1. GENERAL TERMS

1.1. *** Limited Liability Company (hereinafter referred to as the Company) is a legal entity incorporated by:

*** S.p.A. JSC incorporated in accordance with legislation of the Italian Republic, registered on February 19, 1996 with the Register of Enterprises of Genoa with Taxpayer Code and Registration Number ***, located at: ***, the Italian Republic (hereinafter referred to as *** S.p.A.).

The Company shall exist under the Civil Code of the Russian Federation, the Federal Law On Limited Liability Companies (hereinafter referred to as the Law), other effective legislation and these Articles.

1.2. The Company shall acquire the right of a legal entity upon state registration.

1.3. Full business name of the Company shall be as follows:

• in Russian: Общество с ограниченной ответственностью   «***», and


• in English: *** Limited Liability Company.

1.4. Abbreviated business name of the Company shall be:

• in Russian: ООО «***», and


• in English: *** LLC.

1.5. Legal Address of the Company shall be situated at: ***.

1.6. The Company may have natural and legal persons as its members. The number of the Company members shall not exceed 50 (Fifty). Members of the Company shall not be liable for its obligations and the risk of their loss relating to the Company’s business shall be limited to the value of shares held by them. Liability of the Company members, to the extent that the shares in the Share Capital of the Company held by them have not been paid up to the full extent, shall be joint and several.

1.7. The Company shall be deemed incorporated upon state registration. The Company shall be incorporated without term.

1.8. The Company shall be entitled to open bank accounts within the territory of the Russian Federation and abroad in the prescribed order.

1.9. The Company shall have round seal providing its full business name in Russian and its legal address. The Company seal may also provide its business name in English. The Company shall be entitled to have stamps and letterhead papers providing its business name, company emblem (logo), as well as trademark and other brands registered in the prescribed manner.

1.10. The Company shall own its set-apart assets recognized on its independent balance, may acquire and exercise in its name property and personal nonproperty rights, incur obligations, and act as claimant and defendant before court. The Company may have civil rights and incur civil obligations necessary to transact business of any nature not contradictory to federal laws.

1.11.   The Company shall be incorporated to make profit.

1.12. The purpose of the Company shall be the business, both on the territory of the Russian Federation and abroad, either direct or indirect, of industrial and trade company relating to design, supply, installation, putting into operation and maintenance, in power production and generation plants and components sector, and related sectors, as well as any type of work relating to the foregoing business.

1.13. The Company may in particular, without limitation, do the following business:

• Provision of power production and distribution plants and components maintenance;


• Installation, after-sale service, marketing, research, development, production and maintenance of:

- conventional thermal power stations:

- nuclear power plants;

- gas and combined cycle gas turbines and plants;

- hydroelectric power stations;

- geothermal power plants;

 or systems/components of the abovementioned plants and/or provision of related services (i.e. on-site assistance and spare parts sale)

• Machinery maintenance;


• Constructions and plants production;


• Designing, production and development of innovative products for thermal power production and distribution, and energy saving;


• Environment protection and/or environment pollution abatement, operation and maintenance of waste processing and/or waste disposal plants;


• Combined heat and electric power generation, operation and maintenance of boiler houses and power production plants, including renewable energy production, cogeneration and sale of power;


• Research and development, technological advice, design, promotion, production, sale and after-sale support of equipment, devises, full range of products, separate components and other production units, renewable energy storage, delivery and use;


• Research and development, technological advice, design, promotion, production, sale and after-sale support of mechanical gearboxes electric drives for mobile and fixed equipment.

The Company shall be entitled to do any other business not contradictory to laws of the Russian Federation.

1.14. The Company may do certain businesses listed by federal law subject to special authorization (license) only. Should the terms of grant of a special authorization (license) to do a certain business require that such business be done exclusively, the Company, within the terms of validity of such special authorization (license), shall only be entitled to do the businesses envisaged by the special authorization (license) and ancillary types of business.

2. LIABILITY OF THE COMPANY

2.1 The Company shall be liable for its obligations with all its property.

2.2. The Company shall not be liable for obligations of its members.

2.3. In case of insolvency (bankruptcy) of the Company through the fault of its members or through the fault of other persons entitled to give instructions binding upon the Company or having other opportunity to govern its acts, such members or other persons, should the Company’s assets be insufficient, may be held secondary liable for its obligations.

3. SUBSIDIARY AND REPRESENTATIVE OFFICES OF THE COMPANY

3.1. The Company shall be entitled to establish subsidiary and representative offices (being unincorporated bodies) under resolution of the General Meeting of Members adopted by majority of at least two thirds of the total number of votes of the Company members.

3.2. Subsidiary and representative offices shall not be deemed legal entities and shall operate under regulations (by-laws) approved by the General Meeting of the Company Members. Subsidiary and (or) representative offices shall be vested with assets by the establishing Company.

