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Ukraine Auto Loan Finance No. 1 PLC SOLE ARRANGER_ SOLE LEAD

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Ukraine Auto Loan Finance No. 1 PLC SOLE ARRANGER_ SOLE LEAD Powered By Docstoc
					                                     Ukraine Auto Loan Finance No. 1 PLC
            (Incorporated in England and Wales with limited liability under Registered Number 6502734)

                U.S.$ 85,800,000 Class A Asset Backed Floating Rate Notes due November 2018
                U.S.$ 18,700,000 Class B Asset Backed Floating Rate Notes due November 2018
                 U.S.$ 5,500,000 Class C Asset Backed Fixed Rate Notes due November 2018


                                                                         Interest Rate
                 Initial Principal    Initial Interest                   after Step-Up   Legal Maturity
    Notes            Amount                 Rate         Step-up Date         Date            Date        Issue Price

Class A          U.S.$ 85,800,000    3-months LIBOR +     May 2011      3-months LIBOR   November 2018      100%
                                          5.50%                            + 6.88%
Class B          U.S.$ 18,700,000    3-months LIBOR +     May 2011      3-months LIBOR   November 2018      100%
                                          7.50%                            + 9.38%
Class C          U.S.$ 5,500,000          12.0%              N/A             N/A         November 2018      100%



             SOLE ARRANGER, SOLE LEAD MANAGER AND SOLE BOOKRUNNER
                                          UBS INVESTMENT BANK


                                                  Dated 29 May 2008
The Asset Backed Notes due November 2018 of Ukraine Auto Loan Finance No. 1 PLC (the
"Issuer") will comprise U.S.$ 85,800,000 Class A Asset Backed Floating Rate Notes due November
2018 (the "Class A Notes"), U.S.$ 18,700,000 Class B Asset Backed Floating Rate Notes due
November 2018 (the "Class B Notes" and together with the Class A Notes, the "Senior Notes") and
U.S.$ 5,500,000 Class C Asset Backed Fixed Rate Notes due November 2018 (the "Class C Notes"
and, together with the Senior Notes, the "Notes" and the holders thereof, the "Noteholders"). The
Issuer will issue the Notes on or about 29 May 2008 (or such other date as the Issuer, PrivatBank and
the Lead Manager may agree) (the "Issue Date"). AS "PrivatBank" (the "Initial Purchaser") will
subscribe and pay for the Notes on the Issue Date. See "Subscription and Purchase of the Notes".
Interest is payable on the Notes in respect of the first Interest Period on the 20th day in August 2008
and thereafter quarterly in arrear on the 20th of November, February, May and August of each
calendar year (subject to adjustment for non Business Days as described herein) (each an "Interest
Payment Date"). "Business Day" means a day (other than Saturday or Sunday) on which banks are
open for business in Kyiv, London, New York City, Dublin and Luxembourg. Interest is payable on
each Interest Payment Date:
(i)     on the Class A Notes, at an annual rate of three months LIBOR plus 5.50 per cent. per annum
        or, in the case of the first Interest Period, at an annual rate based on a linear interpolation of
        two and three months LIBOR, plus 5.50 per cent. per annum; and after the 20th day of May
        2011 (the "Step-Up Date"), at an annual rate of three months LIBOR plus 6.88 per cent. per
        annum (the "Class A Step-Up Margin)";
(ii)    in the case of the Class B Notes, at an annual rate of three months LIBOR plus 7.50 per cent.
        per annum or, in the case of the first Interest Period, at an annual rate based on a linear
        interpolation of two and three months LIBOR, plus 7.50 per cent. per annum; and after the
        Step-Up Date, at an annual rate of three months LIBOR plus 9.38 per cent. per annum (the
        "Class B Step-Up Margin)"; and
(iii)   on the Class C Notes, at a fixed rate of 12.0 per cent. per annum.
The period from (and including) an Interest Payment Date (or the Issue Date, as defined below) to
(but excluding) the next (or first, as the case may be) Interest Payment Date is an "Interest Period".
The rate of interest payable from time to time (the "Rate of Interest") in respect of the Notes will be
determined in respect of the Notes two Business Days prior to the commencement of each Interest
Period or, in the case of the first Interest Period, the Issue Date (each a "Determination Date"). The
period from (and including) a Determination Date (or the Issue Date) to (but excluding) the next (or
first, as the case may be) Determination Date is a "Determination Period".
The Notes are being offered outside the United States to persons other than U.S. persons ("non-U.S.
persons") as defined in Regulation S ("Regulation S") under the United States Securities Act of
1933, as amended (the "Securities Act") by the Initial Purchaser (as defined below), subject to the
Initial Purchaser's acceptance and right to reject orders in whole or in part. It is expected that delivery
of the Notes will be made in book-entry registered form only through the facilities of Euroclear Bank
S.A./N.V., as operator of the Euroclear System ("Euroclear"), and/or Clearstream Banking
Luxembourg, a division of Clearstream International, société anonyme ("Clearstream"), in each case
against payment therefor in immediately available funds.




                                                   -ii-
Each class of Notes offered and sold outside the United States to non-U.S. persons pursuant to
Regulation S will be represented by beneficial interests in a single, permanent global note in fully
registered form without interest coupons (for each class of Notes individually, a "Regulation S
Global Certificate" and together, the "Regulation S Global Certificates"). Each initial purchaser of
the Notes outside the United States pursuant to Regulation S, and each subsequent purchaser of the
Notes in re-sales during the period which expires on and includes the 40th day after the later of the
commencement of the offering of the Notes and the Issue Date (the "distribution compliance
period"), will be deemed to have represented, agreed and acknowledged as follows:
(a)     it is, or at the time the Notes are purchased will be, the beneficial owner of such Notes and it
        is a non-U.S. person and it is located outside the United States (within the meaning of
        Regulation S);
(b)     it understands that such Notes have not been and will not be registered under the Securities
        Act and that, prior to the expirations of the distribution compliance period, it will not offer,
        sell, pledge or otherwise transfer such Notes except in an offshore transaction in accordance
        with Rule 903 or Rule 904 of Regulation S, and in accordance with any applicable securities
        laws of any State of the United States; and
(c)     the Issuer, PrivatBank, the Registrar, the Initial Purchaser, the Lead Manager and their
        affiliates and others will rely upon the truth and accuracy of the foregoing acknowledgements,
        representations and agreements.
The Senior Notes will be secured by the same security that will secure the Class C Notes. Prior to
redemption on the Interest Payment Date falling in November 2018 in respect of the Notes, the Notes
will be subject to mandatory and/or optional redemption in certain circumstances. The Issuer may not
purchase any Notes.
Application has been made to the Irish Financial Services Regulatory Authority ("IFSRA") in its
capacity as competent authority under Directive 2003/71/EC (the "Prospectus Directive") for this
Prospectus to be approved. Application has been made to the Irish Stock Exchange for the Notes to
be admitted to the official list (the "Official List") and trading on its regulated market. The Irish
Stock Exchange's regulated market is a regulated market for the purposes of Directive 2004/39/EC.
Copies of this Prospectus will be available at the specified office set out below of the Issuer and the
Paying Agent (as defined herein). Such approval relates only to the Notes which are to be admitted to
trading on the regulated market of the Irish Stock Exchange or other regulated markets for the
purposes of Directive 2004/39/EC or which are to be offered to the public in any Member State of the
European Economic Area.
The Notes will be obligations solely of the Issuer and (other than as mentioned in the immediately
following paragraph) will not be guaranteed by, nor be the responsibility of, any other entity. In
particular, the Notes will not be obligations of or responsibilities of, and will not be guaranteed by, the
Originator, the Asset Manager, the Standby Asset Manager, the Cash Manager, the Account Bank, the
PECO Holder, the Agent Bank, the Corporate Services Provider, the Interest Rate Cap Provider, the
Facility Provider, the Paying Agent, the Rating Agencies, the Registrar, the Trustee, the Data
Custodian, the Initial Purchaser or UBS Limited ("UBS") as sole arranger, sole lead manager and sole
bookrunner (the "Lead Manager") or any other managers in relation to the issue of the Notes.
The Issuer will have the benefit of an insurance policy for Expropriation and Currency
Inconvertibility (each as defined below) to be dated as at the Issue Date (the "PRI Policy") issued by
Steadfast Insurance Company (the "PRI Provider") under which the Trustee will be the loss payee
and the Issuer's representative, which policy will maintain timeliness of payment in the event that the
Issuer is unable to convert Ukraine hryvnia ("UAH") into U.S. dollars, if such conversion is required,
or transfer U.S. dollars outside Ukraine in order to make (i) payments with respect to the Senior
Expenses (as defined below); or (ii) interest payments due under the Class A Notes in the manner
described further herein and in accordance with the terms and conditions of the PRI Policy. See "The
PRI Provider and The PRI Policy".



                                                   -iii-
The Senior Notes are expected to be rated by Fitch Ratings Ltd. ("Fitch") and Moody's Investor
Services Limited ("Moody's" and, together with Fitch, the "Rating Agencies"). The Class A Notes
are expected to be rated "BBB-" by Fitch and "Baa3" by Moody's. The Class B Notes are expected to
be rated "B" by Fitch and "Ba3" by Moody's. The Class C Notes will not be rated. The ratings
address the likelihood of timely payment of interest at the applicable rate of interest on each Interest
Payment Date on the Class A Notes, the ultimate payment of interest at the applicable rate of interest
on the Class B Notes and the ultimate payment of the Principal Amount Outstanding of the Senior
Notes at the Final Maturity Date. The ratings do not address the likelihood of the receipt of any Step-
Up Amounts. A security rating is not a recommendation to buy, sell or hold securities and may be
subject to revision, suspension or withdrawal at any time by any of the Rating Agencies.
Particular attention is drawn to the section herein entitled "Risk Factors"
In this Prospectus, unless otherwise noted, all references to specified percentages of the Loans are
references to those Loans as a percentage of the aggregate principal outstanding amounts of the Assets
(each as defined under "The Assets" and "Sale of the Assets" respectively, below).
The Regulation S Global Certificates for the Notes will be deposited on or about the Issue Date with a
common depositary for Euroclear and Clearstream (the "Common Depositary") and will be
registered in the name of a nominee for such Common Depositary. Except as described in this
Prospectus, beneficial interests in the Regulation S Global Certificates will be represented through
accounts of financial institutions acting on behalf of beneficial owners as direct and indirect
participants in Euroclear and Clearstream. Investors may elect to hold interests in the Regulation S
Global Certificates through the applicable clearing system either directly, if they are participants in
such systems, or indirectly through organisations that are participants in such systems. Except as
described in this Prospectus, owners of beneficial interests in the Regulation S Global Certificates will
not be entitled to have the Notes registered in their names and will not receive or be entitled to receive
physical delivery of the Notes in definitive form.
THE NOTES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") ANY STATE
SECURITIES COMMISSION OR ANY OTHER REGULATORY AUTHORITY, NOR HAVE
ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF
THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL. THE NOTES HAVE NOT BEEN
AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT, OR ANY STATE
SECURITIES LAWS. THE NOTES MAY NOT BE OFFERED, SOLD OR DELIVERED
DIRECTLY OR INDIRECTLY WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS (AS DEFINED IN REGULATION S UNDER THE
SECURITIES ACT) EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. THE NOTES WILL ONLY
BE CONTEMPORANEOUSLY OFFERED AND SOLD OUTSIDE THE UNITED STATES TO
NON-U.S. PERSONS PURSUANT TO THE REQUIREMENTS OF REGULATION S UNDER
THE SECURITIES ACT.
Each initial and subsequent purchaser of Notes will be deemed, by its acceptance of such Notes to
have made certain acknowledgements, representations and agreements intended to restrict the resale
or other transfer thereof as set forth therein and described in this Prospectus and, in connection
therewith, may be required to provide confirmation of its compliance with such resale or other
transfer restrictions in certain cases.
This Prospectus constitutes a prospectus for the purpose of Article 5 of the Prospectus Directive and
for the purpose of giving information with regard to the Issuer and the Notes which, according to the
particular nature of the Issuer and the Notes, is necessary to enable investors to make an informed




                                                   -iv-
assessment of the assets and liabilities, financial position, profit and losses and prospects of the Issuer
and of the rights attaching to the Notes.
The Issuer accepts responsibility for the information contained in this Prospectus. To the best of its
knowledge and belief (having taken all reasonable care to ensure that such is the case), the
information contained in this Prospectus is in accordance with the facts and does not omit anything
likely to affect the import of such information.
The information contained in this Prospectus was obtained from the Issuer and other sources, but no
assurance is or can be given by the Lead Manager or the Trustee as to the adequacy, accuracy or
completeness of such information and this Prospectus does not constitute and shall not be construed as
any representation or warranty by the Lead Manager as to the adequacy or completeness of the
information contained herein. Neither the Lead Manager nor the Trustee have independently verified
any of the information contained herein (financial, legal or otherwise) and in making an investment
decision, investors must rely on their own examination of the terms of this Prospectus, including the
merits and risks involved.
Other than the approval by the Financial Regulator of this Prospectus as a prospectus in accordance
with the requirements of the Prospectus Directive and application having been made for the Notes to
be admitted to the Official List of the Irish Stock Exchange and to trading on the regulated market of
the Irish Stock Exchange, no action has been or will be taken to permit a public offering of the Notes
or the distribution of this Prospectus in any jurisdiction where action for that purpose is required.
This Prospectus does not constitute an offer of, or an invitation by or on behalf of, the Issuer or the
Lead Manager to subscribe for or purchase any of the Notes. The distribution of this Prospectus and
the offering of the Notes in certain jurisdictions may be restricted by law. Persons into whose
possession this Prospectus comes are required by the Issuer and the Lead Manager to inform
themselves about and to observe such restrictions. For a description of certain further restrictions on
offers and sales of the Notes and distribution of this Prospectus, see "Purchase and Sale" below.
No person has been authorised to give any information or to make any representation concerning the
issue of the Notes other than as expressly provided in this Prospectus. Nevertheless, if any such
information is given by any broker, seller or any other person, it must not be relied upon as having
been authorised by the Issuer, the Trustee or the Lead Manager.
Neither the delivery of this Prospectus nor any offer, sale or solicitation made in connection herewith
shall, in any circumstances, imply that the information contained herein is correct, complete or
adequate at any time subsequent to the date of this Prospectus.
Delivery of this Prospectus (including the PRI Policy attached as Annex A and the PRI Side
Agreement (as defined below) attached as Annex B) to any person other than the prospective investor
and those persons, if any, retained to advise such prospective investor with respect to the possible
offer and sale of the Notes is unauthorised, and any disclosure of any of the contents of this
Prospectus (including the PRI Policy attached as Exhibit A and the PRI Side Agreement attached as
Annex B) for any purpose other than considering an investment in the Notes is strictly prohibited. A
prospective investor shall not be entitled to, and must not rely on, this Prospectus unless it was
furnished to such prospective investor directly by the Issuer, the Lead Manager or the Initial
Purchaser.
The Issuer, the Lead Manager, the Initial Purchaser and the Trustee make no representation to any
prospective investor or purchaser of the Notes regarding the legality of investment therein by such
prospective investor or purchaser under applicable legal investment or similar laws or regulations.
Prospective investors should consult their legal advisers to determine whether and to what extent the
investment in the Notes constitutes legal investments for them.
UBS AG, London Branch has provided the information under the section headed "The Interest Rate
Cap Provider" and accepts responsibility for the information contained in that section. To the best of
its knowledge and belief (having taken all reasonable care to ensure that such is the case), the




