and Restated
Declaration of Trust (the “Declaration”), dated as of June 20, 2008, among
the trustees named therein of the Issuer, Tidelands Bancshares, Inc., as
sponsor, and the Holders from time to time of undivided beneficial interests in
the assets of the Issuer, the Issuer is issuing on the date hereof securities,
having an aggregate liquidation amount of $6,000,000, designated in the
Declaration as MMCapSSM (the “Capital Securities”); and

 

WHEREAS, as incentive for the Holders to purchase the
Capital Securities, the Guarantor desires irrevocably and unconditionally to
agree, to the extent set forth in this Guarantee, to pay to the Holders of
Capital Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the purchase by
each Holder of the Capital Securities, which purchase the Guarantor hereby
agrees shall benefit the Guarantor, the Guarantor executes and delivers this
Guarantee for the benefit of the Holders.

 

ARTICLE I

 

DEFINITIONS AND
INTERPRETATION

 

SECTION 1.1         Definitions
and Interpretation.

 

In this Guarantee, unless the context otherwise
requires:

 

(a)           capitalized
terms used in this Guarantee but not defined in the preamble above have the
respective meanings assigned to them in this Section 1.1;

 

(b)           a
term defined anywhere in this Guarantee has the same meaning throughout;

 

(c)           all
references to “the Guarantee” or “this Guarantee” are to this Guarantee as
modified, supplemented or amended from time to time;

 

(d)           all
references in this Guarantee to Articles and Sections are to Articles and
Sections of this Guarantee, unless otherwise specified;

 

(e)           terms
defined in the Declaration as of the date of execution of this Guarantee have
the same meanings when used in this Guarantee, unless otherwise defined in this
Guarantee or unless the context otherwise requires; and

 

 

(f)            a
reference to the singular includes the plural and vice versa.

 

“Beneficiaries” means any Person to whom the Issuer is
or hereafter becomes indebted or liable.

 

“Common Securities” has the meaning specified in the
Declaration.

 

“Corporate Trust Office”  means the office of the Guarantee Trustee at
which at any particular time its corporate trust business shall be principally
administered, which at all times shall be located within the United States and
at the time of the execution of this Guarantee shall be Rodney Square North,
1100 North Market Street, Wilmington, DE 19890-0001.

 

“Covered Person” means any Holder of Capital
Securities.

 

“Debenture Issuer” means Tidelands Bancshares, Inc.
or any successor entity resulting from any consolidation, amalgamation, merger
or other business combination, in its capacity as issuer of the Debentures.

 

“Debentures” means the junior subordinated debentures
of the Debenture Issuer that are designated in the Indenture as the “Fixed/Floating
Rate Junior Subordinated Debt Securities due 2038” and held by the
Institutional Trustee (as defined in the Declaration) of the Issuer.

 

“Event of Default” has the meaning set forth in Section 2.4.

 

“Guarantee Payments” means the following payments or
distributions, without duplication, with respect to the Capital Securities, to
the extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions (as defined in the Declaration) which are required to be paid on
such Capital Securities to the extent the Issuer has funds available in the
Property Account (as defined in the Declaration) therefor at such time, (ii) the
price payable upon the redemption of any Capital Securities to the extent the
Issuer has funds available in the Property Account therefor at such time, with
respect to any Capital Securities that are (1) called for redemption by
the Issuer or (2) mandatorily redeemed by the Issuer, in each case, in
accordance with the terms of such Capital Securities, and (iii) upon a
voluntary or involuntary liquidation, dissolution, winding-up or termination of
the Issuer (other than in connection with the distribution of Debentures to the
Holders of the Capital Securities in exchange therefor as provided in the
Declaration), the lesser of (a) the aggregate of the liquidation amount of
the Capital Securities and all accrued and unpaid Distributions on the Capital
Securities to the date of payment, to the extent the Issuer has funds available
in the Property Account therefor at such time, and (b) the amount of
assets of the Issuer remaining available for distribution to Holders in
liquidation of the Issuer after satisfaction of liabilities to creditors of the
Issuer as required by applicable law (in either case, the “Liquidation
Distribution”).

 

“Guarantee Trustee” means Wilmington Trust Company,
until a Successor Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Guarantee and thereafter means each
such Successor Guarantee Trustee.

 

2

 

“Holder” means any Person in whose name any Capital
Securities are registered on the books and records of the Issuer; provided,
however, that, in determining whether the holders of the requisite
percentage of Capital Securities have given any request, notice, consent or
waiver hereunder, “Holder” shall not include the Guarantor or any Affiliate of
the Guarantor.

 

“Indemnified Person” means the Guarantee Trustee
(including in its individual capacity), any Affiliate of the Guarantee Trustee,
or any officers, directors, shareholders, members, partners, employees,
representatives, nominees, custodians or agents of the Guarantee Trustee.

 

“Indenture” means the Indenture, dated as of June 20,
2008, between the Debenture Issuer and Wilmington Trust Company, not in its
individual capacity but solely as trustee, and any indenture supplemental
thereto pursuant to which the Debentures are to be issued to the Institutional
Trustee of the Issuer.

 

“Liquidation Distribution” has the meaning set forth
in the definition of “Guarantee Payments” herein.

 

“Majority in liquidation amount of the Capital
Securities” means Holder(s) of outstanding Capital Securities, voting
together as a class, but separately from the holders of Common Securities, of
more than 50% of the aggregate liquidation amount (including the amount that
would be paid upon the redemption, liquidation or otherwise on the date upon
which the voting percentages are determined, plus unpaid Distributions accrued
thereon to such date) of all Capital Securities then outstanding.

 

“Obligations” means any costs, expenses or liabilities
(but not including liabilities related to taxes) of the Issuer, other than
obligations of the Issuer to pay to holders of any Trust Securities the amounts
due such holders pursuant to the terms of the Trust Securities.

 

“Officer’s Certificate” means, with respect to any
Person, a certificate signed by one Authorized Officer of such Person.  Any Officer’s Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Guarantee shall include:

 

(a)           a statement that such officer signing
the Officer’s Certificate has read the covenant or condition and the
definitions relating thereto;

 

(b)           a brief statement of the nature and
scope of the examination or investigation undertaken by such officer in
rendering the Officer’s Certificate;

 

(c)           a statement that such officer has
made such examination or investigation as, in such officer’s opinion, is
necessary to enable such officer to express an informed opinion as to whether
or not such covenant or condition has been complied with; and

 

(d)           a statement as to whether, in the
opinion of such officer, such condition or covenant has been complied with.

 

“Person” means a legal person, including any
individual, corporation, estate, partnership, joint venture, association, joint
stock company, limited liability company, trust,

 

3

 

unincorporated
association, or government or any agency or political subdivision thereof, or
any other entity of whatever nature.

 

“Responsible Officer” means, with respect to the
Guarantee Trustee, any officer within the Corporate Trust Office of the
Guarantee Trustee with direct responsibility for the administration of any
matters relating to this Guarantee, including any vice president, any assistant
vice president, any secretary, any assistant secretary, the treasurer, any
assistant treasurer, any trust officer or other officer of the Corporate Trust
Office of the Guarantee Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of that officer’s knowledge of and familiarity with
the particular subject.

 

“Successor Guarantee Trustee” means a successor
Guarantee Trustee possessing the qualifications to act as Guarantee Trustee
under Section 3.1.

 

“Trust Securities” means the Common Securities and the
Capital Securities.

 

ARTICLE II

 

POWERS, DUTIES AND
RIGHTS OF THE GUARANTEE TRUSTEE

 

SECTION 2.1         Powers
and Duties of the Guarantee Trustee.

 

(a)           This
Guarantee shall be held by the Guarantee Trustee for the benefit of the Holders
of the Capital Securities, and the Guarantee Trustee shall not transfer this
Guarantee to any Person except a Holder of Capital Securities exercising his or
her rights pursuant to Section 4.4(b) or to a Successor Guarantee
Trustee on acceptance by such Successor Guarantee Trustee of its appointment to
act as Successor Guarantee Trustee.  The
right, title and interest of the Guarantee Trustee shall automatically vest in
any Successor Guarantee Trustee, and such vesting and cessation of title shall
be effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Guarantee Trustee.

 

(b)           If
an Event of Default actually known to a Responsible Officer of the Guarantee
Trustee has occurred and is continuing, the Guarantee Trustee shall enforce
this Guarantee for the benefit of the Holders of the Capital Securities.

 

(c)           The
Guarantee Trustee, before the occurrence of any Event of Default and after the
curing or waiving of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Guarantee, and no implied covenants shall be read into this Guarantee against
the Guarantee Trustee.  In case an Event
of Default has occurred (that has not been cured or waived pursuant to Section 2.4(b))
and is actually known to a Responsible Officer of the Guarantee Trustee, the
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Guarantee, and use the same degree of care and skill in its exercise
thereof, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.

 

4

 

(d)           No
provision of this Guarantee shall be construed to relieve the Guarantee Trustee
from liability for its own negligent action, its own negligent failure to act,
or its own willful misconduct or bad faith, except that:

 

(i)            prior to the occurrence of any Event of Default and
after the curing or waiving of all Events of Default that may have occurred:

 

(A)          the duties and
obligations of the Guarantee Trustee shall be determined solely by the express
provisions of this Guarantee, and the Guarantee Trustee shall not be liable
except for the performance of such duties and obligations as are specifically
set forth in this Guarantee, and no implied covenants or obligations shall be
read into this Guarantee against the Guarantee Trustee; and

 

(B)           in the absence of
bad faith on the part of the Guarantee Trustee, the Guarantee Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions furnished to the
Guarantee Trustee and conforming to the requirements of this Guarantee; but in
the case of any such certificates or opinions furnished to the Guarantee
Trustee, the Guarantee Trustee shall be under a duty to examine the same to
determine whether or not on their face they conform to the requirements of this
Guarantee;

 

(ii)           the Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that such Responsible Officer of the
Guarantee Trustee or the Guarantee Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;

 

(iii)          the Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in accordance
with the written direction of the Holders of a Majority in liquidation amount
of the Capital Securities relating to the time, method and place of conducting
any proceeding for any remedy available to the Guarantee Trustee, or exercising
any trust or power conferred upon the Guarantee Trustee under this Guarantee;
and

 

(iv)          no provision of this Guarantee shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if the Guarantee Trustee shall have reasonable
grounds for believing that the repayment of such funds is not reasonably
assured to it under the terms of this Guarantee, or security and indemnity,
reasonably satisfactory to the Guarantee Trustee, against such risk or
liability is not reasonably assured to it.

 

SECTION 2.2  Certain Rights of the Guarantee Trustee.

 

(a)           Subject to the provisions of Section 2.1:

 

5

 

(i)            The Guarantee
Trustee may conclusively rely, and shall be fully protected in acting or
refraining from acting upon, any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed, sent or presented by the
proper party or parties.

 

(ii)           Any direction or
act of the Guarantor contemplated by this Guarantee shall be sufficiently
evidenced by an Officer’s Certificate.

 

(iii)          Whenever, in the
administration of this Guarantee, the Guarantee Trustee shall deem it desirable
that a matter be proved or established before taking, suffering or omitting any
action hereunder, the Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part, request
and conclusively rely upon an Officer’s Certificate of the Guarantor which,
upon receipt of such request, shall be promptly delivered by the Guarantor.

 

(iv)          The Guarantee
Trustee shall have no duty to see to any recording, filing or registration of
any instrument or other writing (or any rerecording, refiling or reregistration
thereof).

 

(v)           The Guarantee
Trustee may consult with counsel of its selection, and the advice or opinion of
such counsel with respect to legal matters shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with such advice or
opinion.  Such counsel may be counsel to
the Guarantor or any of its Affiliates and may include any of its
employees.  The Guarantee Trustee shall
have the right at any time to seek instructions concerning the administration
of this Guarantee from any court of competent jurisdiction.

 

(vi)          The Guarantee
Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Guarantee at the request or direction of any Holder,
unless such Holder shall have provided to the Guarantee Trustee such security
and indemnity, reasonably satisfactory to the Guarantee Trustee, against the
costs, expenses (including attorneys’ fees and expenses and the expenses of the
Guarantee Trustee’s agents, nominees or custodians) and liabilities that might
be incurred by it in complying with such request or direction, including such
reasonable advances as may be requested by the Guarantee Trustee; provided,
however, that nothing contained in this Section 2.2(a)(vi) shall be
taken to relieve the Guarantee Trustee, upon the occurrence of an Event of
Default, of its obligation to exercise the rights and powers vested in it by
this Guarantee.

 

(vii)         The Guarantee
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the Guarantee Trustee,
in its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit.

 

6

 

(viii)        The Guarantee
Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents, nominees, custodians or
attorneys, and the Guarantee Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed with
due care by it hereunder.

 

(ix)           Any action taken by
the Guarantee Trustee or its agents hereunder shall bind the Holders of the
Capital Securities, and the signature of the Guarantee Trustee or its agents
alone shall be sufficient and effective to perform any such action.  No third party shall be required to inquire
as to the authority of the Guarantee Trustee to so act or as to its compliance
with any of the terms and provisions of this Guarantee, both of which shall be
conclusively evidenced by the Guarantee Trustee’s or its agent’s taking such
action.

 

(x)            Whenever in the
administration of this Guarantee the Guarantee Trustee shall deem it desirable
to receive instructions with respect to enforcing any remedy or right or taking
any other action hereunder, the Guarantee Trustee (A) may request
instructions from the Holders of a Majority in liquidation amount of the
Capital Securities, (B) may refrain from enforcing such remedy or right or
taking such other action until such instructions are received and (C) shall
be protected in conclusively relying on or acting in accordance with such
instructions.

 

(xi)           The Guarantee
Trustee shall not be liable for any action taken, suffered, or omitted to be
taken by it in good faith and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this Guarantee.

 

(b)           No provision of this Guarantee shall be
deemed to impose any duty or obligation on the Guarantee Trustee to perform any
act or acts or exercise any right, power, duty or obligation conferred or
imposed on it, in any jurisdiction in which it shall be illegal or in which the
Guarantee Trustee shall be unqualified or incompetent in accordance with
applicable law to perform any such act or acts or to exercise any such right, power,
duty or obligation.  No permissive power
or authority available to the Guarantee Trustee shall be construed to be a
duty.

 

SECTION 2.3         Not
Responsible for Recitals or Issuance of Guarantee.

 

The recitals contained in this Guarantee shall be
taken as the statements of the Guarantor, and the Guarantee Trustee does not
assume any responsibility for their correctness.  The Guarantee Trustee makes no representation
as to the validity or sufficiency of this Guarantee.

 

SECTION 2.4         Events
of Default; Waiver.

 

(a)           An “Event of Default” under this
Guarantee will occur upon the failure of the Guarantor to perform any of its
payment or other obligations hereunder.

 

(b)           The Holders of a Majority in liquidation
amount of the Capital Securities may, voting or consenting as a class, on
behalf of the Holders of all of the Capital Securities,

 

7

 

waive any past Event of Default and its consequences.  Upon such waiver, any such Event of Default
shall cease to exist, and shall be deemed to have been cured, for every purpose
of this Guarantee, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.

 

SECTION 2.5         Events
of Default; Notice.

 

(a)           The Guarantee Trustee shall, within 90
days after the occurrence of an Event of Default, transmit by mail, first class
postage prepaid, to the Holders of the Capital Securities, notices of all
Events of Default actually known to a Responsible Officer of the Guarantee Trustee,
unless such defaults have been cured before the giving of such notice,
provided, however, that the Guarantee Trustee shall be protected in withholding
such notice if and so long as a Responsible Officer of the Guarantee Trustee in
good faith determines that the withholding of such notice is in the interests
of the Holders of the Capital Securities.

 

(b)           The Guarantee Trustee shall not be
charged with knowledge of any Event of Default unless the Guarantee Trustee
shall have received written notice thereof from the Guarantor or a Holder of
the Capital Securities, or a Responsible Officer of the Guarantee Trustee
charged with the administration of this Guarantee shall have actual knowledge
thereof.

 

ARTICLE III

 

THE GUARANTEE
TRUSTEE

 

SECTION 3.1         The
Guarantee Trustee; Eligibility.

 

(a)                                  There shall at all times be a Guarantee
Trustee which shall:

 

(i)            not be an Affiliate
of the Guarantor; and

 

(ii)           be a corporation or
national association organized and doing business under the laws of the United
States of America or any state thereof or of the District of Columbia, or
Person authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least 50 million U.S. dollars ($50,000,000),
and subject to supervision or examination by federal, state or District of
Columbia authority.  If such corporation
or national association publishes reports of condition at least annually,
pursuant to law or to the requirements of the supervising or examining
authority referred to above, then, for the purposes of this Section 3.1(a)(ii),
the combined capital and surplus of such corporation or national association
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published.

 

(b)           If at any time the Guarantee Trustee
shall cease to be eligible to so act under Section 3.1(a), the Guarantee
Trustee shall immediately resign in the manner and with the effect set forth in
Section 3.2(c).

 

(c)           If the Guarantee Trustee has or shall
acquire any “conflicting interest” within the meaning of Section 310(b) of
the Trust Indenture Act, the Guarantee Trustee shall

 

8

 

either eliminate such interest or resign to the extent and in the
manner provided by, and subject to, this Guarantee.

 

SECTION 3.2         Appointment,
Removal and Resignation of the Guarantee Trustee.

 

(a)           Subject
to Section 3.2(b), the Guarantee Trustee may be appointed or removed
without cause at any time by the Guarantor except during an Event of Default.

 

(b)           The
Guarantee Trustee shall not be removed in accordance with Section 3.2(a) until
a Successor Guarantee Trustee has been appointed and has accepted such
appointment by written instrument executed by such Successor Guarantee Trustee
and delivered to the Guarantor.

 

(c)           The
Guarantee Trustee appointed to office shall hold office until a Successor
Guarantee Trustee shall have been appointed or until its removal or
resignation.  The Guarantee Trustee may
resign from office (without need for prior or subsequent accounting) by an
instrument in writing executed by the Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by an instrument
in writing executed by such Successor Guarantee Trustee and delivered to the
Guarantor and the resigning Guarantee Trustee.

 

(d)           If
no Successor Guarantee Trustee shall have been appointed and accepted
appointment as provided in this Section 3.2 within 60 days after delivery
of an instrument of removal or resignation, the Guarantee Trustee resigning or
being removed may petition any court of competent jurisdiction for appointment
of a Successor Guarantee Trustee.  Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.

 

(e)           No
Guarantee Trustee shall be liable for the acts or omissions to act of any
Successor Guarantee Trustee.

 

(f)            Upon
termination of this Guarantee or removal or resignation of the Guarantee
Trustee pursuant to this Section 3.2, the Guarantor shall pay to the
Guarantee Trustee all amounts owing to the Guarantee Trustee under Sections 7.2
and 7.3 accrued to the date of such termination, removal or resignation.

 

ARTICLE IV

 

GUARANTEE

 

SECTION 4.1         Guarantee.

 

(a)           The
Guarantor irrevocably and unconditionally agrees to pay in full to the Holders
the Guarantee Payments (without duplication of amounts theretofore paid by the
Issuer), as and when due, regardless of any defense (except defense of payment
by the Issuer), right of set-off or counterclaim that the Issuer may have or
assert.  The Guarantor’s obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Issuer to pay such
amounts to the Holders.

 

9

 

(b)           The
Guarantor hereby also agrees to assume any and all Obligations of the Issuer
and in the event any such Obligation is not so assumed, subject to the terms
and conditions hereof, the Guarantor hereby irrevocably and unconditionally
guarantees to each Beneficiary the full payment, when and as due, of any and
all Obligations to such Beneficiaries. 
This Guarantee is intended to be for the Beneficiaries who have received
notice hereof.

 

SECTION 4.2         Waiver
of Notice and Demand.

 

The Guarantor hereby waives notice of acceptance of
this Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first
against the Issuer or any other Person before proceeding against the Guarantor,
protest, notice of nonpayment, notice of dishonor, notice of redemption and all
other notices and demands.

 

SECTION 4.3         Obligations
Not Affected.

 

The obligations, covenants, agreements and duties of
the Guarantor under this Guarantee shall in no way be affected or impaired by
reason of the happening from time to time of any of the following:

 

(a)           the
release or waiver, by operation of law or otherwise, of the performance or
observance by the Issuer of any express or implied agreement, covenant, term or
condition relating to the Capital Securities to be performed or observed by the
Issuer;

 

(b)           the
extension of time for the payment by the Issuer of all or any portion of the
Distributions, the price payable upon the redemption of the Capital Securities,
the Liquidation Distribution or any other sums payable under the terms of the
Capital Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Capital Securities
(other than an extension of time for the payment of the Distributions, the
price payable upon the redemption of the Capital Securities, the Liquidation
Distribution or other sums payable that results from the extension of any
interest payment period on the Debentures);

 

(c)           any
failure, omission, delay or lack of diligence on the part of the Holders to
enforce, assert or exercise any right, privilege, power or remedy conferred on
the Holders pursuant to the terms of the Capital Securities, or any action on
the part of the Issuer granting indulgence or extension of any kind;

 

(d)           the
voluntary or involuntary liquidation, dissolution, sale of any collateral,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangement, composition or readjustment of debt of, or other
similar proceedings affecting, the Issuer or any of the assets of the Issuer;

 

(e)           any
invalidity of, or defect or deficiency in, the Capital Securities;

 

(f)            the
settlement or compromise of any obligation guaranteed hereby or hereby incurred;
or

 

10

 

(g)           any
other circumstance whatsoever that might otherwise constitute a legal or
equitable discharge or defense of a guarantor, it being the intent of this Section 4.3
that the obligations of the Guarantor hereunder shall be absolute and
unconditional under any and all circumstances.

