Loan Agreement

Exercise I. Read and translate the example of Loan Agreement using the words and expressions given below:

This agreement is dated as of October 11^th, 1998 and is between the Russbank of Russia, a juridical person organized and existing under the laws of Russia, hereinafter referred to as “the Borrower” and Nisso Iwa (UK) Limited a corporation organized and existing under the laws of England, hereinafter referred to as “the Lender”.

Whereas, the Lender is willing to lend the funds under the terms and conditions set forth below. Now, therefore, in consideration of the promises contained herein, and each party intending to be legally bound thereby, the parties agree as follows:

Article 1. THE LOAN

Amount of principal subject to the terms hereof, the Lender hereby agrees to lend the Borrower the principal sum of Eight Hundred Nineteen Thousand Two Hundred Tree United States Dollars (USD 819, 203), hereinafter called “the Loan”. Disbursement of the Loan shall be made by the Lender by transfer before 12: 00 noon, London time on the dates, hereinafter called “the Drawdown Dates”, in immediately available funds in United States Dollars to the bank account of the Seller.

The interest shall accrue for each and every period from and including each Drawdown Date to and not including the day as specified for interest payment on Exhibit B attached hereto, hereinafter called “the Interest Payment Date”, immediately following such Drawdown Date, and thereafter from and including each Interest Payment Date to and not including the next Interest Payment Date, hereinafter called “the Interest Period” on the outstanding balance of the Loan at separate rates for each Interest Period calculated on the basis of the actual number of days elapsed

Article 2. RATE AND PAYMENT OF INTEREST

The rate of interest applicable for each interest period, as defined hereinafter, shall be one point three seven five percent (1. 375%) per annum above the London Inter Bank Offered Rate, hereinafter called “the LIBOR”, in effect at the time as described below, hereinafter called “the Interest Rate”.

Article 3. REPAYMENT OF THE LOAN, PREPAYMENT

The Loan shall be repaid in nine (9) equal semiannual installments in accordance with the schedule.

The Borrower shall have the right to prepay the outstanding balance of the Loan in whole on any Interest Payment Date, without any premium or penalty, as long as at least 60 calendar days prior written notice is given, together with the interest accrued and any other amounts then due.

Article 4. OVERDUE PAYMENTS

If the Borrower fails to make any required payment with respect to the repayment of the loan, payment of the Interest, payment of the Interest, or any other items payable under this Agreement on the date(s) due, all such overdue amounts shall bear interest, payable on demand, from and including the due date to and including the date of actual payment, at the rate of 2. 375% per annum over and above the week, one month, three month or six month LIBOR determined on the due date(s) and from time to time thereafter for successive interest periods for so long as such amount remains unpaid, hereinafter called “the Overdue Interest”.

The applicable LIBOR shall be the arithmetic mean, rounded upward, if necessary to the nearest whole multiple of 1/16 of 1% of the relevant LIBOR for deposits in the United States Dollars as quoted on the Reuter’s monitor page “LIBO” as or about 11: 00 a.m., London time on the due date(s) and thereafter for each successive Overdue Interest Period as defined below, on the second business day in London, England prior to the first day of each such Overdue Interest Period.

Article 5. METHOD OF PAYMENT

All amounts payable by the Borrower to the Lender under this Agreement, including, but not limited to, repayments of the Loan, payments of the Interest, the Overdue Interest, shall be payable in United States Dollars in net amounts receivable by the Lender and shall be paid by the Borrower in the full amount stated under this Agreement, without deduction or offset for any present or future income or other taxes, levies, charges or other with holdings or impositions of any nature whatsoever. If the Borrower is required to withhold income or other taxes or levies imposed on repayment of the Loan, payments of the Interest, the Overdue Interest, or other payments due to the Lender by or within Russia under this Agreement, the Borrower shall bear the taxes and/or levies regardless of their nature, and pay them to the relevant authorities.

Article 6. ARBITRATION

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

If the parties do not settle any such dispute or difference within twenty-one 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.

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

3. 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 shall be appointed by the Stockholm Chamber of Commerce and shall be of the nationality other than Russian or English.

Article 6. MISCELLANEOUS