                                                   -v-
information contained in that section is in accordance with the facts and does not omit anything likely
to affect the import of such information. Save as aforesaid, UBS AG, London Branch has not been
involved in the preparation of, and does not accept responsibility for any other information in this
Prospectus.
PrivatBank has provided the information under the sections headed "The Originator and its Motor
Vehicle Loans Business", "The Asset Manager", "The Assets", "Characteristics of the Assets" and
"Management of the Assets" and accepts responsibility for the information contained in those
sections. To the best of its knowledge and belief (having taken all reasonable care to ensure that such
is the case), the information contained in those sections is in accordance with the facts and does not
omit anything likely to affect the import of such information. Save as aforesaid, PrivatBank has not
been involved in the preparation of, and does not accept responsibility for any other information in
this Prospectus.
Deutsche Bank AG, London Branch (in its capacity of the "Cash Manager" and "Paying Agent") has
provided the information under the sections headed "The Cash Manager and Paying Agent" and "Cash
Management of the Assets" and accepts responsibility for the information contained in those sections.
To the best of its knowledge and belief (having taken all reasonable care to ensure that such is the
case), the information contained in those sections is in accordance with the facts and does not omit
anything likely to affect the import of such information. Save as aforesaid, the Cash Manager has not
been involved in the preparation of, and does not accept responsibility for any other information in
this Prospectus.
Steadfast Insurance Company (the "PRI Provider") has provided the information under the heading
"The PRI Provider and the PRI Policy" and accepts responsibility for the information contained in that
section. To the best of its knowledge and belief (having taken all reasonable care to ensure that such
is the case), the information contained in that section is in accordance with the facts and does not omit
anything likely to affect the import of such information. Save as aforesaid, the PRI Provider has not
been involved in the preparation of, and does not accept responsibility for any other information in
this Prospectus.
TMF Trustee Limited (the "Trustee") has provided the information under the heading "The Trustee"
and accepts responsibility for the information contained in that section. To the best of its knowledge
and belief (having taken all reasonable care to ensure that such is the case), the information contained
in that section is in accordance with the facts and does not omit anything likely to affect the import of
such information. Save as aforesaid, the Trustee has not been involved in the preparation of, and does
not accept responsibility for any other information in this Prospectus.
Joint Stock Company "The State Export Import Bank of Ukraine" ("Ukreximbank") has provided the
information under the heading "The Standby Asset Manager" and accepts responsibility for the
information contained in that section. To the best of its knowledge and belief (having taken all
reasonable care to ensure that such is the case), the information contained in that section is in
accordance with the facts and does not omit anything likely to affect the import of such information.
Save as aforesaid, Ukreximbank has not been involved in the preparation of, and does not accept
responsibility for any other information in this Prospectus.
Liza Jane Limited (the "Data Custodian") has provided the information under the section headed
"The Data Custodian" and accepts responsibility for the information contained in that section. To the
best of its knowledge and belief (having taken all reasonable care to ensure that such is the case), the
information contained in that section is in accordance with the facts and does not omit anything likely
to affect the import of such information. Save as aforesaid, the Data Custodian has not been involved
in the preparation of, and does not accept responsibility for any other information in this Prospectus.
Certain matters contained herein are forward-looking statements. Such statements appear in a number
of places in this Prospectus, including with respect to assumptions on prepayment and certain other
characteristics of the Loans and the Assets and reflect significant assumptions and subjective
judgments by the Issuer that may or may not prove to be correct. Consequently, future results may



                                                  -vi-
differ from the Issuer's expectations due to a variety of factors, including (but not limited to) the
economic environment and changes in governmental regulations, fiscal policy, planning or tax laws in
the United Kingdom, Ukraine, Ireland or elsewhere. Moreover, past financial performance should not
be considered a reliable indicator of future performance and prospective purchasers of the Notes are
cautioned that any such statements are not guarantees of performance and involve risks and
uncertainties, many of which are beyond the control of the Issuer. The Lead Manager has not
attempted to verify any such statements, and does not make any representation, express or implied,
with respect thereto.
Payments of interest and principal in respect of the Notes will be subject to any applicable
withholding taxes without the Issuer being obliged to pay additional amounts therefor.
References in this Prospectus to "U.S.$" or "U.S. dollars" are to the lawful currency of the United
States of America (hereafter, the "United States"), references to "hryvnia", "Hryvnia" and "UAH"
are to the lawful currency of Ukraine as at the time of the Issue Date and references to "€","EUR" or
"Euro" are to the lawful currency of the member states of the European Union participating in
Economic and Monetary Union (the "Member States ") as contemplated by the Treaty establishing
the European Community as amended by, inter alia, the Treaty on European Union (the "Treaty ").




                                                -vii-
                                                       TABLE OF CONTENTS
                                                                                                                                              Page
TRANSACTION SUMMARY............................................................................................................... 1
SUMMARY OF THE TRANSACTION ................................................................................................ 2
THE PARTIES AND TRANSACTION DOCUMENTS ..................................................................... 15
RISK FACTORS .................................................................................................................................. 39
CREDIT STRUCTURE........................................................................................................................ 82
THE ISSUER ........................................................................................................................................ 92
PECO HOLDER ................................................................................................................................... 95
USE OF PROCEEDS ........................................................................................................................... 97
THE ORIGINATOR AND ITS MOTOR VEHICLE LOANS BUSINESS......................................... 98
THE INTEREST RATE CAP PROVIDER........................................................................................ 107
THE PRI PROVIDER AND THE PRI POLICY................................................................................ 108
THE TRUSTEE .................................................................................................................................. 110
THE STANDBY ASSET MANAGER............................................................................................... 111
THE DATA CUSTODIAN................................................................................................................. 113
THE CASH MANAGER AND PAYING AGENT............................................................................ 114
THE ASSETS ..................................................................................................................................... 115
CHARACTERISTICS OF THE ASSETS.......................................................................................... 122
TITLE TO THE ASSETS................................................................................................................... 130
SALE OF THE ASSETS .................................................................................................................... 132
MANAGEMENT OF THE ASSETS ................................................................................................. 138
CASH MANAGEMENT OF THE ASSETS...................................................................................... 142
THE MOTOR VEHICLE LOAN MARKET IN UKRAINE ............................................................. 143
ESTIMATED WEIGHTED AVERAGE LIVES OF THE SENIOR NOTES ................................... 145
CLEARING AND SETTLEMENT .................................................................................................... 147
TERMS AND CONDITIONS OF THE NOTES ............................................................................... 149
UNITED KINGDOM TAXATION.................................................................................................... 176
UKRAINIAN TAXATION ................................................................................................................ 179
SUBSCRIPTION AND PURCHASE OF THE NOTES.................................................................... 183
GENERAL INFORMATION ............................................................................................................. 187
GLOSSARY ....................................................................................................................................... 189
ANNEX A — PRI Policy ...................................................................................................................A-1
ANNEX B — PRI Side Agreement.................................................................................................... B-1




                                                                       -viii-
                                                          TRANSACTION SUMMARY
The following information is a brief overview of certain key features of the Notes and is qualified in its
entirety by the more detailed information appearing elsewhere in this Prospectus.
                                                           Initial             Interest Rate    Interest                         Final
          Anticipated     Rating          Credit          Interest   Step-Up       after        Accrual        Interest       Redemption      Clearance /
           Ratings1      Agencies      Enhancement          Rate       Date    Step-UpDate      Method      Payment Dates        Date         Settlement    Denomination

Class A   "BBB-"/       Fitch,       Subordination of    3-months    May       3-months        Actual/360   On the 20th       On       the   Euroclear,     U.S.$
Notes     "Baa3"        Moody's      Class B    Notes,   LIBOR +     2011      LIBOR +                      day          of   Interest       Clearstream
                                     Class C    Notes,   5.50%                 6.88%                        August 2008       Payment                       100,000
                                     Reserve Fund and                                                       and thereafter    Date falling
                                     Facility                                                               on the 20th       in November
                                     Agreement                                                              calendar day of   2018
                                                                                                            each quarter in
                                                                                                            each calendar
                                                                                                            year

Class B   "B"/          Fitch,       Subordination of    3-months    May       3-months        Actual/360   On the 20th       On       the   Euroclear,     U.S.$
Notes     "Ba3"         Moody's      Class C    Notes,   LIBOR +     2011      LIBOR +                      day          of   Interest       Clearstream
                                     Reserve Fund and    7.50%                 9.38%                        August 2008       Payment                       100,000
                                     Facility                                                               and thereafter    Date falling
                                     Agreement                                                              on the 20th       in November
                                                                                                            calendar day of   2018
                                                                                                            each quarter in
                                                                                                            each calendar
                                                                                                            year

Class C   Not rated     Not          Facility            12.0%       N/A       N/A             30/360       On the 20th       On       the   Euroclear,     U.S.$
Notes                   applicable   Agreement                                                              day          of   Interest       Clearstream
                                                                                                            August 2008       Payment                       100,000
                                                                                                            and thereafter    Date falling
                                                                                                            on the 20th       in November
                                                                                                            calendar day of   2018
                                                                                                            each quarter in
                                                                                                            each calendar
                                                                                                            year




1. It is a condition of the issuance and offering of the Senior Notes that such Notes are issued with at least such ratings.




                                                                               -1-
                             SUMMARY OF THE TRANSACTION
The following summary is an introduction to the Prospectus, does not purport to be complete and
should be read in conjunction with, and is qualified in its entirety by, the more detailed information
contained elsewhere in this Prospectus, the terms and conditions of the Notes (the "Conditions") and
the Transaction Documents (as defined below).
                          INTRODUCTION TO THE TRANSACTION
Sale of Assets:                          At least five days prior to the Issue Date (the "Initial
                                         Transfer Date"), and on any Subsequent Transfer Date
                                         during the Revolving Period (each term as defined below),
                                         PrivatBank (the "Originator") will transfer to the Issuer the
                                         Loan Claims and the Pledge Claims (each as defined below
                                         and collectively, the "Assets"). The Loan Claims will be
                                         transferred pursuant to a sale agreement (the "Sale
                                         Agreement") between the Originator as seller and the
                                         Issuer as purchaser, by way of Ukrainian law governed
                                         assignment. The transfer of the Pledge Claims will be
                                         incidental to the assignment of the Loan Claims and will
                                         occur by operation of law.
                                         The Loan Claims arise under loans extended by the
                                         Originator to individual borrowers in Ukraine (the
                                         "Borrowers") to finance the acquisition of new or second
                                         hand motor vehicles (the "Motor Vehicles"), and are
                                         documented by loan agreements between the Originator and
                                         the Borrowers (the "Loans"), concluded on the basis of a
                                         standard form Ukrainian law governed loan agreement (the
                                         "Standard Form Loan Agreement").
                                         The Loans are secured by first ranking pledges over the
                                         Motor Vehicles, which are documented by pledge
                                         agreements between the Originator as pledgee and the
                                         Borrowers as pledgors (the "Pledges"), concluded on the
                                         basis of a standard form Ukrainian law governed pledge
                                         agreement (the "Standard Form Pledge Agreement").
                                         Note that for convenience only, the transfer of the Assets
                                         (involving the sale and assignment of the Loan Claims and
                                         the incidental transfer of the Pledge Claims) is, from time to
                                         time, referred to in this Prospectus as the same and/or as the
                                         sale and/or purchase of the Assets.
                                         The Assets transferred on the Initial Transfer Date will be
                                         referred to as the "Initial Assets". The Assets transferred,
                                         from time to time, on any Subsequent Transfer Date during
                                         the Revolving Period, will be referred to as the
                                         "Subsequent Assets".
                                         The Purchase Price (as defined below) payable in respect of
                                         the Initial Assets (excluding, for the avoidance of doubt, the
                                         Residual Revenue (as defined below)) pursuant to the terms
                                         of the Sale Agreement shall be paid by the Issuer to the
                                         Originator on the Issue Date and the purchase price for
                                         Subsequent Assets shall be paid on the relevant Subsequent