3.3. The heads of the Company subsidiary and representative offices shall be appointed by the Company and shall act under power of attorney issued by the General Director of the Company.

3.4. The Company subsidiary and representative offices shall act in the name of the establishing Company. The Company establishing a subsidiary or representative company shall be liable for their acts.

4. RIGHT AND OBLIGATIONS OF MEMBERS

4.1. The Company members shall be entitled:

• to take part in the Company operation management in order prescribed by Law and the Articles of the Company;


• to examine the books, the Register of Members of the Company, and other documents in order prescribed by the Articles, and to receive information on the Company operation, including, without limitation, information necessary to enable a member to fulfill obligations regarding financial statement in Russia and abroad, in accordance with instructions given by the Members from time to time;


• to participate in distribution of the Company profit:


• to sell or dispose in other way of their share (a share fraction) in the Share Capital of the Company to the benefit of one or several members of the Company or other person in order prescribed by the Law of the Articles of the Company; and


• in case of liquidation of the Company, to receive a share of the Company assets remaining after settlements with creditors or the value thereof.

The Company members shall also have other rights envisaged by the Law.

4.2.   The Company members shall be obliged:

• to pay up the shares in the Share Capital of the Company in order, in the amounts and within the terms envisaged by the Law and the Memorandum of Association of the Company;


• to keep confidential information regarding the Company operation to which confidentiality requirement is applicable;


• to inform the Company without delay on alteration of data on their names or business names, residence or legal addresses, as well as information on the shares in the Share Capital of the Company held by them. Should a Company member fail to provide information on his/her/its data alteration, the Company shall not be held liable for losses inflicted in connection therewith.

The Company members shall also have other obligations envisaged by the Law.

5. THE COMPANY SHARE CAPITAL, SHARES IN THE COMPANY SHARE CAPITAL

5.1. The Company Share Capital shall be the minimum value of the Company assets securing interests of its creditors.

5.2 The Company Share Capital shall be composed of the minimum value of its members’ shares. The value of the Company Share Capital shall be 4,000,000 (Four Million) Russian Rubles.

As at the state registration of the Company, the Company founders shall pay up not less than 50% (Fifty percent) of the Company Share Capital.

5.3. The shares in the Company Share Capital may be paid up in money, in shares, in other property or property rights or other rights that may be assessed in terms of money.

5.4. A share of a Company member shall confer voting right only to the extent that the share owned by him/her/it has been paid for.

6. INCREASE AND DECREASE OF THE COMPANY SHARE CAPITAL

6.1. The Company Share Capital may only be increased provided that it is paid up to the full extent.

6.2. The Share Capital may be increased by contributions out of the Company assets and (or) by additional contributions of its members and (or) by contributions of third persons becoming members of the Company.

6.3. In cases provided by the Law the Company shall be obliged to decrease its Share Capital. The Company Share Capital may be decreased by decrease in the nominal value of the shares of all members of the Company in the Share Capital and (or) by cancellation of the Company treasury shares. In case of decrease of the Share Capital of the Company by decrease in the nominal value of the shares of all members the interest of all members of the Company shall not change.

The Company shall not be entitled to decrease the Share Capital if as the result of such decrease its value becomes less than the minimum value of the Share Capital prescribed by the Law, as of the date of service of documents for the state registration of corresponding amendments to these Articles, or, when the Company in accordance with the Law is obliged to decrease its Share Capital, as of the date of the state registration of the Company.

6.4. Should the value of net assets of the Company become less than its Share Capital, as of the end of the financial year following the second financial year, or each following financial year at the end of which the value of net assets of the Company becomes less than its Share Capital, the Company, not later than six months following the end of corresponding financial year shall pass one of the following resolution:

• that the Company Share Capital be decreased down to amount not exceeding the value of its net assets;


• that the Company be wound up.

Not later than three business days following adoption by the Company of resolution on decrease of its Share Capital the Company shall advise the body in charge of the state registration of legal entities to that affect and publish twice, once a month, in the official gazette publishing data on state registration of legal entities, notice on decrease of its Share Capital.

7. ORDER OF TRANSFER OF A SHARE IN THE SHARE CAPITAL

7.1. A member of the Company shall be entitled to sell or dispose in other way of his/her/its share in the Share Capital of the Company or a fraction thereof to the benefit of one or several members of the Company. Consent of other members of the Company shall not be required to effect such transaction. Consent of the Company to effect such transaction shall be required.

7.2. A member of the Company shall be entitled to sell or dispose in other way of its share in the Share Capital of the Company or a fraction thereof to the benefit of a third person. Consent of other members of the Company shall not be required to effect such transaction. Consent of the Company to effect such transaction shall be required.

7.3. A share of a Company member, not paid up to the full extent, may only be disposed of to the extent it has been paid up.