 

There shall be no obligation of the Holders to give
notice to, or obtain consent of, the Guarantor with respect to the happening of
any of the foregoing.

 

SECTION 4.4         Rights
of Holders.

 

(a)           The
Holders of a Majority in liquidation amount of the Capital Securities have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Guarantee Trustee in respect of this Guarantee or to
direct the exercise of any trust or power conferred upon the Guarantee Trustee
under this Guarantee; provided, however, that (subject to Sections 2.1 and 2.2)
the Guarantee Trustee shall have the right to decline to follow any such direction
if the Guarantee Trustee shall determine that the actions so directed would be
unjustly prejudicial to the Holders not taking part in such direction or if the
Guarantee Trustee being advised by legal counsel determines that the action or
proceeding so directed may not lawfully be taken or if the Guarantee Trustee in
good faith by its board of directors or trustees, executive committee or a
trust committee of directors or trustees and/or Responsible Officers shall
determine that the action or proceeding so directed would involve the Guarantee
Trustee in personal liability.

 

(b)           Any
Holder of Capital Securities may institute a legal proceeding directly against
the Guarantor to enforce the Guarantee Trustee’s rights under this Guarantee,
without first instituting a legal proceeding against the Issuer, the Guarantee
Trustee or any other Person.  The
Guarantor waives any right or remedy to require that any such action be brought
first against the Issuer, the Guarantee Trustee or any other Person before so
proceeding directly against the Guarantor.

 

SECTION 4.5         Guarantee
of Payment.

 

This Guarantee creates a guarantee of payment and not
of collection.

 

SECTION 4.6         Subrogation.

 

The Guarantor shall be subrogated to all (if any)
rights of the Holders of Capital Securities against the Issuer in respect of
any amounts paid to such Holders by the Guarantor under this Guarantee;
provided, however, that the Guarantor shall not (except to the extent required
by applicable provisions of law) be entitled to enforce or exercise any right
that it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Guarantee, if,
after giving effect to any such payment, any amounts are due and unpaid under
this Guarantee.  If any amount shall be
paid to the Guarantor in violation of the preceding sentence, the Guarantor
agrees to hold such amount in trust for the Holders and to pay over such amount
to the Holders.

 

11

 

SECTION 4.7         Independent
Obligations.

 

The Guarantor acknowledges that its obligations
hereunder are independent of the obligations of the Issuer with respect to the
Capital Securities and that the Guarantor shall be liable as principal and as
debtor hereunder to make Guarantee Payments pursuant to the terms of this
Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 4.3 hereof.

 

SECTION 4.8         Enforcement.

 

A Beneficiary may enforce the Obligations of the
Guarantor contained in Section 4.1(b) directly against the Guarantor,
and the Guarantor waives any right or remedy to require that any action be
brought against the Issuer or any other person or entity before proceeding
against the Guarantor.

 

The Guarantor shall be subrogated to all rights (if
any) of any Beneficiary against the Issuer in respect of any amounts paid to
the Beneficiaries by the Guarantor under this Guarantee; provided, however,
that the Guarantor shall not (except to the extent required by applicable
provisions of law) be entitled to enforce or exercise any rights that it may
acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Guarantee, if, after giving
effect to such payment, any amounts are due and unpaid under this
Guarantee.  If any amount shall be paid
to the Guarantor in violation of the preceding sentence, the Guarantor agrees
to hold such amount in trust for the Beneficiaries and to pay over such amount
to the Beneficiaries.

 

ARTICLE V

 

LIMITATION OF
TRANSACTIONS; SUBORDINATION

 

SECTION 5.1         Limitation
of Transactions.

 

So long as any Capital Securities remain outstanding,
if (a) there shall have occurred and be continuing an Event of Default or (b) Debenture
Issuer shall have selected an Extension Period as provided in the Indenture and
such period, or any extension thereof, shall have commenced and be continuing,
then the Guarantor may not (x) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of the Guarantor’s capital stock, (y) make any
payment of principal of or interest or premium, if any, on or repay, repurchase
or redeem any debt securities of the Guarantor that rank in all respects pari passu with or junior in interest to the Debentures or (z) make
any payment under any guarantees of the Guarantor that rank in all respects pari passu with or junior in interest to this Guarantee
(other than (i) repurchases, redemptions or other acquisitions of shares
of capital stock of the Guarantor (A) in connection with any employment
contract, benefit plan or other similar arrangement with or for the benefit of
one or more employees, officers, directors, or consultants, (B) in
connection with a dividend reinvestment or stockholder stock purchase plan or (C) in
connection with the issuance of capital stock of the Guarantor (or securities
convertible into or exercisable for such capital stock), as consideration in an
acquisition transaction entered into prior to the occurrence of the Event of
Default or the

 

12

 

applicable Extension
Period, (ii) as a result of any exchange or conversion of any class or
series of the Guarantor’s capital stock (or any capital stock of a subsidiary
of the Guarantor) for any class or series of the Guarantor’s capital stock or
of any class or series of the Guarantor’s indebtedness for any class or series
of the Guarantor’s capital stock, (iii) the purchase of fractional
interests in shares of the Guarantor’s capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted or
exchanged, (iv) any declaration of a dividend in connection with any
stockholder’s rights plan, or the issuance of rights, stock or other property
under any stockholder’s rights plan, or the redemption or repurchase of rights
pursuant thereto, or (v) any dividend in the form of stock, warrants,
options or other rights where the dividend stock or the stock issuable upon
exercise of such warrants, options or other rights is the same stock as that on
which the dividend is being paid or ranks pari passu with
or junior in interest to such stock).

 

SECTION 5.2         Ranking.

 

This Guarantee will constitute an unsecured obligation
of the Guarantor and will rank subordinate and junior in right of payment to
all present and future Senior Indebtedness (as defined in the Indenture) of the
Guarantor.  By their acceptance thereof,
each Holder of Capital Securities agrees to the foregoing provisions of this
Guarantee and the other terms set forth herein.

 

ARTICLE VI

 

TERMINATION

 

SECTION 6.1         Termination.

 

This Guarantee shall terminate as to the Capital
Securities (i) upon full payment of the price payable upon redemption of
all Capital Securities then outstanding, (ii) upon the distribution of all
of the Debentures to the Holders of all of the Capital Securities or (iii) upon
full payment of the amounts payable in accordance with the Declaration upon
dissolution of the Issuer.  This
Guarantee will continue to be effective or will be reinstated, as the case may
be, if at any time any Holder of Capital Securities must restore payment of any
sums paid under the Capital Securities or under this Guarantee.

 

ARTICLE VII

 

INDEMNIFICATION

 

SECTION 7.1         Exculpation.

 

(a)           No
Indemnified Person shall be liable, responsible or accountable in damages or
otherwise to the Guarantor or any Covered Person for any loss, damage or claim
incurred by reason of any act or omission of such Indemnified Person in good
faith in accordance with this Guarantee and in a manner that such Indemnified
Person reasonably believed to be within the scope of the authority conferred on
such Indemnified Person by this Guarantee or by law, except that an Indemnified
Person shall be liable for any such loss, damage or claim

 

13

 

incurred by reason of such Indemnified Person’s negligence, willful
misconduct or bad faith with respect to such acts or omissions.

 

(b)           An
Indemnified Person shall be fully protected in relying in good faith upon the
records of the Issuer or the Guarantor and upon such information, opinions,
reports or statements presented to the Issuer or the Guarantor by any Person as
to matters the Indemnified Person reasonably believes are within such other
Person’s professional or expert competence and who, if selected by such
Indemnified Person, has been selected with reasonable care by such Indemnified
Person, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Capital Securities might properly be paid.

 

SECTION 7.2         Indemnification.

 

(a)           The
Guarantor agrees to indemnify each Indemnified Person for, and to hold each
Indemnified Person harmless against, any and all loss, liability, damage, claim
or expense incurred without negligence, willful misconduct or bad faith on the
part of the Indemnified Person, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including but
not limited to the costs and expenses (including reasonable legal fees and
expenses) of the Indemnified Person defending itself against, or investigating,
any claim or liability in connection with the exercise or performance of any of
the Indemnified Person’s powers or duties hereunder.  The obligation to indemnify as set forth in
this Section 7.2 shall survive the resignation or removal of the Guarantee
Trustee and the termination of this Guarantee.

 

(b)           Promptly
after receipt by an Indemnified Person under this Section 7.2 of notice of
the commencement of any action, such Indemnified Person will, if a claim in
respect thereof is to be made against the Guarantor under this Section 7.2,
notify the Guarantor in writing of the commencement thereof; but the failure so
to notify the Guarantor (i) will not relieve the Guarantor from liability
under paragraph (a) above unless and to the extent that the Guarantor did
not otherwise learn of such action and such failure results in the forfeiture
by the Guarantor of substantial rights and defenses and (ii) will not, in
any event, relieve the Guarantor from any obligations to any Indemnified Person
other than the indemnification obligation provided in paragraph (a) above.  The Guarantor shall be entitled to appoint
counsel of the Guarantor’s choice at the Guarantor’s expense to represent the
Indemnified Person in any action for which indemnification is sought (in which
case the Guarantor shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the Indemnified Person or Persons
except as set forth below); provided, however, that such counsel shall be
satisfactory to the Indemnified Person. 
Notwithstanding the Guarantor’s election to appoint counsel to represent
the Indemnified Person in any action, the Indemnified Person shall have the
right to employ separate counsel (including local counsel), and the Guarantor
shall bear the reasonable fees, costs and expenses of such separate counsel, if
(i) the use of counsel chosen by the Guarantor to represent the
Indemnified Person would present such counsel with a conflict of interest, (ii) the
actual or potential defendants in, or targets of, any such action include both
the Indemnified Person and the Guarantor and the Indemnified Person shall have
reasonably concluded that there may be legal defenses available to it and/or
other Indemnified Persons

 

14

 

which are different from or additional to those available to the
Guarantor, (iii) the Guarantor shall not have employed counsel
satisfactory to the Indemnified Person to represent the Indemnified Person
within a reasonable time after notice of the institution of such action or (iv) the
Guarantor shall authorize the Indemnified Person to employ separate counsel at
the expense of the Guarantor.  The
Guarantor will not, without the prior written consent of the Indemnified
Persons, settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder (whether
or not the Indemnified Persons are actual or potential parties to such claim or
action) unless such settlement, compromise or consent includes an unconditional
release of each Indemnified Person from all liability arising out of such
claim, action, suit or proceeding.

 

SECTION 7.3         Compensation;
Reimbursement of Expenses.

 

The Guarantor agrees:

 

(a)           to
pay to the Guarantee Trustee from time to time such compensation for all
services rendered by it hereunder as the parties shall agree to from time to
time (which compensation shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust); and

 

(b)           except
as otherwise expressly provided herein, to reimburse the Guarantee Trustee upon
request for all reasonable expenses, disbursements and advances incurred or
made by it in accordance with any provision of this Guarantee (including the
reasonable compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to the negligence, willful misconduct or bad faith of the
Guarantee Trustee.

 

The provisions of this Section 7.3 shall survive
the resignation or removal of the Guarantee Trustee and the termination of this
Guarantee.

 

ARTICLE VIII

 

MISCELLANEOUS

 

SECTION 8.1         Successors
and Assigns.

 

All guarantees and agreements contained in this
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Capital Securities then outstanding. 
Except in connection with any merger or consolidation of the Guarantor
with or into another entity or any sale, transfer or lease of the Guarantor’s
assets to another entity, in each case to the extent permitted under the
Indenture, the Guarantor may not assign its rights or delegate its obligations
under this Guarantee without the prior approval of the Holders of a Majority in
liquidation amount of the Capital Securities.

 

15

 

SECTION 8.2         Amendments.

 

Except with respect to any changes that do not
adversely affect the powers, preferences, rights or interests of Holders of the
Capital Securities in any material respect (in which case no approval of
Holders will be required), this Guarantee may be amended only with the prior
approval of the Holders of a Majority in liquidation amount of the Capital
Securities.  The provisions of the
Declaration with respect to amendments thereof shall apply equally with respect
to amendments of the Guarantee.

 

SECTION 8.3         Notices.

 

All notices provided for in this Guarantee shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:

 

(a)           if
given to the Guarantee Trustee, at the Guarantee Trustee’s mailing address set
forth below (or such other address as the Guarantee Trustee may give notice of
to the Holders of the Capital Securities): Wilmington Trust Company, Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001,
Attention: Corporate Capital Markets, Telecopy: 302-636-4140, Telephone:  302-651-1000;

 

(b)           if
given to the Guarantor, at the Guarantor’s mailing address set forth below (or
such other address as the Guarantor may give notice of to the Holders of the
Capital Securities and to the Guarantee Trustee): Tidelands Bancshares, Inc.,
875 Lowcountry Blvd., Mount Pleasant, South
Carolina 29464, Attention: Chief
Financial Officer, Attention: Chief Financial Officer, Telecopy: (843) 388-8081,
Telephone: (843) 388-8433; or

 

(c)           if
given to any Holder of the Capital Securities, at the address set forth on the
books and records of the Issuer.

 

All such notices shall be deemed to have been given
when received in person, telecopied with receipt confirmed, or mailed by first
class mail, postage prepaid, except that if a notice or other document is
refused delivery or cannot be delivered because of a changed address of which
no notice was given, such notice or other document shall be deemed to have been
delivered on the date of such refusal or inability to deliver.

 

SECTION 8.4         Benefit.

 

This Guarantee is solely for the benefit of the
Holders of the Capital Securities and, subject to Section 2.1(a), is not
separately transferable from the Capital Securities.

 

SECTION 8.5         Governing
Law.

 

THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT
OF LAW PRINCIPLES OF SAID STATE OTHER THAN SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW.

 

16

 

SECTION 8.6         Counterparts.

 

This Guarantee may contain more than one counterpart
of the signature page and this Guarantee may be executed by the affixing
of the signature of the Guarantor and the Guarantee Trustee to any of such
counterpart signature pages.  All of such
counterpart signature pages shall be read as though one, and they shall
have the same force and effect as though all of the signers had signed a single
signature page.

 

17

 

THIS GUARANTEE is executed as of the day and year
first above written.

 

	
   

  	
  TIDELANDS BANCSHARES, INC.,

  
	
   

  	
  as Guarantor

  
	
   

  	
   

  
	
   

  	
  By:: 

  	
  /s/ Robert E. Coffee, Jr.

  
	
   

  	
    Name:
  Robert E. Coffee, Jr.

  
	
   

  	
    Title:
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WILMINGTON TRUST COMPANY,

  
	
   

  	
  as Guarantee Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ W. Thomas Morris, II

  
	
   

  	
    Name:
  W. Thomas Morris, II

  
	
   

  	
    Title:
  Assistant Vice President

  
				

 

18Exhibit 4.1

 

USD
250,000,000

 

FACILITY
AGREEMENT

 

dated [                       ]

 

for

 

OPEN JOINT STOCK COMPANY “WIMM-BILL-DANN FOODS”

 

arranged by

ABN AMRO BANK N.V.

CALYON

ING BANK N.V.

 

as Mandated
Lead Arrangers

 

with

 

ING BANK N.V., LONDON BRANCH

as Agent

 

L-149937

 

 

Linklaters
LLP

 

 

CONTENTS

 

	
  CLAUSE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1

  
	
  INTERPRETATION

  
	
  1.

  	
  Definitions
  and interpretation

  	
   

  
	
  SECTION 2

  
	
  THE FACILITIES

  
	
  2.

  	
  The Facility

  	
   

  
	
  3.

  	
  Purpose

  	
   

  
	
  4.

  	
  Conditions of Utilisation

  	
   

  
	
  SECTION 3

  
	
  UTILISATION

  
	
  5.

  	
  Utilisation

  	
   

  
	
  SECTION 4

  
	
  REPAYMENT, PREPAYMENT AND CANCELLATION

  
	
  6.

  	
  Repayment

  	
   

  
	
  7.

  	
  Prepayment and cancellation

  	
   

  

SECTION 5

COSTS OF UTILISATION

	
  8.

  	
  Interest

  	
   

  
	
  9.

  	
  Interest Periods

  	
   

  
	
  10.

  	
  Changes to the calculation of interest

  	
   

  
	
  11.

  	
  Fees

  	
   

  

SECTION 6

ADDITIONAL PAYMENT
OBLIGATIONS

	
  12.

  	
  Tax gross-up and indemnities

  	
   

  
	
  13.

  	
  Increased costs

  	
   

  
	
  14.

  	
  Other indemnities

  	
   

  
	
  15.

  	
  Mitigation by the Lenders

  	
   

  
	
  16.

  	
  Costs and expenses

  	
   

  

SECTION 7

REPRESENTATIONS,
UNDERTAKINGS AND EVENTS OF DEFAULT

	
  17.

  	
  Representations

  	
   

  
	
  18.

  	
  Information undertakings

  	
   

  
	
  19.

  	
  Financial covenants

  	
   

  
	
  20.

  	
  General undertakings

  	
   

  
	
  21.

  	
  Events of Default

  	
   

  

SECTION 8

CHANGES TO PARTIES

	
  22.

  	
  Changes to the Lenders

  	
   

  
	
  23.

  	
  Changes to the Borrower

  	
   

  

 

 

SECTION 9

THE FINANCE PARTIES

	
  24.

  	
  Role of the Agent and the Arranger

  	
   

  
	
  25.

  	
  Conduct of business by the Finance
  Parties

  	
   

  
	
  26.

  	
  Sharing among the Finance Parties

  	
   

  

SECTION 10

ADMINISTRATION

	
  27.

  	
  Payment mechanics

  	
   

  
	
  28.

  	
  Set-off

  	
   

  
	
  29.

  	
  Notices

  	
   

  
	
  30.

  	
  Calculations and certificates

  	
   

  
	
  31.

  	
  Partial invalidity

  	
   

  
	
  32.

  	
  Remedies and waivers

  	
   

  
	
  33.

  	
  Amendments and waivers

  	
   

  
	
  34.

  	
  Counterparts

  	
   

  

SECTION 11

GOVERNING LAW AND
ENFORCEMENT

	
  35.

  	
  Governing law

  	
   

  
	
  36.

  	
  Enforcement

  	
   

  

 

THE SCHEDULES

 

	
  SCHEDULE

  	
   

  	
   

  
	
   

  	
   

  
	
  SCHEDULE 1 The Original Lenders

  	
   

  
	
  SCHEDULE 2 Conditions precedent and
  subsequent

  	
   

  
	
  SCHEDULE 3 Utilisation Request

  	
   

  
	
  SCHEDULE 4 Mandatory Cost formula

  	
   

  
	
  SCHEDULE 5 Form of Transfer
  Certificate

  	
   

  
	
  SCHEDULE 6 Form of Compliance
  Certificate

  	
   

  
	
  SCHEDULE 7 Timetables

  	
   

  

 

 

THIS AGREEMENT is dated [                             ]
and made between:

 

(1)         OPEN
JOINT STOCK COMPANY “WIMM-BILL-DANN FOODS” (the “Borrower”);

 

(2)         ABN
AMRO BANK N.V., CALYON and ING BANK N.V. as mandated lead arrangers (whether
acting individually or together the “Arranger”);

 

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

 

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

 

 

IT IS AGREED as follows:

 

SECTION 1

 

INTERPRETATION

 

1.           DEFINITIONS
AND INTERPRETATION

 

1.1         Definitions

 

In this Agreement:

 

“Acquisition”
means the acquisition by any member of the Group of any business or going
concern, or the whole or substantially the whole of the assets or business of
any person, or any assets that constitute a division or operating unit of the
business of any person.

 

“Acquisition Costs”
means all costs, fees and expenses (and Taxes on them) and all stamp duty,
stamp duty land tax, registration and other similar Taxes incurred by or on
behalf of a member of the Group or the relevant Obligor (as applicable) in
connection with an Acquisition.

 

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

 

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

 

“Agreed Reorganisation”
means:

 

(a)            (i) the merger (sliyaniye) (as this term is construed by applicable Russian law) of the
Borrower and WBD or (ii) the accession (prisoedinyeniye) (as this term is construed by
applicable Russian law) of WBD to the Borrower (resulting in the Borrower being
the surviving entity); and

 

(b)           (i) the merger (sliyaniye) (as this term is construed by applicable Russian law) of WBD Beverages and certain other subsidiaries
of the
Borrower listed in the Agreed Reorganisation Memorandum or (ii) the accession (prisoedinyeniye) (as this term is construed by
applicable Russian law) of such subsidiaries to WBD Beverages (resulting in WBD
Beverages being the surviving entity),

 

which, in each case, (A) in the reasonable opinion of the Majority
Lenders, does not and is not likely to have an adverse effect on the ability of
the Borrower, WBD Beverages or any surviving 

 

 

 

entity (as the case may be), to
perform or comply with any of its obligations under any Finance Document and (B) is in accordance with the Agreed
Reorganisation Memorandum.

 

“Agreed Reorganisation
Memorandum” means a memorandum, in form and substance satisfactory
to the Agent, prepared by the Borrower and containing a detailed description of
the Agreed Reorganisation.

 

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

 

“Availability Period”
means:

 

(a)            in relation to Tranche 1, the period from
and including the date of this Agreement to and including 21 May 2008 (or,
if not a Business Day, the next Business Day); and

 

(b)           in relation to Tranche 2, the period from
and including the date of this Agreement to and including the date which is
three Months after the date of this Agreement,

 

or, in each case, if earlier, the day on which each Lender’s
Commitment under the relevant Tranche is zero.