                                                 -2-
                                      Transfer Date.
Loan Claims:                          With respect to any Loan, the "Loan Claims" means all of
                                      the rights of claim (prava vymogy), whether current or
                                      future, actual or contingent, of the Originator as lender
                                      against the Borrower under a Loan, to be transferred under
                                      the terms and subject to the conditions of the Sale
                                      Agreement, including, without limitation, the rights of
                                      claim in respect of payment of principal, interest and any
                                      and all other amounts under a Loan.
Pledge Claims:                        With respect to any Loan, the "Pledge Claims" means all of
                                      the rights of claim (prava vymogy), whether current or
                                      future, actual or contingent, of the Originator as pledgee
                                      against the Borrower as pledgor under the Pledge securing a
                                      Loan, to be transferred under the terms and subject to the
                                      conditions of the Sale Agreement.
Initial Assets Eligibility Criteria   The Originator represents and warrants (on the Initial
and Subsequent Assets Eligibility     Transfer Date only in respect of the Initial Assets and two
Criteria:                             (2) Business Days prior to and on any Subsequent Transfer
                                      Date only in respect of the Subsequent Assets purchased on
                                      such date) to the Issuer in the Sale Agreement that the
                                      Initial Assets transferred on the Initial Transfer Date,
                                      comply with certain eligibility criteria set out in the Sale
                                      Agreement as applicable to the Initial Assets (the "Initial
                                      Assets Eligibility Criteria"), and the Assets transferred on
                                      any Subsequent Transfer Date, comply with certain
                                      eligibility criteria set out in the Sale Agreement as
                                      applicable to the Subsequent Assets (the "Subsequent
                                      Assets Eligibility Criteria"). See "The Assets - Initial
                                      Assets Eligibility Criteria" and "The Assets - Subsequent
                                      Assets Eligibility Criteria".
Consideration for purchase of the     The consideration for the purchase of the Assets will be
Assets:                               comprised of: (i) an amount equal to 100 per cent. of the
                                      aggregate of the principal amount outstanding of each Loan
                                      (the "Principal Amount Outstanding") at the start of the
                                      Collection Period (see "Summary of the Transaction —
                                      Relevant Dates and Periods") in which the Initial Transfer
                                      Date or any Subsequent Transfer Date in respect of such
                                      Loan falls (the "Collection Start Date"), being the
                                      principal amount advanced and outstanding under the
                                      relevant Loan as at such Transfer Date (as defined below),
                                      less any repayment of such amount received prior to the
                                      Collection Start Date, and will be met by the Issuer from the
                                      proceeds of the issue of the Notes (the "Purchase Price ")
                                      payable under the Sale Agreement; and (ii) an entitlement
                                      of the Originator to the Residual Revenue, as an adjustment
                                      to the Purchase Price payable under the Sale Agreement and
                                      the Master Securitisation Deed.
Purchase of Subsequent Assets         Prior to each Interest Payment Date during the Revolving
during Revolving Period:              Period, the Originator shall notify the Issuer of the
                                      Originator's intention to sell Subsequent Assets to the Issuer
                                      by submitting a written offer (the "Offer") in accordance




                                             -3-
                                      with the terms of the Sale Agreement. Subject to the
                                      satisfaction of conditions to purchase such Subsequent
                                      Assets (the "Conditions to Purchase Subsequent Assets ")
                                      (as set out below and in "The Assets - "Conditions to
                                      Purchase Subsequent Assets"), the Issuer shall purchase, on
                                      each Interest Payment Date during the Revolving Period,
                                      the Subsequent Assets specified in the Offer, using such
                                      funds as are available for such purpose in accordance with
                                      the Revolving Period Principal Priority of Payments.

Conditions to Purchase Subsequent The Issuer shall not accept an Offer to purchase Subsequent
Assets:                           Assets if, on a Determination Date immediately following
                                  the day of delivery of such Offer, any of the following
                                  conditions exist:

                                       (i)    the Subsequent Assets to be purchased do not
                                              conform to the Subsequent Assets Eligibility
                                              Criteria;

                                       (ii)   the Revolving Period has expired or end of the
                                              Revolving Period has been triggered;

                                      (iii)   the Maximum Pool Concentration is exceeded;

                                      (iv)    Minimum Pool Weighted Average Interest Rate is
                                              less than 11.50 per cent. for either Pool 1
                                              Subsequent Assets or Pool 2 Subsequent Assets; or

                                       (v)    the Issuer does not have sufficient funds available
                                              to accept the Offer to purchase Subsequent Assets
                                              and pay the relevant Purchase Price.

                                      The Cash Manager shall make the determination if any of
                                      the events specified in paragraphs (ii) to (v) above have
                                      occurred on the Determination Date and shall report the
                                      results of its determination to the Issuer and the Originator
                                      on the Determination Date.

                                      If any of the above events occur, the Issuer shall not
                                      purchase the Subsequent Assets on such Interest Payment
                                      Date, but for the avoidance of any doubt, this will not
                                      trigger the commencement of the Amortisation Period. The
                                      Amortisation Period shall commence only upon the
                                      occurrence of any of the Purchase Termination Events (as
                                      defined below).

                                      Also, if, following the Issuer's acceptance of any Offer, it is
                                      determined that any of the events specified in paragraphs (i)
                                      to (v) above have occurred, this will not result in the
                                      relevant Subsequent Assets not being sold or transferred to
                                      the Issuer (in whole or in any part); instead, the Originator
                                      will be required to repurchase or substitute such Subsequent
                                      Assets in accordance with the terms of the Sale Agreement
                                      (See "Sale of the Assets - Warranties and Repurchase" and
                                      "Sale of the Assets - Substitution", below).



                                              -4-
                               "Pool Concentration" means, on any Interest Payment
                               Date, (i) for Pool 1 Subsequent Assets, the ratio resulting
                               from dividing the Principal Amount Outstanding of Pool 1
                               Subsequent Assets which are to be purchased (as specified
                               in the Offer) by the sum of the aggregate Principal Amount
                               Outstanding of each of Pool 1 Subsequent Assets and Pool
                               2 Subsequent Assets; and (ii) for Pool 2 Subsequent Assets,
                               the ratio resulting from dividing the Principal Amount
                               Outstanding of Pool 2 Subsequent Assets which are to be
                               purchased (as specified in the Offer) by the sum of the
                               aggregate Principal Amount Outstanding of each of Pool 1
                               Subsequent Assets and Pool 2 Subsequent Assets.

                               "Maximum Pool Concentration" shall be maximum 100
                               per cent. for Pool 1 Initial Assets, maximum 30 per cent. for
                               Pool 2 Initial Assets, maximum 100 per cent. for Pool 1
                               Subsequent Assets and maximum 20 per cent. for Pool 2
                               Subsequent Assets.


                               "Minimum Pool Weighted Average Interest Rate" shall
                               be in respect of Pool 1 Subsequent Assets not less than
                               11.50 per cent. and in respect of Pool 2 Subsequent Assets
                               not less than 11.50 per cent.

                               "Pool 1" means the aggregate of Pool 1 Initial Assets and
                               Pool 1 Subsequent Assets.

                               "Pool 1 Initial Assets" means all Initial Assets provided in
                               relation to the purchase of New Motor Vehicles (as defined
                               in "The Assets - Initial Assets Eligibility Criteria").

                               "Pool 1 Subsequent Assets" means at any time all
                               Subsequent Assets provided in relation to the purchase of
                               New Motor Vehicles.

                               "Pool 2" means the aggregate of Pool 2 Initial Assets and
                               Pool 2 Subsequent Assets.


                               "Pool 2 Initial Assets" means all Initial Assets provided in
                               relation to the purchase of Second Hand Motor Vehicles (as
                               defined in "The Assets - Initial Assets Eligibility Criteria").

                               "Pool 2 Subsequent Assets" means at any time all
                               Subsequent Assets provided in relation to the purchase of
                               Second Hand Motor Vehicles.

                               Each of Pool 1 and Pool 2 hereinafter also referred to as
                               "Pool".
Asset Management Agreements:   To ensure the administration and servicing of, and
                               collection of proceeds from, the Assets, the Issuer and the
                               Trustee, inter alios, have entered into the Asset




                                       -5-
                                    Management Agreement and the Standby Asset
                                    Management Agreement (each as defined below) dated on
                                    or about the Initial Transfer Date.
Asset Management:                   PrivatBank has been appointed under the terms of an asset
                                    management agreement dated on or about the Initial
                                    Transfer Date (the "Asset Management Agreement"),
                                    between the Issuer, PrivatBank (in its capacity as the Asset
                                    Manager) and the Trustee, inter alia, to manage the Assets
                                    for the benefit of the Issuer and the Trustee. From (and
                                    inclusive of) the Initial Transfer Date, the Asset Manager
                                    will collect payments from the Borrowers in its special
                                    account ("Asset Management Account"), as prescribed by
                                    Ukrainian legislation for the purposes of accumulating and
                                    accounting proceeds of and carrying out settlements under,
                                    the assets which are under the management of a Ukrainian
                                    commercial bank such as the Asset Manager. On the next
                                    Business Day following the Issue Date, and thereafter not
                                    later than on the next Business Day following the collection
                                    of any such funds in the Asset Management Account, the
                                    Asset Manager will transfer such funds into the Issuer's
                                    bank account maintained at the Account Bank and operated
                                    on behalf of the Issuer by the Cash Manager ("Issuer
                                    Account "). However, any funds collected in a currency
                                    other than U.S. dollars will, after such funds have been
                                    converted by the Asset Manager into U.S. dollars, be
                                    transferred from the Asset Management Account to the
                                    Issuer Account within three (3) Business Days following
                                    collection thereof. See "Management of the Assets".
Quarterly Asset Manager's Report:   The Asset Manager will provide a report in a prescribed
                                    form on a quarterly basis on or before the tenth calendar
                                    day after the end of each calendar quarter (each calendar
                                    quarter which shall comprise three calendar months (and in
                                    the case of the first Collection Period, the period from and
                                    including, the Initial Transfer Date to, and excluding the
                                    first day of the immediately following calendar quarter)
                                    being a "Collection Period"), (the "Asset Manager's
                                    Report Date"), to the Issuer, the Trustee, the Rating
                                    Agencies, the Lead Manager, the Interest Rate Cap Provider
                                    and the Cash Manager (the "Quarterly Asset Manager's
                                    Report"). The Quarterly Asset Manager's Report will
                                    specify (inter alia) (i)       the amounts received from
                                    Borrowers during the Collection Period, allocated between
                                    interest ("Revenue Receipts") and principal ("Principal
                                    Receipts"), and (ii) the characteristics of the Subsequent
                                    Assets purchased at the immediately preceding Interest
                                    Payment Date.
Cash Management:                    The Cash Manager shall establish on behalf of the Issuer
                                    eight (8) ledgers, being a revenue ledger (the "Revenue
                                    Ledger"), a principal ledger (the "Principal Ledger"), a
                                    contingency reserve ledger (the "Contingency Reserve
                                    Ledger"), a reserve ledger (the "Reserve Ledger"), a
                                    political risk insurance ledger (the "PRI Ledger"), a set-off
                                    reserve ledger, (the "Set-Off Reserve Ledger"), a principal



                                           -6-
                               deficiency ledger (the "Principal Deficiency Ledger") and
                               a facility costs ledger (the "Facility Costs Ledger") and,
                               together with the Revenue Ledger, the Principal Ledger, the
                               Reserve Ledger, the PRI Ledger, the Set-Off Reserve
                               Ledger, the Contingency Reserve Ledger, the Principal
                               Deficiency Ledger and the Facility Costs Ledger, will be
                               the "Ledgers", and "Ledger" shall mean any one of them)
                               which shall be written up on the basis of the Revenue
                               Receipts and Principal Receipts and the Quarterly Asset
                               Manager's Report following each Collection Period, and the
                               entries for which shall form the basis of the payments and
                               allocations to be calculated by the Cash Manager and made
                               by the Cash Manager on behalf of the Issuer on the Interest
                               Payment Date following such Collection Period in
                               accordance with the payment priorities (prior to delivery of
                               any Enforcement Notice (as defined in Condition 9 (Events
                               of Default)), in respect of the Notes) set out, in the case of
                               revenue amounts, in Condition 2(c) (Revolving Period
                               Revenue Priority of Payments) (the "Revolving Period
                               Revenue Priority of Payments") and in Condition 2(e)
                               (Amortisation Period Revenue Priority of Payments) (the
                               "Amortisation Period Revenue Priority of Payments"
                               and, together with the Revolving Period Revenue Priority of
                               Payments, the "Revenue Priority of Payments")and, in the
                               case of principal amounts, in Condition 2(d) (Revolving
                               Period Principal Priority of Payments) (the "Revolving
                               Period Principal Priority of Payments") and in Condition
                               2(f) (Amortisation Period Priority of Payments) (the
                               "Amortisation Period Principal Priority of Payments"
                               and, together with the Revolving Period Principal Priority
                               of Payments, the "Principal Priority of Payments") in
                               each case prior to the delivery of an Enforcement Notice.
                               The Revenue Priority of Payments and the Principal Priority
                               of Payments together the "Pre-Enforcement Priority of
                               Payments" . See "Credit Structure – Ledgers".
Cash Manager Performance       The Cash Manager will compile a report (the "Cash
Report:                        Manager Performance Report") containing certain
                               information with respect to inter alia (i) the Notes,
                               including the amounts outstanding thereon, and (ii) the
                               Assets. The Cash Manager Performance Report will be
                               delivered by the Cash Manager to the Issuer, the Trustee,
                               the Asset Manager, the Rating Agencies, the Lead Manager,
                               the Interest Rate Cap Provider and the Noteholders on the
                               fourth Business Day after each Interest Payment Date and
                               will also be freely available on the website of the Cash
                               Manager at www.tss.db.com/invr.
Issuance of Notes and Use of   The Issuer will issue the Notes on the Issue Date and will
Proceeds:                      apply the proceeds thereof in payment of the consideration
                               for the purchase of the Initial Assets payable on the Issue
                               Date and will apply the drawings(s) made under Tranche A
                               of the Facility in payment of certain other expenses in
                               connection with the issue of the Notes. The funding of the
                               Set-Off Reserve Fund, the PRI Reserve Fund, the




