Document:

Exhibit 10.1

 

US$135,000,000

 

FACILITY AGREEMENT

 

dated 27 June 2008

 

for

 

CLOSED JOINT-STOCK COMPANY “SET
TELEVISSIONNYKH STANTSIY”

 

arranged by

 

ABN AMRO BANK N.V., BNP PARIBAS, ING BANK N.V.,
RAIFFEISEN ZENTRALBANK

ÖSTERREICH AKTIENGESELLSCHAFT AND ZAO RAIFFEISENBANK

 

with

 

RAIFFEISEN ZENTRALBANK ÖSTERREICH AKTIENGESELLSCHAFT

 

acting as
Agent

 

	
  Linklaters CIS

  
	
   

  
	
  Paveletskaya sq. 2, bld. 2

  
	
  Moscow 115054

  
	
   

  
	
  Telephone (+7) 495 797 9797

  
	
  Facsimile (+7) 495 797 9798

  
	
   

  
	
  Ref: L-154029

  

 

 

CONTENTS

 

	
  CLAUSE

  	
   

  	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 1

  	
   

  	
   

  
	
   

  	
   

  	
  INTERPRETATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  Definitions
  and interpretation

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 2

  	
   

  	
   

  
	
   

  	
   

  	
  THE FACILITY

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  The
  Facility

  	
   

  	
  15

  
	
  3.

  	
   

  	
  Purpose

  	
   

  	
  15

  
	
  4.

  	
   

  	
  Conditions
  of Utilisation

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 3

  	
   

  	
   

  
	
   

  	
   

  	
  UTILISATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Utilisation

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 4

  	
   

  	
   

  
	
   

  	
   

  	
  REPAYMENT, PREPAYMENT AND
  CANCELLATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Repayment

  	
   

  	
  18

  
	
  7.

  	
   

  	
  Prepayment
  and cancellation

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 5

  	
   

  	
   

  
	
   

  	
   

  	
  COSTS OF UTILISATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  Interest

  	
   

  	
  22

  
	
  9.

  	
   

  	
  Interest
  Periods

  	
   

  	
  23

  
	
  10.

  	
   

  	
  Changes
  to the calculation of interest

  	
   

  	
  23

  
	
  11.

  	
   

  	
  Fees

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 6

  	
   

  	
   

  
	
   

  	
   

  	
  ADDITIONAL PAYMENT OBLIGATIONS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  Tax
  gross up and indemnities

  	
   

  	
  26

  
	
  13.

  	
   

  	
  Increased
  costs

  	
   

  	
  29

  
	
  14.

  	
   

  	
  Other
  indemnities

  	
   

  	
  30

  
	
  15.

  	
   

  	
  Mitigation
  by the Lenders

  	
   

  	
  31

  
	
  16.

  	
   

  	
  Costs
  and expenses

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 7

  	
   

  	
   

  
	
   

  	
   

  	
  GUARANTEE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
   

  	
  Guarantee
  and indemnity

  	
   

  	
  33

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 8

  	
   

  	
   

  
	
   

  	
   

  	
  REPRESENTATIONS, UNDERTAKINGS
  AND EVENTS OF DEFAULT

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
   

  	
  Representations

  	
   

  	
  37

  
	
  19.

  	
   

  	
  Information
  undertakings

  	
   

  	
  43

  
	
  20.

  	
   

  	
  Financial
  covenants

  	
   

  	
  47

  
	
  21.

  	
   

  	
  General
  undertakings

  	
   

  	
  49

  
	
  22.

  	
   

  	
  Events
  of Default

  	
   

  	
  54

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 9

  	
   

  	
   

  
	
   

  	
   

  	
  CHANGES TO PARTIES

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  23.

  	
   

  	
  Changes
  to the Lenders

  	
   

  	
  59

  
	
  24.

  	
   

  	
  Changes
  to the Obligors

  	
   

  	
  62

  

 

i

 

	
   

  	
   

  	
  SECTION 10

  	
   

  	
   

  
	
   

  	
   

  	
  THE FINANCE PARTIES

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  25.

  	
   

  	
  Role
  of the Agent and the Arranger

  	
   

  	
  64

  
	
  26.

  	
   

  	
  Conduct
  of business by the Finance Parties

  	
   

  	
  68

  
	
  27.

  	
   

  	
  Sharing
  among the Finance Parties

  	
   

  	
  68

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 11

  	
   

  	
   

  
	
   

  	
   

  	
  ADMINISTRATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  28.

  	
   

  	
  Payment
  mechanics

  	
   

  	
  71

  
	
  29.

  	
   

  	
  Set-off

  	
   

  	
  74

  
	
  30.

  	
   

  	
  Notices

  	
   

  	
  74

  
	
  31.

  	
   

  	
  Calculations
  and certificates

  	
   

  	
  76

  
	
  32.

  	
   

  	
  Partial
  invalidity

  	
   

  	
  76

  
	
  33.

  	
   

  	
  Remedies
  and waivers

  	
   

  	
  76

  
	
  34.

  	
   

  	
  Amendments
  and waivers

  	
   

  	
  77

  
	
  35.

  	
   

  	
  USA
  Patriot Act

  	
   

  	
  77

  
	
  36.

  	
   

  	
  Counterparts

  	
   

  	
  77

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 12

  	
   

  	
   

  
	
   

  	
   

  	
  GOVERNING LAW AND ENFORCEMENT

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  37.

  	
   

  	
  Governing
  law

  	
   

  	
  78

  
	
  38.

  	
   

  	
  Arbitration

  	
   

  	
  78

  
	
  39.

  	
   

  	
  Jurisdiction

  	
   

  	
  79

  

 

THE SCHEDULES

 

	
  SCHEDULE

  	
   

  	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 1 The Original Parties

  	
   

  	
  81

  
	
  SCHEDULE 2 Conditions precedent

  	
   

  	
  84

  
	
  SCHEDULE 3 Requests

  	
   

  	
  89

  
	
  SCHEDULE 4 Mandatory Cost formula

  	
   

  	
  91

  
	
  SCHEDULE 5 Form of Transfer Certificate

  	
   

  	
  93

  
	
  SCHEDULE 6 Form of Accession Letter

  	
   

  	
  95

  
	
  SCHEDULE 7 Form of Resignation Letter

  	
   

  	
  97

  
	
  SCHEDULE 8 Form of Compliance Certificate

  	
   

  	
  98

  
	
  SCHEDULE 9 Broadcasting Licences

  	
   

  	
  100

  
	
  SCHEDULE 10 Form of Payment Confirmation Notice

  	
   

  	
  103

  
	
  SCHEDULE 11 Form of
  Payment Notification

  	
   

  	
  104

  

 

ii

 

THIS AGREEMENT is
dated 27 June 2008 and made between:

 

(1)         CLOSED JOINT-STOCK COMPANY “SET TELEVISSIONNYKH STANTSIY”,
a closed joint stock company established and existing under the laws of the
Russian Federation with main state registration number 1027700151852 and having
its registered address at 3RD Khoroshevskaya Str., 12, 123298,
Moscow, Russian Federation (ZAO CTC or the “Borrower”);

 

(2)         THE SUBSIDIARIES of CTC Media listed in Part I
of Schedule 1 as original guarantors (the “Original
Guarantors”);

 

(3)         ABN AMRO BANK N.V., BNP
PARIBAS, ING BANK N.V., RAIFFEISEN ZENTRALBANK ÖSTERREICH AKTIENGESELLSCHAFT
and ZAO RAIFFEISENBANK as mandated lead arrangers (whether acting individually or together the “Arranger”);

 

(4)         THE FINANCIAL INSTITUTIONS listed in Part II of Schedule 1
as lenders (the “Original Lenders”);
and

 

(5)         RAIFFEISEN ZENTRALBANK
ÖSTERREICH AKTIENGESELLSCHAFT as agent of the other Finance Parties (the “Agent”).

 

IT IS AGREED as
follows:

 

SECTION 1

 

INTERPRETATION

 

1.           DEFINITIONS
AND INTERPRETATION

 

1.1         Definitions

 

In this Agreement:

 

“Accession Letter” means a document
substantially in the form set out in Schedule 6 (Form of Accession Letter).

 

“Acquisition” means the purchase by the Borrower of: (i) 49
per cent of the issued share capital of the Target; (ii) 10 per cent of
the charter capital of Nomad; (iii) 10 per cent of the charter capital of
MRG; (iv) 49 per cent of the charter capital of Premi; and (v) 49 per
cent of the charter capital of Zollen, pursuant to the Acquisition Agreement.

 

“Acquisition Adjustment Amount” has the meaning given to it
in Clause 7.3 (Acquisition).

 

“Acquisition Agreement” means the sale and purchase agreement
between the Borrower as purchaser, MTG AB as seller and MTG Group AB dated 10 March 2008
(as amended by the amendment agreement dated 16 April 2008).

 

“Acquisition Closing Date” means the date of completion of
the Acquisition.

 

“Acquisition Documents” means the Acquisition Agreement, the
guarantee agreement between CTC Media, MTG AB and MTG Group AB dated 10 March 2008
(as amended by the amendment agreement dated 16 April 2008), all other
material documents relating to the Acquisition as agreed between both the
Borrower and the Agent (on behalf of the Original Lenders) and any updates or
amendments thereto.

 

1

 

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

 

“Additional Guarantor” means a company which
becomes an Additional Guarantor in accordance with Clause 24 (Changes to the Obligors).

 

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

 

“Alfa Group” means CTF and its Subsidiaries from time to
time.

 

“Anti-Terrorism Laws” means the Executive Order, the Bank
Secrecy Act (31 U.S.C. §§ 5311 et seq.), the Money Laundering Control Act of
1986 (18 U.S.C. §§ 1956 et seq.), the USA Patriot Act, the International
Emergency Economic Powers Act (50 U.S.C. §§ 1701 et seq.), the Trading with the
Enemy Act (50 U.S.C. App. §§ 1 et seq.), any other law or regulation
administered by OFAC, and any similar law enacted in the United States after
the Signing Date.

 

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

 

“Availability Period” means the period from
and including the Signing Date to and including the date which is 60 days after
the Signing Date.

 

“Balance Note” means the promissory note issued by the
Borrower in connection with the Acquisition.

 

“Board” means the Board of Governors of the Federal Reserve
System of the United States (or any successor thereto).

 

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

 

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

 

exceeds:

 

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

 

“Broadcasting Affiliate” means an independent affiliate with
which the relevant entity or any of its Subsidiaries has a network affiliation
agreement (whether or not in writing).

 

“Broadcasting Authorisations” means any Authorisation from
any governmental or other regulatory authority necessary in order for any
Obligor or Material Subsidiary to conduct its business in accordance with the
Broadcasting Laws.

 

“Broadcasting Licences” means any one or more television
broadcasting licences for the provision of television broadcasting services.

 

2

 

“Broadcasting Laws” all laws and regulations which relate to
television broadcasting that are applicable to any Obligor or Material
Subsidiary and/or the business of any Obligor or Material Subsidiary.

 

“Business Day” means

 

(a)            for the purposes of Clause 7.4 (Voluntary cancellation) and Clause 7.5 (Voluntary
prepayment of the Loan), a day (other than a Saturday or Sunday) on
which banks are open for general interbank business in New York, Moscow and
Vienna; and

 

(b)           for any other purpose, a day (other
than a Saturday or Sunday) on which banks are open for general interbank
business in London, New York, Moscow, Vienna and Amsterdam.

 

“Cash” has the meaning given to it in Clause 20.3 (Definitions).

 

“Cash Equivalent Investments” has the meaning given to it in
Clause 20.3 (Definitions).

 

“Change of Control Event” means any of the following events:

 

(a)            MTG AB and/or Alfa Group cease to
directly or indirectly jointly control at least 50 per cent. plus one share of (i) the
shares entitling the holder to vote for the election of directors to the Board
of Directors or (ii) the share capital, of CTC Media;

 

(b)           MTG AB ceases to directly or
indirectly control at least 25 per cent. plus one share of (i) the shares
entitling the holder to vote for the election of directors to the Board of
Directors or (ii) the share capital, of CTC Media; and/or

 

(c)            CTC Media ceases to directly or
indirectly control at least 100 per cent. of (i) the shares entitling the
holder to vote for the election of directors to the Board of Directors or (ii) the
share capital, of the Borrower.

 

“Commitment” means:

 

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

 

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

 

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

 

“Compliance Certificate” means a certificate
substantially in the form set out in Schedule 8 (Form of Compliance Certificate).

 

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

 

“Controlled Group” means an entity, whether or not
incorporated, which is under common control with an Obligor within the meaning
of section 4001 of ERISA or is part of a group that includes an Obligor and
that is treated as a single employer under section 414 of the Internal Revenue
Code. When any provision of this Agreement relates to a past event, the term “member

 

3

 

of the Controlled
Group” includes any person that was a member of the Controlled Group at the
time of that past event.

 

“CTC Media” means CTC Media, Inc., a corporation incorporated
under the laws of Delaware with registration number 2210850 and registered
address at 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808,
United States of America.

 

“CTF” means CTF Holdings Limited, a company registered in
Gibraltar with its registered office at Suite 2, 4 Irish Place, Gibraltar.

 

“Default” means an Event of Default or any
event or circumstance specified in Clause 22 (Events
of Default) which would (with the expiry of a grace period, the
giving of notice, the making of any determination under the Finance Documents
or any combination of any of the foregoing) be an Event of Default.

 

“Designated Amount” has the meaning given to it in Clause
12.1 (Definitions).

 

“Designated Lender” has the meaning given to it in Clause 12.1
(Definitions).

 

“Designated Person” means a person or entity:

 

(a)            listed in the annex to, or otherwise
subject to the provisions of, the Executive Order;

 

(b)           named as a “Specially Designated
National and Blocked Person” on the most current list published by OFAC at its
official website or any replacement website or other replacement official
publication of such list; or

 

(c)            with which any Lender is prohibited
from dealing or otherwise engaging in any transaction by any Anti-Terrorism
Law.

 

“Disruption Event” means either or both of:

 

(a)            a material disruption to those
payment or communications systems or to those financial markets which are, in
each case, required to operate in order for payments to be made in connection
with the Facility (or otherwise in order for the transactions contemplated by
the Finance Documents to be carried out) which disruption is not caused by and
is beyond the control of any of the Parties; or

 

(b)           the occurrence of any other event
which results in a disruption (of a technical or systems-related nature) to the
treasury or payments operations of a Party preventing that, or any other Party:

 

(i)             from performing its payment
obligations under the Finance Documents; or

 

(ii)            from communicating with other Parties
in accordance with the terms of the Finance Documents,

 

and which (in either such case) is not caused by, and is
beyond the control of, the Party whose operations are disrupted

 

“Dollars” and “US$” means the
lawful currency for the time being of the United States of America.

 

4

 

“Employee Plan” means, at any time, an “employee pension
benefit plan” as defined in Section 3(2) of ERISA subject to the
provisions of Title IV of ERISA or Section 412 of the Internal Revenue
Code or Section 302 of ERISA (other than a Multiemployer Plan), then or at
any time during the previous five years maintained for, or contributed to (or
to which there is or was an obligation to contribute) on behalf of, employees
of any Obligor or ERISA Affiliate.

 

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

 

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

 

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

 

(c)            land (including land under water).

 

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

 

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

 

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

 

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

 

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

 

“ERISA” means the US Employee Retirement Income Security Act
of 1974 (or any successor legislation thereto) and the regulations promulgated
and rulings issued thereunder.

 

“ERISA Affiliate” means each person (as defined in Section 3(9) of
ERISA) that is a member of a Controlled Group of any Obligor.

 

“Executive Order” means the US Executive Order No. 13224
on Blocking Property and Prohibiting Transactions with Persons who Commit,
Threaten to Commit, or Support Terrorism, which came into effect on 24 September 2001,
as amended.

 

“Extending Lender” means a Lender that has consented to the
Borrower’s term extension request pursuant to paragraph (c) of Clause 6.2
(Extension option).

 

“Extension Option Date” means 22 June 2009.

 

“Event of Default” means any event or
circumstance specified as such in Clause 22 (Events
of Default).

 

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

 

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

 

5

 

“Fee Letter” means any letter or letters
dated on or about the Signing Date between the Arranger and the Borrower (or
the Agent and the Borrower) setting out any of the fees referred to in Clause
11 (Fees).

 

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

 

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

 

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

 

(a)            moneys borrowed;

 

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

 

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

 

(d)           the amount of any liability in
respect of any lease or hire purchase contract which would, in accordance with
US GAAP, be required to be capitalised on the balance sheet of the Group;

 

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

 

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

 

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

 

(h)           shares which are expressed to be
redeemable other than at the sole option of the issuer or by virtue of any
relevant law or regulation in relation to share buy-backs;

 

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

 

(j)             without double counting the amount of
any liability in respect of any guarantee or indemnity for any of the items
referred to in paragraphs (a) to (i) above.

 

“Fraudulent Transfer Law” means any applicable US Bankruptcy
Law or any applicable US state fraudulent transfer or conveyance law.

 

“Group” means CTC Media and its Subsidiaries
from time to time to the extent such Subsidiaries are consolidated with CTC
Media under its most recent US GAAP consolidated financial statements (to
include, for the avoidance of doubt, the Borrower and its Subsidiaries and,
from the Acquisition Closing Date, the Target Group).

 

“Group Structure Chart” means the Group structure chart
delivered to the Agent pursuant to Clause 4.1(Initial
conditions precedent) as updated by an Obligor under paragraph (e) of
Clause 19.4 (Information: miscellaneous).

 

6

 

“Guarantor” means an Original Guarantor or
an Additional Guarantor, unless it has ceased to be a Guarantor in accordance
with Clause 24 (Changes to the Obligors).

 

“Hazardous Substance” means any waste, pollutant,
contaminant or other substance (including any liquid, solid, gas, ion, living
organism or noise) that may be harmful to human health or other life or the
Environment or a nuisance to any person or that may make the use or ownership
of any affected land or property more costly.

 

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

 

“Information Memorandum” means the document
in the form approved by the Borrower concerning the Group which, at the
Borrower’s request and on its behalf, was prepared in relation to this
transaction and distributed by the Arranger to selected financial institutions
before the Signing Date.

 

“Intellectual Property Rights” means all patents, designs,
copyrights, topographies, trade marks, service marks, trading names, domain
names, rights in confidential information, programming rights (including third
party programming rights) and know-how, any other intellectual property and any
associated or similar rights, and any interest in any of the foregoing (in each
case whether registered or unregistered and including any related licences and
sub-licences of the same, applications and rights to apply for the same and
wherever subsisting).

 

“Interest Expense” has the meaning given to
it in Clause 20.3 (Definitions).

 

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

 

“Internal Revenue Code” means the United States Internal
Revenue Code of 1986 (26 U.S.C. §§ 1 et seq.), as amended from time to time.

 

“Lender” means:

 

(a)            any Original Lender; and

 

(b)           any person which has become a Party
in accordance with Clause 23 (Changes to the
Lenders),

 

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

 

“LIBOR” means, in relation to the Loan:

 

(a)            the applicable Screen Rate; or

 

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

 

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

 

7

 

 “LMA” means the Loan Market Association.

 

“Loan” means
the loan made or to be made under the Facility or the principal amount
outstanding for the time being of the loan.

 

“Majority
Lenders” means:

 

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

 

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

 

“Mandatory Cost”
means the percentage rate per annum calculated by the Agent in accordance with
Schedule 4 (Mandatory Cost  formula) and as certified (in reasonable
detail) to the Borrower by the relevant Lender acting through the Agent.

 

“Margin” means
3 per cent. per annum.

 

“Margin Stock”
means “margin stock” or “margin security” within the meaning of Regulation U or
X.

 

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

 

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

 

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

 

(c)            the
validity, legality or enforceability of any Finance Document, or the rights or
remedies of any Finance Party thereunder.

 

“Material Subsidiary”
means, from time to time, any Subsidiary of CTC Media that:

 

(a)            together
with its Subsidiaries, the total assets or total revenues of which as at the
date as at which the Group’s latest consolidated financial statements were
prepared or, as the case may be, for the financial period to which those
financial statements relate account for 5 per cent. or more of the consolidated
total assets or total revenues of the Group (all as calculated by reference to
the latest audited consolidated financial statements of the Group delivered
pursuant to paragraphs (a) of Clause 19.1 (Financial
Statements)); or

 

(b)           to
which has been transferred (whether in a single transaction or a series of
transactions (whether related or not)) the whole or substantially the whole of
the assets of a Subsidiary which immediately prior to such transaction(s) was
a Material Subsidiary.

 

For the purposes of this definition:

 

(i)             if
a Subsidiary becomes a Material Subsidiary pursuant to paragraph (b) above,
the Material Subsidiary by which the relevant transfer was made shall, subject
to paragraph (a) above, cease to be a Material Subsidiary; and

 

8

 

(ii)            if
a Subsidiary is acquired by the Group after the end of the financial period to
which the latest consolidated financial statements of the Group relate, those financial
statements shall be adjusted as if that Subsidiary had been shown in them by
reference to its then latest financial statements until consolidated financial
statements of the Group for the financial period in which the acquisition is
made have been prepared. This paragraph (ii) shall not apply to the Target
for the 2008 financial year.

 

“Merger” means
the reorganisation of Nomad, Premi and Zollen, whereby Premi and Zollen will be
merged by means of accession into Nomad.

 

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

 

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

 

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

 

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

 

“MRG” means OOO “MRG”,
a limited liability company organised under the laws of the Russian Federation.

 

“MTG AB” means
MTG Broadcasting AB, a company incorporated under the laws of Sweden.

 

“MTG Group AB”
means Modern Times Group MTG AB, a company incorporated under the laws of
Sweden.

 

“Multiemployer Plan”
means, at any time, a multiemployer plan (as defined in Section 4001(a)(3) of
ERISA) then or at any time during the previous five years maintained for, or
contributed to (or to which there is or was an obligation to contribute) on
behalf of, employees of any Obligor or ERISA Affiliate.

 

“New Lender” has
the meaning given to it in Clause 23.1 (Assignments and transfers
by the Lenders).

 

“Nomad” means
OOO “Nomad”, a limited liability company organised under the laws of the
Russian Federation.

 

“Non-Extending Lender”
means a Lender that is not an Extending Lender following the exercise of Clause
6.2 (Extension Option).

 

“Novy Kanal”
means Closed Joint Stock Company “New Channel”, a closed joint stock company
organised under the laws of the Russian Federation with main state registration
number 1047796750880 and having its registered address at 3RD Khoroshevskaya
Str., 12, 123298, Moscow, Russian Federation.

 

“Obligor” means
the Borrower or a Guarantor.

 

“OFAC” means the
Office of Foreign Assets Control of the United States Department of the
Treasury.

 

9

 

“OIBDA” has the
meaning given to it in Clause 20.3 (Definitions).

 

  “Original Financial Statements” means:

 

(a)            the
consolidated financial statements of the Group for the financial quarter ended
31 March 2008 together with the related notes thereto, prepared in accordance
with US GAAP; and

 

(b)           in
relation to each Russian Obligor, its audited financial statements for its
financial year ended 31 December 2007, prepared in accordance with RAS.

 

“Original Obligor”
means the Borrower or an Original Guarantor.

 

“Participating Member
State” means any member state of the European Communities that
adopts or has adopted the euro as its lawful currency in accordance with
legislation of the European Community relating to Economic and Monetary Union.

 

“Party” means a
party to this Agreement.

 

“Payment Confirmation
Notice” means a document substantially in the form set out in
Schedule 10 (Form of Payment Confirmation Notice).

 

“Payment Notification”
means a document substantially in the form set out in Schedule 11 (Form of Payment Notification).

 

“Premi” means
OOO “Premi”, a limited liability company organised under the laws of the
Russian Federation.

 

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

 

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

 

“RAS” means
generally accepted accounting principles, standards and practices in the
Russian Federation.

 

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

 

“Regulation T”, “Regulation U” or “Regulation X”
means Regulation U or X, as the case may be, of the Board, as from time to time
in effect and all official rulings and interpretations thereunder or thereof.

 

“Relevant Interbank Market”
means the London interbank market.

 

“Relevant Lender”
has the meaning given to it in Clause 12.1 (Definitions).

 

“Relevant Period”
has the meaning given to it in Clause 20.3 (Definitions).

 

10

 

“Repayment Date”
means each date for repayment of the Loan specified in Clause 6.1 (Repayment of Loan).

 

“Repayment Instalment”
means each instalment for repayment of the Loan specified in Clause 6.1 (Repayment of Loan).

 

“Repeating Representations”
means each of the representations set out in Clause 18 (Representations)
other than those set out in Clause 18.7 (Deduction of Tax),
Clause 18.8 (No filing or stamp tax), Clause
18.10 (No misleading information), Clause 18.11
(Financial statements), Clause 18.12 (No obligation to create Security), paragraph (b) of
Clause 18.17 (Licences), Clause 18.23 (Group Structure), Clause 18.24 (Target and Target Group) and
Clause 18.28 (Acquisition Documents).

 

“Resignation Letter”
means a letter substantially in the form set out in Schedule 7 (Form of Resignation Letter).