7.4. The Company members shall have preemption right to buy a share or a fraction of a share of a Company member at the price offered to a third person in proportion to the shares held by them. The Company shall not have preemption right to buy a share or a fraction of a share held by a Company member.

7.5. A Company member intending to sell a share (a fraction of a share) held by him/her/it to a third person shall give written notice to other members and the Company to that effect my making offer, through mediation of the Company and for his/her/its account, providing the price and other terms of sale.

7.6. Such offer shall be deemed received by all members of the Company upon its receipt by the Company. An offer shall not be deemed received in case not later than the day it is received by the Company a Member of the Company receives the offer revocation notice. Revocation of a share or a fraction of a share sale offer after it is received by the Company may only be allowed subject to consent of all members of the Company.

7.7. The Company members shall be entitled to exercise the preemption right to buy a share (a fraction of a share) in the Share Capital of the Company within 30 (Thirty) days from the day of the offer receipt by the Company.

7.8. Assignment of the preemption rights envisaged by item 7.7. shall not be allowed.

7.9. A sale of a share or a fraction of a share to third persons, as well as the preemption right to buy a share or a fraction of a share in the Share Capital of the Company conferred upon the members of the Company, shall be exercised subject to requirements prescribed by the Law.

7.10. The preemptive right to buy a share (a fraction of a share) in the Share Capital of the Company shall cease upon:

• service of written statement of such preemptive right waiver:


• termination of such preemptive right exercise term.

Authenticity of a Company member’s signature on statement of waiver of the preemptive right to buy a share (a fraction of a share) in the Share Capital of the Company shall be certified by a notary.

7.11. Shares in the Share Capital of the Company shall transfer to heirs of natural persons and successors of legal persons being members of the Company irrespective of consent of other members of the Company.

7.12. A transaction intended for disposition of a share or a faction of a share in the share capital of the Company shall be certified by a notary. A lack of notarial certification shall render such transaction null. Notarial certification of such transaction shall not be required in cases envisaged by the Law. A share or a fraction of a share in the Share Capital of the Company shall transfer to the transferee upon transaction notarial certification and, when notarial certification is not required, upon registration of corresponding amendments with the Unified State Register of Legal Entities. Copies of application for registration of corresponding amendments with the Uniform State Register of Legal Entities shall be delivered to the Company within 3 (Three) days from the day of notarial certification of the transaction.

7.13. A member of the Company shall be entitled to pledge a share or a fraction of a share held by him/her/it in favor of other member of the Company. A member of the Company shall be entitled to pledge a share or a fraction of a share held by him/her/it in favor of a third person subject to approval of the General Meeting of the Company members. An agreement for pledge of a share or a fraction of a share in the Share Capital of the Company shall be certified by a notary. Copies of application for registration of corresponding amendments with the Uniform State Register of Legal Entities shall be delivered to the Company within 3 (Three) days from the day of notarial certification of the agreement for pledge of a share or a fraction of a share.

7.14. A charge of a share or a fraction of a share in the Share Capital of the Company held by a member on demand of creditors against debts of a Company member shall only be allowed under a court judgment in case of insufficiency of other property of the Company member to settle the debts.

A charge of a share or a fraction of a share in the Share Capital of the Company held by a Company member may be allowed without recourse to court under a pledge agreement stipulating provision on charge over the pledged property without recourse to court.

The Company or its members shall be entitled to pay the creditors the fair value of a share or a fraction of a share held by a member in case his/her/its property is charged subject to the terms and in order provided by the Law.

8.        PROCEDURE AND CONSEQUENCES OF A MEMBER’S WITHDRAWAL FROM THE COMPANY

8.1. A Company member shall be entitled to withdraw from the Company without consent of other members or the Company.

8.2. In case of a Company member’s withdrawal from the Company his/her/its share shall transfer to the Company.

8.3. A member intending to withdraw from the Company shall file application for withdrawal from the Company addressed to the General Director of the Company. The Company shall pay such member the fair value of his/her/its share in the Share Capital of the Company established on the basis of the Company accounting statement for the last reporting period preceding the day the application for withdrawal from the Company is filed or, subject to the Company member’s consent, to transfer him in kind property of the same value or, in case the share in the Share Capital of the Company has not been paid up by him/her/it to the full extent, the fair value of the paid-up fraction of the share. The Company shall effect the above payment within 3 (Three) months from the day such obligation accrues.

8.4. Withdrawal of the Company members from the Company resulting in the Company’s having no one member, as well as withdrawal of the sole member of the Company from the Company, shall not be allowed.

8.5. The Company shall not be entitled to pay the fair value of a share or a fraction of a share in the Share Capital of the Company or transfer property of equal value in kind should, as of such payment or allotment of the property in kind, it meet criteria of insolvency (bankruptcy) or should the Company, as a result of such payment or allotment of the property in kind, meet such criteria.

