CA-04/00/01Annex 1 to the Collection Agreement

CA-04/00/01Annex 1 to the Collection Agreement

Standard Terms and Conditions

of theCollection Agreement

1 / 6

Signature of the Client /______/

CA-04/00/01Annex 1 to the Collection Agreement

Definitions

Unless otherwise defined by the Agreementand/or Other Agreement Associated Thereto or implied by its/their context, theterms and phrasings in the Agreement and/or Other Agreement Associated Thereto shall have the following meanings:

1.1.Account – Bank account(s) of theClient.

1.2.Application – the Client’s appeal to the Bankin the form established by the Bank requesting from the Bank toapprove the Collection and issue the Collection Orderin accordance with the terms and conditions defined in theapplication. Application represent(s) the integral part of the Agreement and is/are effective together with it.If there is a discrepancy between the terms and conditions set forth in the application and the terms and conditions defined by the Agreement and/orOther Agreement Associated Thereto,the terms and conditions defined by the Agreementand/or Other Agreement Associated Thereto are given priority.

1.3.Representations and Warranties - representationsandwarrantiesof the Client outlined in Article 2 ofthe Annex 1 to theCollectionAgreement.

1.4.Annex – unless otherwise explicitly envisaged by the Agreement and/or Other Agreements Associated Thereto, annex(es) (commensurate with the context) of the Agreement or Other agreement Associated Thereto, which represent(s) the integral part of the Agreement or Other Agreement Associated Theretoand is/are effective together with them.

1.5.Collection – obligation assumed by the Bank on the basis and in accordance with the terms and conditions ofthe Agreementand/orOther Agreement Associated Thereto bythe Client’s instruction, to directly and/or through the Collection Remitting Bank ensure: a) delivery of Collection Order to the Recipient,b) issuance of the Commercial Document to the Recipientin exchange for the paymentand/or fulfillment of other conditions by theRecipientandc) transfer to the Client of the Collection Amount and/or Document (if available) delivered by the Recipient,in exchange for which the Client undertakes to pay the Bank the cost envisaged by the Agreement and other payables.

1.6.Collection Repayment –In accordance withterms and conditions of the Agreement and/or Other Agreement Associated Thereto: a) handing over Financial Documentto the Recipient in exchange for payment and/or fulfillment of other obligations by the Recipient and b) handing over to the ClientCollection amount and/or documents (if any).

1.7.Cash Letter – the below documens received/handed over on the basis of Annex3(hereinafter the Delivery and Acceptance Certificate) to theCollection Agreementexecuted between theParties:

1.7.1.Financial Document – bill(s) of exchange, check(s) or other similar securities;

1.7.2.Commercial Document – invoice(s), shipment document(s), the enclosed Commoditydocument(s) and other similar document(s), other than Financial Documents;

1.8.Collection Amount –theamountdefined by the Collection Agreementand related payables (interest), to be paid by the Recipientto theBank or the Collection Remittent Bank in exchange for the Cash Letter.

1.9.Collection Remittent Bank–Collection Bankand/or Presenting Bank.

1.10.Collection Agreement– an agreement defined by Sub-paragraph 3.1.1.1.of theAnnex 1 to theAgreement.

1.11.Legislation – effective legislative and byl aw normative acts of Georgia and the international agreements and covenants falling within the system of the normative acts of Georgia.

1.12.Client – Person, whose title, identification data and other information are provided in Paragraph1.2. of theAgreement.

1.13.Other Agreement Associated Thereto (or the Other Agreement Associated tothe Agreement) –(a) insurance agreement, security agreement, personal guarantee agreement and/or documents executed between the Bank and the Client or the Bank and the third party(ies), the execution and/or issuance of which is envisaged by the Agreement; and/or (b) other agreements executed between the Bank and the Client or the Bank and the third party(ies) which are executed according to the terms and conditions of the Agreement for the Client to use the Collectionas set forth in the Agreement, or for their security.

1.14.Third party – any person other than theClientand/or theBank.

1.15.Recipient–Personto whom the Cash Letter shall be submitted.

1.16.Party/Parties – the Client and/or the Bank, as the context may require.