                                      -7-
                               Contingency Reserve Fund and the Reserve Fund will be
                               met, on the Issue Date, by the Issuer from the drawing(s)
                               under Tranche B of the Facility. See "Use of Proceeds".
Redemption of Notes:           Each class of Notes will be redeemed on the Interest
                               Payment Date falling in November 2018 (the "Final
                               Maturity Date") at its Principal Amount Outstanding to the
                               extent not previously redeemed. Prior to the Final Maturity
                               Date, each class of the Notes will be subject to mandatory
                               redemption in order of seniority on each Interest Payment
                               Date to the extent of the amount of Principal Receipts
                               received in the corresponding Collection Period and other
                               amounts available for principal payments in respect of such
                               class of Notes and to optional redemption as specified in
                               Condition 5 (Redemption and Post-Enforcement Call
                               Option).
Interest and Payments:         Each Note will bear interest from the Issue Date in the
                               manner set out in Condition 4 (Interest) — see "Summary of
                               the Transaction — Principal Features of the Notes —
                               Interest".
Withholding Tax:               Payments of interest and principal with respect to the Notes
                               will be subject to any applicable withholding taxes and the
                               Issuer will not be obliged to pay additional amounts in
                               relation thereto. The applicability of any withholding taxes
                               to payments under the Notes is discussed under "United
                               Kingdom Taxation" below.
                               The applicability of withholding taxes to payments under
                               the relevant Transaction Documents from Ukraine abroad
                               (where applicable, to the Issuer Account with the Account
                               Bank) is discussed under "Ukraine Taxation" below.
Interest Rate Cap Agreement:   The Issuer will on or prior to the Issue Date enter into an
                               interest rate cap agreement with UBS AG, London Branch
                               (in this capacity, the "Interest Rate Cap Provider"), which
                               will be subject to the terms of an agreement entered into
                               between the Interest Rate Cap Provider and the Issuer in the
                               form of an ISDA 1992 Master Agreement (Multicurrency –
                               Cross Border) together with the schedules thereto, and
                               confirmation thereunder (the "Interest Rate Cap
                               Agreement").
PRI Policy:                    The Issuer will have the benefit of an insurance policy for
                               Expropriation and Currency Inconvertibility (each as
                               defined below) to be dated as at the Issue Date (the "PRI
                               Policy") issued by Steadfast Insurance Company (the "PRI
                               Provider"). The Trustee shall be the loss payee thereunder.
                               Subject to the terms of the PRI Policy, the PRI Policy will
                               insure for a period of 10 years from the Issue Date against
                               the Issuer's inability to make (a) payments with respect to
                               items (i) (one) to (v) (five) (inclusive) (other than any
                               amounts payable to the Asset Manager or the Standby Asset
                               Manager) of the Revolving Period Revenue Priority of
                               Payments or the Amortisation Period Revenue Priority of




                                      -8-
Payments, as applicable, up to an amount equal to
approximately U.S.$ 135,000 (the "Senior Expenses"); and
(b) interest payments due under the Class A Notes, in each
case, as a result of an Expropriation or Currency
Inconvertibility (each a "PRI Event").
An "Expropriation" means: an act or series of acts taken
by the present or any succeeding government authority in
effective control of all or any part of the territory of Ukraine
or any political or territorial subdivision thereof, including
for the avoidance of doubt but without limitation, the
National Bank of Ukraine or its agency or successor ("Host
Government") that effectively deprives the Issuer, the
Trustee, the Asset Manager acting for the benefit of the
Issuer or (following delivery of an Enforcement Notice) the
Trustee or the Standby Asset Manager acting for the benefit
of the Issuer or (following delivery of an Enforcement
Notice) the Trustee of the use and control of funds
deposited (either in UAH or U.S. dollars) by or for the
benefit of the Issuer, the Trustee, the Asset Manager acting
for the benefit of the Issuer or (following delivery of an
Enforcement Notice) the Trustee or the Standby Asset
Manager acting for the benefit of the Issuer or (following
delivery of an Enforcement Notice) the Trustee with a
financial institution in Ukraine for the purpose of making
(i) payments due with respect to the Senior Expenses and
(ii) interest payments due under the Class A Notes;
provided that such act or acts continue for the duration of at
least 180 days.
"Currency Inconvertibility" means: (a) an act or series of
acts by the Host Government that prevents the Issuer, the
Trustee, the Asset Manager acting for the benefit of the
Issuer or (following delivery of an Enforcement Notice) the
Trustee or the Standby Asset Manager acting for the benefit
of the Issuer or (following delivery of an Enforcement
Notice) the Trustee, for the duration of at least 180 days,
from directly or indirectly: (i) converting UAH into U.S.
dollars in order to make (A) payments due in respect of the
Senior Expenses and (B) interest payments due under the
Class A Notes; or (ii) transferring outside of Ukraine the
U.S. dollar funds as described in (i)(A) and (B) above; or
(b) failure by the Host Government (or by entities
authorised under the laws of Ukraine to operate in the
foreign exchange markets) to effect a conversion or transfer
under (a) above on behalf or at the request of the Issuer, the
Trustee, the Asset Manager or the Standby Asset Manager.
The PRI Provider's obligation to pay claims under the PRI
Policy will be limited to U.S.$ 9,094,800 and is subject to
certain conditions, limitations and exclusions that may
affect the ability of the Trustee to receive payments under
the PRI Policy.
The PRI Policy will not cover the payment of (i) interest
under any of the Notes, other than the Class A Notes, or



        -9-
                    (ii) any principal under the Notes. The Noteholders will not
                    have any direct legal or equitable right, remedy or claim
                    under the PRI Policy or the PRI Side Agreement (as defined
                    below).
                    The Issuer, the Trustee, the PRI Provider and the Asset
                    Manager will enter into the Agreement Regarding the
                    Insurance Policy for Expropriation and Currency
                    Inconvertibility (the "PRI Side Agreement") on the Issue
                    Date which will require that the Asset Manager make
                    certain representations, warranties and covenants in favour
                    of the PRI Provider and take certain actions in respect of the
                    PRI Policy. In addition to the representations, warranties
                    and covenants set out in the PRI Side Agreement, the Issuer
                    will delegate to the Asset Manager, and the Asset Manager
                    will accept such delegation, certain of the Issuer's duties and
                    responsibilities under the PRI Policy.
                    A copy of the PRI Policy is attached to this Prospectus as
                    Annex A and a copy of the PRI Side Agreement is attached
                    to this Prospectus as Annex B.
Reserve Fund:       In order to provide limited coverage for any deficiencies (in
                    payments of the items (i) (one) to (vii) (seven) (inclusive) of
                    the Revolving Period Revenue Priority of Payments or
                    items (i) (one) to (vii) (seven) (inclusive) of the
                    Amortisation Period Revenue Priority of Payments) on the
                    balance of the Revenue Ledger (the amount of any
                    deficiency being an "Income Deficiency") and Principal
                    Loss, including Interest Shortfall on the Notes arising from
                    time to time, the Issuer will establish a reserve fund (the
                    "Reserve Fund") to be maintained in the amount equal to
                    (i) 4 per cent. of the Principal Amount Outstanding of the
                    Senior Notes as at the Issue Date or (ii) PROVIDED THAT
                    that the Principal Amount Outstanding of the Class A Notes
                    has been reduced to 50 per cent. of the Principal Amount
                    Outstanding of the Class A Notes as at the Issue Date and
                    the Portfolio Cumulative Net Default Ratio has not been
                    breached, 4 per cent. of the Principal Amount Outstanding
                    of the Senior Notes on such Interest Payment Date,
                    provided further that it shall not, in any event, be reduced to
                    an amount less than U.S.$ 1,000,000 (the "Reserve Fund
                    Required Amount"). The Reserve Fund will be funded on
                    the Issue Date by part of Tranche B of the Facility, as
                    described below, and from time to time through the
                    distribution of Available Revenue Funds in accordance with
                    the Pre-Enforcement Priority of Payments.
PRI Reserve Fund:   In order to maintain timeliness of payment during the first
                    180 days of a PRI Event, the Issuer will establish a political
                    risk insurance reserve fund (the "PRI Reserve Fund") to be
                    applied towards (i) the Senior Expenses, and (ii) interest
                    payments due under the Class A Notes for the first 180 days
                    of such Expropriation or Currency Inconvertibility, as
                    applicable, occurring. The PRI Reserve Fund will be in an
                    amount (the "PRI Reserve Required Amount") equal to



                           -10-
                            the sum of: (i) the aggregate Principal Amount Outstanding
                            of the Class A Notes at the immediately preceding Interest
                            Payment Date multiplied by the average of: (x) the Interest
                            Rate Cap (as defined in "Credit Structure – Interest Rate
                            Cap Agreement" below), and (y) the Class A Step-Up
                            Margin (as defined in Condition 4 (Interest)) and (ii) the
                            Senior Expenses outstanding on any Determination Date (as
                            defined below).
Contingency Reserve Fund:   On the Issue Date, the Issuer will establish a contingency
                            reserve fund from part of Tranche B of the Facility (the
                            "Contingency Reserve Fund") in the amount of U.S.$
                            250,000 for the purposes of holding an amount to cover
                            exceptional extraordinary expenses that may arise whilst the
                            Notes are outstanding.
Set-Off Reserve Fund:       On the Issue Date, the Issuer will establish a set-off reserve
                            fund from part of Tranche B of the Facility (the "Set-Off
                            Reserve Fund") in an amount equal to U.S.$ 880,000 (the
                            "Set-Off Reserve Required Amount"), for the purposes of
                            holding an amount to cover any risk that a Borrower may
                            set-off its monetary claims to the Originator against any
                            monetary claims of the Issuer if the Originator fails to give
                            to such Borrower, or the Borrower fails to receive for any
                            reason whatsoever, a Transfer Notice (as defined below in
                            "Risk Factors—The Transfer of the Assets").
                            As the Principal Amount Outstanding of each Asset reduces
                            to zero, the Set-Off Reserve Required Amount will from
                            time to time be reduced accordingly based on the
                            information provided by the Asset Manager.
Facility:                   The Facility Provider will make available to the Issuer a
                            facility (the "Facility") in the amount of U.S.$ 12,661,985
                            to be drawn down on the Issue Date and credited to the
                            Issuer Account, being the aggregate of:
                            (a)     the amount of U.S.$ 1,162,360 ("Tranche A"),
                                    which will be recorded in the Facility Costs Ledger
                                    to be applied in or towards payment of the costs and
                                    expenses incurred by the Issuer in connection with
                                    the issue of the Notes; and
                            (b)     the amount of U.S.$ 11,499,625 ("Tranche B"),
                                    which will be distributed as agreed under the terms
                                    of the Facility Agreement amongst, and recorded
                                    in, the Reserve Ledger, the PRI Ledger, the
                                    Contingency Reserve Ledger and the Set-Off
                                    Reserve Ledger in order to fund the Reserve Fund,
                                    the PRI Reserve Fund, the Contingency Reserve
                                    Fund and the Set-Off Reserve Fund.
                            The principal amount outstanding on the Facility will be
                            repaid to the extent of available funds in accordance with
                            the Amortisation Period Principal Priority of Payments and
                            will be fully repaid on the Final Discharge Date.




                                   -11-
                          The Facility will bear fixed interest payable quarterly in
                          arrear in U.S. dollars on each Interest Payment Date (the
                          amount so payable on an Interest Payment Date at a rate of
                          9 per cent. per annum on the outstanding principal amount
                          of the Facility, subject to and in accordance with the
                          Revolving Period Priority of Payments or the Amortisation
                          Period Priority of Payments, as applicable). See "Credit
                          Structure".
Status of the Notes:      The Notes will constitute direct, secured and unconditional
                          obligations of the Issuer. Each class of Notes will rank pari
                          passu without priority amongst themselves. For a
                          description of the ranking of each class of Notes in respect
                          of payments of interest and principal see "Summary of the
                          Transaction - Principal Features of the Notes — Ranking".
Security for the Notes:   Pursuant to a deed of charge and assignment dated on or
                          about the Issue Date (the "Deed of Charge") between, inter
                          alios, the Issuer and the Trustee, the Issuer will grant, under
                          English law, (i) a fixed security in favour of the Trustee in
                          its own capacity and as trustee on behalf of the Secured
                          Creditors of the Issuer over its present and future right, title,
                          interest and benefit in, to and under the Issuer Account and
                          any Authorised Investments (as defined in "Credit Structure
                          – Authorised Investments"), (ii) an assignment of all of its
                          present and future right, title, interest and benefit in and to
                          the Charged Obligation Documents, and (iii) a first floating
                          charge over the whole of its undertaking and all of its
                          property, assets and rights whatsoever and wheresoever
                          present and future including, without limitation, its uncalled
                          capital except to the extent otherwise charged or secured
                          under the Trust Deed.
                          "Charged Obligation Documents" means the Sale
                          Agreement, the Asset Management Agreement, the Master
                          Securitisation Deed, the Standby Asset Management
                          Agreement, the Paying Agency Agreement, the Cash
                          Management Agreement, the Issuer Account Bank
                          Agreement, the Data Custodian Agreement, the Corporate
                          Services Agreement, the Interest Rate Cap Agreement, the
                          Subscription Agreement, the Facility Agreement, the PRI
                          Side Agreement and the PRI Policy.
                          Pursuant to an agreement for pledge of property rights (the
                          "Property Rights Pledge Agreement"), the Issuer will
                          grant, under Ukrainian law, a pledge over the Assets, in
                          favour of the Trustee in its own capacity and as trustee on
                          behalf of the Secured Creditors.
                          The security created in favour of the Trustee contained in or
                          granted pursuant to the Deed of Charge and the Property
                          Rights Pledge Agreement being together, the "Security".
                          The terms under which the Security will be held will
                          provide that upon enforcement, certain fees, expenses,




                                 -12-
costs, charges and other liabilities will rank in priority to
amounts owing by the Issuer under the Notes.