 

“Russian Obligor”
means each Obligor established and existing under the laws of the Russian
Federation.

 

“Screen Rate”
means the British Bankers Association Interest Settlement Rate for Dollars for
the relevant period displayed on the appropriate page of the Reuters
screen, calculated, where necessary, by interpolating on a linear basis between
the rate quoted in respect of the longest period (for which a rate is quoted)
which is less than the Interest Period and that quoted in respect of the
shortest period (for which a rate is quoted) which exceeds the Interest Period.
If the agreed page is replaced or service ceases to be available, the
Agent may specify another page or service displaying the appropriate rate
after consultation with the Borrower and the Lenders.

 

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

 

“Selection Notice”
means a notice substantially in the form set out in Part II of Schedule 3
(Requests) given in accordance
with Clause 9 (Interest Periods).

 

“Signing Date”
means the date of this Agreement.

 

“Subsidiary”
means, with respect to any person, an entity from time to time of which such
person has direct or indirect control or owns directly or indirectly more than
50 per cent. of the share capital or similar right of ownership. For the
purpose of this definition, “control” of a
person by another means that the other (whether alone or acting in concert with
others, whether directly or indirectly and whether by the ownership of share
capital, the possession of voting power, contract or otherwise) has the power
to appoint and/or remove all, the majority or 50 per cent. including the right
to exercise a casting vote, of the members of the board of directors or other
governing body of that person or of any other person which controls that person
or otherwise controls or has the power to control the affairs and policies of
that person or of any other person which controls that person.

 

“Target” means
Closed Joint Stock Company “TV DARIAL”, a closed joint-stock company organised
under the laws of the Russian Federation with main state registration number

 

11

 

1027739313205 and having its registered address at Academika
Koroleva Str., 4, Building 4, 129515, Moscow, Russian Federation.

 

“Target Group”
means prior to the Merger, the Target, MRG, Nomad, Premi and Zollen and their
Subsidiaries from time to time and following the Merger, the Target, MRG and
Nomad and their Subsidiaries from time to time.

 

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

 

“Termination Date”
means, subject to Clause 6.2 (Extension option),
22 June 2010 (except that, if the Termination Date would otherwise fall on
a day which is not a Business Day, it will instead be the immediately preceding
Business Day).

 

“Total Commitments”
means the aggregate of the Commitments, being US$135,000,000 at the Signing
Date.

 

“Total Debt” has
the meaning given to it in Clause 20.3 (Definitions).

 

“Total Net Debt”
has the meaning given to it in Clause 20.3 (Definitions).

 

“Total Shareholder Equity”
has the meaning given to it in Clause 20.3 (Definitions).

 

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

 

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

 

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

 

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

 

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

 

“US” and “United States” means the United States of America, its
territories and possessions.

 

“USA Patriot Act”
means the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56 of
the United States, as amended.

 

“US Bankruptcy Law”
means the United States Bankruptcy Code of 1978 (Title 11 of the United States
Code) or any other United States federal or state bankruptcy, insolvency or
similar law.

 

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

 

“US Obligor”
means a Guarantor that is organised, incorporated or formed under the laws of
the United States or any State thereof (including the District of Columbia).

 

“Utilisation”
means a utilisation of the Facility.

 

“Utilisation Date”
means the date of the Utilisation, being the date on which the Loan is
disbursed by the Agent.

 

12

 

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

 

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

 

“Zollen” means
OOO “Zollen”, a limited liability company organised under the laws of the
Russian Federation.

 

1.2         Construction

 

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

 

(i)             the “Agent”, the “Arranger”, any “Finance
Party”, any “Lender”, any “Obligor” or any “Party”
shall be construed so as to include its successors in title, permitted assigns
and permitted transferees;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

13

 

1.3         Third Party Rights

 

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

 

14

 

SECTION 2

 

THE FACILITY

 

2.           THE FACILITY

 

2.1         The Facility

 

Subject to the terms of this Agreement, the Lenders make
available to the Borrower a term loan facility with an extension option in
Dollars in an aggregate amount equal to the Total Commitments.

 

2.2         Finance Parties’ rights and
obligations

 

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

 

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

 

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

 

3.           PURPOSE

 

3.1         Purpose

 

The Borrower shall apply all amounts borrowed by it under
the Facility towards discharge of its liability under the Balance Note. To the
extent its liability under the Balance Note has been fully discharged, the
Facility may be used for general corporate purposes, including future
acquisitions.

 

3.2         Monitoring

 

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

 

4.           CONDITIONS OF UTILISATION

 

4.1         Initial conditions precedent

 

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

 

4.2         Further conditions precedent

 

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

 

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

 

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

 

15

 

4.3         Maximum number of
Utilisations

 

The Borrower may only deliver one Utilisation Request in
respect of the Facility.

 

16

 

SECTION 3

 

UTILISATION

 

5.           UTILISATION

 

5.1         Delivery of a Utilisation
Request

 

The Borrower may utilise the Facility by delivery to the
Agent of a duly completed Utilisation Request not later than 10:00 a.m. on
the day falling three Business Days before the proposed Utilisation Date.

 

5.2         Completion of a Utilisation
Request

 

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

 

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

 

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

 

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

 

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

 

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

 

5.3         Currency and amount

 

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

 

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

 

(i)             a
minimum of US$10,000,000 and an integral multiple of US$1,000,000; or

 

(ii)            in
any event such that it is less than or equal to the Total Commitments.

 

5.4         Lenders’ participation

 

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

 

(b)         The
amount of each Lender’s participation in the Loan will be equal to the
proportion borne by its Commitment to the Total Commitments.

 

(c)         The
Agent shall notify each Lender of the amount of the Loan and the amount of its
participation in the Loan by 4.00 p.m. on the day falling three Business
Days before the proposed Utilisation Date.

 

5.5         Cancellation of Commitment

 

The unused portion of each Lender’s Commitment shall be
immediately cancelled at the earlier of (a) the Utilisation Date and (b) the
end of the Availability Period for the Facility.

 

5.6         Disbursement

 

For the avoidance of doubt and without limiting any other
term under this Agreement, the Loan shall be disbursed by the Agent to the
Borrower in one transfer and otherwise pursuant to Clause 28.2 (Distributions by the Agent).

 

17

 

SECTION 4

 

REPAYMENT, PREPAYMENT AND CANCELLATION

 

6.           REPAYMENT

 

6.1         Repayment of Loan

 

(a)         The Borrower shall
repay the Loan in instalments on each Repayment Date in an amount equal to the
Repayment Instalment set out opposite that Repayment Date in the following
table:

 

	
  Repayment Date

  	
   

  	
  Repayment Instalment for all Lenders

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  expressed as a percentage of the Loan
  outstanding at the close of business on the last day of the Availability
  Period

  
	
   

  	
   

  	
   

  
	
  22 December 2008

  	
   

  	
  25%

  
	
   

  	
   

  	
   

  
	
  22 June 2009

  	
   

  	
  25%

  

 

	
   

  	
   

  	
  Repayment Instalment for all

  Non-Extending Lenders

  	
   

  	
  Repayment Instalment for all

  Extending Lenders

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  expressed as a percentage of the aggregate
  amount of each Non-Extending Lender’s participation in the Loan outstanding
  immediately following the second Repayment Date

  	
   

  	
  expressed as a percentage of the aggregate
  amount of each Extending Lender’s participation in the Loan outstanding
  immediately following the second Repayment Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  22 December 2009

  	
   

  	
  50%

  	
   

  	
  25%

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Termination Date (for
  Non-Extending Lenders)

  	
   

  	
  50%

  	
   

  	
  25%

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  22 December 2010

  	
   

  	
  nil

  	
   

  	
  25%

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Termination Date (for
  Extending Lenders)

  	
   

  	
  nil

  	
   

  	
  25%

  

 

For the
avoidance of doubt, (i) the Loan shall be fully repaid in accordance with
the table above and no amount of any Lender’s participation in the Loan shall
remain outstanding after the relevant Termination Date and (ii) should the
Loan outstanding on a Repayment Date be less than the amount of the relevant
Repayment Instalment, the Borrower shall only repay the amount of the Loan that
remains outstanding.

 

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

 

18

 

6.2         Extension Option

 

(a)         The Borrower may
request to extend the Termination Date by 12 Months by delivery of an extension
request notice received by the Agent not less than 45 (nor more than 60) days
before the Extension Option Date.

 

(b)         The Agent shall
promptly notify each Lender of any such request.

 

(c)         Each Lender shall
notify the Agent of its decision (which shall be in its sole discretion)
whether or not to agree to the request at least 30 days before the Extension
Option Date.

 

(d)         The Termination
Date shall be extended by 12 Months in relation to each Extending Lender’s
participation in the Loan. For the avoidance of doubt, if a Lender fails to
respond, such Lender shall be deemed to have declined such request and the
participation of that Lender and any Lender which declines the request, shall
be repaid on that basis.

 

(e)         The Agent shall
promptly notify the Borrower and the Lenders which of the Lenders have agreed
to the request.

 

(f)          There may be only
one extension of the Termination Date.

 

(g)         If any extension is
so agreed, the Borrower shall pay to the Agent (for the account of each
Extending Lender) a fee to be agreed prior to the extension request on that
Extending Lender’s participation in the Loan as at the Extension Option Date.
That fee shall be payable 10 Business Days following the Extension Option Date.

 

(h)         If (i) Lenders
whose aggregate participations represent 75 per cent or more of the outstanding
Loan decline the extension request or (ii) no extension fee can be agreed
in accordance with paragraph (g) of this Clause 6.2, then the Borrower
may, by providing the Agent with notice of such no later than 10 Business Days
prior to the Extension Option Date, revoke its extension request made under
paragraph (a) of this Clause 6.2.

 

7.           PREPAYMENT
AND CANCELLATION

 

7.1         Illegality

 

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

 

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

 

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

 

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

 

7.2         Change of control

 

On the occurrence
of any Change of Control Event:

 

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

 

19

 

(b)           if a Lender so
requires, the Agent shall, by not less than 10 Business Days notice to the
Borrower, cancel the Commitment of that Lender and declare the participation of
that Lender in the outstanding Loan, together with accrued interest thereon,
and all other amounts accrued under the Finance Documents in relation thereto
due and payable, whereupon the Commitment of that Lender will be cancelled and
all such outstanding amounts will become due and payable on the date set out in
the notice to the Borrower.

 

7.3         Acquisition

 

(a)         In this Clause 7.3
(Acquisition), “Acquisition
Adjustment Amount” means any amount received or recovered by a
member of the Group in respect of any Acquisition Document or related claim or
against the provider of any related report, after deducting related reasonable
third party expenses and any taxes payable, or an adjustment downwards in the
purchase price for the Acquisition, to the extent such amounts received or
recovered are in an aggregate amount exceeding US$20,000,000 (or its equivalent
in another currency or currencies).

 

(b)         The Obligors shall
ensure that any Acquisition Adjustment Amount is applied in prepayment of the
outstanding Loan on the last day of the Interest Period in which it was
received or recovered by the relevant member of the Group or, if received or
recovered less than five Business Days before the end of that Interest Period,
on the last day of the following Interest Period.

 

(c)         Paragraph (b) above
does not apply to any Acquisition Adjustment Amount to the extent it:

 

(i)             relates to a loan
granted by a member of the Group to another member of the Group;

 

(ii)            is contractually
committed to be applied within six Months of receipt or recovery by the
relevant member of the Group; or

 

(iii)           is committed to be
applied to replace the assets or meet the liabilities to which that Acquisition
Adjustment Amount relates within 12 Months of receipt or recovery.

 

7.4         Voluntary cancellation

 

The Borrower may,
if it gives the Agent not less than five Business Days’ (or such shorter period
as the Majority Lenders may agree) prior notice, cancel the whole or any part
(being a minimum amount of US$5,000,000 and an integral multiple of
US$1,000,000) of the Total Commitments without premium or penalty. Any
cancellation under this Clause 7.4 shall reduce the Commitments of the Lenders
rateably.

 

7.5         Voluntary prepayment of the
Loan

 

(a)         The Borrower may,
if it gives the Agent not less than five Business Days’ (or such shorter period
as the Majority Lenders may agree) prior notice, prepay the whole or any part
of the Loan (but, if in part, being an amount that reduces the Loan by a
minimum amount of US$2,000,000 and an integral multiple of US$1,000,000).

 

(b)         The Loan may only
be prepaid after the last day of the Availability Period (or, if earlier, the
Utilisation Date).

 

20

 

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

 

(a)           If:

 

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

 

(ii)            any Lender claims
indemnification from the Borrower under Clause 12.3 (Tax indemnity) or Clause 13 (Increased costs); or

 

(iii)           any Mandatory Costs
are payable to any Lender by the Borrower under paragraph (c) of Clause
8.1 (Calculation of Interest),

 

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

 

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

 

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

 

7.7         Restrictions

 

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

 

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

 

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

 

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

 

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

 

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

 

(g)         For the avoidance
of doubt, any prepayment shall reduce the repayment obligations of the Borrower
accordingly.

 

21

 

SECTION 5

 

COSTS OF UTILISATION

 

8.           INTEREST

 

8.1         Calculation of interest

 

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

 

(a)            Margin;

 

(b)           LIBOR for that
Interest Period; and

 

(c)            Mandatory Cost, if
any.

 

8.2         Payment of interest

 

The Borrower shall
pay accrued interest on the Loan on the last day of each Interest Period (and,
if the Interest Period is longer than six Months, on the dates falling at six
monthly intervals after the first day of the Interest Period).

 

8.3         Default interest

 

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

 

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

 

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

 

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

 

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

 

8.4         Notification of rates of
interest

 

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

 

22

 

9.           INTEREST
PERIODS

 

9.1         Selection of Interest Periods

 

(a)         The first Interest
Period for the Loan shall start on the Utilisation Date and end on 22 September 2008.

 

(b)         Following the first
Interest Period, the Borrower may select an Interest Period for the Loan in a
Selection Notice.

 

(c)         Each Selection
Notice for the Loan is irrevocable and must be delivered to the Agent by the
Borrower not later than 10:00 a.m. on the day falling five Business Days
before the first day of the relevant Interest Period.

 

(d)         Subject to this
Clause 9, the Borrower may select an Interest Period of three or six Months or
any other period agreed between the Borrower and the Agent (acting on the
instructions of all the Lenders).

 

(e)         If the Borrower
fails to deliver a Selection Notice to the Agent in accordance with paragraph (b) above,
the relevant Interest Period will, subject to paragraph (f) below, be
three Months.

 

(f)          An Interest Period
for the Loan shall not extend beyond any Repayment Date or the Termination
Date.

 

(g)         Subject to
paragraph (a) above, each Interest Period for the Loan shall start on the
last day of its preceding Interest Period.

 

9.2         Non-Business Days

 

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

 

10.         CHANGES TO
THE CALCULATION OF INTEREST

 

10.1       Absence of quotations

 

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

 

10.2       Market disruption

 

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

 

(i)             the Margin;

 

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

 

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

 

23

 

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

 

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

 

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

 

10.3       Alternative basis of interest
or funding

 

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

 

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

 

10.4       Break Costs

 

(a)         The Borrower shall,
within five Business Days of demand (which shall include sufficient details of
the calculation) by a Lender (acting through the Agent), pay to the Agent (for
distribution to the relevant Lender) that Lender’s certified Break Costs
attributable to all or any part of the Loan or Unpaid Sum being paid by the
Borrower on a day other than the last day of an Interest Period for the Loan or
Unpaid Sum.

 

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

 

11.         FEES

 

11.1       Commitment fee

 

(a)         The Borrower shall
pay to the Agent (for the account of each Lender) a fee in Dollars computed at
the rate of 40 per cent. of the Margin on that Lender’s Commitment for the
Availability Period.

 

(b)         The accrued
commitment fee will be calculated on a daily basis, will accrue from the
Signing Date until (and including) the day falling immediately before the
Utilisation Date and is payable on the Utilisation Date or, if cancelled in
full prior to the end of the Availability Period, on the cancelled amount of
the relevant Lender’s Commitment at the time the cancellation is effective.

 

11.2       Arrangement fee

 

The Borrower shall
pay to the Agent (for the account of the Arranger) an arrangement fee in the
amount and at the times agreed in a Fee Letter (which, for the avoidance of
doubt, is a Finance Document).

 

11.3       Agency fee

 

The Borrower shall
pay to the Agent (for its own account) an agency fee in the amount and at the
times agreed in a Fee Letter (which, for the avoidance of doubt, is a Finance
Document).

 

24

 

11.4       Documentation agent and
co-ordination fee

 

The Borrower shall
pay to BNP Paribas a documentation agent and co-ordination fee in the amount
and at the times agreed in a Fee Letter (which, for the avoidance of doubt, is
a Finance Document).

 

25

 

SECTION 6

 

ADDITIONAL PAYMENT OBLIGATIONS

 

12.         TAX GROSS
UP AND INDEMNITIES

 

12.1       Definitions

 

(a)         In this Agreement:

 

“Designated Amount” means each amount in Dollars set opposite
a Designated Lender’s name under the heading “Designated
Amount” in Part III of Schedule 1 (The Original
Parties) as transferred or assigned from time to time under this Agreement.

 

“Designated Lender” means:

 

(i)             any financial institution who is
listed in Part III of Schedule 1 (The Original Parties)
as a designated lender; and

 

(ii)            any person which has received from
any such financial institution a direct or indirect transfer or assignment of a
Designated Amount (whether in whole or in part),

 

and in each such case, only for so long as such person is
not a Qualifying Lender but is a Lender and only in respect of the relevant
Designated Amount.

 

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

 

“Qualifying Lender” means any Lender which is situated for
tax purposes in the Russian Federation or in a Tax Treaty Jurisdiction.

 

“Relevant Lender” means a Qualifying Lender or a Designated
Lender.

 

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

 

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

 

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

 

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

 

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

 

12.2       Tax gross-up

 

(a)         Each Obligor shall
make all payments required to be made by it under the Finance Documents to the
Finance Parties without any Tax Deduction, unless a Tax Deduction is required
by law.

 

26

 

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

 

(c)         Subject to
paragraph (d) below, if a Tax Deduction is required by law to be made by
an Obligor, the amount of the payment due from that Obligor to the applicable
Finance Party shall be increased to an amount which (after making any Tax Deduction)
leaves an amount equal to the payment which would have been due if no Tax
Deduction had been required.

 

(d)         An Obligor is not
required to make an increased payment to a Lender under paragraph (c) above
if, on the date on which the payment falls due, the Lender:

 

(i)             is not, or has
ceased to be, a Relevant Lender (other than, in the case of a Qualifying
Lender, as a result of any change after the date it became a Lender under this
Agreement in (or in the interpretation, administration, or application of) any
law or treaty, or any published practice or concession of any relevant taxing
authority); or

 

(ii)            has not provided
the tax forms it is required to provide in accordance with Clause 12.8 (Tax forms).

 

(e)         If an Obligor is
required to make a Tax Deduction, that Obligor shall make that Tax Deduction
and any payment required in connection with that Tax Deduction to the relevant
taxing authority within the time allowed and in the minimum amount required by
law.

 

(f)          Within 30 days of
making either a Tax Deduction or any payment required in connection with that
Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Agent
for the Finance Party entitled to the payment a copy of the payment order(s) for
such payment stamped by the bank from which the payment was initiated.

 

12.3       Tax indemnity

 

(a)         The Borrower shall
(within five Business Days of demand by the Agent) pay to a Protected Party an
amount equal to the loss, liability or cost which that Protected Party (acting
reasonably) determines has been suffered for or on account of Tax by that
Protected Party in respect of a Finance Document.

 

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

 

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

 

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

 

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

 

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

 

27

 

(ii)            to the extent a
loss, liability or cost:

 

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

 

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

 

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

 

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

 

12.4       Tax Credit

 

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

 

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

 

(b)           that Finance Party
has obtained, will be able to utilise and retain that Tax Credit,

 

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

 

12.5       Tax Credit clawback

 

If any Finance
Party makes any payment to the Borrower pursuant to Clause 12.4 (Tax Credit) and such Finance Party subsequently determines
that the Tax Credit in respect of which such payment was made was not available
or has been withdrawn or that it was unable to obtain, utilise or retain such
Tax Credit in full, the Borrower shall reimburse such Finance Party such amount
as such Finance Party determines is necessary to place it in the same after-Tax
position as it would have been in if such Tax Credit had been obtained,
utilised and retained in full by such Finance Party.

 

12.6       Stamp taxes

 

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

 

12.7       Value added tax

 

(a)         All consideration
expressed to be payable under a Finance Document by any Party to a Finance
Party shall be deemed to be exclusive of any VAT. If VAT is chargeable on such
consideration, that Party shall pay to the Finance Party (or directly to the
appropriate tax authority, if so required by law) (in addition to and at the same
time as paying the consideration) an amount equal to the amount of the VAT.

 

28

 

(b)         Where a Finance
Document requires any Party to reimburse a Finance Party for any costs or
expenses, that Party shall also at the same time pay and indemnify the Finance
Party against all VAT incurred by the Finance Party in respect of the costs or
expenses.

 

12.8       Tax forms

 

(a)         No later than 30
Business Days after the Signing Date, and within 30 Business Days from the beginning
of each calendar year starting in 2009, each Lender shall provide to the
Borrower an apostiled document issued by the relevant tax authority in its
jurisdiction of residence confirming that it is a tax resident of that
jurisdiction.

 

(b)         At the request of
the Borrower (acting reasonably), each Lender shall use its reasonable efforts
to provide any additional documentation or information to the Borrower that may
be reasonably necessary for the Borrower to establish a complete or in the case
of a Designated Lender, partial exemption from Russian withholding tax in
relation to payments of interest under this Agreement.

 

(c)         Each New Lender
shall provide to the Agent (for delivery to the Borrower) an apostiled document
issued by the relevant tax authority in its jurisdiction of residence
confirming that it is a tax resident of that jurisdiction. Such tax form shall
be delivered together with the relevant Transfer Certificate no later than 10
Business Days before the last day of the current Interest Period in which the
Transfer Date is to take place.

 

12.9       Designated Amount

 

The aggregate
amount of the Designated Amounts shall not exceed US$25,000,000.

 

13.         INCREASED
COSTS

 

13.1       Increased costs

 

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

 

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

 

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

 

(ii)            an additional or
increased cost; or

 

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

 

which is incurred
or suffered by a Finance Party or any of its Affiliates as a result of (i) the
introduction of or any change in (or in the interpretation, administration or
application of) any law or regulation or (ii) compliance with any law or
regulation made after the Signing Date, to the extent that it is attributable
to that Finance Party having entered into its Commitment or funding or
performing its obligations under any Finance Document.

 

29

 

13.2       Increased cost claims

 

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

 

(b)         Each Finance Party
(acting through the Agent) shall, as soon as practicable after a demand by the
Agent, provide a certificate confirming the amount of its Increased Costs and,
in reasonable detail, the basis therefore and calculation thereof.

 

13.3       Exceptions

 

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

 

(i)             attributable to a
Tax Deduction required by law to be made by an Obligor;

 

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

 

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

 

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

 

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

 

14.         OTHER
INDEMNITIES

 

14.1       Currency indemnity

 

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

 

(i)             making or filing a
claim or proof against that Obligor;

 

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

 

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

 

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

 

30

 

14.2       Other indemnities

 

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

 

(a)            the occurrence of any Event of
Default;

 

(b)           a failure by an Obligor to pay any
amount due under a Finance Document on its due date, including without
limitation, any cost, loss or liability arising as a result of Clause 27 (Sharing among the Finance Parties);

 

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

 

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

 

14.3       Indemnity to the Agent

 

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

 

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

 

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

 

15.         MITIGATION
BY THE LENDERS

 

15.1       Mitigation

 

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

 

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

 

15.2       Limitation of liability

 

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

 

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

 

16.         COSTS AND
EXPENSES

 

16.1       Transaction expenses

 

(a)         The Borrower shall,
within 10 Business Days of presentation of the relevant invoice, pay the Agent
and/or the Arranger (as applicable) the amount of all documented costs and
expenses

 

31

 

 reasonably incurred by any of them in
connection with the negotiation, preparation, printing, execution and
syndication of:

 

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

 

(ii)            any other Finance Documents executed
after the Signing Date,

 

subject to any
pre-agreed cap.

 

(b)         The Borrower shall,
within 10 Business Days of presentation of the relevant invoice, pay BNP
Paribas the amount of all documented legal fees (subject to a cap as detailed
in the fee facsimile from Linklaters CIS to BNP Paribas dated 25 April 2008
(the “Legal Fee Letter”) (provided that the
assumptions upon which such cap was provided as set out in the Legal Fee Letter
have not been breached or if so, the Borrower has been informed and has agreed
to an increase in the cap as a result of such breach)) incurred in connection
with the negotiation, preparation, execution and syndication of this Agreement
and any other documents referred to in this Agreement.

 

16.2       Amendment costs

 

If (a) an
Obligor requests an amendment, waiver or consent or (b) an amendment is
required pursuant to Clause 28.9 (Change of
currency), the Borrower shall, within five Business Days of demand,
reimburse the Agent for the amount of all costs and expenses (including legal
fees) reasonably incurred by the Agent in responding to, evaluating,
negotiating or complying with that pre-agreed request or requirement.