 

“Available Tranche 1
Commitment” means, in relation to Tranche 1, a Lender’s Commitment
under that Tranche minus:

 

(a)            the amount of its participation in any
outstanding Loans under that Tranche; and

 

(b)           in relation to any proposed Utilisation
under that Tranche, the amount of its participation in any Loans that are due
to be made under that Tranche on or before the proposed Utilisation Date.

 

“Available Tranche 2
Commitment” means, in relation to Tranche 2, a Lender’s Commitment
under that Tranche minus:

 

(a)            the amount of its participation in any
outstanding Loans under that Tranche; and

 

(b)           in relation to any proposed Utilisation under
that Tranche, the amount of its participation in any Loans that are due to be
made under that Tranche on or before the proposed Utilisation Date.

 

“Break Costs”
means the amount (if any) by which:

 

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

 

exceeds:

 

(b)           the amount which that Lender would be able
to obtain by placing an amount equal to the principal amount or Unpaid Sum
received by it on deposit with a leading bank in the Relevant Interbank Market
for a period starting on the Business Day following receipt or recovery and
ending on the last day of the current Interest Period.

 

 

 

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

 

“Change of Shareholding
Structure”
means any person, other than an Excluded Person or Excluded Persons,
whether acting alone or together with (an)other person(s):

 

(a)            has or acquires, directly or
indirectly, in aggregate more than 25 per cent. of the voting shares
of the Borrower (whether by virtue of any issuance, sale or other disposition
of such shares, any merger or other transaction having a similar effect or any
voting trust or other agreement);

 

(b)           has or acquires the right to
appoint or remove a majority of the Borrower’s board of directors or its chief
executive officer; or

 

(c)            has or acquires the power to
cast or control the casting of more than 25 per cent. of the voting rights
in the Borrower.

 

“Commitment”
means a Tranche 1 Commitment or a Tranche 2 Commitment.

 

“Compliance Certificate”
means a certificate substantially in the form set out in Schedule 6 (Form of Compliance Certificate).

 

“Confidentiality
Undertaking” means a confidentiality undertaking substantially in a
recommended form of the LMA or in any other form agreed between the Borrower
and the Agent.

 

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

 

“Dollars”, “USD” or “$” means the
lawful currency of the United States of America.

 

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

 

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

 

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

 

(c)            land (including land under water).

 

“Environmental Law”
means all laws and regulations of any relevant jurisdiction which:

 

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

 

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

 

(c)            relate to Hazardous Substances or health
and safety matters.

 

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

 

 

“Event of Default”
means any event or circumstance specified as such in Clause 21 (Events of Default).

 

“Eurobond Facility
Agreement” means the USD150,000,000 loan agreement dated 21 May 2003
between the Borrower as borrower and UBS (Luxembourg) S.A. as lender.

 

“Excluded Persons”
means Groupe DANONE SA and its subsidiaries, I.M. Arteks
Holding Limited, Gavril A. Yushavaev, Mikhail V. Dubinin,
Sergei A. Plastinin, Alexander S. Orlov, David Iakobachvili, Mikhail I.
Vishnyakov and Viktor E. Evdokimov and each of their legal
successors, respective heirs and first degree relatives.

 

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

 

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

 

“Fee Letter”
means any letter or letters dated on or about the date of this Agreement
between, as the case may be, the Arranger and the Borrower, or the Agent and
the Borrower setting out any of the fees referred to in Clause 11 (Fees).

 

“Finance Document”
means this Agreement, any Guarantee, any Fee Letter, the Mandate Letter and any
other document designated as such by the Agent and the Borrower.

 

“Finance Party”
means the Agent, the Arranger or a Lender.

 

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

 

(a)            moneys borrowed;

 

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

 

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

 

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

 

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

 

(f)            any amount raised under any other
transaction having the commercial effect of a borrowing;

 

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

 

(h)           shares which are expressed to be redeemable
prior to the Termination Date;

 

 

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

 

(j)             the amount of any liability in respect of
any guarantee or indemnity for any of the items referred to in paragraphs (a) to
(i) above. (For
the avoidance of doubt, this paragraph (j) shall include any guarantee,
indemnity or other similar instrument in respect of obligations of any
person who is not a member of the Group, arising under any of the items
referred to in paragraphs (a) to (i) above.)

 

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

 

“GBP” means the
lawful currency for the time being of the United Kingdom.

 

“Group” means
the Borrower and its Subsidiaries from time to time.

 

“Group Structure Chart”
means the structure chart of the Group delivered to the Agent pursuant to
Clause 4.1 (Initial conditions precedent) as updated
from time to time pursuant to paragraph (c) of Clause 18.4 (Information: miscellaneous).

 

“Guarantee”  means the WBD Guarantee or the WBD Beverages Guarantee.

 

“Guarantor”
means WBD or WBD Beverages.

 

“Hazardous Substance”
means any waste, pollutant, contaminant or other substance (including any
liquid, solid, gas, ion, living organism or noise) that may be harmful to human
health or other life or the Environment.

 

“Holding Company”
means, in relation to a company or corporation, any other company or
corporation in respect of which it is a Subsidiary.

 

“Instruction 117-I”
means the Central Bank of the Russian Federation Instruction N 117-I dated 15 June 2004.

 

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

 

“Lender” means:

 

(a)            any Original Lender; and

 

(b)           any bank, financial institution, trust,
fund or other entity which has become a Party in accordance with Clause 22 (Changes to the Lenders),

 

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

 

“Liabilities”
means all present and future moneys, debts and liabilities due, owing or
incurred by the Obligors (or any of them) to the Finance Parties under or in
connection with the Finance Documents (or any of them) (in each case, whether
alone or jointly, or jointly and severally, with any other person, whether
actually or contingently and whether as principal, surety or otherwise).

 

 

“LIBOR” means,
in relation to any Loan:

 

(a)            the applicable Screen Rate; or

 

(b)           (if no Screen Rate is available for the currency or
Interest Period of that Loan) the arithmetic mean of the rates (rounded upwards
to four decimal places) as supplied to the Agent at its request quoted by the
Reference Banks to leading banks in the London interbank market,

 

as of the Specified Time on the Quotation Day for the
offering of deposits in the currency of that Loan and for a period comparable
to the Interest Period for that Loan.

 

“LMA” means the
Loan Market Association.

 

“Loan” means the
Tranche 1 Loan or a Tranche 2 Loan.

 

“Majority Lenders”
means:

 

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

 

(b)                                  at any other time, a Lender or Lenders
whose participations in the Loans then outstanding aggregate more than 662/3
 per cent. of all the Loans then
outstanding.

 

“Mandate Letter”
means the mandate letter between the Obligors and the Arranger dated 14 February 2008.

 

“Mandatory Cost”
means the percentage rate per annum calculated by the Agent in accordance with
Schedule 4 (Mandatory Cost formula).

 

“Margin” means
1.75 per cent. per annum.

 

“Material Adverse Effect”
means a material adverse effect on or material adverse change in:

 

(a)            the financial condition, assets, prospects or business
of any Obligor or the consolidated financial condition, assets, prospects or
business of the Group or the Obligors taken as a whole;

 

(b)           the ability of any Obligor to perform and comply with
its obligations under any Finance Document; or

 

(c)            the validity, legality or enforceability of any
Finance Document.

 

“Material Asset”
means:

 

(a)            in relation to an Obligor, any asset(s) of that
Obligor the value of which (as determined in accordance with GAAP) exceeds 5
per cent. of the Total Assets of that Obligor;

 

(b)           in relation to any member of the Group which is not an
Obligor, any asset(s) of that member of the Group the value of which (as
determined in accordance with GAAP) exceeds 5 per cent. of the Total Assets of
the Group.

 

 

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

 

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

 

(b)           if there is no numerically corresponding
day in the calendar month in which that period is to end, that period shall end
on the last Business Day in that calendar month,

 

(and “Monthly” shall
be construed accordingly). The above rules will only apply to the last
Month of any period.

 

“Obligor” means
the Borrower or a Guarantor.

 

“Original Financial
Statements” means the financial statements:

 

(a)            of the Borrower on a consolidated basis for
the accounting year ending 31 December 2006, audited and prepared in
accordance with GAAP;

 

(b)           of the Borrower on a consolidated basis for
the accounting quarter ending 30 September 2007 prepared in accordance
with GAAP;

 

(c)            of each Obligor on a stand-alone basis for
the accounting year ending 31 December 2006, audited and prepared in
accordance with RAS; and

 

(d)           of each Obligor on a stand-alone basis for
the accounting quarter ending 31 December 2007 prepared in accordance with
RAS.

 

“Party” means a
party to this Agreement.

 

“Passport Bank”
means ING Bank Eurasia ZAO acting in its capacity as transaction passport bank
in relation to this Agreement in accordance with Instruction 117-I.

 

“Permitted
Disposal” means any sale, lease, licence, transfer, assignment or
other disposal of any asset made:

 

(a)            in the
ordinary course of trading of the disposing entity (including, for the
avoidance of doubt, cash and cash equivalent investments) and on arm’s length
terms;

 

(b)           by a
member of the Group to another member of the Group;

 

(c)            with the
prior written consent of the Agent; or

 

(d)           on arm’s
length terms where the higher of the market value and the consideration
receivable for any sale, lease, transfer or other disposal does not exceed 10
per cent. in aggregate of the Total Assets of the Group in any financial year.

 

“Permitted
Guarantee” means:

 

(a)            any
guarantee or indemnity given in favour of directors and officers of any member
of the Group in respect of their function as such;

 

(b)           any
indemnity given to professional advisers and consultants in the ordinary course
of business;

 

 

(c)            any
guarantee given to any
person which is not a member of the Group in respect
of any netting or set-off arrangements; and

 

(d)           the
endorsement of negotiable instruments in the ordinary course of trading; or

 

(e)            any
guarantee or indemnity provided in respect of the obligations of any person which is a
distributor or supplier to any member of the Group,

 

provided that such guarantee, indemnity or endorsement shall be given
only in respect of obligations undertaken on arm’s length terms and provided
further that the aggregate amount of all such guarantees, indemnities and
endorsements, when taken together with the aggregate value of the assets of the
Obligors secured by any Permitted Security, shall not exceed 15 per cent. of the Total Assets of the Group.

 

“Permitted Security”
means any Security granted
by a member of the Group to any person who is not a member of the Group, provided
that:

 

(a)            in relation to any Obligor on a stand-alone
basis, the aggregate value of the assets of that Obligor secured thereby,
together with the aggregate amount of Permitted Guarantees given by that
Obligor, shall not exceed 15 per cent. in aggregate of the Total Assets of that
Obligor; and

 

(b)                                  in relation to the Group on a consolidated
basis, the value of the assets of the Group secured thereby, together with the
aggregate amount of Permitted Guarantees given by the Obligors, shall not
exceed 15 per cent. in aggregate of the Total Assets of the Group.

 

“Quotation Day”
means, in relation to any period for which an interest rate is to be
determined, two Business Days before the first day of that period unless market
practice differs in the Relevant Interbank Market for a currency, in which case
the Quotation Day for that currency will be determined by the Agent in
accordance with market practice in the Relevant Interbank Market (and if
quotations for that currency and period would normally be given by leading
banks in the Relevant Interbank Market on more than one day, the Quotation Day
will be the last of those days).

 

“RAS” means the
accounting principles and practices specified by the laws of the Russian
Federation, consistently applied.

 

“Reference Banks”
means, in relation to LIBOR and Mandatory Cost the principal London offices of
ABN AMRO Bank N.V., CALYON and ING Bank N.V. or such other banks as may be
appointed by the Agent in consultation with the Borrower.

 

“Relevant Interbank Market”
means the London interbank market.

 

“Repeating Representations”
means each of the representations set out in Clauses 17.1 (Status)
to 17.6 (Governing law and enforcement), 17.9 (No default) to 17.13 (No proceedings pending or
threatened) and 17.17 (Taxes).

 

“Reservations”
means:

 

(a)            the principle that equitable remedies (and
similar remedies under the laws of any relevant jurisdiction) may be
unavailable or granted or refused at the discretion of a court, the limitation
of the recognition of a chosen choice of law or validity and 

 

 

enforcement of rights and obligations in
each case by laws relating to public policy (including the principles of
non-recognition of judgments on the grounds of lack of natural justice or res judicata and the principle that a court will not enforce
a penalty or any other contractual provision held to be in terrorem),
bankruptcy, liquidation, winding-up, dissolution, administration, insolvency,
reorganisation and/or other laws generally affecting the rights of creditors;

 

(b)           the time barring of claims under statutes
of limitation or similar acts or principles in any relevant jurisdiction, the
possibility that an undertaking to assume liability for or indemnify a person
against non-payment of stamp duty may be void and defences of set-off or
counterclaim and similar principles of law, contractual severance of an
invalid, illegal and unenforceable provision of an agreement may not be
effective in all circumstances;

 

(c)            the fact that a person vested with a
discretion or a right to determine a matter in its opinion may be required to
exercise that discretion reasonably or hold that opinion on reasonable grounds;

 

(d)           that any determination or certification
which provides for such determination or certificate to constitute conclusive
or prima facie evidence may not be so if it is shown to have been incorrect,
unreasonable, arbitrary or given other than in good faith; and

 

(e)            the fact that courts may regulate the
conduct of judicial proceedings and the recognition, award and enforcement of
judgments and costs in accordance with the rules of the relevant lex fori notwithstanding any contractual stipulations to the
contrary.

 

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

 

“Screen Rate”
means the British Bankers’ Association Interest Settlement Rate for Dollars for
the relevant period displayed as at 11:00 a.m. London time on the
appropriate page of the Reuters screen. If the agreed page is
replaced or service ceases to be available, the Agent may specify another page or
service displaying the appropriate rate after consultation with the Borrower
and the Lenders.

 

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

 

“Specified Time”
means a time determined in accordance with Schedule 7 (Timetables).

 

“Subsidiary”
means, in relation to any company, corporation or other legal entity, a
company, corporation or other legal entity:

 

(a)            which is controlled, directly or
indirectly, by the first mentioned company, corporation or legal entity (as the
case may be);

 

(b)           more than half the issued share capital or
voting rights in respect of more than half the issued share capital of which is
or are beneficially owned, directly or indirectly, by the first mentioned
company, corporation or other legal entity (as the case may be); or

 

(c)            which is a Subsidiary of another Subsidiary
of the first mentioned company, corporation or other legal entity (as the case
may be),

 

 

and, for this purpose, a company, corporation or other legal
entity shall be treated as being controlled by another if that other company,
corporation or other legal entity is able to direct its affairs and/or to
control the composition of its board of directors or equivalent body.

 

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

 

“Termination Date”
means the date which is 36 Months after the date of this Agreement.

 

“Total Assets” shall have the meaning given
to such term in Clause 19.3 (Financial definitions).

 

“Total Commitments”
means the aggregate of the Total Tranche 1 Commitments and the Total Tranche 2
Commitments, being USD 250,000,000 at the date of this Agreement.

 

“Total Tranche 1
Commitments” means the aggregate of the Tranche 1 Commitments, being
USD 150,000,000 at the date of this Agreement.

 

“Total Tranche 2
Commitments” means the aggregate of the Tranche 2 Commitments, being
USD 100,000,000 at the date of this Agreement.

 

“Tranche” means
Tranche 1 or Tranche 2.

 

“Tranche 1”
means the term loan facility made available under this Agreement as described
in paragraph (a) of Clause 2.1 (The Facility).

 

“Tranche 1 Commitment”
means:

 

(a)            in relation to an Original Lender, the
amount in Dollars set opposite its name under the heading “Tranche 1 Commitment”
in Schedule 1 (The Original Lenders) and the
amount of any other Tranche 1 Commitment transferred to it under this
Agreement; and

 

(b)                                  in relation to any other Lender, the amount
in Dollars of any Tranche 1 Commitment transferred to it under this Agreement,

 

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

 

“Tranche 1 Loan”
means a loan made or to be made under Tranche 1 or the principal amount
outstanding for the time being of that loan.

 

“Tranche 2”
means the term loan facility made available under this Agreement as described
in paragraph (b) of Clause 2.1 (The Facility).

 

“Tranche 2 Commitment”
means:

 

(a)            in relation to an Original Lender, the
amount in Dollars set opposite its name under the heading “Tranche 2 Commitment”
in Schedule 1 (The Original Lenders) and the
amount of any other Tranche 2 Commitment transferred to it under this
Agreement; and

 

(b)           in relation to any other Lender, the amount
in Dollars of any Tranche 2 Commitment transferred to it under this Agreement,

 

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

 

 

“Tranche 2 Loan”
means a loan made or to be made under Tranche 2 or the principal amount
outstanding for the time being of that loan.

 

“Transfer Certificate”
means a certificate substantially in the form set out in Schedule 5 (Form of Transfer Certificate) or any other form agreed
between the Agent and the Borrower.

 

“Transfer Date”
means, in relation to a transfer, the later of:

 

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

 

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

 

“Unpaid Sum”
means any sum due and payable but unpaid by an Obligor under the Finance
Documents.

 

“Utilisation”
means a utilisation of the Facility.

 

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

 

“Utilisation Request”
means a notice substantially in the form set out in Schedule 3 (Requests).

 

“VAT” means
value added tax as provided for in the Value Added Tax Act 1994 and any other
tax of a similar nature.

 

“WBD” means Open
Joint Stock Company “Wimm-Bill-Dann”, an open joint stock company registered
and existing under the laws of the Russian Federation.

 

“WBD Beverages”
means Public Joint Stock Company “Wimm-Bill-Dann Beverages”, an open joint
stock company registered and existing under the laws of the Russian Federation.

 

“WBD Beverages Guarantee”
means the guarantee entered into on or about the same date as this Agreement
between WBD Beverages and the Agent.

 

“WBD Guarantee”
means the guarantee entered into on or about the same date as this Agreement
between WBD and the Agent.

 

1.2         Construction

 

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

 

(i)             the “Agent”, the “Arranger”, any “Finance Party”,
any “Lender”, any “Obligor”
or any “Party” shall be construed so as to
include its successors in title (and in the case of an Obligor, shall include
any merged or surviving entity as a result of the Agreed Reorganisation),
permitted assigns and permitted transferees;

 

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

 

(iii)           “control” of a
company or corporation by any person or persons shall be construed as:

 

(A)         the power (whether by way of ownership of
shares, proxy, contract, agency or otherwise) to:

 

 

(1)          cast, or control
the casting of, more than one-half of the maximum number of votes that might be
cast at a general meeting of that company or corporation; or

 

(2)          appoint or remove
all, or the majority, of the members of a board of directors or members of a
management board, a chief executive officer or other equivalent officers of
that company or corporation (and the relevant person or persons shall be deemed
to have power to make such an appointment if (x) an individual cannot be
appointed as a director or an equivalent officer of that company or corporation
without the exercise by the relevant person or persons of such power in the
individual’s favour or (y) an individual’s appointment as a director or an
equivalent officer of that company or corporation follows necessarily from the
individual being a director or other equivalent officer of any of the relevant
person or persons); or

 

(3)          give directions
with respect to the operating and financial policies of that company or
corporation with which the directors or other equivalent officers of that
company or corporation are obliged to comply; or

 

(B)          the holding by that person or persons (directly or
indirectly) of more than one-half of the issued share capital of that company
or corporation (excluding any shares which are non-voting or any part of that
issued share capital that carries no right to participate beyond a specified
amount in a distribution of either profits or capital),

 

(and “controlled”
shall be construed accordingly);

 

(iv)          a “Finance Document”
or any other agreement or instrument is a reference to that Finance Document or
other agreement or instrument as amended, novated, supplemented,
extended, restated (however fundamentally and whether or not more onerously) or
replaced and includes any change in the purpose of, any extension of or any
increase in any facility or the addition of any new facility under that Finance
Document or other agreement or instrument;

 

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

 

(vi)          a “person”
includes any individual, firm, company, corporation, government, state or
agency of a state or any association, trust, joint venture, consortium or
partnership (whether or not having separate legal personality);

 

(vii)         a “regulation”
includes any regulation, rule, official directive, request or guideline
(whether or not having the force of law, but if not having the force of law,
with which compliance is necessary) of any governmental, intergovernmental or
supranational body, agency, department or regulatory, self-regulatory or other authority
or organisation;

 

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

 

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

 

 

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

 

(c)         Unless a contrary indication appears, a term used in
any other Finance Document or in any notice given under or in connection with
any Finance Document has the same meaning 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 under the Contracts
(Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any
term of this Agreement.

 

 

SECTION 2

 

THE FACILITIES

 

2.           THE FACILITY

 

2.1         The Facility

 

Subject to the terms of this Agreement, the Lenders make available to
the Borrower a term loan facility in an aggregate amount equal to the Total
Commitments and in two Tranches:

 

(a)            Tranche
1 in an aggregate amount equal to the Total Tranche 1 Commitments; and

 

(b)           Tranche
2 in an aggregate amount equal to the Total Tranche 2 Commitments.

 

2.2         Finance Parties’ rights and
obligations

 

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

 

(b)         The
rights of each Finance Party under or in connection with the Finance Documents
are separate and independent rights and any debt arising under the Finance
Documents to a Finance Party from an Obligor shall be a separate and
independent debt.

 

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

 

3.           PURPOSE

 

3.1         Purpose

 

(a)         The
Borrower shall apply all amounts borrowed by it under Tranche 1 towards:

 

(i)             repayment
in full and discharge of any and all of its liabilities under the Eurobond
Facility Agreement; and

 

(ii)            as to
any balance remaining, for its general corporate purposes.

 

(b)         The
Borrower shall apply all amounts borrowed by it under Tranche 2 for its general
corporate purposes.