       -13-
                                STRUCTURE DIAGRAM




                          PECO Holder                          Nominee Trustee


                                                                                                  Trustee
                                                                                                TMF Trustee
                                                                                                  Limited
       Cash Manager
       Deutsche Bank
            AG
                                                                                                 Noteholders
                                                                                                   Class A
                                                                                  Issue        expected to be
                                       Ukraine Auto                             Proceeds      rated "BBB-" by
                                     Loan Finance No.                                         Fitch and "Baa3"
         PRI Provider                 1 Plc - English                                            by Moody's
          Steadfast                        SPV
        Insurance Co.
                                                                                              Class B expected
                                                                                               to be rated "B"
                                                                                 Notes          by Fitch and
      Interest Rate Cap                                                                           "Ba3" by
           Provider                                                                                Moody's
           UBS AG




                                                                                                Noteholders
                                       Purchase Price




                                                               Sale of Assets




                                                                                                Class C - NR
                          Facility




   Asset
Management
 Agreement                                                                                     Standby Asset
                                                                                                  Manager
                                                                                               Ukreximbank

                                           PrivatBank
                                                                                                 Borrowers
                                     (Originator and Asset                        Interest
                                           Manager)                                 and
                                                                                  principal


                                                                                                   Loans




                                                        -14-
              THE PARTIES AND TRANSACTION DOCUMENTS
Issuer:                   Ukraine Auto Loan Finance No. 1 PLC (the "Issuer") was
                          incorporated and registered in England and Wales under the
                          Companies Act 1985 with limited liability as a public
                          limited company on 13 February 2008 with registered
                          number 6502734 as a special purpose vehicle or entity for
                          the purpose of issuing asset backed securities. The issued
                          share capital of the Issuer comprises 50,000 ordinary shares
                          of £1 each. 49,999 of the issued shares (being 49,998 shares
                          of £1 each, each of which is paid up as to 25 pence, and one
                          share of £1 which is fully paid) in the Issuer are held by
                          Ukraine Auto Loan Options Limited (the "PECO
                          Holder"). The remaining one share of £1 in the Issuer
                          (which is fully paid) is held by Financial Trustees Limited
                          (the "Nominee Trustee)" as nominee for the PECO Holder.
                          The entire issued share capital of the PECO Holder is held
                          by Financial Trustees Limited (the "Share Trustee)" on the
                          terms of a share declaration of trust (the "Share
                          Declaration of Trust") declared by the Share Trustee on or
                          about the Issue Date.
                          The registered office of the Issuer is at Pellipar House, 1st
                          Floor, 9 Cloak Lane, London, EC4R 2RU.
                          For more detailed information, see "The Issuer".
                          The Issuer has been established to acquire from the
                          Originator, on the relevant Transfer Date (as defined
                          below), the Assets and, inter alia, to enter into the
                          Transaction Documents and perform its obligations
                          thereunder and issue the Notes. The Issuer will contract to
                          purchase the Assets pursuant to the Sale Agreement entered
                          into on the Initial Transfer Date with the Originator.
                          Each Loan relating to the Loan Claims comprising part of
                          the Assets has been originated by the Originator and the
                          Loan Claims thereunder will be transferred by the
                          Originator to the Issuer on the relevant Transfer Date (as
                          defined below). The Purchase Price payable by the Issuer
                          for the purchase of the Initial Assets will be financed by the
                          issue of the Notes and will be paid on the Issue Date. The
                          Purchase Price payable by the Issuer for the purchase of the
                          Subsequent Assets will be financed by the distribution from
                          the Revolving Period Principal Priority of Payments on any
                          relevant Interest Payment Date.
Originator:               Closed Joint Stock Company Commercial Bank
                          "PrivatBank" ("PrivatBank"), a bank organised and
                          existing under the laws of Ukraine, Identification Code of
                          Legal Entity (Code EDRPOU 1436570), having its
                          registered office at 50 Naberezhna Peremohy Street,
                          Dnipropetrovsk 49094, Ukraine.        For more detailed
                          information, see "The Originator and its Motor Vehicle
                          Loans Business".




                                 -15-
Borrowers:               Individual persons who have borrowed money from the
                         Originator under Loans and who have secured such Loans
                         by granting Pledges to the Originator.
Trustee:                 TMF Trustee Limited (the "Trustee") will be appointed as
                         trustee pursuant to a trust deed (the "Trust Deed") to be
                         entered into on the Issue Date between the Issuer and the
                         Trustee, inter alia, to hold the trust property on behalf of
                         itself and the Noteholders. The Trustee will also be
                         appointed to hold, and upon the occurrence of an Event of
                         Default (as described in Condition 9 (Events of Default))
                         will be entitled to enforce, the security granted by the Issuer
                         on trust for the Secured Creditors pursuant to the Deed of
                         Charge and the Property Rights Pledge Agreement.
Asset Manager:           PrivatBank, on or about the Initial Transfer Date, was
                         appointed under the terms of the Asset Management
                         Agreement, between the Issuer, PrivatBank (in this
                         capacity, the "Asset Manager") and the Trustee, inter alia,
                         to manage the Assets for the benefit of the Issuer and
                         (following a delivery of an Enforcement Notice) the
                         Trustee.
Standby Asset Manager:   Joint Stock Company "The State Export-Import Bank of
                         Ukraine"      (the    "Standby     Asset    Manager"         or
                         "Ukreximbank"), was appointed as Standby Asset Manager
                         under the terms of a Standby Asset Management Agreement
                         dated on or about the Initial Transfer Date (the "Standby
                         Asset Management Agreement") between the Standby
                         Asset Manager, the Issuer and the Trustee, such that, if the
                         appointment of PrivatBank as Asset Manager is terminated,
                         the Standby Asset Manager will assume such asset
                         management functions with respect to the Assets. The
                         appointment of the Standby Asset Manager can be
                         terminated on three months' notice from the Issuer provided,
                         inter alia, that the Rating Agencies confirm that this will not
                         result in a qualification, suspension, withdrawal or
                         downgrade of the Senior Notes and a substitute Asset
                         Manager has been appointed which is capable of managing
                         assets such as Assets with borrowers in Ukraine (see "The
                         Standby Asset Manager" below).
Data Custodian:          Liza Jane Limited, an affiliate of the Trustee (the "Data
                         Custodian") will be appointed as Data Custodian under the
                         terms of the Data Custodian Agreement (the "Data
                         Custodian Agreement"), between the Data Custodian, the
                         Issuer and the Trustee (see "The Data Custodian" below).
Cash Manager:            Deutsche Bank AG, London Branch, banking corporation
                         acting through its London branch whose principal place of
                         business is at Winchester House, 1 Great Winchester Street,
                         London EC2N 2DB (in this capacity, the "Cash Manager")
                         will be appointed under the terms of the cash management
                         agreement (the "Cash Management Agreement"), between
                         the Issuer, the Cash Manager and the Trustee, inter alia, to
                         manage all cash transactions outside of Ukraine and to




                                -16-
                               maintain all cash management Ledgers as agent for the
                               Issuer (see "Cash Management of the Assets" below).
                               The Cash Manager will be obliged to report on a regular
                               basis to the Trustee and the Issuer in respect of the Ledgers
                               and other matters relating to its respective administrative
                               functions as described herein.
PRI Provider:                  Steadfast Insurance Company, whose registered office is at
                               32 Loockerman Square Suite 202, Dover DE 19901, U.S.A.
Account Bank:                  Deutsche Bank AG, London Branch, banking corporation
                               acting through its London branch whose principal place of
                               business is at Winchester House, 1 Great Winchester Street,
                               London EC2N 2DB, will act as the bank at which the Issuer
                               Account is held (in such capacity, the "Account Bank") in
                               accordance with the terms of an issuer account bank
                               agreement to be dated on or about the Issue Date (the
                               "Issuer Account Bank Agreement") between the Issuer,
                               the Cash Manager, the Account Bank and the Trustee.
                               The Account Bank will also act as the bank at which cash
                               representing the paid-up share capital of the Issuer is being
                               held (the "Issuer Corporate Account") in accordance with
                               the terms of an issuer corporate account agreement to be
                               dated on or about the Issue Date (the "Issuer Corporate
                               Account Agreement") between the Issuer and the Account
                               Bank. The funds held in the Issuer Corporate Account are
                               not available for distributions pursuant to the Pre-
                               Enforcement Priority of Payments or the Post-Enforcement
                               Priority of Payments and may only be released when and if
                               permitted by the Issuer in accordance with the terms of the
                               Issuer Corporate Account Agreement.
Corporate Services Provider:   The Issuer and the Corporate Services Provider entered into
                               a corporate services agreement on 23 May 2008 (the
                               "Corporate Services Agreement") with TMF Management
                               (UK) Limited (the "Corporate Services Provider"). The
                               Corporate Services Provider's duties under the Corporate
                               Services Agreement include the provisions of certain
                               administrative, accounting and related services.
Interest Rate Cap Provider:    UBS AG, London Branch will be the interest rate cap
                               provider under the terms of the Interest Rate Cap
                               Agreement.
Agent Bank:                    Deutsche Bank AG, London Branch, banking corporation
                               acting through its London branch whose principal place of
                               business is at Winchester House, 1 Great Winchester Street,
                               London EC2N 2DB, will act as the agent bank (in such
                               capacity, the "Agent Bank") in accordance with the terms
                               of the Paying Agency Agreement. The Agent Bank will
                               calculate the interest rates applicable to each class of Notes
                               in accordance with the Conditions.
Paying Agent:                  Deutsche Bank AG, London Branch, banking corporation
                               acting through its London branch whose principal place of




                                      -17-
                     business is at Winchester House, 1 Great Winchester Street,
                     London EC2N 2DB, will act as the paying agent in respect
                     of the Notes (in such capacity, the "Paying Agent") in
                     accordance with the terms of a paying agency agreement to
                     be dated on or about the Issue Date (the "Paying Agency
                     Agreement") between the Issuer, the Registrar, the Paying
                     Agent, the Agent Bank and the Trustee.
Facility Provider:   PrivatBank will act as the provider of the Facility (in such
                     capacity, the "Facility Provider") to the Issuer in
                     accordance with the terms of a Facility Agreement to be
                     dated on or about the Issue Date (the "Facility Agreement
                     ") between the Facility Provider, the Issuer and the Trustee.
                     The proceeds of the Facility will be used on the Issue Date
                     to fund from the drawing(s) under Tranche A the costs and
                     expenses of the Issuer related to the issue of the Notes and
                     from the drawing(s) under Tranche B, the Set-Off Reserve
                     Fund, the Contingency Reserve Fund, the PRI Reserve Fund
                     and the Reserve Fund.
Share Trustee:       Financial Trustees Limited, a company incorporated in the
                     British Virgin Islands with number 1010452 whose
                     principal office is at TMF Place, P.O.Box 964, Road Town,
                     Tortola, British Virgin Islands (in such capacity, the "Share
                     Trustee") will hold the entire issued share capital of the
                     PECO Holder on the terms of a charitable declaration of
                     trust (the "Share Declaration of Trust").
Nominee Trustee:     Financial Trustees Limited, a company incorporated in the
                     British Virgin Islands with number 1010452 whose
                     principal office is at TMF Place, P.O.Box 964, Road Town,
                     Tortola, British Virgin Islands (in such capacity, the
                     "Nominee Trustee") will pursuant to a declaration of trust
                     in favour of the PECO Holder (the "Nominee Declaration
                     of Trust") hold a share in the Issuer as nominee for the
                     PECO Holder.
PECO Holder:         Ukraine Auto Loan Options Limited, a company
                     incorporated under the laws of England and Wales with
                     number 6498487 whose registered office is at Pellipar
                     House, 1st Floor, 9 Cloak Lane, London EC4R 2RU (the
                     "PECO Holder") shall hold the entire issued share capital
                     of the Issuer except for the share held by the Nominee
                     Trustee.
                     For further information about the PECO Holder and the
                     Post-Enforcement Call Option Agreement, see "PECO
                     Holder" and Condition 5 (Redemption and Post-
                     Enforcement Call Option), respectively.
Secured Creditors:   The Trustee in its own capacity and as trustee on behalf of
                     those persons listed as entitled to payment under the Post-
                     Enforcement Priority of Payments (the "Secured
                     Creditors").
Rating Agencies:     Fitch Ratings Ltd. ("Fitch") and Moody's Investor Services




                            -18-
                                    Limited ("Moody's").
Registrar:                          Deutsche Bank Luxembourg S.A., a company incorporated
                                    under the laws of Luxembourg having its registered office at
                                    2, boulevard Konrad Adenauer, Luxembourg, L-1115
                                    Luxembourg (the "Registrar").
Lead Manager:                       UBS Limited of 1 Finsbury Avenue, London EC2M 2PP,
                                    will act as arranger, sole lead manager and sole bookrunner
                                    (the "Lead Manager") of the issue of the Notes.
Initial Purchaser:                  AS "PrivatBank" (the "Initial Purchaser") will purchase all
                                    of the Notes from the Issuer on the Issue Date in accordance
                                    with the terms of a subscription agreement dated on or
                                    about the Issue Date between the Initial Purchaser, the
                                    Issuer, the Lead Manager and the Originator (the
                                    "Subscription Agreement").
Transaction Documents:              The following documents constitute the "Transaction
                                    Documents" for the transaction: the Corporate Services
                                    Agreement, the Sale Agreement, the Asset Management
                                    Agreement, the Standby Asset Management Agreement, the
                                    Data Custodian Agreement, the Deed of Charge, the
                                    Property Rights Pledge Agreement, the Issuer Account
                                    Bank Agreement, the Issuer Corporate Account Agreement,
                                    the Cash Management Agreement, the Interest Rate Cap
                                    Agreement, the Subscription Agreement, the Paying
                                    Agency Agreement, the Trust Deed, the Post-Enforcement
                                    Call Option Agreement, the PRI Side Agreement, the PRI
                                    Policy, the Facility Agreement and the Master Securitisation
                                    Deed (which includes in its Schedule 1 the Master
                                    Definitions Schedule).
                             RELEVANT DATES AND PERIODS
Issue Date:                         The date of issuance for the Notes will be 29 May 2008 (or
                                    such other date as the Issuer and the Lead Manager may
                                    agree) (the "Issue Date").
Final Maturity Date:                Unless previously redeemed in full, the Issuer will redeem
                                    the Principal Amount Outstanding of the Notes in full
                                    (together with all accrued interest thereon) on the Interest
                                    Payment Date falling in November 2018 (the "Final
                                    Maturity Date").
Transfer Date:                      The date which refers to an Initial Transfer Date or any
                                    Subsequent Transfer Date (the "Transfer Date").
Initial Transfer Date:              23 May 2008 (the "Initial Transfer Date").
Subsequent Transfer Dates:          The purchase of Subsequent Assets may occur, during the
                                    Revolving Period, on any of the Interest Payment Dates
                                    falling in 2008 and in 2009, provided that the last such date
                                    is the Interest Payment Date falling in May 2009 (each a
                                    "Subsequent Transfer Date"), subject to satisfaction of the
                                    Conditions to Purchase Subsequent Assets.




                                           -19-
Revolving Period:   The period commencing on the Interest Payment Date
                    falling in August 2008 and ending on the earlier of:

                            (a)          the Amortisation Date; or

                            (b)          the occurrence of a Purchase Termination
                                         Event; or

                            (c)          the delivery of an Enforcement Notice by the
                                         Trustee to the Issuer,

                            (the "Revolving Period").