1.17.Overdraft – on the basis of the Agreement and/or relevant overdraft agreement and consistent with the terms of those agreements, the debit balance allowed by the Bank on the Client’sAccount for the short period which enables the Client to utilize funds within the debit balance in excess of the amount deposited at his/her Account; the accrued debt shall in the first place be automatically covered from the amount entered to the Account.

1.18.Fine (Penalty) – the amount payable by the Client due to failure to perform or undue performance of the financial and/or other obligations undertaken by the Client under the Agreement and/or Other agreement associated thereto, the amount of which and the payment terms are determined according to the provisions of the Agreement and/or Other agreement associated thereto.

1.19.Person – physical person(s), legal entity(ies) and/or other organizational formations envisaged by the Legislation of Georgia or other country which do not represent legal entities.

1.20.Bankingday – a day (other than Saturday, Sunday or official holidays determined by the Legislation) when the commercial banks in Georgia are open and conduct regular activities.

1.21.Collecting Bank– thebanking institution, to which the Bank sendsthe Collection Order with the aid of which collection will take place and/or PresentingBank will be nominated in case if the Presenting Bank is not nominated.

1.22.Collection Order – notificationsent to the Recipient,which describes the instructions received from the Clientin exchange for the fulfillment of which the Commercial Documents are handed over to theRecipient.

1.23.Commission Fee – the payables established by the Bank for the Client within the limits of the Agreementand/orOther Agreement Associated Thereto and in accordance with them for the use of Collection,the amount and payment conditions of which are defined in accordance with the provisions of the Agreement and/orOther Agreement Associated Thereto.

1.24.Commodities– material assets, not excluded from turnover under the rule established by the Legislation.

1.25.Standard Terms and Conditions – terms and conditions outlined in the Annex No. 1to theCollection Agreement, including amendments and modifications thereto (if any).

1.26.Force Majeure– acts of God, fire, hostilities, administrative and legal acts and/or other circumstances insurmountable for the Bankand beyond their control, which: a) are not connected with the Bank'serrors or negligence, b) started or developed after entering into force of the Agreement and c) affect directly full and proper fulfillment of obligations assumed under the Agreement and/or OtherAgreement Associated Thereto;

1.27.Subsidiary – with respect to the Person - any other company, not less than 50 per cent (fifty per cent) of the share and/or votes of which are owned directly or indirectly or otherwise administered by the said Person.

1.28.Presenting Bank – the banking institutionnominated by the Bank or the CollectingBank,which presents the Collection Order to the Recipientand/or ensures in exchange for the Cash Letterthe Collection Paymentand/or fulfillment of other conditions.

1.29.Agreement – executed between the parties(a) Collection Agreement; (b) Annex 1 to the Collection Agreement (Standard Terms and Conditions); (c) Annex 2to the CollectionAgreement (SupplementaryTerms and Conditions), if any; and (d) any additional Annex/Application (if any) which will be executed/submittes by the Client in future regarding the Agreement, including amendments and modifications thereto.

1.30.ICC Uniform Rules – uniform rules established by the International Chamber of Commerce: URC522, 1995 edition or the edition defined by the Agreement/Collection Orderincluding the changes and additions introduced into them.

1.31.SWIFT -Worldwide System for Interbank Financial Telecommunication (network), which is used by commercial banks for exchange of information about financial operations.

Representations and Warranties

2.1.TheClient represents and warrants that:

2.1.1.As of the moment of executing the Agreement and/or Other Agreement Associated Thereto, he/she will be capable (among them according to the rule established by the effective Legislation);

2.1.2.For the purpose of execution and enforcement of the Agreement and/or Other Agreement Associated Thereto, he/she/it has acquired all necessary permits, approvals or proxies;

2.1.3.For the purpose of execution and enforcement of the Agreement and/or Other Agreement Associated Thereto, he/she/it will have acquired all necessary permits, approvals or proxies;

2.1.4.The Agreement and/or Other agreement associated thereto are/will be executed by him/her/it voluntarily, without any violence, threat, cheating, misleading and/or any other circumstances on behalf of the other Party or other Third parties;

