Document:

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                                                                  EXHIBIT 10.21

                              STOCKHOLDER AGREEMENT

         STOCKHOLDER AGREEMENT dated as of October 15, 1999 (the "AGREEMENT"),
     among WAVEXPRESS, INC., a Delaware corporation (the "COMPANY"), and the
     stockholders listed on EXHIBIT A hereto, as the same may be supplemented
     from time to time (individually, a "STOCKHOLDER" and, collectively, the
     "STOCKHOLDERS").

         WHEREAS, the holders of all of the shares of the Company's common stock
and preferred stock and options or warrants to purchase the Company's common
stock wish to set forth their relative rights with regard to election of the
Company's Board of Directors, the transfer and issuance of the Company's
securities and certain other matters concerning the Company's capital stock.

         Accordingly, the parties hereto agree as follows:

                                   ARTICLE 1.

                                   DEFINITIONS

         1.1. DEFINED TERMS. As used in this Agreement, the following terms
shall have the meanings specified below:

         "AFFILIATE" shall mean, with respect to any Person, any other person
which directly or indirectly controls, is controlled by, or is under common
control with such person, including any limited partner, the general partner of
which is any such other person.

         "BOARD" shall mean the Board of Directors of the Company.

         "COMMON STOCK" shall mean the Company's Common Stock, par value $0.0001
per share.

         "COMMON STOCK EQUIVALENTS" shall mean, with respect to any Stockholder,
the number of shares of Common Stock owned by such Stockholder and the number of
shares of Common Stock into or for which any shares of Preferred Stock or
Convertible Securities owned by such Stockholder shall be convertible,
exchangeable or exercisable (other than in

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respect of accrued and unpaid dividends) as of the date of determination
thereof.

         "CONVERSION STOCK" shall mean Common Stock into or for which shares of
Preferred Stock or Convertible Securities shall have been converted, exchanged
or exercised.

         "CONVERTIBLE NOTE" shall mean the Unsecured Convertible Term Note dated
October 15, 1999 made by the Company payable to the order of Wave for the
principal amount of $3,000,000.

         "CONVERTIBLE SECURITIES" shall mean any options, warrants, convertible
notes or other securities or rights (other than Shares) convertible,
exchangeable or exercisable, with or without the payment of additional
consideration, into or for shares of Common Stock, directly or indirectly.

         "ENCUMBRANCES" shall mean any and all liens, claims, charges, security
interests, options or other legal or equitable encumbrances.

         "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934 or any
similar federal statute, and the rules and regulations of the SEC thereunder,
all as the same shall be in effect at the time.

         "FOUNDERS" shall mean Sarnoff and Wave.

         "INDEPENDENT THIRD PARTY" shall mean any Person excluding each of the
following: (i) the Stockholders, (ii) the Company and (iii) any officer,
director, Affiliate or Associate (within the meaning of Rule 12b-2 under the
Exchange Act) of the Company or any Stockholder.

         "JOINT VENTURE AGREEMENT" shall mean the Joint Venture Agreement dated
as of October 15, 1999, among the Company, Sarnoff and Wave, as the same may be
amended, restated, supplemented or otherwise modified from time to time.

         "PERSON" shall mean an individual, a corporation, a partnership, a
limited liability company, an association, a trust or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.

         "PREFERRED STOCK" shall mean the Company's Series A Preferred Stock,
par value $0.0001 per share, having such rights, preferences and privileges as
may be in effect from time to time.

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         "PUBLIC SALE" shall mean any sale of Common Stock to the public
pursuant to a public offering registered under the Securities Act or to the
public through a broker or market-maker pursuant to the provisions of Rule 144
(or any successor rule) adopted under the Securities Act of 1933.

         "QUALIFIED INITIAL PUBLIC OFFERING" shall mean the Company's
underwritten public offering pursuant to an effective registration statement
under the Securities Act covering the offer and sale of shares of Common Stock
in which not less than $15,000,000 of gross proceeds from such public offering
are received by the Company for the account of the Company.

         "SARNOFF" shall mean Sarnoff Corporation, a New Jersey corporation.

         "SEC" shall mean the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.

         "SECURITIES ACT" shall mean the Securities Act of 1933, or any similar
federal statute, and the rules and regulations of the SEC thereunder, all as the
same shall be in effect at the time.

         "SHARES" shall mean any shares of capital stock of the Company,
including Common Stock and Preferred Stock, now or hereafter issued.

         "WAVE" shall mean Wave Systems Corp., a Delaware corporation.

         "WAVE WARRANT" means the Warrant to Purchase Common Stock of the
Company dated as of October 15, 1999 issued by the Company to Wave.

                                   ARTICLE 2.

                               BOARD OF DIRECTORS

         2.1. NOMINATION AND ELECTION OF DIRECTORS.

         (a) SELECTION OF NOMINEES. In any and all elections of directors of the
Company (whether at a meeting or by written consent in lieu of a meeting), each
Stockholder, to the extent that such Stockholder has voting rights, shall vote,
or cause to be voted, or cause such Stokcholder's designees as directors to
vote, all Shares owned by such Stockholder or over which such Stockholder has
voting control, so as to fix the number of directors of the

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Company at five, and to nominate and elect such five directors of the Company as
follows:

         (i) Three (3) individuals designated by Wave SO LONG AS Wave and its
     Affiliates own at least 1,800,000 Common Stock Equivalents; and

         (ii) Two (2) individuals designated by Sarnoff SO LONG AS Sarnoff and
     its Affiliates own at least 1,200,000 Common Stock Equivalents.

Each Stockholder agrees to vote, or to cause to be voted, all voting Securities
owned by such Stockholder, or over which such Stockholder has voting control, in
order to comply with this Section 2.1(a). The number of Common Stock Equivalents
referred to in this Section 2.1(a) shall be adjusted proportionately in order to
give effect to any stock dividends, splits, reverse splits, combinations or
recapitalizations after the date of this Agreement.

         (b) If any vacancy shall occur in the Board of Directors of the Company
as a result of death, disability, resignation or any other termination of a
director, the replacement for such vacating director shall be designated by the
Person or Persons who originally designated such vacating director. Each Person
entitled to designate a director or a replacement for a director pursuant to
this Section 5 shall also be entitled to designate the removal of such director,
with or without cause.

         (c) No Stockholder shall vote any Shares in favor of the removal of a
director nominated by one of the other Stockholders hereunder unless the right
of any such Stockholder so to nominate such director shall no longer exist due
to the reduction in the ownership of Common Stock Equivalents by such
Stockholder pursuant to Section 2.1(a); PROVIDED, HOWEVER, that upon the request
of the Stockholder to remove a director previously nominated by such
Stockholder, the Stockholders shall vote all of their Shares in favor of (i) the
removal of such director and (ii) the election of any replacement director as
may be designated by such Stockholder.

         2.2. CONSENT TO CERTAIN ACTIONS. The Company hereby agrees that it will
not take, and will not permit any of its subsidiaries to take, any of the
actions set forth in EXHIBIT C attached hereto and incorporated herein by
reference, and each of the Stockholders hereby agrees that it shall not vote any
voting Shares owned by it or over which it has voting control for or approve, or
cause any of the directors designated by it to vote for or approve, any of the
actions set forth on Exhibit C, unless such action has been approved by the
affirmative vote of (i) at least one (1) of the directors of the Company

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designated by Wave pursuant to Section 2.1(a)(i) and (ii) at least one (1) of
the directors of the Company designated by Sarnoff pursuant to Section 2.1(a)
(ii).

         2.3 PROXY. EACH STOCKHOLDER HEREBY GRANTS TO THE COMPANY AN IRREVOCABLE
PROXY, COUPLED WITH AN INTEREST, TO VOTE ALL OF THE VOTING SECURITIES OWNED BY
SUCH STOCKHOLDER OR OVER WHICH SUCH STOCKHOLDER HAS VOTING CONTROL TO THE EXTENT
NECESSARY TO CARRY OUT THE PROVISIONS OF THIS ARTICLE 2 IN THE EVENT OF ANY
BREACH BY SUCH STOCKHOLDER OF HIS, HER OR ITS OBLIGATIONS UNDER THE VOTING
AGREEMENT CONTAINED HEREIN.

         2.4 ACTION BY SECURITYHOLDERS. Each Stockholder further agrees that
such Stockholder will not vote any voting Shares owned by such Stockholder or
over which such Stockholder has voting control, or take any action by written
consent, or take any other action as a stockholder of the Company, to circumvent
the voting arrangements required by this Article 2. Without limiting the
generality of the foregoing, each Stockholder agrees not to (a) vote any voting
Shares owned by such Stockholder or over which such Stockholder has voting
control, or take any other action as a stockholder of the Company, to approve
any corporate action or transaction by the Company not previously approved by
the Board elected in accordance with this Article 2 and the By-Laws of the
Company, or (b) commence or maintain any shareholder's derivative suit
challenging any action or transaction approved by the Company's Board.

         2.5. BOARD OF DIRECTORS MEETING EXPENSES. The Company shall reimburse
each director for all reasonable out-of-pocket expenses incurred by such
director in connection with the attendance at meetings of the Board.

         2.6. CONSENT TO CERTAIN ACTIONS PRIOR TO APPOINTMENT OF CEO. Anything
to the contrary notwithstanding, until such time as a Chief Executive Officer of
the Company satisfactory to Sarnoff and Wave has commenced employment with the
Company, the Company hereby agrees that it will not take any of the actions set
forth in EXHIBIT D attached hereto and incorporated herein by reference, and
each of the stockholders hereby agrees that it shall not vote any voting Shares
owned by it or over which it has voting control for or approve, or cause any of
the directors designated by it to vote for or approve, any of the actions set
forth on EXHIBIT D, unless such action has been approved by the affirmative vote
of a majority of the committee consisting of Steven Sprague, Bruce Campelia and
Craig Thuerson

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(or any substitute members approved by Sarnoff and Wave), which majority vote
shall include the approval of Steven Sprague.

                                   ARTICLE 3.

                               TRANSFER OF SHARES

         3.1. RESTRICTIONS ON TRANSFER. So long as this Agreement is in effect,
no Stockholder shall sell, assign, transfer, give, encumber, pledge, hypothecate
or in any other way dispose of any Shares or any Convertible Securities (any of
which being a "TRANSFER"), except as provided in this Agreement. No Transfer in
violation of this Agreement shall be made or recorded on the books of the
Company and any such Transfer shall be void and of no force or effect. Subject
to the terms of this Agreement, the Stockholders shall be entitled to exercise
all rights of ownership of their Shares and Convertible Securities.

         3.2. CERTAIN PERMITTED TRANSFERS. The Company and the Stockholders
acknowledge and agree that any of the following Transfers shall be deemed to be
in compliance with this Agreement, and shall not be governed by Section 3.3 or
3.4:

         (a) a Transfer made to the Company pursuant to Article 3 hereof or the
redemption provisions applicable to the Preferred Stock as in effect from time
to time;

         (b) a Transfer upon the death of a Stockholder to his executors,
administrators and testamentary trustees;

         (c) a Transfer made by Sarnoff or Wave to any of their respective
Affiliates or to any of their respective officers, directors, employees or
consultants, or to any officer, director, employee or consultant of any of their
respective Affiliates; and

         (d) a Transfer made for nominal consideration or as a gift in
compliance with applicable federal and state securities laws to the
Stockholder's spouse, parents or issue or to a trust, the beneficiaries of
which, or to a corporation or partnership the stockholders or partners of which,
include only the Stockholder and such Stockholder's spouse or issue.

         3.3. RIGHTS OF FIRST REFUSAL AND FIRST OFFER.

         (a) Each Stockholder agrees that, subject to the restrictions on
Transfers contained in Sections 3.4 and 3.5 hereof and subject to the

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provisions of Section 3.3(g), if any Stockholder (for purposes of this Section
3.3, a "TRANSFERRING STOCKHOLDER") wishes to Transfer any or all of the Shares
or Convertible Securities then owned by such Transferring Stockholder, other
than as provided in Section 3.2, 3.5 or 3.6 hereof, then such Transferring
Stockholder shall first give a written notice (the "TRANSFER NOTICE") to the
Company (and to the other Founder if the Transferring Stockholder is a Founder)
specifying the number of Shares or Convertible Securities such Transferring
Stockholder wishes to Transfer (the "TRANSFER SECURITIES"), containing an
irrevocable offer (open to acceptance for a period of 30 days after the date
such Transfer Notice is received) to sell the Transfer Securities to the Company
(and the other Founder, if applicable) at the price (and upon such other terms)
stated in the Transfer Notice, which price and terms shall be the same as the
price and terms offered to such Stockholder by a bona fide third party offeror
whose identity has been disclosed by the Transferring Stockholder (the "TRANSFER
PRICE").

         (b) The Company shall have the right to purchase all, but not less than
all, of the Transfer Securities at the Transfer Price and on terms identical to
those set forth in the Transfer Notice. The Company shall have 20 days following
receipt of the Transfer Notice (the "COMPANY PERIOD") to deliver written notice
to the Transferring Stockholder that it wishes to purchase the Transfer
Securities ("COMPANY ACCEPTANCE NOTICE"). If the Company shall not give a
Company Acceptance Notice within the Company Period, the Company shall be deemed
not to have elected to purchase the Transfer Securities.

         (c) If the Company has not elected (or has been deemed not to have
elected) to purchase the Transferring Securities within the Company Period and
the Transferring Stockholder is a Founder, the other Founder shall have the
right to purchase all, but not less than all, of the Transfer Securities. Such
other Founder shall have 20 days following the end of the Company Period to
deliver a written notice to the Transferring Stockholder that it wishes to
purchase the Transfer Securities ("FOUNDER ACCEPTANCE NOTICE"). If such Founder
shall not give a Founder Acceptance Notice within 20 days following the end of
the Company Period, such Founder shall be deemed not to have elected to purchase
the Transfer Securities.

         (d) The closing of the purchase and sale of the Transfer Securities
pursuant to clauses (b) or (c) of this Section 3.3 shall take place at the
principal offices of the Company on the 15th business day after the Company
Acceptance Notice or Founder Acceptance Notice, as applicable, is given. At such
closing, the Company or the Founder, as applicable, shall deliver a certified
check in the appropriate amount to the Transferring

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Stockholder against delivery of duly endorsed certificates representing the
Transfer Securities to be purchased. The Transfer Securities shall be delivered
free and clear of all Encumbrances other than those imposed by this Agreement.

         (e) If the Company and, if applicable, the Founders, have not elected
(or have been deemed not to have elected) to purchase the Transfer Securities
pursuant to this Section 3.3, then the Transferring Stockholder shall have 90
days in which to Transfer all of the Transfer Securities, at a price not lower
than the Transfer Price and on terms no more favorable to the transferee than
those contained in the Transfer Notice, to any third party; PROVIDED, HOWEVER,
that no Transfer may be made to any third party unless and until such third
party delivers to the Company an executed consent in the form of EXHIBIT B
hereto. Promptly after any Transfer pursuant to this Section 3.3, the
Transferring Stockholder shall notify the Company of the consummation thereof
and shall furnish such evidence of the completion and time of completion of such
Transfer and of the terms thereof as the Company may request. If, at the end of
such 90 day period, the Transferring Stockholder has not completed the Transfer
of the Transfer Securities, the Transferring Stockholder shall no longer be
permitted to Transfer such Securities pursuant to this Section 3.3(e) without
again complying with this Section 3.3 in its entirety. If the Transferring
Stockholder determines at any time within such 90 day period that the Transfer
of such Transfer Securities at a price not lower than the Transfer Price and on
terms no more favorable to the transferee than those contained in the Transfer
Notice is impractical, such Stockholder may terminate all attempts to Transfer
such Transfer Securities and recommence the procedures of this Section 3.3 in
their entirety without waiting for the expiration of such 90 day period by
delivering written notice of such decision to the Company.

         (f) Transfers of Shares or Convertible Securities for property other
than cash are not permitted pursuant to this Section 3.3.

         3.4. RESTRICTIONS IN CONNECTION WITH REGISTRATIONS. Each Stockholder
agrees not to effect any sale or other transfer of Shares or Convertible
Securities, during the seven days prior to the effective date of a registration
statement effected pursuant to the terms of the Joint Venture Agreement and
during such period of time beginning on such effective date as may be required
by the underwriters of such offering and agreed to by the Company, but in no
event exceeding 180 days (in each case except as part of such registration).
Each Stockholder hereby acknowledges that such Stockholder shall have no right
to include its Shares or Convertible Securities in any registration of Shares or
Convertible Securities, except as expressly provided in Article 6 hereof.

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         3.5. BRING ALONG.

         (a) BRING ALONG RIGHT. If, after complying with the right of first
refusal procedures contained in Section 3.3, any Stockholder wishes to Transfer
any Shares or Convertible Securities (other than any Transfer (i) pursuant to
Section 3.2 or (ii) through a sale in a registered offering or through the right
to sell securities provided by this Section 3.5), then such Stockholder must, as
a condition to such Transfer, permit each Founder (or the other Founder if such
selling Stockholder is a Founder) (for the purposes of this Section 3.5(a),
individually a "REMAINING STOCKHOLDER" and collectively the "REMAINING
STOCKHOLDERS") (or cause each such Remaining Stockholder to be permitted) to
sell (either to the prospective purchaser of the selling Stockholder's Shares or
to another financially reputable purchaser reasonably acceptable to such
Remaining Stockholder) the same proportion of the Shares then owned by such
Remaining Stockholder as the proportion that the number of Shares the selling
Stockholder proposes to sell held by him on the date of the Transfer Notice
bears to the total number of Shares held by him on such date, on substantially
equivalent terms and at a substantially equivalent price to that offered by the
third party offeror taking into account any difference in the type of securities
(i.e., Preferred Stock, Common Stock or Convertible Securities) held by the
selling Stockholder and the Remaining Stockholders who desire to sell Shares.
All numbers of Shares under this Section 3.5 and Section 3.6 shall be determined
on the basis of full conversion, exchange or exercise of all Convertible
Securities.

         (b) NOTICE. Each Stockholder's obligation under Section 3.5(a) to
afford each of the Remaining Stockholders (or to cause each of them to be
afforded) the rights referred to herein will be discharged if the Remaining
Stockholders are given written notice hereof simultaneously with the giving of
the Transfer Notice required by Section 3.3 and if such notice provides that
each of the Remaining Stockholders may elect to avail himself of such rights by
a written reply given on or before the expiration of the time period referred to
in Section 3.3, addressed to such Person as may be designated in the Transfer
Notice.

                                   ARTICLE 4.

                          LIMITED FIRST REFUSAL RIGHTS

         4.1 ANTI-DILUTION PROVISION. Except for the issuance of Shares and
Convertible Securities (i) pursuant to any Public Sale, (ii) upon the conversion
of Convertible Securities, (including, without limitation, the

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Convertible Note and the Wave Warrant), (iii) to employees, directors or
consultants of the Company in consideration for their service or continued
service to the Company, (iv) as consideration for acquisitions by the Company of
the assets or business of another Person or entity, (v) for the establishment of
corporate relationships for purposes other than raising capital (including,
without limitation, joint ventures and corporate partnerships), and (vi) as a
dividend on the outstanding Shares, if the Company authorizes the issuance of
any Shares or Convertible Securities (collectively, "FIRST REFUSAL SECURITIES"),
the Company will first offer to sell to each Founder a portion of such First
Refusal Securities equal to the percentage determined by dividing (A) the number
of Common Stock Equivalents held by such Founder and such Founder's Affiliates
and the employees, officers, directors and consultants of such Founder and such
Founder's Affiliates, BY (B) the number of Common Stock Equivalents then
outstanding. Each Founder will be entitled to purchase all or part of such First
Refusal Securities at the same price and on the same terms as such stock or
securities are to be offered to any other Persons.