                    A "Purchase Termination Event" will occur if:

                    (i)           on any Interest Payment Date the Portfolio
                                  Cumulative Net Default Ratio Event occurs; or

                    (ii)          on any Interest Payment Date, the balance on the
                                  Principal Deficiency Ledger is greater than zero and
                                  there is an insufficient amount of Revenue Addition
                                  Amounts to make the balance on the Principal
                                  Deficiency Ledger equal to zero; or

                    (iii)         a Downgrade Event has occurred and is continuing
                                  for more than 10 Business Days or Insolvency
                                  Proceedings have been initiated against the
                                  Originator; or

                    (iv)          on any Interest Payment Date, the Issuer is unable
                                  to replenish the Reserve Fund to reach the Reserve
                                  Fund Required Amount; or

                    (v)           on any Interest Payment Date either the Minimum
                                  Pool Weighted Average Interest Rate or the
                                  Maximum Pool Concentration is breached; or

                    (vi)          on any two Interest Payment Dates the Issuer is
                                  unable to apply at least ninety 90 per cent. of the
                                  Principal Receipts towards the payment of the
                                  purchase price for Subsequent Assets to be
                                  purchased on the next Subsequent Transfer Date in
                                  accordance with item (ii) (two) of the Revolving
                                  Period Principal Priority of Payments; or

                    (vii)         an Asset Manager Termination Event has occurred;
                                  or

                    (viii)        any of the representations and warranties given by
                                  PrivatBank under any of the Transaction
                                  Documents to which it is a party is or proves to
                                  have been incorrect or misleading in any material
                                  respect when made or deemed to be made; or




                                  -20-
                       (ix) on two Determination Dates (applicable in regards to
                             the delivery of a further Offer), the Conditions for
                             Purchase of Subsequent Assets have not been met;
                             or

                       (x)   a PRI Event has occurred.

                       "Portfolio Cumulative Net Default Ratio Event" means,
                       in relation to any Interest Payment Date, an event when the
                       Portfolio Cumulative Net Default Ratio as reported in the
                       Quarterly Asset Manager's Report delivered with respect to
                       the Collection Period immediately preceding such Interest
                       Payment Date, is higher than the percentage stated with
                       respect to such Interest Payment Date in the list below:

                        Interest Payment Date         Level (in %)
                        August 08                     0.32
                        November 08                   0.64
                        February 09                   1.00
                        May 09                        2.25

                       "Portfolio Cumulative Net Default Ratio " means, on any
                       Interest Payment Date, a percentage, calculated with respect
                       to the Collection Period immediately preceding such
                       Interest Payment Date, equivalent to the fraction obtained
                       by dividing: (i) the aggregate Principal Amount Outstanding
                       of Defaulted Loans in the Pool since the Issue Date minus
                       the aggregate amount of the Recoveries received in respect
                       of all Defaulted Loans in the Pool since the Issue Date, by
                       (ii) the aggregate of the Principal Amount Outstanding of
                       the Pool as at the Issue Date.

                       "Recovery" means any Principal Recovery or any
                       subsequent recovery of any loss of interest; the amount of
                       such Recovery shall be credited to the Revenue Ledger.

                       "Insolvency Proceedings" means, in respect of a company
                       or entity, the winding-up, liquidation, rehabilitation,
                       sanation,     dissolution,      examinership,     temporary
                       administration or declaration of bankruptcy of such
                       company or entity or any equivalent or analogous
                       proceedings under the law of the jurisdiction in which such
                       company or entity is incorporated or of any jurisdiction in
                       which such company or entity carries on business including
                       the appointment of a temporary administrator by the
                       National Bank of Ukraine or the seeking of liquidation,
                       winding-up, dissolution, examinership, arrangement,
                       adjustment, protection or relief from creditors.

Amortisation Period:   The period commencing on the Amortisation Date and
                       ending on the date on which all amounts owed under the
                       Notes have been paid in full (the "Amortisation Period)".
Amortisation Date:     The earlier of the Interest Payment Date falling in May
                       2009 and the Interest Payment Date falling immediately



                              -21-
                                after the end of the Revolving Period (the "Amortisation
                                Date").
Final Discharge Date:           The date on which the Trustee notifies the Issuer and the
                                Secured Creditors that it is satisfied that all amounts which
                                from time to time are or may become due, owing and
                                payable by the Issuer to the Secured Creditors under the
                                Notes or the Transaction Documents and any other amounts
                                due or owing by the Issuer have been paid or discharged in
                                full (the "Final Discharge Date").
Interest Payment Date:          The 20th calendar day of each quarter in each calendar year
                                (or, if such day is not a Business Day in Kyiv, New York
                                City, London, Dublin and Luxembourg, the immediately
                                following day which is a Business Day in Kyiv, New York
                                City, London, Dublin and Luxembourg), commencing on
                                the Interest Payment Date falling in August 2008 (the "First
                                Interest Payment Date") and thereafter in November,
                                February, May and August of each calendar year (each an
                                "Interest Payment Date"). "Business Day" means a day
                                (other than Saturday or Sunday) on which banks are open
                                for business in Kyiv, London, New York City, Dublin and
                                Luxembourg.
Collection Period:              The amounts payable on each Interest Payment Date will be
                                calculated by reference to Revenue Receipts and Principal
                                Receipts received in the calendar quarter prior to that in
                                which the Interest Payment Date falls. Each such calendar
                                quarter is referred to as a "Collection Period". The first
                                Collection Period will commence on (and include) the
                                Initial Transfer Date and end on (and include) the last
                                calendar day of the immediately following calendar quarter
                                ("Collection End Date"). Each successive Collection
                                Period will commence on (and exclude) the Collection End
                                Date and end on (and include) the next Collection End Date.
Collection Notification Date:   In respect of any Collection Period, the eighth Business Day
                                prior to each Interest Payment Date (the "Collection
                                Notification Date").
                                The Collection Notification Date is the date by which the
                                Asset Manager will be required to identify and to report to
                                the Cash Manager in the form of the Quarterly Asset
                                Manager's Report (see "Management of the Assets - Asset
                                Management Agreement"), among other things, the source
                                of the amounts received in respect of the Assets during the
                                Collection Period ending immediately prior to such
                                Collection Notification Date.
Collection Start Date:          The Initial Transfer Date, being the day on which the first
                                Collection Period starts (the "Collection Start Date").
Determination Date:             The second Business Day prior to each Interest Payment
                                Date (the "Determination Date").
                                The Determination Date is the date on which the Cash
                                Manager or the Agent Bank, as applicable, will be required




                                       -22-
                                   to calculate, among other things, the amounts of interest and
                                   principal required to be paid by the Issuer in respect of the
                                   Notes on the basis of entries made by it in the Ledgers (see
                                   "Credit Structure — Ledgers").
Floating Rate Interest Period:     Interest on the Notes will be payable by reference to interest
                                   periods (each a "Floating Rate Interest Period"). The first
                                   Floating Rate Interest Period will commence on (and
                                   include) the Issue Date and end on (but exclude) the first
                                   Interest Payment Date. Each successive Floating Rate
                                   Interest Period will commence on (and include) the Interest
                                   Payment Date and will end on (but exclude) the next
                                   Interest Payment Date.
                          PRINCIPAL FEATURES OF THE NOTES
Ranking:                           The Notes represent the right to receive interest and
                                   principal payments from the Issuer in accordance with the
                                   Conditions and the Trust Deed.
                                   All payments of interest due on the Class A Notes, other
                                   than the Class A Step-Up Amounts, will rank in priority to
                                   payments of interest due on the Class B Notes. All
                                   payments of interest due on the Class B Notes, other the
                                   Class B Step-Up Amounts, will rank in priority to payments
                                   of interest due under the Class C Notes and all payments of
                                   interest due on the Class C Notes will rank in priority to
                                   payments of interest due on the Facility.
                                   All payments of principal due on the Class A Notes will
                                   rank in priority to payments of principal due on the Class B
                                   Notes and all payments of principal due on the Class B
                                   Notes will rank in priority to payments of principal due on
                                   the Class C Notes and all payments of principal due on the
                                   Class C Notes will rank in priority to payments of principal
                                   due on the Facility.
Interest Rate:                     The interest rate applicable to the Notes for each Floating
                                   Rate Interest Period (other than with respect to the first
                                   Floating Rate Interest Period which interest rate will be
                                   obtained upon a linear interpolation of two and three months
                                   LIBOR (as defined below)) will be calculated by reference
                                   to the three months U.S. dollar London Interbank Offered
                                   Rate as calculated in the manner specified in the Conditions
                                   ("LIBOR") on the Determination Date for such Floating
                                   Rate Interest Period. The interest rate applicable to the
                                   Class A Notes (the "Class A Notes Rate of Interest") will
                                   be LIBOR plus the Relevant Margin, the interest rate
                                   applicable to the Class B Notes (the "Class B Notes Rate of
                                   Interest") will be LIBOR plus the Relevant Margin and the
                                   interest rate applicable to the Class C Notes will be LIBOR
                                   plus the Relevant Margin (the "Class C Notes Rate of
                                   Interest".




                                          -23-
Relevant Margin:   (a)    In respect of the Class A Notes:
                           (i)    from the period from (and including) the
                                  Issue Date up to (but excluding) the Interest
                                  Payment Date falling in May 2011 (the
                                  "Step-Up Date") 5.50 per cent. per annum
                                  (the "Class A Original Margin"); and
                           (ii)   thereafter, 6.88 per cent. per annum (the
                                  "Class A Step-Up Margin"), the difference
                                  between the amount of interest accruing at
                                  the Class A Step-Up Margin and the amount
                                  of interest accruing at the Class A Original
                                  Margin being the "Class A Step-Up
                                  Amounts".
                   (b)    In respect of the Class B Notes:
                           (i)    from the period from (and including) the
                                  Issue Date up to (but excluding) the Step-Up
                                  Date, 7.50 per cent. per annum (the "Class B
                                  Original Margin"); and
                           (ii)   thereafter, 9.38 per cent. per annum, the
                                  difference between the amount of interest
                                  accruing at the Relevant Margin in this
                                  sub-paragraph (ii) and the amount of interest
                                  accruing at the Relevant Margin in
                                  sub-paragraph (i) above being the "Class B
                                  Step-Up Amounts" and, together with the
                                  Class A Step-Up Amounts, the "Step-Up
                                  Amounts".
                   The Class A Step-Up Amounts and the Class B Step-Up
                   Amounts will be equal to 125 per cent. of the Class A
                   Original Margin and the Class B Original Margin,
                   respectively.
                   (c)    In respect of the Class C Notes, 12.0 per cent. per
                          annum.
Interest:          Interest will be payable in arrear in U.S. dollars on each
                   Interest Payment Date by reference to the Interest Period
                   ending on or immediately prior to such Interest Payment
                   Date. The interest on each Interest Payment Date shall
                   (save as referred to below):
                   (a)    in the case of each Class A Note, be the interest
                          accrued at the Class A Notes Rate of Interest on the
                          Principal Amount Outstanding of such Note for the
                          relevant Interest Period;
                   (b)    in the case of each Class B Note, be the interest
                          accrued at the Class B Notes Rate of Interest on the
                          Principal Amount Outstanding of such Note for the
                          relevant Interest Period; and




                         -24-
                        (c)     in the case of each Class C Note, be the interest
                                accrued at the Class C Notes Rate of Interest on the
                                Principal Amount Outstanding of such Note for the
                                relevant Interest Period.
                        The "Principal Amount Outstanding" of a Note on any
                        day shall be the principal amount of such Note upon issue
                        less the aggregate amount of any principal payments in
                        respect of that Note which have become due and payable
                        and been paid on or prior to that day.
                        On any Interest Payment Date, to the extent that the Issuer
                        does not receive sufficient income from the Assets or
                        amounts otherwise credited to the Revenue Ledger after
                        meeting certain prior ranking claims in respect of certain
                        expenses of the transaction in accordance with the
                        Revolving Period Revenue Priority of Payments or the
                        Amortisation Period Revenue Priority of Payments, as
                        applicable, the Issuer may be unable to make payments of
                        interest under the Class A Notes, the Class B Notes, the
                        Class C Notes and the Facility. Any shortfall will be borne
                        first by the Facility, secondly by the Class C Notes, thirdly
                        by the Class B Notes and fourthly by the Class A Notes.
                        Failure by the Issuer to make any interest payments due
                        under the Class A Notes (other than the Class A Step-Up
                        Amounts) in such circumstances will constitute an Event of
                        Default (as described in Condition 9 (Events of Default)).
                        Payments of interest due under the Facility, the Class C
                        Notes or the Class B Notes (including the Class B Step-Up
                        Amounts) or the Class A Step-Up Amounts, if the Class A
                        Notes are still outstanding, may be deferred in such
                        circumstances and will be accrued, to the extent that funds
                        are not available to the Issuer to meet such payments, until
                        funds are so available. Any interest amount deferred on the
                        Class A Step-Up Amounts, the Class B Notes (including the
                        Class B Step-Up Amounts), the Class C Notes or the
                        Facility shall not accrue interest.
Deferral of Interest:   In the event that the Available Revenue Funds (as defined in
                        "Credit Structure—Credit Support for the Notes Provided
                        by Available Revenue Funds") available to the Issuer on any
                        Interest Payment Date for application in or towards the
                        payment of the Class A Step-Up Amounts which is due on
                        the Class A Notes on such Interest Payment Date (the
                        "Class A Step-Up Residual Amount") are not sufficient to
                        satisfy in full the aggregate amount of the Class A Step-Up
                        Amounts which is due on the Class A Notes on such Interest
                        Payment Date, there shall be payable on such Interest
                        Payment Date, by way of the Class A Step-Up Amount on
                        each Class A Note, a pro rata share of the Class A Step-Up
                        Residual Amount.
                        In the event that the Available Revenue Funds (as defined in
                        "Credit Structure - Credit Support for the Notes Provided
                        by Available Revenue Funds") available to the Issuer on any
                        Interest Payment Date for application in or towards the