 

3.2         Monitoring

 

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

 

4.           CONDITIONS OF UTILISATION

 

4.1         Initial conditions precedent

 

The Borrower may not deliver a Utilisation Request unless
the Agent has received all of the documents and other evidence listed in Part I
of Schedule 2 (Conditions precedent and subsequent)
in form and substance satisfactory to the Agent. The Agent shall notify the
Borrower and the Lenders promptly upon being so satisfied.

 

 

4.2         Further conditions precedent

 

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

 

(a)           no
Default is continuing or would result from the proposed Loan; and

 

(b)           the
Repeating Representations to be made by each Obligor are true in all material
respects.

 

4.3         Conditions subsequent

 

(a)         The
Borrower shall, as soon as practicable but in any event not later than six
Months after the date of this Agreement, deliver to the Agent the evidence
referred to in paragraph (a) of Part II of Schedule 2 (Conditions precedent and subsequent). Failure to deliver
such evidence to the Agent on or before such date shall, unless waived by the
Agent, constitute an immediate Event of Default under Clause 21 (Events of Default).

 

(b)         The
Borrower shall, as soon as practicable but in any event not later than three
Months after the date of this Agreement, deliver to the Agent the documents
referred to in paragraphs (b) and (c) of Part II of Schedule 2 (Conditions precedent and subsequent). Failure to deliver
such documents to the Agent on or before such date shall, unless waived by the
Agent, constitute an immediate Event of Default under Clause 21 (Events of Default).

 

4.4         Maximum number of Loans

 

The Borrower may not deliver a Utilisation Request if as a
result of the proposed Utilisation:

 

(a)            more
than two Tranche 1 Loans would be outstanding; or

 

(b)           more
than four Tranche 2 Loans would be outstanding.

 

 

SECTION 3

 

UTILISATION

 

5.           UTILISATION

 

5.1         Delivery of a Utilisation
Request

 

The Borrower may utilise the Facility by delivery to the
Agent of a duly completed Utilisation Request not later than the Specified
Time.

 

5.2         Completion of a Utilisation
Request

 

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

 

(i)            it
identifies the Tranche to be utilised;

 

(ii)           the
proposed Utilisation Date is a Business Day within the Availability Period
applicable to that Tranche;

 

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

 

(iv)          the
proposed Interest Period complies with Clause 9 (Interest
Periods); and

 

(v)          it
specifies the account of the Borrower (which shall be an account of the
Borrower held with the Passport Bank) to which the proceeds of the Utilisation
are to be credited.

 

(b)         The
Borrower shall ensure that upon the receipt of the proceeds of each Utilisation
of Tranche 1 into the account of the Borrower with the Passport Bank in
accordance subparagraph (v) of paragraph (a) above such proceeds
shall be paid to UBS (Luxembourg) S.A. as lender under the Eurobond Facility
Agreement in discharge of the obligations of the Borrower under the Eurobond
Facility Agreement at the times provided in, and otherwise in accordance with
the terms of, the Eurobond Facility Agreement.

 

(c)         Only one
Loan may be requested in each Utilisation Request.

 

5.3        Currency and amount

 

(a)         The
currency specified in a Utilisation Request must be Dollars.

 

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

 

(i)             in
the case of the first Utilisation under Tranche 1, an amount equal to the
aggregate amount due and payable under the Eurobond Facility Agreement on its
maturity date;

 

(ii)            in
the case of any other Utilisation under Tranche 1, a minimum of USD5,000,000
or, if less, the Available Tranche 1 Commitments; or

 

(iii)           in the
case of Tranche 2, a minimum of USD25,000,000 or, if less, the Available
Tranche 2 Commitments.

 

5.4         Lenders’ participation

 

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

 

 

(b)         The
amount of each Lender’s participation in each Loan will be equal to the
proportion borne by:

 

(i)             in
the case of a Loan under Tranche 1, its Available Tranche 1 Commitment to the
aggregate for the time being of each Lender’s Available Tranche 1 Commitment;
and

 

(ii)            in
the case of a Loan under Tranche 2, its Available Tranche 2 Commitment to the
aggregate for the time being of each Lender’s Available Tranche 2 Commitment,

 

in each case, immediately prior to making the Loan.

 

(c)         The
Agent shall notify each Lender of the amount of each Loan and the amount of its
participation in that Loan by the Specified Time.

 

5.5        Cancellation of Commitment

 

(a)         The
Available Tranche 1 Commitments shall be immediately cancelled at the end of
the Availability Period for Tranche 1.

 

(b)         The
Available Tranche 2 Commitments shall be immediately cancelled at the end of
the Availability Period for Tranche 2.

 

 

SECTION 4

 

REPAYMENT,
PREPAYMENT AND CANCELLATION

 

6.           REPAYMENT

 

(a)         The
Borrower shall repay each Loan on the Termination Date.

 

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

 

7.           PREPAYMENT AND CANCELLATION

 

7.1         Illegality

 

If it is or becomes unlawful in any applicable jurisdiction
for a Lender to perform any of its obligations as contemplated by this
Agreement or to fund or maintain its participation in any Loan:

 

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

 

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

 

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

 

7.2         Change of Shareholding
Structure

 

If a Change of Shareholding Structure occurs:

 

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

 

(b)           a
Lender shall not be obliged to fund a Utilisation; and

 

(c)            if
the Majority Lenders so require, the Agent shall, by not less than 15 days’
notice to the Borrower, cancel the Total Commitments and declare all outstanding
Loans, together with accrued interest and all other amounts accrued under the
Finance Documents, immediately due and payable, whereupon the Total Commitments
will be cancelled and all such outstanding amounts will become immediately due
and payable.

 

7.3         Voluntary cancellation

 

The Borrower may, if it gives the Agent not less than 10
Business Days’ (or such shorter period as the Majority Lenders may agree) prior
notice, cancel the whole or any part (but if in part, being a minimum amount of
USD10,000,000) of the aggregate of each Lender’s Available Tranche 1 Commitment
and/or Available Tranche 2 Commitment (as the case may be). Any cancellation
under this Clause 7.3 shall reduce the Tranche 1 Commitments and/or Tranche 2
Commitments (as the case may be) of the Lenders rateably under the Facility.

 

 

7.4         Voluntary prepayment of Loans

 

The Borrower may, if it gives the Agent not less than 10
Business Days’ (or such shorter period as the Majority Lenders may agree) prior
notice, prepay the whole or any part of any Loan (but, if in part, being an
amount that reduces the Loan by a minimum amount of USD10,000,000).

 

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

 

(a)         If:

 

(i)             any
sum payable to any Lender by an Obligor is required to be increased under
paragraph (c) of Clause 12.2 (Tax gross-up);

 

(ii)            any
Lender claims indemnification from the Borrower under Clause 12.3 (Tax indemnity) or Clause 13.1 (Increased
costs); or

 

(iii)           any
Lender notifies the Agent that it intends to claim payment of any Mandatory
Costs pursuant to paragraph 3 of Schedule 4 (Mandatory
Cost formula),

 

the Borrower may, whilst the circumstance giving rise to the
requirement, indemnification or Additional Cost Rate continues, give the Agent
notice of cancellation of the Commitment of that Lender and its intention to
procure the repayment of that Lender’s participation in the Loans.

 

(b)         On
receipt of a notice referred to in paragraph (a) above, the Commitment of
that Lender shall immediately be reduced to zero.

 

(c)         On the
last day of each Interest Period which ends after the Borrower has given notice
under paragraph (a) above (or, if earlier, the date specified by the
Borrower in that notice), the Borrower shall repay that Lender’s participation
in that Loan.

 

7.6         Restrictions

 

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

 

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

 

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

 

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

 

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

 

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

 

 

SECTION 5

 

COSTS OF
UTILISATION

 

8.           INTEREST

 

8.1         Calculation of interest

 

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

 

(a)           Margin;

 

(b)           LIBOR;
and

 

(c)           Mandatory
Cost, if any.

 

8.2         Payment of interest

 

The Borrower shall pay accrued interest on each Loan on the
last day of each Interest Period relating to that Loan.

 

8.3         Default interest

 

(a)         If the
Borrower fails to pay any amount payable by it under a Finance Document on its
due date, interest shall accrue on the overdue amount from the due date up to
the date of actual payment (both before and after judgment) at a rate which,
subject to paragraph (b) below, is the sum of 2 per cent. and the rate
which would 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
successive Interest Periods, each of a duration selected by the Agent (acting
reasonably). Any interest accruing under this Clause 8.3 shall be immediately
payable by the Borrower on demand by the Agent.

 

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

 

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

 

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

 

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

 

8.4         Notification of rates of
interest

 

The Agent shall promptly notify the Lenders and the Borrower
of the determination of a rate of interest under this Agreement.

 

 

9.           INTEREST PERIODS

 

9.1         Interest Periods

 

(a)         Each
Interest Period for a Loan shall be three Months (or such other period as may
be agreed between the Borrower and the Agent from time to time), except in the
case of a Loan made after the first Utilisation Date, in which case the first
Interest Period in relation to that Loan shall start on the Utilisation Date
relating to that Loan and end on the last day of the current Interest Period
for outstanding Loans.

 

(b)        An
Interest Period for a Loan shall not extend beyond the Termination Date.

 

(c)         Each
Interest Period for a Loan shall start on the Utilisation Date or (if already
made) on the last day of its preceding Interest Period.

 

9.2         Non-Business Days

 

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

 

9.3         Consolidation of Loans

 

If two or more Interest Periods end on the same date, the Loans
to which they relate shall, on that date, be consolidated into, and treated as,
a single Loan.

 

10.         CHANGES TO THE CALCULATION OF INTEREST

 

10.1       Absence of quotations

 

Subject to Clause 10.2 (Market disruption),
if LIBOR is to be determined by reference to the Reference Banks but a
Reference Bank does not supply a quotation by the Specified Time on the
Quotation Day, the applicable LIBOR shall be determined on the basis of the
quotations of the remaining Reference Banks.

 

10.2       Market disruption

 

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

 

(i)             the
Margin;

 

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

 

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

 

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

 

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

 

 

(ii)            before
close of business in London on the Quotation Day for the relevant Interest
Period, the Agent receives notifications from a Lender or Lenders (whose
participations in a Loan exceed 35 per cent. of that Loan) that the cost to it
of obtaining matching deposits in the Relevant Interbank Market would be in
excess of LIBOR.

 

10.3       Alternative basis of interest
or funding

 

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

 

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

 

10.4      Break Costs

 

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

 

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

 

11.         FEES

 

11.1      Commitment fee

 

(a)         The
Borrower shall pay to the Agent (for the account of each Lender) a fee in
Dollars computed at the rate of:

 

(i)             0.875
per cent. per annum on that Lender’s Available Tranche 1 Commitment for the
Availability Period applicable to Tranche 1; and

 

(ii)            0.875
per cent. per annum on that Lender’s Available Tranche 2 Commitment for the
Availability Period applicable to Tranche 2.

 

(b)         The
accrued commitment fee is payable on the last day of the Availability Period
and, if cancelled in full, on the cancelled amount of the relevant Lender’s
Commitment at the time the cancellation is effective.

 

11.2       Arrangement fee

 

The Borrower shall pay to the Arranger an arrangement fee in
the amount and at the times agreed in a Fee Letter.

 

11.3       Agency fee

 

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

 

 

SECTION 6

 

ADDITIONAL
PAYMENT OBLIGATIONS

 

12.         TAX GROSS-UP AND INDEMNITIES

 

12.1      Definitions

 

(a)         In this
Agreement:

 

“Protected Party”
means a Finance Party which 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 any sum deemed for the purposes of Tax to be received or
receivable) under a Finance Document.

 

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

 

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

 

“Tax Payment”
means either the increase in a payment made by the Borrower to a Finance Party
under Clause 12.2 (Tax gross-up)
or a payment under Clause 12.3 (Tax indemnity).

 

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

 

12.2      Tax gross-up

 

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

 

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

 

(c)         If a Tax
Deduction is required by law to be made by the Borrower, the amount of the
payment due from the Borrower shall be increased to an amount which (after
making any Tax Deduction) leaves an amount equal to the payment which would
have been due if no Tax Deduction had been required.

 

(d)         If the
Borrower is required to make a Tax Deduction, the Borrower shall make that Tax
Deduction and any payment required in connection with that Tax Deduction within
the time allowed and in the minimum amount required by law.

 

(e)         Within
30 days of making either a Tax Deduction or any payment required in connection
with that Tax Deduction, the Borrower shall deliver to the Agent for the
Finance Party entitled to the payment evidence reasonably satisfactory to that
Finance Party that the Tax Deduction has been made or (as applicable) any
appropriate payment paid to the relevant taxing authority.

 

12.3      Tax indemnity

 

(a)         The
Borrower shall (within three Business Days of demand by the Agent) pay to a
Protected Party an amount equal to the loss, liability or cost which that
Protected Party determines will be

 

 

or has been (directly or indirectly) suffered for or
on account of Tax by that Protected Party in respect of a Finance Document.

 

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

 

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

 

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

 

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

 

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

 

(ii)            to
the extent a loss, liability or cost is compensated for by an increased payment
under Clause 12.2 (Tax gross-up).

 

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

 

(d)         A
Protected Party shall, on receiving a payment from the Borrower under this
Clause 12.3, notify the Agent.

 

12.4       Tax Credit

 

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

 

(a)            a Tax
Credit is attributable either to an increased payment of which that Tax Payment
forms part, or to that Tax Payment; and

 

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

 

the Finance Party shall pay an amount to the Borrower which
that Finance Party determines will leave it (after that payment) in the same
after-Tax position as it would have been in had the Tax Payment not been
required to be made by the Borrower.

 

12.5       Stamp taxes

 

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

 

12.6       Value added tax

 

(a)         All
amounts set out, or expressed to be payable under a Finance Document by any
Party to a Finance Party which (in whole or in part) constitute the
consideration for VAT purposes shall be deemed to be exclusive of any VAT which
is chargeable on such supply, and accordingly, subject to paragraph (c) below,
if VAT is chargeable on any supply made by any Finance Party to any Party under
a Finance Document, that Party shall pay to the Finance Party (in addition to
and at

 

 

the same time as paying the consideration) an amount
equal to the amount of the VAT (and such Finance Party shall promptly provide
an appropriate VAT invoice to such Party).

 

(b)         If VAT
is chargeable on any supply made by any Finance Party (the “Supplier”) to any other Finance Party (the “Recipient”) under a Finance Document, and
any Party (the “Relevant Party”)
is required by the terms of any Finance Document to pay an amount equal to the
consideration for such supply to the Supplier (rather than being required to
reimburse the Recipient in respect of that consideration), such Party shall
also pay to the Supplier (in addition to and at the same time as paying such
amount) an amount equal to the amount of such VAT. The Recipient will promptly
pay to the Relevant Party an amount equal to any credit or repayment from the
relevant tax authority which it reasonably determines relates to the VAT
chargeable on that supply.

 

(c)         Where a
Finance Document requires any Party to reimburse a Finance Party for any costs
or expenses, that Party shall also at the same time pay and indemnify the
Finance Party against all VAT incurred by the Finance Party in respect of the
costs or expenses to the extent that the Finance Party reasonably determines
that neither it nor any other member of any group of which it is a member for
VAT purposes is entitled to credit or repayment from the relevant tax authority
in respect of the VAT.

 

12.7      Residence certificates

 

(a)         Each
Finance Party shall, as soon as reasonably possible, make an application in
accordance with applicable law to the relevant authority for the
issue/certification of a residence certificate in accordance with the laws of
the relevant jurisdiction confirming its residence for Tax purposes and
promptly upon receipt of such residence certificate provide it to the Borrower.

 

(b)         If,
having used all reasonable efforts, a Finance Party has been unable to provide
such residence certificate, then the relevant Finance Party shall, promptly on
request by the Borrower provide to the Borrower, evidence that it has made a
timely application in accordance with applicable law to the relevant authority
for the issue of the residence certificate referred to in paragraph (a) above.

 

(c)         For the
avoidance of doubt, this Clause 12.7 shall not apply to a Finance Party
resident in a country without a double tax treaty with the Russian Federation.

 

13.         INCREASED COSTS

 

13.1      Increased costs

 

(a)         Subject
to Clause 13.3 (Exceptions) the Borrower shall,
within five Business Days of a demand by the Agent, pay for the account of a
Finance Party the amount of any Increased Costs incurred by that Finance Party
or any of its Affiliates as a result of (i) the introduction of or any
change in (or in the interpretation, administration or application of) any law
or regulation or (ii) compliance with any law or regulation made after the
date of this Agreement.

 

(b)         In this
Agreement “Increased Costs” means:

 

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

 

 

(ii)            an
additional or increased cost; or

 

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

 

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

 

13.2      Increased cost claims

 

(a)         A
Finance Party intending to make a claim pursuant to Clause 13.1 (Increased costs) shall notify the Agent of the event giving
rise to the claim, following which the Agent shall promptly notify the
Borrower.

 

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

 

13.3      Exceptions

 

(a)         Clause
13.1 (Increased costs) does not apply to the
extent any Increased Cost is:

 

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

 

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

 

(iii)           compensated
for by the payment of the Mandatory Cost; or

 

(iv)          attributable
to the wilful breach by the relevant Finance Party or its Affiliates of any law
or regulation.

 

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

 

14.        OTHER INDEMNITIES

 

14.1      Currency indemnity

 

(a)         If any
sum due from the Borrower under the Finance Documents (a “Sum”),
or any order, judgment or award given or made in relation to a Sum, has to be
converted from the currency (the “First Currency”)
in which that Sum is payable into another currency (the “Second
Currency”) for the purpose of:

 

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

 

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

 

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

 

 

(b)         The
Borrower waives any right it may have in any jurisdiction to pay any amount
under the Finance Documents in a currency or currency unit other than that in
which it is expressed to be payable.

 

14.2      Other indemnities

 

The Borrower shall, within five Business Days of demand,
indemnify each Finance Party against any cost, loss or liability incurred by
that Finance Party as a result of:

 

(a)            the
occurrence of any Event of Default;

 

(b)          a
failure by an Obligor to pay any amount due under a Finance Document on its due
date, including without limitation, any cost, loss or liability arising as a
result of Clause 26 (Sharing among the Finance
Parties);

 

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

 

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

 

14.3      Indemnity to the Agent

 

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

 

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

 

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

 

15.        MITIGATION BY THE LENDERS

 

15.1      Mitigation

 

(a)         Each
Finance Party shall, in consultation with the Borrower, take all reasonable
steps to mitigate any circumstances which arise and which would result in any
amount becoming payable under or pursuant to, or cancelled pursuant to, any of
Clause 7.1 (Illegality), Clause 12 (Tax gross-up and indemnities) or Clause 13 (Increased costs), paragraph 3 of Schedule 4 (Mandatory Cost formula) including (but not limited to)
transferring its rights and obligations under the Finance Documents to another
Affiliate or Facility Office.

 

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

 

15.2      Limitation of liability

 

(a)         The
Borrower shall indemnify each Finance Party for all costs and expenses
reasonably incurred by that Finance Party as a result of steps taken by it
under Clause 15.1 (Mitigation).

 

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

 

 

16.         COSTS AND EXPENSES

 

16.1       Transaction expenses

 

The Borrower shall within five Business Days on demand pay
the Agent and the Arranger the amount of all costs and expenses (including
legal fees) reasonably incurred by any of them in connection with the
negotiation, preparation, printing, execution of, and syndication under:

 

(a)         this
Agreement and any other documents referred to in this Agreement, in accordance
with the Mandate Letter; and

 

(b)         and any
other Finance Documents executed after the date of this Agreement.

 

16.2       Amendment costs

 

If an Obligor requests an amendment, waiver or consent the
Borrower shall, within three Business Days of demand, reimburse the Agent for
the amount of all costs and expenses (including legal fees) reasonably incurred
by the Agent in responding to, evaluating, negotiating or complying with that request
or requirement.

 

16.3       Enforcement costs

 

The Borrower shall, within five Business Days of demand, pay
to each Finance Party the amount of all costs and expenses (including legal
fees) incurred by that Finance Party in connection with the enforcement of, or
the preservation of any rights under, any Finance Document.

 

 

SECTION 7

 

REPRESENTATIONS,
UNDERTAKINGS AND EVENTS OF DEFAULT

 

17.         REPRESENTATIONS

 

The Borrower makes the representations and warranties set
out in this Clause 17 to each Finance Party on the date of this Agreement.

 

17.1       Status

 

(a)         Each
Obligor is an open joint stock company, duly incorporated and validly existing
under the laws of the Russian Federation.

 

(b)         Each
Obligor and each of its Subsidiaries has the power to own its assets and carry
on its business as it is being conducted.

 

17.2       Binding obligations

 

The obligations expressed to be assumed by each Obligor in
each Finance Document to which it is a party are, subject to any Reservations,
legal, valid, binding and enforceable.

 

17.3       Non-conflict with other
obligations

 

The entry into and performance by each Obligor of, and the
transactions contemplated by, the Finance Documents to which it is a party do
not and will not conflict with:

 

(a)            any
law or regulation applicable to it;

 

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

 

(c)            any
agreement or instrument binding upon it or any of its Subsidiaries or any of
its or any of its Subsidiaries’ assets,

 

nor result in the existence of, or oblige it to create, any
Security over any of its or its Subsidiaries’ assets. For the avoidance for
doubt and without limiting the generality of the foregoing, borrowing or
guaranteeing (as the case may be) the Total Commitments will not cause any
borrowing or guaranteeing limit binding upon any Obligor to be exceeded nor
will such borrowing or guaranteeing or the entry into the Finance Documents to
which an Obligor is a party oblige it to enter into any subordination agreement
in respect thereof.