9. THE COMPANY TREASURY SHARES

9.1,      The shares held y the Company shall not be considered in counting the votes casted on a General Meeting of the Company Members, in distributing profit and allotting the property of the Company should it be liquidated.

9.2.      Within 1 (One) year after transfer of a share or a fraction of a share in the Share Capital of the Company to the Company it shall be allotted among all members of the Company in proportion of their shares in the Share Capital of the Company or offered for purchasing to all or some members of the Company and (or) third persons.

Allotment of a share or a fraction of a share among the Company members may be allowed provided that, prior to transfer of the share or the fraction of the share to the Company, they were paid-up or consideration prescribed by the Law was provided therefor. A share or a fraction of a share not allotted or sold within due term shall be cancelled, and the value of the Company Share Capital shall be decreased by the nominal value of such share or such fraction of the share.

10. CONTRIBUTIONS INTO PROPERTY OF THE COMPANY

10.1. Upon resolution of the General Meeting of the Company Members, the members shall make contributions into property of the Company. The contributions into the Property of the Company shall be made by all members of the Company in proportion to the shares in the Share Capital of the Company held by them, unless other order of the Company members’ contributions into property of the Company be prescribed by resolution of the General Meeting of the Company Members.

10.2. The Contributions into property of the Company shall be made in money, unless otherwise prescribed by resolution of the General Meeting of the Company Members.

10.3. The Contributions into property of the Company shall not alter the value and the nominal value of shares of the Company members in the Share Capital of the Company.

11. DISTRIBUTION OF THE COMPANY PROFIT AMONG THE COMPANY MEMBERS

11.1. The Company shall be entitled, on quarter, half-a-year or year basis, to pass resolution on distribution of its net profit between the Company members. Resolution on distribution of a share of the Company profit distributed among the Company members shall be passed by the General Meeting of the Company Members.

11.2. A share of the Company profit to be distributed among its members shall be distributed in proportion to the shares in the Share Capital of the Company held by them.

12. SURPLUS FUND AND OTHER FUNDS OF THE COMPANY

12.1. The Company shall be entitled to form surplus fund amounting to 5% (Five percent) of the Company Share Capital, as well as other funds.

12.2. The surplus fund shall be formed of annual assignments until the named amount is reached.

13. GOVERNING BODIES OF THE COMPANY

13.1. Operation of the Company shall be managed by governing bodies formed in accordance with these Articles, the Law and other effective legislation.

13.2. The following shall be the governing bodies of the Company:

• the General Meeting of the Company Members;


• the Board of Directors of the Company;


• the General Director of the Company.

13.3.    The General Meeting of the Company Members shall be the supreme governing body of the Company. The General Meeting of the Company Members may be ordinary or extraordinary.

All members of the Company shall be entitled to attend the General Meeting of the Company Members, to take part in consideration of issues put on agenda and cast votes in adopting resolutions. Each member of the Company attending the General Meeting of the Company Members shall have the number of votes equal to the share held by him/her/it in the Company Share Capital, unless otherwise prescribed by the Law.

13.4.    The Board of Directors (supervisory board) shall be formed by the Company under resolution adopted by the General Meeting of Members. The Board of Directors shall perform general management of the Company operation subject to its powers. A separate vote shall be held on each person nominated as a member of the Board of Directors. Members of the Board of Directors may be nominated from among members of the Company (members’ representatives) and/or persons being not members of the Company.

13.5. Day-to-day operation of the Company shall be managed by the sole executive body of the Company (General Director). The sole executive body of the Company shall be accountable to the General Meeting of Members and the Board of Directors of the Company.

14.      GENERAL MEETING OF THE COMPANY MEMBERS

14.1.    The following issues fall within the competence of the General Meeting of the Company Members:

1) amendment of the Articles of Association of the Company including alteration of the Company Share Capital value;

2) forming of the executive bodies of the Company and early termination of their authorities, as well as adoption of resolution on delegation of powers of the sole executive body of the Company to manager, approval of such manager and the terms of agreement with him/her;

3) approval of annual reports and annual balance-sheets of the Company;

4) adoption of resolutions on distribution of net profit of the Company among the Company members;

5) approval (adoption) of documents governing internal operation of the Company (Company by-laws);

6) adoption of resolution on placement by the Company of bonds and other issuable securities;

7) approval of audit, approval of auditor and amount of auditor’s service remuneration;

8) adoption of resolutions on execution of major transactions with the Company assets amounting to more than 50 % (Fifty percent) of the Company assets;

9) adoption of resolutions on execution of related-party transactions, where the amount of consideration under the transaction or the value of assets being the subject-matter of the transaction exceeds 2 % (Two percent) of the Company assets value established under the data the accounting statement for the last preceding reporting period;

10) adoption of resolutions on establishment of subsidiary and representative offices of the Company;

11) adoption of resolutions on reorganization and liquidation of the Company;

12) appointment of liquidation committee and approval of liquidation balances of the Company;

13) other issues envisaged by the Law and the Articles of Association of the Company.