         4.2 FOUNDERS' EXERCISE OF RIGHT. Each Founder must exercise its
purchase rights under this Article 4 within 15 days after receipt of a written
notice from the Company describing in reasonable detail the First Refusal
Securities being offered, the purchase price thereof, the payment terms and such
Founders' percentage allotment. If all of the First Refusal Securities offered
to the Founders are not fully subscribed by the Founders, the First Refusal
Securities which are not so subscribed for will be reoffered to the Founders
purchasing their full allotment upon the terms set forth in this paragraph,
except that such Founders must exercise their purchase rights within five (5)
days after receipt of such reoffer.

         4.3 COMPANY'S EXERCISE OF RIGHT. Upon the expiration of the offering
periods described above, the Company will be free to sell such First Refusal
Securities which the Founders have not elected to purchase during the 60 days
following such expiration on terms and conditions no more favorable to the
purchasers thereof than those offered to the Founders. Any First Refusal
Securities offered or sold by the Company after such 60-day period must be
reoffered to the Founders pursuant to the terms of this Article 4.

         4.4 ASSIGNMENT. The rights of any Founder under Section 4.2 may be
assigned by such Founder to any Affiliate of such Founder or to any employee,
officer, director or consultant to such Founder or to such Founder's Affiliates.

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                                   ARTICLE 5.

                                   TERMINATION

         5.1. This Agreement will terminate upon the earlier to occur of (i) the
completion of any voluntary or involuntary liquidation or dissolution of the
Company, and (ii) the completion of a Qualified Public Offering and the
expiration of all lock-up periods in such Qualified Public Offering.

                                   ARTICLE 6.

                                  MISCELLANEOUS

         6.1. CERTIFICATE LEGEND. Upon execution of this Agreement, the
certificates representing Shares and Convertible Securities held by the
Stockholders shall contain substantially the following legend, in addition to
any other legends deemed appropriate or necessary by the Company:

         This certificate is transferable only upon compliance with and subject
         to the provisions of a Stockholder Agreement among the Company, its
         stockholders and their respective spouses, a copy of which Agreement is
         on file in the office of the Secretary of the Company at its principal
         place of business. The Company will furnish a copy of such Agreement to
         the record holder of this Certificate, without charge, upon written
         request to the Company at its principal place of business or registered
         office.

         6.2. NEGOTIABLE FORM. Whenever any Shares are to be delivered or sold
pursuant to this Agreement, the Person selling such Shares shall deliver such
certificates or other instruments duly endorsed or accompanied by appropriate
stock powers or assignments separate from the instrument.

         6.3. ENFORCEMENT. No Shares or Convertible Securities shall be
transferred on the books of the Company and no sale, assignment, transfer,
pledge or other disposition thereof shall be effective unless and until the
terms and provisions of this Agreement are complied with, and in cases of
violation of this Agreement by the attempted transfer of the Shares or
Convertible Securities without compliance with the terms and provisions thereof,
such sale, assignment, transfer, pledge or other disposition shall be invalid
and of no effect, and the Company and/or any of the Stockholders who are not
attempting to transfer the Shares or Convertible Securities shall have the right
to compel the Stockholder who is attempting to transfer the Shares

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or Convertible Securities, and/or the purported transferee, to transfer and
deliver the same in accordance with the applicable provisions of this Agreement.

         6.4. SPECIFIC PERFORMANCE. The parties hereto recognize that the
Company's Shares and Convertible Securities cannot be readily purchased or sold
on the open market and that it is to the benefit of the Company and the
Stockholders that this Agreement be carried out; and for those and other
reasons, the parties hereto would be irreparably damaged if this Agreement is
not specifically enforced in the event of a breach hereof. If any controversy
concerning the rights or obligations to purchase or sell any Shares and
Convertible Securities arises, or if this Agreement is breached, the parties
hereto hereby agree that remedies at law might be inadequate and that,
therefore, such rights and obligations, and this Agreement, shall be enforceable
by specific performance. The remedy of specific performance shall not be an
exclusive remedy, but shall be cumulative of all other rights and remedies of
the parties hereto at law, in equity or under this Agreement.

         6.5. TRANSFEREES AND FUTURE STOCKHOLDERS. The Company and the
Stockholders shall cause any transferee of any Shares or Convertible Securities
that is not already a party to this Agreement and any future Stockholder of the
Company to execute a consent in the form attached as EXHIBIT B hereto, prior to
or simultaneously with such transfer, to be bound by the terms and conditions of
the Agreement. Upon execution thereof, provided such transfer shall not have
been made in contravention of this Agreement, such Stockholder shall be entitled
to the rights of an owner of the Shares or Convertible Securities held by such
Stockholder hereunder, provided that the foregoing shall not apply to Shares or
Convertible Securities that have been sold pursuant to an effective registration
statement under the Securities Act or Rule 144 thereunder.

         6.6. NOTICES. Any notices or other communications required or permitted
hereunder shall be sufficiently given if in writing and delivered in person,
transmitted by telecopier or sent by registered or certified mail (return
receipt requested) or recognized overnight delivery service, postage pre-paid,
addressed as follows, or to such other address as any such party may notify to
the other parties in writing:

         (a) if to the Company:

         WaveXpress, Inc.
         201 Washington Road, 3-075
         Princeton, NJ  08543
         Attn: President
         Facsimile No.: (609) 720-4817

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         (b) if to a Stockholder,
             at the address set forth on
             Exhibit A hereto,

A notice or communication will be effective (i) if delivered in person or by
overnight courier, on the business day it is delivered, (ii) if transmitted by
telecopier, on the business day of actual confirmed receipt by the addressee
thereof, and (iii) if sent by registered or certified mail, five business days
after dispatch.

         6.7. BINDING EFFECT; ASSIGNMENT. This Agreement, including, the rights
and conditions contained herein in connection with disposition of Shares and
Convertible Securities, shall be binding upon the parties hereto, together with
their respective executors, administrators, successors, personal
representatives, heirs and assigns permitted under this Agreement.

         6.8. GOVERNING LAW. THE AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE.

         6.9. SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during
the term hereof, such provisions shall be fully severable and this Agreement
shall be construed and enforced as if such illegal, invalid or unenforceable
provision never comprised a part hereof; and the remaining provisions hereof
shall remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance here from. Furthermore,
in lieu of such illegal, invalid or unenforceable provision, there shall be
added automatically as part of this Agreement, a provision as similar in its
terms to such illegal, invalid or unenforceable provision as may be possible and
be legal, valid and enforceable.

         6.10. ENTIRE AGREEMENT. This Agreement embodies the entire agreement
and understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to the
subject matter hereof.

         6.11. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one instrument.

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         6.12. AMENDMENTS. No modification, amendment of waiver of any provision
of this Agreement will be effective against the Company or the Stockholders
unless such modification, amendment or waiver is approved in writing by the
holders of at least 80% of the total number of then outstanding Shares held by
the Stockholders; PROVIDED, HOWEVER, that (i) no amendment, modification or
waiver of any provision of this Agreement that could materially adversely affect
the rights of the Founders hereunder in a manner different from the rights of
the other Stockholders shall be effective against such Founders without their
written consent, and (ii) no amendment, modification or waiver of any provision
of this Agreement that could materially adversely affect the rights of the other
Stockholders hereunder in a manner different from the rights of the Founders
shall be effective against such other Stockholders unless approved in writing by
the holders of a majority of the Shares held by such other Stockholders
constituting Common Stock. The failure of any party to enforce any of the
provisions of this Agreement will in no way be construed as a waiver of such
provisions and will not affect the right of such party thereafter to enforce
each and every provision of this Agreement in accordance with its terms.

         6.13. CAPTIONS. The captions of this Agreement are for convenience of
reference only and shall not limit or otherwise affect any of the terms or
provisions hereof.

         6.14. PRONOUNS. Any masculine personal pronoun shall be considered to
mean the corresponding feminine or neuter personal pronoun, and vice versa, as
the context requires.

         6.15. SPOUSES. By executing this Agreement, the spouse of each
Stockholder that is an individual agrees to be bound in all respects by the
terms of this Agreement to the same extent as the Stockholders. Each spouse
further agrees that should she or he predecease the Stockholder to whom she or
he is married or should she or he become divorced from such Stockholder, any of
the Shares which such spouse may own or in which she or he may have any interest
shall remain subject to all of the restrictions and to all of the rights of the
Stockholders contained in this Agreement.

            [The remainder of this page is intentionally left blank.]

<PAGE>
                                      -15-

         IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.

                                 WAVEXPRESS, INC.

                                 By:
                                    -------------------------------------------
                                     Bruce Campelia
                                     President

SARNOFF CORPORATION

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

                                 WAVE SYSTEMS CORP.

                                 By:
                                    -------------------------------------------
                                     Steven Sprague
                                     President

<PAGE>

                                    EXHIBIT A

                                  STOCKHOLDERS

Sarnoff  Corporation
201 Washington Road
CN 5300
Princeton, NJ 08543-5300
Attention: Anne M. VanLent
Facsimile No: (609) 734-2888

Wave Systems Corp.
480 Pleasant Street
Suite A-200
Lee, MA 01238
Attention: Gerard Feeney, Chief Financial Officer
Facsimile No.: (413) 243-0045

<PAGE>

                                    EXHIBIT B

                                 FORM OF CONSENT

         The undersigned, having purchased Shares of WaveXpress, Inc., hereby
agrees to be bound by the terms and conditions of the Stockholder Agreement of
the Company as a "Stockholder" thereunder, the form of which is attached hereto,
as if the undersigned had been a party to such agreement as of the date thereof.

         Name:
              -----------------------------------------------------------------
         Signature:
                   ------------------------------------------------------------
         Address:
                 --------------------------------------------------------------

         Telecopy No.:
                      ---------------------------------------------------------
         No. of Shares:
                       --------------------------------------------------------

         I, the undersigned, being the spouse of the above-named Stockholder,
hereby acknowledge that I have read and understand the Stockholder Agreement,
and I agree to be bound by the terms thereof, including, but not limited to,
Section 6.15 thereof.

         Name:
              -----------------------------------------------------------------

         Signature:
                   ------------------------------------------------------------

<PAGE>

                                    EXHIBIT C

                           CONSENT TO CERTAIN ACTIONS

(a) the election of the Chief Executive Officer of the Company;

(b) the declaration or payment of any dividends or other distributions in
    respect of any capital stock (including, without limitation, the Common
    Stock and the Preferred Stock) of the Company and its subsidiaries;

(c) any action to effect the voluntary, or which would precipitate an
    involuntary, dissolution or winding-up of the Company or any of its
    subsidiaries;

(d) the creation, modification, amendment or repeal of the Certification of
    Incorporation or By-laws of the Company or any of its subsidiaries, or the
    creation or issuance of any equity security, including any security
    convertible into or exercisable for any equity security having a preference
    over, or being on a parity with the Preferred Stock with respect to voting,
    dividends, redemption or liquidation rights;

(e) the entering into or consummating of any merger or consolidation, or any
    sale, lease, sublease or other transfer or disposition of all or
    substantially all of the assets of the Company or any of its subsidiaries;
    or

(f) any redemption, purchase or other acquisition of any shares of capital stock
    (including, without limitation, the Common Stock and the Preferred Stock) of
    the Company or any of its subsidiaries.

(g) except pursuant to the agreements contemplated by the Joint Venture
    Agreement, enter into any transaction with an Affiliate of the Company or
    any entity in which any officer, director or employee of the Company (or a
    spouse or any immediate family member of the same) has an ownership or other
    financial interest, whether directly or indirectly (other than as a holder
    of less than 3% of the common stock of any publicly traded company).

<PAGE>

                                    EXHIBIT D

                  CONSENT TO CERTAIN ACTIONS PRIOR TO FIRST CEO

(a) the establishment and modification of the annual budget and forecasts with
    respect to income, balance sheets, cash flow, and capital expenditures of
    the Company;

(b) (i) the entering into by the Company of any agreement which requires total
    payments of more than $5,000, (ii) the making of any expenditure in excess
    of $5,000 (iii) the sale or license or any commitment for the sale or
    license by the Company of any assets or property which individually have a
    value of more than $5,000;

(c) (i) the incurrence by the Company or any of its Subsidiaries of any
    indebtedness for borrowed money (including, without limitation, the
    establishment of a line of credit at any bank or other financial
    institution), other than any indebtedness for borrowed money incurred
    pursuant to the Convertible Note (as defined in the Joint Venture
    Agreement), or (ii) the granting by the Company of any liens on any of its
    properties or assets except (A) liens to secure taxes, assessments and other
    governmental charges in respect of obligations not overdue, (B) landlord's
    or lessor's liens under leases under which the Company is the lessee, and
    (C) liens being contested by the Company in good faith by appropriate
    proceedings;

(d) the giving by the Company of any guaranties or indemnities in connection
    with the debt or other obligations of any Person, except in connection with
    product and service warranties in the ordinary course of business;

(e) the institution or settlement of any lawsuit or other legal proceeding
    involving a claim by the Company of more than $5,000;

(f) the appointment or retention of auditors or legal counsel for the Company;

(g) the entering into by the Company of any oral or written contract outside the
    ordinary course of business which contemplates the payment to or by the
    Company of more than $5,000 in the aggregate; and

(h) the entering into by the Company of any agreement obliging, committing or
    binding the Company to do any thing or take any action referred to in
    clauses (a)-(g) above.QuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 4.1    
    

      

      

      

       

U.S.$150,000,000 

       

LOAN AGREEMENT 

      

Dated
as of 14 May 2003 

      

OPEN JOINT STOCK COMPANY WIMM-BILL-DANN FOODS 

       

as Borrower 

       

and 

      

UBS (LUXEMBOURG) S.A. 

      

as Lender 

       

       

       

       

      

      

CLEARY, GOTTLIEB, STEEN & HAMILTON

City Place House,

55 Basinghall Street,

London EC2V 5EH 

  

 
 

TABLE OF CONTENTS    
    

	 
	 	 
	 	 
	 	Page

	1.	 	Definitions and Interpretation	 	1
	 	 	1.1	 	Definitions	 	1
	 	 	1.2	 	Interpretation	 	7
	 	 	1.3	 	Statutes	 	8
	 	 	1.4	 	Headings	 	8
	 	 	1.5	 	Amended Documents	 	8
	

2.	
 	

The Loan	
 	

8
	

3.	
 	

Availability of the Loan	
 	

8
	

4.	
 	

Interest Periods	
 	

8
	

5.	
 	

Payment and Calculation of Interest	
 	

8
	 	 	5.1	 	Payment of Interest	 	8
	 	 	5.2	 	Calculation of Interest	 	8
	

6.	
 	

Repayment	
 	

9
	

7.	
 	

Prepayment	
 	

9
	 	 	7.1	 	Prepayment for Tax Reasons	 	9
	 	 	7.2	 	Prepayment for Reasons of Increased Costs	 	9
	 	 	7.3	 	Prepayment in the event of a Change of Control	 	9
	 	 	7.4	 	Notice of Prepayment	 	10
	 	 	7.5	 	Costs of Prepayment	 	10
	 	 	7.6	 	No Other Repayments	 	10
	 	 	7.7	 	Purchase of Instruments Issued to the Agreed Funding Source	 	10
	

8.	
 	

Taxes	
 	

10
	 	 	8.1	 	Additional Amounts	 	10
	 	 	8.2	 	Payments	 	11
	 	 	8.3	 	Tax Indemnity	 	11
	 	 	8.4	 	Tax Claims	 	11
	 	 	8.5	 	Tax Credits and Tax Refunds	 	12
	 	 	8.6	 	Representations of the Lender	 	12
	 	 	8.7	 	Exceptions	 	12
	 	 	8.8	 	Delivery of Forms	 	13
	

9.	
 	

Tax Receipts	
 	

13
	 	 	9.1	 	Notification of Requirement to Deduct Tax	 	13
	 	 	9.2	 	Evidence of Payment of Tax	 	13
	

10.	
 	

Changes in Circumstances	
 	

14
	 	 	10.1	 	Increased Costs	 	14
	 	 	10.2	 	Increased Costs Claims	 	14
	 	 	10.3	 	Illegality	 	14
	 	 	10.4	 	Mitigation	 	14
	

11.	
 	

Representations and Warranties Of The Borrower	
 	

15
	 	 	11.1	 	Due Organisation	 	15
	 	 	11.2	 	Authorisations	 	15
	 	 	11.3	 	No Conflict	 	15
	 	 	11.4	 	Financial Statements	 	16
	 	 	11.5	 	No Other Indebtedness	 	16
	 	 	11.6	 	Payment in U.S. Dollars	 	17
	 	 	11.7	 	Taxes	 	17
	 	 	11.8	 	Litigation and Contracts	 	17
	 	 	11.9	 	Labour	 	17
	 	 	11.10	 	Title, Licenses and Consents	 	17
	 	 	11.11	 	Adequate Insurance	 	18
	 	 	 	 	 	 	 

i

 

	 	 	11.12	 	No Withholding or Similar Tax	 	18
	 	 	11.13	 	Not an Investment Company	 	18
	 	 	11.14	 	Rating	 	18
	 	 	11.15	 	No Liquidation or Similar Proceedings	 	18
	 	 	11.16	 	Certificates	 	18
	 	 	11.17	 	Pari Passu Obligations	 	19
	 	 	11.18	 	No Stamp Taxes	 	19
	 	 	11.19	 	No Events of Default	 	19
	 	 	11.20	 	Health, Safety and Environment	 	19
	 	 	11.21	 	Repetition	 	19
	

12.	
 	

Representations and Warranties of the Lender	
 	

19
	 	 	12.1	 	Status	 	19
	 	 	12.2	 	Authorisation	 	20
	 	 	12.3	 	Consents and Approvals	 	20
	 	 	12.4	 	No Conflicts	 	20
	

13.	
 	

Financial Information	
 	

20
	

14.	
 	

Covenants	
 	

20
	 	 	14.1	 	Liens	 	20
	 	 	14.2	 	Stay, Extension and Usury Laws	 	21
	 	 	14.3	 	Asset Sales	 	21
	 	 	14.4	 	Transactions with Affiliates and Related Persons	 	21
	 	 	14.5	 	Change of Control	 	21
	 	 	14.6	 	Mergers and Similar Transactions	 	22
	 	 	14.7	 	Maintenance of Authorisations	 	23
	 	 	14.8	 	Maintenance of Property	 	24
	 	 	14.9	 	Payment of Taxes	 	24
	 	 	14.10	 	Financial Covenant	 	24
	 	 	14.11	 	Maintenance of ownership of Guarantors	 	24
	 	 	14.12	 	No limitation on dividend or other payments affecting Subsidiaries	 	24
	 	 	14.13	 	Maintenance of Guarantee and Certain Ratios	 	25
	 	 	14.14	 	Insurance	 	26
	

15.	
 	

Events of Default	
 	

26
	 	 	15.1	 	Circumstances which constitute Events of Default	 	26
	 	 	15.2	 	Rights of Lender upon occurrence of an Event of Default	 	28
	 	 	15.3	 	Other Remedies	 	28
	 	 	15.4	 	Notification of Default or Event of Default	 	28
	

16.	
 	