 

17.4       Power and authority

 

(a)         Each
Obligor has the power to enter into, perform and deliver, and has taken all
necessary action to authorise its entry into, performance and delivery of, the
Finance Documents to which it is a party and the transactions contemplated by
those Finance Documents.

 

(b)         Without
limiting the generality of paragraph (a) above, none of the Finance
Documents, and none of the transactions contemplated thereunder, does or will
constitute a major transaction or an interested party transaction for any
Obligor under applicable Russian law, except where requisite corporate approvals
authorising all major transactions and all interested party transactions have
been obtained by it with respect to such Finance Documents.

 

17.5       Validity and admissibility in
evidence

 

As regards each Obligor, all Authorisations required or
desirable:

 

 

(a)            to
enable it lawfully to enter into, exercise its rights and comply with its
obligations in the Finance Documents to which it is a party; and

 

(b)           to
make the Finance Documents to which it is a party admissible in evidence in its
jurisdiction of incorporation,

 

have been (or will be when required by applicable law or
regulation) obtained or effected and are (or will be at the time required by
applicable law or regulation) in full force and effect.

 

17.6      Governing law and enforcement

 

(a)         As regards
each Obligor, subject to any Reservations, the choice of English law as the
governing law of the Finance Documents to which it is a party will be
recognised and enforced in its jurisdiction of incorporation.

 

(b)         As
regards each Obligor, subject to any Reservations, any arbitration award
obtained in England in relation to a Finance Document to which it is a party
will be recognised and enforced in its jurisdiction of incorporation.

 

17.7       Deduction of Tax

 

No Obligor is required to make any deduction for or on
account of Tax from any payment it may make under any Finance Document to a
Lender which is resident in a jurisdiction which has a double tax treaty with
the Russian Federation (or with the Union of Soviet Socialist Republics, to
which the Russian Federation has succeeded), the effect of which is to provide
that payment of interest to the relevant Lender by the Borrower may be made
free and clear of any deduction for or on account of Tax, and has delivered the
tax residence certificate referred to in paragraph (a) of Clause 12.7 (Residence certificates).

 

17.8      No filing or stamp taxes

 

Under the law of any Obligor’s jurisdiction of incorporation
it is not necessary that the Finance Documents be filed, recorded or enrolled
with any court or other authority in that jurisdiction or that any stamp,
registration or similar tax be paid on or in relation to the Finance Documents
or the transactions contemplated by the Finance Documents (excluding, for the avoidance of doubt, the submission by the Borrower of
a copy of this Agreement to the relevant Russian authorised bank (including,
without limitation and if relevant, the Passport Bank) through which payments
to and from it under this Agreement and/or other Finance Documents, as the case
may be, are to be made in accordance with Instruction 117-I).

 

17.9      No default

 

(a)         No
Default is continuing or might reasonably be expected to result from the making
of any Utilisation.

 

(b)         No other
event or circumstance is outstanding which constitutes a default under any other
agreement or instrument which is binding on any Obligor or any of its
Subsidiaries or to which its (or any of its Subsidiaries’) assets are subject
which might have a Material Adverse Effect.

 

17.10    No misleading information

 

(a)         Any
factual information provided by or on behalf of any Obligor in writing in
connection with any Finance Document (including, without limitation, the Agreed
Reorganisation Memorandum) was 

 

 

true and accurate in all material respects as at the
date it was provided or as at the date (if any) at which it is stated.

 

(b)         Any
financial projections contained in any written information provided by or on
behalf of any Obligor to any Finance Party in connection with any Finance
Document have been prepared on the basis of recent historical information and
on the basis of reasonable assumptions.

 

(c)         Nothing
has occurred or been omitted from any written information (including, without
limitation, the Agreed Reorganisation Memorandum) provided by any Obligor to
any Finance Party in connection with any Finance Document that results in the
information referred to in paragraphs (a) and (b) above being untrue
or misleading in any material respect.

 

17.11    Financial statements

 

(a)         The
Original Financial Statements of each Obligor were prepared in accordance with
GAAP or RAS (as applicable) consistently applied.

 

(b)         The
Original Financial Statements of each Obligor fairly represent that Obligor’s
financial condition and operations (and the consolidated financial condition of
the Group in the case of the Borrower) as at the end of and for the relevant
financial period.

 

(c)         No
Obligor has incurred any material liabilities since the date of its Original
Financial Statements or the most recent financial statements delivered pursuant
to Clause 18.1 (Financial statements) (whichever
is later), which were not disclosed to the Agent in writing.

 

(d)         There
has been no material adverse change in the business or financial condition of
any Obligor other than the Borrower (or the business or consolidated financial
condition of the Group, in the case of the Borrower) since the date of its
Original Financial Statements.

 

17.12    Pari passu ranking

 

Each Obligor’s payment obligations under the Finance
Documents rank at least pari passu with
the claims of all its other unsecured and unsubordinated creditors, except for
obligations mandatorily preferred by law applying to companies generally.

 

17.13    No proceedings pending or
threatened

 

Save as fully, fairly and specifically disclosed to the
Agent in writing prior to the date of this Agreement and except for any
frivolous or vexatious proceedings which are being contested in good faith and
with appropriate action and which are discharged, stayed or dismissed within 30
days from commencement, no litigation, arbitration or administrative
proceedings of or before any court, arbitral body or agency (including any
arising from or relating to Environmental Law) have been started or threatened
against any Obligor or any of its Subsidiaries.

 

17.14    Title

 

Each
Obligor and each of its Subsidiaries has good and marketable title to, or valid
leases or licences of, or is otherwise entitled to use, all material assets
necessary for the conduct of its business as it is being, and is proposed to
be, conducted.

 

17.15    Environmental Laws and
Environmental Licences

 

Except as fully, fairly and specifically disclosed to the
Agent in writing prior to the date of this Agreement, each Obligor and each of
its Subsidiaries has:

 

 

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

 

(b)           obtained
all Environmental Licences required or desirable in connection with its
business; and

 

(c)            complied
with the terms of those Environmental Licences.

 

17.16    Environmental releases

 

No:

 

(a)           property
currently or previously owned, leased, occupied or controlled by any Obligor or
any of its Subsidiaries (including any offsite waste management or disposal
location utilised by it or any of its Subsidiaries) is contaminated with any
Hazardous Substance; and

 

(b)           discharge,
release, leaching, migration or escape of any Hazardous Substance into the
Environment has occurred or is occurring on, under or from that property.

 

17.17    Taxes

 

(a)         Each
Obligor and each of its Subsidiaries are not materially overdue in filing any
income tax returns and all other material tax returns which are required to be
filed in all jurisdictions.

 

(b)         Each
Obligor and each of its Subsidiaries have duly paid when due all Taxes required
to be paid by it other than any Taxes:

 

(i)             that are being contested by it in good faith
and in accordance with the relevant procedures, for which adequate reserves are
being maintained in accordance with GAAP and where payment can be lawfully
withheld and will not result in the imposition of any penalty nor in any
attachment or freezing of its assets; or

 

(ii)            the non-payment of which is not likely to have
a Material Adverse Effect.

 

17.18    Pensions,
undisclosed liabilities

 

(a)         No
member of the Group has any material liability in respect of any pension scheme
or otherwise and there are no circumstances which would give rise to such a
liability.

 

(b)         Each member of the Group is in compliance with all applicable laws
and contracts relating to and the governing provisions of the pension schemes
maintained by or for the benefit of any member of the Group and/or any of its
employees.

 

17.19    Immunity

 

(a)         The
execution by each Obligor of each Finance Document to which it is a party
constitutes, and the exercise by it of its rights and performance of its
obligations under each Finance Document will constitute, private and commercial
acts performed for private and commercial purposes.

 

(b)         No
Obligor will be entitled to claim immunity from suit, execution, attachment or
other legal process in any proceedings taken in any jurisdiction in relation to
any Finance Document.

 

17.20    Group Structure Chart

 

The Group Structure Chart delivered pursuant to Part I of Schedule
2 (Conditions precedent and subsequent) is
complete and accurate.

 

 

17.21    Solvency

 

(a)         No
Obligor is insolvent or unable to pay its debts (including subordinated and
contingent debts), nor could it be deemed by a court to be unable to pay its
debts within the meaning of the law of the jurisdiction in which it is
incorporated nor, in any such case, will it become so in consequence of entering
into any Finance Document, and/or performing any transaction contemplated by
any Finance Document.

 

(b)         No
Obligor has taken any corporate action nor have any legal proceedings or other
procedure or step been taken, started or threatened in relation to anything
referred to in Clause 21.8 (Insolvency
proceedings).

 

17.22    No Security

 

No Security exists over all or any of any Obligor’s (or any
of its Subsidiaries’) assets other than Permitted Security.

 

17.23    Repetition

 

The Repeating Representations are deemed to be made by the
Borrower by reference to the facts and circumstances then existing on the date
of each Utilisation Request, the date on which the Agreed Reorganisation is
completed and the first day of each Interest Period.

 

18.        INFORMATION UNDERTAKINGS

 

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

 

18.1      Financial statements

 

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

 

(a)            as
soon as the same become available but in any event within:

 

(i)           180
days after the end of the Borrower’s financial years its audited consolidated
financial statements for that financial year prepared in accordance with GAAP;

 

(ii)          90 days
after the end of each half of the Borrower’s financial years its consolidated
financial statements for that financial half year prepared in accordance with
GAAP;

 

(iii)         90 days
after the end of each quarter of the Borrower’s financial years, its
consolidated financial statements for that financial quarter prepared in
accordance with GAAP;

 

(b)           as
soon as the same become available but in any event within 180 days after the
end of each of that Obligor’s financial years, that Obligor’s audited financial
statements (stand-alone in the case of the Borrower) for that financial year
prepared in accordance with RAS;

 

(c)           as
soon as the same become available but in any event within 95 days after the end
of each of that Obligor’s financial years, that Obligor’s unaudited financial
statements (stand-alone in the case of the Borrower) for that financial year
prepared in accordance with RAS;

 

 

(d)           as
soon as the same become available, but in any event within 35 days after the
end of each quarter of each of that Obligor’s financial years, that Obligor’s
financial statements for that financial quarter prepared in accordance with
RAS; and

 

(e)            as
soon as the same becomes available, but in any event not later than 30 April in
any financial year, the updated business model of the Group (substantially in
the form of the business model delivered to the Agent pursuant to Clause 4.1 (Initial conditions precedent)) for the immediately following
financial year.

 

18.2      Compliance Certificate

 

(a)         The
Borrower shall supply to the Agent, with each set of financial statements
delivered pursuant to paragraphs (a) to (c) of Clause 18.1 (Financial statements), a Compliance Certificate setting out
(in reasonable detail) computations as to compliance with Clause 19  (Financial covenants)
as at the date at which those financial statements were drawn up and confirming
that no Default is continuing as at the date of the Compliance Certificate.

 

(b)         Each
Compliance Certificate shall be signed by the general director and the chief
accountant of the Borrower and, if required to be delivered with the financial
statements delivered pursuant to paragraph (a)(i) of Clause 18.1 (Financial statements), shall be confirmed by the Borrower’s
auditors in the form agreed by the Borrower and all the Lenders before the date
of this Agreement.

 

18.3      Requirements as to financial
statements

 

(a)         Each set
of financial statements delivered by the Borrower pursuant to Clause 18.1 (Financial statements) shall be certified by the general director
and the chief accountant of the relevant company as fairly representing its
(or, as the case may be, its consolidated) financial condition and operations
as at the end of and for the period in relation to which those financial
statements were drawn up.

 

(b)         The
Borrower shall procure that each set of financial statements of an Obligor
delivered pursuant to Clause 18.1 (Financial statements)
is prepared using GAAP or RAS (as the case may be), accounting practices and
financial reference periods consistent with those applied in the preparation of
the Original Financial Statements for that Obligor unless, in relation to any
set of financial statements, it notifies the Agent that there has been a change
in GAAP or RAS (as the case may be), the accounting practices or reference
periods and its auditors (or, if appropriate, the auditors of the Obligor)
deliver to the Agent:

 

(i)             a
description of any change necessary for those financial statements to reflect
RAS, or GAAP (as the case may be), accounting practices and reference periods
upon which that Obligor’s Original Financial Statements were prepared; and

 

(ii)            sufficient
information, in form and substance as may be reasonably required by the Agent,
to enable the Lenders to determine whether Clause 19 (Financial
covenants) has been complied with and make an accurate comparison
between the financial position indicated in those financial statements and that
Obligor’s Original Financial Statements.

 

 

Any reference in this Agreement to those financial statements
shall be construed as a reference to those financial statements as adjusted to
reflect the basis upon which the Original Financial Statements were prepared.

 

18.4      Information: miscellaneous

 

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

 

	
  (a)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  promptly upon becoming aware of them, the
  details of any litigation, arbitration or administrative proceedings which
  are current, threatened or pending against any member of the Group and which
  is reasonably likely to be adversely determined and, if adversely determined,
  could reasonably be expected to have a Material Adverse Effect;

  
	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  promptly upon any change in the corporate
  structure of the Group, an updated Group Structure Chart; and

  
	
   

  	
   

  	
   

  
	
  (d)

  	
   

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

  

 

18.5      Notification of default

 

(a)         The
Borrower shall notify the Agent of any Default (and the steps, if any, being
taken to remedy it) promptly upon becoming aware of its occurrence (unless the
Borrower is aware that a notification has already been provided by another
Obligor).

 

(b)         Promptly
upon a request by the Agent, the Borrower shall supply to the Agent a
certificate signed by two of its directors or senior officers on its behalf
certifying that no Default is continuing (or if a Default is continuing,
specifying the Default and the steps, if any, being taken to remedy it).

 

18.6      “Know your customer” checks

 

(a)         If:

 

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

 

(ii)            any
change in the status of an Obligor after the date of this Agreement; or

 

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

 

obliges the Agent or any Lender (or, in the case of
paragraph (iii) above, any prospective new Lender) to comply with “know
your customer” or similar identification procedures in circumstances where the
necessary information is not already available to it, the Borrower shall, and
shall procure that each Obligor shall, promptly upon the request of the Agent
or any Lender supply, or procure the supply of, such documentation and other
evidence as is reasonably requested by the Agent (for itself or on behalf of
any Lender) or any Lender (for itself or, in the case of the event described in
paragraph (iii) above, on behalf of any prospective new Lender) in order
for the Agent, such Lender or, in the case of the event described in paragraph (iii) above,

 

 

any prospective new Lender to carry out and be satisfied it
has complied with all necessary “know your customer” or other similar checks
under all applicable laws and regulations pursuant to the transactions
contemplated in the Finance Documents.

 

(b)         Each
Lender shall promptly upon the request of the Agent supply, or procure the
supply of, such documentation and other evidence as is reasonably requested by
the Agent (for itself) in order for the Agent to carry out and be satisfied it
has complied with all necessary “know your customer” or other similar checks
under all applicable laws and regulations pursuant to the transactions contemplated
in the Finance Documents.

 

19.         FINANCIAL COVENANTS

 

19.1       Financial condition

 

(a)         At any
time, in relation to the Group on a consolidated basis, the ratio of Total Debt
to Adjusted EBITDA shall not exceed 3.5:1.

 

(b)         For each
Relevant Period ending on a Relevant Date, in relation to the Group on a
consolidated basis, the ratio of Adjusted EBITDA to Interest Expense shall not
be less than 4:1.

 

(c)         For each
Relevant Period ending on a Relevant Date, the ratio of the combined Adjusted
EBITDA of the Obligors (construed by reference to their stand-alone financial
statements) to the consolidated Adjusted EBITDA of the Group shall not be less
than 0.7:1.

 

(d)         For each
Relevant Period ending on a Relevant Date, the ratio of the combined Total
Assets of the Obligors (construed by reference to their stand-alone financial
statements) to the consolidated Total Assets of the Group shall not be less
than 0.7:1.

 

19.2      Financial covenant calculations

 

(a)         Total
Debt, Adjusted EBITDA, Interest Expense and Total Assets shall be calculated
and interpreted in accordance with GAAP applicable to the Original Financial
Statements and shall be expressed in Dollars.

 

(b)         Total
Debt, Adjusted EBITDA, Interest Expense and Total Assets shall be determined
from the financial statements delivered under Clause 18.1 (Financial
statements) and the Compliance Certificates delivered under Clause
18.2 (Compliance Certificate)  in which the combined Adjusted EBITDA and the combined
Total Assets of the Obligors shall be calculated on the basis of the pro-forma
GAAP statements of each Obligor for each Relevant Period.

 

(c)         For the
purpose of paragraph (c) of Clause 19.1 (Financial
condition) the combined Adjusted EBITDA of the Obligors shall
exclude any Adjusted EBITDA attributable to intra-Group sales, if any.

 

(d)         For the
purpose of paragraph (d) of Clause 19.1 (Financial
condition) the combined Total Assets of the Obligors shall exclude
any intra-Group items, including but not limited to:

 

(i)             any
investment made by any Obligor in any other member of the Group;

 

(ii)            any
intra-Group loans granted by an Obligor to any other member of the Group; or

 

(iii)           any
receivables due to any Obligor from any other member of the Group.

 

 

19.3      Financial definitions

 

In this Clause 19:

 

“Adjusted  EBITDA” means the total consolidated net
profit of the Group or the net profit of the relevant Obligor (as applicable):

 

(a)            before
taking into account:

 

(i)           Interest
Expense;

 

(ii)          interest
income;

 

(iii)         Tax;

 

(iv)         profits
(or losses) attributable to minority interests in any member of the Group or
the relevant Obligor (as applicable);

 

(v)         any
share of the profit of any associated company or undertaking, except for
dividends or other profit distributions (net of Tax) received in cash by any
member of the Group or the relevant Obligor (as applicable);

 

(vi)         all
extraordinary and exceptional items; and

 

(vii)        exchange
rate gains (or losses) arising due to the re-translation of balance sheet items
and mark-to-market adjustments on currency swaps;

 

(b)           after
excluding (to the extent included) any gains or losses on the disposal or
revaluation of assets (other than in the ordinary course of trading);

 

(c)            after
adding any business interruption loss incurred which is covered by insurance
and which is not added back to the total consolidated net profit of the Group
or the relevant Obligor (as applicable) in accordance with GAAP;

 

(d)           after
adding back all amounts provided for depreciation and amortisation (including
acquisition goodwill); and

 

(e)            including
the Adjusted EBITDA of a member of the Group acquired by the Group or the
relevant Obligor (as applicable) during that Relevant Period for the part of
that Relevant Period when it was not a member of the Group but excluding the
Adjusted EBITDA attributable to any member of the Group sold by the Group or
the relevant Obligor (as applicable) during that Relevant Period.

 

“Interest Expense”
means, in relation to any Relevant Period, the aggregate amount of interest and
any other finance charges (whether or not paid, payable or capitalised) accrued
by the Group in that Relevant Period in respect of Total Debt (where “other
financial charges” include, but are not limited to, such items as:

 

(a)            the
interest element of leasing and hire purchase payments;

 

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

 

(c)            prepayment
fees),

 

 

adjusted (but without double counting) by adding back the net amount
payable (or deducting the net amount receivable) by any member of the Group in
respect of that Relevant Period under any interest or (so far as they relate to
interest) currency hedging arrangements.

 

“Relevant Date”
means:

 

(a)            for
the purposes of paragraphs (a) and (b) of Clause 19.1 (Financial condition), the last day of each financial quarter
of a financial year; and

 

(b)           for
the purposes of paragraphs (c) and (d) of Clause 19.1 (Financial condition), the last day of each half of a
financial year,

 

being the dates as at (or to) which a particular ratio is tested.

 

“Relevant Period”
means:

 

(a)            for
the purposes of paragraphs (a) and (b) of Clause 19.1 (Financial condition), each period of four consecutive
financial quarters ending on a Relevant Date; and

 

(b)           for
the purposes of paragraphs (c) and (d) of Clause 19.1 (Financial condition), each period of two consecutive
financial half-years ending on a Relevant Date.

 

“Total Assets”
means, in respect of an Obligor, the total assets of that Obligor as construed
by reference to the stand-alone financial statements of that Obligor and, in
respect of the Group, the total assets of the Group as construed by reference
to the consolidated financial statements of the Borrower, in each case,
delivered pursuant to Clause 18.1 (Financial statements).

 

“Total Debt”
means, as at any particular time, the aggregate outstanding principal, capital
or nominal amount (and any fixed or minimum premium payable on prepayment or
redemption) of the Financial Indebtedness of the Group (other than any
indebtedness referred to in paragraph (g) of the definition of Financial
Indebtedness and any guarantee or indemnity in respect of that indebtedness).

 

For this purpose, any amount outstanding or repayable in a
currency other than Dollars shall on that day be taken into account in its
Dollar equivalent at the rate of exchange that would have been used had an
audited consolidated balance sheet of the Group been prepared as at that day in
accordance with GAAP applicable to the Original Financial Statements of the
Group.

 

20.         GENERAL UNDERTAKINGS

 

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

 

20.1       Authorisations

 

The Borrower shall, and shall procure that each other
Obligor shall, promptly:

 

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

 

(b)           supply
certified copies to the Agent of

 

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

 

 

validity, enforceability or admissibility in evidence in its
jurisdiction of incorporation of any Finance Document.

 

20.2       Compliance with laws

 

The Borrower shall, and shall procure that each other Obligor
will, comply in all respects with all laws to which it may be subject, if
failure so to comply is reasonably likely to impair its ability to perform its
obligations under the Finance Documents.

 

20.3       Negative pledge

 

The Borrower shall not, and shall procure that no other
member of the Group will, create or permit to subsist any Security over any of
its assets other than Permitted Security.