14.2.    The issues provided in item 14.1 shall fall within exclusive competence of the General Meeting of the Company Members and may not be referred to for resolution of the Board of Directors or the General Director, unless otherwise envisaged by the Law.

Resolutions on the issues provided in sub-items 9 and 11  of item 14.1. of these Articles, as well as in other cases prescribed by the Law, shall be passed unanimously by all members of the Company.

Unless otherwise prescribed by the Law and these Articles, resolutions on the issues provided in sub-item 1 of item 14.1 of these Articles, as well as in other cases prescribed by the Law and these Articles, shall be passed by at least two-third majority of the total votes of members.

Other resolutions shall be passed by majority of votes of the total number of the Company member’s votes, unless the Law or these Articles require that such resolutions be passed by a larger number of votes.

14.3. Ordinary General Meeting of the Company Members shall be held not less than 1 (once) a year. Ordinary General Meeting of the Company Members shall be convened by the Chairman of the Board of Directors of the Company.

14.4. Extraordinary General Meeting of the Company Members shall be held in cases provided by the Law and the Company Articles of Association, when holding of such meeting is to the best interests of the Company and its members. Extraordinary General Meeting of the Company Members shall be convened upon demand of the Board of Directors of the Company or the General Director, as well as the members of the Company holding in the aggregate not less than 1/10 (one tenth) of the total number of votes of the Company members.

14.5. Ordinary General Meeting of the Company Members convened to approve annual results of the Company shall be held not less than 2 (Two) months prior to, and not later than 4 (Four) months after, the end of a financial year.

14.6. Not later than 30 (Thirty) days prior to the date of a General Meeting of the Company Members the Chairman of the Board of Directors shall give notice to that effect to each member of the Company by registered letter to the address provided in the Register of Members of the Company. Such notice should provide the time and place of the General Meeting of the Company Members, as well as proposed agenda.

14.7. Each member of the Company shall be entitled to propose extra issues to be put on agenda not later than 15 (Fifteen) days prior to the Meeting. The Chairman of the Board of Directors of the Company shall not be entitled to introduce amendments into wording of extra issues proposed to be put on agenda of the General Meeting of the Company Members.

14.8. Should an initial agenda of the General Meeting of the Company be amended upon proposal of the Company members, the Chairman of the Board of Directors shall give notice on amendment introduced into the agenda to all members of the Company not later than 10 (Ten) days prior to such Meeting.

14.9. The Chairman of the Board of Directors shall give the members of the Company information and materials, as provided by the Law, along with the notice on the General Meeting of the Company Members, and should the agenda be amended, corresponding information and materials shall be given along with the notice on such amendments.

Within 30 (Thirty) days prior to the day of the General Meeting of the Company Members all members of the Company shall be allowed to examine the named materials at the Company office. On demand of a Company member, the Company shall provide him/her/it copies of the named documents within 20 (Twenty) business days from the day of receipt of such demand by the General Director of the Company. The fee collected by the Company for provision of such copies shall not exceed the cost of making thereof.

14.10. Should the order of holding of the General Meeting of the Company Members prescribed by this article be not observed, such General Meeting may be declared duly convened and held if attended by all members of the Company.

15. PROCEEDING AT THE GENERAL MEETING AND ORDER OF ADOPTION OF RESOLUTIONS

15.1. The General Meeting of the Company Members shall be held in order prescribed by the Law, the Articles of Association of the Company and the Company by-laws. To the extent that the Law, the Company Articles of Association and the Company by-laws do not envisage the order of holding of the General Meeting of the Company Members, it shall be prescribed by resolution of the General Meeting of the Company Members.

15.2. Prior to declaration of the General Meeting of the Company Members open registration of the present members of the Company shall be made. An unregistered member of the Company (his/her/its representative) shall not be entitled to cast vote.

15.3. The General Meeting of the Company Members may be held by absentee voting bay way of phone conference, correspondence exchange, including by e-mail and by other means of communication. The General Meeting of the Company Members may be held by way of absentee voting on issues envisaged by sub-item 3 of item 14.1. of the Articles.

15.4. The Chairman of the Board of Directors of the Company shall procure keeping of minutes of the General Meeting of the Company Members. Within 10 (Ten) days after execution of minutes of the General Meeting of the Company Members, the Chairman of the Board of Directors of the Company or other person in charge of the named minutes keeping shall give a copy of the minutes of the General Meeting of the Company Members to all members of the Company in order prescribed for giving of notice of the General Meeting of the Company Members. Minutes of the General Meeting of the Company Members shall be signed by all members attending the meeting, unless the General Meeting of Members should resolve otherwise. Minutes of all General Meetings of the Company Members shall be filed to minute-book.