Default Interest and Indemnity	
 	

28
	 	 	16.1	 	Default Interest Periods	 	28
	 	 	16.2	 	Default Interest	 	29
	 	 	16.3	 	Payment of Default Interest	 	29
	 	 	16.4	 	Borrower's Indemnity	 	29
	 	 	16.5	 	Unpaid Sums as Advances	 	29
	

17.	
 	

Amendments to Agreed Funding Source Agreements	
 	

29
	

18.	
 	

Currency of Account and Payment	
 	

29
	 	 	18.1	 	Currency of Account	 	29
	 	 	18.2	 	Currency Indemnity	 	29
	

19.	
 	

Payments	
 	

30
	 	 	19.1	 	Payments to the Lender	 	30
	 	 	19.2	 	Alternative Payment Arrangements	 	30
	 	 	19.3	 	No Set-off	 	30
	

20.	
 	

Costs and Expenses	
 	

30
	 	 	20.1	 	Transaction Expenses and Fees	 	30
	 	 	20.2	 	Preservation and Enforcement of Rights	 	30
	 	 	 	 	 	 	 

ii

 

	 	 	20.3	 	Stamp Taxes	 	30
	 	 	20.4	 	Lender's Costs	 	30
	

21.	
 	

Assignments and Transfers	
 	

31
	 	 	21.1	 	Binding Agreement	 	31
	 	 	21.2	 	No Assignments and Transfers by the Borrower	 	31
	 	 	21.3	 	Assignments by the Lender	 	31
	

22.	
 	

Calculations and Evidence of Debt	
 	

31
	 	 	22.1	 	Basis of Accrual	 	31
	 	 	22.2	 	Evidence of Debt	 	31
	 	 	22.3	 	Change of Circumstance Certificates	 	32
	

23.	
 	

Remedies and Waivers, Partial Invalidity	
 	

32
	 	 	23.1	 	Remedies and Waivers	 	32
	 	 	23.2	 	Partial Invalidity	 	32
	

24.	
 	

Notices; Language	
 	

32
	 	 	24.1	 	Communications in Writing	 	32
	 	 	24.2	 	Delivery	 	32
	 	 	24.3	 	Language	 	32
	

25.	
 	

Law and Jurisdiction	
 	

32
	 	 	25.1	 	English Law	 	32
	 	 	25.2	 	English Courts	 	33
	 	 	25.3	 	Appropriate Forum	 	33
	 	 	25.4	 	Service of Process	 	33
	 	 	25.5	 	Non-exclusivity	 	33
	 	 	25.6	 	Consent to Enforcement, etc.	 	33
	 	 	25.7	 	Arbitration	 	33
	 	 	25.8	 	Contracts (Rights of Third Parties) Act 1999	 	33
	 	 	25.9	 	Counterparts	 	33

iii

   THIS AGREEMENT is dated 14 May 2003 

BETWEEN:  

	(1)
	OPEN JOINT STOCK COMPANY WIMM-BILL-DANN FOODS, an open joint stock company organised under the laws of the
Russian Federation (the "Borrower"); and

	(2)
	UBS (LUXEMBOURG) S.A., a bank established under the laws of Luxembourg and whose registered office is 36-38 Grand rue,
L-1660 Luxembourg, Luxembourg (the "Lender"). 

IT IS AGREED:  

1.     DEFINITIONS AND INTERPRETATION  

1.1   Definitions  

        In this Agreement the following terms have the meanings given to them in this Clause 1.1: 

        "Acceleration Notice" has the meaning set forth in Clause 15.2 (Rights of Lender upon occurrence of an
Event of Default). 

        "Account" means an account of the Lender with The Bank of New York, account number 8397608400. 

        "Additional Amounts" has the meaning set forth in Clause 8.1(b) (Additional
Amounts). 

        "Affiliate" of any specified Person means any other Person, directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such specified Person. For purposes of this definition, "control" (including, with correlative meanings, the terms "controlling," "controlled by" and "under common control with"),
as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of
voting securities, by contract or otherwise; provided that beneficial ownership of 10 per cent. or more of the Capital Stock with voting power of a Person shall be deemed to be control. 

        "Agency" means any agency, authority, central bank, department, committee, government, legislature, minister, ministry, official or public
or statutory person (whether autonomous or not). 

        "Asset Sale" means any lease, sale, sale and lease-back, transfer or other disposition (excluding any transaction by way of
merger falling within Clause 14.6 (Mergers and Similar Transactions)) either in one transaction or in a series of related transactions, by the
Borrower or any of its Subsidiaries to a Person that is not part of the Group, of any assets the value of which exceeds 10 per cent. of the total net assets of the Group in any 12-month
period; provided that "Asset Sale" shall not include sales or other dispositions of inventory, receivables or other current assets in the ordinary course of business. 

        "Board of Directors" means, as to any Person, the board of directors of such Person or any duly authorised committee thereof. 

        "Borrower" means the party named as such above until a successor replaces it in accordance with Clause 14.6
(Mergers and Similar Transactions) and thereafter means such successor. 

        "Business Day" means any day (other than a Saturday or Sunday) on which banks generally are open for business in New York City, Luxembourg
and London. 

        "Capital Adequacy Requirement" means a request or requirement relating to the maintenance of capital, including one which makes any change
to, or is based on any alteration in, the interpretation of the International Convergence of Capital Measurement and Capital Standards (the Basle Capital Accord prepared by the Basle Committee on
Banking Regulations and Supervision, dated July 1988, and
amended in November 1991) or which increases the amounts of capital required thereunder, other than a request or requirement made by way of implementation of the International Convergence of
Capital Measurement and Capital Standards in the manner in which it is being implemented at the date hereof. 

        "Capital Stock" means, with respect to any Person, any and all shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) or such Person's equity, including any preferred stock of such Person, whether now outstanding or issued after the date hereof, including without limitation,
all series and classes of such Capital Stock. 

        "Change of Control" means such time as any Person, other than an Excluded Person or Excluded Group, whether acting alone or together with
other Persons, other than Excluded Persons or Excluded 

1

 

Groups:
(i) is or becomes interested, directly or indirectly, in the aggregate of more than 50 per cent. of the Capital Stock with voting power of the Borrower, whether by virtue of issuance,
sale or other disposition of such Capital Stock with voting power of the Borrower, a merger or a transaction having a similar effect involving the Borrower or such Person or Persons or any voting
trust agreement or other agreement to which the Borrower or any such Person or Persons is or are a party or subject, or (ii) has or acquires the right to appoint or remove a majority of the
Borrower's board of directors, or (iii) has or acquires control of a majority of the voting rights in the Borrower, in each case in circumstances where, solely as a result of any such event as
specified by the Rating Agencies, a Rating Decline would result. 

        "Change of Control Payment Date" means the date specified as such in the notice from the Borrower to the Lender pursuant to
Clause 7.3(b) (Prepayment in the event of a Change of Control). 

        "Change of Law" means any of the enactment or introduction of any new law, the variation, amendment or repeal of an existing or new law,
and any ruling on or interpretation or application by a competent authority of any existing or new law which, in each case, occurs after the date hereof and for this purpose the word "law" means all
or any of the following whether in existence at the date hereof or introduced hereafter and with which it is obligatory or customary for banks or other financial institutions or, as the case may be,
companies in the relevant jurisdiction to comply: 

	(i)
	any
statute, treaty, order, decree, instruction, letter, directive, instrument, regulation, ordinance or similar legislative or executive action by any national or
international or local government or authority or by any ministry or department thereof and other agencies of state power and administration (including, but not limited to, taxation departments and
authorities); and/or

	(ii)
	any
letter, regulation, decree, instruction, request, notice, guideline, directive, statement of policy or practice statement given by, or required of, any central bank
or other monetary authority, or by or of any Taxing Authority or fiscal or other authority or agency (whether or not having the force of law); and 

the
decision or ruling on, the interpretation or application of, or a change in the interpretation or application of, any of the foregoing by any court of law, tribunal, central bank, monetary
authority or agency or any Taxing Authority or fiscal or other competent authority or agency. 

        "Consolidated EBITDA" means operating profit or operating loss before depreciation and amortisation as calculated in accordance with the
consolidated financial statements of the Borrower prepared in accordance with U.S. GAAP. Consolidated EBITDA shall be calculated for the four quarters immediately prior to the last reporting date and,
in the case of an acquisition of any Subsidiary or any transaction by way of merger falling within Clause 14.6 (Mergers and Similar
Transactions), Consolidated EBITDA shall be calculated as if such Subsidiary were acquired or such transaction by way of merger were completed on the first date of such four
quarter period. 

        "Credit Facilities" means one or more credit agreements, loan agreements or similar facilities with banks or other institutional lenders,
providing for revolving credit loans, term loans (including receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such
lenders against such receivables)), bankers' acceptances or letters of credit, in each case, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to
time. 

        "Default" means any event that is, or after any notice or passage of time or both would be, an Event of Default. 

        "Dispute" has the meaning set forth in Clause 25.7 (Arbitration). 

        "Event of Default" has the meaning set forth in Clause 15.1 (Circumstances which constitute Events of
Default). 

        "Excluded Group" means a "group" (as such term is used in Sections 13(d) and 14(d) of the United States Securities Exchange Act of 1934
(the "Exchange Act")) that includes one or more Excluded Persons; provided that the voting power of the Capital Stock of the Borrower "beneficially owned" (as such term is used in
Rule 13(d)-3 promulgated under the Exchange Act) by such Excluded Persons (without attribution to such excluded Persons of the ownership by other member or members of the "group")
represents a majority of the voting power of the Capital Stock "beneficially owned" (as such term is used in Rule 13(d)-3 promulgated under the Exchange Act) by such group. 

2

 

        "Excluded Person" means Gavril A. Yushavaev, Mikhail V. Dubinin, Sergei A. Plastinin, Alexander S. Orlov and David Iakobachvili. 

        "Fair Market Value" means the price that would be paid in an arm's-length transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer under no compulsion to buy, as determined in good faith by the Board of Directors of the Borrower or any Subsidiary of the Borrower, as the case
may be (including a majority of the disinterested directors, if any) whose determination shall be conclusive if evidenced by a resolution of such Board of Directors. 

        "Fee Letter" means the letter from the Lender to the Borrower, dated 14 May 2003, setting out certain fees payable by the Borrower
in connection with the Loan and the agreed funding source. 

        "Guarantee" means a deed of guarantee dated 14 May 2003 between the Guarantors and the Lender as the same may be amended or
supplemented from time to time, including any further guarantees that may be granted in respect of the Borrower's obligations under this Loan Agreement from time to time. 

        "Guarantors" means (i) initially OAO Lianozovo Dairy Plant, OAO Tsaritsino Dairy Plant and ZAO Trade Company
Wimm-Bill-Dann and (ii) after the date hereof the Borrower's Subsidiaries from time to time guaranteeing the obligations of the Borrower under the Loan Agreement and
"Guarantor" means any of the Guarantors. 

        "Group" means the Borrower and its Subsidiaries taken as a whole. 

        "Hedging Obligations" means: (i) the obligations of any Person pursuant to any interest rate protection agreement (including,
without limitation, interest rate swaps, caps, floors, collars, derivative instruments and similar agreements) and/or other types of interest hedging arrangements; and/or (ii) any foreign
exchange contract, currency swap agreement or other similar agreement as to which such Person is a party. 

        "Indebtedness" means, with respect to any Person at any date of determination (without duplication): 

	(1)
	all
indebtedness of such Person for borrowed money;

	(2)
	all
obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;

	(3)
	all
obligations of such Person in respect of letters of credit or other similar instruments (including reimbursement obligations with respect thereto);

	(4)
	all
obligations of such Person to pay the deferred and unpaid purchase price of property, assets or services, which purchase price is due more than six months after the earlier of the
date of placing such property in service or taking delivery and title thereof or the completion of such services;

	(5)
	all
capitalised lease obligations of such Person;

	(6)
	all
Indebtedness of other Persons secured by a Lien granted by such Person on any asset (the value of which, for these purposes, shall be determined by reference to the balance sheet
in respect of the latest financial quarter of the Person providing the Lien) of such Person, whether or not such Indebtedness is assumed by such Person (but disregarding for this purpose Liens granted
by a Subsidiary in favour of the Borrower or another Subsidiary or by the Borrower in favour of a Subsidiary, with respect to the property or assets, or any income or profits therefrom, of the
Borrower or such Subsidiary;

	(7)
	all
Indebtedness of other Persons guaranteed by such Person to the extent such Indebtedness is guaranteed by such Person; and

	(8)
	to
the extent not otherwise included in this definition, net obligations under any currency or interest rate hedging agreements. 

        The
amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above and, with respect to contingent
obligations as described above, the maximum liability upon the occurrence of the contingency giving rise to the obligation; provided: 

	(A)
	that
the amount outstanding at any time of any Indebtedness issued with original discount is the face amount of such Indebtedness less the remaining unamortised portion of the
original issue discount of such Indebtedness at such time as determined in conformity with U.S. GAAP; 

3

 

	(B)
	that
Indebtedness shall not include Trade Payables, prepayments received on account of agreed sales and accrued current liabilities arising in the ordinary course of business, except
those that are overdue;

	(C)
	that
Indebtedness shall not include grants to the Borrower from the Russian Government and/or any Russian local authority which do not need to be repaid but are still recorded as a
liability in the Borrower's consolidated balance sheet;

	(D)
	that
Indebtedness shall not include any amounts guaranteed by the Borrower in respect of the debt of any Subsidiary or any amounts guaranteed by any Subsidiary in respect of the debt
of the Borrower or any other Subsidiary or owed by the Borrower to any one or more of its Subsidiaries or amounts owed by any Subsidiary of the Borrower to any one or more of its other Subsidiaries or
the Borrower;

	(E)
	that
Indebtedness shall not include any liability for federal, state, local or other Taxes; and

	(F)
	that
Indebtedness shall not include obligations of any Persons (x) arising from the honouring by a bank or other financial institution of a cheque, draft or similar instrument
inadvertently drawn against insufficient funds (which, for the avoidance of doubt, shall not include funds drawn against an overdraft facility of such Person) in the ordinary course of business;
provided that such obligations are extinguished within two Business Days of their incurrence, (y) resulting from the endorsement of negotiable instruments for collection in the ordinary course
of business and consistent with past business practices and (z) under stand-by letters of credit or guarantees to the extent collateralised by cash or cash equivalents. 

        "Interest Payment Date" means May 21 and November 21 of each year in which the Loan remains outstanding, being the last day
of the corresponding Interest Period, commencing on 21 November 2003, and the last such date being the Repayment Date. 

        "Interest Period" means, except as otherwise provided herein, any of those periods mentioned in Clause 4
(Interest Periods). 

        "Interest Rate" means, except as otherwise provided herein, the interest rate specified in Clause 5.2
(Calculation of Interest). 

        "Lien" means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including, without limitation, any
conditional sale or other title retention agreement or lease in the nature thereof, any sale with recourse against the seller or any Affiliate of the seller, or any agreement to give any security
interest). 

        "Loan" means the U.S. $150,000,000 term loan granted to the Borrower by the Lender in this Agreement. 

        "Luxembourg" means the Grand Duchy of Luxembourg. 

        "Material Adverse Effect" means any material adverse effect on the business, financial condition or results of operations of the Borrower
and its Subsidiaries taken as a whole. 

        "Officer" means, with respect to a Person, the Chairman of the Board of Directors, the General Director, the Chief Executive Officer, the
President, the Chief Financial Officer, the Controller, the Treasurer or the General Counsel of such Person. 

        "Officers' Certificate" means a certificate signed by two Officers of the Borrower. 

        "Permitted Liens" means: 

	(1)
	Liens
securing the Loan;

	(2)
	Liens
granted by a Subsidiary in favour of the Borrower or another Subsidiary or by the Borrower in favour of a Subsidiary, with respect to the property or assets, or any income or
profits therefrom, of the Borrower or such Subsidiary, as the case may be;

	(3)
	any
Lien existing on the date of this Agreement;

	(4)
	statutory
and common law Liens of landlords and carriers, warehousemen, mechanics, suppliers, material men, repairmen or other similar Liens arising in the ordinary course of
business; 

4

  

	(5)
	any
Lien on any property or assets of any Person existing at the time such Person is acquired, merged or consolidated with or into the Borrower or any of its Subsidiaries and not
created in contemplation of such event; provided that no such Lien shall extend to any other property or assets of such Person or to any other property or assets of the Subsidiaries of such Person or
the Borrower or any of its Subsidiaries;

	(6)
	any
Lien existing on any property or assets prior to the acquisition thereof by the Borrower or any of its Subsidiaries and not created in contemplation of such acquisition; provided
that no such Lien shall extend to any other property or assets or any property or assets of the Borrower or any of its Subsidiaries;

	(7)
	any
Lien on any property or assets securing Indebtedness of the Borrower or any of its Subsidiaries incurred or assumed for the sole purpose of Vendor Financing (including bank
financing arranged by a vendor for the sole purpose of Vendor Financing); provided that (i) no such Lien shall extend to any other property or assets of the Borrower or any of its Subsidiaries
other than the assets affixed thereto and the proceeds thereof, (ii) the aggregate principal amount of all Indebtedness secured by Liens on such property or assets does not exceed the purchase
price of such property or assets and (iii) such Lien attaches to such property or assets within 90 days after the acquisition thereof;

	(8)
	any
Lien securing Hedging Obligations so long as the related Indebtedness is permitted to be incurred under this Agreement and any such Hedging Obligation is not speculative;

	(9)
	any
extension, renewal or replacement of any Lien described in clauses (1) to (8) above, provided that (i) such extension, renewal or replacement shall be no more
restrictive in any material respect than the original Lien, (ii) the amount of Indebtedness secured by such Lien is not increased and (iii) if the property or assets securing the
Indebtedness subject to such Lien are changed in connection with such refinancing, extension or replacement, the Fair Market Value of such property or assets is not increased;

	(10)
	any
Lien on the property or assets of the Borrower or any Subsidiaries of the Borrower securing Indebtedness of the Borrower or such Subsidiaries incurred under one or more Credit
Facilities in an aggregate principal amount outstanding at any one time not to exceed 15 per cent. of the total assets of the Group determined by reference to the latest consolidated balance sheet of
the Group; and

	(11)
	any
Lien arising solely by operation of law which is discharged within 45 days of arising. 

        "Person" means any individual, corporation, partnership, joint venture, trust unincorporated organisation or government or any Agency or
political subdivision thereof. 

        "Proceedings" has the meaning set forth in Clause 25.2 (English Courts). 

        "Qualifying Jurisdiction" means any jurisdiction the transfer or assignment of the Loan (or any rights, benefits and/or obligations
hereunder) to which would not cause the Borrower to provide payments of Additional Amounts or Tax Indemnity Amounts when interest, principal and any other amounts paid under this Loan Agreement is
paid to or from such jurisdiction. 

        "Rating Agencies" means Moody's Investors Service Limited ("Moody's") or any successor to
its rating agency business and Standard & Poor's Ratings Services, a division of McGraw-Hill Companies, Inc. ("S&P") or any
successor to its rating agency business or any other rating agency that provides a corporate credit rating of the Borrower or a credit rating in respect of the Loan or of any instruments issued to the
agreed funding source, if applicable. 