 

20.4       Disposals

 

The Borrower shall not, and shall procure that no other
member of the Group will, enter into a single transaction or a series of
transactions (whether related or not and whether voluntary or involuntary) to
sell, lease, transfer or otherwise dispose of any asset other than a Permitted
Disposal.

 

20.5       Distributions

 

The Borrower shall not declare, pay or make any dividend or
other payment or distribution of any kind on or in respect of any of its shares
in respect of any financial year in an amount exceeding 40 per cent. of net
profits of the Group for such financial year as construed by reference to the
consolidated financial statements of the Borrower delivered under paragraph (a) of
Clause 18.1 (Financial statements).

 

20.6       Reorganisation

 

The Borrower shall not (and shall ensure that no other
member of the Group will) enter into or become subject to any consolidation or
reorganisation, whether by way of merger (sliyaniye
obschestva), company accession (prisoedinyeniye
obschestva), company division (razdelyeniye
obschestva), company separation (vydelyeniye
obschestva), company transformation (preobrazovaniye obschestva), company liquidation (likvidatsiya obschestva) or any other
company reorganisation (reorganizatsiya
obschestva) (as these terms are construed by applicable Russian law)
or otherwise, or any analogous transaction in any jurisdiction, other than the
Agreed Reorganisation, in each case, without the prior consent of the Agent.

 

20.7       Acquisitions

 

Save with the prior written consent of the Agent, the
Borrower shall not (and shall ensure that no other member of the Group will)
make any Acquisition, other than an Acquisition of a business or going concern with business operations substantially
similar to the general nature of the business of the Group, provided that:

 

(a)            the
aggregate Acquisition Costs in any financial year do not exceed 25 per cent. of
the Total Assets of the Group for such financial year as construed by reference
to the consolidated financial statements of the Borrower delivered under
paragraph (a) of Clause 18.1 (Financial statements);

 

(b)           such Acquisition is made at fair market
value; and

 

(c)            no
Default is continuing or would result from the proposed Acquisition.

 

 

20.8       Change of business

 

The Borrower shall procure that no change is made to the
general nature of the business of the Group as a whole from that carried on at
the date of this Agreement.

 

20.9       Insurance

 

The Borrower shall, and shall procure that each other
Obligor will, maintain insurances on and in relation to its business and assets
with reputable underwriters or insurance companies.

 

20.10     Environmental undertakings

 

The Borrower shall, and shall procure that each other
Obligor will:

 

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

 

(b)           obtain
all Environmental Licences required or desirable in connection with its
business; and

 

(c)            comply
with the terms of all those Environmental Licences.

 

20.11               Environmental claims

 

The Borrower shall, and shall procure that each other
Obligor will, promptly notify the Agent of any claim, notice or other
communication received by it in respect of any actual or alleged breach of or
liability under Environmental Law.

 

20.12     Loans

 

(a)         The
Borrower shall not, and shall ensure that no other Obligor shall, without the
prior written consent of the Agent, make any loans or grant any credit to or
for the benefit of any person.

 

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

 

(i)             any
trade credit extended by any Obligor to its customers on arm’s length terms and
in the ordinary course of trading;

 

(ii)            any
unsecured loans granted by
an Obligor to another Obligor;

 

(iii)                                any loans granted by an Obligor to any other member of the Group which
is not an Obligor on arm’s length terms and solely for the purpose of
developing the baby food, agricultural, dairy or beverage business of the
Group; or

 

(iv)          any
loans granted by an Obligor to any person which is not a member of the Group, provided that:

 

(A)         without
prejudice to paragraph (C) below, the aggregate amount of all such loans
granted to distributors or suppliers of raw milk and other dairy products to
any member of the Group does not exceed 10 per cent. of the Total Assets of the
Group;

 

(B)          without
prejudice to paragraph (C) below, the aggregate amount of all such loans
granted to persons other than distributors or suppliers of raw milk and other
dairy products to any member of the Group does not exceed 5 per cent. of the
Total Assets of the Group; and

 

(C)          the
aggregate amount of all such loans and credit referred to in this paragraph (iv) does
not exceed 10 per cent. of the Total Assets of the Group.

 

 

20.13     Guarantees

 

The
Borrower shall not, and shall ensure that no other Obligor shall, without the
prior written consent of the Agent, grant any guarantee or indemnity to or for
the benefit of any person or otherwise voluntarily assume any liability,
whether actual or contingent, in respect of any obligation of any other person,
other than:

 

(a)            any
guarantee granted by an Obligor to any person which is not a member of the
Group in respect of the obligations of any other member of the Group;

 

(b)           any guarantee or indemnity
granted pursuant to the Finance Documents; or

 

(c)            any
Permitted Guarantee.

 

20.14               Acknowledgement following Agreed Reorganisation

 

Following
completion of the Agreed Reorganisation, the Borrower shall:

 

(a)         if the Agreed
Reorganisation in relation to the Borrower is by way of:

 

(i)          the merger of the
Borrower and WBD, (A) if required or desirable in accordance with
applicable law, assign its rights and novate its obligations under the Finance
Documents to which it is a party to the resulting entity and (B) procure
that the resulting entity shall acknowledge such rights and obligations as if
it were an original party to this Agreement; or

 

(ii)         the accession of
WBD to the Borrower such that the Borrower is the surviving entity, acknowledge
its rights and obligations under the Finance Documents to which it is a party;
and

 

(b)         if the Agreed
Reorganisation in relation to WBD Beverages is by way of:

 

(i)          the merger of WBD
Beverages and certain other Subsidiaries of the Borrower, (A) if required
or desirable in accordance with applicable law, procure that WBD Beverages
shall assign its rights and novate its obligations under the Finance Documents
to which it is a party to the resulting entity and (B) procure that the
resulting entity shall acknowledge such rights and obligations as if it were an
original party to the relevant Finance Document; or

 

(ii)         the accession of
such Subsidiaries to WBD Beverages such that WBD Beverages is the surviving
entity, procure that WBD Beverages shall acknowledge its rights and obligations
under the Finance Documents to which it is a party,

 

in each case, in form and substance
satisfactory to the Agent.

 

20.15     Submission of documents to Russian bank

 

The Borrower shall (and shall ensure that each other Obligor
will) comply in all respects with applicable currency control laws and
regulations to which it may be subject in connection with the entry into, and
performance of its obligations under, the Finance Documents and shall (and
shall ensure that each other Obligor will), inter alia,
timely submit to the relevant Russian authorised bank (including, where
relevant, the Passport Bank) through which payments to and from it under this
Agreement and/or other Finance Documents, as the case may be, are to be made,
such documents and other information as may be required from time to time under

 

 

Instruction 117-I and applicable currency control laws and
regulations for the purpose of the receipt and making of such payments, in
accordance with the procedure described therein and in form and substance
satisfactory to that Russian authorised bank.

 

21.         EVENTS OF DEFAULT

 

Each of the events or circumstances set out in this Clause
21 is an Event of Default (save for Clause 21.19 (Acceleration)).

 

21.1       Non-payment

 

An Obligor does not pay on the due date any amount payable
pursuant to a Finance Document at the place at and in the currency in which it
is expressed to be payable unless:

 

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

 

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

 

21.2       Financial covenants

 

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

 

21.3       Other obligations

 

(a)              An Obligor does not comply with any provision of any Finance
Document (other than those referred to in Clause 4.3 (Conditions
subsequent), Clause 21.1 (Non-payment)
and Clause 21.2 (Financial covenants)).

 

(b)              No Event of Default under paragraph (a) above will occur if the
failure to comply is capable of remedy and is remedied within 10 Business Days
of the Agent giving notice to the Borrower or the Borrower becoming aware of
the failure to comply (whichever occurs earlier).

 

21.4       Misrepresentation

 

Any representation or statement made or deemed to be made by
an Obligor in any Finance Document or any other document delivered by or on
behalf of any Obligor under or in connection with any Finance Document is or
proves to have been incorrect or misleading in any material respect when made
or deemed to be made.

 

21.5                     Cross default

 

(a)         Any
Financial Indebtedness of any member of the Group is not paid when due nor
within any originally applicable grace period.

 

(b)         Any
Financial Indebtedness of any member of the Group is declared to be or
otherwise becomes due and payable prior to its specified maturity as a result
of an event of default (however described).

 

(c)         Any
commitment for any Financial Indebtedness of any member of the Group is
cancelled or suspended by a creditor of any member of the Group as a result of
an event of default (however described).

 

(d)         Any
creditor of any member of the Group becomes entitled to declare any Financial
Indebtedness of any member of the Group due and payable prior to its specified
maturity as a result of an event of default (however described).

 

 

(e)         No Event
of Default will occur under this Clause 21.5 if the aggregate amount of
Financial Indebtedness or commitment for Financial Indebtedness falling within
paragraphs (a) to (d) above (when aggregated with the aggregate
amount of Financial Indebtedness falling within Clause 21.6 (Statutory rights resulting from Agreed Reorganisation)) of
the Group on a consolidated basis is less than USD15,000,000 (or its equivalent
in any other currency or currencies).

 

21.6       Statutory rights resulting from
Agreed Reorganisation

 

(a)         Any
Financial Indebtedness of any member of the Group is declared to be or
otherwise becomes due and payable prior to its specified maturity as a result
of the exercise by a creditor of a member of the Group, being a subject of the
Agreed Reorganisation, of its statutory right to accelerate the repayment of
the debt owed to it, as conferred upon it by statute following the announcement
of the Agreed Reorganisation.

 

(b)         No Event
of Default will occur under this Clause 21.6 if the aggregate amount of
Financial Indebtedness falling within paragraph (a) above (when aggregated
with the aggregate amount of Financial Indebtedness and commitment for
Financial Indebtedness falling within paragraphs (a) to (d) of Clause
21.5 (Cross default)) of the Group on a
consolidated basis is less than USD15,000,000 (or its equivalent in any other
currency or currencies).

 

21.7       Insolvency

 

(a)         A member
of the Group is unable or admits inability to pay its debts as they fall due,
suspends making payments on any of its debts or, by reason of actual or
anticipated financial difficulties, commences negotiations with one or more of
its creditors with a view to rescheduling any of its indebtedness.

 

(b)         The
value of the assets of any member of the Group (as determined in accordance
with GAAP) is less than its liabilities (taking into account contingent and
prospective liabilities).

 

(c)         A moratorium
is declared in respect of any indebtedness of any member of the Group.

 

21.8       Insolvency proceedings

 

Any corporate action, legal proceedings or other procedure
or step is taken in relation to or any petition is presented for:

 

(a)            the
suspension of payments, a moratorium of any indebtedness, winding-up,
dissolution, liquidation, bankruptcy, insolvency, financial rehabilitation,
administration or reorganisation (by way of voluntary arrangement, scheme of
arrangement or otherwise) of any member of the Group (other than an intra-Group
voluntary merger or reorganisation on a solvent basis of any member of the
Group which constitutes the Agreed Reorganisation), including, but not limited
to, implementation of pre-judicial recovery (dosudebnaya
sanatsiya) or institution of supervision (nablyudeniye),
financial rehabilitation (finansovoe ozdorovlenie),
external management (vneshneye upravlenie)
or bankruptcy management (konkursnoye proizvodstvo);

 

(b)           a
composition, compromise, assignment or arrangement with any creditor of any
member of the Group;

 

 

(c)            the
appointment of a liquidator (likvidator) or
a liquidation commission (likvidatsionnaya komissiya)
(other than in respect of a voluntary solvent liquidation of a member of the
Group which is not an Obligor), temporary manager (vremennyi
upravlaushiy), administrative manager (administrativniy
upravlaushiy), external manager (vneshniy upravlaushiy),
bankruptcy manager (konkursniy upravlaushiy),
receiver, administrative receiver, administrator, compulsory manager or other
similar officer in respect of any member of the Group or any of its assets;

 

(d)                                  the convening or announcement of an intention to convene a meeting
of creditors of any member of the Group for the purposes of considering an
amicable settlement (as defined in the Russian Insolvency Law); or

 

(e)            the
enforcement of any Security over any asset or assets of any member of the
Group,

 

or any analogous procedure or step is taken in any
jurisdiction.

 

21.9       Creditors’ process

 

Any expropriation, attachment, sequestration, distress or
execution affects any asset or assets of any Obligor with an aggregate value of
not less than USD15,000,000 (or equivalent in other currencies) and
is not discharged within 15 Business Days.

 

21.10     Ownership or control of the Guarantors

 

Save as a result of the Agreed Reorganisation, the ownership
or control (whether legal or beneficial, and whether direct or indirect) of any
of the Guarantors changes without the prior consent of the Agent, acting on the
instructions of all the Lenders.

 

21.11     Unlawfulness

 

It is or becomes unlawful for an Obligor to perform any of
its obligations under a Finance Document.

 

21.12     Repudiation

 

An Obligor repudiates a Finance Document or evidences in
writing an intention to repudiate a Finance Document.

 

21.13     Litigation

 

Any litigation, arbitration, proceeding or dispute is
started or threatened in writing against any member of the Group that is
reasonably likely to have a Material Adverse Effect.

 

21.14     Failure to comply with final
judgment

 

Any member of the Group fails to comply with a binding
judgment or any final order made or given by any court of competent
jurisdiction which, in respect of non-Obligors only, might have a Material
Adverse Effect.

 

21.15     Material adverse change

 

Any event or circumstance exists, has occurred or is
reasonably likely to occur that the Majority Lenders reasonably determine has a
Material Adverse Effect.

 

21.16     Cessation
of business

 

Any
Obligor suspends or ceases (or threatens to suspend or cease) to carry on all
or a material part of its business except as a result of the Agreed
Reorganisation.

 

 

21.17     Taxes

 

A Tax claim is presented to an Obligor or any of its
Subsidiaries unless:

 

(a)            it is
being contested by it in good
faith and in accordance with the relevant procedures, for which adequate
reserves are being maintained in accordance with GAAP and where payment can be
lawfully withheld and will not result in the imposition of any penalty nor in
any attachment or freezing of its assets; or

 

(b)           the non-payment of such Tax claim is not likely to have a Material
Adverse Effect.

 

21.18      Sovereign intervention

 

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

 

(i)             the
management of any member of the Group is wholly or materially displaced or the
authority of any member of the Group in the conduct of its business is wholly
or partially curtailed;

 

(ii)            any
of the revenues of the Group or any Material Asset(s) is seized,
nationalised, expropriated or compulsorily acquired; or

 

(iii)           any
member of the Group is otherwise deprived of, or prevented from exercising,
ownership or control of all or any part of its business, assets or rights, the
value of which (as determined in accordance with GAAP) exceeds 5 per cent. in
aggregate of the Total Assets of the Group.

 

(b)         Any
foreign exchange law is enacted or introduced in the Russian Federation,
Ukraine, Georgia, Kyrgyzstan or Uzbekistan which, in the opinion of the Agent,
has or might have the effect of preventing or delaying any payment under any
Finance Document.

 

(c)         A moratorium
is called on the payment of interest or repayment of principal on international
debts of Russian borrowers generally or a class thereof to which the Borrower
or any other Obligor belongs which has the effect of preventing or delaying any
payment under any Finance Document.

 

(d)         A
deterioration occurs in the political or economic situation in any of the
Russian Federation, Ukraine, Georgia, Kyrgyzstan or Uzbekistan or an act of war
or hostilities, invasion, armed conflict or act of foreign enemy, revolution,
insurrection, insurgency or threat thereof occurs in or involving any of the
Russian Federation, Ukraine, Georgia, Kyrgyzstan or Uzbekistan which (in any
case and in the reasonable opinion of the Majority Lenders) has or might
reasonably be expected to have a Material Adverse Effect.

 

21.19               Acceleration

 

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

 

(a)            cancel
the Total Commitments whereupon they shall immediately be cancelled; and/or

 

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

 

 

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

 

 

SECTION 8

 

CHANGES TO
PARTIES

 

22.         CHANGES TO THE LENDERS

 

22.1       Assignments and transfers by
the Lenders

 

Subject to this Clause 22, a Lender (the “Existing Lender”) may:

 

(a)            assign
any of its rights; or

 

(b)           transfer
by novation any of its rights and obligations,

 

to another bank or financial institution or to a trust, fund
or other entity which is regularly engaged in or established for the purpose of
making, purchasing or investing in loans, securities or other financial assets
(the “New Lender”).

 

22.2                     Conditions of assignment or transfer

 

(a)         The
consent of the Borrower is required for an assignment or transfer by an
Existing Lender, unless the assignment or transfer is to another Lender or an
Affiliate of a Lender or an Event of Default is continuing.

 

(b)         The consent
of the Borrower to an assignment or transfer must not be unreasonably withheld
or delayed. The Borrower will be deemed to have given its consent five Business
Days after the Existing Lender has requested it unless consent is expressly
refused by the Borrower within that time.

 

(c)         The
consent of the Borrower to an assignment or transfer must not be withheld
solely because the assignment or transfer may result in an increase to the
Mandatory Cost.

 

(d)         An
assignment will only be effective on:

 

(i)             receipt
by the Agent of written confirmation from the New Lender (in form and substance
satisfactory to the Agent) that the New Lender will assume the same obligations
to the other Finance Parties as it would have been under if it was an Original
Lender; and

 

(ii)            performance
by the Agent of all necessary “know your customer” or other similar checks
under all applicable laws and regulations in relation to such assignment to a
New Lender, the completion of which the Agent shall promptly notify to the
Existing Lender and the New Lender.

 

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

 

(f)          If:

 

(i)             a
Lender assigns or transfers any of its rights or obligations under the Finance
Documents or changes its Facility Office; and

 

(ii)            as a
result of circumstances existing at the date the assignment, transfer or change
occurs, an Obligor would be obliged to make a payment to the New Lender or
Lender acting through its new Facility Office under Clause 12 (Tax gross-up and indemnities), or Clause 4.1 (Tax Gross-up) of the Guarantees, or Clause 13 (Increased costs),

 

 

then the New Lender or Lender acting through its new
Facility Office is only entitled to receive payment under those Clauses to the
same extent as the Existing Lender or Lender acting through its previous
Facility Office would have been if the assignment, transfer or change had not
occurred.

 

22.3       Assignment or transfer fee

 

Each New Lender shall, on the date upon which an assignment
or transfer takes effect, pay to the Agent (for its own account) a fee of
USD2,000 unless such assignment or transfer is to an Affiliate of an Existing
Lender in which case no fee shall be payable.

 

22.4       Limitation of responsibility of Existing Lenders

 

(a)         Unless
expressly agreed to the contrary, an Existing Lender makes no representation or
warranty and assumes no responsibility to a New Lender for:

 

(i)             the
legality, validity, effectiveness, adequacy or enforceability of the Finance
Documents or any other documents;

 

(ii)            the
financial condition of any Obligor;

 

(iii)           the performance and observance by any Obligor of its obligations
under the Finance Documents or any other documents; or

 

(iv)          the
accuracy of any statements (whether written or oral) made in or in connection
with any Finance Document or any other document,

 

and any representations or warranties implied by law are
excluded.

 

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

 

(i)             has
made (and shall continue to make) its own independent investigation and
assessment of the financial condition and affairs of each Obligor and its
related entities in connection with its participation in this Agreement and has
not relied exclusively on any information provided to it by the Existing Lender
in connection with any Finance Document; and

 

(ii)            will
continue to make its own independent appraisal of the creditworthiness of each
Obligor and its related entities whilst any amount is or may be outstanding
under the Finance Documents or any Commitment is in force.

 

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

 

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

 

(ii)            support
any losses directly or indirectly incurred by the New Lender by reason of the
non-performance by any Obligor of its obligations under the Finance Documents
or otherwise.

 

22.5       Procedure for transfer

 

(a)         Subject
to the conditions set out in Clause 22.2 (Conditions of assignment
or transfer) a transfer is effected in accordance with paragraph (c) below
when the Agent executes an otherwise duly completed Transfer Certificate
delivered to it by the Existing Lender and the New Lender. The 

 

 

Agent shall, subject to paragraph (b) below, as
soon as reasonably practicable after receipt by it of a duly completed Transfer
Certificate appearing on its face to comply with the terms of this Agreement
and delivered in accordance with the terms of this Agreement, execute that
Transfer Certificate.

 

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

 

(c)         On the
Transfer Date:

 

(i)             to
the extent that in the Transfer Certificate the Existing Lender seeks to
transfer by novation its rights and obligations under the Finance Documents,
each of the Obligors and the Existing Lender shall be released from further
obligations towards one another under the Finance Documents and their
respective rights against one another under the Finance Documents shall be
cancelled (being the “Discharged Rights and
Obligations”);

 

(ii)            each
of the Obligors and the New Lender shall assume obligations towards one another
and/or acquire rights against one another which differ from the Discharged
Rights and Obligations only insofar as that Obligor and the New Lender have
assumed and/or acquired the same in place of that Obligor and the Existing
Lender;

 

(iii)           the
Agent, the Arranger, the New Lender and other Lenders shall acquire the same
rights and assume the same obligations between themselves as they would have
acquired and assumed had the New Lender been an Original Lender with the rights
and/or obligations acquired or assumed by it as a result of the transfer and to
that extent the Agent, the Arranger and the Existing Lender shall each be released
from further obligations to each other under the Finance Documents; and

 

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

 

22.6       Copy of Transfer Certificate to
Company

 

The Agent shall, as soon as reasonably practicable after it
has executed a Transfer Certificate, send to the Borrower a copy of that
Transfer Certificate.