 

16.3       Enforcement costs

 

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

 

32

 

SECTION 7

 

GUARANTEE

 

17.                           GUARANTEE AND INDEMNITY

 

17.1                     Guarantee
and indemnity

 

Each Guarantor
irrevocably and unconditionally jointly and severally:

 

(a)                                   guarantees as primary obligor and not merely as surety to each Finance
Party punctual performance by the Borrower of all the Borrower’s obligations
under the Finance Documents;

 

(b)                                  undertakes with each Finance Party that whenever the Borrower does not pay
any amount when due under or in connection with any Finance Document, that
Guarantor shall immediately on demand pay that amount as if it was the
principal obligor; and

 

(c)                                   agrees with each Finance Party that if, for any reason, any amount claimed
by a Finance Party under this Clause 17 is not recoverable on the basis of a
guarantee or if any obligation guaranteed by it is or becomes unenforceable,
invalid or illegal, it will be liable to indemnify that Finance Party
immediately on demand against any cost, loss or liability it incurs as a result
of the Borrower not paying any amount when due under or in connection with any
Finance Document. The amount payable by a Guarantor under this indemnity will
not exceed the amount it would have had to pay under this Clause 17 if the
amount claimed had been recoverable on the basis of a guarantee.

 

17.2                     Continuing
guarantee

 

This guarantee is a
continuing guarantee and will extend to the ultimate balance of sums payable by
the Borrower under the Finance Documents, regardless of any intermediate
payment or discharge in whole or in part or any increase of the Commitments,
and this guarantee constitutes a guarantee of payment and not of collection.

 

17.3                     Reinstatement

 

If as a result of
insolvency or any similar event:

 

(a)                                   any payment by an Obligor is avoided, reduced or must be restored; or

 

(b)                                  any discharge or arrangement (whether in respect of the obligations of any
Obligor or any security for those obligations or otherwise) is made in whole or
in part on the basis of any payment, security or other thing which is avoided,
reduced or must be restored,

 

then,

 

(i)                                  the liability of each Obligor shall continue or be reinstated as if the
payment, discharge or arrangement had not occurred; and

 

(ii)                               each Finance Party shall be entitled to recover the value or amount of
that payment or security from each Obligor, as if the payment, discharge or
arrangement had not occurred.

 

33

 

17.4                     Waiver
of defences

 

The obligations of
each Guarantor under this Clause 17 will not be affected by an act, omission,
matter or thing which, but for this Clause, would reduce, release or prejudice
any of its obligations under this Clause 17 (without limitation and whether or
not known to it or any Finance Party) including:

 

(a)                                   any time, waiver or consent granted to, or composition with, any Obligor
or other person;

 

(b)                                  the release of any other Obligor or any other person under the terms of
any composition or arrangement with any creditor of any member of the Group;

 

(c)                                   the taking, variation, compromise, exchange, renewal or release of, or
refusal or neglect to perfect, take up or enforce, any rights against, or
security over assets of, any Obligor or other person or any non-presentation or
non-observance of any formality or other requirement in respect of any
instrument or any failure to realise the full value of any security;

 

(d)                                  any incapacity or lack of power, authority or legal personality of or
dissolution or change in the members or status of an Obligor or any other
person;

 

(e)                                   any amendment, novation, supplement, extension, restatement (however
fundamental and whether or not more onerous) or replacement of any Finance
Document or any other document or security, including any change in the purpose
of, any extension of or any increase in any facility or the addition of any new
facility under any Finance Document or other document or security;

 

(f)                                     any unenforceability, illegality or invalidity of any obligation of any
person under any Finance Document or any other document or security; or

 

(g)                                  any insolvency or similar proceedings.

 

17.5                     Immediate
recourse

 

Each Guarantor
waives any right it may have of first requiring any Finance Party (or any
trustee or agent on its behalf) to proceed against or enforce any other rights
or security or claim payment from any person before claiming from that
Guarantor under this Clause 17. This waiver applies irrespective of any law or
any provision of a Finance Document to the contrary.

 

17.6                     Appropriations

 

Until all amounts
which may be or become payable by the Obligors under or in connection with the
Finance Documents have been irrevocably paid in full, each Finance Party (or
any trustee or agent on its behalf) may (acting reasonably):

 

(a)                                   refrain from applying or enforcing any other moneys, security or rights
held or received by that Finance Party (or any trustee or agent on its behalf)
in respect of those amounts, or apply and enforce the same in such manner and
order as it sees fit (whether against those amounts or otherwise) and no
Guarantor shall be entitled to the benefit of the same; and

 

(b)                                  hold in an interest-bearing suspense account any moneys received from any
Guarantor or on account of that Guarantor’s liability under this Clause 17.

 

34

 

17.7                     Deferral
of Guarantors’ rights

 

Until all amounts
which may be or become payable by the Obligors under or in connection with the
Finance Documents have been irrevocably paid in full and unless the Agent
otherwise directs, no Guarantor will exercise any rights which it may have by
reason of performance by it of its obligations under the Finance Documents:

 

(a)                                   to be indemnified by an Obligor;

 

(b)                                  to claim any contribution from any other guarantor of any Obligor’s
obligations under the Finance Documents; and/or

 

(c)                                   to take the benefit (in whole or in part and whether by way of subrogation
or otherwise) of any rights of the Finance Parties under the Finance Documents
or of any other guarantee or security taken pursuant to, or in connection with,
the Finance Documents by any Finance Party.

 

If a Guarantor
receives any benefit, payment or distribution in relation to such rights it
shall hold that benefit, payment or distribution to the extent necessary to
enable all amounts which may be or become payable to the Finance Parties by the
Obligors under or in connection with the Finance Documents to be repaid in full
on trust for the Finance Parties and shall promptly pay or transfer the same to
the Agent or as the Agent may direct for application in accordance with Clause
28 (Payment mechanics) of this
Agreement.

 

17.8                     Limitation
on guarantee by US Obligors

 

(a)                            Each US Obligor acknowledges that it will receive valuable direct or
indirect benefits as a result of the transactions financed by the Finance
Documents.

 

(b)                           Each US Obligor represents, warrants and agrees that:

 

(i)                                                 the aggregate amount of its debts and
liabilities, subordinated, contingent or otherwise (including its obligations
under the Finance Documents as limited by paragraph (c) below), is not
greater than the aggregate value (being the lesser of fair valuation and
present fair saleable value) of its assets;

 

(ii)                                    its capital is not unreasonably small to carry on its business as it is
being conducted;

 

(iii)                                 it has not incurred and does not intend to incur debts beyond its ability
to pay as they mature; and

 

(iv)                                it has not made a transfer or incurred any obligation under any Finance
Document with the intent to hinder, delay or defraud any of its present or
future creditors.

 

(c)                            Notwithstanding anything to the contrary contained herein or in any other
Finance Document, each Finance Party agrees that the maximum liability of each
US Obligor under Clause 17.1 (Guarantee and indemnity)
shall in no event exceed an amount equal to the greatest amount that would not
render such US Obligor’s obligations hereunder and under the other Finance
Documents subject to avoidance under US Bankruptcy Law or to being set aside,
avoided or annulled under any Fraudulent Transfer Law, in each case after
giving effect (i) to all other Transfer Law (specifically excluding,
however, any liabilities of such US Obligor in respect of intercompany
indebtedness to the Borrower to the extent that such Financial Indebtedness 

 

35

 

would
be discharged in an amount equal to the amount paid by such US Obligor
hereunder) and (ii) to the value as assets of such US Obligor (as
determined under the applicable provisions of such Fraudulent Transfer Law) of
any right to subrogation, contribution, reimbursement, indemnity or similar
rights held by such US Obligor pursuant to (A) applicable law, (B) or
(C) any other agreement providing for an equitable allocation among such
US Obligor and the Borrower and other Guarantors of obligations arising under
this Agreement or other guarantees of such obligations by such parties.

 

17.9                     Release
of Guarantors’ right of contribution

 

If any Guarantor (a
“Retiring Guarantor”) ceases to be
a Guarantor in accordance with the terms of the Finance Documents for the
purpose of any sale or other disposal of that Retiring Guarantor or pursuant to
Clause 24.4 (Resignation of a Guarantor), then
on the date such Retiring Guarantor ceases to be a Guarantor:

 

(a)                                   that Retiring Guarantor is released by each other Guarantor from any
liability (whether past, present or future and whether actual or contingent) to
make a contribution to any other Guarantor arising by reason of the performance
by any other Guarantor of its obligations under the Finance Documents; and

 

(b)                                  each other Guarantor waives any rights it may have by reason of the performance
of its obligations under the Finance Documents to take the benefit (in whole or
in part and whether by way of subrogation or otherwise) of any rights of the
Finance Parties under any Finance Document or of any other security taken
pursuant to, or in connection with, any Finance Document where such rights or
security are granted by or in relation to the assets of the Retiring Guarantor.

 

17.10               Additional
security

 

This guarantee is
in addition to and is not in any way prejudiced by any other guarantee or
security now or subsequently held by any Finance Party.

 

36

 

SECTION 8

 

REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT

 

18.                           REPRESENTATIONS

 

Each Obligor makes
the representations and warranties set out in this Clause 18 to each Finance
Party on the Signing Date.

 

18.1                     Status

 

(a)                            It is a corporation or company, duly incorporated and validly existing
under the law of its jurisdiction of incorporation.

 

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

 

18.2                     Binding
obligations

 

The obligations
expressed to be assumed by it in the Finance Documents are legal and valid
obligations binding on it and enforceable against it in accordance with the
terms thereof (subject to bankruptcy, insolvency and similar laws of general
application relating to creditors’ rights and general principles of equity).

 

18.3                     Non-conflict
with other obligations

 

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

 

(a)                                   any law or regulation applicable to
it;

 

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

 

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

 

18.4                     Power
and authority

 

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

 

18.5                     Validity,
enforceability and admissibility in evidence

 

All Authorisations
required:

 

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

 

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

 

have been obtained
or effected and are in full force and effect.

 

18.6                     Governing
law and enforcement

 

(a)                            The choice of English law as the governing law of the Finance Documents
will be recognised and enforced in its jurisdiction of incorporation.

 

37

 

(b)                           Any arbitration award obtained in England in relation to a Finance
Document will be recognised and enforced in its jurisdiction of incorporation
in accordance with the 1958 New York Convention on Recognition and Enforcement
of Foreign Arbitral Awards, subject to any applicable limitations set forth
therein.

 

18.7                     Deduction
of Tax

 

It is not required
under the laws of the Russian Federation to make any deduction for or on
account of Tax from any payment it may make under any Finance Document to a
Qualifying Lender, subject to each Qualifying Lender providing its tax forms
under Clause 12.8 (Tax forms).

 

18.8                     No
filing or stamp taxes

 

Under the law of
its jurisdiction of incorporation, it is not necessary that the Finance
Documents be filed, recorded or enrolled with any court or other authority in
that jurisdiction or that any stamp, registration or similar tax be paid on or
in relation to the Finance Documents or the transactions contemplated by the
Finance Documents.

 

18.9                     No
default

 

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

 

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

 

18.10               No
misleading information

 

(a)                            All of the information supplied by or on behalf of any member of the Group
and any representation or statement made by it to any of the Lenders in or in
connection with the Finance Documents is true, complete and accurate in all
material respects, it has made full investigation of its subject matter and it
is not aware of any material facts or circumstances that have not been
disclosed to the Lenders and which might reasonably be expected, if disclosed,
adversely affect the decision of a person reasonably considering whether or not
to provide finance to the Borrower.

 

(b)                           Any financial projections in the Information Memorandum have been prepared
on the basis of recent historical information and on the basis of reasonable
assumptions at the time of such preparation.

 

(c)                            Nothing has occurred or been omitted from the Information Memorandum and
no information has been given or withheld that results in:

 

(i)                                      any factual information in the Information Memorandum being untrue or
misleading in any material respect;

 

(ii)                                   any financial projection or expression of opinion or intention in the
Information Memorandum being untrue or misleading in any material respect; or

 

(iii)                                any assumption or ground on which any financial projection or expression
of opinion or intention in the Information Memorandum is based being unreasonable.

 

38

 

(d)                           There is no matter disclosed in any disclosure document which has made or
would reasonably be expected to make any of the factual information, financial
projections or expressions of opinion or intention in the Information
Memorandum untrue or misleading in any material respect.

 

18.11               Financial
statements

 

(a)                            Its respective Original Financial Statements were prepared in accordance
with US GAAP or RAS (as applicable) consistently applied.

 

(b)                           Its Original Financial Statements fairly represent its financial condition
and operations (consolidated in the case of CTC Media) as at the end of and for
the relevant financial period.

 

(c)                            There has been no material adverse change in the business or financial
condition of any Obligor (excluding CTC Media) since 31 December 2007 and
there has been no material adverse change in the business or consolidated
financial condition of the Group, in the case of CTC Media, since 31 March 2008.

 

18.12               No
obligation to create Security

 

The execution of
the Finance Documents by it and the exercise of its rights and performance of
its obligations thereunder, will not result in the existence of nor oblige it
to create any Security over all or any of its assets, save as contemplated by
the Finance Documents.

 

18.13               Pari
passu ranking

 

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

 

18.14               No
proceedings pending or threatened

 

No litigation,
arbitration or administrative proceedings of or before any court, arbitral body
or agency have been started (to the best of its knowledge and belief) or been
threatened against it or any of its Material Subsidiaries which, if adversely
determined, might reasonably be expected to result in any claims or liabilities
exceeding an aggregate amount of US$10,000,000 (or its equivalent in any other
currency or currencies).

 

18.15               Environmental
laws and licences

 

It and each of its
Material Subsidiaries has:

 

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

 

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

 

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

 

in each case where
failure to do so might reasonably be expected to result in any claims or
liabilities exceeding an aggregate amount of US$10,000,000 (or its equivalent
in any other currency or currencies).

 

18.16               Insurance

 

(a)                            It and each of its Material Subsidiaries maintains insurances on and in
relation to its business and assets with reputable independent underwriters or
insurance companies:

 

39

 

(i)                                      against those risks, and to the extent, usually insured against by prudent
companies located, and carrying on a similar business, in the same or a similar
location; and

 

(ii)                                   against those risks, and to the extent, required by applicable law or by
contract.

 

(b)                           No event or circumstance has occurred, and there has been no failure to
disclose a fact, which would entitle any insurer to reduce or avoid its
liability under any such insurance.

 

18.17               Licences

 

Other than as
notified in writing to the Agent no later than five Business Days prior to the
Signing Date, it and each of its Material Subsidiaries has:

 

(a)                                   complied in all material respects
with all Broadcasting Laws to which it is subject;

 

(b)                                  obtained or is in the course of
obtaining all Broadcasting Authorisations necessary to conduct its business;
and

 

(c)                                   complied in all material respects
with the terms of those Broadcasting Authorisations.

 

18.18               Compliance
with law

 

Save where such
non-compliance does not have a Material Adverse Effect, it and each of its
Material Subsidiaries is conducting its business and operations in compliance
with all laws applicable to it.

 

18.19               Intellectual
property rights

 

(a)                                   Save where such non-compliance does
not have a Material Adverse Effect, it and each of its Material Subsidiaries
owns or has licensed to it on arm’s length terms all the Intellectual Property
Rights necessary for the conduct of its business as it is being, or is proposed
to be, conducted.

 

(b)                                  Save where such non-compliance does not
have a Material Adverse Effect, it and each of its Material Subsidiaries has
taken all necessary action (including payments of fees) to safeguard, maintain
in full force and effect and preserve its ability to enforce all such
Intellectual Property Rights.

 

(c)                                   Neither it nor any of its Material
Subsidiaries have infringed any Intellectual Property Rights of any third party
in any material respect.

 

(d)                                  There has been no material
infringement or threatened or suspected infringement of or challenge to the validity
of any Intellectual Property Rights owned by or licensed to it or any of its
Material Subsidiaries.

 

(e)                                   No disclosure has been or will be
made of any trade secret which is an Intellectual Property Right and is owned
by or licensed to it or each of its Material Subsidiaries other than under
enforceable confidentiality undertakings or where such non-compliance does not
have a Material Adverse Effect.

 

18.20               Ownership
and title to assets

 

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

 

40

 

18.21               Payment
of taxes

 

(a)                                   It and each of its Material
Subsidiaries has duly and punctually paid and discharged all Taxes imposed upon
it or its assets within the time period allowed without incurring penalties,
except where payment is being contested in good faith by appropriate proceedings
and it has maintained adequate reserves for those Taxes;

 

(b)                                  neither it nor its Material
Subsidiaries is materially overdue in the filing of any tax returns; and

 

(c)                                   no material claims are being or are
reasonably likely to be asserted against it or any of its Material Subsidiaries
with respect to Taxes.

 

18.22               No
material adverse change

 

Since the date as
at which the consolidated Original Financial Statements of CTC Media were
stated to be prepared, there has been no material adverse change in the business,
financial condition, performance, assets or prospects of the Group.

 

18.23               Group
Structure

 

As at the Signing
Date or, if updated after the Signing Date, as at the date of such update, the
Group Structure Chart shows:

 

(a)                                   each member of the Group and any person in whose shares any member of the
Group has an interest (and the percentage of the issued share capital held, and
whether legally or beneficially, by that member) as at the Signing Date;

 

(b)                                  the jurisdiction of incorporation or establishment of each person shown in
it; and

 

(c)                                   the status of each person shown in it which is not a limited liability
company or corporation.

 

18.24               Target
and the Target Group

 

To the best of its
knowledge, there are no material liabilities (on or off balance sheet),
litigation or unpaid claims that in aggregate exceed US$5,000,000 (or its
equivalent in any other currency or currencies) in respect of the Target Group
except:

 

(a)                                   as disclosed in the Acquisition Documents;

 

(b)                                  as disclosed in the Target Group members’ statutory 2007 financial
accounts; or

 

(c)                                   liabilities incurred during the normal course of business.

 

18.25               ERISA

 

It has not and none
of its ERISA Affiliates has, during the past five years maintained, contributed
to or had an obligation to contribute to any Employee Plan or Multiemployer
Plan or has any present intention to do so.

 

18.26               US
Regulation

 

(a)                            It is not a “public utility” within the meaning of, or subject to
regulation under, the United States Federal Power Act of 1920 (16 USC §§791 et
seq.).

 

(b)                           It is not an “investment company” or a company “controlled” by an “investment
company” within the meaning of the United States Investment Company Act of 1940
(15 USC. §§ 80a-1 et seq.) 

 

41

 

or
subject to regulation under any United States federal or state law or
regulation that limits its ability to incur or guarantee indebtedness.

 

(c)                            It has not made an “unlawful payment” within the meaning of, and is not in
any other way in violation of, the Foreign Corrupt Practices Act (15 USC. §§
78dd-1 et seq.) or any similar laws.

 

18.27               Anti-terrorism
laws

 

Neither it nor, to
its knowledge, any of its Material Subsidiaries:

 

(a)                                   is in violation of any Anti-Terrorism Law;

 

(b)                                  is a Designated Person; or

 

(c)                                   deals in any property or interest in property blocked pursuant to any
Anti-Terrorism Law.

 

18.28               Margin
Regulations

 

Neither the making
of the Utilisation or the Loan nor the use of proceeds of the Loan will violate
the provisions of Regulations T, U or X.

 

18.29               Acquisition
Documents

 

(a)                            Except as disclosed in writing to the Agent no later than five Business
Days before the Signing Date, the Acquisition Documents in the form provided to
the Agent:

 

(i)                                      contain all the material terms of the agreement and arrangements between
the Borrower, MTG AB, MTG Group AB and CTC Media (and/or any of their
Affiliates) in relation to the Acquisition;

 

(ii)                                   are in full force and effect in accordance with their terms; and

 

(iii)                                have not been amended or waived (in whole or in part) and no consent has
been given thereunder.

 

(b)                           Neither it nor any of its Material Subsidiaries is in, or aware of, any
breach of or default under any Acquisition Document.

 

18.30               Repetition

 

(a)                            The Repeating Representations (and, in the case of paragraph (ii) below,
the representations set out in Clauses 18.5 (Validity
and admissibility in evidence), 18.7 (Deduction of Tax), and 18.8 (No filing or stamp taxes)) are deemed to be made by each
Obligor by reference to the facts and circumstances then existing on:

 

(i)                                      the date of the Utilisation Request
and the first day of each Interest Period; and

 

(ii)                                   in the case of an Additional
Guarantor, the day on which the company becomes (or it is proposed that the
company becomes) an Additional Guarantor.

 

(b)                           The representations and warranties in paragraphs (b) to (d) of
Clause 18.10 (No misleading information) are
deemed to be made by the Borrower with respect to the Information Memorandum
only: (i) on the Signing Date; (ii) the date the Information Memorandum
is approved by the Borrower; and (iii) on any date on which the
Information Memorandum is released to the Arranger for distribution in
connection with syndication.

 

42

 

(c)                            The representations set out in paragraph (b) of Clause 17.8 (Limitation on guarantee by US Obligors) are deemed to be
made by each Additional Guarantor that is a US Obligor the day on which the
company becomes an Additional Guarantor.

 

19.                           INFORMATION UNDERTAKINGS

 

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

 

19.1                     Financial
statements

 

(a)                                   The Borrower or CTC Media (as applicable) shall supply one electronic copy
of the following financial statements to the Agent for all the Lenders:

 

(i)                                  as soon as they become available, but in any event within 120 days of the
end of CTC Media’s financial years, CTC Media’s annual audited consolidated
financial statements prepared in accordance with US GAAP;

 

(ii)                               as soon as they become available, but in any event within 45 days of the
end of CTC Media’s financial quarter, CTC Media’s unaudited quarterly
consolidated financial statements;

 

(iii)                            as soon as they become available, but in any event within 120 days of the
end of the Borrower’s financial years, the Borrower’s annual audited financial
statements prepared in accordance with RAS, together with those for each
Russian Obligor; and

 

(iv)                           as soon as they become available, but in any event within 45 days of the
end of the Borrower’s financial quarter, the Borrower’s unaudited quarterly
statutory financial statements prepared in accordance with RAS, together with
those for each Russian Obligor.

 

(b)                                  If requested by a Lender, the Agent may request one paper copy of the
above financial statements from the Borrower or CTC Media (as applicable). The
Borrower or CTC Media (as applicable) shall comply with any such request within
10 Business Days.

 

19.2                     Compliance
Certificate

 

(a)                            CTC Media shall supply to the Agent, with each set of financial statements
delivered pursuant to paragraphs (a) and (b) of Clause 19.1 (Financial statements), a Compliance
Certificate setting out (in reasonable detail) computations as to compliance
with Clause 20 (Financial covenants)
as at the date at which those financial statements were drawn up.

 

(b)                           Each Compliance Certificate shall be signed by any two of the following
authorised officers of CTC Media: the Chief Executive Officer, the Chief
Financial Officer and the Chief Operating Officer, and, if required to be
delivered with the financial statements delivered pursuant to paragraph (a) of
Clause 19.1 (Financial statements),
shall be reported on by CTC Media’s auditors (or another auditor of equal
standing at CTC Media’s discretion) in the form agreed by CTC Media and the
Lenders prior to the Signing Date.

 

19.3                     Requirements
as to financial statements

 

The Borrower and
CTC Media shall ensure that each set of financial statements delivered pursuant
to Clause 19.1 (Financial Statements)  is prepared using US GAAP or RAS (as applicable) accounting
practices and financial reference periods consistent with those applied in the
preparation of the Original Financial Statements unless, in relation to any set
of financial 

 

43

 

statements, it
notifies the Agent that there has been a change in US GAAP or RAS (as
applicable), the accounting practices or reference periods, and the Borrower or
CTC Media deliver to the Agent:

 

(a)                                   a description of any change necessary
for those financial statements to reflect the US GAAP or RAS (as applicable),
accounting practices and reference periods upon which the Original Financial
Statements were prepared (to the extent not described in the notes to those
financial statements); and

 

(b)                                  in relation to the financial
statements delivered pursuant to paragraphs (a) and (b) of Clause
19.1 (Financial statements),
sufficient information, in form and substance as
may be reasonably required by the Agent, to enable the Lenders to determine
whether the Financial Covenants have been complied with and make an accurate
comparison between the financial position indicated in those financial
statements and in the Original Financial Statements.

 

For the avoidance
of doubt, the information in paragraph (b) above shall be provided to the
Agent only once with respect to each change in US GAAP accounting practices or
reference periods.