        "Rating Categories" means (1) with respect to S&P, any of the following categories (any of which may include a "+" or
"-"): AAA, AA, A, BBB, BB, B, CCC, CC, C and D (or equivalent successor categories); (2) with respect to Moody's, any of the following categories (any of which may include a "1,"
"2" or "3"): Aaa, Aa, A, Baa, Ba, B, Caa, Ca, C and D (or equivalent successor categories), and (3) the equivalent of any such categories of S&P or Moody's used by another rating agency, if
applicable. 

        "Rating Decline" means that at any time within 90 days (which period shall be extended so long as the corporate credit rating of
the Borrower or the credit rating in respect of the Loan or of any instruments issued to the agreed funding source is under publicly announced consideration for possible downgrade by any Rating
Agency) after the date of public notice of any transaction or series of transactions, or of the intention of the Borrower or of any Person to effect such a transaction or series of transactions, the
corporate rating of the Borrower or the rating of the Loan or of any instruments issued to the agreed funding source is decreased by both or, if such ratings are at the relevant time provided by more
than two 

5

 

Rating
Agencies, by the majority of the relevant Rating Agencies by one or more Rating Categories as a result of such transaction or series of transactions, as specified by both or, if such ratings
are at the relevant time provided by more than two Rating Agencies, by the majority of the relevant Rating Agencies. 

        "Related Person" of any Person means any other Person directly or indirectly owning: 

	(1)
	5
per cent. or more of the outstanding Capital Stock with voting power of such Person (or, in the case of a Person that is not a corporation, 5 per cent. or more of the equity
interest in such Person); or

	(2)
	5
per cent. or more of the combined voting power of the Capital Stock with voting power of such Person. 

        "Repayment Date" means the fifth anniversary of the date on which the Loan is made hereunder referred to in Clause 3
(Availability of the Loan), or if such day is not a Business Day, the next succeeding Business Day. 

        "Russia" shall mean the Russian Federation and any province or political subdivision or Agency thereof or therein, and
"Russian" shall be construed accordingly. 

        "Russian GAAP" means the rules set by Federal Law «On Accounting» (No. 129-FZ of
November 21, 1996, as amended), the Regulation on Accounting and Reporting in the RF, approved by Order No. 34n of July 29, 1998, of the RF Ministry of Finance; the Accounting
Regulation "Financial Statement of an Organisation" (PBU/499), approved by Order No. 43n of July 6, 1999, of the RF Ministry of Finance; and other normative acts of the Russian
Federation regulating accounting procedures and the preparation of financial statements. 

        "Securities Act" means the United States Securities Act of 1933, as amended. 

        "Side Letter" means each of the letters, dated the date hereof, from the Borrower to the Lender and from the Guarantors to the Lender. 

        "Significant Subsidiary" means (i) at the date hereof and on the date of the making of the Loan: OAO Lianozovo Dairy Plant, OAO
Tsaritsino Dairy Plant, ZAO Trade Company Wimm-Bill-Dann, OAO Moscow Baby Food Plant, OAO Ramenskiy Dairy Plant and OAO Timashevsk Dairy Plant and (ii) at any other date
of determination any Subsidiary that: 

	(A)
	for
the most recent fiscal year of the Borrower, accounted for more than 5 per cent. of the consolidated revenues of the Borrower and its Subsidiaries;

	(B)
	as
of the end of such fiscal year, was the owner of more than 5 per cent. of the consolidated assets of the Borrower and its Subsidiaries, all as set forth in the most recently
available consolidated financial statements of the Borrower for such fiscal year; or

	(C)
	to
which are transferred all or substantially all the assets and undertaking of a Subsidiary which immediately prior to such transfer is a Significant Subsidiary. 

        For
the avoidance of doubt, the term "Significant Subsidiary" shall be deemed to include each Guarantor. 

        "Stated Maturity" means: 

	(1)
	with
respect to any Indebtedness, the date specified in such Indebtedness as the fixed date on which the final instalment of principal of such Indebtedness is due and payable; and

	(2)
	with
respect to any scheduled instalment of principal of or interest on any Indebtedness, the date specified in such Indebtedness as the fixed date on which such instalment is due and
payable. 

        "Subsidiary" means, with respect to any Person, (i) a corporation more than 50 per cent. of whose Capital Stock with voting power,
under ordinary circumstances, to elect directors is at the time, directly or indirectly, owned by such Person, by such Person and one or more Subsidiaries of such Person or by one or more Subsidiaries
of such Person, or (ii) a partnership in which such Person or a Subsidiary of such Person is, at the time, a general partner, or (iii) any other Person in which such Person, one or more
Subsidiaries of such Person, or such Person and one or more Subsidiaries of such Person, directly or indirectly, at the date of determination thereof has (x) over a 50 per cent. ownership
interest or (y) the power to elect or direct the election of a majority of the directors, members of the board of directors or other governing body of such Person. For the avoidance of doubt,
the term "Subsidiary" shall be deemed to include each Guarantor. 

6

 

        "Taxes" has the meaning set out in Clause 8.1 (Additional Amounts). 

        "Tax Indemnity Amounts" has the meaning set out in Clause 8.3 (Tax Indemnity). 

        "Taxing Authority" has the meaning set out in Clause 8.1 (Additional Amounts). 

        "Trade Payables" means, with respect to any Person, any accounts payable or any other indebtedness or monetary obligation to trade
creditors created, assumed or guaranteed by such Person or guaranteed by any of its Subsidiaries arising in the ordinary course of business in connection with the acquisition of goods or services. 

        "unpaid sum" has the meaning set forth in Clause 16.1 (Default Interest Periods). 

        "U.S. GAAP" means U.S. generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles
Board and statements and pronouncements of the Financial Accounting Standards Board ("FASB") or, if FASB ceases to exist, any successor thereto;
provided, however, that for purposes of determining compliance with this Agreement, "U.S. GAAP" means such generally accepted accounting principles as in effect on the date hereof. 

        "Vendor Financing" means any indebtedness of any Person owed to a vendor of materials or equipment for use in connection with the business
of the Group in respect of or arising under or in connection with the supply of such materials or equipment by such vendor to such Person. 

 Other Definitions:  

        "agreed funding source" shall mean any Person to whom the Lender owes any Indebtedness (including securities),
which Indebtedness was incurred solely and expressly to fund the Loan (including a designated representative of such Person); 

        the
"equivalent" on any given date in one currency (the "first currency") of an amount
denominated in another currency (the "second currency") is a reference to the amount of the first currency which could be purchased with the amount of
the second currency at the spot rate of exchange quoted on the relevant Reuters page or, where the first currency is (i) roubles and the second currency is (ii) U.S. dollars, or as the
case may be euro (or vice versa), by the Central Bank of Russia, at or about noon (London time, Brussels time or Moscow time (as applicable) on such date for the purchase of the first currency with
the second currency; 

        the
"Lender" shall be construed so as to include it and any of its subsequent successors, assignees and chargees in accordance with their
respective interests; 

        "repay" (or any derivative form thereof) shall, subject to any contrary indication, be construed to include "prepay" (or, as the case may
be, the corresponding derivative form thereof); and 

        "VAT" shall be construed as a reference to value added tax including any similar tax which may be imposed in place thereof from time to
time. 

1.2   Interpretation  

        Unless the context otherwise requires, 

	(a)
	a
term has the meaning assigned to it;

	(b)
	an
accounting term not otherwise defined has the meaning assigned to it in accordance with U.S. GAAP consistently applied;

	(c)
	"or"
is not exclusive;

	(d)
	words
in the singular include the plural, and words in the plural include the singular;

	(e)
	provisions
apply to successive events and transactions;

	(f)
	references
to sections of or rules under the Securities Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the Commission from time to
time;

	(g)
	references
to "U.S.$" or "U.S. dollars" are to United States dollars and references to "Roubles" are to Russian roubles; and

	(h)
	references
to the "Guarantee" are to the Guarantee which may exist from time to time in accordance with the provisions hereof; in the event that no such Guarantee exists at any time,
the relevant provisions and references in this Agreement shall be deemed to be amended accordingly. 

7

   1.3   Statutes  

        Any reference in this Agreement to a statute shall be construed as a reference to such statute as the same may have been, or may from time to time be, amended or
re-enacted. 

1.4   Headings  

        Clause and Schedule headings are for ease of reference only. 

1.5   Amended Documents  

        Except where the contrary is indicated, any reference in this Agreement to this Agreement, the Guarantee, the Fee Letter or any other agreement or document shall
be construed as a reference to this Agreement, the Guarantee, the Fee Letter or, as the case may be, such other agreement or document as the same may have been, or may from time to time be, amended,
varied, novated or supplemented. 

2.     THE LOAN  

        The Lender grants to the Borrower, upon the terms and subject to the conditions hereof, a single disbursement term loan facility in the amount of U.S.
$150,000,000. 

3.     AVAILABILITY OF THE LOAN  

        The Loan will be available by way of a single advance which will be made by the Lender to the Borrower, and the Borrower will draw down the Loan, on 21
May 2003, or such later date as may otherwise be agreed by the parties to this Agreement, if: 

	(1)
	the
Lender has not, prior to 21 May 2003, or such later date as may otherwise be agreed by the parties to this Agreement, notified the Borrower that it has not received the
condition precedent documents as listed in the agreements entered into in connection with the agreed funding source in form and substance satisfactory to the Lender;

	(2)
	the
Lender has received funding of the Loan from the agreed funding source; and

	(3)
	no
event has occurred or circumstance arisen which would, whether or not with the giving of notice and/or the passage of time constitute an event described under Clause 15
(Events of Default) and the representations set out in Clause 11 (Representations and Warranties of the
Borrower) and the representations of each of the Guarantors set out in the Guarantee are true and accurate in all material respects on and as of the proposed date for the
making of the Loan. 

4.     INTEREST PERIODS  

        The period for which the Loan is outstanding shall be divided into successive semi-annual periods, ending on and excluding 21 May and 21 November,
each of which, other than the first (which shall commence on, and shall include, 21 May 2003) shall start on, and shall include, the last day of the preceding such period (each, an
"Interest Period"). 

5.     PAYMENT AND CALCULATION OF INTEREST  

5.1   Payment of Interest  

        Not later than 10.00am (New York City time) one Business Day prior to each Interest Payment Date, the Borrower shall pay to the Account all accrued and unpaid
interest, any Additional Amounts, and any Tax Indemnity Amounts, calculated to the last day of each Interest Period, on the outstanding principal amount of the Loan. 

5.2   Calculation of Interest  

        The amount of interest payable for any Interest Period shall be calculated by applying the rate of 8.5 per cent. per annum (the "Interest
Rate") to the amount of the Loan, dividing the product by two and rounding the resulting figure to the nearest cent, half a cent being rounded upwards. When interest is
required to be calculated for any other period, it shall be calculated on the basis of a 360 day year consisting of 12 months of 30 days each, and in the case of an incomplete
month, the actual number of days elapsed. 

8

 

6.     REPAYMENT  

        Subject to Clause 15.2 (Rights of Lender upon occurrence of an Event of Default), not later than 10:00 am
(New York City time) one Business Day prior to the Repayment Date, the Borrower shall repay in full the outstanding principal amount of the Loan and, to the extent not already paid in accordance with
Clause 5.1 (Payment of Interest), all accrued and unpaid interest, any Additional Amounts, and any Tax Indemnity Amounts, calculated to the last
day of the last Interest Period. 

7.     PREPAYMENT  

7.1   Prepayment for Tax Reasons  

        If, as a result of the application of or any amendment or clarification to, or change (including a change in interpretation or application) in, or determination
under, the double taxation treaty between Russia and Luxembourg (or any Qualifying Jurisdiction in which the Lender or any successor thereto is resident for tax purposes) or the laws or regulations of
Russia or Luxembourg (or any Qualifying Jurisdiction in which the Lender or any successor thereto is resident for tax purposes) or of any political sub-division thereof or any Agency
therein, the Borrower would thereby be required to pay any Additional Amounts in respect of Taxes pursuant to Clause 8.1 (Additional Amounts), or
pay any Tax Indemnity Amounts pursuant to Clause 8.3 (Tax Indemnity), then the Borrower may (without premium or penalty), upon not less than 30
calendar days' written irrevocable notice to the Lender (and, following the execution of the agreements entered into in connection with the agreed funding source, to the party designated by such
agreements) including an Officers' Certificate of the Borrower, to the effect that the Borrower would be required to pay such Additional Amounts or Tax Indemnity Amounts prepay the Loan in whole (but
not in part) at any time together with all accrued and unpaid interest, any Additional Amounts and any Tax Indemnity Amounts; provided, however, that no such notice shall be given earlier than 90
calendar days prior to the earliest date on which the Borrower would be obligated to pay such Additional Amounts or Tax Indemnity Amounts, as the case may be. 

7.2   Prepayment for Reasons of Increased Costs  

        The Borrower may, if it is required to make any payment by way of indemnity under Clause 10.1 (Increased
Costs), subject to giving to the Lender not less than 30 calendar days' prior written notice to that effect (without premium or penalty), prepay the whole, but not part only,
of the amount of the Loan, together with any amounts then payable under Clause 10.1 (Increased Costs) and accrued and unpaid interest, any
Additional Amounts and Tax Indemnity Amounts, if any. 

7.3   Prepayment in the event of a Change of Control  

	(a)
	In
the event of a Change of Control, the Borrower shall be required to prepay the Loan on the Change of Control Payment Date to the extent and in the amount that the Lender is
required to pay the agreed funding source as a result thereof as set forth in a written notice by the Lender to the Borrower, including computation of such amount, given at least two Business Days
prior to the Change of Control Payment Date.

	(b)
	Promptly,
and in any event within 10 calendar days after the date of any Change of Control, the Borrower shall deliver to the Lender (and, following the execution of the agreements
entered into in connection with the agreed funding source, to the party designated by such agreements) a written notice in the form of an Officers' Certificate, which notice shall be irrevocable (but
may, in respect of subclause (iii), be amended), stating:

	(i)
	that
a Change of Control has occurred;

	(ii)
	the
Change of Control Payment Date, which date shall be a Business Day occurring 60 calendar days from the date such notice is delivered; and

	(iii)
	the
circumstances and relevant facts giving rise to such Change of Control, including, to the extent available, information with respect to pro forma historical income, cash flow
and capitalisation for the most recent complete financial period that is subject to a review by auditors, each after giving effect to such Change of Control and events causing such Change of Control,
and the date upon which such Change of Control is deemed to have occurred. 

9

 

	(c)
	On
the Business Day prior to the Change of Control Payment Date, the Borrower shall deposit in the Account an amount in cash equal to the amount payable hereunder to the Lender by the
Borrower. 

7.4   Notice of Prepayment  

        Without prejudice to any other requirement in this Agreement, any notice of prepayment given by the Borrower pursuant to Clause 7.1
(Prepayment for Tax Reasons) or Clause 7.2 (Prepayment for Reasons of Increased Costs) hereof,
shall be irrevocable, shall specify the date upon which such prepayment is to be made and shall oblige the Borrower to make such prepayment one Business Day prior to such date. 

7.5   Costs of Prepayment  

        The Borrower shall, on the date of prepayment, pay all accrued and unpaid interest, any Additional Amounts and any Tax Indemnity Amounts (each only with respect
to the amount subject to such prepayment), as of such date of prepayment and all other amounts payable to the Lender hereunder in connection with such prepayment. The Borrower shall indemnify the
Lender on demand against any costs and expenses reasonably incurred and properly documented by the Lender on account of any prepayment made in accordance with this Clause 7
(Prepayment). 

7.6   No Other Repayments  

        The Borrower shall not repay the whole or any part of the amount of the Loan except at the times and in the manner expressly provided for in this Agreement. 

7.7   Purchase of Instruments Issued to the Agreed Funding Source  

        The Borrower and its Subsidiaries may purchase instruments issued to the agreed funding source at any time in the open market or otherwise. If such instruments
are surrendered by the Borrower or any of its Subsidiaries to the Lender, as issuer of such instruments, for cancellation (together with an authorisation addressed to the agent of the agreed funding
source to cancel such instruments), the Lender shall credit the Borrower with the prepayment of an amount of the Loan equal to the principal amount of such cancelled instruments. 

8.     TAXES  

8.1   Additional Amounts  

	(a)
	Subject
to Clause 8.1(b), all payments made by the Borrower under or with respect to the Loan will be made free and clear of, and without withholding or deduction for, or on
account of any present or future tax, duty, levy, impost, assessment, or other governmental charge (including penalties, interest and other liabilities related thereto) (collectively,
"Taxes") imposed or levied by or on behalf of any government or political subdivision or territory or possession of any government or authority or
Agency therein or thereof having the power to tax (each, a "Taxing Authority") within Russia or Luxembourg (or any Qualifying Jurisdiction in which the
Lender or any successor thereto is resident for tax purposes), unless the Borrower is required to withhold or deduct Taxes by law or by the interpretation or administration thereof. For the avoidance
of doubt, this Clause 8.1 shall not apply to any taxes on income payable by the Lender.

	(b)
	If
at any time the Borrower is required to withhold or deduct any amount for or on account of Taxes imposed or levied by or on behalf of any Taxing Authority within Russia or
Luxembourg (or any Qualifying Jurisdiction in which the Lender or any successor thereto is resident for tax purposes) from any payment made under or with respect to the Loan, the Borrower shall, on
the due date for such payment, pay such additional amounts ("Additional Amounts") as may be necessary so that the net amount received by the Lender
(including Additional Amounts) in U.S. dollars after such withholding or deduction will not be less than the amount the Lender would have received if such Taxes had not been withheld or deducted and
free from liability in respect of such withholding or deduction; provided, however, that for the avoidance of doubt, such Additional Amounts shall not be payable with respect to any Taxes on income
payable by the Lender. 

10

 

	(c)
	The
Borrower will also:

	(i)
	make
such withholding or deduction; and

	(ii)
	remit
the full amount deducted or withheld to the relevant authority in accordance with applicable law.

	(d)
	If
the Lender pays any amount in respect of such Taxes in respect of which Additional Amounts are payable (without prejudice to, and duplication of, the provisions of
Clause 8.3 (Tax Indemnity)), the Borrower shall reimburse the Lender in U.S. dollars for such payment on demand.

	(e)
	Whenever
this Agreement mentions, in any context, the payment of amounts based upon the principal or premium, if any, interest or of any other amount payable under or with respect to
the Loan, this includes, without duplication, payment of any Additional Amounts and Tax Indemnity Amounts that may be applicable. 

        The
foregoing provisions shall apply, modified as necessary, to any Taxes imposed or levied by any Taxing Authority in any jurisdiction in which any successor of the Borrower is
organised. 

8.2   Payments  

        The Lender shall assist the Borrower in ensuring that all payments made under this Agreement are exempt from deduction or withholding of Tax. 