2.1.5.Execution and enforcement of the Agreement and/or Other Agreement Associated Theretodoes not/will not inflict violation of those contractual, judiciary (including arbitration), Legislativeand/or other obligations which he/she is committed to preserve;

2.1.6.Except for the cases preliminarily notified by him/her/it to the Bank in writing, as of the moment of executing the Agreement and/or Other Agreement Associated Thereto, he/she/it does not participate in any dispute (as a plaintiff, defendant, third party or otherwise) which jeopardizes his/her/its assets/property and/or performance of the terms of the Agreement and/or Other Agreement Associated Thereto;

2.1.7.As of the moment of executing the Agreement and/or Other Agreement Associated Theretoand for their entire effective term, his/her/its activities and/or actions complies/shall comply with own charter and/or other regulatory document and local and/or international legislation;

2.1.8.As of the moment of executing the Agreement and/or Other Agreement Associated Theretoand for their entire effective term, he/she/it shall adhere to the terms of any agreement and or other covenants, and/or other commitments, disregard of which may negatively impact performance of obligations assumed by the Client under the Agreement and/or Other Agreement Associated Thereto.

2.1.9.As of the moment of executing the Agreement and/or Other Agreement Associated Theretoand for their entire effective term, on his/her/its behalf there is/will be no violations of local and/or international laws (administrative, criminal, etc), including: terrorism, drug abuse, crime against public security, crime against cultural heritage, crime against the rule(s) of using natural resources and environment protection, crime against human rights and freedoms, crime against public health and public morality, crime against entrepreneurial or other economic activities and infringement of the monetary and credit system. Furthermore, he/she/it explicitly:

2.1.9.1.Does/will not engage in trading and/or manufacturing of such goods and/or products or other activities which are prohibited by the local and/or international legislation, among them, shall not conduct fishing using prohibited methods;

2.1.9.2.Does/will not engage in trading in weapons (except when such trading does not represent main activity of the Client), radioactive materials (except for medical and/or quality control equipment), asbestos fiber (except when the Bank gives approval for particular types of activities and/or products), species of tropical forests or those of other flora and fauna restricted by the local and/or international legislation;

2.1.9.3.Does/will not use forced labour or child labour for his/her/its main business.

2.1.9.4.Ensure the rights to safe and sound working environment.

2.1.10.His/her/its actions are/will not be intended to cheat the Bank. Taking into account this principle, for the purpose of execution and/or enforcement of the Agreement and/or Other Agreement Associated Thereto, the document and/or information submitted by him/her/it to the Bank, at the moment of submission, is/will be true, correct and complete. Besides, he/she/it is aware that submission of false documents and/or information represents the punishable offence according to the Legislation;

2.1.11.Shall duly and in good faith perform obligations assumed under the Agreement and/or Other Agreement Associated Thereto, notwithstanding the rights and requirements of the Client which may arise towards relevant contractor(s) deriving from charged agreement related to the purpose of the Agreement and/or Other Agreement Associated Thereto.

2.1.12.He/she/it is aware that the Bank’s policy strictly prohibits participation of a director, authorized Person, representative, employee, other staff or related Person and/or affiliated entity in such actions which stipulate offering or accepting of any valuable thing/non-material property (directly or indirectly) for the purpose of receiving benefit by any of the Persons, Bank,related Person and/oraffiliated entity or client in order to unfairly acquire or retain business or other business-related advantage;

2.1.13.He/she/it (including his/her/its director, authorized Person, representative, employee or other staff) or related person and/or affiliated entity:

2.1.13.1.has not directly or indirectly paid or received (or has not been involved in any deal, which provides for the payment or receipt of) any illegal and/or hidden commission fee, bribe, or compensation, which may be related to the Agreement and/or the Other Agreement Associated Thereto;and/or

2.1.13.2.has not taken any action (including secret deal) which could have affected the processof acquiring the right of Collectionor entering into the Agreement which aims artificial control and/or creation of non-competitive environment; and/or

2.1.13.3.has not offered or accepted any valuable thing/non-material property, which may have affected the actions of the Bank,its director, authorized Person,representative, employee, other staff or related Person and/or affiliated entity, and neither the above-mentioned Persons have threatened his/her/its property or reputation in order to unfairly acquire business-related advantage, or do the business; and/or

2.1.13.4.has not been otherwise involved in the corruptive activity.