 

19.4                     Information:
miscellaneous

 

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

 

(a)                                   all documents dispatched by an
Obligor to its creditors generally at the same time as they are dispatched;

 

(b)                                  promptly upon becoming aware of them,
the details of any:

 

(i)                                  litigation, arbitration or administrative proceedings which are current,
threatened or pending against any member of the Group, and which might
reasonably be expected to be adversely determined and, if adversely determined,
have a Material Adverse Effect; and

 

(ii)                               claim, notice or other communication in respect of any material breach of
any Broadcasting Licence or licensing agreement;

 

(iii)                            claim, notice or other communication in respect of any actual or alleged
material breach of or liability under Environmental Law; and

 

(iv)                           material labour dispute affecting any member of the Group;

 

(c)                                   promptly upon becoming aware of it,
any material change in the structure of the Group from that set out in the
Group Structure Chart;

 

(d)                                  such information as may be reasonably
requested by the Agent (including relevant figures from management accounts) to
ascertain whether any Subsidiary of the Group falls within the definition of “Material
Subsidiary”;

 

(e)                                   promptly upon becoming aware of them,
the details of any actual or proposed material amendment to or material waiver
or material consent under, any material default under, any breach of a party’s
material obligations under, and any notice in respect of such 

 

44

 

amendment, waiver, consent, default, or breach given
or received under, any Acquisition Document;

 

(f)                                     promptly upon becoming aware of them,
the details of any actual or potential material claim made by or against any
member of the Group under any Acquisition Document, details of the progress of
any such claim and notice of the resolution of any such claim; and

 

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

 

19.5                     Notification
of default

 

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

 

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

 

19.6                     Use
of websites

 

(a)                            Each Obligor (together, the “Website Providers”)
may satisfy their obligations under this Agreement to deliver any information
in relation to those Lenders (the “Website
Lenders”) who accept this method of communication by posting this
information onto an electronic website designated by the Website Providers and
the Agent (the “Designated Website”)
if:

 

(i)                                      the Agent expressly agrees (after consultation with each of the Lenders)
that it will accept communication of the information by this method;

 

(ii)                                   both the Website Providers and the Agent are aware of the address of and
any relevant password specifications for the Designated Website; and

 

(iii)                                the information is in a format previously agreed between the Website
Providers and the Agent.

 

If any Lender (a “Paper Form Lender”) does not agree to
the delivery of information electronically then the Agent shall notify the
Borrower accordingly and the Website Providers shall supply the information to
the Agent (in sufficient copies for each Paper Form Lender) in paper form.
In any event the relevant Website Provider shall supply the Agent with at least
one copy in paper form of any information required to be provided by it.

 

(b)                           The Agent shall supply each Website Lender with the address of and any
relevant password specifications for the Designated Website following
designation of that website by the Website Providers and the Agent.

 

(c)                            The Website Providers shall promptly upon becoming aware of its occurrence
notify the Agent if:

 

(i)                                      the Designated Website cannot be accessed due to technical failure;

 

(ii)                                   the password specifications for the Designated Website change;

 

45

 

(iii)                                any new information which is required to be provided under this Agreement
is posted onto the Designated Website;

 

(iv)                               any existing information which has been provided under this Agreement and
posted onto the Designated Website is amended; or

 

(v)                                  the Website Providers become aware that the Designated Website or any
information posted onto the Designated Website is or has been infected by any
electronic virus or similar software.

 

If the Website
Providers notify the Agent under paragraph (c)(i) or paragraph (c)(v) above,
all information to be provided by the Website Providers under this Agreement
after the date of that notice shall be supplied in paper form unless and until
the Agent and each Website Lender is satisfied that the circumstances giving
rise to the notification are no longer continuing.

 

(d)                           Any Website Lender may request, through the Agent, one paper copy of any
information required to be provided under this Agreement which is posted onto
the Designated Website. The Website Providers shall comply with any such
request within 10 Business Days.

 

19.7                     “Know
your customer” checks

 

(a)                            If:

 

(i)                                      the introduction of or any change in (or in the interpretation,
administration or application of) any law or regulation made after the Signing
Date;

 

(ii)                                   any change in the status of an Obligor after the Signing Date; or

 

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

 

obliges the Agent
or any Lender (or, in the case of paragraph (iii) above, any prospective
new Lender) to comply with “know your customer” or similar identification
procedures in circumstances where the necessary information is not already
available to it, each Obligor shall promptly upon the request of the Agent or
any Lender supply, or procure the supply of, such documentation and other
evidence as is reasonably requested by the Agent (for itself or on behalf of
any Lender) or any Lender (for itself or, in the case of the event described in
paragraph (iii) above, on behalf of any prospective new Lender) in order
for the Agent, such Lender or, in the case of the event described in paragraph (iii) above,
any prospective new Lender to carry out and be satisfied it has complied with
all necessary “know your customer” or other similar checks under all applicable
laws and regulations pursuant to the transactions contemplated in the Finance
Documents.

 

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

 

46

 

(c)                            CTC Media shall, by not less than 10 Business Days’ prior written notice
to the Agent, notify the Agent (which shall promptly notify the Lenders) of its
intention to request that one of its Subsidiaries becomes an Additional
Guarantor pursuant to Clause 24 (Changes to
the Obligors).

 

(d)                           Following the giving of any notice pursuant to paragraph (c) above,
if the accession of such Additional Guarantor obliges the Agent or any Lender
to comply with “know your customer” or similar identification procedures in
circumstances where the necessary information is not already available to it,
CTC Media shall promptly upon the request of the Agent or any Lender supply, or
procure the supply of, such documentation and other evidence as is reasonably
requested by the Agent (for itself or on behalf of any Lender) or any Lender
(for itself or on behalf of any prospective new Lender) in order for the Agent
or such Lender or any prospective new Lender to carry out and be satisfied it
has complied with all necessary “know your customer” or other similar checks
under all applicable laws and regulations pursuant to the accession of such
Subsidiary to this Agreement as an Additional Guarantor.

 

20.                           FINANCIAL COVENANTS

 

20.1                     Financial
condition

 

                                          CTC Media shall ensure that:

 

(a)                                   the ratio of Total Net Debt to OIBDA
for the then most recently ended Relevant Period shall not exceed 2:1;

 

(b)                                  the ratio of OIBDA to Interest
Expense for any Relevant Period shall not be less than 4.5:1;

 

(c)                                   Total Shareholder Equity as at the
last day of any Relevant Period shall not be less than US$500,000,000; and

 

(d)                                  the ratio of Total Net Debt to Total
Shareholder Equity as at the last day of any Relevant Period shall not exceed
1.5:1.

 

20.2                     Financial
covenant calculations

 

Total Net Debt,
OIBDA, Interest Expense and Total Shareholder Equity shall be calculated and
interpreted on a consolidated basis in accordance with US GAAP and shall be
expressed in Dollars.

 

20.3                     Definitions

 

In this Clause
20.3:

 

“Cash” means any credit balance on any deposit, savings,
current or other account, and any cash in hand, which is:

 

(a)                                   freely withdrawable on demand;

 

(b)                                  not subject to any security; and

 

(c)                                   denominated and payable in freely
transferable and freely convertible currency (including, for the avoidance of
doubt, Russian Roubles).

 

47

 

“Cash Equivalent
Investments” means:

 

(a)                                   securities with a maturity of less
than 12 months from the date of acquisition issued or fully guaranteed or fully
insured by the Government of the United States or any member state of the
European Union which is rated at least AA by Standard & Poor’s Rating
Group or Aa by Moody’s Investors Service, Inc.;

 

(b)                                  commercial paper or other debt
securities issued by an issuer rated at least A-1 by Standard & Poor’s
Ratings Group or P-1 by Moody’s Investors Service, Inc. and with a
maturity of less than 12 months; and

 

(c)                                   certificates of deposit or time
deposits of any commercial bank (which has outstanding debt securities rated as
referred to in paragraph (b) above) and with a maturity of less than 3
months,

 

in each case not subject to any security, denominated and
payable in freely convertible currency (including, for the avoidance of doubt,
Russian Roubles).

 

“Interest  Expense”
means, in relation to any Relevant Period:

 

(a)                                   the aggregate amount of interest and
any other finance charges reported in the Group’s financial statements for that
Relevant Period under the Statement of Income under the line titled “Interest
Expense” (or any replacement category or line); plus

 

(b)                                  to the extent not already included in
paragraph (a) above, the aggregate amount of interest and any other
finance charges (whether or not paid, payable or capitalised) accrued by the
Group in that Relevant Period in respect of Total Net Debt including:

 

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

 

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

 

(iii)                            amounts in the nature of interest payable in respect of any shares other
than equity share capital,

 

as determined
(except as needed to reflect the terms of this Clause 20) from the financial
statements of the Group and Compliance Certificates delivered pursuant to
paragraphs (a) and (b) of Clause 19.1 (Financial statements) and Clause 19.2 (Compliance Certificate).

 

“OIBDA” means, in relation to any Relevant Period, the total
operating income of the Group before taking into account depreciation and
amortisation and one-time impairment charges of the Group, to the extent not included
in amortisation and depreciation (except in relation to amortisation of
programming rights including impairment charges on programming rights), for
that Relevant Period, as determined from the financial statements of the Group
and compliance certificates.

 

“Relevant Period” means each period of 12 consecutive Months
ending on the last day of each financial year and financial quarter of the
Group.

 

“Total Debt” means, as at any particular time and without
duplication, the aggregate outstanding principal, capital or nominal amount
(and any fixed or minimum premium payable on prepayment or redemption) of the
Financial Indebtedness of members of the Group (other than any 

 

48

 

indebtedness
referred to in paragraph (g) of the definition of Financial Indebtedness
and any guarantee or indemnity in respect of that indebtedness).

 

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

 

“Total Net Debt” means, as at any particular time, Total Debt
less Cash and Cash Equivalent Investments at that time.

 

“Total Shareholder Equity” means, as at any particular time,
the amount reported in the Group’s financial statements under the balance
sheet, under the category titled “Total Liabilities and stockholders equity”
and the line titled “total stockholders’ equity” (or any replacement category
or line), as determined (except as needed to reflect the terms of this
paragraph) from the financial statements of the Group and Compliance
Certificates delivered pursuant to paragraphs (a) and (b) of Clause
19.1 (Financial statements) and Clause 19.2 (Compliance Certificate).

 

21.                           GENERAL UNDERTAKINGS

 

The undertakings in
this Clause 21 remain in force from the Signing Date for so long as any amount
is outstanding under the Finance Documents or any Commitment is in force.

 

21.1                     Authorisations

 

                                          Each Obligor shall promptly:

 

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

 

(b)                                  supply certified copies to the Agent
of,

 

any Authorisation
required under any law or regulation of its jurisdiction of incorporation to
enable it to perform its obligations under the Finance Documents and to ensure
the legality, validity, enforceability or admissibility in evidence in its
jurisdiction of incorporation of any Finance Document.

 

21.2                     Compliance
with laws

 

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

 

21.3                     Maintenance
of pari passu ranking

 

Each Obligor shall
ensure that its payment obligations under the Finance Documents rank at least pari passu in right of payment with all
its other unsecured, unsubordinated obligations save where such other
obligations are mandatorily preferred by law.

 

21.4                     Negative
pledge

 

(a)                            No Obligor shall (and each Obligor shall ensure that no other member of
the Group will) create or permit to subsist any Security over any of its
assets.

 

(b)                           No Obligor shall (and shall ensure that no other member of the Group
will):

 

49

 

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

 

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

 

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

 

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

 

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

 

(c)                            Paragraphs (a) and (b) above do not apply to:

 

(i)                                      any Security created pursuant to any Finance Document;

 

(ii)                                   any Security which is to be irrevocably discharged or released in full on
the Utilisation Date;

 

(iii)                                any lien arising by operation of law in the ordinary course of trading
(including retention of title arrangements) and securing amounts not more than
30 days overdue;

 

(iv)                               any Security securing indebtedness the principal amount of which (when
aggregated with the principal amount of any other indebtedness which has the
benefit of Security given by any member of the Group other than any permitted
under paragraphs (i) to (iii) above) does not exceed US$25,000,000
(or its equivalent in any other currency or currencies).

 

21.5                     Disposals

 

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

 

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

 

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

 

(ii)                                   as made by any member of the Group to another member of the Group; or

 

(iii)                                where the book value or fair sale value (whichever is the lower) of the
asset disposed of (when aggregated with the book value or fair sale value (as
the case may be) of any other asset disposed of under this paragraph (iii) but
excluding the book value or fair sale value (as the case may be) of any assets
disposed of under paragraph (iii) above) does not exceed US$25,000,000 (or
its equivalent in any other currency or currencies) during any financial year
of the Group.

 

21.6                     Merger

 

(a)                            No Obligor shall (and each Obligor shall ensure that no other member of
the Group will) enter into any amalgamation, demerger, consolidation, merger or
corporate reconstruction (including, without limitation, any merger (sliyaniye obschestva), company accession (prisoedinyeniye obschestva), company division (razdelyeniye obschestva), company separation (vydelyeniye obschestva), company transformation (preobrazovaniye obschestva), company liquidation (likvidatsiya obschestva)

 

50

 

or any other company reorganisation (reorganizatsiya obschestva)
(as these terms are construed by applicable Russian law)) or otherwise, or any
analogous transaction in any relevant jurisdiction.

 

(b)                           Paragraph (a) above does not apply if the relevant transaction is
between:

 

(i)                                      members of the Target Group in connection with the Merger;

 

(ii)                                   two members of the Group (excluding the Borrower) in which the surviving
entity remains a member of the Group and such surviving entity retains or
assumes by operation of law substantially all of the assets of those two
members of the Group at the time of the relevant transaction; or

 

(iii)                                the Borrower and another member of the Group, and: (x) the Borrower
is the sole surviving entity; (y) the Borrower retains or assumes by
operation of law substantially all of the assets and all of the obligations
under the Finance Documents of the two entities at the time of the relevant
transaction; and (z) no Default is continuing on the date of such
reorganisation or transaction or would occur as a result of such reorganisation
or transaction.

 

21.7                     Change
of business

 

Each Obligor shall
ensure that no substantial change is made to the general nature of its business
or that of any Material Subsidiary from that carried on at the Signing Date.

 

21.8                     Maintenance
of customary insurance

 

(a)                            Each Obligor shall (and shall ensure
that each other member of the Group will) maintain insurances on and in
relation to its business and assets with reputable independent underwriters or
insurance companies:

 

(i)                                      against those risks, and to the extent, usually insured against by prudent
companies located, and carrying on a similar business, in the same or a similar
location; and

 

(ii)                                   against those risks, and to the extent, required by applicable law or by
contract.

 

(b)                           Each Obligor shall (and shall ensure
that each other member of the Group will) promptly pay premiums and do all
things necessary to maintain insurances required of it by paragraph (a) above.

 

21.9                     Environmental
undertakings

 

                                          Each Obligor shall (and shall ensure
that each other member of the Group will):

 

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

 

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

 

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

 

in each case where
failure to do so might reasonably be expected to result in any claim or
liability exceeding an aggregate amount of US$10,000,000 (or its equivalent in
any other currency or currencies).

 

21.10               Restrictions
on acquisitions and investments

 

(a)                            No Obligor shall (and each Obligor
shall ensure that no other member of the Group will):

 

51

 

(i)                                      acquire any share in or any equity
security issued by any person, or any interest therein; or

 

(ii)                                   acquire any business or going
concern, or the whole or substantially the whole of the assets or business of
any person, or any assets that constitute a division or operating unit of the
business of any person.

 

(b)                           Paragraph (a) above does not
apply to any acquisition where:

 

(i)                                      such acquisition relates to the
Acquisition or an intra-Group transaction;

 

(ii)                                   the purchase price (when aggregated
with the purchase price of each other acquisition made under this paragraph
(ii)) does not, for each financial year of the Group (but excluding the first
six calendar months of 2008), exceed US$100,000,000 (or its equivalent in any
other currency or currencies);

 

(iii)                                such acquisition relates to a person,
or the assets or business of a person, where the principal business of such
person, assets or business is in media or a related business;

 

(iv)                               after giving pro forma effect to such
acquisition, CTC Media would continue to be in compliance with its obligations
under the financial covenants set out in Clause 20 (Financial
Covenants); and

 

(v)                                  no Default is continuing on the date
of such acquisition or would occur as a result of such acquisition.

 

(c)                            Promptly upon completion of an
acquisition permitted under paragraph (b) above, the Borrower shall notify
the Agent of such acquisition.

 

21.11               Arm’s
length terms

 

No Obligor shall
(and each Obligor shall ensure that no other member of the Group will) enter
into any contract or arrangement with or for the benefit of any other person
except another member of the Group (including any disposal to that person)
other than in the ordinary course of business, for full market value and on arm’s
length terms, other than where such transaction is disclosed as a related party
transaction in accordance with US GAAP.

 

21.12               Restrictions
on guarantees

 

(a)                            No Obligor shall (and each Obligor
shall ensure that no other member of the Group will) give or issue any
guarantee, indemnity, bond or letter of credit for the benefit of, or in
respect of liabilities or obligations of, any other person or voluntarily
assume any liability (whether actual or contingent) of any other person.

 

(b)                           Paragraph (a) above does not
apply to guarantees, indemnities, bonds, assumptions of liability and letters
of credit:

 

(i)                                      expressly required or permitted by
the Finance Documents;

 

(ii)                                   granted by a member of the Group to
another member of the Group; or

 

(iii)                                for aggregate outstanding amounts
that do not at any time exceed $25,000,000 (or its equivalent in any other
currency or currencies).

 

52

 

21.13               Restrictions
on loans and credit

 

(a)                            No Obligor shall (and each Obligor
shall ensure that no other member of the Group will) make any loan, or provide
any form of credit or other form of financial accommodation to any other
person.

 

(b)                           Paragraph (a) above does not
apply to loans, credits and financial accommodation:

 

(i)                                      expressly permitted by the Finance
Documents;

 

(ii)                                   for normal trade credit in the
ordinary course of trading;

 

(iii)                                made by a member of the Group to
another member of the Group; or

 

(iv)                               for aggregate outstanding amounts
that do not at any time exceed $20,000,000 (or its equivalent in any other currency
or currencies).

 

21.14               No
material amendments to Acquisition Documents

 

No Obligor shall
(and each Obligor shall ensure that no other member of the Group will) amend,
terminate, give any waiver or consent under, or agree or decide not to enforce,
in whole or in part, any term or condition of any Acquisition Document without
the prior written consent of all the Lenders (such consent not to be
unreasonably withheld or delayed), other than amendments, waivers or consents
which could not reasonably be expected to be materially adverse to the
interests of the Finance Parties under the Finance Documents.

 

21.15               ERISA

 

No Obligor or any
ERISA Affiliate shall establish, or agree to contribute to, any Employee Plan
or Multiemployer Plan.

 

21.16               US
Regulations

 

Each Obligor shall
ensure that it will not, by act or omission, become subject to regulation under
any of the laws or regulations described in Clause 18.26 (US
Regulation).

 

21.17               Margin
Stock

 

No Obligor may use
the Loan, directly or indirectly, to buy or carry Margin Stock or to extend
credit to others for the purpose of buying or carrying Margin Stock.

 

21.18               Compliance
with Anti-Terrorism Laws

 

(a)                            No Obligor shall (and each Obligor
shall ensure that no other member of the Group will) engage in any transaction
that violates any of the applicable prohibitions set forth in any
Anti-Terrorism Law.

 

(b)                           (i) None of the funds or assets
of such Obligor that are used to repay the Facilities shall constitute property
of, or shall be beneficially owned directly or indirectly by, any Designated
Person and (ii) no Designated Person shall have any direct or indirect
interest in such Obligor that would constitute a violation of any
Anti-Terrorism Laws.

 

(c)                            No Obligor shall (and each Obligor
shall ensure that no other member of the Group will) fund all or part of any
payment under this Agreement out of proceeds derived from transactions that
violate the prohibitions set forth in any Anti-Terrorism Law.

 

53

 

21.19               Conduct
of business

 

Each Obligor shall
(and shall ensure that each of its Material Subsidiaries will) conduct its
business in all material respects in accordance with:

 

(a)                                   all Broadcasting Laws to which it may
become subject;

 

(b)                                  all requirements of the telecommunications
and broadcasting regulators of the Russian Federation and any other
jurisdiction in which it conducts its business; and

 

(c)                                   the terms of all relevant
Broadcasting Authorisations.

 

21.20               Maintenance
of assets and material Broadcasting Licences

 

Each Obligor shall
(and shall ensure that each of its Material Subsidiaries will) maintain good
and marketable title to or valid leases or licences, including all Broadcasting
Licences material to its business, of, or rights of use relating to, all assets
and Intellectual Property Rights necessary to maintain, develop and operate and
otherwise conduct its business as then being conducted by it.

 

21.21               Prompt
payment of Taxes

 

Each Obligor shall
(and shall ensure that each member of the Group will) duly pay all Taxes
payable by it, other than Taxes which are being contested in good faith and by
appropriate proceedings and in respect of which adequate reserves or other
appropriate provisions have been made.

 

21.22               Obligors

 

The Borrower and
CTC Media shall ensure that for each Relevant Period after the Signing Date:

 

(a)                                   the aggregate of the unconsolidated
net assets (excluding any intra-Group loans) of the Obligors (without double
counting and excluding any interests in any Subsidiaries which are Obligors) at
the end of such Relevant Period equals or exceeds 85 per cent. of the
consolidated net assets of the Group at the end of such Relevant Period
(calculated in accordance with US GAAP); and

 

(b)                                  the aggregate of the unconsolidated
revenues of the Obligors (without double counting and excluding any dividends
or other distributions from Subsidiaries which are Obligors) for such Relevant
Period equals or exceeds 85 per cent. of the consolidated revenues of the Group
for such Relevant Period (calculated in accordance with US GAAP),

 

in each case
calculated by reference to the then most recent unconsolidated financial
statements of each Obligor and the then most recent consolidated financial
statements of the Group, each required to be delivered pursuant to Clause 19.1
(Financial statements).

 

22.                           EVENTS OF DEFAULT

 

Each of the events
or circumstances set out in Clause 22 is an Event of Default (save for Clause
22.20 (Acceleration).

 

22.1                     Non-payment

 

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

 

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

 

54

 

(b)                                  its failure to pay is caused by a Disruption Event; and

 

(c)                                   payment is made within five Business Days of its due date.

 

22.2                     Financial
covenants

 

Any requirement of
Clause 20 (Financial covenants)
is not satisfied.

 

22.3                     Other
obligations

 

(a)                            An Obligor does not comply with any provision of the Finance Documents
(other than those referred to in Clause 22.1 (Non-payment)
and Clause 22.2 (Financial covenants)).

 

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

 

22.4                     Misrepresentation

 

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

 

(b)                           No Event of Default under paragraph (a) above will occur if the
misrepresentation or statement is capable of being rendered correct and not
misleading, and it is rendered correct and not misleading within 10 days of the
Agent giving notice to the Borrower or the Borrower becoming aware of the same.

 

22.5                     Cross
default

 

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

 

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

 

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

 

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

 

(e)                            No Event of Default will occur under this Clause 22.5 if the aggregate
amount of Financial Indebtedness or commitment for Financial Indebtedness
falling within paragraphs (a) to (d) above is less than US$5,000,000
(or its equivalent in any other currency or currencies).

 

22.6                     Insolvency

 

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

 

55

 

(b)                           The value of the assets (as determined in accordance with US GAAP) of CTC
Media is less than its liabilities (as determined in accordance with US GAAP,
taking into account contingent and prospective liabilities as recognised on the
balance sheet).

 

(c)                            The value of the assets (as determined in accordance with RAS) of any
Obligor (other than CTC Media) or any Material Subsidiary (other than the
Target) is less than its liabilities (as determined in accordance with RAS,
taking into account contingent and prospective liabilities as recognised on the
relevant balance sheet).

 

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

 

22.7                     Insolvency
proceedings

 

Any corporate
actions, legal proceedings or other procedure or step are taken in relation to:

 

(a)                           the bankruptcy, winding-up, insolvency, dissolution, administration,
reorganisation (other than a voluntary and solvent reorganisation) or
liquidation of any member of the Group, including, but not limited to,
institution of supervision (nablyudenie),
financial rehabilitation (finansovoe ozdorovlenie),
external management (vneshneye upravlenie)
or bankruptcy proceedings (konkursnoye proizvodstvo)
(and such legal proceedings continue for at least 14 days);

 

(b)                          the suspension of payments or a moratorium on any indebtedness of any
member of the Group (and such suspension or moratorium continues for at least
14 days);

 

(c)                           the presentation or filing of a petition (or similar document) in respect
of any member of the Group in any court, state arbitration court (arbitrazhnyi sud) or before any other authority in respect
of the bankruptcy, winding-up, insolvency, dissolution, administration,
reorganisation or liquidation of any member of the Group (and such petition has
not been discharged within 14 days);

 

(d)                          the appointment of a liquidator (likvidator) or
a liquidation commission (likvidatsionnaya komissiya),
temporary manager (vremenniy upravlaushiy),
administrative manager (administrativniy
upravlaushiy), external manager (vneshniy upravlaushiy),
bankruptcy manager (konkursniy upravlaushiy),
receiver, administrator, administrative receiver, compulsory manager or other
similar officer in respect of any member of the Group (and such appointment
continues for at least 14 days); or

 

(e)                           the enforcement of any Security over any asset or assets with an aggregate
book value in excess of US$7,500,000 (or its equivalent in any other current or
currencies) of any member of the Group,

 

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

 

22.8                     Creditors’
process

 

Any expropriation,
attachment, sequestration, distress or execution is effected against any asset
or assets with an aggregate book value in excess of US$7,500,000 (or its
equivalent in any other currency or currencies) of any member of the Group.