15.5. Resolutions of the General Meeting of the Company Members shall be passed on show of hands.

15.6. Should the Company have one member, resolutions on the issues falling within the competence of the General Meeting of the Company Members shall be passed by the sole Member of the Company alone and executed in writing. Provided that provisions of these Articles prescribing the order of organizing, convening and holding of the General Meeting of the Company Members, save for the provisions prescribing the terms of holding of the annual General Meeting of the Company Members, shall not apply.

16.    BOARD OF DIRECTORS

16.1. The Board of Directors shall consist of three members elected by the General Meeting of the Company Members for the term prescribed by resolution of the General Meeting of the Company Members. Should the number of members the Board of Directors become less than three, the Company shall convene Extraordinary General Meeting of the Company Members to elect new Board. The surviving members of the Board of Directors shall be in charge of convening of the Extraordinary General Meeting of the Company Members.

16.2. The persons elected the members of the Company Board of Directors shall be eligible for reelection unlimited number of times.

16.3. The powers of any member (all members) of the Company Board of Directors may be early terminated upon resolution of the General Meeting of the Company Members.

16.4. The Chairman of the Company Board of Directors shall be elected by the members of the Board of Directors from among them by simple majority of votes. The General Director of the Company may not hold office of the Chairman of the Company Board of Directors.

16.5. The Chairman of the Board of Directors shall preside at meetings of the Board of Directors. The Chairman shall be in charge of arrangement of keeping and storing of documents of the Board of Directors. The Chairman shall also exercise other functions envisaged by these Articles and the Company by-laws.

16.6. The following shall fall within the competence of the Board of Directors:

• determination of general lines of the Company operation and adoption of resolutions on participation of the Company in associations and societies;


• approval of amount of remuneration and consideration paid to the sole executive body of the Company (the General Director of the Company) or manger;


• approval of transactions for acquisition or transfer of assets, financial instruments[1], institutions or branches effected in whatever way (including by way of amalgamation, split or by other way), each amounting to, or aggregated transaction price under which amounts to, more than 10,000,000 (Ten Million) Euros or equivalent of the named amount in any other currency over 12 (Twelve) months (excluding transactions made in ordinary course of the Company business), unless in accordance with the Company Articles approval of such transactions fall within the competence of the General Meeting of Members;


• approval of settlement agreements, each amounting to, or the price of which in the aggregate amounts to, more than 2,000,000 (Two Million) Euros or equivalent of the named amount in any other currency over 12 (Twelve) months, unless in accordance with the Company Articles approval of such transactions fall within the competence of the General Meeting of Members;


• approval or entering into, amendment or termination of contract of any nature or several related contracts providing the Company gains exceeding 70,000,000 (Seventy Million) Euros or equivalent of the named amount in any other currency over the whole effective period of the contract, unless in accordance with the Company Articles approval of entering into, amendment or termination of such contracts fall within the competence of the General Meeting of Members;


• approval of any transaction of the Company intended for debt recovery, including, without limitation, any type of debt restructuring plans, settlements and any transaction and/or arrangement with creditors;


• approval of the Company’s entering into subscription agreements and shareholder’s agreements;


• approval of transfer, assignment, usufruct, transfer into trust or any other deed of conveyance or other type of security with regard to the Company itself (its shares) and property of the Company; acquisition, usufruct of companies or branches of other companies;


• approval of acquisition or transfer by the Company of shares and interests in other companies with or without the right of option, including unseasoned companies, transfer or assignment by the Company of ownership right, pledge and/or doing of other acts intended for disposition of the named assets, as well as any restrictions on disposition of interest/shares, and each of the deeds named in this item shall be subject of approval in case of participation of the Company in joint ventures;


• approval of acquisition, exchange and sale of immovable property, as well as contracts for lease of immovable property owned by the Company, its business divisions and branches for a term exceeding 9 (Nine) years;


• adoption of resolutions on entering into interested-party transactions, unless the amount of consideration under such transaction or the value of property being subject-matter of such transaction exceeds 2% (Two percent) of the Company assets value established on the basis of data of the balance-sheet for the preceding reporting period;


• adoption of resolutions on approval of major transactions concerning acquisition, disposition of or contingent direct or indirect disposition by the company of assets the value of which amounts to twenty to fifty percent of the company assets value established on the basis of data of the balance-sheet for the preceding reporting period;


• adoption of resolutions on other issues envisaged by the Law and these Articles not falling within the competence of the General Meeting of Members and the General Director of the Company.

