Article 9. Events of default

The occurrence of any of the following events shall constitute the event of default (hereinafter called «the Event of default») hereunder.

1. If the Borrower fails to pay on the due date any sum which is ex­pressed to be due and payable hereunder (unless such failure is due solely to technical reasons and does not last for a period of more than fifteen (15) days following the date of notice thereof from the Lender).

2. If the Borrower commits breach of or fails to observe any of its ob­ligations or undertaking under this Agreement (other than 1. above) and such breach continues for thirty (30) days after notice thereof has been received by the Borrower from the Lender.

3. If any representation, warranty, resolution or transactions made by the Borrower in or pursuant to this Agreement or in any docu­ment or statement delivered or made pursuant hereto is or be­comes incorrect in any material respect and, if subject to cure, is not cured within fifteen (15) days from date of receipt by the Bor­rower of notice given by the Lender of such incorrectness.

4. If the Borrower fails to pay within fifteen (15) days as from its stat­ed maturity any indebtedness of the Borrower arising from any and all Letters of Credit, Letters of Guarantee and Loan Agree­ments with the Lender, the Lender’s affiliates or subsidiaries, the Lender’s parent company affiliates or subsidiaries, and such fail­ure does not result from the introduction of any law or instru­ments having the force of law in the country of the currency where the payment is to be made and making it unlawful or impossible for the Borrower to make such payment in such country.

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5. If any order is made or an effective resolution is passed or analo­gous proceedings are taken for the liquidation or dissolution of the Borrower or if any event occurs which under the laws of Russia shall have an equivalent effect.

6. If the Borrower fails to observe any material term of any and all Letters of Credit, Letters of Guarantee and Loan Agreements with the Lender, the Lender’s affiliates or subsidiaries, the Lender’s parent company affiliates or subsidiaries to be performed or ob­served by the Borrower and if the effect of such failure is to permit the acceleration of any payment under such agreement.

Then, in any such event and at any time hereafter i any such event then continues the Lender may by notice to the Borrower:

a. If no drawing has been made hereunder, declare that this

Agreement shall be cancelled whereupon the same shall be cancelled forthwith and all amounts payable hereunder shall become forthwith due and payable.

OR

b. Declare the outstanding amount under this Agreement to be

immediately due and payable together with accrued interest and all other sums payable hereunder whereupon the same shall become forthwith due and payable.

Article 10. Arbitration

1. All disputes or differences which arise out of, or in connection with, this Agreement shall be settled by means of negotiations be­tween the parties.

2. If the parties do not settle any such disputes or difference within twenty-one (21) days after first conferring, then such dispute or difference shall be settled by arbitration. The award of the Arbitra­tors shall be final and binding upon the parties.

3. The arbitration shall be held in accordance with the UNCITRAL Arbitration Rules as in effect on the date of this Agreement except that, in the event of any conflict between those rules and the Ar-237

bitration provisions of this Agreement, the provisions of this Agreement shall govern.

4. The Stockholm Chamber of Commerce shall be appointing au­thority, except for the specific provisions contained in Clause 6.1 and 6.2 below.

5. The number of arbitrators shall be three.

6. Each party shall appoint one arbitrator. If, within fifteen days af­ter receipt by the claimant of the name of the Arbitrator, the re­spondent has not, by cable or telex, notified the claimant of the name of the arbitrator he appoints, the second arbitrator shall be appointed in accordance with the following procedures:

1. if respondent is the Borrower, the second arbitrator shall be ap­pointed by the Russian Chamber of Commerce and Industry;

2. if the respondent is the Lender, the second arbitrator shall be appointed by the London Court of International Arbitration;

3. if within fifteen days after receipt of the request claimant, the Russian Chamber of Commerce and Industry or the London Court of International Arbitration as the case may be, has not, by cable or telex, notified the claimant of the name of the sec­ond arbitration the second arbitrator shall be appointed by Stockholm Chamber of Commerce.

7. The two arbitrators thus appointed shall choose the third arbitrator who will act as a presiding arbitrator of the tribunal, if, within thirty days after appointment of the second arbitrator, the two arbitrators have not agreed upon the choice of the presiding arbitrator, the presid­ing arbitrator shall be appointed by the Stockholm Chamber of Com­merce and shall be of the nationality other than Russian or English.

8. The Arbitration, including the marking of the award, shall take place in Stockholm, Sweden and the arbitrators shall resolve any such dispute or difference referred to them in accordance with the substantive laws of England,

9. All submissions and awards in relation to arbitration hereunder shall be made in England and all arbitration proceedings shall be conducted in the English language.

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Article 11. MISCELLANEOUS GOVERNMENT APPROVAL

The parties shall obtain necessary government approval of this Agreement, if any, from the governments of their respective countries.

NON-WAIVER OF RIGHTS

No failure or delay of any party hereto to Exercise any power given it under this Agreement or to insist upon strict compliance by any of the parties hereto of any obligations shall constitute a waiver of any of the party’s rights to demand exact compliance with the terms hereof.

SEVERABILITY

If, for any reason, any provision of this Agreement is held invalid, such invalidity shall not effect any other provision of this Agreement and the other provisions shall, to the full extent consistent with law, continue in full force and effect.

GOVERNING LAW

The provision of this Agreement shall be construed and interpret­ed in accordance with the laws of England.

LANGUAGE

This Agreement has been drawn up and executed in the English language and the English language text of this Agreement shall govern and prevail over any translation hereof.

SECRECY

The Borrower» the Lender and the Assignee (if any) shall not dis­close the existence and the contents of this Agreement to any third party other than relevant government authorities, the Seller, or other parties mutually agreed between the Borrower and the Lender. The

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Borrower, the Lender and the Assignee (if any) shall take steps neces­sary to have its directors and officers maintain the same secrecy obli­gations as imposed under this Agreement.