8.3   Tax Indemnity  

        Without prejudice to, and without duplication of, the provisions of Clause 8.1 (Additional Amounts), 

	(a)
	if
at any time the Lender makes or is required to make any payment to a Person (other than to or for the account of the agreed funding source) on account of Tax (other than Taxes on
income payable by the Lender) in respect of the Loan or in respect of any instruments issued to, or documents entered into with, the agreed funding source imposed by any Taxing Authority of or in
Russia, Luxembourg or any Qualifying Jurisdiction in which the Lender or any successor thereto is resident for tax purposes, or any liability in respect of any such Tax is asserted, imposed, levied or
assessed against the Lender, the Borrower shall, as soon as reasonably practicable following, and in any event within 30 calendar days of, written demand made by the Lender, indemnify the Lender
against such payment or liability, together with any interest, penalties, costs and expenses payable or incurred in connection therewith; and

	(b)
	if
at any time a Taxing Authority imposes an obligation on the Lender to withhold or deduct any amount on any payment made or to be made by the Lender to or for the account of the
agreed funding source and the Lender is required by any instruments issued to, or documents entered into with, the agreed funding source, to pay additional amounts to such agreed funding source in
connection therewith, the Borrower shall, as soon as reasonably practicable following, and in any event within 30 calendar days of, written demand made by the Lender, pay to the Lender such additional
amounts as may be necessary so that the net amount received by the agreed funding source (including such additional amounts) in U.S. dollars after such withholding or deduction will not be less than
the amount such agreed funding source would have received if such withholdings or deductions had not been made and free from liability in respect of such withholding or deduction. 

        Any
payments required to be made by the Borrower under this Clause 8.3 are collectively referred to as "Tax Indemnity Amounts". For
the avoidance of doubt, the provisions of this Clause 8.3 shall not apply to any withholding or deductions of Taxes with respect to the Loan which are subject to payment of Additional Amounts
under Clause 8.1 (Additional Amounts). 

8.4   Tax Claims  

        If the Lender intends to make a claim for any Tax Indemnity Amounts pursuant to Clause 8.3 (Tax Indemnity),
it shall notify the Borrower thereof; provided that nothing herein shall require the Lender to disclose any confidential information relating to the organisation of its affairs. 

11

 

8.5   Tax Credits and Tax Refunds  

	(a)
	If
any Additional Amounts are paid under Clause 8.1 (Additional Amounts) or Tax Indemnity Amounts are paid under
Clause 8.3 (Tax Indemnity) by the Borrower for the benefit of the Lender and the Lender, in its reasonable opinion, determines that it has
received or been granted a credit against, a relief or remission for, or a repayment of, any Tax, then, if and to the extent that the Lender, in its reasonable opinion, determines that such credit,
relief, remission or repayment is in respect of or calculated with reference to the deduction or withholding giving rise to such Additional Amounts or, in the case of Tax Indemnity Amounts, with
reference to the liability, expense or loss to which the payment giving rise to such Tax Indemnity Amounts relates, the Lender shall, to the extent that it can do so without prejudice to the retention
of the amount of such credit, relief, remission or repayment, pay to the Borrower such amount as the Lender shall, in its reasonable opinion, have concluded to be attributable to such deduction or
withholding or, as the case may be, such liability, expense or loss; provided that the Lender shall not be obliged to make any payment under this Clause 8.5 in respect of such credit, relief,
remission or repayment until the Lender is, in its reasonable opinion, satisfied that its tax affairs for its tax year in respect of which such credit, relief, remission or repayment was obtained have
been finally settled. Any such payment shall, in the absence of manifest error and subject to the Lender specifying in writing in reasonable detail the calculation of such credit, relief, remission or
prepayment and of such payment and providing relevant supporting documents evidencing such matters, be conclusive evidence of the amount due to the Borrower hereunder and shall be accepted by the
Borrower in full and final settlement of its rights of reimbursement hereunder in respect of such deduction or withholding. Nothing contained in this Clause 8.5 shall interfere with the right
of the Lender to arrange its tax affairs generally in whatever manner it thinks fit nor oblige the Lender to disclose any information relating to its tax affairs generally or any computations in
respect thereof.

	(b)
	If
as a result of a failure to obtain relief from deduction or withholding of any Tax imposed by Russia or Luxembourg (or any Qualifying Jurisdiction in which the Lender or any
successor thereto is resident for tax purposes) (i) such Tax is deducted or withheld by the Borrower and pursuant to Clause 8.1 (Additional
Amounts) an increased amount is paid by the Borrower to the Lender in respect of such deduction or withholding, and (ii) following the deduction or withholding of Tax as
referred to above, (A) the Borrower applies on behalf of the Lender to the relevant Russian Taxing Authorities for a tax refund and such tax refund is credited by the Russian Taxing Authorities
to the Lender or (B) if such tax refund is otherwise credited by a relevant Taxing Authority to the Lender pursuant to a final decision of such Taxing Authority, the Lender shall as soon as
reasonably possible notify the Borrower of the receipt of such tax refund and promptly transfer the entire amount of the tax refund to a bank account of the Borrower specified for that purpose by the
Borrower. 

8.6   Representations of the Lender  

        The Lender represents that (a) it is a bank which at the date hereof is a resident of Luxembourg, is subject to taxation in Luxembourg on the basis of its
registration as a legal entity, location of its management body or another similar criterion and it is not subject to taxation in Luxembourg merely on income from sources in Luxembourg or connected
with property located in Luxembourg; (b) it will account for the Loan on the date of closing on its balance sheet as an asset under "loans and advances to customers" and any arrangements with
the agreed funding source as a liability under "liabilities evidenced by paper"; and (c) at the date hereof, it does not have a permanent establishment in Russia. 

        The
Lender shall make reasonable and timely efforts to assist the Borrower to obtain relief from withholding of Russian income tax pursuant to the double taxation treaty between Russia
and the jurisdiction in which the Lender is incorporated, including its obligations under Clause 8.8 (Delivery of Forms). The Lender makes no
representation as to the application or interpretation of any double taxation treaty between Russia and the jurisdiction in which the Lender is incorporated. 

8.7   Exceptions  

        The Lender agrees promptly, upon becoming aware of such, to notify the Borrower if it ceases to be resident in Luxembourg or a Qualifying Jurisdiction or if any
of the representations set forth in Clause 8.6 (Representations of the Lender) are no longer true and correct. If the Lender ceases to be
resident in 

12

 

Luxembourg
or a Qualifying Jurisdiction, then, except in circumstances where the Lender has ceased to be resident in Luxembourg or a Qualifying Jurisdiction by reason of any Change of Law (including a
change in a double taxation treaty or in such law or treaty's application or interpretation), in each case taking effect after the date of this Agreement, the Borrower shall not be liable to pay to
the Lender under Clause 8.1 (Additional Amounts) or Clause 8.3 (Tax Indemnity) any sum in
excess of the sum it would have been obliged to pay if the Lender had not ceased to be resident in Luxembourg or a Qualifying Jurisdiction. 

8.8   Delivery of Forms  

        The Lender shall within 30 calendar days of the request of the Borrower, to the extent it is able to do so under applicable laws including Russian laws, deliver
to the Borrower a certificate issued by the competent Taxing Authority in Luxembourg (or any Qualifying Jurisdiction in which the Lender or any successor thereto is resident for tax purposes)
confirming that the Lender is a tax resident in Luxembourg (or any Qualifying Jurisdiction in which the Lender or any successor thereto is resident for tax purposes) and such other information or
forms as the Borrower may need to be duly completed and delivered by the Lender to enable the Borrower to apply to obtain relief from deduction or withholding of Russian Tax after the date of this
Agreement or, as the case may be, to apply to obtain a tax refund if a relief from deduction or withholding of Russian Tax has not been obtained. The Lender shall, within 30 calendar days of the
request of the Borrower, to the extent it is able to do so under applicable laws including Russian laws, from time to time deliver to the Borrower any additional duly completed application forms as
need to be duly completed and delivered by the Lender to enable
the Borrower to apply to obtain relief from deduction or withholding of Russian Tax or, as the case may be, to apply to obtain a tax refund if a relief from deduction or withholding of Russian Tax has
not been obtained. The certificate and, if required, other forms referred to in this Clause 8.8 shall be duly signed by the Lender, if applicable, and stamped or otherwise approved by the
competent Taxing Authority in Luxembourg (or any Qualifying Jurisdiction in which the Lender or any successor thereto is resident for tax purposes) and apostilled or otherwise legalised. If a relief
from deduction or withholding of Russian Tax under this Clause 8.8 has not been obtained and further to an application of the Borrower to the relevant Russian Taxing Authorities the latter
requests the Lender's rouble bank account details, the Lender shall at the request of the Borrower (x) use reasonable efforts to procure that such rouble bank account of the Lender is duly
opened and maintained, and (y) thereafter furnish the Borrower with the details of such rouble bank account. The Borrower shall pay for all costs associated, if any, with opening and
maintaining such rouble bank account. 

8.9   Tax Treatment  

        The Borrower and the Lender hereby agree to treat the Loan as a debt obligation of the Borrower payable to the Lender, as the beneficial owner of such debt
obligation, for Russian, Luxembourg and U.S. tax purposes. 

9.     TAX RECEIPTS  

9.1   Notification of Requirement to Deduct Tax  

        If, at any time, the Borrower is required by law to make any deduction or withholding from any sum payable by it hereunder, or if thereafter there is any change
in the rates at which or the manner in which such deductions or withholdings are calculated, the Borrower shall promptly notify the Lender. 

9.2   Evidence of Payment of Tax  

        The Borrower will make all reasonable endeavours to obtain certified copies, and translations into English, of tax receipts evidencing the payment of any Taxes so
deducted or withheld from each Taxing Authority imposing such Taxes. The Borrower will furnish to the Lender (and, following the execution of any other agreements entered into in connection with the
agreed funding source, to the party designated by such agreements), within 60 calendar days after the date the payment of any Taxes so deducted or withheld is due pursuant to applicable law, either
certified copies of tax receipts evidencing such payment by the Borrower or, if such receipts are not obtainable, other evidence of such payments by the Borrower. 

13

   10.   CHANGES IN CIRCUMSTANCES  

10.1 Increased Costs  

        If, by reason of (i) any Change of Law, other than a Change of Law which relates only to the basis or rate of Tax on the net income of the Lender or the
amounts required pursuant to the Fee Letter, and/or (ii) compliance with any Capital Adequacy Requirement, reserve or deposit requirement or any other request from or requirement of any central
bank or other fiscal, monetary or other authority which has effect in Luxembourg (or any Qualifying Jurisdiction in which the Lender or any successor thereto is resident for tax purposes): 

	(a)
	the
Lender incurs an additional cost as a result of the Lender's entering into or performing its obligations, including its obligation to make the Loan, under this Agreement
(excluding Taxes payable by the Lender on its net income); or

	(b)
	the
Lender becomes liable to make any additional payment on account of Tax or otherwise, not being a tax imposed on its net income or the amounts due pursuant to the Fee Letter, on or
calculated by reference to the amount of the Loan and/or to any sum received or receivable by it hereunder except where compensated under Clause 8.1 (Additional
Amounts) or under Clause 8.3 (Tax Indemnity), 

then
the Borrower shall, from time to time within 30 calendar days of written demand of the Lender, pay to the Lender amounts sufficient to hold harmless and indemnify it from and against, as the case
may be, such properly documented (1) cost or (2) liability; provided that the Lender will not be entitled to indemnification where such increased cost or liability arises as a result of
the gross negligence, fraud or wilful default of the Lender; and provided that the amount of such increased cost shall be deemed not to exceed an amount equal to the proportion of any cost or
liability which is directly attributable to this Agreement. 

10.2 Increased Costs Claims  

        If the Lender intends to make a claim pursuant to Clause 10.1 (Increased Costs), it shall notify the
Borrower thereof and provide a written description in reasonable detail of the relevant Change of Law or Capital Adequacy Requirement, as the case may be, including a description of the relevant
affected jurisdiction or country and the date on which the change in circumstances took effect; provided that nothing herein shall require the Lender to disclose any confidential information relating
to the organisation of its or any other person's affairs. The written description shall demonstrate the connection between the change in circumstance and the increased costs and shall be accompanied
by relevant supporting documentation evidencing the matters described therein. 

10.3 Illegality  

        If, at any time after the date of this Agreement, it is unlawful for the Lender to make, fund or allow to remain outstanding the Loan made or to be made by it
hereunder or to maintain its agreed funding source of the Loan, then the Lender shall, after becoming aware of the same, deliver to the Borrower a written notice, setting out in reasonable detail the
nature and extent of the relevant circumstances, to that effect and: 

	(a)
	if
the Loan has not then been made, the Lender shall not thereafter be obliged to make the Loan; and

	(b)
	if
the Loan is then outstanding and the Lender so requests, the Borrower shall, on the latest date permitted by the relevant law or, if such notice is received after the latest date
permitted by the relevant law, on the date which is three business days after such request is received by the Borrower, or such earlier day as the Borrower elects (as notified to the Lender upon not
less than 30 calendar days' written notice prior to the date of repayment), repay the Loan together with accrued and unpaid interest thereon and all other amounts owing to the Lender hereunder. 

10.4 Mitigation  

        If circumstances arise which would result in: 

	(a)
	any
payment falling due to be made by or to the Lender or for its account pursuant to Clause 10.3 (Illegality); 

14

 

	(b)
	any
payment falling due to be made by the Borrower pursuant to Clause 8.1 (Additional Amounts); or

	(c)
	a
claim for indemnification pursuant to Clause 8.3 (Tax Indemnity) or Clause 10.1 (Increased
Costs), 

then,
without in any way limiting, reducing or otherwise qualifying the rights of the Lender or the Borrower's obligations under any of the above mentioned provisions, the Lender shall, upon becoming
aware of the same, notify the Borrower thereof and, in consultation with the Borrower and to the extent it can lawfully do so and without prejudice to its own position, take reasonable steps to remove
such circumstances or mitigate the effects of such circumstances including, without limitation, by the change of its lending office or transfer of its rights or obligations under this Agreement to
another bank; provided that the Lender shall be under no obligation to take any such action if, in its opinion, to do so might have any adverse effect upon its business, operations or financial
condition or might be in breach of any arrangements which it may have made with the agreed funding source. 

11.   REPRESENTATIONS AND WARRANTIES OF THE BORROWER  

        The Borrower makes the following representations and warranties and acknowledges that the Lender has entered into this Agreement in reliance on those
representations and warranties. 

11.1 Due Organisation  

        Except as described in Schedule II to the Side Letter, each of the Borrower and its Subsidiaries has been duly incorporated and is validly existing as a
legal entity in good standing (where such concept or an analogous concept exists) under the laws of its jurisdiction of incorporation and has full power and authority (corporate and other) to own or
lease its properties and conduct its business as described in Schedule II to the Side Letter, except where the failure to do so would not have a Material Adverse Effect; and the Borrower and
each of its Subsidiaries is duly qualified to do business as a legal entity in good standing (where such concept or an analogous concept exists) in all jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification, except where the failure to do so would not have a Material Adverse Effect. 

11.2 Authorisations  

        The Borrower has full corporate power and authority to enter into this Agreement, and this Agreement has been duly authorised, executed and delivered by the
Borrower, and is a legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, except that the enforcement thereof may be limited by
(i) bankruptcy, insolvency, fraudulent transfer, reorganisation, moratorium and other similar laws relating to or affecting creditors' rights generally and (ii) general equitable
principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. 

11.3 No Conflict  

        Neither the Borrower nor any of its Subsidiaries is in violation of its charter or by-laws or other constitutive documents; and no default exists, and
no event has occurred which, with notice or lapse of time or both, would constitute a default in the due performance and observance of any term, covenant or condition of any agreement or instrument
(for the avoidance of doubt including this Agreement) to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is bound or to which any of their
respective properties is subject, except, in each case, where such violation, default or event would not, individually or in the aggregate, have a Material Adverse Effect. 

        The
execution, delivery and performance of this Agreement by the Borrower, the compliance by the Borrower with all the provisions hereof and the consummation of the transactions
contemplated hereby (a) will not require any consent, approval, authorisation or other order of any court, regulatory body, administrative agency or other governmental body (except such as may
be required under the securities or Blue Sky laws of the various states of the United States or any securities laws of any jurisdiction other than Russia, Luxembourg, the United Kingdom and the
Federal law of the United States) except for such consents, approvals, authorisations or other orders as have been obtained and which are in full force and effect and except for such consents as may
be obtained within 30 days of the requirement for such consent arising, (b) will not conflict with or constitute a breach of any of the terms or provisions of, or constitute a 

15

 

default
under, the charter or other constitutive documents of the Borrower, (c) will not conflict with or constitute a breach of any agreement, indenture or other instrument to which the
Borrower or any of its Subsidiaries is a party or by which the Borrower, any of its Subsidiaries or their respective property or assets is bound, and (d) will not violate or conflict with any
laws, administrative regulations or rulings or court decrees applicable to the Borrower, any of its Subsidiaries or their respective property, except, in the case of clause (c), for any
conflict, breach or violation which would not have a Material Adverse Effect. 

11.4 Financial Statements  

        The audited consolidated financial statements of the Borrower and the related notes thereto, as contained in Schedule I and Schedule II to the Side
Letter, were prepared in accordance with U.S. GAAP consistently applied throughout the periods involved, except as set forth in Schedule II to the Side Letter, and present fairly, in all
material respects, the consolidated financial position of the Borrower as at the dates at which they were prepared and the results of the operations and the cash flows of the Borrower in respect of
the periods for which they were prepared. The other financial and statistical information and data, including, but not limited to, the 1998 summary consolidated and combined historical financial data
of the Borrower and the 2000 and 2001 financial data, set forth in Schedule I and Schedule II to the Side Letter is, in all material respects, accurately presented and prepared on a
basis consistent with such financial statements, where applicable, and the books and records of the Borrower and its Subsidiaries and, in the case of the 1998 summary consolidated and combined
historical financial data of the Borrower, has been correctly extracted from the Borrower's 1998 unaudited financial statements and, in the case of the 2000 and 2001 financial data, has been correctly
extracted from the consolidated financial statements of the Borrower audited by Arthur Andersen. Since the 31 December 2002 consolidated financial statements contained in Schedule I and
Schedule II to the Side Letter and, except as disclosed in Schedule II to the Side Letter, (a) there has been no material adverse change in the condition (financial or otherwise)
or affecting the business,
prospects, financial position, or results of operations of the Borrower or the Borrower and its Subsidiaries taken as a whole, whether or not arising from transactions in the ordinary course of
business; and (b) neither the Borrower nor any of its Subsidiaries has entered into any transaction or agreement material to the Borrower or to the Borrower and its Subsidiaries taken as a
whole, other than in the ordinary course of business. 

        The
audited financial statements of each Guarantor and the related notes thereto, as contained in Schedule I and Schedule II to the Side Letter, were prepared in accordance
with Russian GAAP consistently applied throughout the periods involved, except as set forth in Schedule II to the Side Letter, and present fairly, in all material respects, the financial
position of each Guarantor as at the dates at which they were prepared and the results of the operations and the cash flows of each Guarantor in respect of the periods for which they were prepared.
The other financial and statistical information and data set forth in Schedule I and Schedule II to the Side Letter is, in all material respects, accurately presented and prepared on a
basis consistent with such financial statements and the books and records of each Guarantor and its Subsidiaries. Since the 31 December 2002 financial statements contained in Schedule I
and Schedule II to the Side Letter and, except as disclosed in Schedule II to the Side Letter, (a) there has been no material adverse change in the condition (financial or
otherwise) or affecting the business, prospects, financial position, or results of operations of any Guarantor or any Guarantor and its Subsidiaries taken as a whole, whether or not arising from
transactions in the ordinary course of business; and (b) none of the Guarantors nor any of their Subsidiaries have entered into any transaction or agreement material to such Guarantor or to
such Guarantor and its Subsidiaries taken as a whole, other than in the ordinary course of business. 

        The
selected Guarantor financial information, as contained in Schedule I and Schedule II to the Side Letter, was prepared on the basis stated therein, consistently applied
and without any material adjustments not disclosed therein, and present fairly, in all material respects, those aspects of the financial position of each Guarantor that are stated therein. 