16.7. The Board of Directors shall meet as necessary but not less than twice a year. The date, place of meetings of the Board of Directors and agenda thereof shall be notified of by the Chairman of the Board of Directors who shall give notice of meeting in writing (by registered letter, fax or telex) to every member of the Board of Directors personally not later than 7 (Seven) days prior to the date of the meeting. The issues of proceeding at meetings of the Board of Directors and procedure of adoption of resolutions shall be governed by these Articles and Regulations of the Board of Directors approved by the General Meeting of the Company Members.

16.8. Each member of the Board of Directors shall have one vote.

Presence of majority of member of the Board of Directors shall be deemed quorum necessary to hold meetings of the Board of Directors. Meetings of the Board of Directors may be held by phone, by exchange of correspondence, including by e-mail and through other means of communication, i.e. do not require joint attendance of its members. The Board of Directors may hold absentee voting by poll.

16.9.    Subject as otherwise prescribed by the Law, all resolutions of the Board of Directors shall be passed by simple majority of votes of the members attending a meeting. In case of equality of votes the Chairman of the Board of Directors shall have casting vote.

16.10. Proceedings at the Board of Directors meetings shall be minuted. All members of the Board of Directors present at a meeting of the Board of Directors shall sign the minutes.

17. THE SOLE EXECUTIVE BODY OF THE COMPANY

17.1.    Day-to-day operation of the Company shall be managed by the General Director of the Company being the sole executive body of the Company.

The sole executive body of the Company (the General Director) shall be elected by the General Meeting of the Company Members for the term of 3 (Three) years and shall have his/her powers until termination of that term or until early termination of his/her powers in accordance with provisions of the Law, the Articles and (or) the terms of the agreement between him/her and the Company. The General Director of the Company may as well be elected from among persons not being its members.

17.2. Subject to article 42 of the Law, only a natural person may exercise the powers of the sole executive body of the Company.

The General Director of the Company shall:

• represent the Company without power of attorney;


• issue powers of attorney to act in the name of the Company;


• issue orders on appointment of employees to positions in the Company, their transfers and resignations, use incentives and impose disciplinary penalties;


• ensure execution of resolutions of the General Meeting of the Company Members;


• ensure execution of resolutions of the Board of Directors of the Company:


• keep the Resister of Members of the Company;


• ensure correspondence of information on the Company members and the shares or fractions of the shares in the Company Share Capital held by them, on treasury shares or fractions of shares provided in the Register of Members of the Company to information provided in the Uniform State Register of Legal Entities, and notarized instruments of transfer of shares in the Share Capital of the Company the Company becomes aware of;


• execute transactions and do acts upon prior approval (resolution) of the General Meeting of Members or the Board of Directors, subject to the issues falling within the competence of the General Meeting of Members or the Board of Directors in accordance with provisions of the Law and/or these Articles;


• exercise other powers that subjects to the Law do not fall within the competence of the General Meeting of Members and the Board of Directors of the Company.

18. LIST OF MEMBERS OF THE COMPANY

18.1. The Company shall ensure keeping and storing of the List of Members of the Company (hereinafter referred to as the List).

18.2. The List shall provide the following information on each member of the Company:

With respect to a member being a natural person:

• surname, name and patronymic;


• citizenship;


• type, number, series, date and place of issue of identification document, as well as the name of issuing authority;


• date of birth;


• residence address;


• postal address (if differs from the residence address);


• telephone number;


• e-mail address;


• taxpayer identification number;

With respect of a corporate member:

• full and abbreviated business name in accordance with constitutive documents:


• name of the state authority such legal person is registered by;


• date of state registration;


• registration number;


• taxpayer identification number;


• legal address;


• postal address;


• share capital value;


• telephone and fax number;


• name of executive body;


• impression of seal and specimen signatures of officials entitled to act in the name of the legal entity without power of attorney in accordance with its constitutive documents.

The List shall also provide information on the value of the Company member share in the Share Capital of the Company and payment thereof, on the value of treasury shares, dates of transfer thereof to, or acquisition thereof by, the Company, pledge and other incumbencies over shares or fraction of shares.

18.3. An entry into the List shall be made under original documents certifying accrual, incumbency or termination of the member’s rights to the share (a fraction of the share) or copies thereof certified by a notary, as well as copies of applications filed by a notary and notarially certifying corresponding transactions, or under other information envisaged by the Law.

18.4. A member of the Company shall inform the Company in writing on any changes in the information provided in item 18.2 of the Articles of Association, as well as information on shares in the Company Share Capital held by him/her/it, within 3 (Three) business days from the day of such member’s receipt of the documents certifying such changes. Should a member of the Company fail to give such information, the Company shall not be liable for loss inflicted as a result thereof.

18.5. A Company shall approve, by internal document, regulations on keeping of the List prescribing order of processing and keeping of the documents being grounds of making entries into the List, including ways of processing, storing and archiving of the documents, order of access to the archive, methods of electronic data storing, order of passwords assignment in working in the List-keeping program, way of the data restoration in case of loss, and confidentiality requirements.