 

56

 

22.9                     Unlawfulness

 

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

 

22.10               Repudiation

 

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

 

22.11               Material
adverse change

 

Any event or
circumstance occurs which the Majority Lenders (acting reasonably) believe has
or is reasonably likely to have a Material Adverse Effect.

 

22.12               Expropriation/government
intervention

 

By or under the
authority of any government:

 

(a)                                   any seizure, compulsory acquisition,
expropriation, nationalisation or renationalisation is made after the Signing
Date of all or any material part of the assets or shares of (or other ownership
interest in) any member of the Group;

 

(b)                                  the management of any member of the
Group is displaced (either wholly or in material part) or the authority of any
member of the Group in the conduct of its business is wholly or in material
part curtailed; or

 

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

 

22.13               Non-compliance
with final judgement

 

Any member of the
Group fails to comply with or pay any sum due from it under any final judgment
or any final order made or given by any court of competent jurisdiction and
such failure is not remedied within seven days of the earlier of (i) the
date on which the Agent gives notice thereof to the Borrower and (ii) the
date on which the Borrower becomes aware of the same.

 

22.14               Loss
of Broadcasting Licence

 

(a)                                   At any time:

 

(i)                                      all Moscow Broadcasting Licences;

 

(ii)                                   all Saint Petersburg and other cities’
Broadcasting Licences that together represent at least 15 per cent. of the
total number of households surveyed as set out in Schedule 9 (Material Licences); or

 

(iii)                                all Broadcasting Licences of cities
representing together at least 15% of the total number of households surveyed
as set out in Schedule 9 (Material Licences),

 

owned by a Subsidiary or Broadcasting Affiliate of CTC
Media are suspended, lost, revoked, terminated or effectively cease to be
effective, and as a result of which:

 

(A)                              the Borrower, its Subsidiaries or
Broadcasting Affiliates; or

 

(B)                                Novy Kanal and the Target, and each
of their Subsidiaries or Broadcasting Affiliates,

 

57

 

are
unable to broadcast in the area covered by the above mentioned Broadcasting
Licences for a period of more than 45 days, and by the end of such 45-day
period such Broadcasting Licences have not been reissued, replaced or
reinstated.

 

(b)                                  No Event of Default under paragraph (a) above
will occur if broadcasting licence 13517 held by the relevant member of the
Target Group in Saint Petersburg is suspended, lost, revoked, terminated or
effectively ceases to be effective.

 

22.15               Material
adverse change in the Russian Federation

 

(a)                            The political or economic situation in the Russian Federation deteriorates
or an act of war or hostilities, invasion, armed conflict or act of a foreign
enemy, revolution, insurrection or insurgency occurs in, or involves, the
Russian Federation and such event, in the reasonable opinion of the Majority
Lenders, has a Material Adverse Effect.

 

(b)                           Any foreign exchange law is enacted or introduced in the Russian
Federation which has the effect of prohibiting, restricting or delaying any
payment by the Borrower under the Finance Documents, and such event, in the
reasonable opinion of the Majority Lenders, has a Material Adverse Effect.

 

22.16               Litigation

 

Any litigation,
arbitration, proceeding or dispute is started or threatened against any member
of the Group, in each case (i) which is reasonably likely to be adversely
determined and (ii) if adversely determined, would reasonably be expected
to have a Material Adverse Effect .

 

22.17               Ownership

 

An Obligor (other than CTC Media) is not or ceases
to be a Subsidiary of CTC Media.

 

22.18               Acquisition

 

After the
completion of the Acquisition on the Acquisition Closing Date, the Target is
not or ceases to be a wholly-owned Subsidiary of CTC Media.

 

22.19               Use
of proceeds of the Facility

 

The Borrower fails
to use the proceeds of the Facility in connection with the purpose specified in
Clause 3 (Purpose).

 

22.20               Acceleration

 

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

 

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

 

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

 

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

 

58

 

SECTION 9

 

CHANGES TO PARTIES

 

23.                           CHANGES TO THE LENDERS

 

23.1                     Assignments
and transfers by the Lenders

 

Subject to this
Clause 23, a Lender (the “Existing
Lender”) may:

 

(a)                                   assign any of its rights; or

 

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

 

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

 

23.2                     Conditions
of assignment or transfer

 

(a)                            Subject to paragraphs (b) and (c) below, the prior written
consent of the Borrower is required for an assignment or transfer by an
Existing Lender.

 

(b)                           The consent of the Borrower shall not be required if (i) an Event of
Default is continuing or (ii) the New Lender is another Lender or an
Affiliate of any Lender.

 

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

 

(d)                           An assignment will only be effective on:

 

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

 

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

 

(e)                            A transfer will only be effective if the procedure set out in Clause 23.5
(Procedure for transfer) is
complied with.

 

(f)                              If:

 

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

 

(ii)                                   as a result of circumstances existing at the date the assignment, transfer
or change occurs, an Obligor would be obliged to make a payment to the New
Lender or Lender acting through its new Facility Office under Clause 12 (Tax gross-up and indemnities) or Clause 13
(Increased Costs) (including
without limitation where a Qualifying Lender transfers to a Designated Lender),

 

59

 

then the New Lender
or Lender acting through its new Facility Office is only entitled to receive
payment under those Clauses to the same extent as the Existing Lender or Lender
acting through its previous Facility Office would have been if the assignment,
transfer or change had not occurred (provided no Event of Default is
continuing).

 

23.3                     Assignment
or transfer fee

 

The New Lender
shall, on the date upon which an assignment or transfer takes effect, pay to
the Agent (for its own account) a fee of US$3,000.

 

23.4                     Limitation
of responsibility of Existing Lenders

 

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

 

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

 

(ii)                                   the financial condition of any Obligor;

 

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

 

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

 

and any
representations or warranties implied by law are excluded.

 

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

 

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

 

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

 

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

 

(i)                                      accept a re-transfer from a New Lender of any of the rights and
obligations assigned or transferred under this Clause 23; or

 

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

 

23.5                     Procedure
for transfer

 

(a)                            Subject to the conditions set out in Clause 23.2 (Conditions of assignment or transfer) a transfer
is effected in accordance with paragraph (c) below when the Agent executes
an otherwise duly completed Transfer Certificate delivered to it by the
Existing Lender and the New Lender. The Agent shall, subject to paragraph (b) below,
as soon as reasonably practicable after receipt by it 

 

60

 

of
a duly completed Transfer Certificate appearing on its face to comply with the
terms of this Agreement and delivered in accordance with the terms of this
Agreement, execute that Transfer Certificate.

 

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

 

(c)                            On the Transfer Date:

 

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

 

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

 

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

 

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

 

23.6                     Copy
of Transfer Certificate to Borrower

 

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

 

23.7                     Disclosure
of information

 

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

 

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

 

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

 

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

 

(d)                                  for whose benefit that Lender charges, assigns or otherwise creates
Security (or may do so) pursuant to Clause 23.8 (Security
over Lenders’ rights),

 

61

 

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

 

23.8                     Security
over Lenders’ rights

 

In addition to the
other rights provided to Lenders under this Clause 23, each Lender may without
consulting with or obtaining consent from any Obligor, at any time charge,
assign or otherwise create Security in or over (whether by way of collateral or
otherwise) all or any of its rights under any Finance Document to secure
obligations of that Lender including:

 

(a)                                   any charge, assignment or other Security to secure obligations to a
federal reserve or central bank; and

 

(b)                                  in the case of any Lender which is a fund, any charge, assignment or other
Security granted to any holders (or trustee or representatives of holders) of
obligations owed, or securities issued, by that Lender as Security for those obligations
or securities,

 

except that no such
charge, assignment or Security shall:

 

(i)                                  release a Lender from any of its obligations under the Finance Documents
or substitute the beneficiary of the relevant charge, assignment or Security
for the Lender as a party to any of the Finance Documents;

 

(ii)                               require any payments to be made by an Obligor or grant to any person any
more extensive rights than those required to be made or granted to the relevant
Lender under the Finance Documents; or

 

(iii)                            result in an assignment or transfer not otherwise permitted under Clause
23.2 (Conditions of assignment or transfer).

 

24.                           CHANGES TO THE OBLIGORS

 

24.1                     Assignments
and transfer by Obligors

 

No Obligor may
assign any of its rights or transfer any of its rights or obligations under the
Finance Documents.

 

24.2                     Additional
Guarantors

 

(a)                            Subject to compliance with the provisions of paragraphs (c) and (d) of
Clause 19.7 (“Know your customer” checks)
and to paragraphs (i) and (ii) below, CTC Media may require that any
of its wholly owned Subsidiaries become an Additional Guarantor. That
Subsidiary shall become an Additional Guarantor if:

 

(i)                                      CTC Media delivers to the Agent a duly completed and executed Accession
Letter; and

 

(ii)                                   the Agent has received all of the documents and other evidence listed in Part II
of Schedule 2 (Conditions precedent)
in relation to that Additional Guarantor, each in form and substance
satisfactory to the Agent.

 

62

 

(b)                           The Agent shall notify the Borrower, CTC Media and the Lenders promptly
upon being satisfied (acting reasonably) that it has received (in form and
substance satisfactory to it) all the documents and other evidence listed in Part II
of Schedule 2 (Conditions precedent).

 

24.3                     Repetition
of Representations

 

Delivery of an
Accession Letter constitutes confirmation by the relevant Subsidiary that the
Repeating Representations and each of the representations set out in Clauses
18.5 (Validity and admissibility in evidence),
18.7 (Deduction of Tax) and 18.8
(No filing or stamp taxes) and
paragraph (b) of Clause 17.8 (Limitation on guarantee by
US Obligors) are true and correct in relation to it as at the date
of delivery as if made by reference to the facts and circumstances then existing.

 

24.4                     Resignation
of a Guarantor

 

(a)                            CTC Media may request that a Guarantor ceases to be a Guarantor by
delivering to the Agent a Resignation Letter.

 

(b)                           The Agent shall accept a Resignation Letter and notify the Borrower, CTC
Media and the Lenders of its acceptance if:

 

(i)                                      Clause 21.22 (Guarantors) is
satisfied without the resigning guarantor being included as a Guarantor; and

 

(ii)                                   no Default is continuing or would result from the acceptance of the
Resignation Letter (and the Borrower has confirmed this is the case).

 

(c)                            This Clause 24.4 shall not apply to CTC Media, which shall always be a
Guarantor under the terms of this Agreement.

 

63

 

SECTION 10

 

THE FINANCE PARTIES

 

25.                           ROLE OF THE AGENT AND THE ARRANGER

 

25.1                     Appointment
of the Agent

 

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

 

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

 

25.2                     Duties
of the Agent

 

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

 

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

 

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

 

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

 

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

 

25.3                     Role
of the Arranger

 

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

 

25.4                     No
fiduciary duties

 

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

 

(b)                           Neither the Agent nor the Arranger shall be bound to account to any Lender
for any sum or the profit element of any sum received by it for its own
account.

 

25.5                     Business
with the Group

 

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

 

25.6                     Rights
and discretions of the Agent

 

(a)                            The Agent may rely on:

 

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

 

64

 

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

 

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

 

(i)                                      no Default has occurred (unless it has actual knowledge of a Default
arising under Clause 22.1 (Non-payment));

 

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

 

(iii)                                any notice or request made by the Borrower (other than the Utilisation
Request or Selection Notice) is made on behalf of and with the consent and
knowledge of all the Obligors.

 

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

 

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

 

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

 

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

 

25.7                     Majority
Lenders’ instructions

 

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

 

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

 

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

 

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

 

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

 

65

 

25.8                     Responsibility
for documentation

 

Neither the Agent
nor the Arranger:

 

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

 

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

 

25.9                     Exclusion
of liability

 

(a)                            Without limiting paragraph (b) below (and without prejudice to the
provisions of paragraph (e) of Clause 28.10 (Disruption
to Payment Systems etc)), the Agent will not be liable for any
action taken by it under or in connection with any Finance Document, unless
directly caused by its gross negligence or wilful misconduct.

 

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

 

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

 

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

 

25.10               Lenders’
indemnity to the Agent

 

Each Lender shall
(in proportion to its share of the Total Commitments or, if the Total
Commitments are then zero, to its share of the Total Commitments immediately
prior to their reduction to zero) indemnify the Agent, within three Business
Days of demand, against any cost, loss or liability incurred by the Agent
(otherwise than by reason of the Agent’s gross negligence or wilful misconduct)
(or in the case of any cost, loss or liability pursuant to Clause 28.10 (Disruption to Payment Systems etc) notwithstanding the Agent’s
negligence, gross negligence or any other category of liability whatsoever but
not including any claim based on the fraud of the Agent) in acting as Agent
under the Finance Documents (unless the Agent has been reimbursed by an Obligor
pursuant to a Finance Document).

 

25.11               Resignation
of the Agent

 

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

 

66

 

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

 

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

 

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

 

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

 

(f)                              Upon the appointment of a successor, the retiring Agent shall be
discharged from any further obligation in respect of the Finance Documents but
shall remain entitled to the benefit of this Clause 25. Its successor and each
of the other Parties shall have the same rights and obligations amongst
themselves as they would have had if such successor had been an original Party.

 

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

 

25.12               Confidentiality

 

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

 

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

 

25.13               Relationship
with the Lenders

 

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

 

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

 

25.14               Credit
appraisal by the Lenders

 

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

 

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

 

67

 

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

 

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

 

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

 

25.15               Reference
Banks

 

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

 

25.16               Deduction
from amounts payable by the Agent

 

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

 

26.                           CONDUCT OF BUSINESS BY THE FINANCE PARTIES

 

No provision of
this Agreement will:

 

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

 

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

 

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

 

27.                           SHARING AMONG THE FINANCE PARTIES

 

27.1                     Payments
to Finance Parties

 

If a Finance Party
(a “Recovering Finance Party”) receives or
recovers any amount from an Obligor other than in accordance with Clause 28 (Payment mechanics) and applies that amount
to a payment due under the Finance Documents then:

 

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

 

68

 

(b)                                  the Agent shall determine whether the receipt or recovery is in excess of
the amount the Recovering Finance Party would have been paid had the receipt or
recovery been received or made by the Agent and distributed in accordance with
Clause 28 (Payment mechanics),
without taking account of any Tax which would be imposed on the Agent in
relation to the receipt, recovery or distribution; and

 

(c)                                   the Recovering Finance Party shall, within three Business Days of demand
by the Agent, pay to the Agent an amount (the “Sharing
Payment”) equal to such receipt or recovery less any amount which
the Agent determines may be retained by the Recovering Finance Party as its
share of any payment to be made, in accordance with Clause 28.5 (Partial payments).

 

27.2                     Redistribution
of payments

 

The Agent shall
treat the Sharing Payment as if it had been paid by the relevant Obligor and
distribute it between the Finance Parties (other than the Recovering Finance
Party) in accordance with Clause 28.5 (Partial
payments).

 

27.3                     Recovering
Finance Party’s rights

 

(a)                            On a distribution by the Agent under Clause 27.2 (Redistribution of payments), the
Recovering Finance Party will be subrogated to the rights of the Finance
Parties which have shared in the redistribution.

 

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

 

27.4                     Reversal
of redistribution

 

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

 

(a)                                   each Finance Party which has received a share of the relevant Sharing
Payment pursuant to Clause 27.2 (Redistribution
of payments) shall, upon request of the Agent, pay to the Agent for
account of that Recovering Finance Party an amount equal to the appropriate part
of its share of the Sharing Payment (together with an amount as is necessary to
reimburse that Recovering Finance Party for its proportion of any interest on
the Sharing Payment which that Recovering Finance Party is required to pay);
and

 

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

 

27.5                     Exceptions

 

(a)                            This Clause 27 shall not apply to the extent that the Recovering Finance
Party would not, after making any payment pursuant to this Clause, have a valid
and enforceable claim against the relevant Obligor.

 

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

 

69

 

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

 

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

 

70

 

SECTION 11

 

ADMINISTRATION

 

28.                           PAYMENT MECHANICS

 

28.1                     Payments to the
Agent

 

(a)                           The Agent shall
deliver a duly completed Payment Notification to the Borrower not later than
seven Business Days before the last day of an Interest Period.

 

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

 

(c)                            Any Obligor shall
in respect of each payment made by such Obligor to the Agent hereunder procure
that the bank through which such Obligor makes such payment shall irrevocably
confirm to the Agent by authenticated SWIFT message that it will make such
payment. Such authenticated SWIFT message shall be delivered to the Agent no
later than midday on the due date of the relevant payment.

 

(d)                           On each date on
which this Agreement requires an amount to be paid by an Obligor or any Lender
hereunder, such Obligor or Lender, as the case may be, shall make the same
available to the Agent by payment in Dollars and in same day funds (or in such
other funds as may for the time being be customary in New York for the
settlement in Dollars of international banking transactions in Dollars) to the
Agent’s account with the following details:

 

	
  With:

  	
   

  	
  JP Morgan Chase Bank N.A., New York (CHASUS33)

  
	
   

  	
   

  	
   

  
	
  For the account of:

  	
   

  	
  Raiffeisen Zentralbank Österreich AG, Vienna
  (RZBAATWW)

  
	
   

  	
   

  	
   

  
	
  Account:

  	
   

  	
  5447 02991

  
	
   

  	
   

  	
   

  
	
  Reference:

  	
   

  	
  CTC/Projectfinance

  

 

(or such
other account or bank as the Agent may have specified for this purpose on not
less than five Business Days notice).

 

(e)                            The Agent shall in
respect of each Repayment Instalment or interest payment made by the Borrower
to the Agent hereunder (a “Borrower Payment”)
confirm to the Borrower that it received such Borrower Payment by delivery of a
Payment Confirmation Notice. The Agent shall (i) deliver a copy of each
Payment Confirmation Notice to the Borrower by way of fax delivery not later
than the Business Day immediately following the date of the relevant Borrower
Payment and (ii) deposit the original of each Payment Confirmation Notice
with DHL Couriers or, if unavailable, with another reputable courier company
not later than the Business Day immediately following the date of the relevant
Borrower Payment for courier delivery to the Borrower.

 

71

 

28.2                    Distributions by
the Agent

 

Each payment
received by the Agent under the Finance Documents for another Party shall,
subject to Clause 28.3 (Distributions to
an  Obligor) and Clause 28.4 (Clawback),
be made available by the Agent as soon as practicable after receipt to the
Party entitled to receive payment in accordance with this Agreement (in the
case of a Lender, for the account of its Facility Office), to such account as
that Party may notify to the Agent by not less than five Business Days’ notice
with a bank in the principal financial centre of the country of that currency.

 

28.3                     Distributions to an
Obligor

 

The Agent may (with
the consent of the Obligor or in accordance with Clause 29 (Set-off)) apply any amount received by it
for that Obligor in or towards payment (on the date and in the currency and
funds of receipt) of any amount due from that Obligor under the Finance
Documents or in or towards purchase of any amount of any currency to be so
applied.

 

28.4                     Clawback

 

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

 

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

 

28.5                     Partial payments

 

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

 

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

 

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

 

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

 

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

 

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

 

(c)                            Paragraphs (a) and
(b) above will override any appropriation made by an Obligor.

 

72

 

28.6                     No set-off by
Obligors

 

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

 

28.7                     Business Days

 

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

 

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

 

28.8                     Currency of account

 

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

 

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

 

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

 

(d)                           Unless otherwise
agreed to by the Borrower, each payment in respect of costs, expenses or Taxes
shall be made in Dollars.

 

28.9                     Change of currency

 

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

 

(i)                                      any reference in
the Finance Documents to, and any obligations arising under the Finance
Documents in, the currency of that country shall be translated into, or paid
in, the currency or currency unit of that country designated by the Agent (with
the consent of the Borrower (provided no Event of Default is continuing)); and

 

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

 

(b)                           If a change in any
currency of a country occurs, this Agreement will, to the extent the Agent
(acting reasonably and with the consent of the Borrower (provided no Event of
Default is continuing)) specifies to be necessary, be amended to comply with
any generally accepted conventions and market practice in the Relevant
Interbank Market and otherwise to reflect the change in currency.

 

28.10              Disruption to payment systems
etc.

 

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

 

73

 

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

 

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

 

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

 

(d)                          any such changes
agreed upon by the Agent and the Borrower shall (whether or not it is finally
determined that a Disruption Event has occurred) be binding upon the Parties as
an amendment to (or, as the case may be, waiver of) the terms of the Finance
Documents notwithstanding the provisions of Clause 34 (Amendments
and Waivers);

 

(e)                           the Agent shall not
be liable for any damages, costs or losses whatsoever  (including, without limitation for
negligence, gross negligence or any other category of liability whatsoever but
not including any claim based on the fraud of the Agent) arising as a result of
its taking, or failing to take, any actions pursuant to or in connection with
this Clause 28.10; and

 

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

 

29.                           SET-OFF

 

To the extent not
restricted by applicable law and regulations, a Finance Party may set off any
matured obligation due from an Obligor under the Finance Documents (to the
extent beneficially owned by that Finance Party) against any matured obligation
owed by that Finance Party to that Obligor, regardless of the place of payment,
booking branch. For the avoidance of doubt, as at the Signing Date applicable
laws and regulations of the Russian Federation restrict any such set-off.

 

30.                           NOTICES

 

30.1                     Communications in
writing

 

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

 

30.2                     Addresses

 

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

 

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

 

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

 

74

 

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

 

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

 

30.3                     Delivery

 

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

 

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

 

(ii)                                   if by way of
letter, when it has been left at the relevant address or (in relation to any
receiving Party which is not a Russian Obligor) five Business Days after being
deposited in the post postage prepaid in an envelope addressed to it at that
address,

 

and, if a
particular department or officer is specified as part of its address details
provided under Clause 30.2 (Addresses),
if addressed to that department or officer.

 

(b)                           Any communication
or document to be made or delivered to the Agent will be effective only when
actually received by the Agent and then only if it is expressly marked for the
attention of the department or officer identified with the Agent’s signature
below (or any substitute department or officer as the Agent shall specify for
this purpose).

 

(c)                            All notices from or
to an Obligor shall be sent through the Agent.

 

(d)                           Any communication
or document made or delivered to the Borrower in accordance with this Clause
will be deemed to have been made or delivered to each of the Obligors.

 

30.4                     Notification of
address and fax number

 

Promptly upon
receipt of notification of an address and fax number or change of address or
fax number pursuant to Clause 30.2 (Addresses)
or changing its own address or fax number, the Agent shall notify the other
Parties.

 

30.5                     Electronic
communication

 

(a)                            Any communication
to be made between the Agent and a Lender under or in connection with the
Finance Documents may be made by electronic mail or other electronic means, if
the Agent and the relevant Lender:

 

(i)                                      agree that, unless
and until notified to the contrary, this is to be an accepted form of
communication;

 

(ii)                                   notify each other
in writing of their electronic mail address and/or any other information
required to enable the sending and receipt of information by that means; and

 

(iii)                                notify each other
of any change to their address or any other such information supplied by them.

 

(b)                           Any electronic
communication made between the Agent and a Lender will be effective only when
actually received in readable form and in the case of any electronic
communication made by a Lender to the Agent only if it is addressed in such a
manner as the Agent shall specify for this purpose.

 

75

 

30.6                     English language

 

(a)                            Any notice given
under or in connection with any Finance Document must be in English.

 

(b)                           All other documents
provided under or in connection with any Finance Document (except for RAS
statements) must be:

 

(i)                                      in English; or

 

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

 

31.                           CALCULATIONS AND CERTIFICATES

 

31.1                     Accounts

 

In any litigation
or arbitration proceedings arising out of or in connection with a Finance
Document, the entries made in the accounts maintained by a Finance Party are
prima facie evidence of the matters to which they relate.

 

31.2                     Certificates and
Determinations

 

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

 

31.3                     Day count
convention

 

Any interest,
commission or fee accruing under a Finance Document will accrue from day to day
and is calculated on the basis of the actual number of days elapsed and a year
of 360 days or, in any case where the practice in the Relevant Interbank Market
differs, in accordance with that market practice. For the avoidance of doubt,
interest on the Loan shall be calculated from the first day of an Interest
Period to the day preceding the last day of that Interest Period (both days
included in such calculation).

 

32.                           PARTIAL INVALIDITY

 

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

 

33.                           REMEDIES AND WAIVERS

 

No failure to
exercise, nor any delay in exercising, on the part of any Finance Party, any
right or remedy under the Finance Documents shall operate as a waiver, nor
shall any single or partial exercise of any right or remedy prevent any further
or other exercise or the exercise of any other right or remedy. The rights and
remedies provided in this Agreement are cumulative and not exclusive of any
rights or remedies provided by law.

 

76

 

34.                           AMENDMENTS AND WAIVERS

 

34.1                     Required consents

 

(a)                            Subject to Clause
34.2 (Exceptions) any term of the
Finance Documents may be amended or waived only with the consent of the
Majority Lenders and the Obligors and any such amendment or waiver will be
binding on all Parties.