 

22.7       Disclosure of information

 

Any Lender may disclose to any of its Affiliates and any
other person:

 

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

 

(b)           with
(or through) whom that Lender enters into (or may potentially enter into) any
sub-participation in relation to, or any other transaction under which payments
are to be made by reference to, this Agreement or any Obligor;

 

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

 

 

any information about any Obligor, the Group and the Finance
Documents as that Lender shall consider appropriate if, in relation to
paragraphs (a) and (b) above, the person to whom the information is
to be given has entered into a Confidentiality Undertaking. This Clause 22.7
supersedes any previous agreement relating to the confidentiality of this
information.

 

22.8       Agreed Reorganisation

 

Subject to Clause 21.6 (Statutory rights resulting
from Agreed Reorganisation), each Lender shall refrain from
exercising its statutory right to accelerate the repayment of the Liabilities,
as conferred upon it by statute, following the announcement of the Agreed
Reorganisation.

 

23.         CHANGES TO THE BORROWER

 

No Obligor may assign any of its rights or transfer any of
its rights or obligations under the Finance Documents, except as permitted in
accordance with the Agreed Reorganisation.

 

 

SECTION 9

 

THE FINANCE
PARTIES

 

24.         ROLE OF THE AGENT AND THE ARRANGER

 

24.1       Appointment of the Agent

 

(a)         Each
other Finance Party appoints the Agent to act as its agent under and in
connection with the Finance Documents.

 

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

 

24.2       Duties of the Agent

 

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

 

(b)         Except
where a Finance Document specifically provides otherwise, the Agent is not
obliged to review or check the adequacy, accuracy or completeness of any
document it forwards to another Party.

 

(c)         If the
Agent receives notice from a Party referring to this Agreement, describing a
Default and stating that the circumstance described is a Default, it shall
promptly notify the Finance Parties.

 

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

 

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

 

24.3       Role of the Arranger

 

Except as specifically provided in the Finance Documents,
the Arranger has no obligations of any kind to any other Party under or in
connection with any Finance Document.

 

24.4       No fiduciary duties

 

(a)         Nothing
in this Agreement constitutes the Agent (except as expressly provided in any
Finance Document) or the Arranger as a trustee or fiduciary of any other
person.

 

(b)         Neither
the Agent (except as expressly provided in any Finance Document) nor the
Arranger shall be bound to account to any Lender for any sum or the profit
element of any sum received by it for its own account.

 

24.5       Business with the Group

 

The Agent and the Arranger may accept deposits from, lend
money to and generally engage in any kind of banking or other business with any
member of the Group.

 

24.6       Rights and discretions of the
Agent

 

(a)         The
Agent may rely on:

 

 

(i)             any
representation, notice or document believed by it to be genuine, correct and
appropriately authorised; and

 

(ii)            any
statement made by a director, authorised signatory or employee of any person
regarding any matters which may reasonably be assumed to be within his
knowledge or within his power to verify.

 

(b)         The
Agent may assume, unless it has received notice to the contrary in its capacity
as agent for the Lenders, that:

 

(i)             no
Default has occurred (unless it has actual knowledge of a Default arising under
Clause 21.1 (Non-payment));

 

(ii)            any
right, power, authority or discretion vested in any Party or the Majority
Lenders (or if appropriate, the Lenders) has not been exercised; and

 

(iii)           any
notice or request made by an Obligor (other than a Utilisation) is made on
behalf of and with the consent and knowledge of all the Obligors.

 

(c)         The
Agent may engage, at the cost of the Borrower, and rely on the advice or
services of any lawyers, accountants, surveyors or other experts.

 

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

 

(e)         The
Agent may disclose to any other Party any information it reasonably believes it
has received as agent under this Agreement.

 

(f)          Notwithstanding
any other provision of any Finance Document to the contrary, neither the Agent
nor the Arranger is obliged to do or omit to do anything if it would or might
in its reasonable opinion constitute a breach of any law or regulation or a
breach of a fiduciary duty or duty of confidentiality.

 

24.7       Majority Lenders’ instructions

 

(a)         Unless a
contrary indication appears in a Finance Document, the Agent shall (i) exercise
any right, power, authority or discretion vested in it as Agent in accordance
with any instructions given to it by the Majority Lenders (or, if so instructed
by the Majority Lenders, refrain from exercising any right, power, authority or
discretion vested in it as Agent) and (ii) not be liable for any act (or
omission) if it acts (or refrains from taking any action) in accordance with an
instruction of the Majority Lenders.

 

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

 

(c)         The
Agent may refrain from acting in accordance with the instructions of the
Majority Lenders (or, if appropriate, the Lenders) until it has received such
security as it may require for any cost, loss or liability (together with any
associated VAT) which it may incur in complying with the instructions.

 

(d)         In the
absence of instructions from the Majority Lenders (or, if appropriate, the
Lenders), the Agent may act (or refrain from taking action) as it considers to
be in the best interests of the Lenders.

 

 

(e)         The
Agent is not authorised to act on behalf of a Lender (without first obtaining
that Lender’s consent) in any legal or arbitration proceedings relating to any
Finance Document.

 

24.8       Responsibility for
documentation

 

Neither the Agent nor the Arranger:

 

(a)            is
responsible for the adequacy, accuracy and/or completeness of any information
(whether oral or written) supplied by the Agent, the Arranger, an Obligor or
any other person given in or in connection with any Finance Document; or

 

(b)           is
responsible for the legality, validity, effectiveness, adequacy or
enforceability of any Finance Document or any other agreement, arrangement or
document entered into, made or executed in anticipation of or in connection
with any Finance Document.

 

24.9       Exclusion of liability

 

(a)         Without
limiting paragraph (b) below (and without prejudice to the provisions of
paragraph (e) of Clause 27.10 (Disruption
to payment systems etc.)), the Agent will not be liable for any
action taken by it under or in connection with any Finance Document, unless
directly caused by its gross negligence or wilful misconduct.

 

(b)         No Party
(other than the Agent) may take any proceedings against any officer, employee
or agent of the Agent in respect of any claim it might have against the Agent
or in respect of any act or omission of any kind by that officer, employee or
agent in relation to any Finance Document and any officer, employee or agent of
the Agent may rely on this Clause 24.9.

 

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

 

(d)         Nothing
in this Agreement shall oblige the Agent or the Arranger to carry out any “know
your customer” or other checks in relation to any person on behalf of any
Lender and each Lender confirms to the Agent and the Arranger that it is solely
responsible for any such checks it is required to carry out and that it may not
rely on any statement in relation to such checks made by the Agent or the
Arranger.

 

24.10     Lenders’ indemnity to the Agent

 

Each Lender shall (in proportion to its share of the Total
Commitments or, if the Total Commitments are then zero, to its share of the
Total Commitments immediately prior to their reduction to zero) indemnify the
Agent, within three Business Days of demand, against any cost, loss or
liability incurred by the Agent (otherwise than by reason of the Agent’s gross
negligence or wilful misconduct) without prejudice to Clause 27.10 (Disruption to payment systems etc.) in
acting as Agent under the Finance Documents (unless the Agent has been
reimbursed by an Obligor pursuant to a Finance Document).

 

24.11    Resignation of the Agent

 

(a)         The
Agent may resign and appoint one of its Affiliates as successor by giving
notice to the other Finance Parties and the Borrower.

 

 

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

 

(c)         If the
Majority Lenders have not appointed a successor Agent in accordance with
paragraph (b) above within 30 days after notice of resignation was given,
the Agent (after consultation with the Borrower) may appoint a successor Agent.

 

(d)         The
retiring Agent shall, at its own cost, make available to its successor such
documents and records and provide such assistance as its successor may
reasonably request for the purposes of performing its functions as Agent under
the Finance Documents.

 

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

 

(f)          Upon
the appointment of a successor, the retiring Agent shall be discharged from any
further obligation in respect of the Finance Documents but shall remain
entitled to the benefit of this Clause 24. Its successor and each of the other
Parties shall have the same rights and obligations among themselves as they
would have had if such successor had been an original Party.

 

(g)         After
consultation with the Borrower, the Majority Lenders may, by notice to the
Agent, require it to resign in accordance with paragraph (b) above. In
this event, the Agent shall resign in accordance with paragraph (b) above.

 

24.12    Confidentiality

 

(a)         The
Agent (in acting as agent for the Finance Parties) shall be regarded as acting
through its division which shall be treated as a separate entity from any other
of its divisions or departments.

 

(b)         If
information is received by another division or department of the Agent, it may
be treated as confidential to that division or department and the Agent shall
not be deemed to have notice of it.

 

24.13    Relationship with the Lenders

 

(a)         The
Agent may treat each Lender as a Lender, entitled to payments under this
Agreement and acting through its Facility Office unless it has received not
less than five Business Days’ prior notice from that Lender to the contrary in
accordance with the terms of this Agreement.

 

(b)         Each
Lender shall supply the Agent with any information required by the Agent in
order to calculate the Mandatory Cost in accordance with Schedule 4 (Mandatory Cost formula).

 

24.14    Credit appraisal by the Lenders

 

Without affecting the responsibility of any Obligor for
information supplied by it or on its behalf in connection with any Finance
Document, each Lender confirms to the Agent and the Arranger that it has been,
and will continue to be, solely responsible for making its own independent
appraisal and investigation of all risks arising under or in connection with
any Finance Document including but not limited to:

 

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

 

(b)          the
legality, validity, effectiveness, adequacy or enforceability of any Finance
Document and any other agreement, Security, arrangement or document entered
into, made or executed in anticipation of, under or in connection with any
Finance Document;

 

 

(c)            whether
that Lender has recourse, and the nature and extent of that recourse, against
any Party or any of its respective assets under or in connection with any
Finance Document, the transactions contemplated by the Finance Documents or any
other agreement, Security, arrangement or document entered into, made or
executed in anticipation of, under or in connection with any Finance Document;
and

 

(d)          the
adequacy, accuracy and/or completeness of any information provided by the
Agent, any Party or by any other person under or in connection with any Finance
Document, the transactions contemplated by the Finance Documents or any other
agreement, Security, arrangement or document entered into, made or executed in
anticipation of, under or in connection with any Finance Document.

 

24.15    Reference Banks

 

If a Reference Bank (or, if a Reference Bank is not a
Lender, the Lender of which it is an Affiliate) ceases to be a Lender, the
Agent shall (in consultation with the Borrower) appoint another Lender or an
Affiliate of a Lender to replace that Reference Bank.

 

24.16    Management Time of the Agent

 

Any amount payable to the Agent under Clause 14.3 (Indemnity to the Agent), Clause 16 (Costs and
expenses) and Clause 24.10 (Lenders’ indemnity to the
Agent) shall include the cost of utilising its management time or
other resources and will be calculated on the basis of such reasonable daily or
hourly rates as it may notify to the Borrower and the Lenders, and is in
addition to any fee paid or payable to it under Clause 11 (Fees).

 

24.17    Deduction from amounts payable by
the Agent

 

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

 

25.        CONDUCT OF BUSINESS BY THE FINANCE
PARTIES

 

No provision of this Agreement will:

 

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

 

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

 

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

 

 

26.         SHARING AMONG THE FINANCE PARTIES

 

26.1       Payments to Finance Parties

 

If a Finance Party (a “Recovering Finance Party”)
receives or recovers any amount from an Obligor other than in accordance with
Clause 27 (Payment mechanics) and applies that
amount to a payment due under the Finance Documents then:

 

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

 

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

 

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

 

26.2       Redistribution of payments

 

The Agent shall treat the Sharing Payment as if it had been
paid by the relevant Obligor and distribute it between the Finance Parties
(other than the Recovering Finance Party) in accordance with Clause 27.5 (Partial payments).

 

26.3       Recovering Finance Party’s
rights

 

(a)         On a
distribution by the Agent under Clause 26.2 (Redistribution
of payments), the Recovering Finance Party will be subrogated to the
rights of the Finance Parties which have shared in the redistribution.

 

(b)         If and
to the extent that the Recovering Finance Party is not able to rely on its
rights under paragraph (a) above, the Borrower shall ensure that the
relevant Obligor shall be liable to the Recovering Finance Party for a debt
equal to the Sharing Payment which is immediately due and payable.

 

26.4      Reversal of redistribution

 

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

 

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

 

 

(b)          that
Recovering Finance Party’s rights of subrogation in respect of any reimbursement
shall be cancelled and the Borrower shall ensure that the relevant Obligor will
be liable to the reimbursing Finance Party for the amount so reimbursed.

 

26.5      Exceptions

 

(a)         This
Clause 26 shall not apply to the extent that the Recovering Finance Party would
not, after making any payment pursuant to this Clause 26, have a valid and
enforceable claim against the relevant Obligor.

 

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

 

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

 

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

 

 

SECTION 10

 

ADMINISTRATION

 

27.        PAYMENT MECHANICS

 

27.1      Payments to the Agent

 

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

 

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

 

27.2      Distributions by the Agent

 

Each payment received by the Agent under the Finance Documents
for another Party shall, subject to Clause 27.3 (Distributions
to the Borrower) and Clause 27.4 (Clawback),
be made available by the Agent as soon as practicable after receipt to the
Party entitled to receive payment in accordance with this Agreement (in the
case of a Lender, for the account of its Facility Office), to such account as
that Party may notify to the Agent by not less than five Business Days’ notice
with a bank in the principal financial centre of the country of that currency
(or, in relation to euro, in the principal financial centre of a Participating
Member State or London).

 

27.3      Distributions to the Borrower

 

The Agent may (with the consent of the Borrower or in
accordance with Clause 28 (Set-off)) apply
any amount received by it for the Borrower in or towards payment (on the date
and in the currency and funds of receipt) of any amount due from the Borrower
under the Finance Documents or in or towards purchase of any amount of any
currency to be so applied.

 

27.4      Clawback

 

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

 

(b)        If
the Agent pays an amount to another Party and it proves to be the case that it
had not actually received that amount, then the Party to whom that amount (or
the proceeds of any related exchange contract) was paid shall on demand refund
the same to the Agent together with interest on that amount from the date of
payment to the date of receipt by the Agent calculated by it to reflect its
cost of funds.

 

 

27.5                   Partial payments

 

(a)                            If the
Agent receives a payment that is insufficient to discharge all the amounts then
due and payable by the Borrower under the Finance Documents, the Agent shall
apply that payment towards the obligations of the Borrower under the Finance
Documents in the following order:

 

(i)                                      first, in or towards
payment pro rata of any unpaid fees, costs and expenses of the Agent or the
Arranger under the Finance Documents;

 

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

 

(iii)                                thirdly, in or towards payment pro rata of any principal due but unpaid
under this Agreement; and

 

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

 

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

 

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

 

27.6                   No set-off by the Borrower

 

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

 

27.7                   Business Days

 

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

 

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

 

27.8                   Currency of account

 

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

 

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

 

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

 

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

 

(e)                            Any amount
expressed to be payable in a currency other than the Dollar shall be paid in
that other currency.

 

 

27.9                   Change of currency

 

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

 

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

 

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

 

(b)                           If a change
in any currency of a country occurs, this Agreement will, to the extent the
Agent (acting reasonably and after consultation with the Borrower) specifies to
be necessary, be amended to comply with any generally accepted conventions and
market practice in the Relevant Interbank Market and otherwise to reflect the
change in currency.

 

27.10             Disruption
to payment systems etc.

 

If either the Agent determines (in its discretion) that a
Disruption Event has occurred or the Agent is notified by the Borrower that a
Disruption Event has occurred:

 

(a)                                   the
Agent may, and shall if requested to do so by the Borrower, consult with the
Borrower with a view to agreeing with the Borrower such changes to the
operation or administration of the Facilities as the Agent may deem necessary
in the circumstances;

 

(b)                                  the
Agent shall not be obliged to consult with the Borrower in relation to any
changes mentioned in paragraph (a) above if, in its opinion, it is not
practicable to do so in the circumstances and, in any event, shall have no
obligation to agree to such changes;

 

(c)                                   the
Agent may consult with the Finance Parties in relation to any changes mentioned
in paragraph (a) above but shall not be obliged to do so if, in its
opinion, it is not practicable to do so in the circumstances;

 

(d)                                  any
such changes agreed upon by the Agent and the Borrower shall (whether or not it
is finally determined that a Disruption Event has occurred) be binding upon the
Parties as an amendment to (or, as the case may be, waiver of) the terms of the
Finance Documents notwithstanding the provisions of Clause 33 (Amendments and waivers);

 

(e)                                   the
Agent shall not be liable for any damages, costs or losses whatsoever
(including, without limitation for negligence, gross negligence or any other
category of liability whatsoever but not including any claim based on the fraud
of the Agent) arising as a result of its taking, or failing to take, any
actions pursuant to or in connection with this Clause 27.10; and

 

(f)                                     the
Agent shall notify the Finance Parties of all changes agreed pursuant to
paragraph (d) above.

 

 

28.                         SET-OFF

 

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

 

29.                         NOTICES

 

29.1                   Communications in writing

 

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

 

29.2                   Addresses

 

The
address and fax number (and the department or officer, if any, for whose
attention the communication is to be made) of each Party for any communication
or document to be made or delivered under or in connection with the Finance
Documents is:

 

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

 

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

 

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

 

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

 

29.3                   Delivery

 

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

 

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

 

(ii)                                 if by way of letter, when it has been left at the relevant address
or five Business Days after being deposited in the post postage prepaid in an
envelope addressed to it at that address,

 

and, if
a particular department or officer is specified as part of its address details
provided under Clause 29.2 (Addresses), if
addressed to that department or officer.

 

(b)                           Any
communication or document to be made or delivered to the Agent will be
effective only when actually received by it and then only if it is expressly
marked for the attention of the department or officer identified with its
signature below (or any substitute department or officer as it shall specify
for this purpose).

 

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

 

 

29.4                   Notification of address and fax number

 

Promptly
upon receipt of notification of an address and fax number or change of address
or fax number pursuant to Clause 29.2 (Addresses) or
changing its own address or fax number, the Agent shall notify the other
Parties.

 

29.5                   Electronic communication

 

(a)                            Without
prejudice to paragraph (c) of Clause 33.1 (Required
consents), any communication to be made between the Agent and a
Lender under or in connection with the Finance Documents may be made by
electronic mail or other electronic means, if the Agent and the relevant
Lender:

 

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

 

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

 

(iii)                              notify each other of any change to their address or any other such
information supplied by them.

 

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

 

29.6                   English language

 

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

 

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

 

(i)                                      in
English; or

 

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

 

30.                         CALCULATIONS AND CERTIFICATES

 

30.1                   Accounts

 

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

 

30.2                   Certificates and determinations

 

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

 

30.3                   Day count convention

 

Any
interest, commission or fee accruing under a Finance Document will accrue from
day to day and is calculated on the basis of the actual number of days elapsed
and a year of 360 days or, in

 

 

any
case where the practice in the Relevant Interbank Market differs, in accordance
with that market practice.

 

31.                         PARTIAL INVALIDITY

 

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

 

32.                         REMEDIES AND WAIVERS

 

No
failure to exercise, nor any delay in exercising, on the part of any Finance
Party, any right or remedy under the Finance Documents shall operate as a
waiver, nor shall any single or partial exercise of any right or remedy prevent
any further or other exercise or the exercise of any other right or remedy. The
rights and remedies provided in this Agreement are cumulative and not exclusive
of any rights or remedies provided by law.

 

33.                         AMENDMENTS AND WAIVERS

 

33.1                   Required consents

 

(a)                            Subject to
Clause 33.2 (Exceptions), any term of the
Finance Documents to which the Borrower is a Party may be amended or waived
only with the consent of the Majority Lenders and the Borrower and any such
amendment or waiver will be binding on all Parties.

 

(b)                           The Agent
may effect, on behalf of any Finance Party, any amendment or waiver permitted
by this Clause 33.

 

(c)                            An
amendment to any Finance Document shall be in writing and shall be signed by
the duly authorised signatories of the relevant Parties.

 

33.2                   Exceptions

 

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

 

(i)                                      the
definition of “Majority Lenders” in Clause 1.1 (Definitions);

 

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

 

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

 

(iv)                               an
increase in or an extension of any Commitment;

 

(v)                                  a
change to the Borrowers other than in accordance with Clause 23 (Changes to the Borrower);

 

(vi)                               an
extension of an Availability Period;

 

(vii)                            a change
of the currency of any payment under any Finance Document;

 

(viii)                         the release
of the obligations of any Guarantor under any Finance Documents;

 

(ix)                                 any
provision which expressly requires the consent of all the Lenders; or

 

 

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

 

shall
not be made without the prior consent of all the Lenders.

 

(b)                           An
amendment or waiver which relates to the rights or obligations of the Agent or
the Arranger may not be effected without the consent of the Agent or, as the
case may be, the Arranger.

 

34.                         COUNTERPARTS

 

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

 

 

SECTION 11

 

GOVERNING LAW AND ENFORCEMENT

 

35.                         GOVERNING LAW

 

This Agreement is governed by English law.

 

36.                         ENFORCEMENT

 

36.1                   Arbitration

 

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

 

36.2                   Procedure for arbitration

 

(a)                            The
arbitral tribunal shall consist of three arbitrators. The claimant(s),
irrespective of number, shall nominate jointly one arbitrator; the
respondent(s), irrespective of number, shall nominate jointly the second
arbitrator; and a third arbitrator, who shall serve as Chairman (who shall be a
lawyer currently qualified in England and Wales and be admitted to the Bar of
England and Wales), shall be appointed by the LCIA Court as soon as possible
and, in any event, within 15 days of the appointment of the second arbitrator.

 

(b)                           In the
event the claimant(s) or the respondent(s) shall fail to nominate an
arbitrator within the time limits specified in the Rules, such arbitrator shall
be appointed by the LCIA Court as soon as possible and, in any event, within 15
days of such failure. In the event that both the claimant(s) and the
respondent(s) fail to nominate an arbitrator within the time limits
specified in the Rules, all three arbitrators shall be appointed by the LCIA
Court as soon as possible and, in any event, within 15 days of such failure who
shall designate one of them as chairman.