18.6. The General Director shall not be entitled to refuse making of corresponding entry into the List, save for the cases provided by effective legislation of the Russian Federation.

18.7. Should the General Director refuse making an entry into the List, the General Director shall within 3 (Three) business days from the day of receipt of the documents being the ground for making such entry give written notice to the member or the person acquiring the share or a fraction of the share in the Company Share Capital providing reasons of such refusal.

18.8. A refusal to make an entry into the List may be challenged in court. Upon the court judgment the general Director shall make corresponding entry into the List.

18.9.    On demand of a person entitled to receive information from the List, the General Director shall provide such person with information on rights of members to shares (fraction of shares) in the Company Share Capital by giving extract from the List. The following are the persons entitled to receive extracts from the List:

• the Company members;


• authorized representatives of state bodies.

A pledgee shall be entitled to receive extract from the List with regard to the pledged share (a fraction of the share).

18.10.  An extract from the List shall provide the following data:

• surname, name and patronymic of a natural person or full name of a legal person being the member of the Company;


• residence address or address of stay:


• type, number, series, date and place of issue of identification document, as well as name of the document issuing authority, for a member being a natural person, or the name of authority in charge of state registration, number and date of registration, for a corporate member;


• documents being the ground for making of the entry into the List, as well as the date of receipt of such documents;


• value of the share held by the member of the Company as a percentage or fraction;


• surname, name and patronymic of the General Director entering the data into the List;


• number and date of making of the entry into the List;


• residence address and phone number of the Company General Director;


• seal of the Company and signature of the General Director.

19. AUDIT

19.1. In order to check and acknowledge correctness of annual reports and balance-sheets of the Company and current statement of affairs of the Company the Company shall be entitled, upon resolution of the General Meeting of the Company Members, engage a chartered accountant.

19.2. In cases provided by the Law and other effective legislation audit shall be conducted for account of the Company or for account of the member demanding audit. The General Meeting of Members may pass resolution on compensation of costs of the member borne in connection with payment for auditor’s service for account of the Company.

20. KEEPING OF THE COMPANY DOCUMENTS AND ORDER OF PROVISION BY THE COMPANY OF INFORMATION TO THE COMPANY MEMBERS AND OTHER PERSONS

20.1.    The Company shall keep the following documents:

• the Memorandum of Association of the Company. The Company Articles of Association and amendments introduced and registered in order prescribed for amending hereto;


• minutes of meeting of the Company founders providing resolution on incorporation of the Company and on approval of money equivalent of non-monetary contributions into the Share Capital of the Company, as well as other resolutions relating to incorporation of the Company;


• minutes of the General Meeting of the Company Members;


• minutes of the Board of Directors of the Company;


• document certifying the state registration of the Company;


• documents certifying rights of the Company to the property recognized on its balance;


• the Company by-laws;


• by-laws of subsidiary and representative offices of the Company;


• documents relating to issue of bonds and other issuable securities of the Company;


• lists of the Company affiliates;


• reports of the Company auditor, state and local financial control bodies;


• the List of Members of the Company; and


• other documents envisaged by federal laws and other regulations of the Russian Federation, these Articles, the Company by-laws, resolutions of the General Meeting of the Company Members, the Board of Directors of the Company and the General Director.

20.2.    The Company shall keep all the above documents at location of the executive body of the Company (the General Director) or a place known and accessible by the Company members.

Provision of the Company documents copies and information to the Company members shall be made on request of a Company Member. Such request shall be given to the General Director of the Company and shall be satisfied within 3 (Three) business days from the day of receipt. Provision of the information to other persons shall be made in order prescribed by effective legislation and by-laws of the Company.

21. REORGANIZATION AND LIQUIDATION OF THE COMPANY

21.1. The Company may be reorganized or liquidated in order provided by the Law, the Civil Code of the Russian Federation and other federal laws.

21.2. Upon reorganization of the Company its rights and obligations (or a part of its rights and obligations) shall transfer to successors. Reorganization of the Company shall be made upon resolution of the General Meeting of the Company Members in order envisaged by the Law, the Civil Code of the Russian Federation and other federal laws. The Company may be reorganized by amalgamation, consolidation, spinoff, split and transformation.

21.3. The Company shall be deemed reorganized (except for reorganization by consolidation) upon state registration of the legal entities incorporated by way of reorganization.

21.4. The Company may be liquidated:

• upon resolution of the General Meeting of the Company Members on voluntary liquidation of the Company and appointment of liquidation committee on proposal of the General Director of the Company or a member of the Company;


• under court judgment in order prescribed by the Civil Code of the Russian Federation.

21.5.    Liquidation of the Company shall result in termination of its operation without transfer of rights and obligations by succession to other persons.