 

(b)                           The Agent may
effect, on behalf of any Finance Party, any amendment or waiver permitted by
this Clause.

 

34.2                     Exceptions

 

(a)                            An amendment or
waiver that has the effect of changing or which relates to:

 

(i)                                      the definition of “Majority
Lenders” in Clause 1.1 (Definitions);

 

(ii)                                   an extension to the
date of payment of any amount under the Finance Documents other than in
accordance with Clause 6.2 (Extension option);

 

(iii)                                a reduction in the
Margin or a reduction in the amount of any payment of principal, interest, fees
or commission payable;

 

(iv)                               an increase in or
an extension of any Commitment;

 

(v)                                  a change to the
Borrower or Guarantors other than in accordance with Clause 24 (Changes to the  Obligors);

 

(vi)                               any provision which
expressly requires the consent of all the Lenders; or

 

(vii)                            Clause 2.2 (Finance Parties’ rights and obligations),
Clause 23 (Changes to the Lenders),
Clause 27 (Sharing among the Finance Parties)
or this Clause 34,

 

shall not be made
without the prior consent of all the Lenders.

 

(b)                           An amendment or
waiver which relates to the rights or obligations of the Agent or the Arranger
may not be effected without the consent of the Agent or the Arranger.

 

35.                           USA PATRIOT ACT

 

Each Lender
hereby notifies each Obligor that pursuant to the requirements of the USA
Patriot Act, such Lender is required to obtain, verify and record information
that identifies such Obligor, which information includes the name and address
of such Obligor and other information that will allow such Lender to identify
such Obligor in accordance with the USA Patriot Act.

 

36.                           COUNTERPARTS

 

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

 

77

 

SECTION 12

 

GOVERNING LAW AND ENFORCEMENT

 

37.                           GOVERNING LAW

 

This Agreement is
governed by English law.

 

38.                           ARBITRATION

 

38.1                     Arbitration

 

Subject to Clause
38.4 (Agent’s option), any dispute arising out
of or in connection with this Agreement (including a dispute regarding the
existence, validity or termination of this Agreement) (a “Dispute”)
shall be referred to and finally resolved by arbitration under the Arbitration Rules (the
“Rules”) of the LCIA.

 

38.2                     Procedure for
arbitration

 

(a)                            The arbitral
tribunal shall consist of three arbitrators. The claimant(s), irrespective of
number, shall nominate jointly one arbitrator; the respondent(s), irrespective
of number, shall nominate jointly the second arbitrator; and a third
arbitrator, who shall serve as Chairman (who shall be a lawyer currently
qualified in England and Wales and be admitted to the Bar of England and
Wales), shall be appointed by the LCIA within 15 days of the appointment of the
second arbitrator.

 

(b)                           In the event the
claimant(s) or the respondent(s) shall fail to nominate an arbitrator
within the time limits specified in the Rules, such arbitrator shall be
appointed by the LCIA within 15 days of such failure. In the event that both
the claimant(s) and the respondent(s) fail to nominate an arbitrator
within the time limits specified in the Rules, all three arbitrators shall be
appointed by the LCIA within 15 days of such failure who shall designate one of
them as chairman.

 

(c)                            If all the parties
to an arbitration so agree, there shall be a sole arbitrator appointed by the
LCIA within 15 days of such agreement.

 

(d)                           The seat of
arbitration shall be London, England and the language of the arbitration shall
be English.

 

(e)                            Where disputes
arise under this Agreement or any other Finance Document which, in the
reasonable opinion of the first arbitral tribunal to be appointed in any of the
Disputes, are so closely connected that it is expedient for them to be resolved
in the same proceedings, that arbitral tribunal shall have the power to order
that the proceedings to resolve that Dispute shall be consolidated with those
to resolve any of the other Disputes (whether or not proceedings to resolve
those other Disputes have yet been instituted), provided that no date for the
final hearing of the first arbitration has been fixed. If the arbitral tribunal
so orders, the parties to each Dispute which is a subject of the order shall be
treated as having consented to that Dispute being finally decided:

 

(i)                                      by the arbitral
tribunal who ordered the consolidation unless the LCIA decides that it would
not be suitable or impartial; and

 

(ii)                                   in accordance with
the procedure, at the seat and in the language specified in the arbitration
agreement in the contract under which the arbitral tribunal who ordered the 

 

78

 

consolidation
was appointed, save as otherwise agreed by all parties to the consolidated
proceedings or, in the absence of such agreement, ordered by the arbitral
tribunal in the consolidated proceedings.

 

38.3                     Recourse to courts

 

Save as provided in
Clause 38.4 (Agent’s option), the parties
exclude the jurisdiction of the courts under Sections 45 and 69 of the
Arbitration Act 1996.

 

38.4                     Agent’s option

 

Before an
arbitrator has been appointed by a Finance Party to determine a Dispute, the
Agent may (and, if so instructed by the Majority Lenders, shall) by notice in
writing to the Borrower require that all Disputes or a specific Dispute be
heard by a court of law. If the Agent gives such notice, the Dispute to which
such notice refers shall be determined in accordance with Clause 39(Jurisdiction).

 

39.                           JURISDICTION

 

39.1                     Jurisdiction of
English courts

 

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

 

(b)                           The Parties agree
that the courts of England are the most appropriate and convenient courts to
settle Disputes and accordingly no Party will argue to the contrary.

 

(c)                            This Clause 39.1 is
for the benefit of the Finance Parties only. As a result, no Finance Party
shall be prevented from taking proceedings relating to a Dispute in any other
courts with jurisdiction. To the extent allowed by law, the Finance Parties may
take concurrent proceedings in any number of jurisdictions.

 

39.2                     Service of process

 

Without prejudice
to any other mode of service allowed under any relevant law, each Obligor:

 

(a)                                   irrevocably
appoints Clifford Chance Secretaries Limited, with its registered office as at
the Signing Date at 10 Upper Bank Street, London E14 5JJ, England, as its agent
for service of process in relation to any proceedings commenced in accordance
with this Agreement; and

 

(b)                                  agrees that failure
by a process agent to notify any Obligor of the process will not invalidate the
proceedings concerned.

 

39.3                     Waiver of damages

 

In no event shall
any Finance Party be liable on any theory of liability for any special,
indirect, consequential or punitive damages and each Obligor hereby waives,
releases and agrees (for itself and on behalf of its Subsidiaries) not to sue
upon any such claim for any such damages, whether or not accrued and whether or
not known or suspected to exist in its favour.

 

39.4                     Waiver of immunity

 

Each Obligor
irrevocably agrees that, should any party take any proceedings anywhere
(whether for an injunction, specific performance, damages or otherwise), no
immunity (to the extent that it may at any time exist, whether on the grounds
of sovereignty or otherwise) from those proceedings, from attachment (whether
in aid of execution, before judgment or otherwise) of its 

 

79

 

assets or from
execution of judgment shall be claimed by it or on behalf of it or with respect
to its assets, any such immunity being irrevocably waived. Each Obligor
irrevocably agrees that it and its assets are, and shall be, subject to such
proceedings, attachment or execution in respect of its obligations under the
Finance Documents.

 

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

 

80

 

SCHEDULE 1

 

THE ORIGINAL
PARTIES

 

PART I

 

THE ORIGINAL
GUARANTORS

 

	
  Name of Original Guarantor

  	
   

  	
  Registration details

  
	
   

  	
   

  	
   

  
	
  CTC MEDIA,
  INC.

  	
   

  	
  Corporation
  incorporated under the laws of Delaware with registration number 2210850 and
  registered address at 2711 Centerville Road, Suite 400, Wilmington,
  Delaware 19808, United States of America.

  
	
   

  	
   

  	
   

  
	
  CLOSED
  JOINT STOCK COMPANY “NEW CHANNEL”

  	
   

  	
  Closed
  joint stock company organised under the laws of the Russian Federation with
  main state registration number 1047796750880 and having its registered
  address at 3RD Khoroshevskaya Str., 12, 123298, Moscow, Russian Federation.

  
	
   

  	
   

  	
   

  
	
  LIMITED
  LIABILITY COMPANY “MARATHON-TV”

  	
   

  	
  Limited
  liability company organised under the laws of the Russian Federation with
  main state registration number 1027739137887 and having its registered
  address at Trehsvyatitelsky B. Pereulok, 2, 109208, Moscow, Russian
  Federation.

  

 

81

 

PART II

 

THE ORIGINAL
LENDERS

 

	
  Name of Original Lender

  	
   

  	
  Facility Office (country

  of tax residence)

  	
   

  	
  Commitment

  (US$)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ABN AMRO
  BANK N.V.

  	
   

  	
  Netherlands

  	
   

  	
  US$27,250,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BNP PARIBAS
  SA

  	
   

  	
  France

  	
   

  	
  US$27,250,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ING BANK
  N.V.

  	
   

  	
  Netherlands

  	
   

  	
  US$27,250,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  RAIFFEISEN
  ZENTRALBANK ÖSTERREICH AKTIENGESELLSCHAFT

  	
   

  	
  Austria

  	
   

  	
  US$13,625,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ZAO
  RAIFFEISENBANK

  	
   

  	
  Russia

  	
   

  	
  US$13,625,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  THE
  GOVERNOR AND COMPANY OF THE BANK OF IRELAND

  	
   

  	
  United
  Kingdom

  	
   

  	
  US$12,500,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DEMIR-HALK
  BANK (NEDERLAND) N.V.

  	
   

  	
  Netherlands

  	
   

  	
  US$8,500,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  RAIFFEISENLANDESBANK
  NIEDERÖSTERREICH-WIEN AG

  	
   

  	
  Austria

  	
   

  	
  US$5,000,000

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Commitments

  	
   

  	
   

  	
   

  	
  US$135,000,000

  

 

82

 

Part III

 

THE
DESIGNATED LENDERS

 

	
  Name of Designated Lender

  	
   

  	
  Designated Amount (US$ )

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  N/A

  	
   

  	
  N/A

  	
   

  

 

83

 

SCHEDULE 2

 

CONDITIONS
PRECEDENT

 

PART I

 

CONDITIONS
PRECEDENT TO INITIAL UTILISATION

 

1.           Finance Documents

 

Duly executed
originals of:

 

(a)            this Agreement; and

 

(b)           any Fee Letter.

 

2.           Original Obligors

 

(a)         Notarised copies of
(i) each Russian Obligor’s duly registered constitutional documents
(including any amendments thereto) and certificate of registration thereof in
force at the date of each of the Finance Documents, (ii) (A) each
Russian Obligor’s registration certificate issued by the competent registration
authority and (B) certificate of its entry into the Unified State Registry
of Legal Entities issued by the competent tax authority (if applicable), and (iii) in
the case of CTC Media, copies of the certificate of incorporation of articles
of incorporation of  CTC Media certified
as of a recent date by the Delaware Secretary of State and a copy of its
bylaws;

 

(b)         certified copies of
all internal approvals and corporate resolutions necessary to authorise each
Obligor to execute and perform the Finance Documents to which it is a party and
any related documents and the transactions contemplated thereunder (including,
but not limited to, any major transaction approvals or interested party
transaction approvals required under applicable Russian law);

 

(c)         if required
pursuant to the bylaws of CTC Media, a copy of the resolutions of the
shareholders of CTC Media;

 

(d)         evidence of the
authority of the relevant signatories of each Obligor (including the Chief
Accountant) to execute the Finance Documents to which it is party and any
related documents;

 

(e)         original
certificate issued by each Obligor:

 

(i)             certifying the
sample signature and office of each person that is to execute the Finance
Documents to which it is party and any related documents on behalf of such
Obligor and certifying that such signatories hold the positions in which
capacity they will execute such documents;

 

(ii)            certifying in case
of the Russian Obligors only (A) that none of the Finance Documents to
which it is party, and none of the transactions contemplated thereunder, does
or will constitute a major transaction or an interested party transaction for
it under applicable Russian law, except where requisite corporate approvals
authorising all major transactions and all interested party transactions have
been obtained by it with respect to such Finance Documents and (B) that
the aggregate value of the transactions contemplated under the Finance
Documents exceeds 25 per cent. but does not exceed 

 

84

 

50 per
cent./exceeds 50 per cent. (as applicable) of the balance sheet value of its
assets as of the latest reporting date (prepared and calculated in accordance
with RAS);

 

(iii)           in case of the
Russian Obligors, confirming that borrowing or guaranteeing, as appropriate,
the total commitments would not cause any borrowing or guaranteeing or similar
limit binding on it to be exceeded;

 

(iv)          in case of the
Russian Obligors, certifying that each copy document relating to it that that
has been provided by it to the Agent under the Facility Agreement and/or any of
its legal advisors is correct, complete and in full force and effect as of a
date no earlier than each of the Finance Documents to which the relevant
Russian Obligor is a party;

 

(v)           in case of the
Russian Obligors, confirming that the conclusion of and the performance by it
of its obligations under the Finance Documents to which it is a party and any
related documents would not contravene any of its internal orders or
regulations or decisions of its governing bodies and the power of the chief
executive officer and, where relevant, other authorised signatories to act on
its behalf, as defined in its constitutional documents and in any power(s) of
attorney issued to any signatory/ies referred to in paragraph (iv) above,
is not limited by any of its internal documents or decisions of its governing
bodies or by any contract;

 

(vi)          certificate of the
secretary of CTC Media, attaching and certifying the CTC Media documents listed
in paragraphs (b) to (d) and (h) to (i);

 

(f)          evidence that (A) the
Borrower has complied or will comply with applicable currency control laws and
regulations in respect of the entry into and performance of any Finance
Document to which it is party, including a certified copy of the transaction
passport (passport sdelki) of the Borrower in
relation to the relevant Finance Documents accepted and duly certified by the
passport bank and (B) all necessary documents in relation to the Finance
Documents have been submitted to the passport bank in accordance with
applicable currency control laws and regulations and in form and substance
satisfactory to the passport bank, together with certified copies of any of
such documents as the Agent may require;

 

(g)         a certificate as to
the existence and good standing (including verification of tax status) of CTC
Media, certified as of a recent date by the Delaware Secretary of State, in
form and substance satisfactory to the Agent and its counsel;

 

(h)         a solvency
certificate of CTC Media, in form and substance satisfactory to the Agent and
its counsel; and

 

(i)          certificate of an
officer of CTC Media, addressed to Linklaters LLP, certifying as to certain
factual matters.

 

3.           Legal
opinions

 

(a)         A legal opinion of
Linklaters CIS, legal advisers to the Arranger and the Agent in England,
substantially in the form distributed to the Original Lenders prior to the
Signing Date;

 

85

 

(b)         a legal opinion of
Linklaters LLP, legal advisers to the Arranger and the Agent in United States
of America, substantially in the form distributed to the Original Lenders prior
to the Signing Date; and

 

(c)         a legal opinion of
Linklaters CIS, legal advisers to the Arranger and the Agent in the Russian
Federation, substantially in the form distributed to the Original Lenders prior
to the Signing Date.

 

4.           Other documents and evidence

 

(a)         Evidence that the
process agent referred to in Clause 39.2 (Service of process)
has accepted its appointment;

 

(b)         a copy of any other
Authorisation or other document, opinion (of Lenders’ counsel) or assurance
which the Agent reasonably considers to be necessary (if it has notified the
Borrower accordingly) in connection with the entry into and performance of the
transactions contemplated by any Finance Document or for the validity and
enforceability of any Finance Document;

 

(c)         the Original
Financial Statements;

 

(d)         evidence that the
fees, costs and expenses then due from the Borrower pursuant to Clause 11 (Fees) and Clause 16 (Costs and expenses)
have been paid or will be paid by the proposed Utilisation Date;

 

(e)         the Group Structure
Chart;

 

(f)          a copy of all
applicable Acquisition Documents;

 

(g)         evidence that the
Acquisition Closing Date has occurred and no material conditions have been
waived or consents given under the Acquisition Documents;

 

(h)         copies of all
applicable Broadcasting Licences of the Target Group;

 

(i)          certificate of
closing indebtedness and disclosure schedule in relation to the Acquisition;

 

(j)          evidence, based on
the Group’s annual forecast (in the form and substance satisfactory to the
Agent), that the Group does not breach any Financial Covenant on a pro forma
basis for the next four succeeding test dates;

 

(k)         copies of the
latest annual audited financial statements of each Russian Obligor (if
applicable) and the 2007 audited financial statements of the Target Group (if
available);

 

(l)          copies of the
latest available financial statements of each Russian Obligor prepared in
accordance with RAS;

 

(m)        extract from the
Unified State Register Of Legal Entities in relation to each Russian Obligor
issued by the competent tax authority no earlier than 30 days prior to the date
of each of the Finance Documents;

 

(n)         an extract from the
share register of the Borrower; and

 

(o)         such other
documents or evidence as the Agent considers to be necessary or desirable (if
it has notified the Borrower accordingly).

 

86

 

PART II

 

CONDITIONS
PRECEDENT REQUIRED TO BE

 

DELIVERED BY AN
ADDITIONAL GUARANTOR

 

1.           An Accession Letter
duly executed by the Additional Guarantor and CTC Media.

 

2.           Notarised copies of
the Additional Guarantor’s (i) duly registered constitutional documents
(including any amendments thereto) and certificate of registration thereof in
force at the date of the Accession Letter, (ii) (A) registration
certificate issued by the competent registration authority (in case of an
Additional Guarantor incorporated in the Russian Federation, such certificate
to be provided only if such company is registered before 1 July 2002) and (B) in
case of an Additional Guarantor incorporated in the Russian Federation only,
certificate of its entry into the Unified State Registry of Legal Entities
issued by the competent tax authority.

 

3.           Certified copies of
all internal approvals and corporate resolutions (including, if applicable,
shareholders’ resolution) necessary to authorise the Additional Guarantor to
execute and perform the Accession Letter and/or other Finance Documents to
which it is a party and any related documents and the transactions contemplated
thereunder (including, but not limited to, any major transaction approvals or
interested party transaction approvals required under applicable Russian law).

 

4.           Evidence of the
authority of the relevant signatories of the Additional Guarantor (including,
in case of the Additional Guarantor incorporated in the Russian Federation, of
its Chief Accountant) to execute the Accession Letter and/or other Finance
Documents to which it is party and any related documents

 

5.           Original
certificate issued by the Additional Guarantor:

 

(i)             certifying the
sample signature and office of each person that is to execute the Accession
Letter and/or other Finance Documents to which it is party and any related documents
on behalf of that Additional Guarantor and certifying that such signatories
hold the positions in which capacity they will execute such documents;

 

(ii)            in case of an
Additional Guarantor incorporated in the Russian Federation only, certifying (A) that
none of the Accession Letter and/or other Finance Documents to which it is
party, and none of the transactions contemplated thereunder, does or will
constitute a major transaction or an interested party transaction for it under
applicable Russian law, except where requisite corporate approvals authorising
all major transactions and all interested party transactions have been obtained
by it with respect to such Accession Letter and/or  Finance Documents and (B) that the
aggregate value of the transactions contemplated under the Accession Letter
and/or other Finance Documents to which it is a party does not exceed 25 per
cent./exceeds 25 per cent. but does not exceed 50 per cent./exceeds 50 per
cent. (as applicable) of the balance sheet value of its assets as of the latest
reporting date (prepared and calculated in accordance with RAS);

 

87

 

(iii)           confirming that
guaranteeing the Total Commitments would not cause any borrowing or
guaranteeing or similar limit binding on it to be exceeded;

 

(iv)          certifying that
each copy document relating to it that has been provided by it to the Agent
under the Facility Agreement and/or any of its legal advisors is correct,
complete and in full force and effect as of a date no earlier than each of the
Finance Documents to which the Additional Guarantor is a party; and

 

(v)           in case of an
Additional Guarantor incorporated in the Russian Federation only, confirming
that the conclusion of and the performance by it of its obligations under the
Accession Letter and/or other Finance Documents to which it is a party and any
related documents would not contravene any of its internal orders or
regulations or decisions of its governing bodies and the power of the chief
executive officer and, where relevant, other authorised signatories to act on
its behalf, as defined in its constitutional documents and in any power(s) of
attorney issued to any signatory/ies referred to in paragraph (iv) above,
is not limited by any of its internal documents or decisions of its governing
bodies or by any contract.

 

6.           A copy of any other
Authorisation or other document, opinion or assurance which the Agent considers
to be necessary or desirable in connection with the entry into and performance
of the transactions contemplated by the Accession Letter or for the validity
and enforceability of any Finance Document.

 

7.           If available, the
latest audited financial statements of the Additional Guarantor.

 

8.           A legal opinion of
the legal advisers to the Arranger and the Agent in England.

 

9.           If the Additional
Guarantor is incorporated in a jurisdiction other than England and Wales, a
legal opinion of the legal advisers to the Arranger and the Agent in the
jurisdiction in which the Additional Guarantor is incorporated.

 

10.         If the proposed
Additional Guarantor is incorporated in a jurisdiction other than England and
Wales, evidence that the process agent specified in Clause 39.2 (Service of process) has accepted its
appointment in relation to the proposed Additional Guarantor.

 

88

 

SCHEDULE 3

 

REQUESTS

 

PART I

 

UTILISATION REQUEST

 

From:      CLOSED JOINT-STOCK COMPANY “SET TELEVISSIONNYKH STANTSIY”
as Borrower

 

To:          RAIFFEISEN ZENTRALBANK
ÖSTERREICH AKTIENGESELLSCHAFT as Agent

 

Dated:

 

Dear Sirs

 

CLOSED JOINT-STOCK COMPANY “SET TELEVISSIONNYKH STANTSIY” - US$135,000,000

Facility Agreement

dated 27 June 2008 (the “Agreement”)

 

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

 

2.           We wish to borrow
the Loan on the following terms:

 

	
  Proposed
  Utilisation Date:

  	
   

  	
  [                   ]
  or, if that is not a Business Day, the next Business Day)

  
	
   

  	
   

  	
   

  
	
  Amount:

  	
   

  	
  [                   ]
  or, if less, the Total Commitments

  
	
   

  	
   

  	
   

  
	
  Interest
  Period:

  	
   

  	
  the
  proposed first Interest Period to end on 22 September 2008

  

 

3.           We confirm that
each condition specified in Clause 4.2 (Further
conditions precedent) is satisfied on the date of this Utilisation
Request.

 

4.           The proceeds of
this Loan should be credited to [account].

 

5.           This Utilisation
Request is irrevocable.

 

Yours faithfully

 

CLOSED JOINT-STOCK COMPANY “SET TELEVISSIONNYKH STANTSIY”

 

 

	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
  Title:  Chief Accountant

  

 

89

 

PART II

 

SELECTION NOTICE

 

	
  From:

  	
   

  	
  CLOSED
  JOINT-STOCK COMPANY “SET TELEVISSIONNYKH STANTSIY” as Borrower

  
	
   

  	
   

  	
   

  
	
  To:

  	
   

  	
  RAIFFEISEN
  ZENTRALBANK ÖSTERREICH AKTIENGESELLSCHAFT as Agent

  

 

Dated:

 

Dear Sirs

 

CLOSED JOINT-STOCK COMPANY “SET TELEVISSIONNYKH STANTSIY” - US$135,000,000

Facility Agreement

dated 27 June 2008   (the “Agreement”)

 

1.           We refer to the
Agreement. This is a Selection Notice. Terms defined in the Agreement have the
same meaning in this Selection Notice unless given a different meaning in this
Selection Notice.

 

2.           We refer to the
following Loan with an Interest Period ending on
[                   ].

 

3.           We request that the
next Interest Period for the above Loan is [three/six
Months].

 

4.           This Selection
Notice is irrevocable.

 

Yours faithfully

 

CLOSED JOINT-STOCK COMPANY “SET TELEVISSIONNYKH STANTSIY”

 

 

	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
  Title:  Chief Accountant

  

 

90

 

SCHEDULE 4

 

MANDATORY COST
FORMULA

 

1.           The Mandatory Cost
is an addition to the interest rate to compensate Lenders for the cost of
compliance with (a) the requirements of the Bank of England and/or the
Financial Services Authority (or, in either case, any other authority which
replaces all or any of its functions) or (b) the requirements of the
European Central Bank.

 

2.           On the first day of
each Interest Period (or as soon as possible thereafter) the Agent shall
calculate, as a percentage rate, a rate (the “Additional
Cost Rate”) for each Lender, in accordance with the paragraphs set
out below. The Mandatory Cost will be calculated by the Agent as a weighted
average of the Lenders’ Additional Cost Rates (weighted in proportion to the
percentage participation of each Lender in the relevant Loan) and will be
expressed as a percentage rate per annum.

 

3.           The Additional Cost
Rate for any Lender lending from a Facility Office in a Participating Member
State will be the percentage notified by that Lender to the Agent. This
percentage will be certified by that Lender in its notice to the Agent to be
its reasonable determination of the cost (expressed as a percentage of that
Lender’s participation in the Loan made from that Facility Office) of complying
with the minimum reserve requirements of the European Central Bank in respect
of loans made from that Facility Office.

 

4.           The Additional Cost
Rate for any Lender lending from a Facility Office in the United Kingdom will
be calculated by the Agent as follows:

 

	
  

  	
  per cent. per
  annum.