11.5 No Other Indebtedness  

        The Borrower has no Indebtedness, other than Indebtedness (a) as set forth in the December 31, 2002 audited consolidated balance sheet of the
Borrower; (b) as disclosed in Schedule II to the Side Letter or (c) that in the aggregate would not have a Material Adverse Effect 

16

 

11.6 Payment in U.S. Dollars  

        All payment obligations of the Borrower under this Agreement are required by the terms hereof to be paid in U.S. dollars, and the Borrower does not require any
approvals, consents, licenses and permissions to make and may make such payments in U.S. dollars. 

11.7 Taxes  

        Except as disclosed in Schedule II to the Side Letter, each of the Borrower and the Significant Subsidiaries has duly filed with the appropriate Taxing
Authorities, or has received an extension for filing with respect to, all tax returns, reports and other information required to be filed by it, and each such tax return, report, or other information
was, when filed, accurate and complete in all material respects; and, except as disclosed in Schedule II to the Side Letter, each of the Borrower and the Significant Subsidiaries has duly paid,
or has made adequate reserves for, all Taxes required to be paid by it and any other assessment, fine or penalty levied against it, and to the best of the Borrower's knowledge, no Tax deficiency is
currently asserted against the Borrower or any of the Significant Subsidiaries, except, in each case, where any failure to do so would not have a Material Adverse Effect 

11.8 Litigation and Contracts  

        Except as set forth in the Schedule II to the Side Letter (which disclosure shall be disregarded for the purposes of Clause 11.21
(Repetition)): (A) there are no pending legal or governmental proceedings against the Borrower or any of its Subsidiaries or any of their
respective properties and (B) there are no pending legal or governmental proceedings naming, and, to the best knowledge of the Borrower, there are no threatened legal or governmental
proceedings against or naming, the Borrower or any of its Subsidiaries or any of their respective properties that, in each case, if determined adversely to the Borrower or any such Subsidiary, would
individually or in the aggregate have a Material Adverse Effect or would have a material adverse effect on the ability of the Borrower to perform its obligations under this Agreement and, to the best
knowledge of the Borrower, no such proceedings are contemplated. 

11.9 Labour  

        There are no labour disputes involving the employees of the Borrower or any of its Subsidiaries that exist, or to the best knowledge of the Borrower, that are
threatened, except where such would not, individually or in the aggregate, have a Material Adverse Effect. 

11.10 Title, Licenses and Consents  

        Except as set forth in Schedule II to the Side Letter, each of the Borrower and its Subsidiaries possesses all certificates, authorisations, licences and
permits issued by appropriate governmental agencies or bodies necessary to conduct the business now conducted by it, except, in each case, where the failure to do so would not, individually or in the
aggregate, have a Material Adverse Effect and neither the Borrower nor any of its Subsidiaries has received any notice of proceedings relating to the revocation or modification for any such
certificate, authorisation or permit that, if determined adversely to the Borrower or any of its Subsidiaries, could have a Material Adverse Effect. 

        Except
as set forth in Schedule II to the Side Letter, each of the Borrower and its Subsidiaries (A) has good and marketable title to all items of real property owned by it
and good and marketable title to all other property and assets owned by it, in each case free and clear of any security interests, liens, encumbrances, equities, claims and other defects that would
affect the value thereof or interfere with the use made or proposed to be made thereof by it, and (B) holds any real property and buildings leased by it under valid, subsisting and enforceable
leases with no exceptions that would interfere with the use made or proposed to be made thereof by it, except, in the cases of each of (A) and (B), where the failure to do so would not,
individually or in the aggregate, have a Material Adverse Effect. 

        Except
as set forth in Schedule II to the Side Letter, the Borrower and each of its Subsidiaries owns or possesses all patents, patent applications, trademarks, service marks,
trade names, licenses, copyrights and proprietary or other confidential information currently employed by it in connection with its business (collectively, "intellectual
property rights"), except, in each case, where the failure to do so would not, individually or in the aggregate, have a Material Adverse Effect; and neither the Borrower nor
any of its Subsidiaries has received any notice of infringement of or conflict with asserted rights of others with 

17

 

respect
to any intellectual property rights that, if determined adversely to the Borrower or any of its Subsidiaries, could individually or in the aggregate have a Material Adverse Effect. 

11.11 Adequate Insurance  

        The Borrower and each of its Significant Subsidiaries has, where relevant, applied for insurance with an insurer or insurers of sufficient standing against such
losses and risks and in such amounts as are prudent and customary in the businesses in which they are engaged in the jurisdiction where they operate, respectively; the Borrower and each of its
Significant Subsidiaries has not been refused any insurance coverage sought or applied for; and the Borrower and each of its Significant Subsidiaries, where relevant, has no reason to believe that
they will not be able to obtain, within 60 days of the date of the making of the Loan, such coverage as may be necessary to continue their business at a cost that would not have a Material
Adverse Effect. 

11.12 No Withholding or Similar Tax  

        Under current laws and regulations of Russia and Luxembourg and any respective political subdivisions thereof, and based upon the representations of the Lender
set forth in Clause 8.6 (Representations of the Lender) hereof, all payments of principal and/or interest, Additional Amounts, Tax Indemnity
Amounts or any other amounts payable on or in respect of the Loan may be paid by the Borrower to the Lender in U.S. dollars and will not be subject to Taxes under laws and regulations of Russia, or
any political subdivision or Taxing Authority thereof or therein, respectively, and will otherwise be free and clear of any other Tax, duty, withholding or deduction in Luxembourg, Russia, or any
political subdivision or Taxing Authority thereof or therein (provided, however, that the Borrower makes no representation as to any income or similar Tax of Luxembourg (or any Qualifying
Jurisdiction) which may be assessed thereon) and without the necessity of obtaining any governmental authorisation in Russia or any political subdivision or Taxing Authority thereof or therein. 

11.13 Not an Investment Company  

        Without regard to the number or nature of the holders of their securities neither the Borrower nor any Guarantor is and, after giving effect to the Loan and the
application of the proceeds thereof will not be, required to register as an "investment company" as defined in the U.S. Investment Company Act of 1940, as amended. 

11.14 Rating  

        No Rating Agency (a) has imposed (or has informed the Borrower that it is considering imposing) any condition (financial or otherwise) on the Borrower's
retaining any rating assigned to the Borrower or any securities of the Borrower or (b) has indicated to the Borrower that it is considering (i) the downgrading, suspension or withdrawal
of, or any review for a possible change that does not indicate the direction of the possible change in, any rating so assigned or (ii) any change in the outlook for any rating of the Borrower,
as applicable, or any securities of the Borrower. 

11.15 No Liquidation or Similar Proceedings  

        No receiver or liquidator (or similar person) has been appointed in respect of the Borrower or any Subsidiary of the Borrower or in respect of any part of the
assets of the Borrower or any Subsidiary of the Borrower; no resolution, order of any court, regulatory body, governmental body or otherwise, or petition or application for an order, has been passed,
made or presented for the winding up of the Borrower or any Subsidiary of the Borrower or for the protection of the Borrower or any such Subsidiary from its creditors; and the Borrower has not, and no
Subsidiary of the Borrower has, stopped or suspended payments of its debts, become unable to pay its debts or otherwise become insolvent. 

11.16 Certificates  

        Each certificate signed by any director or officer of the Borrower and delivered to the Lender or counsel for the Lender on the date of the making of the Loan
shall be deemed to be a representation and warranty by the Borrower to the Lender as to the matters covered thereby. 

18

 

11.17 Pari Passu Obligations  

        The obligations of the Borrower under this Agreement will rank at least pari passu in right of payment with all
other unsecured and unsubordinated obligations of the Borrower, except as otherwise provided by mandatory provisions of applicable law. 

11.18 No Stamp Taxes  

        Under the laws of Russia in force at the date hereof, it is not necessary that any stamp, registration or similar Tax be paid on or in relation to this Agreement. 

11.19 No Events of Default  

        No event has occurred or circumstances arisen which would (whether or not with the giving of notice and/or the passage of time) constitute an event described in
Clause 15 (Events of Default). 

11.20 Health, Safety and Environment  

        Each of the Borrower and its Subsidiaries is in compliance with all statutes, and all rules, regulations, requirements, decisions and orders of, and agreements
with, any governmental agency or body and any court, relating to the protection of human health and safety (including occupational health and safety), the use, handling, transportation, disposal or
release of hazardous or toxic substances, or the protection or restoration of the environment (collectively, "hse laws"), and has received, and is in
compliance with all terms and conditions of, all permits, licenses or other approvals required of it under applicable hse laws in order to conduct its business, except, in each case, where the failure
to be in compliance with or receive such permits, licenses or other approvals would not, individually or in the aggregate, have a Material Adverse Effect; 

        Neither
the Borrower nor any of its Subsidiaries is subject to any claims, costs or liabilities associated with any hse laws (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance with hse laws or to acquire or comply with the terms and conditions of any permit, license or approval under any hse
laws, any constraints on operating activities and any potential liabilities to third parties) which could, individually or in the aggregate, have a Material Adverse Effect; and, to the best of the
Borrower's knowledge, having made all due inquiries, there are no past or present events, conditions, circumstances, activities, practices, incidents or actions that would be reasonably likely to give
rise to such costs, liabilities or claims; 

11.21 Repetition  

        Each of the representations and warranties in Clause 11 (Representations and Warranties of the Borrower)
shall be deemed to be repeated by the Borrower on the date of the making of the Loan and each of Clause 11.1 (Due Organisation) (solely with
respect to the Borrower and provided that, upon the occurrence of a merger or sale of assets pursuant to Clause 14.6 (Mergers and Similar
Transactions), the Borrower is the Surviving Entity), Clause 11.2 (Authorisations) Clause 11.3
(No Conflict) and Clause 11.8 (Litigation and Contracts) (solely with respect to any legal or
governmental proceedings pending or, to the best knowledge of the Borrower, threatened in writing delivered to the Borrower, before any court, tribunal, arbitration panel or Agency challenging the
lawfulness, validity or enforceability of this Agreement (except for any such proceedings as may have been disclosed in writing by the Borrower to the Lender prior to the relevant date of repetition)
shall be deemed to be repeated and updated on each Interest Payment Date. The Borrower shall inform the Lender in writing of any breach or prospective breach of such deemed repeated representations
and warranties as soon as it becomes aware of the same. 

12.   REPRESENTATIONS AND WARRANTIES OF THE LENDER  

        In addition to the representations and warranties set forth in Clause 8.6 (Qualifying Lender), the Lender
makes the representations and warranties set out in Clause 12.1 (Status) to Clause 12.4 (No
Conflicts),
inclusive, and acknowledges that the Borrower has entered into this Agreement in reliance on those representations and warranties. 

12.1 Status  

        The Lender is duly incorporated under the laws of Luxembourg and is resident in Luxembourg for taxation purposes and has full corporate power and authority to
enter into this Agreement and any other agreements relating to the agreed funding source, and to undertake and perform the obligations expressed to be assumed by it herein and therein. 

19

   12.2 Authorisation  

        Each of this Agreement and any other agreements entered into in connection with the agreed funding source has been duly authorised, executed and delivered by the
Lender, and is a legal, valid and binding obligation of the Lender, enforceable against the Lender in accordance with its terms, except that the enforcement thereof may be subject to bankruptcy,
insolvency, fraudulent conveyance, reorganisation, moratorium and other similar laws relating to or affecting creditors' rights generally and general equitable principles. 

12.3 Consents and Approvals  

        All authorisations, consents and approvals required by the Lender for or in connection with the execution of this Agreement and any other agreements relating to
the agreed funding source and the performance by the Lender of the obligations expressed to be undertaken in such agreements have been obtained and are in full force and effect. 

12.4 No Conflicts  

        The execution of this Agreement and any other agreements relating to the agreed funding source and the undertaking and performance by the Lender of the
obligations expressed to be assumed by it herein and therein will not conflict with, or result in a breach of or default under, the laws of Luxembourg or the constitutive documents of the Lender. 

13.   FINANCIAL INFORMATION  

        The Borrower will, at its own expense, so long the Loan remains outstanding, furnish to the Lender, copies of all reports and other communications (financial or
other) furnished to stockholders of the Borrower and furnish to the Lender, (i) as promptly as practicable, copies of any reports and financial statements furnished to or filed with any
securities exchange (other than any securities exchange in Russia) on which any class of securities of the Borrower is listed (such financial statements to be on a consolidated basis and prepared in
accordance with U.S. GAAP consistently applied with the preceding
period); and (ii) such additional publicly available information concerning the business and financial condition of the Borrower as the Lender may from time to time reasonably request. In
addition, the Borrower shall furnish to the Lender, such information as the London Stock Exchange plc (or any other or further stock exchange or stock exchanges or any other relevant authority or
authorities on which the instruments issued to the agreed funding source may, from time to time, be listed or admitted to trading) may require in connection with the listing or admittance to trading
on such stock exchange or relevant authority of instruments issued to the agreed funding source. 

        If
so requested by the Lender, the Borrower shall deliver to the Lender (and, following the execution of any other agreements entered into in connection with the agreed funding source,
to the party designated by such agreements), within 14 days of such request, an Officers' Certificate (a) stating that to the best of each of the Officers' knowledge (i) the
Borrower has kept, observed, performed and fulfilled each and every covenant, and complied with the covenants and conditions contained in this Agreement and (ii) the Borrower is not in default
in the performance or observance of any of the terms, provisions and conditions hereof (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of
which he may have knowledge) and (b) setting out the calculations of the ratios set out in clause 14.13(a). 

14.   COVENANTS  

14.1 Liens  

        The Borrower will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien (other than Permitted Liens) on any asset
now owned or hereafter acquired, or any income or profits therefrom, which secures any Indebtedness, unless the Loan and any other sum owing hereunder are secured by a Lien equally and rateably with
the Liens securing such other Indebtedness; provided that if such Indebtedness is subordinated Indebtedness of the Borrower, the Lien securing such Indebtedness shall be subordinate or junior to the
Lien securing the Loan, with the same relative priority as such Indebtedness shall have with respect to the Loan. 

20

 

14.2 Stay, Extension and Usury Laws  

        The Borrower covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Agreement; and the Borrower
(to the extent it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution
of any power herein granted to the Lender (and, following the execution of any other agreements entered into in connection with the agreed funding source, to the party designated by such agreements),
but will suffer and permit the execution of every such power as though no such law had been enacted. 

14.3 Asset Sales  

        The Borrower will not, and will not permit any of its Subsidiaries to consummate any Asset Sale, unless the proceeds received by the Borrower or such Subsidiary,
as the case may be, are at least equal to the Fair Market Value of the assets sold or disposed of (as determined in good faith by the Board of Directors of the Borrower or the relevant Subsidiary) and
an amount equal to such proceeds (less any costs plus reasonable expenses incurred in relation to such Asset Sale) is either (a) applied to repay permanently any Indebtedness (other than
subordinated Indebtedness) of the Borrower or any Subsidiary or (b) invested in assets (including Capital Stock) of a nature or type that is used or usable in the business of the Borrower or
any Subsidiary, being any food and beverage business that the Borrower or any such Subsidiary may conduct at the relevant time, in each case within 360 days of the date when such proceeds are
received. 

14.4 Transactions with Affiliates and Related Persons  

	(a)
	Subject
to sub-Clause 14.4(b) below, the Borrower shall not, and shall not permit any Subsidiary to, directly or indirectly, enter into, permit to exist, renew or
extend any transaction or series of related transactions (including, without limitation, the purchase, sale, transfer, assignment, lease, conveyance or exchange of property or assets, or the rendering
of any service) (each a "Transaction") with, or for the benefit of, any Related Person of the Borrower (or any Affiliate of such Person) or with, or for
the benefit of, any Affiliate of the Borrower, unless any such Transaction or series of related Transactions is made upon fair and reasonable terms no less favourable to the Borrower or such
Subsidiary, as the case may be, than could be obtained, at the time of such Transaction or, if such Transaction is pursuant to a written agreement, at the time of the execution of the agreement
providing therefor, in a comparable arms'-length Transaction with, or for the benefit of, a Person that is not a Related Person of the Borrower (or any Affiliate of such Person) or an Affiliate of the
Borrower. 

No
such Transaction shall be consummated unless, in the case of a Transaction or series of related Transactions involving aggregate consideration equal to or in excess of
(i) U.S.$1 million, the Borrower or the relevant Subsidiary, as the case may be, obtains the approval of its Board of Directors and (ii) U.S.$25 million, the Borrower or
the relevant Subsidiary shall in addition have received (and shall have delivered a copy to the Lender (and, following the execution of any other agreements entered into in connection with the agreed
funding source, to the party designated by such agreements)) a written opinion of an internationally or nationally recognised investment banking firm addressed to, and stating that the Transaction or
series of related Transactions is fair from a financial point of view to, the Borrower or such Subsidiary. 

	(b)
	The
limitations in sub-Clause 14.4(a) above shall not limit, and shall not apply to any Transaction or series of related Transactions solely between the Borrower
and any of its Subsidiaries or solely between Subsidiaries of the Borrower. 

14.5 Change of Control  

        Upon the occurrence of a Change of Control, the Borrower shall prepay the Loan, in whole or in part, pursuant to and subject to the conditions described in
Clause 7.3 (Prepayment in the event of a Change of Control), under the definition of Change of Control. 