                               -25-
                                payment of interest which is due on the Class B Notes
                                (including the Class B Step-Up Amounts) on such Interest
                                Payment Date (the "Class B Note Residual Amount") are
                                not sufficient to satisfy in full the aggregate amount of
                                interest which is due on the Class B Notes (including the
                                Class B Step-Up Amounts) on such Interest Payment Date,
                                there shall be payable on such Interest Payment Date, by
                                way of interest on each Class B Note, a pro rata share of the
                                Class B Note Residual Amount.
                                In the event that the Available Revenue Funds available to
                                the Issuer on any Interest Payment Date for application in or
                                towards the payment of interest which is due on the Class C
                                Notes on such Interest Payment Date (the "Class C Note
                                Residual Amount") are not sufficient to satisfy in full the
                                aggregate amount of interest which is due on the Class C
                                Notes on such Interest Payment Date, there shall be payable
                                on such Interest Payment Date, by way of interest on each
                                Class C Note, a pro rata share of the Class C Note Residual
                                Amount.
Interest Shortfall:             In the event that a pro rata share of the Class A Step-Up
                                Residual Amount, the Class B Note Residual Amount or the
                                Class C Note Residual Amount is not paid to Noteholders of
                                the relevant class, the Issuer shall create provisions in its
                                accounts for the shortfall equal to the amount by which the
                                aggregate amount of the Class A Step-Up Amounts or
                                interest paid on the Class B Notes or on the Class C Notes,
                                as the case may be, on any Interest Payment Date falls short
                                of the aggregate amount of the Class A Step-Up Amounts
                                or, as the case may be, interest payable on the relevant class
                                of Notes (the "Interest Shortfall").
Final Redemption:               Unless the Notes have previously been redeemed in full as
                                described in Condition 5 (Redemption and Post-
                                Enforcement Call Option), the Notes will be redeemed by
                                the Issuer on the Final Maturity Date at their then Principal
                                Amount Outstanding plus accrued and unpaid interest
                                thereon.
Mandatory Redemption in Part:   Each class of Notes will be subject to mandatory
                                redemption in part in accordance with Condition 5(b)
                                (Mandatory Redemption in Part of the Class A Notes, the
                                Class B Notes and the Class C Notes) on each Interest
                                Payment Date on which there are Available Principal Funds
                                (and Available Revenue Funds remaining after payments
                                are made in accordance with the Revolving Period Revenue
                                Priority of Payments or the Amortisation Period Revenue
                                Priority of Payments, if applicable) in an amount equal to
                                the Note Principal Payment in respect of such class of Notes
                                as determined on the related Determination Date. The terms
                                "Available Principal Funds" and "Note Principal
                                Payment" have the meanings given to them in the
                                Conditions.




                                       -26-
                                   The Issuer will cause the Cash Manager to determine on (or
                                   as soon as practicable after) each Determination Date:
                                   (i) the aggregate of any Note Principal Payments due in
                                   relation to each class of Notes on the immediately
                                   succeeding Interest Payment Date; and (ii) the Principal
                                   Amount Outstanding of each class of Notes.
Optional Redemption in whole for   The Issuer may redeem all (but not some only) of the Notes
Taxation Reasons:                  of each class at their Principal Amount Outstanding plus
                                   accrued and unpaid interest on any Interest Payment Date,
                                   if:
                                   (i) on such Interest Payment Date the Issuer would be
                                   required by reason of a change in law, or the interpretation
                                   or administration thereof, to deduct or withhold from any
                                   payment of principal or interest on the Notes (other than in
                                   respect of default interest) any amount for or on account of
                                   any present or future taxes, duties, assessments or
                                   governmental charges of whatever nature imposed, levied,
                                   collected, withheld or assessed by the United Kingdom or
                                   any political sub division thereof or any authority thereof or
                                   therein or (ii) the total amount payable in respect of interest
                                   in relation to any of the Loans during an Interest Period
                                   ceases to be receivable (whether by reason of any Borrower
                                   being obliged to deduct or withhold any amount in respect
                                   of tax therefrom or otherwise, and whether or not actually
                                   received) by the Issuer during such Interest Period or
                                   (iii) amounts payable by the Interest Rate Cap Provider to
                                   the Issuer will be subject to deduction or withholding on
                                   account of any present or future taxes, duties, assessments
                                   or governmental charges of whatever nature and are not
                                   otherwise subject to a gross up payment on the part of the
                                   Interest Rate Cap Provider and, in all cases, the Issuer will
                                   be in a position at the relevant Interest Payment Date on
                                   which the Notes are to be redeemed to discharge all its
                                   liabilities in respect of the Notes and any amounts required
                                   under the Cash Management Agreement or, as the case may
                                   be, the Deed of Charge or the Property Rights Pledge
                                   Agreement to be paid in priority to the Notes.
                                   In order to effect such a redemption the Issuer must have
                                   given not more than 60 nor less than 30 days' unconditional
                                   and irrevocable notice to the Trustee and the Noteholders in
                                   accordance with Condition 15 (Notice to Noteholders).
                                   Condition 5(e) (Optional Redemption for Tax Reasons) also
                                   requires that the Trustee is satisfied prior to the notice of
                                   redemption being given that the Issuer will be in a position
                                   to discharge all the Trustee's liabilities in accordance with
                                   Condition 5(e) (Optional Redemption for Tax Reasons) and
                                   any amounts required under the Cash Management
                                   Agreement or, as the case may be, the Deed of Charge or
                                   the Property Rights Pledge Agreement to be paid in priority
                                   to the Notes.
Clean-up Call:                     On any Interest Payment Date, the Issuer may redeem all
                                   (but not some only) of the outstanding Notes upon the



                                          -27-
                                     Issuer giving not less than 30 day's notice nor more than 60
                                     day's notice, to the Trustee and the Noteholders (in
                                     accordance with Condition 15 (Notice to Noteholders))
                                     provided that the Principal Amount Outstanding of the
                                     Notes on such Interest Payment Date is less than 10 per
                                     cent. of the original Principal Amount Outstanding of the
                                     Notes on the Issue Date and provided further that the
                                     Trustee is satisfied prior to the notice of redemption being
                                     given that (i) the Issuer will be in a position to fully repay
                                     (at least) interest and principal on the Senior Notes and the
                                     amounts payable pursuant to the Priority of Payments to be
                                     paid in priority to the interest and principal on the Senior
                                     Notes, and (ii) if applicable, the Assets were or will be, as
                                     the case may be, sold to a bona fide purchaser at fair market
                                     value (the "Clean-up Call").
Optional Redemption On or After      On any Interest Payment Date on or after the Step-Up Date,
Step-Up Date:                        the Issuer may give not more than 60 nor less than 30 days'
                                     notice to the Trustee and the Noteholders (in accordance
                                     with Condition 15 (Notice to Noteholders)) and following
                                     the giving of such notice the Issuer shall be obliged to
                                     redeem all (but not some only) of the Notes at their
                                     Principal Amount Outstanding, together in each case, with
                                     accrued and unpaid interest, provided that no such notice
                                     shall be given unless the Trustee is satisfied prior to the
                                     notice of redemption being given that the Issuer will be in a
                                     position to fully repay (at least) interest and principal on the
                                     Senior Notes and the amounts payable pursuant to the
                                     Priority of Payments to be paid in priority to the interest and
                                     principal on the Senior Notes.
                                APPLICATION OF FUNDS
Payments of Principal and Interest   The payment of principal and interest by the Borrowers
in Respect of the Notes:             under the Loans will provide the main source of funds from
                                     which the Issuer will make payments of principal and
                                     interest in respect of the Notes. For a more detailed
                                     description of certain aspects of the application of funds see
                                     "Credit Structure". See also "Risk Factors — Risks
                                     Relating to the Notes — Insufficient Issuer Funds and the
                                     Effect of Interest Deferral Events".
Pre-Enforcement Priority of          During the Revolving Period and prior to any enforcement
Payments:                            of the Security, revenue and principal amounts in the Issuer
                                     Account will be applied on each Interest Payment Date in
                                     accordance with the "Revolving Period Revenue Priority
                                     of Payments" and the "Revolving Period Principal
                                     Priority of Payments", respectively, in the manner set out
                                     in Condition 2(c) (Revolving Period Revenue Priority of
                                     Payments) and Condition 2(d) (Revolving Period Principal
                                     Priority of Payments).
                                     During the Amortisation Period and prior to any
                                     enforcement of the Security, revenue and principal amounts
                                     in the Issuer Account will be applied on each Interest
                                     Payment Date in accordance with the "Amortisation




                                            -28-
                                    Period Revenue Priority of Payments" and the
                                    "Amortisation Period Principal Priority of Payments",
                                    respectively, in the manner set out in Condition 2(e)
                                    (Amortisation Period Revenue Priority of Payments) and in
                                    Condition 2(f) (Amortisation Period Principal Priority of
                                    Payments).
Post-Enforcement Priority of        Following any enforcement of the Security, the net proceeds
Payments:                           of enforcement will be applied in accordance with the
                                    "Post-Enforcement Priority of Payments" as set out in
                                    Condition 2(g) (Post-Enforcement Priority of Payments).
Revolving Period Priority of
Payments:
Revolving Period Revenue Priority   (I) Available Revenue Funds
of Payments:
                                    On each Interest Payment Date during the Revolving Period
                                    and prior to enforcement of the Security, payments shall be
                                    made from Available Revenue Funds (as defined in "Credit
                                    Structure") in the following order of priority, in each case,
                                    only if and to the extent that payments of a higher priority
                                    have been made in full:
                                    (i)     first, in no order of priority inter se, but pro rata to
                                            the respective amounts then due and payable by the
                                            Issuer, to pay (A) any Expenses; and (B) any
                                            amounts to the Trustee in accordance with the
                                            Transaction Documents;
                                    (ii)    second, to pay all fees and other amounts payable to
                                            the PRI Provider under the PRI Policy, if
                                            applicable;
                                    (iii)   third, to pay, pro rata, (a) the Asset Manager fee in
                                            the amount equal to 0.30 per cent. per annum of the
                                            aggregate Principal Amount Outstanding of the
                                            Loans in the Pool on the first day of the
                                            immediately preceding Interest Period, together
                                            with related costs and expenses up to the Asset
                                            Manager Costs payable to the Asset Manager
                                            pursuant to the Asset Management Agreement,
                                            (b) the fees payable to the Cash Manager pursuant
                                            to the Cash Management Agreement, (c) the
                                            amounts due to the Paying Agent, the Agent Bank
                                            and Registrar under the Paying Agency Agreement
                                            and the Account Bank under the Issuer Account
                                            Bank Agreement and under the Issuer Corporate
                                            Account Agreement, (d) the amounts payable to the
                                            Data Custodian under the Data Custodian
                                            Agreement and (e) the amounts payable to the
                                            Corporate Services Provider under the Corporate
                                            Services Agreement;
                                    (iv)    fourth, to pay the due and payable Standby Asset
                                            Manager fees pursuant to the Standby Asset




                                            -29-
         Management Agreement;
(v)      fifth, to pay any premium payable to an interest rate
         cap counterparty under an interest rate cap
         agreement upon any replacement of the Interest
         Rate Cap Provider, to the extent that such premium
         is not paid to the outgoing counterparty as a
         termination payment;
(vi)     sixth, to pay pro rata amounts of interest payable in
         respect of the Class A Notes (other than the Class A
         Step-Up Amounts);
(vii)    seventh, to pay pro rata amounts of interest payable
         in respect of the Class B Notes (other than the Class
         B Step-Up Amounts);
(viii)   eighth, to pay Revenue Addition Amount to be
         credited to the Principal Deficiency Ledger until the
         balance of the Principal Deficiency Ledger has
         reached zero;
(ix)     ninth, to pay pro rata amounts (a) to the Reserve
         Ledger until the balance of the Reserve Fund
         reaches the Reserve Fund Required Amount; and
         (b) to the PRI Ledger until the balance of the PRI
         Reserve Fund reaches the PRI Reserve Fund
         Required Amount;
(x)      tenth, to pay pro rata Class A Step-Up Amounts (if
         any);
(xi)     eleventh, to pay pro rata Class B Step-Up Amounts
         (if any);
(xii)    twelfth, to pay pro rata amounts of interest payable
         in respect of the Class C Notes;
(xiii)   thirteenth, to pay interest due on the amount
         advanced under the Facility Agreement;
(xiv)    fourteenth, to pay to the Issuer an amount equal to
         the Issuer Margin for such Interest Period which
         amount may be distributed by the Issuer at its
         election to its shareholders by way of dividend
         payment; and
(xv)     fifteenth, to pay the Originator, as an adjustment to
         the purchase price payable under the Sale
         Agreement and the Master Securitisation Deed, the
         Residual Revenue (as defined in "Credit
         Structure").
"Issuer Margin" means an amount equal to U.S. $ 500.

"Revenue Addition Amount" means an amount equal to
the total debit balance on the Principal Deficiency Ledger
(including any Principal Addition Amount utilised as



         -30-
                                  referred to in "Credit Structure - Income Deficiency") which
                                  debit balance shall be covered by crediting the Principal
                                  Deficiency Ledger from the Revenue Ledger under item
                                  (viii) (eight) of the Revolving Period Revenue Priority of
                                  Payments or under item (viii) (eight) of the Amortisation
                                  Period Priority of Payments to the extent sufficient funds
                                  are available for such purpose on any Interest Payment
                                  Date.


                                  "Expenses" means:
                                  (i)     any and all documented fees, costs, expenses, taxes
                                          and other amounts required to be paid to any third-
                                          party creditors (other than the Noteholders and the
                                          Secured Creditors) arising in connection with this
                                          Transaction; and/or required to be paid in order to
                                          preserve the existence of the Issuer, to maintain it in
                                          good standing or to comply with applicable tax or
                                          other laws;
                                  (ii)    any and all outstanding fees, costs, expenses, taxes
                                          and other amounts required to be paid in connection
                                          with the listing, deposit or ratings of the Notes, or
                                          any notice to be given to the Noteholders or the
                                          other parties to the Transaction Documents; and
                                  (iii)   all out of pocket costs and expenses associated with
                                          maintaining the licences and registrations necessary
                                          for the purposes of the Issuer's business, which are
                                          not paid by the Corporate Services Provider,

                                  but excluding those other costs and expenses otherwise
                                  specified in the Revolving Period Priority of Payments or
                                  the Amortisation Period Priority of Payments, as applicable.


                                  "Asset Manager Costs" means an amount of the costs due
                                  to the Asset Manager under the Asset Management
                                  Agreement which shall not in any event exceed U.S.$
                                  100,000.