 

(c)                            If all the
parties to an arbitration so agree, there shall be a sole arbitrator appointed
by the LCIA Court as soon as possible and, in any event, within 15 days of such
agreement.

 

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

 

(e)                            Where
disputes arise under this Agreement and/or any other Finance Document which, in
the reasonable opinion of the first arbitrator to be appointed by a Finance
Party in any of the disputes, are so closely connected that it is expedient for
them to be resolved in the same proceedings, that arbitrator shall have the
power to order that the proceedings to resolve that dispute shall be
consolidated with those to resolve any of the other disputes (whether or not
proceedings to resolve those other disputes have been instituted), provided that no date for the final hearing of the first
arbitration has been fixed. If he so orders, the parties to each dispute which
is subject to his order shall be treated as having consented to that dispute
being finally decided:

 

(i)                                      by
the arbitrator who ordered the consolidation unless the LCIA Court decides that
he would not be suitable or impartial; and

 

 

(ii)                                   in
accordance with the procedure, at the seat and in the language specified in the
arbitration agreement in the contract under which the arbitrator who ordered
the consolidation was appointed, save as otherwise agreed by all parties to the
consolidated proceedings or, in the absence of such agreement, ordered by the
arbitrator in the consolidated proceedings.

 

36.3                   Recourse to courts

 

Save as provided in Clause 36.4 (Agent’s
option), the parties exclude the jurisdiction of the courts under
sections 45 and 69 of the Arbitration Act 1996.

 

36.4                   Agent’s option

 

Before an arbitrator has been appointed by a Finance Party
to determine a Dispute, the Agent may (and, if so directed by the Majority
Lenders, shall) by notice in writing to the Borrower require that all Disputes
or a specific Dispute be heard by a court of law. If the Agent gives such
notice, the Dispute to which such notice refers shall be determined in
accordance with Clause 36.5 (Jurisdiction).

 

36.5                   Jurisdiction

 

(a)                            The courts
of England have non-exclusive jurisdiction to settle any Dispute.

 

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

 

(c)                            This
Clause 36.5 is for the benefit of the Finance Parties only. As a result, no
Finance Party shall be prevented from taking proceedings relating to a Dispute
in any other courts with jurisdiction. To the extent allowed by law, the
Finance Parties may take concurrent proceedings in any number of jurisdictions.

 

36.6                   Service of process

 

Without prejudice to any other mode of service allowed
under any relevant law, the Borrower:

 

(a)                                   irrevocably
appoints Clifford Chance Secretaries Limited of 10 Upper Bank Street, London
E14 5JJ, United Kingdom as its agent for service of process in relation to any
proceedings before the English courts in connection with any Finance Document
governed by English law; and

 

(b)                                  agrees
that failure by a process agent to notify the Borrower of the process will not
invalidate the proceedings concerned.

 

36.7                   Waiver of immunity

 

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

 

 

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

 

 

SCHEDULE 1

 

THE ORIGINAL LENDERS

 

	
  Name of Original Lender

  	
   

  	
  Tranche 1 Commitment

  	
   

  	
  Tranche 2 Commitment

  	
   

  
	
  ABN
  AMRO Bank N.V.

  	
   

  	
  20,400,000

  	
   

  	
  13,600,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CALYON

  	
   

  	
  20,400,000

  	
   

  	
  13,600,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ING
  Bank N.V., Dublin Branch

  	
   

  	
  20,400,000

  	
   

  	
  13,600,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Joint-Stock
  Bank Orgresbank

  	
   

  	
  19,800,000

  	
   

  	
  13,200,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EFG
  Private Bank (Luxembourg) S.A.

  	
   

  	
  15,000,000

  	
   

  	
  10,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Intesa Sanpaolo Bank Ireland plc

  	
   

  	
  15,000,000

  	
   

  	
  10,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Banque
  Societe Generale Vostok

  	
   

  	
  12,000,000

  	
   

  	
  8,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Alpha
  Bank A.E.

  	
   

  	
  6,000,000

  	
   

  	
  4,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Banco Nacional Ultramarino, S.A.

  	
   

  	
  6,000,000

  	
   

  	
  4,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Taiwan
  Cooperative Bank, Offshore Banking Branch

  	
   

  	
  6,000,000

  	
   

  	
  4,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ZAO
  Svenska Handelsbanken

  	
   

  	
  6,000,000

  	
   

  	
  4,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bank
  Sinopac, Offshore Banking Branch

  	
   

  	
  3,000,000

  	
   

  	
  2,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  150,000,000

  	
   

  	
  100,000,000

  	
   

  

 

 

SCHEDULE 2

 

CONDITIONS PRECEDENT AND SUBSEQUENT

 

PART I

 

CONDITIONS PRECEDENT

 

1.                               Obligors

 

(a)                            Notarised copy of each Obligor’s duly registered constitutional
documents (including any amendments thereto) and certificate of registration
thereof in force at the date of each of the Finance Documents.

 

(b)                           Notarised copy of (i) each Obligor’s registration certificate
issued by the competent registration authority (if applicable), (ii) certificate
of its entry into the Unified State Registry of Legal Entities issued by the
competent tax authority and (iii) an extract from the Unified Registry of
Legal Entities in relation to it issued by the competent tax authority as of
the date no earlier than five days prior to the date of each of the Finance
Documents.

 

(c)                            Certified copy of all internal approvals and corporate resolutions
necessary to authorise each Obligor to execute and perform the Finance
Documents to which it is a party and any related documents and the transactions
contemplated thereunder (including, but not limited to, any major transaction
approvals or interested party transaction approvals required under applicable
Russian law).

 

(d)                           Evidence of the authority of the relevant signatories of each
Obligor (including the Chief Accountant) to execute the Finance Documents to
which it is party and any related documents.

 

(e)                            Original certificate issued by each Obligor:

 

(i)                                      certifying
the sample signature and office of each person that is to execute the Finance
Documents to which it is party and any related documents on behalf of such
Obligor and certifying that such signatories hold the positions in which
capacity they will execute such documents;

 

(ii)                                   certifying
(A) that none of the Finance Documents to which it
is party, and none of the transactions contemplated thereunder, does or will
constitute a major transaction or an interested party transaction for it under
applicable Russian law, except where requisite corporate approvals authorising
all major transactions and all interested party transactions have been obtained
by it with respect to such Finance Documents and (B) in the case of the Borrower only, that the aggregate value of the
transactions contemplated under the Finance Documents exceeds 25 per cent. but
does not exceed 50 per cent. of the balance sheet value of its assets as of the
latest reporting date (prepared and calculated in accordance with RAS);

 

(iii)                                certifying
that each copy document relating to it that is specified in Part I of this
Schedule 2 is correct, complete and in full force and effect as of a date no
earlier than each of the Finance Documents to which the relevant Obligor is a
party;

 

 

(iv)                               confirming
that the conclusion of and the performance by it of its obligations under the
Finance Documents to which it is a party and any related documents would not
contravene any of its internal orders or regulations or decisions of its
governing bodies and the power of the chief executive officer and, where
relevant, other authorised signatories to act on its behalf, as defined in its
constitutional documents and in any power(s) of attorney issued to any
signatory/ies referred to in paragraph (i) above, is not limited by any of
its internal documents or decisions of its  governing bodies
or by any contract; and

 

(v)                                  confirming
that borrowing, guaranteeing, as appropriate, the Total Commitments would not
cause any borrowing, guaranteeing or similar limit binding on it to be
exceeded.

 

(f)                              Evidence that (A) the Borrower has complied or will comply with
applicable currency control laws and regulations in respect of the entry into and
performance of any Finance Document to which it is party, including a certified
copy of the transaction passport (passport sdelki)
of the Borrower in relation to the relevant Finance Documents (in the form
established by Instruction 117-I or other applicable currency control laws and
regulations, as the case may be) accepted and duly certified by the Passport
Bank and (B) all necessary documents in relation to the Finance Documents
have been submitted to the Passport Bank in accordance with applicable currency
control laws and regulations and in form and substance satisfactory to the
Passport Bank, together with certified copies of any of such documents as the
Agent may require.

 

2.                               Legal opinions

 

(a)                            A legal opinion of Linklaters LLP, legal advisers to the Arranger
and the Agent in England.

 

(b)                           A legal opinion of Linklaters CIS, legal advisers to the Arranger
and the Agent in the Russian Federation.

 

3.                               Finance Documents

 

An executed original of each:

 

(a)                                   this Agreement;

 

(b)                                  each Guarantee; and

 

(c)                                   each Fee Letter.

 

4.                               Other documents and evidence

 

(a)                            The Original Financial Statements of each Obligor.

 

(b)                           A certified copy of the business model of the Group (including cash
flow projections, balance sheet and profit and loss accounts) for the financial
year ended on 31 December 2007 as approved by the competent governing body
of the Borrower that is able to effectively approve such matters.

 

(c)                            The latest available consolidated audited annual financial
statements of the Borrower prepared in accordance with GAAP, if different from
the Borrower’s Original Financial Statements.

 

 

(d)                           The latest available consolidated unaudited quarterly financial
statements of the Borrower prepared in accordance with GAAP, if different from
the Borrower’s Original Financial Statements.

 

(e)                            The latest available financial statements of each Obligor prepared
in accordance with RAS, together with the auditors’ statement (if any), if
different from the relevant Obligor’s Original Financial Statements.

 

(f)                              Confirmation from the tax authorities of the Russian Federation that
all liabilities of each Obligor to the tax authorities of the Russian
Federation are being routinely discharged to the satisfaction of all the
relevant authorities, in form and substance acceptable to the Agent.

 

(g)                           Evidence that any process agent referred to in Clause 36.6 (Service of process) of this Agreement, clause 14.6 (Service of process) of the WBD Guarantee and clause 14.6 (Service of process) of the WBD Beverages Guarantee has
accepted its appointment.

 

(h)                           A certified copy of a Group structure chart as at the date no
earlier than the date of this Agreement.

 

(i)                               Evidence that the fees, costs and expenses then due from the
Borrower pursuant to Clause 11 (Fees) and
Clause 16 (Costs and expenses) have been paid or
will be paid by the first Utilisation Date.

 

(j)                               A copy of any other Authorisation or other document, opinion or
assurance which the Agent considers to be necessary or desirable (if it has
notified the Borrower accordingly) in connection with the entry into and
performance of the transactions contemplated by any Finance Document or for the
validity and enforceability of any Finance Document.

 

 

PART II

 

CONDITIONS SUBSEQUENT

 

(a)                            A certified copy of the hedging policy adopted by the Borrower.

 

(b)                           A certified copy of the Agreed Reorganisation Memorandum, in form
and substance satisfactory to the Agent (acting on the instructions of the
Majority Lenders).

 

(c)                            A legal opinion of Clifford Chance CIS Limited, legal advisers to
the Borrower in the Russian Federation, issued in relation to the Agreed
Reorganisation and the Agreed Reorganisation Memorandum in form and substance
satisfactory to the Agent (acting on the instructions of the Majority Lenders).

 

 

SCHEDULE 3

 

UTILISATION REQUEST

 

From:                                              Open
Joint Stock Company “Wimm-Bill-Dann Foods”

 

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

 

Dated:

 

Dear Sirs

 

USD 250,000,000 Facility Agreement

dated [       ] 2008 (the “Agreement”)

 

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

 

2.                                 We wish to borrow a Loan on the following terms:

 

	
  Proposed
  Utilisation Date:

  	
   

  	
  [          ]
  (or, if that is not a Business Day, the next Business Day)

  
	
   

  	
   

  	
   

  
	
  Tranche
  to be utilised:

  	
   

  	
  [Tranche
  1/Tranche 2]

  
	
   

  	
   

  	
   

  
	
  Currency
  of Loan:

  	
   

  	
  Dollars

  
	
   

  	
   

  	
   

  
	
  Amount:

  	
   

  	
  [          ]

  
	
   

  	
   

  	
   

  
	
  Interest
  Period:

  	
   

  	
  3
  Months

  

 

3.                                 We confirm that each condition specified in Clause 4.2 (Further conditions precedent) is satisfied on the date of
this Utilisation Request.

 

4.                                 The proceeds of this Loan should be credited to [account].(1)

 

5.                                 This Utilisation Request is irrevocable.

 

Yours faithfully

 

 

	
  Signed:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  authorised signatory of

  	
   

  	
  Chief Accountant

  
	
   

  	
   

  	
  Open Joint Stock Company

  	
   

  	
  Open Joint Stock Company

  
	
   

  	
   

  	
  “Wimm-Bill-Dann Foods”

  	
   

  	
  “Wimm-Bill-Dann Foods”

  

 

(1)                            Account of the Borrower held with the Passport Bank.

 

 

SCHEDULE 4

 

MANDATORY COST FORMULA

 

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

 

2.                                 On the first day of each Interest Period (or as soon as possible
thereafter) the Agent shall calculate, as a percentage rate, a rate (the “Additional Cost Rate”) for each Lender, in accordance with
the paragraphs set out below. The Mandatory Cost will be calculated by the
Agent as a weighted average of the Lenders’ Additional Cost Rates (weighted in
proportion to the percentage participation of each Lender in the relevant Loan)
and will be expressed as a percentage rate per annum.

 

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

 

4.                                 The Additional Cost Rate for any Lender lending from a Facility
Office in the United Kingdom will be calculated by the Agent as follows:

 

	
  

  	
   

  	
  per cent.
  per annum.

  

 

Where: E is designed to compensate Lenders for amounts
payable under the Fees Rules and is calculated by the Agent as being the
average of the most recent rates of charge supplied by the Reference Banks to
the Agent pursuant to paragraph 6 below and expressed in pounds per £1,000,000.

 

5.                                 For the purposes of this Schedule:

 

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

 

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

 

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

 

6.                                 If requested by the Agent, each Reference Bank shall, as soon as
practicable after publication by the Financial Services Authority, supply to
the Agent, the rate of charge payable by that

 

 

Reference Bank to the Financial Services Authority
pursuant to the Fees Rules in respect of the relevant financial year of
the Financial Services Authority (calculated for this purpose by that Reference
Bank as being the average of the Fee Tariffs applicable to that Reference Bank
for that financial year) and expressed in pounds per £1,000,000 of the Tariff
Base of that Reference Bank.

 

7.                                 Each Lender shall supply any information required by the Agent for
the purpose of calculating its Additional Cost Rate. In particular, but without
limitation, each Lender shall supply the following information on or prior to
the date on which it becomes a Lender:

 

(i)                                      the jurisdiction of its Facility Office; and

 

(ii)                                   any other information that the Agent may reasonably require for such
purpose.

 

Each Lender shall promptly notify the Agent of any
change to the information provided by it pursuant to this paragraph 7.

 

8.                                 The rates of charge of each Reference Bank for the purpose of E
above shall be determined by the Agent based upon the information supplied to
it pursuant to paragraphs 6 and 7 above.

 

9.                                 The Agent shall have no liability to any person if such
determination results in an Additional Cost Rate which over or under
compensates any Lender and shall be entitled to assume that the information
provided by any Lender or Reference Bank pursuant to paragraphs 3, 6 and 7
above is true and correct in all respects.

 

10.                           The Agent shall distribute the additional amounts received as a
result of the Mandatory Cost to the Lenders on the basis of the Additional Cost
Rate for each Lender based on the information provided by each Lender and each
Reference Bank pursuant to paragraphs 3, 6 and 7 above.

 

11.                           Any determination by the Agent pursuant to this Schedule 4 in
relation to a formula, the Mandatory Cost, an Additional Cost Rate or any
amount payable to a Lender shall, in the absence of manifest error, be
conclusive and binding on all Parties.

 

12.                           The Agent may from time to time, after consultation with the Borrower
and the Lenders, determine and notify to all Parties any amendments which are
required to be made to this Schedule in order to comply with any change in law,
regulation or any requirements from time to time imposed by the Bank of
England, the Financial Services Authority or the European Central Bank (or, in
any case, any other authority which replaces all or any of its functions) and
any such determination shall, in the absence of manifest error, be conclusive
and binding on all Parties.

 

 

SCHEDULE 5

 

FORM OF TRANSFER CERTIFICATE

 

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

 

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

 

Dated:

 

USD 250,000,000 Facility Agreement

dated [        ] 2008 (the “Agreement”)

 

1.                                 We refer to the Agreement. This is a Transfer Certificate. Terms
defined in the Agreement have the same meaning in this Transfer Certificate
unless given a different meaning in this Transfer Certificate.

 

2.                                 We refer to Clause 22.5 (Procedure for transfer):

 

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

 

(b)                                  The proposed Transfer Date is [          ].

 

(c)                                   The Facility Office and address, fax number and attention details
for notices of the New Lender for the purposes of Clause 29.2 (Addresses) are set out in the Schedule.

 

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

 

4.                                 This Transfer Certificate may be executed in any number of
counterparts and this has the same effect as if the signatures on the
counterparts were on a single copy of this Transfer Certificate.

 

5.                                 This Transfer Certificate is governed by English law.

 

 

THE SCHEDULE

 

Commitment/rights and obligations to be transferred

 

[insert relevant details]

 

[Facility Office address,
fax number and attention details for notices and account details for payments.]

 

 

	
  [Existing Lender]

  	
   

  	
  [New Lender]

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  By:

  

 

 

This Transfer Certificate is accepted by the Agent and the
Transfer Date is confirmed as

 

[               ].

 

[Agent]

 

By:

 

 

SCHEDULE 6

 

FORM OF COMPLIANCE CERTIFICATE

 

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

 

From:                                              Open Joint Stock Company “Wimm-Bill-Dann Foods”

 

Dated:

 

Dear Sirs

 

USD
250,000,000 Facility Agreement

dated [       ] 2008 (the “Agreement”)

 

1.                                 We refer to the Agreement. This is a Compliance Certificate. Terms
defined in the Agreement have the same meaning when used in this Compliance
Certificate unless given a different meaning in this Compliance Certificate.

 

2.                                 We confirm that: [Insert details of covenants to be certified]

 

3.                                 We confirm that no Default is continuing.

 

 

	
  Signed:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  General
  Director

  	
   

  	
  Chief
  Accountant

  
	
   

  	
   

  	
  Open Joint
  Stock Company

  	
   

  	
  Open Joint
  Stock Company

  
	
   

  	
   

  	
  “Wimm-Bill-Dann
  Foods”

  	
   

  	
  “Wimm-Bill-Dann
  Foods”

  

 

[insert applicable certification
language]

 

 

	
   

  	
   

  
	
  for and on behalf of

  
	
  [name of auditors of the
  Borrower]

  

 

 

SCHEDULE 7

 

TIMETABLES

 

“D -  
“ refers to the number of Business Days before the relevant Utilisation
Date/the first day of the relevant Interest Period.

 

	
  Delivery of a duly completed Utilisation
  Request (Clause 5.1 (Delivery of a
  Utilisation Request))

  	
   

  	
  D-3

  10:00 a.m.

  
	
   

  	
   

  	
   

  
	
  Agent notifies the Lenders of the Loan in
  accordance with Clause 5.4 (Lenders’ participation)

  	
   

  	
  D-3

  11:00 a.m.

  
	
   

  	
   

  	
   

  
	
  LIBOR is fixed

  	
   

  	
  Quotation
  Day

  as of 11:00 a.m.

  

 

 

The Borrower

 

OPEN JOINT STOCK COMPANY “WIMM-BILL-DANN
FOODS”

 

By:

 

 

By:

 

Chief Accountant

 

 

Address:

 

Fax No:

 

Attention:

 

 

The Arrangers

 

ABN AMRO BANK N.V.

 

By:

 

Address:

 

Fax No:

 

Attention:

 

 

CALYON

 

By:

 

Address:

 

Fax No:

 

Attention:

 

 

ING BANK N.V.

 

By:

 

Address:

 

Fax No:

 

Attention:

 

 

The Original Lenders

 

 

ABN AMRO BANK N.V.

 

By:

 

Address:

 

Fax No:

 

Attention:

 

 

CALYON

 

By:

 

Address:

 

Fax No:

 

Attention:

 

 

ING
BANK N.V., DUBLIN BRANCH

 

By:

 

Address:

 

Fax No:

 

Attention:

 

 

JOINT-STOCK
BANK ORGRESBANK

 

By:

 

Address:

 

Fax No:

 

Attention:

 

 

EFG
PRIVATE BANK (LUXEMBOURG) S.A.

 

By:

 

Address:

 

Fax No:

 

Attention:

 

 

INTESA
SANPAOLO BANK IRELAND PLC

 

By:

 

Address:

 

Fax No:

 

Attention:

 

 

BANQUE SOCIETE GENERALE VOSTOK

 

By:

 

Address:

 

Fax No:

 

Attention:

 

 

ALPHA
BANK A.E.

 

By:

 

Address:

 

Fax No:

 

Attention:

 

 

BANCO NACIONAL ULTRAMARINO, S.A.

 

By:

 

Address:

 

Fax No:

 

Attention:

 

 

TAIWAN
COOPERATIVE BANK, OFFSHORE BANKING BRANCH

 

By:

 

Address:

 

Fax No:

 

Attention:

 

 

ZAO
SVENSKA HANDELSBANKEN

 

By:

 

Address:

 

Fax No:

 

Attention:

 

 

BANK
SINOPAC, OFFSHORE BANKING BRANCH

 

By:

 

Address:

 

Fax No:

 

Attention:

 

 

The Agent

 

ING BANK N.V., LONDON BRANCH

 

By:

 

Address:

 

Fax No:

 

Attention:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00144-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00144-of-00352.parquet"}]]