  

 

Where:

 

E              is designed to compensate Lenders for
amounts payable under the Fees Rules and is calculated by the Agent as
being the average of the most recent rates of charge supplied by the Reference
Banks to the Agent pursuant to paragraph 7 below and expressed in pounds per
£1,000,000.

 

5.           For the purposes of
this Schedule:

 

(a)         “Fees Rules” means the rules on
periodic fees contained in the FSA Supervision Manual or such other law or
regulation as may be in force from time to time in respect of the payment of
fees for the acceptance of deposits;

 

(b)         “Fee Tariffs” means the fee tariffs
specified in the Fees Rules under the activity group A.1 Deposit acceptors
(ignoring any minimum fee or zero rated fee required pursuant to the Fees Rules but
taking into account any applicable discount rate); and

 

(c)         “Tariff Base” has the meaning given to it
in, and will be calculated in accordance with, the Fees Rules.

 

6.           The resulting
figure shall be rounded to four decimal places.

 

91

 

7.           If requested by the
Agent, each Reference Bank shall, as soon as practicable after publication by
the Financial Services Authority, supply to the Agent, the rate of charge
payable by that Reference Bank to the Financial Services Authority pursuant to
the Fees Rules in respect of the relevant financial year of the Financial
Services Authority (calculated for this purpose by that Reference Bank as being
the average of the Fee Tariffs applicable to that Reference Bank for that
financial year) and expressed in pounds per £1,000,000 of the Tariff Base of
that Reference Bank.

 

8.           Each Lender shall
supply any information required by the Agent for the purpose of calculating its
Additional Cost Rate. In particular, but without limitation, each Lender shall
supply the following information on or prior to the date on which it becomes a
Lender:

 

(a)            the jurisdiction of
its Facility Office; and

 

(b)           any other
information that the Agent may reasonably require for such purpose.

 

Each Lender shall
promptly notify the Agent of any change to the information provided by it
pursuant to this paragraph.

 

9.           The rates of charge
of each Reference Bank for the purpose of E above shall be determined by the
Agent based upon the information supplied to it pursuant to paragraphs 7 and 8
above.

 

10.         The Agent shall
have no liability to any person if such determination results in an Additional
Cost Rate which over or under compensates any Lender and shall be entitled to
assume that the information provided by any Lender or Reference Bank pursuant
to paragraphs 3, 7 and 8 above is true and correct in all respects.

 

11.         The Agent shall
distribute the additional amounts received as a result of the Mandatory Cost to
the Lenders on the basis of the Additional Cost Rate for each Lender based on
the information provided by each Lender and each Reference Bank pursuant to
paragraphs 3, 7 and 8 above.

 

12.         Any determination
by the Agent pursuant to this Schedule in relation to a formula, the Mandatory
Cost, an Additional Cost Rate or any amount payable to a Lender shall, in the
absence of manifest error, be conclusive and binding on all Parties.

 

13.         The Agent may from
time to time, after consultation with the Borrower and the Lenders, determine
and notify to all Parties any amendments which are required to be made to this
Schedule in order to comply with any change in law, regulation or any
requirements from time to time imposed by the Bank of England, the Financial
Services Authority or the European Central Bank (or, in any case, any other
authority which replaces all or any of its functions) and any such
determination shall, in the absence of manifest error, be conclusive and
binding on all Parties.

 

92

 

SCHEDULE 5

 

FORM OF
TRANSFER CERTIFICATE

 

	
  To:

  	
   

  	
  RAIFFEISEN
  ZENTRALBANK ÖSTERREICH AKTIENGESELLSCHAFT as Agent

  
	
   

  	
   

  	
   

  
	
  From:

  	
   

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

  

 

Dated:

 

CLOSED JOINT-STOCK COMPANY “SET TELEVISSIONNYKH STANTSIY” - US$135,000,000

Facility Agreement

dated 27 June 2008   (the “Agreement”)

 

1.           We refer to the
Agreement. This is a Transfer Certificate. Terms defined in the Agreement have
the same meaning in this Transfer Certificate unless given a different meaning
in this Transfer Certificate.

 

2.           We refer to Clause
23.5 (Procedure for transfer):

 

(a)            The Existing Lender
and the New Lender agree to the Existing Lender transferring to the New Lender
by novation all or part of the Existing Lender’s Commitment, rights and
obligations referred to in the Schedule in accordance with Clause 23.5 (Procedure for transfer).

 

(b)           The proposed
Transfer Date is
[                   ].

 

(c)            The Facility Office
and address, fax number and attention details for notices of the New Lender for
the purposes of Clause 30.2 (Addresses)
are set out in the Schedule.

 

3.           The New Lender
expressly acknowledges the limitations on the Existing Lender’s obligations set
out in paragraph (c) of Clause 23.4 (Limitation
of responsibility of Existing Lenders).

 

4.           This Transfer
Certificate may be executed in any number of counterparts and this has the same
effect as if the signatures on the counterparts were on a single copy of this
Transfer Certificate.

 

5.           This Transfer Certificate
is governed by English law.

 

93

 

THE
SCHEDULE

 

Commitment/rights
and obligations to be transferred

 

[insert relevant details]

 

[Facility Office address, fax number and attention details for notices
and account details for payments.]

 

	
  [Existing Lender]

  	
   

  	
  [New Lender]

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  By:

  

 

This Transfer
Certificate is accepted by the Agent and the Transfer Date is confirmed as
[                   ].

 

RAIFFEISEN ZENTRALBANK ÖSTERREICH
AKTIENGESELLSCHAFT

 

By:

 

94

 

SCHEDULE 6

 

FORM OF
ACCESSION LETTER

 

	
  To:

  	
   

  	
  RAIFFEISEN
  ZENTRALBANK ÖSTERREICH AKTIENGESELLSCHAFT as Agent

  
	
   

  	
   

  	
   

  
	
  From:

  	
   

  	
  [SUBSIDIARY] and CTC MEDIA, INC.

  

 

Dated:

 

Dear Sirs

 

CLOSED JOINT-STOCK COMPANY “SET  TELEVISSIONNYKH STANTSIY”- US$135,000,000

Facility Agreement

dated 27 June 2008   (the “Agreement”)

 

1.           We refer to the
Agreement. This is an Accession Letter. Terms defined in the Agreement have the
same meaning in this Accession Letter unless given a different meaning in this
Accession Letter.

 

2.           [Subsidiary] agrees to become an Additional Guarantor and to
be bound by the terms of the Agreement as an Additional Guarantor pursuant to
Clause 24.2 (Additional Guarantors)
of the Agreement. [Subsidiary] is
a company duly incorporated under the laws of [name of
relevant jurisdiction].

 

3.           [Subsidiary’s] administrative details are as follows:

 

Address:

 

Fax No:

 

Attention:

 

4.           This Accession
Letter is governed by English law.

 

This Accession
Letter has been delivered as a deed on the date stated at the beginning of this
Accession Letter.

 

Yours faithfully

 

CTC Media, Inc.

 

Executed as a deed

 

	
  By:

  
	
   

  
	
  Name:

  
	
   

  
	
  Title:       [Authorised Signatory]

  

 

95

 

[Subsidiary]

 

Executed as a deed

 

	
  By:

  	
   

  	
  By:

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  
	
  Title:     [Authorised Signatory]

  	
   

  	
  Title:     [Chief Accountant]

  

 

96

 

SCHEDULE 7

 

FORM OF
RESIGNATION LETTER

 

	
  To:

  	
   

  	
  RAIFFEISEN
  ZENTRALBANK ÖSTERREICH AKTIENGESELLSCHAFT as Agent

  
	
   

  	
   

  	
   

  
	
  From:

  	
   

  	
  [RESIGNING GUARANTOR] and CTC MEDIA, INC.

  

 

Dated:

 

Dear Sirs

 

CLOSED JOINT-STOCK COMPANY “SET TELEVISSIONNYKH STANTSIY” - US$135,000,000

Facility Agreement

dated
27 June 2008 (the “Agreement”)

 

1.           We refer to the
Agreement. This is a Resignation Letter. Terms defined in the Agreement have
the same meaning in this Resignation Letter unless given a different meaning in
this Resignation Letter.

 

2.           Pursuant to Clause
24.4 (Resignation of a Guarantor),
we request that [resigning Guarantor] be released
from its obligations as a Guarantor under the Agreement.

 

3.           We confirm that:

 

(a)            no Default is
continuing or would result from the acceptance of this request; and

 

(b)           [                   ]

 

4.           This Resignation
Letter is governed by English law.

 

Yours faithfully

 

CTC Media, Inc.

 

	
  By:

  
	
   

  
	
  Name:

  
	
   

  
	
  Title:     [Authorised Signatory]

  

 

[resigning Guarantor]

 

	
  By:

  	
   

  	
  By:

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
  Title:

  

 

97

 

SCHEDULE 8

 

FORM OF COMPLIANCE CERTIFICATE

 

	
  To:

  	
   

  	
  RAIFFEISEN ZENTRALBANK ÖSTERREICH AKTIENGESELLSCHAFT as Agent

  
	
   

  	
   

  	
   

  
	
  From:

  	
   

  	
  CTC MEDIA, INC.

  

 

Dated:

 

Dear
Sirs

 

CLOSED JOINT-STOCK COMPANY “SET TELEVISSIONNYKH STANTSIY” -
US$135,000,000

Facility Agreement

dated 27 June 2008 (the “Agreement”)

 

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

 

1.                                 [We confirm that no
Default is continuing.]*

 

2.                                 We confirm that:

 

(a)                                   as at [·] the ratio of
Total Net Debt to OIBDA for the Relevant Period ending on [·] was [·];

 

(b)                                  the ratio of OIBDA
to Interest Expense for the Relevant Period ending on [·] was [·];

 

(c)                                   as at [·] Total Shareholder
Equity was [·]; and

 

(d)                                  as at [·] the ratio of
Total Net Debt to Total Shareholder Equity was [·].

 

 

	
  Signed:

  	
   

  	
   

  	
  Signed:

  	
   

  
	
   

  	
   

  	
   

  
	
  [·] of 

  	
   

  	
  [·] of 

  
	
  CTC Media, Inc.

  	
   

  	
  CTC Media, Inc.

  

 

[We
have reviewed the Facility Agreement and audited consolidated financial
statements of CTC Media, Inc. for the year ended
[                   ].]

 

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

 

98

 

[On
the basis of that review and audit, nothing has come to our attention which
would require any  modification to the
confirmations in paragraph 2 of the above Compliance Certificate [or which we
know to be a continuing Default].]

 

for
and on behalf of

 

[name of CTC Media’s auditors (or another
auditor of equal standing at CTC Media’s discretion)]

 

99

 

SCHEDULE 9

 

BROADCASTING LICENCES

 

	
  City

  	
   

  	
  Number of households

  surveyed

  	
   

  	
  Percentage

  	
   

  
	
  Moscow

  	
   

  	
  550

  	
   

  	
   

  	
   

  
	
  Balachikha

  	
   

  	
  15

  	
   

  	
   

  	
   

  
	
  Zheleznodorozhny

  	
   

  	
  10

  	
   

  	
   

  	
   

  
	
  Zhukovski

  	
   

  	
  9

  	
   

  	
   

  	
   

  
	
  Korolev

  	
   

  	
  15

  	
   

  	
   

  	
   

  
	
  Lyubertsy

  	
   

  	
  14

  	
   

  	
   

  	
   

  
	
  Mitishy

  	
   

  	
  14

  	
   

  	
   

  	
   

  
	
  Noginsk

  	
   

  	
  10

  	
   

  	
   

  	
   

  
	
  Odintsovo

  	
   

  	
  11

  	
   

  	
   

  	
   

  
	
  Podolsk

  	
   

  	
  15

  	
   

  	
   

  	
   

  
	
  Khimki

  	
   

  	
  15

  	
   

  	
   

  	
   

  
	
  Shelkovo

  	
   

  	
  10

  	
   

  	
   

  	
   

  
	
  Yelektrostal

  	
   

  	
  12

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  700

  	
   

  	
  20.15

  	
  %

  
	
  St Petersburg

  	
   

  	
  190

  	
   

  	
  5.47

  	
  %

  
	
  Yaroslavl

  	
   

  	
  80

  	
   

  	
  2.30

  	
  %

  
	
  Nizhny Novgorod

  	
   

  	
  78

  	
   

  	
  2.25

  	
  %

  
	
  Yekaterinburg

  	
   

  	
  78

  	
   

  	
  2.25

  	
  %

  
	
  Chelyabinsk

  	
   

  	
  78

  	
   

  	
  2.25

  	
  %

  
	
  Kemerovo

  	
   

  	
  78

  	
   

  	
  2.25

  	
  %

  
	
  Krasnoyarsk

  	
   

  	
  78

  	
   

  	
  2.25

  	
  %

  
	
  Novosibirsk

  	
   

  	
  78

  	
   

  	
  2.25

  	
  %

  
	
  Vladivostok

  	
   

  	
  78

  	
   

  	
  2.25

  	
  %

  
	
  Khabarovsk

  	
   

  	
  78

  	
   

  	
  2.25

  	
  %

  
	
  Voronezh

  	
   

  	
  77

  	
   

  	
  2.22

  	
  %

  
	
  Arkhangelsk

  	
   

  	
  77

  	
   

  	
  2.22

  	
  %

  
	
  Samara

  	
   

  	
  77

  	
   

  	
  2.22

  	
  %

  
	
  Perm

  	
   

  	
  76

  	
   

  	
  2.19

  	
  %

  
	
  Saratov

  	
   

  	
  76

  	
   

  	
  2.19

  	
  %

  

 

100

 

	
  City

  	
   

  	
  Number of households

  surveyed

  	
   

  	
  Percentage

  	
   

  
	
  Barnaul

  	
   

  	
  76

  	
   

  	
  2.19

  	
  %

  
	
  Omsk

  	
   

  	
  76

  	
   

  	
  2.19

  	
  %

  
	
  Tver

  	
   

  	
  75

  	
   

  	
  2.16

  	
  %

  
	
  Tula

  	
   

  	
  75

  	
   

  	
  2.16

  	
  %

  
	
  Volgograd

  	
   

  	
  75

  	
   

  	
  2.16

  	
  %

  
	
  Ulyanovsk

  	
   

  	
  75

  	
   

  	
  2.16

  	
  %

  
	
  Tcheboksary

  	
   

  	
  75

  	
   

  	
  2.16

  	
  %

  
	
  Tyumen

  	
   

  	
  75

  	
   

  	
  2.16

  	
  %

  
	
  Tomsk

  	
   

  	
  75

  	
   

  	
  2.16

  	
  %

  
	
  Izhevsk

  	
   

  	
  74

  	
   

  	
  2.13

  	
  %

  
	
  Rostov

  	
   

  	
  73

  	
   

  	
  2.10

  	
  %

  
	
  Ufa

  	
   

  	
  73

  	
   

  	
  2.10

  	
  %

  
	
  Kazan

  	
   

  	
  73

  	
   

  	
  2.10

  	
  %

  
	
  Irkutsk

  	
   

  	
  72

  	
   

  	
  2.07

  	
  %

  
	
  Krasnodar

  	
   

  	
  70

  	
   

  	
  2.01

  	
  %

  
	
  Stavropol

  	
   

  	
  70

  	
   

  	
  2.01

  	
  %

  
	
  Arzamas

  	
   

  	
  31

  	
   

  	
  0.89

  	
  %

  
	
  Stari Oskol

  	
   

  	
  21

  	
   

  	
  0.60

  	
  %

  
	
  Ussuriysk

  	
   

  	
  21

  	
   

  	
  0.60

  	
  %

  
	
  Novomoskovsk

  	
   

  	
  20

  	
   

  	
  0.58

  	
  %

  
	
  Berezniki

  	
   

  	
  20

  	
   

  	
  0.58

  	
  %

  
	
  Kansk

  	
   

  	
  19

  	
   

  	
  0.55

  	
  %

  
	
  Rybinsk

  	
   

  	
  18

  	
   

  	
  0.52

  	
  %

  
	
  Severodvinsk

  	
   

  	
  17

  	
   

  	
  0.49

  	
  %

  
	
  Volszhki

  	
   

  	
  16

  	
   

  	
  0.46

  	
  %

  
	
  Novocherkassk

  	
   

  	
  16

  	
   

  	
  0.46

  	
  %

  
	
  Togliatti

  	
   

  	
  15

  	
   

  	
  0.43

  	
  %

  
	
  Angarsk

  	
   

  	
  14

  	
   

  	
  0.40

  	
  %

  
	
  Petrozavodsk

  	
   

  	
  13

  	
   

  	
  0.37

  	
  %

  
	
  Balakovo

  	
   

  	
  13

  	
   

  	
  0.37

  	
  %

  
	
  Nizhny Tagil

  	
   

  	
  13

  	
   

  	
  0.37

  	
  %

  
	
  Sizran

  	
   

  	
  10

  	
   

  	
  0.29

  	
  %

  

 

101

 

	
  City

  	
   

  	
  Number of households

  surveyed

  	
   

  	
  Percentage

  	
   

  
	
  Pervouralsk

  	
   

  	
  10

  	
   

  	
  0.29

  	
  %

  
	
  Myass

  	
   

  	
  10

  	
   

  	
  0.29

  	
  %

  
	
  Nevinnomisk

  	
   

  	
  9

  	
   

  	
  0.26

  	
  %

  
	
  Pyatigorsk

  	
   

  	
  9

  	
   

  	
  0.26

  	
  %

  
	
   

  	
   

  	
  3,474

  	
   

  	
  100.00

  	
  %

  

 

102

 

SCHEDULE 10

 

FORM OF PAYMENT CONFIRMATION NOTICE

 

	
  To:

  	
   

  	
  CLOSED JOINT-STOCK COMPANY “SET TELEVISSIONNYKH STANTSIY”

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attn.
  Anatoly Smirnov

  
	
   

  	
   

  	
  3rd
  Khoroshevskaya Str. 12

  
	
   

  	
   

  	
  123298
  Moscow

  
	
   

  	
   

  	
  Russian
  Federation

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  fax
  to + 7 495 797 41 01, original to follow by courier

  
	
   

  	
   

  	
   

  
	
  From:

  	
   

  	
  RAIFFEISEN ZENTRALBANK ÖSTERREICH AKTIENGESELLSCHAFT as Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attn.
  Christine Neuberger/Mersiha Mehmedovic

  
	
   

  	
   

  	
  Am
  Stadtpark 9

  
	
   

  	
   

  	
  1030
  Vienna

  
	
   

  	
   

  	
  Austria

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dear
  Sirs

  

 

CLOSED JOINT-STOCK COMPANY “SET TELEVISSIONNYKH STANTSIY”-
US$135,000,000

Facility Agreement

dated 27 June 2008 (the “Agreement”)

 

1.                                 We refer to the
Agreement and the above mentioned transaction. This is a Payment Confirmation
Notice. Terms defined in the Agreement have the same meaning in this Payment
Confirmation Notice.

 

2.                                 Please be informed
that on [date/month/year] we received from you
funds in the total amount of US$[xxxx], which
relate to the following:

 

	
  Repayment
  Instalment:

  	
   

  	
  [xxxx]

  
	
   

  	
   

  	
   

  
	
  Interest:

  	
   

  	
  [xxxx]

  

 

Your faithfully

 

Raiffeisen Zentralbank Österreich Aktiengesellschaft

 

	
  By:

  
	
   

  
	
  Name:

  
	
   

  
	
  Title:

  

 

103

 

SCHEDULE 11

 

FORM OF PAYMENT NOTIFICATION

 

	
  To:

  	
   

  	
  CLOSED JOINT-STOCK COMPANY “SET TELEVISSIONNYKH STANTSIY”

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attn.
  Anatoly Smirnov

  
	
   

  	
   

  	
  3rd
  Khoroshevskaya Str. 12

  
	
   

  	
   

  	
  123298
  Moscow

  
	
   

  	
   

  	
  Russian
  Federation

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  fax
  to + 7 495 797 41 01, original to follow by courier

  
	
   

  	
   

  	
   

  
	
  From:

  	
   

  	
  RAIFFEISEN ZENTRALBANK ÖSTERREICH AKTIENGESELLSCHAFT as Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attn.
  Christine Neuberger/Mersiha Mehmedovic

  
	
   

  	
   

  	
  Am
  Stadtpark 9

  
	
   

  	
   

  	
  1030
  Vienna

  
	
   

  	
   

  	
  Austria

  

 

Dated:

 

Dear
Sirs

 

CLOSED JOINT-STOCK COMPANY “SET TELEVISSIONNYKH STANTSIY”-
US$135,000,000

Facility Agreement

dated 27 June 2008 (the “Agreement”)

 

1.                                 We refer to the
Agreement and the above mentioned transaction. This is a Payment Notification.
Terms defined in the Agreement have the same meaning in this Payment
Notification unless given a different meaning in this Payment Notification.

 

2.                                 Please be informed
that the following amounts become due on [date/month/year]:

 

	
  Repayment
  Instalment:

  	
   

  	
  [xxxx]

  
	
   

  	
   

  	
   

  
	
  Interest:

  	
   

  	
  [xxxx]

  

 

3.                                 For your
information, the above Repayment Instalment and Interest are allocated to the
following banks:

 

	
  Lender (official name)

  	
   

  	
  Facility Office (country of

  tax residence)

  	
   

  	
  Repayment

  Instalment

  	
   

  	
  Interest

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

104

 

4.                                 We therefore kindly
ask you to arrange payment as follows:

 

	
  value:

  	
   

  	
  [xxxx]

  
	
   

  	
   

  	
   

  
	
  amount:

  	
   

  	
  [xxxx]

  
	
   

  	
   

  	
   

  
	
  to:

  	
   

  	
  [JP Morgan Chase Bank N.A., New York (CHASUS33)]

  
	
   

  	
   

  	
   

  
	
  in favour of:

  	
   

  	
  [Raiffeisen Zentralbank Österreich AG, Vienna
  (RZBAATWW)]

  
	
   

  	
   

  	
   

  
	
  account:

  	
   

  	
  [5447 02991]

  
	
   

  	
   

  	
   

  
	
  reference:

  	
   

  	
  [CTC/Projectfinance]

  
	
   

  	
   

  	
   

  
	
  without deduction of any charges and under prior
  advice to us.

  

 

Your faithfully

 

Raiffeisen Zentralbank Österreich Aktiengesellschaft

 

	
  By:

  
	
   

  
	
  Name:

  
	
   

  
	
  Title:

  

 

105

 

The
Borrower

 

CLOSED
JOINT-STOCK COMPANY “SET TELEVISSIONNYKH STANTSIY”

 

	
  Address:

  	
   

  	
  3rd Khoroshevskaya Str. 12

  
	
   

  	
   

  	
  123298 Moscow

  
	
   

  	
   

  	
  Russian Federation

  
	
   

  	
   

  	
   

  
	
  Fax:

  	
   

  	
  + 7 495 797 41 01

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
   

  	
  Anatoly Smirnov

  

 

 

	
  By: 

  	
  /s/ Vladimir Khanumyan

  	
   

  	
  By: 

  	
  /s/ Chaykovskaya Marina

  
	
   

  	
   

  
	
  Name: Vladimir Khanumyan

  	
  Name: Chaykovskaya Marina

  
	
   

  	
   

  
	
  Title: First Deputy 

  	
  Title: Chief Accountant

  
	
   

  	
  General Director

  	
   

  

 

 

The  Original Guarantors

 

CTC MEDIA, INC.

 

 

	
  By: 

  	
  /s/ Boris Podolsky

  	
   

  	
   

  
	
   

  	
   

  
	
  Name: Boris Podolsky

  	
   

  
	
   

  	
   

  
	
  Title: Chief Financial Officer

  	
   

  

 

 

CLOSED JOINT STOCK COMPANY “NEW
CHANNEL”

 

 

	
  By: 

  	
  /s/ Vladimir Khanumyan

  	
   

  	
  By: 

  	
  /s/ Chaykovskaya Marina

  
	
   

  	
   

  
	
  Name: Vladimir Khanumyan

  	
  Name: Chaykovskaya Marina

  
	
   

  	
   

  
	
  Title: First Deputy 

  	
  Title: Chief Accountant

  
	
   

  	
  General Director

  	
   

  
						

 

106

 

LIMITED
LIABILITY COMPANY “MARATHON-TV”

 

 

	
  By: 

  	
  /s/ Sergey Petrov

  	
   

  	
  By: 

  	
  /s/ Speranskaya Elena

  
	
   

  	
   

  	
   

  
	
  Name: Sergey Petrov

  	
  Name: Speranskaya Elena

  
	
   

  	
   

  
	
  Title: General Director

  	
  Title: Chief Accountant

  

 

 

The Arranger

 

 

ABN AMRO BANK N.V.

 

 

	
  By: 

  	
  /s/ [signature illegible]

  	
   

  	
  By:

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Name:

  
	
   

  	
   

  
	
  Title:

  	
  Title:

  

 

 

BNP PARIBAS

 

 

	
  By: 

  	
  /s/ Geoffrey Holgate

  	
   

  	
  By: 

  	
  /s/ Yues-Henri Saziou

  
	
   

  	
   

  
	
  Name: Geoffrey Holgate

  	
  Name: Yues-Henri Saziou

  
	
   

  	
   

  
	
  Title: Authorised Signatory

  	
  Title: Director

  

 

 

ING BANK N.V.