21

 

14.6 Mergers and Similar Transactions  

	(a)
	Subject
to sub-Clause 14.6(b) below the Borrower shall not, and shall procure that no Guarantor shall, merge with or into or enter into a transaction whose effect
would be similar to that of a merger (including, but not limited to, by way of an acquisition through a share-for-share exchange or contribution of assets) or sell, convey,
transfer, lease or otherwise dispose of all or substantially all of its property and assets (each a "merger") to, any Person or permit any Person to
merge with or into the Borrower or any Guarantor:

	(i)
	if
such merger would result in a Rating Decline;

	(ii)
	unless
the Borrower or the relevant Guarantor shall be the continuing Person, or the Person (if other than the Borrower or the relevant Guarantor) into which the Borrower or such
Guarantor is merged or that acquired or leased such property and assets of the Borrower or the relevant Guarantor (the "Surviving Entity") shall be a
company organised and validly existing under the laws of the Russian Federation, a member of the European Union (as the European Union is constituted on the date hereof), Switzerland or a State of the
United States of America or the District of Columbia, and shall expressly assume, by amendment hereto, executed and delivered by such continuing Person to the Lender (and, following the execution of
any other agreements entered into in connection with the agreed funding source, to the party designated by such agreements), in form and substance satisfactory to the Lender (and, following the
execution of any other agreements entered into in connection with the agreed funding source, to the party designated by such agreements), the due and punctual payment of the principal of and interest
on the Loan or the Guarantee, as the case may be, and the due and punctual performance and observance of all the covenants, conditions and other obligations of the Borrower or the relevant Guarantor
in respect of the Loan and this Agreement or the Guarantee, as the case may be;

	(iii)
	unless,
in the case of a sale, conveyance, transfer, lease or other disposal of all or substantially all of the Borrower's or its relevant Subsidiary's property and assets, such
property and assets shall have been transferred as an entirety or substantially an entirety in one transaction or a series of related transactions to one Person;

	(iv)
	unless
immediately before and after giving effect to such transaction or series of transactions on a pro forma basis (and treating any Indebtedness which becomes, or is anticipated
to become, an obligation of the Surviving Entity or any Subsidiary thereof as a result of such transaction or series of transactions as having been incurred by the Surviving Entity or such Subsidiary
at the time of such transaction or series of transactions), no Default or Event of Default shall have occurred and be continuing;

	(v)
	unless
the Borrower or the Surviving Entity is able to comply with Clause 14.13 (Maintenance of Guarantee and Guarantors' assets
ratio);

	(vi)
	unless
immediately before and after giving effect to such transaction or series of transactions on a pro forma basis (and treating any Indebtedness which becomes, or is anticipated
to become, an obligation of the Surviving Entity or any Subsidiary thereof as a result of such transaction or series of transactions as having been incurred by the Surviving Entity or such Subsidiary
at the time of such transaction or series of transactions) the Borrower or its Subsidiaries, or any Person becoming the successor obligor of the Loan or the Guarantee, as the case may be, would be
able to incur an additional $1.00 of Indebtedness pursuant to Clause 14.10 (Financial Covenant) hereof;

	(vii)
	unless
the Borrower delivers to the Lender an opinion of counsel or tax adviser in form and substance reasonably acceptable to the Lender (and, following the execution of any other
agreements entered into in connection with the agreed funding source, to the party designated by such agreements), to the effect that neither the Lender nor any agreed funding source will recognise
any income, gain or loss for Tax purposes from any such merger or sale of assets of the Borrower or the relevant Guarantor and that the Lender and any agreed funding source would, after such merger,
be subject to Taxes in the same amounts and in the same manner and at the same times as would have been the case if such merger had not occurred; and 

22

 

	(viii)
	unless
the Borrower delivers to the Lender (and, following the execution of any other agreements entered into in connection with the agreed funding source, to the party designated
by such agreements) an Officers' Certificate (attaching the arithmetic computations to demonstrate compliance with Clause 14.10 (Financial
Covenant) hereof) and an opinion of counsel reasonably acceptable to the Lender, each in form and substance satisfactory to the Lender (and, following the execution of any
supplemental agreements entered into in connection with the agreed funding source, to the party designated by such agreements) and in each case stating that such, merger or transfer and such
supplemental agreement comply with this provision, that all legal conditions precedent provided for herein relating to such transaction have been complied with and that this Agreement and the Loan
constitute legal, valid and binding obligations of the continuing Person, enforceable in accordance with their terms, subject, in the case of the opinion of counsel, to customary exceptions,
qualifications and limitations.

	(b)
	The
restrictions in sub-Clauses 14.6(a)(i), (iii) and (vi) and the Officers' Certificate referred to in (viii) above shall not apply to any mergers
between the Borrower and any of the Guarantors or any of the Subsidiaries or between two or more of the Guarantors or between any of the Guarantors and any of the Subsidiaries. The restrictions in
sub-Clauses 14.6(a)(vii) and (viii) above shall not apply to any mergers between the Borrower and any of the Guarantors or any of the Subsidiaries or between two or more of
the Guarantors or between any of the Guarantors and any of the Subsidiaries if: (i) both relevant entities are incorporated in Russia, (ii) both relevant entities have no business
presence or tax residency outside Russia, and (iii) the Borrower (in the event of a merger involving the Borrower) or a Guarantor (in all other mergers), is the Surviving Entity. 

14.7 Maintenance of Authorisations  

        So long as any amount remains outstanding hereunder: 

	(i)
	the
Borrower shall, and it shall procure that each of its Significant Subsidiaries shall take all necessary action to obtain and do or cause to be done all things
necessary, in the opinion of the Borrower or the relevant Significant Subsidiary, to ensure the continuance of its corporate existence, its business and intellectual property relating to its business;

	(ii)
	the
Borrower shall, and it shall procure that each of the Guarantors shall, make or cause to be made all registrations, recordings and filings, and shall obtain and
maintain all consents, licences, approvals and authorisations, which may at any time be required to be obtained or made in Russia or any other relevant jurisdiction for the purposes of the execution,
delivery or performance of this Agreement and the Guarantee and for the validity and enforceability thereof; and

	(iii)
	if
any regulation, decree, consent, approval, licence or other authority necessary to enable the Borrower or any Guarantor to enter into or perform its obligations
under this Agreement or the Guarantee, as the case may be, or for the validity or enforceability thereof expires or is withheld, revoked or terminated or otherwise ceases to remain in full force and
effect or is modified in a manner which adversely affects any rights or claims of the Lender (and, following the execution of any other agreements entered into in connection with the agreed funding
source, of the party designated by such agreements) the Borrower shall ensure compliance with any such regulation, decree or other law or rule and/or take such action as would allow it and the
Guarantors, notwithstanding the coming into force of any such regulation, decree or other law or rule or such revocation of an approval, licence or other authority, to execute, deliver and perform
this Agreement and the Guarantee and maintain their validity and enforceability (including any rights or claims of the Lender (and, following the execution of any other agreements entered into in
connection with the agreed funding source, of the party designated by such agreements)); 

provided
that, in any case if the Borrower or as the case may be, the relevant Subsidiary can remedy any failure to comply with (i) and (ii) above and can remedy any event contemplated
by (iii) above within 60 days of such failure or of the occurrence of such event, then this covenant shall be deemed not to have been breached. 

23

   14.8 Maintenance of Property  

        So long as any amount remains outstanding hereunder, the Borrower and its Significant Subsidiaries will cause all property used in the conduct of its or their
business to be maintained and kept in good condition, repair and working order and supplied with all necessary equipments and shall cause to be made all necessary repairs, renewals, replacements and
improvements thereof, all as, in the judgments of the Borrower or any Significant Subsidiary, may be reasonably necessary so that the business carried on in connection therewith may be properly
conducted at all times. 

14.9 Payment of Taxes  

        The Borrower shall, and shall cause each of its Subsidiaries to pay or discharge, before the same shall become overdue all Taxes, assessments and governmental
levies, except (i) as contested in good faith and by appropriate proceedings and for which adequate reserves, as determined by the Borrower, in accordance with appropriate accounting provisions
have been made or (ii) the amount of which, together with all such other unpaid and undischarged Taxes, assessments and governmental levies does not in aggregate exceed U.S.$1 million. 

14.10 Financial Covenant  

        The Borrower shall not, and shall not permit any Subsidiary to, incur any Indebtedness, other than: 

	(i)
	the
Loan;

	(ii)
	any
Indebtedness in circumstances where: (1) no Event of Default shall have occurred and be continuing at the time or would occur as a consequence of the
incurrence of such Indebtedness, and (2) after giving effect to the incurrence of such Indebtedness on a pro forma basis and the receipt and application of the proceeds therefrom, immediately
after such incurrence the ratio of the consolidated Indebtedness to Consolidated EBITDA is 4:1 or lower; and

	(iii)
	in
addition, any Indebtedness incurred by the Borrower or any Guarantor, other than any Indebtedness owed to any Affiliate of the Borrower or an Affiliate of any
relevant Subsidiary, in aggregate not exceeding U.S. $100 million. 

14.11 Maintenance of ownership of Guarantors  

        The Borrower shall not permit any Person or Persons, other than the Borrower or another Subsidiary of the Borrower, to directly or indirectly, alone or in the
aggregate, own or control more that 24.9 per cent. of the Capital Stock with voting power of any Guarantor. 

14.12 No limitation on dividend or other payments affecting Subsidiaries  

	(a)
	Subject
to sub-Clause 14.12(b) below, the Borrower shall not, and shall not cause or permit any of its Subsidiaries to, directly or indirectly create or otherwise
cause or permit to exist or become effective any encumbrance or restriction on the ability of any Subsidiary to:

	(i)
	pay
dividends or make any other distributions on or in respect of its Capital Stock to the Borrower or any Subsidiary of the Borrower or pay any Indebtedness owed to the Borrower or
any such Subsidiary;

	(ii)
	make
loans or advances to, or guarantee any Indebtedness or other obligations of the Borrower or any Subsidiary of the Borrower; or

	(iii)
	transfer
any of its property or assets to the Borrower or any of the Borrower's Subsidiaries.

	(b)
	The
provisions of sub-Clause 14.12(a) above shall not restrict any encumbrance or restriction:

	(i)
	arising
solely by operation of law;

	(ii)
	existing
under an agreement in effect on the date hereof; provided, however, that the terms, conditions and scope of any such encumbrance or restriction included in any such
agreement may be amended only if:

	(1)
	such
amended encumbrance or restriction, when taken together with all the other encumbrances and restrictions in such agreement (as amended), will not be materially more restrictive
or disadvantageous (A) to the agreed funding source or the Borrower 

24

 

than
the encumbrance or restriction being amended or (B) to the Borrower than is customary in comparable transactions (in each case, as determined by the Borrower); and 

	(2)
	the
amended terms, conditions and scope of any such amended encumbrance or restriction, when taken together with the terms, conditions and scope of all the other encumbrances and
restrictions in such agreement (as amended), will not materially adversely affect the Borrower's ability to make principal or interest payments on the Loan (as determined by the Borrower); or

	(iii)
	contained
in the terms of any Indebtedness incurred in compliance with Clause 14.10 (Financial Covenant) hereof or in any
agreement pursuant to which such Indebtedness was issued, if:

	(1)
	the
encumbrances and restrictions in any such agreement, when taken as a whole, will not be materially more restrictive or disadvantageous to the Borrower than is customary in
comparable transactions (as determined by the Borrower); and

	(2)
	the
terms, conditions and scope of any such encumbrances and restrictions in any such agreement, when taken as a whole, will not materially adversely affect the Borrower's ability to
make principal or interest payments on the Loan (as determined by the Borrower); 

14.13 Maintenance of Guarantee and Certain Ratios  

	(a)
	Should
the obligations of any Guarantor under the Guarantee cease to be legal, valid, binding and enforceable or should the aggregate value of the assets, revenues and operating
income of the Borrower and the Guarantors at any time fall below 40 per cent, 60 per cent and 60 per cent, respectively, of the consolidated assets, consolidated revenues and consolidated operating
income of the Group, the Borrower shall procure that additional guarantees guaranteeing the obligations of the Borrower under the Loan Agreement are given by one or more of its Subsidiaries whose
asset value, revenues and operating income when aggregated with the value of the assets, revenues and operating income of the then existing Guarantors and the Borrower, are equal to or exceed the
above respective ratios.

	(b)
	The
Borrower shall also procure that:

	(i)
	an
opinion of counsel or tax adviser, in form and substance reasonably acceptable to the Lender (and, following the execution of any other agreements entered into in connection with
the agreed funding source, to the party designated by such agreements), to the effect that neither the Lender nor any agreed funding source will recognise any income, gain or loss for Tax purposes as
a result of any such addition to or substitution of the Guarantee, subject to customary exceptions, qualifications and limitations; and

	(ii)
	an
opinion of counsel reasonably acceptable to the Lender, in form and substance satisfactory to the Lender (and, following the execution of any other agreements entered into in
connection with the agreed funding source, to the party designated by such agreements), stating that all legal conditions precedent in relation to such substitution or addition have been complied with
and that the new guarantee constitutes legal, valid and binding obligations of such new Guarantor, enforceable in accordance with its terms, subject to customary exceptions, qualifications and
limitations; 

provided
that, if the Borrower or any Subsidiary can remedy any failure to comply with the above within 60 days, this covenant shall be deemed not to have been breached; and provided further
that, immediately after the coming into effect of such additional guarantee or guarantees, no Default or Event of Default shall have occurred and be continuing. 

	(c)
	For
purposes of this Clause 14.13, the aggregate value of the assets, revenues and operating income, respectively, of the Borrower and each of the Guarantors is to be
calculated on the basis of the accounting records of the Borrower and each of the Guarantors which support the conversion of Russian statutory accounts into U.S. GAAP financial schedules that are used
in preparation of the consolidated U.S. GAAP financial statements of the Group. The following adjustments will be made to the sum of the assets, revenues and operating income of the 

25

 

Borrower
and Guarantors respectively in order to calculate the aggregate value of their assets, revenues and operating income: 

	(i)
	elimination
of transactions and balances between the Borrower and the Guarantors, and between the Guarantors and other Subsidiaries of the Borrower;

	(ii)
	elimination
of investments between the Guarantors, between the Guarantors and the Borrower, and between the Guarantors, the Borrower and other Subsidiaries of the Borrower;

	(iii)
	elimination
of expenses incurred by the Borrower and the Guarantors for the benefit of other Subsidiaries of the Borrower;

	(iv)
	incorporation
of effects of purchase accounting to the extent that such adjustments are not reflected in the U.S. GAAP financial schedules of the Borrower and the Guarantors and have
been recorded at the Group level only; and

	(v)
	any
other adjustments that would be required in order to present aggregate assets, revenues and operating income of the Borrower and the Guarantors on a basis consistent with the
consolidated financial statements of the Borrower.

	(d)
	Provided
that the Borrower complies with the requirements of this Clause 14.13, the Guarantee in relation to any Guarantor can be terminated at any time by the Borrower and the
relevant Guarantor without the consent of the Lender (and, following the execution of any agreements entered into in connection with the agreed funding source, without the consent of the agreed
funding source provided that a notice of such intended termination is delivered to the Lender (and the party designated by such agreements) no later that 20 days before such intended
termination).

	(e)
	The
Borrower's obligation to comply with the provisions of this Clause 14.13 will be suspended during any period in which the ratings of the Loan or of any instruments issued
to the agreed funding source by both Rating Agencies meet both of the following standards for investment-grade securities: (i) Baa3 or better from Moody's and (ii) BBB- or
better from S&P. 

14.14 Insurance  

        The Borrower and each of its Significant Subsidiaries will obtain and maintain insurance with an insurer or insurers of sufficient standing against such losses
and risks and in such amounts as are prudent and customary in the businesses in which they are engaged in the jurisdiction where they operate, respectively, at a cost that would not have a Material
Adverse Effect; provided that if the Borrower or any such Subsidiary can remedy any failure to comply with the above within 30 days, this covenant shall be deemed not to have been breached. 

15.   EVENTS OF DEFAULT  

15.1 Circumstances which constitute Events of Default  

        Each of the following constitutes an "Event of Default" with respect to the Loan: 

	(a)
	default
by the Borrower or any Guarantor in the payment of principal of (or premium, if any, on) the Loan, in the currency and in the manner provided herein or in the Guarantee, as
the case may be, when the same becomes due and payable at maturity, upon acceleration, redemption or otherwise;

	(b)
	default
by the Borrower or any Guarantor in the payment of interest on the Loan, in the currency and in the manner provided herein or in the Guarantee, as the case may be, when the
same becomes due and payable if such default continues for a period of 15 Business Days;

	(c)
	failure
by the Borrower or any Guarantor to prepay the Loan in accordance with Clause 14.5 (Change of Control) hereof;

	(d)
	default
by the Borrower or any Guarantor in the performance or breach of any other provisions of this Agreement or the Guarantee, as the case may be, (except in relation to the
representations and warranties of the Borrower and/or any Guarantor and Clause 14.7 (Maintenance of Authorisations)) and (except where in any such case that failure is not capable of remedy)
that 

26

 

failure
continues for a period of 30 days following the submission by the Lender of a notice in writing requiring the breach to be remedied; 

	(e)
	a
failure to comply with Clause 14.7 hereof (Maintenance of Authorisations);

	(f)
	any
representation and warranty of the Borrower in this Agreement or any Guarantor in the Guarantee or in any other documents, certificate or notice delivered to the Lender in
connection with this Agreement, the Guarantee or any instruments issued to the agreed funding source proves to be inaccurate, incomplete or misleading in any material respect at the time it was made
or repeated or deemed to have been made or repeated if not remedied within 30 days;

	(g)
	any
Indebtedness of either the Borrower or any of its Subsidiaries is not paid when due (taking into account any originally applicable grace period), or any Indebtedness of either the
Borrower or any of its Subsidiaries is either declared to be or otherwise becomes due and payable prior to its Stated Maturity (otherwise than at the option of the Borrower or any of its Subsidiaries,
as the case may be, or (provided that no Event of Default has occurred) any person entitled to such Indebtedness; provided, however, that the total amount of such Indebtedness which is not paid when
due or becomes due and payable prior to its Stated Maturity is equal to or greater than U.S.$10 million (or its equivalent in another currency) disregarding any guarantee of the Borrower or its
Subsidiaries given in respect of such Indebtedness owed by the Borrower or its Subsidiaries, as the case may be;

	(h)
	any
final judgment or order (not covered by insurance) for the payment of money in excess of U.S.$5 million (or, to the extent non-U.S. dollar denominated, the U.S.
dollar equivalent of such amount) in the aggregate for all such final judgments or orders against all such Persons (treating any deductibles, self-insurance or retention as not so covered)
shall be rendered against the Borrower or any Significant Subsidiary and shall not be paid or discharged, and there shall be any period of 60 consecutive calendar days following entry of the final
judgment or order that causes the aggregate amount for all such final judgments or orders outstanding and not paid or discharged against all such Persons to exceed U.S.$5 million (or, to the
extent non-U.S. dollar denominated, the U.S. dollar equivalent of such amount) during which a stay of enforcement of such final judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect;

	(i)
	the
validity of this Agreement or the Guarantee is contested by the Borrower or any Guarantor or the Borrower or any Guarantor shall deny any of its obligations under this Agreement
or any Guarantor shall deny any of its obligations under the Guarantee; or it is, or will become, unlawful for the Borrower or any Guarantor to perform or comply with any of its obligations under or
in respect of this Agreement or the Guarantee, as the case may be, or any of such obligations shall become unenforceable or cease to be legal, valid and binding, provided that no Event of Default
shall have occurred under this sub-Clause (i) in respect of any Guarantor's obligations under the Guarantee if the Borrower can still comply with Clause 14.13
(Maintenance of Guarantee and Guarantors' assets ratio);

	(j)
	a
decree, judgment, or order by any Agency or a court of competent jurisdiction shall have been entered adjudging the Borrower or any of its Significant Subsidiaries as bankrupt or
insolvent, or approving as properly filed a petition seeking reorganisation of the Borrower or any of its Significant Subsidiaries under any bankruptcy or similar law, and such decree or order shall
have continued undischarged and unstayed for a period of 60 days; or a decree or order of a court of competent jurisdiction over the appointment of a receiver, liquidator, trustee, or assignee
in bankruptcy or insolvency of the Borrower or any of its Significant Subsidiaries, or any substantial part of the assets or property of any such Person, or for the winding up or liquidation of the
affairs of any such Person, shall have been entered, and such decree, judgment or order shall have remained in force undischarged and unstayed for a period of 60 days; or

	(k)
	the
Borrower or any of its Significant Subsidiaries shall institute proceedings to be adjudicated a voluntary bankrupt, or shall consent to the filing of a bankruptcy proceeding
against it, or shall file a petition or answer or consent seeking reorganisation under any bankruptcy or similar law or similar statute, or shall consent to the filing of any such petition, or
shall consent to the appointment of a custodian, receiver, liquidator, trustee or assignee in bankruptcy or insolvency of it or any substantial part of its assets or property, or shall make a general
assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts generally as they become due, or shall, within the meaning of any Bankruptcy Law, become insolvent,
fail generally to pay 

27

 

its
debts as they become due, or takes any corporate action in furtherance of or to facilitate, conditionally or otherwise, any of the foregoing. 