2.1.14.Violation of the Bank’s policy or any of the above-mentioned clauses will immediately cause his/her/its disqualification from the process of acquiring theright of Collectionand/or the termination of the Agreement and/or theOther Agreement Associated Thereto.Further,suchdisqualificationand/ortermination of the Agreementand/or theOther Agreement Associated Theretodoes not exclude the responsibility and respective sanctionsof theClientand/or his/her/its director, authorized person, representative, employee, other staff or related Person and/or affiliated entity, stipulated by the Legislation (including, without limitation, the criminal responsibility).

2.2.These Representations and Warranties of the Client are in effect prior to full and due performance of the obligations assumed by the Parties under the Agreement and/or Other Agreement Associated Thereto, despite full or partial termination of the Agreement and/or Other Agreement Associated Thereto.

2.3.The Client shall immediately inform the Bank in writing regarding all circumstance(s) which may be incompliant with his/her/its above representations and/or may affect the above warranties; Furthermore, he/she/it shall notify the Bank on any such occurrence which jeopardizes the Client’s assets/property and/or full and due performance of obligations assumed under the Agreement and/or Other Agreement Associated Thereto.

2.4.The Parties represent and acknowledge that the Bank shall enter into and enforce the Agreement and/or Other Agreement Associated Thereto only on the basis of the above Representations and Warranties of the Client.

Conditions, Procedures and Rules of Using the Collection Stipulated by the Agreement

3.1.Collection

3.1.1.Rule of ussuance of the Collection Order

3.1.1.1.On the bases of presentation of Application and making a positive decision regardingthe approvement of the Collection, the Bank and the Client executedCollection Agreement,defining specific conditions of using theCollection.

3.1.1.2.The Collectionwill be used within the term(s) stipulated by the Agreement on condition, that all conditions stipulated by the Agreementand/or Other Agreement Associated Theretoare fulfilled inthe form acceptable for the Bank.

3.1.1.3.In case the Client does not request issuance of the CollectionOrder within the term(s) and in accordance with the conditions stipulated by the Agreement orthe Client breachesconditions of the Agreementand/or Other Agreements Associated Thereto and/or any agreement(s) executed with the Bank,the Bank is authorized to waive service of theCollectionor issuance of Collection Orderor exercise other rights stipulated by theAgreement,Other Agreements Associated Thereto and/or any agreement(s) executed with the Bank.

3.1.2 Commission Feeand rule of their calculation and accrual

3.1.2.1.AmountofCommission Fee (and/or other amount/form defined by the Agreement)is defined by the Agreement.

3.1.2.2.The amount of the Commission Fee is defined as a one-time-only payment in the form and periodicity stipulated by the Agreementand/or the Other Agreement Associated Theretoincluding its (their) Annexes). If the annual Commission Fee is stipulated, it is calculated in equivalent to 365 (three hundred sixty five)days per year.

3.1.3.Fine (Penalty)for violation of conditions of using theCollectionand rule of its accrual

3.1.3.1.Amount of Fine in case of violating the conditions of using the Collectionshall be defined by the Agreement and/or the Other Agreement Associated Thereto.

3.1.3.2.Unless the Bank decides otherwise, the Client shall pay the Fine in following cases:

3.1.3.2.1.for the non-payment of any of the Commission Fees in the established amount and terms;

3.1.3.2.2.In other cases stipulated by the Agreement and/or the Other Agreement Associated Thereto (including its (their) Annexes).

3.1.3.3.Unless the Bank decides otherwise, accrual of the Fine continues and is subject to payment regardless the effectiveness or termination of the Agreement and/or the Other Agreement Associated Thereto associated thereto (including its (their) Annexes), by the moment of the forced or voluntary disbursement of the debt under the Agreement and/or the Other Agreement Associated Thereto by the Client.

3.1.3.4.By executionthe Agreement and/or the Other Agreement Associated Thereto associated thereto (including its (their) Annexes) the Client confirms/will confirm that it recognizes and agrees with theexistence ofthe Fine established by the Agreement andits amount and does not consider the Fine to be inadequately high.