 

 

	
  By: 

  	
  /s/ Bas Haanraadts

  	
   

  	
  By: 

  	
  /s/ [signature illegible]

  
	
   

  	
   

  
	
  Name: Bas Haanraadts

  	
  Name:

  
	
   

  	
   

  
	
  Title: Director

  	
  Title: Manager

  

 

107

 

RAIFFEISEN
ZENTRALBANK ÕSTERREICH AKTIENGESELLSCHAFT

 

 

	
  By: 

  	
  /s/ B. Ericson-Peichl

  	
   

  	
  By: 

  	
  /s/ Mersiha Mehmedovic

  
	
   

  	
   

  
	
  Name: B. Ericson-Peichl

  	
  Name: Mersiha Mehmedovic

  
	
   

  	
   

  
	
  Title:

  	
  Title:

  

 

 

ZAO RAIFFEISENBANK

 

 

	
  By: 

  	
  /s/ Garin P.V.

  	
   

  	
  By: 

  	
  /s/ [signature illegible]

  
	
   

  	
   

  
	
  Name: Garin P.V.

  	
  Name:

  
	
   

  	
   

  
	
  Title: Deputy Chairman of the Board

  	
  Title: Chief Accountant

  

 

 

The Original Lenders

 

 

ABN AMRO BANK N.V.

 

 

	
  By: 

  	
  /s/ [signature illegible]

  	
   

  	
  By:

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  Name:

  
	
   

  	
   

  
	
  Title:

  	
  Title:

  

 

 

BNP PARIBAS SA

 

 

	
  By: 

  	
  /s/ Geoffrey Holgate

  	
   

  	
  By: 

  	
  /s/ Yues-Henri Saziou

  
	
   

  	
   

  
	
  Name: Geoffrey Holgate

  	
  Name: Yues-Henri Saziou

  
	
   

  	
   

  
	
  Title: Authorised Signatory

  	
  Title: Director

  

 

108

 

ING BANK N.V.

 

 

	
  By: 

  	
  /s/ Bas Haanraadts

  	
   

  	
  By: 

  	
  /s/ [signature illegible]

  
	
   

  	
   

  
	
  Name: Bas Haanraadts

  	
  Name:

  
	
   

  	
   

  
	
  Title: Director

  	
  Title: Manager

  

 

 

RAIFFEISEN ZENTRALBANK ÕSTERREICH
AKTIENGESELLSCHAFT

 

 

	
  By: 

  	
  /s/ B. Ericson-Peichl

  	
   

  	
  By: 

  	
  /s/ Mersiha Mehmedovic

  
	
   

  	
   

  
	
  Name: B. Ericson-Peichl

  	
  Name: Mersiha Mehmedovic

  
	
   

  	
   

  
	
  Title:

  	
  Title:

  

 

 

ZAO RAIFFEISENBANK

 

 

	
  By: 

  	
  /s/ Garin P.V.

  	
   

  	
  By: 

  	
  /s/ [signature illegible]

  
	
   

  	
   

  
	
  Name: Garin P.V.

  	
  Name:

  
	
   

  	
   

  
	
  Title: Deputy Chairman of the Board

  	
  Title: Chief Accountant

  

 

 

THE GOVERNOR AND COMPANY OF THE
BANK OF IRELAND

 

 

	
  By: 

  	
  /s/ Tom Herring

  	
   

  	
  By: 

  	
  /s/ [signature illegible]

  
	
   

  	
   

  
	
  Name: Tom Herring

  	
  Name:

  
	
   

  	
   

  
	
  Title: Manager

  	
  Title: Director – Media Finance

  

 

109

 

DEMIR-HALK BANK (NEDERLAND) N.V.

 

 

	
  By: 

  	
  /s/ M. Ozan Dereli

  	
   

  	
  By: 

  	
  /s/ Ayse Cingil

  
	
   

  	
   

  
	
  Name: M. Ozan Dereli

  	
  Name: Ayse Cingil

  
	
   

  	
   

  
	
  Title: Section Manager 

  Corporate Loans Administration

  	
  Title: Assistant General Manager

  

 

 

RAIFFEISENLANDESBANK
NIEDERÖSTERREICH-WIEN AG

 

 

	
  By: 

  	
  /s/ Claudia Westermayr

  	
   

  	
  By: 

  	
  /s/ Elisabeth Reiter

  
	
   

  	
   

  
	
  Name: Claudia Westermayr

  	
  Name: Elisabeth Reiter

  
	
   

  	
   

  
	
  Title:

  	
  Title:

  

 

 

The Agent

 

RAIFFEISEN ZENTRALBANK ÖSTERREICH
AKTIENGESELLSCHAFT

 

	
  Address:

  	
   

  	
  Am Stadtpark 9, 1030 Vienna, Austria

  
	
   

  	
   

  	
   

  
	
  Fax:

  	
   

  	
  +43-1-71707-3022

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
   

  	
  Christine Neuberger/Mersiha Mehmedovic

  

 

 

	
  By: 

  	
  /s/ B. Ericson-Peichl

  	
   

  	
  By: 

  	
  /s/ Mersiha Mehmedovic

  
	
   

  	
   

  
	
  Name: B. Ericson-Peichl

  	
  Name: Mersiha Mehmedovic

  
	
   

  	
   

  
	
  Title:

  	
  Title:

  

 

110Exhibit 4.20

 

ANNOUNCEMENT
OF COMMENCEMENT OF PUBLIC DISTRIBUTION OF THE

SECOND
ISSUE OF DEBENTURES BY

 

 

Listed company

CNPJ/MF n° 06.981.180/0001-16

Avenida Barbacena 1200, A1 Wing, 17th Floor,

30190-131 Belo Horizonte, Minas Gerais, Brazil.

 

ISIN: no BRCMGDDBS017

 

BB BANCO DE INVESTIMENTO S.A. (“the Lead Manager”), hereby announces the
distribution on today’s date of 40,000 (forty thousand) non-convertible
debentures of the Second Issue by CEMIG
DISTRIBUIÇÃO S.A. (“the
Offering”, “the Issue”
and “the Company”), being
unsecured, nominal, book-entry Debentures (“the Debentures”), in a
single series, with nominal unit value of R$10,000.00 (ten thousand Reais),
comprising a total, on the Issue Date, namely December 15, 2007 (“the Issue Date”), of:

 

R$ 400,000,000.00

 

Rating:  Fitch :
A+(bra)

 

 

1.             DECISION AND DEED OF
THE ISSUE

 

1.1.          Corporate decisions: The Offer was approved
at the meeting of the Board of Directors of the Issuer held on August 30,
2007, the minutes of which were ratified by the meeting of the Board of
Directors of the Issuer held on October 30, 2006. The meeting of the Board
of Directors of the Issuer held on December 13, 2007, decided the final
interest rate for Remuneratory Interest (as defined below).

 

1.2           Issue Deed and Amendment to the Deed: The
terms and conditions of the Debentures are contained in the Private Deed of the
Second Public Issue of Non-Convertible Debentures, in a Single Series,
unsecured, of Cemig Distribuição
S.A. (“the
Deed”) and the First Amendment to the Private Deed of the
Second Public Issue of Non-Convertible Debentures, in a Single Series,
unsecured, of Cemig Distribuição
S.A.  (“the Amendment to the Deed”),
signed, respectively on November 12, 2007 and December 13,
2007 between the Issuer and SLW
Corretora de Valores e Câmbio Ltda. (“the
Fiduciary Agent”), and the Deed was filed with the Commercial Board
of the State of Minas Gerais  under
no. ED000043-4/000 on November 21, 2007 and the Amendment to the Deed was
submitted for registration under no. 07/459.087-1, on December 13, 2007.

 

2.             CHARACTERISTICS OF
THE DEBENTURES

 

2.1.          Issue Date: December 15th,
2007 (“the Issue Date”).

 

2.2           Nominal unit value:
R$ 10,000.00 (ten thousand Reais), on the Issue Date (“the Nominal Unit
Value”).

 

2.3           Number of Debentures:
40,000 (forty thousand) Debentures will be issued, so that the total value of
the Issue is R$ 400,000,000.00 (four hundred million Reais).

 

2.4           Increase in the
Quantity of Debentures: There will be no possibility of increase in the
Quantity of Debentures to be distributed under this Offering as a result of
excess of demand, neither at the option of the Issuer (under the terms of Article 14
of CVM Instruction 400), nor at the option of the Lead Manager (under the terms
of Article 24 of CVM Instruction 400).

 

2.5           Number of Series: The Offering will be made in a
single series.

 

2.6           Period and Date of
Maturity: The period of maturity of the Debentures of this Issue is 120
(one hundred and twenty) months from the Issue Date, with final maturity on December 15,
2017 (“the Maturity Date”). On the Maturity Date, the Issuer undertakes
to pay such Debentures as are still in circulation, for their Nominal Unit
Value, plus the due Remuneration (as defined below).

 

2.7           Form and Type:
The Debentures will be issued in Nominal form and will be of the book-entry
type, without issue of deposits or certificates.

 

2.8           Convertibility:
The Debentures will not be convertible into shares.

 

2.9           Unsecured: The
Debentures will be of the unsecured type.

 

2.10         Registry for
Distribution and Trading: The Debentures shall have registry: (a) for
placement on the primary market through the Securities Distribution System
(SDT), administered
by the Custody and Settlement Chamber (“Cetip”), based on the policies
and directives set by the Brazilian Association of Financial Market
Institutions (“Andima”), and the Debentures will be paid up, settled and
held in custody at Cetip; and (b) for trading, in the secondary market, (i) through
the National Debentures System (SND), administered by Cetip, based on the policies
and directives set by Andima, the Debentures being settled and held in custody
at Cetip; and/or (ii) through the Bovespafix system, with the Debentures
being settled and held in custody at the CBLC (Brazilian Settlement and Custody
Company).

 

2.11         Collection of
investment intentions: The procedure of Bookbuilding was adopted, organized
by the Lead Manager, through collection of investment intentions, in the terms
of Paragraphs 1 and 2 of Article 23 and Article 44 of CVM
Instruction 400, without receipt of anticipated reservations, nor minimum
nor maximum lots (“the Bookbuilding Procedure”). The Bookbuilding
Procedure was effected with
the objective of determining the final rate used for the purpose of calculation
of the Remuneration Interest (as defined below), of the Debentures, resulting
in the rate of 7.96% (seven point nine six per cent), which was the rate

 

 

equivalent to the lowest of the rates
offered by the institutions participating in the process for lots of Debentures
the sum of which is equal to or greater than the total number of the Debentures
offered.

 

2.12         Placement period:
The period of placement of the Debentures shall be up to 5 (five) business
days, from the date of publication of this announcement of opening of
distribution of the Debentures (“the Placement Period”, and “the
Opening Announcement”). After the full placement of the Debentures the
respective announcement of closing of the distribution of the Debentures (“the
Closing Announcement”) will be published.

 

2.13         Distribution Procedure: The Debentures shall be the subject
of a public distribution, under the firm guarantee distribution regime, with
intermediation by a financial institution that is part of the system of
distribution of securities, through the SDT, administered by Cetip, based on
the policies and directives fixed by Andima, using the procedure specified in
paragraph 3 of Article 33 on CVM Instruction 400, and according to
the distribution plan prepared by the Lead Manager, which shall take into
consideration its relationships with clients and other aspects of a commercial
nature, and also the strategies of the Lead Manager and the Issuer, subject to
the terms and conditions defined in the Contract for Management,
Placement and Distribution of Non-Convertible Debentures under the Firm
Guarantee Regime, for the Second Public Issue by CEMIG Distribuição S.A
(“the Distribution Contract”), and the Offering shall be carried out in
accordance with the result of the Bookbuilding
Procedure.

 

2.14         Subscription price and
form of paying up: All the debentures shall be subscribed in the primary
market for their Nominal Unit Value, plus the Remuneration, calculated pro rata temporis, from the Issue Date up
to the date of their actual paying up, which shall be at sight, in Brazilian
currency, simultaneously with the subscription period.

 

2.15         Amortization of the
principal: The Nominal Unit Value of the Debentures shall be amortized in 3
(three) equal, annual and consecutive installments, the first becoming due on December 15,
2015 (each one of these dates being an “Amortization Date”).

 

2.16         Remuneration: The
Debentures will be remunerated in accordance with the following: (a) Monetary
Updating: the Nominal Unit Value of the Debentures shall be updated, from the
Issue Date or from the date of expiry of the most recent Capitalization Period,
as the case may be, up to the date of their actual payment, by the IPCA
(Amplified National Consumer Price) Index, calculated and published by the IBGE
(Brazilian Geography and Statistics Institute) (the “Updating”). The
Updating of the Debentures shall be calculated pro rata
temporis, by business days, according to the formula specified in
Clause 4.1.9.1 of the Deed and shall be paid proportionately by the Issuer
jointly with the Nominal Unit Value of the Debentures, on the same Amortization
Dates of the Debentures, the first taking place on December 15, 2015 and
the last on the Maturity Date; and (b) Remuneration Interest: The
Debentures shall have Remuneration Interest calculated at the rate of 7.96%
(seven point nine six per cent) per year, as defined by a Bookbuilding
Procedure (“the Remuneration Interest” and, jointly with the Updating, “the
Remuneration”), calculated exponentially and cumulatively pro rata temporis by business days expired, based on a
year of 252 business days, applicable to the Nominal Unit Value of the
Debentures plus the Updating, from the Issue Date, or on the balance of the
Nominal Unit Value, from the Date of Maturity of the last capitalization period
as the case may be, up to the date of its actual payment. The Remuneratory
Interest shall be calculated in accordance with the formula contained in Clause
4.1.9.2 of the Deed and shall be paid annually, starting from the Issue Date,
on December 15 of each year, the first payment taking place on December 15,
2008, and the last on the Maturity Date. For the purposes of setting the price
of distribution of the Debentures, in the Bookbuilding Process investment
intentions from persons linked to the Offering were not accepted – defined as
those referred to by Clause 55 of CVM Instruction 400, with the exception of
the intermediaries contracted with firm guarantee clause for subscription of
the Debentures.

 

2.17         Renegotiation:
There will be no programmed renegotiation of the Debentures.

 

2.18         Extraordinary
amortization: There will be no possibility of the Issuer amortizing the
non-amortized Nominal Unit Value of the Debentures on any date other than the
Amortization Dates.

 

2.19         Optional early
redemption: The Debentures of this Issue will not be subject to optional
early redemption by the Issuer.

 

2.20        Early
maturity:

 

Subject to items 2.20.1,
2.20.1.1 and 2.20.2 below, the fiduciary agent shall declare all the
obligations relating to the Debenture to become due for payment immediately and
demand immediate repayment by the Issuer of the debtor balance of the nominal
unit value of the Debentures, plus the Remuneration, due up to the date of
actual payment, calculated pro rata temporis from the Issue Date or from the start of
the respective Capitalization Period, and other charges, independently
of advice, contestation or notification within or

 

 

outside the Courts, in
any of the following events: (each event being referred to as a “Default
Event”):

 

(a)   declaration
of bankruptcy, dissolution and/or liquidation of the Issuer or application for
Judicial Recovery or out-of-Court reorganization of the Issuer of an
application for bankruptcy made by the Issuer, or any analogous event that
characterizes a state of insolvency of the Issuer, in accordance with the
applicable legislation;

 

(b)   non-compliance
by the Issuer with any pecuniary obligation related to the Debentures;

 

(c)   early
maturity of any debt of the Issue in an amount of R$50,000,000.00 (fifty
million Reais) or more, or its equivalent in other currencies, due to any
non-compliance, contractual or otherwise;

 

(d)   termination,
for any reason, of any of the concession contracts to which the Issuer is a
party representing separately or jointly an amount equal to 30% (thirty per
cent) or more of the net operational revenue of the Issuer as stated in its
last prior financial statements;

 

(e)   legitimate
protest of securities against the Issuer, in an amount exceeding
R$50,000,000.00 (fifty million Reais) or its equivalent in other currencies,
unless made in error or bad faith of a third party validly proven by the
Issuer, as the case may be, or unless suspended or cancelled, or unless a
guarantee for the security(ies) be given in Court, under any circumstances,
within a maximum of 30 (thirty) calendar days from the date on which the
written notice sent by the Fiduciary Agent is received;

 

(f)    non-compliance
by the Issuer or by Cemig with any non-pecuniary obligations specified in the
Issue Deed, not cured in 30 (thirty) calendar days from the date of the written
notice sent by the Fiduciary Agent to the issuer to this effect;

 

(g)   if
the Issuer omits to pay by the maturity date, or does not take the legal or
judicial measures required for non-payment in relation to, any debt or any
other obligation payable by the Issuer under any agreement or contract to which
it is a party as a lender, borrower, or guarantor, involving an amount of
R$50,000,000.00 (fifty million Reais) or more or its equivalent in other
currencies; and/or

 

(h)   privatization,
merger, liquidation, dissolution, extinction, split and/or any form of
stockholding reorganization which results in reduction of the registered
capital of the Issuer, for the purposes of this sub-clause “privatization”
being understood as an event in which (i) the present direct controlling
stockholder of the Issuer, Companhia Energética de Minas Gerais – Cemig (“Cemig”),
ceases directly or indirectly to hold the equivalent of at least 50% (fifty per
cent) plus one of the total shares representing the voting stock of the Issuer;
and/or (ii) the present controlling stockholder of Cemig, the government
of the State of Minas Gerais, ceases directly or indirectly to hold the
equivalent of at least 50% (fifty per cent) plus one of the total of the shares
representing the voting capital of Cemig.

 

2.20.1
The occurrence of any Default Event indicated in sub-items (a), (b) e (c) above
shall result in automatic early maturity of the Debentures, independently of
any Court or out-of-court notice, or any consultation of the Debenture holders.

 

2.20.1.1
If any of the other Default Events (other than those specified in item 2.20.1
above) take place, the Fiduciary Agent shall call, within 48 (forty eight)
hours of the date on which it becomes aware of such event, a General Meeting of
Debenture Holders to decide on declaration of early maturity of the Debentures,
subject to the procedure for convocation specified in Clause VIII of the Issue
Deed and the specific quorum established in item 2.20.2 below.

 

2.20.2
After the General Meeting of Debenture Holders mentioned in item 2.20.1.1 above
has been held, the Fiduciary Agent shall declare early maturity of all the
obligations arising from the Debentures and demand immediate payment by the
Issuer of the Nominal Unit value of the Debentures, plus the Remuneration and
charges up to the date of actual payment, in accordance with item 2.20 above,
unless Debenture Holders representing at least 2/3 (two-thirds) of the
Debentures in circulation (as defined in the Deed) opt not to declare early
maturity of the obligations arising from the Debentures.

 

2.20.2.1
If the Debenture Holders of the present Issue opt not to declare early maturity
of the obligations arising from the Debentures, under item 2.20.2 above, the
Debentures held by the Debenture Holders who do not agree with that decision
shall be redeemed by the Issuer within a maximum of 30 (thirty) calendar days
from the date of the holding of the General Meeting of Debenture Holders. The

 

 

Debentures
shall be redeemed for their nominal unit value plus the remuneration owed,
calculated pro rata temporis from the Issue Date or the date of the start
of the respective Capitalization Period, up to the date of actual redemption.

 

2.20.3
If the General Meeting of Debenture Holders does not take place as specified in
item 2.20.2. above, or if: (a) it is not called; (b) there is no
decision on the date originally established for its being held; or (c) there
is no quorum, where any of these events arises from an act or event not
imputable to the Fiduciary Agent, the Fiduciary Agent shall declare early
maturity of all the obligations arising from the Debentures, and the provisions
of item 2.20.4 below shall apply.

 

2.20.4
In the event of early maturity of the Debentures, the Issuer undertakes to redeem
the totality of the Debentures in circulation (as defined in the Deed) with
their consequent cancellation, by payment of the balance of the Nominal Unit
Value of the Debentures in circulation (as defined in the Deed), plus the
Remuneration, calculated pro rata temporis
from the Issue Date or from the date of the start of the respective
Capitalization Period, up to the date of its actual payment, plus any other
amounts owed by the Issuer under the Deed, including the charges for arrears
therein established.

 

2.21         Target Investor Public
for the Offering: The Target Public of the Offering is made up of
institutional or qualified investors, as defined in Article 109 of CVM
Instruction 409, of August 18, 2004, as amended, but debentures may be
placed with other non-qualified investors, investment funds, private
individuals or legal entities, whether or not clients of the institutions that
adhere to the distribution contract, if they are aware of the terms, conditions
and risks inherent to the Debentures, and also have access to the prospectuses
relating to the Offering.

 

2.22         Inappropriateness
of investment in the Debentures:

 

The Debentures that are the subject of the present
Offer are not appropriate for investors who need considerable liquidity in
relation to the securities acquired, since trading of Debentures in the
Brazilian secondary market is restricted.

 

Investors should read the Risk Factors
section of the Final Prospectus, which is available to investors as stated in
item 6 below.

 

2.23         Use of Proceeds:
The funds obtained from the Offering will be used, in their entirety, to pay
the remaining debtor balance of the promissory notes issued under the Third
Public Issue of Promissory Notes of Cemig Distribuição S.A., subject to the
provisions of Clause 3.5 of the Deed.

 

 

3.             THE LEAD MANAGER

 

BB Banco de Investimento S.A.

Rua Senador Dantas
105, 36th Floor - Centro, Rio de Janeiro, Rio de Janeiro State

Att: Mr. Alexandre Wanzeller Casali

Telephone: (21) 3808-2742 - Fax: (21) 3808-3239

E-mail: acasali@bb.com.br

 

4.             MANDATED BANK

 

Banco Bradesco S.A.

Cidade de Deus –
Prédio Amarelo – 2nd Floor - Osasco, SP - CEP: 06029-900Att.: Mr. José Donizetti de
Oliveira

Telephone: (11) 3684-3749 - Fax: (11) 3684-2714E-mail:
4010.donizetti@bradesco.com.br

 

5.             FIDUCIARY AGENT

 

SLW Corretora de Valores e Câmbio Ltda.

Rua Dr. Renato
Paes de Barros 717, 6th to 10th Floors 

Itaim Bibi, São Paulo, São
Paulo State - CEP: 04530-001Att.: Mr. Felipe Coimbra Aloi André

Telephone: (11) 3048-9763 / 3048-9915 - Fax: (11) 3048-9888E-mail:
slw@slw.com.br

 

6.             ADDITIONAL
INFORMATION

 

For additional
information on the Offering and the Debentures, and also to consult the
Definitive Prospectus, interested parties should contact the CVM, the Issuer,
Cetip, or the head office of the Lead Manager, at the addresses given in this
announcement.

 

CEMIG Distribuição S.A. 

Av.
Barbacena 1200, 17th Floor, A1 Wing 

Belo Horizonte, Minas Gerais
State - CEP: 30190-131

Att.: Sr. Paulo Eduardo Pereira Guimarães

Telephone: (31)
3506-4105 - Fax: (31) 3506-5068

E-mail: peduardo@cemig.com.br

Web:http://cemigd.infoinvest.com.br

 

CETIP
– Câmara de Custódia e Liquidação

Rua Líbero Badaró
425, 24th Floor - São Paulo, São Paulo State 

Telephone: (11)
3111-1596 - Fax: (11) 3115-1564 

Email:  gr.debentures@cetip.com.br

Web: www.cetip.com.br

 

CVM –
Rio de Janeiro – RJ

Rua Sete de
Setembro 111, 5th Floor - Rio de Janeiro, Rio de Janeiro State

Web: www.cvm.gov.br

 

CVM –
São Paulo – SP

Rua Cincinato
Braga 340 – 2nd-4th Floors - Edifício Delta Plaza - São
Paulo, São Paulo State

Web: www.cvm.gov.br

 

The Prospectus of the Offering is available to
investors at the CVM for consultation and reproduction only

 

7.             DATE OF COMMENCEMENT
OF THE OFFERING

 

The Commencement Date of
the Offering is December 19, 2007.

 

 

8.             REGISTRY OF THE OFFER
WITH THE CVM

 

The offering was registered with
the Brazilian Securities Commission (CVM) on December 17, 2007, under
number CVM/SRE/DEB/2007/048.

 

Registry of this distribution does not imply any
guarantee by the CVM of the truthfulness of the information given nor any
judgment on the quality of the issuer, nor on the debentures to be distributed.

 

	
  

  	
  The present Public Offer or program was prepared in
  accordance with the terms of the Self-Regulation Code of Anbid for Public
  Offers for distribution and acquisition of securities, which has been
  registered at the 4th Registry Office for Securities and Documents of the
  district of São Paulo, São Paulo State, under No. 4890254, and the
  present Public Offer/program thus complies with the minimum standards of
  information contained in the Code, and Anbid has no responsibility for the
  said information, for the quality of the Issuer and/or the Offering
  party/ies, nor of the participating institutions nor the securities that are
  the subject of the present Public Offer/program.

  

 

THE LEAD
MANAGER

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