15.2 Rights of Lender upon occurrence of an Event of Default  

	(a)
	If
an Event of Default occurs under this Agreement and is continuing, the Lender (and, following the execution of any other agreements entered into in connection with the agreed
funding source, the party designated by such agreements) may, by written notice (an "Acceleration Notice") to the Borrower, if the Lender, (and,
following the execution of any other agreements entered into in connection with the agreed funding source, the party designated by such agreements) receives written instructions from the agreed
funding source,

	(i)
	declare
the obligations of the Lender hereunder to be terminated, whereupon such obligations shall terminate, and

	(ii)
	declare
the principal amount of, premium, if any, and accrued and unpaid interest, Additional Amounts and Tax Indemnity Amounts, if any, on the Loan to be immediately due and payable
and the same shall become immediately due and payable, 

pursuant
to and in accordance with the terms of any agreements entered into in connection with the agreed funding source. 

	(b)
	If
an Event of Default specified in Clause 15.1(h), (i) or (j) occurs with respect to the Borrower or any of its relevant Significant Subsidiaries, the
obligations of the Lender hereunder shall immediately terminate, and the principal amount of, premium, if any, and accrued and unpaid interest, Additional Amounts and Tax Indemnity Amounts, if any, on
the Loan then outstanding shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Lender (and, following the execution of any other
agreements entered into in connection with the agreed funding source, of the party designated by such agreements), all without diligence, presentment, demand of payment, protest or notice of any kind,
which are expressly waived by the Borrower. 

15.3 Other Remedies  

        If an Event of Default occurs and is continuing, the Lender by notice to the Borrower and/or the Guarantors, as the case may be, (and, following the execution of
any other agreements entered into in connection with the agreed funding source, the party designated by such agreements) may pursue any available remedy to collect the payment of principal or interest
on the Loan or to enforce the performance of any provision of this Agreement or the Guarantee. A delay or omission by the Lender (and, following the execution of any other agreements entered into in
connection with the agreed funding source, by the party designated by such agreements) in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law. 

15.4 Notification of Default or Event of Default  

        The Borrower shall and shall procure that each of the Guarantors shall promptly on becoming aware thereof inform the Lender of the occurrence of any Default or
Event of Default and, upon receipt of a written request to that effect from the Lender, confirm to the Lender that, save as previously notified to the Lender or as notified in such confirmation, no
Default or Event of Default has occurred. 

16.   DEFAULT INTEREST AND INDEMNITY  

16.1 Default Interest Periods  

        If any sum due and payable by the Borrower hereunder is not paid on the due date therefor in accordance with the provisions of Clause 19
(Payments) or if any sum due and payable by the Borrower under any judgement of any court in connection herewith is not paid on the date of such
judgment, the period beginning on such due date or, as the case may be, the date of such judgment and ending on the date upon which the obligation of the Borrower to pay such sum (the balance thereof
for the time being unpaid being herein referred to as an "unpaid sum") is discharged shall be divided into successive periods, each of which, other than
the first, shall start on the last day of the preceding such period and the duration of each of which shall, except as otherwise provided in this Clause 16 (Default
Interest and Indemnity), be selected by the Lender, but shall in any event not be longer than one month. 

28

  

16.2 Default Interest  

        During each such period relating thereto as is mentioned in Clause 16.1 (Default Interest Periods) an
unpaid sum shall bear interest at a rate per annum equal to the Interest Rate. 

16.3 Payment of Default Interest  

        Any interest which shall have accrued under Clause 16.2 (Default Interest) in respect of an unpaid sum
shall be due and payable and shall be paid by the Borrower at the end of the period by reference to which it is calculated or on such other dates as the Lender may specify by written notice to the
Borrower. 

16.4 Borrower's Indemnity  

        The Borrower undertakes to indemnify the Lender against any reasonably incurred and properly documented cost, claim, loss, expense (including legal fees) or
liability, together with any VAT thereon, which it may sustain or incur as a consequence of the occurrence of any Event of Default or any default by the Borrower in the performance of any of the
obligations expressed to be assumed by it in this Agreement. 

        The
Borrower also undertakes to indemnify the Lender against any claim, demand, action, liability, damages, cost, loss or expense (including, without limitation, legal fees) arising out
of, or in connection with any instruments issued to the agreed funding source, or based on any dispute or issue arising out of, or in connection with, any instruments issued to the agreed funding
source. 

16.5 Unpaid Sums as Advances  

        Any unpaid sum shall, for the purposes of this Clause 16 (Default Interest and Indemnity) and
Clause 10.1 (Increased Costs), be treated as an advance and accordingly in this Clause 16 (Default Interest and
Indemnity) and Clause 10.1 (Increased Costs) the term "Loan" includes any unpaid sum and the term "Interest Period," in
relation to an unpaid sum, includes each such period relating thereto as is mentioned in Clause 16.1 (Default Interest Periods). 

17.   AMENDMENTS TO AGREED FUNDING SOURCE AGREEMENTS  

        Any amendment to, or waivers of any provision of, any agreements entered into in connection with the agreed funding source shall be prohibited without the express
written consent of the Borrower, which consent shall not be unreasonably withheld (other than amendments or waivers that are made pursuant to any legal, regulatory or accounting requirement, with
respect to which the Lender shall consult with the Borrower to the extent reasonably practicable). 

18.   CURRENCY OF ACCOUNT AND PAYMENT  

18.1 Currency of Account  

        The U.S. dollar is the currency of account and payment for each and every sum at any time due from the Borrower hereunder. 

18.2 Currency Indemnity  

        If any sum due from the Borrower under this Agreement or any order or judgment given or made in relation hereto has to be converted from the currency (the
"first currency") in which the same is payable hereunder or under such order or judgment into another currency (the "second
currency") for the purpose of (a) making or filing a claim or proof against the Borrower, (b) obtaining an order or judgment in any court or other tribunal or
(c) enforcing any order or judgment given or made in relation hereto, the Borrower shall indemnify and hold harmless the Lender from and against any loss suffered or reasonably incurred as a
result of any discrepancy between (i) the rate of exchange used for such purpose to convert the sum in question from the first currency into the second currency and (ii) the rate or
rates of exchange at which the Lender may in the ordinary course of business purchase the first currency with the second currency upon receipt of a sum paid to it in satisfaction, in whole or in part,
of any such order, judgment, claim or proof. 

29

 

19.   PAYMENTS  

19.1 Payments to the Lender  

        On each date on which this Agreement requires an amount denominated in U.S. dollars to be paid by the Borrower, the Borrower shall make the same available to the
Lender by payment in U.S. dollars and in same day funds on such date, or in such other funds as may for the time being be customary in London for the settlement in London of international banking
transactions in U.S. dollars, to the Account. The Borrower shall procure that the bank effecting payment on its behalf confirms to the Lender or to such person as the Lender may direct by tested telex
or authenticated SWIFT message three Business Days prior to the date that such payment is required to be made by this Agreement the payment instructions relating to such payment. 

19.2 Alternative Payment Arrangements  

        If, at any time, it shall become impracticable, by reason of any action of any governmental authority or any Change of Law, exchange control regulations or any
similar event, for the Borrower to make any payments hereunder in the manner specified in Clause 19.1 (Payments to the Lender), then the Borrower
may agree with the Lender alternative arrangements for such payments to be made; provided that, in the absence of any such agreement, the Borrower shall be obliged to make all payments due to the
Lender in the manner specified herein. 

19.3 No Set-off  

        All payments required to be made by the Borrower hereunder shall be calculated without reference to any set-off or counterclaim and shall be made free
and clear of and without any deduction for or on account of any set-off or counterclaim. 

20.   COSTS AND EXPENSES  

20.1 Transaction Expenses and Fees  

        The Borrower agrees to pay the Lender a fee, pursuant to the Fee Letter. 

20.2 Preservation and Enforcement of Rights  

        The Borrower shall, from time to time on demand of the Lender and following receipt from the Lender of a description in writing in reasonable detail of the
relevant costs and expenses, together with the relevant supporting documents evidencing the matters described therein, reimburse the Lender for all costs and expenses, including legal fees, together
with any VAT thereon properly incurred in or in connection with the preservation and/or enforcement of any of its rights under this Agreement except where the relevant claim is successfully defended
by the Borrower. 

20.3 Stamp Taxes  

        The Borrower shall pay all stamp, registration and other similar Taxes to which this Agreement or any judgement given against the Borrower in connection herewith
is or at any time may be subject and shall, from time to time on demand of the Lender, indemnify the Lender against any properly documented liabilities, costs, expenses and claims resulting from any
failure to pay or any delay in paying any such Tax. 

20.4 Lender's Costs  

        The Borrower shall, from time to time on demand of the Lender, and without prejudice to the provisions of Clause 20.2 (Preservation
and Enforcement of Rights), compensate the Lender at such daily and/or hourly rates as the Lender shall from time to time reasonably determine for the time and expenditure, all
costs and expenses (including telephone, fax, copying, travel and personnel costs) reasonably incurred and properly documented by the Lender in connection with its taking such action as it may deem
appropriate or in complying with any request by the Borrower in connection with: 

	(a)
	the
granting or proposed granting of any waiver or consent requested hereunder by the Borrower;

	(b)
	any
actual breach by the Borrower of its obligations hereunder; or

	(c)
	any
amendment or proposed amendment hereto requested by the Borrower. 

30

 

21.   ASSIGNMENTS AND TRANSFERS  

21.1 Binding Agreement  

        This Agreement shall be binding upon and inure to the benefit of each party hereto and its or any subsequent successors and assigns. 

21.2 No Assignments and Transfers by the Borrower  

        The Borrower shall not be entitled to assign or transfer all or any of its rights, benefits and obligations hereunder, except as permitted under
Clause 14.6 (Mergers and Similar Transactions). 

21.3 Assignments by the Lender  

	(a)
	Prior
to an Event of Default, the Lender may (i) on or at any time after the date hereof assign all or any of its rights and benefits hereunder or transfer all or any of its
rights, benefits and obligations hereunder (save for (x) its rights to principal, interest and other amounts paid and payable under this Agreement and (y) its right to receive amounts
paid and payable under any claim, award or judgment relating to this Agreement in favour of the agreed funding source (other than any rights arising under the indemnity in relation to instruments
issued to the agreed funding source described in the second paragraph of Clause 16.4 (Borrower's Indemnity)) (the "afs
indemnity")) to or on behalf of the agreed funding source or, in the case of an assignment of the afs indemnity, to any relevant party who suffers or incurs, as the case may
be, any claim, demand, action, liability, damages, cost, loss or expense (including, without limitation, legal fees) arising out of, or in connection with, or based on any dispute or issue arising in
connection with the agreed funding source; and (ii) subject to the prior written consent of the Borrower (such consent not to be unreasonably withheld or delayed) and except as may be otherwise
specifically provided under the agreements entered into in connection with the agreed funding source, assign all or any of its rights and benefits hereunder or transfer all or any of its rights,
benefits and obligations hereunder to any company which, as a result of any amalgamation, merger or reconstruction or which, as a result of any agreement with the Lender, or any previous substitute,
owns beneficially the whole or substantially the whole of the undertaking, property and assets owned by the Lender prior to such amalgamation, merger, reconstruction or agreement coming into force and
where, in the case of any company which will own the whole or substantially the whole of the undertaking, property or assets of the Lender, the substitution of that company as principal debtor in
relation to the agreed funding source would not be materially prejudicial to the interests of the agreed funding source or the Borrower. Any reference in this agreement to any such assignee or
transferee pursuant to sub-Clause (ii) of this Clause 21.3(a) shall be construed accordingly and, in particular, references to the rights, benefits and obligations hereunder
of the Lender, following such assignment or transfer, shall be references to such rights, benefits or obligations by the assignee or transferee.

	(b)
	On
or following an Event of Default, the Lender may, by notice to the Borrower, assign all or any of its rights and benefits hereunder or transfer all or any of its rights, benefits
and obligations hereunder to the agreed funding source, or any assignee or transferee appointed in connection with the agreed funding source. Any reference in this agreement to any such assignee or
transferee shall be construed accordingly and, in particular, references to the rights, benefits and obligations hereunder of the Lender, following such assignment or transfer, shall be references to
such rights, benefits or obligations by the assignee or transferee appointed in connection with the agreed funding source. 

22.   CALCULATIONS AND EVIDENCE OF DEBT  

22.1 Basis of Accrual  

        Default interest shall accrue from day to day and shall be calculated on the basis of a year of 360 days consisting of 12 30-day months. 

22.2 Evidence of Debt  

        The Lender shall maintain, in accordance with its usual practice, accounts evidencing the amounts from time to time lent by and owing to it hereunder; in any
legal action or proceeding arising out of or in connection with this Agreement, in the absence of manifest error and subject to the provision by the 

31

 

Lender
to the Borrower of written information describing in reasonable detail the calculation or computation of such amounts together with the relevant supporting documents evidencing the matters
described therein, the entries made in such accounts shall be conclusive evidence of the existence and amounts of the obligations of the Borrower therein recorded. 

22.3 Change of Circumstance Certificates  

        A certificate signed by two authorised signatories of the Lender describing in reasonable detail (a) the amount by which a sum payable to it hereunder is
to be increased under Clause 8.1 (Additional Amounts) or (b) the amount for the time being required to indemnify it against any such cost,
payment or liability as is mentioned in Clause 8.3 (Tax Indemnity) or Clause 10.1 (Increased
Costs) shall, in the absence of manifest error, be prima facie evidence of the existence and amounts of the specified
obligations of the Borrower. 

23.   REMEDIES AND WAIVERS, PARTIAL INVALIDITY  

23.1 Remedies and Waivers  

        No failure by the Lender to exercise, nor any delay by the Lender in exercising, any right or remedy hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right or remedy prevent any further or other exercise thereof or the exercise of any other right or remedy. The rights and remedies herein provided are cumulative and
not exclusive of any rights or remedies provided by law. 

23.2 Partial Invalidity  

        If, at any time, any provision hereof is or becomes illegal, invalid or unenforceable in any respect under the law of any jurisdiction, neither the legality,
validity or enforceability of the remaining provisions hereof nor the legality, validity or enforceability of such provision under the law of any other jurisdiction shall in any way be affected or
impaired thereby. 

24.   NOTICES; LANGUAGE  

24.1 Communications in Writing  

        Each communication to be made hereunder shall be made in writing and, unless otherwise stated, shall be made by fax or letter. 

24.2 Delivery  

        Any communication or document to be made or delivered by one person to another pursuant to this Agreement shall, unless that other person has by 15 calendar days'
written notice to the same specified another address, be made or delivered to that other person at the address identified with its signature below and shall be effective or when left at that address
(in the case of a letter) or when received by the addressee (in the case of a fax). Provided that any communication or document to be made or delivered by one party to the other party shall be
effective only when received by such other party and then only if the same is expressly marked for the attention of the department or officer identified with the such other party's signature below, or
such other department or officer as such other party shall from time to time specify for this purpose. 

24.3 Language  

        This Agreement shall be signed in English. Each communication and document made or delivered by one party to another pursuant to this Agreement shall be in the
English language or accompanied by a translation thereof into English certified by an officer of the person making or delivering the same as being a true and accurate translation thereof. 

25.   LAW AND JURISDICTION  

25.1 English Law  

        This Agreement is governed by, and shall be construed in accordance with, English law. 

32

 

25.2 English Courts  

        Each of the Lender and the Borrower agrees that the courts of England shall have jurisdiction to hear and determine any suit, action or proceedings, and to settle
any disputes, which arise out of or in connection with this Agreement ("Proceedings") and, for such purposes, irrevocably submit to the jurisdiction of
such courts. 

25.3 Appropriate Forum  

        Each of the Lender and the Borrower irrevocably waives any objection which it might now or hereafter have to the courts of England being nominated as the forum to
hear and determine any Proceedings and to settle any Disputes, and agrees not to claim that any such court is not a convenient or appropriate forum. 

25.4 Service of Process  

        The Lender and the Borrower agree that the process by which any Proceedings in England are begun may be served on them by being delivered to UBS Limited and Law
Debenture Corporate Services Limited, respectively, or their registered offices for the time being. If any such Person mentioned in this Clause is not or ceases to be effectively appointed to accept
service of process on the Lender's behalf,
the Lender shall immediately appoint a further Person in England to accept service of process on its behalf. If such Person mentioned in this Clause is not or ceases to be effectively appointed to
accept service of process on the Borrowers' behalf, the Borrower shall immediately appoint a further Person in England to accept service of process on its behalf. Nothing in this Clause shall affect
the right of either party hereto to serve process in any other manner permitted by law. 

25.5 Non-exclusivity  

        The submission to the jurisdiction of the English courts in accordance with Clause 25.2 (English courts)
hereof shall not, and shall not be construed so as to, limit the right of any party hereto to take Proceedings in any other court of competent jurisdiction. 

25.6 Consent to Enforcement, etc.  

        Each of the Lender and the Borrower consents generally in respect of any Proceedings to the giving of any relief or the issue of any process in connection with
such Proceedings including, without limitation, the making, enforcement or execution against any property whatsoever, irrespective of its use or intended use, of any order or judgement which is made
or given in such Proceedings. 

25.7 Arbitration  

        If any dispute or difference of whatever nature howsoever arises from or in connection with this Agreement, or any supplement, modifications or additions thereto
(each a "Dispute"), the Lender may elect, by notice to the Borrower, to settle such claim by arbitration in accordance with the following provisions.
The Borrower hereby agrees that (regardless of the nature of the Dispute) any Dispute may be settled by arbitration in accordance with the UNCITRAL Arbitration Rules (the
"Rules") as at present in force by a panel of three arbitrators appointed in accordance with the Rules. The seat of any reference to arbitration shall
be London, England. The procedural law of any reference to arbitration shall be English law. The language of any arbitral proceedings shall be English. The appointing authority for the purposes set
forth in Articles 7(2) and 7(3) of the Rules shall be the London Court of International Arbitration. 

25.8 Contracts (Rights of Third Parties) Act 1999  

        A person who is not a party to this Agreement has no rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement, but this
does not affect any right or remedy of a third party which exists or is available apart from that Act. 

25.9 Counterparts  

        This Agreement may be signed in two or more counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were
upon the same instrument. 

33

 

        AS WITNESS    the hands of the duly authorised representatives of the parties hereto the day and year first before written. 

 
 

SIGNATURE PAGE    
    

	 
	 	 
	 

	 	 	Borrower

OPEN JOINT STOCK COMPANY WIMM-BILL-DANN FOODS
	

 	
 	

By:

Title:	

/s/  V. PREOBRAJENSKY      
 V. Preobrajensky
 Chief Executive Officer
	

 	
 	

By:

Title:	

/s/  E. LARYUSHKINA      
 E. Laryushkina
 Chief Accountant
	 	 	Notices:
	

 	
 	

Open Joint Stock Company

Wimm-Bill-Dann Foods

Yauzsky Boulevard 16/15

109028 Moscow

The Russian Federation

Fax: +7 095 105 5805
	

 	
 	
Lender

UBS (LUXUMBOURG) S.A.
	
 	
 	

By:

Title:	

/s/  M. SCHWITTER      
 M. Schwitter
	

 	
 	

By:

Title:	

/s/  F. GERSTER      
 F. Gerster
	 	 	Notices:
	

 	
 	

UBS (Luxembourg) S.A.

36-38 Grand' rue

L-1600 Luxembourg

Fax: +352-45 12 12 703

Attention: Michael Schwitter/Flemming Gerster

34

QuickLinks

Exhibit 4.1

TABLE OF CONTENTS

SIGNATURE PAGE

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