(II) Revolving Period Principal   (II) Available Principal Funds
Priority of Payments:
                                  On each Interest Payment Date during the Revolving Period
                                  and prior to an enforcement of the Security, payments shall
                                  be made from Available Principal Funds in the following
                                  order of priority, in each case, only if and to the extent that
                                  payments of a higher priority have been made in full:
                                  (i)     first, in transferring to the Revenue Ledger, the
                                          Principal Addition Amount necessary to meet any
                                          Income Deficiency (as defined in "Credit




                                          -31-
                                          Structure");
                                  (ii)    second, in respect of any Offer accepted by the
                                          Issuer, to pay to the Originator any amount due as
                                          purchase price for any Subsequent Assets purchased
                                          on such Interest Payment Date; and
                                  (iii)   third, any surplus to be invested in the Authorised
                                          Investment until the next succeeding Interest
                                          Payment Date.
Amortisation Period Priority of
Payments:
Amortisation Period Revenue       (I) Available Revenue Funds
Priority of Payments:
                                  On each Interest Payment Date during the Amortisation
                                  Period and prior to enforcement of the Security, payments
                                  shall be made from Available Revenue Funds in the
                                  following order of priority, in each case, only if and to the
                                  extent that payments of a higher priority have been made in
                                  full:
                                  (i)     first, in no order of priority inter se, but pro rata to
                                          the respective amounts then due and payable by the
                                          Issuer, to pay (A) any Expenses (as defined above);
                                          and (B) any amounts due and payable to the Trustee
                                          in accordance with the Transaction Documents;
                                  (ii)    second, to pay all fees and other amounts payable to
                                          the PRI Provider under the PRI Policy, if
                                          applicable;
                                  (iii)   third, to pay, pro rata, (a) the Asset Manager fee in
                                          the amount equal to 0.30 per cent. per annum of the
                                          aggregate Principal Amount Outstanding of the
                                          Loans in the Pool on the first day of the
                                          immediately preceding Interest Period, together
                                          with related costs and expenses up to the Asset
                                          Manager Costs payable to the Asset Manager
                                          pursuant to the Asset Management Agreement,
                                          (b) the fees payable to the Cash Manager pursuant
                                          to the Cash Management Agreement, (c) the
                                          amounts due to the Paying Agent, the Agent Bank
                                          and Registrar under the Paying Agency Agreement
                                          and the Account Bank under the Issuer Account
                                          Bank Agreement and under the Issuer Corporate
                                          Account Agreement, (d) the amounts payable to the
                                          Data Custodian under the Data Custodian
                                          Agreement and (e) the amounts payable to the
                                          Corporate Services Provider under the Corporate
                                          Services Agreement;
                                  (iv)    fourth, to pay the due and payable Standby Asset
                                          Manager fees pursuant to the Standby Asset
                                          Management Agreement;




                                          -32-
(v)      fifth, to pay any premium payable to an interest rate
         cap counterparty under an interest rate cap
         agreement upon any replacement of the Interest
         Rate Cap Provider, to the extent that such premium
         is not paid to the outgoing counterparty as a
         termination payment;
(vi)     sixth, to pay pro rata amounts of interest payable in
         respect of the Class A Notes (other than the Class A
         Step-Up Amounts);
(vii)    seventh, provided that the Portfolio Cumulative Net
         Default Ratio is less than 5 per cent, to pay pro rata
         amounts of interest payable in respect of the Class
         B Notes (other than the Class B Step-Up Amounts);
         and, if the Portfolio Cumulative Net Default Ratio
         is greater than 5 per cent. and any Class A Notes are
         outstanding, any amount otherwise payable
         pursuant to this item (vii) shall be credited to the
         Principal Ledger to form part of the Available
         Principal Funds to be applied in accordance with
         the Principal Priority of Payments;
(viii)   eighth, to pay Revenue Addition Amount to be
         credited to the Principal Deficiency Ledger until the
         balance of the Principal Deficiency Ledger has
         reached zero;
(ix)     ninth, to pay pro rata amounts (a) to the Reserve
         Ledger until the balance of the Reserve Fund
         reaches the Reserve Fund Required Amount; and
         (b) to the PRI Ledger until the balance of the PRI
         Reserve Fund reaches the PRI Reserve Fund
         Required Amount;
(x)      tenth, to pay Class A Step-Up Amounts (if any);
(xi)     eleventh, to pay Class B Step-Up Amounts (if any);
(xii)    twelfth, provided that the Portfolio Cumulative Net
         Default Ratio is less than 3.5 per cent, to pay pro
         rata amounts of interest payable in respect of the
         Class C Notes; and, if the Portfolio Cumulative Net
         Default Ratio is greater than 3.5 per cent. and any
         Class B Notes are outstanding, any amount
         otherwise payable pursuant to this item (xii) shall
         be credited to the Principal Ledger to form part of
         the Available Principal Funds to be applied in
         accordance with the Principal Priority of Payments;
(xiii)   thirteenth, to pay interest due on the amount
         advanced under the Facility Agreement;
(xiv)    fourteenth, to pay to the Issuer an amount equal to
         the Issuer Margin for such Interest Period (less any
         amount sent aside at item (i) (one) above for
         corporation tax in respect of that Interest Period)




         -33-
                                        which amount may be distributed by the Issuer at its
                                        election to its shareholders by way of dividend
                                        payment; and
                                (xv)    fifteenth, to pay the Originator, as an adjustment to
                                        the purchase price payable under the Sale
                                        Agreement and the Master Securitisation Deed, the
                                        Residual Revenue (as defined in "Credit
                                        Structure").
Amortisation Period Principal   (II) Available Principal Funds
Priority of Payments:
                                On each Interest Payment Date during the Amortisation
                                Period and prior to an enforcement of the Security,
                                payments shall be made from Available Principal Funds in
                                the following order of priority, in each case, only if and to
                                the extent that payments of a higher priority have been
                                made in full:
                                (i)     first, in transferring to the Revenue Ledger, the
                                        Principal Addition Amount necessary to meet any
                                        Income Deficiency (as defined in "Credit
                                        Structure");
                                (ii)    second, to pay pari passu and pro rata in or towards
                                        repayment in full, of the Principal Amount
                                        Outstanding of the Class A Notes;
                                (iii)   third, to pay pari passu and pro rata in or towards
                                        repayment in full, of the Principal Amount
                                        Outstanding of the Class B Notes;
                                (iv)    fourth, pay pari passu and pro rata in or towards
                                        repayment in full, of the Principal Amount
                                        Outstanding of the Class C Notes; and
                                (v)     fifth, pay pari passu and pro rata in or towards
                                        repayment in full, of the amount outstanding under
                                        the Facility Agreement.
Post-Enforcement Priority of    Following the delivery by the Trustee of an Enforcement
Payments:                       Notice to the Issuer declaring the Notes to be due and
                                payable, the Trustee shall, to the extent that such funds are
                                available, use funds standing to the credit of the Bank
                                Accounts (after making payments of certain moneys which
                                properly belong to third parties or owing to the Originator
                                as accrued interest), to make payments in the following
                                order of priority (the "Post-Enforcement Priority of
                                Payments"), in each case, only if and to the extent that
                                payments of a higher priority have been made in full:
                                (i)     first, to pay, pro rata, payments in satisfaction of
                                        any tax incurred by the Issuer and the fees, costs,
                                        charges, expenses and liabilities incurred by the
                                        Trustee or any receiver in preparing and executing
                                        the trusts hereunder (including any taxes required to
                                        be paid, the costs of realising any security and the



                                        -34-
        Trustee's remuneration);
(ii)    second, to pay any amounts due to the PRI Provider
        under the PRI Policy, if applicable (inclusive of
        insurance premium tax, if any);
(iii)   third, to pay, pro rata, the fees, costs, expenses and
        liabilities due to the Asset Manager, the Cash
        Manager, the Standby Asset Manager, the Paying
        Agent, the Agent Bank, the Registrar, the Account
        Bank, the Rating Agencies, the Corporate Services
        Provider and the Data Custodian (inclusive or
        exclusive of value added tax, as the case may be);
(iv)    fourth, to pay amounts due to the Interest Rate Cap
        Provider in connection with an early termination of
        the Interest Rate Cap Agreement (other than where
        such early termination results from a default by the
        Interest Rate Cap Provider or a rating downgrade
        termination event);
(v)     fifth, to pay, pro rata:
        (a)      all amounts of interest then due and payable
                 in respect of the Class A Notes (pro rata
                 according to the respective interest
                 entitlements of the Class A Noteholders) in
                 accordance with Condition 4 (Interest); and
        (b)      all amounts of principal due thereon until
                 redemption in full of the Class A Notes
                 (pro rata according to the respective
                 entitlements of the Class A Noteholders);
(vi)    sixth, to pay, pro rata:
        (a)      all amounts of interest then due and payable
                 in respect of the Class B Notes (pro rata
                 according to the respective interest
                 entitlements of the Class B Noteholders) in
                 accordance with Condition 4 (Interest); and
        (b)      all amounts of principal due thereon until
                 redemption in full of the Class B Notes (pro
                 rata according to the respective entitlements
                 of the Class B Noteholders);
(vii)   seventh, to pay, pro rata:
        (a)      all amounts of interest then due and payable
                 in respect of the Class C Notes (pro rata
                 according to the respective interest
                 entitlements of the Class C Noteholders) in
                 accordance with Condition 4 (Interest); and
        (b)      all amounts of principal due thereon until
                 redemption in full of the Class C Notes (pro
                 rata according to the respective entitlements




        -35-
                                   of the Class C Noteholders);
                  (viii)   eighth, to pay amounts of interest (including any
                           applicable withholding tax payable) in respect of
                           the Facility Agreement;
                  (ix)     ninth, to pay all amounts of principal due thereon
                           until redemption in full of the Facility Agreement;
                  (x)      tenth, in or towards payments of amounts due to the
                           Interest Rate Cap Provider in connection with an
                           early termination of the Interest Rate Cap
                           Agreement where such early termination results
                           from a default by the Interest Rate Cap Provider or
                           a rating downgrade termination event;
                  (xi)     eleventh, to pay to the Issuer an amount equal to the
                           Issuer Margin, which amount may be distributed by
                           the Issuer at its election to its shareholders by way
                           of dividend payment; and
                  (xi)     twelfth, to pay the Originator, as an adjustment to
                           the purchase price payable under the Sale
                           Agreement and the Master Securitisation Deed, the
                           Residual Revenue (as defined in "Credit
                           Structure").
Principal Loss:   If a Loan relating to the Loan Claims comprising part of the
                  Assets has, during the Collection Period, become a
                  Defaulted Loan (as defined below), the full amount of any
                  Principal Amount Outstanding of the Loan at such time that
                  Loan becomes a Defaulted Loan (a "Principal Loss")
                  would be debited to the Principal Deficiency Ledger against
                  first, the principal amount outstanding of the Facility,
                  second, against the Principal Amount Outstanding of the
                  Class C Notes, third, against the Principal Amount
                  Outstanding of the Class B Notes and fourth, against the
                  Principal Amount Outstanding of the Class A Notes. A
                  Revenue Addition Amount (which amount shall correspond
                  to a Principal Loss) shall subsequently be debited to the
                  Revenue Ledger with the Available Revenue Funds and the
                  amount of such Principal Loss shall be credited to the
                  Principal Deficiency Ledger in accordance with the
                  Revolving Period Revenue Priority of Payments or the
                  Amortisation Period Revenue Priority of Payments (See
                  "Credit Structure - Principal Deficiency Ledger").
                  In case of a subsequent recovery of any loss of principal (a
                  "Principal Recovery") the amount of such Principal
                  Recovery shall be credited to the Revenue Ledger.
                  "Defaulted Loan" means any Loan, in respect of which:
                  (a) an Instalment remains unpaid by the Borrower for a
                  period equal to or greater than 120 calendar days after the
                  corresponding Instalment Due Date; or (b) the Asset
                  Manager has reduced the Principal Amount Outstanding to
                  zero on account of such amount being classified as




                           -36-
                                     irrecoverable in accordance with the Asset Manager's
                                     customary procedures from time to time.
                                     "Delinquent Loan" means any Loan, in respect of which an
                                     Instalment remains unpaid by the Borrower for a period
                                     equal to or greater than 30 calendar days after the
                                     corresponding Instalment Due Date.
                                     "Instalment" means, with respect to each Loan, each
                                     scheduled payment of principal and interest thereunder.
                                     "Instalment Due Date" means, with respect to any
                                     Instalment, the date on which it is due and payable under
                                     the relevant Loan.
                            OTHER ASPECTS OF THE NOTES
Post-Enforcement Option:             The Trustee will, on the Issue Date, grant to Ukraine Auto
                                     Loan Options Limited (the "PECO Holder") an option, (the
                                     "Post-Enforcement Call Option") to acquire all (but not
                                     some only) of the Notes (plus accrued interest thereon) for a
                                     consideration of one cent per Note outstanding following
                                     any enforcement of the Security (as defined in Condition 2
                                     (Status, Security and Administration)) for the Notes, after
                                     the date on which the Trustee determines that the proceeds
                                     of such enforcement are insufficient, after payment of all
                                     other claims ranking in priority, in accordance with the
                                     Post-Enforcement Priority of Payments and after the
                                     application of any such proceeds of the Notes (see
                                     Condition 2 (Status, Security and Administration)), to pay
                                     any further amounts due in respect of the Notes. The
                                     Noteholders are bound by the terms of the Post-
                                     Enforcement Call Option pursuant to the terms and
                                     conditions of the Trust Deed and by the Conditions and the
                                     Trustee is irrevocably authorised by the Noteholders in
                                     accordance with Condition 5 (j) (Redemption and Post-
                                     Enforcement Call Option) to enter into the Post-
                                     Enforcement Call Option Agreement with the PECO
                                     Holder.
Form, Registration and Transfer of   The Class A Notes, the Class B Notes and the Class C Notes
the Notes:                           will be sold outside the United States to non-U.S. persons in
                                     compliance with Regulation S and will be represented by a
                                     corresponding          global       note       (each        a
                                     "Regulation S Global Certificate" and together the
                                     "Regulation S Global Certificates") registered in the name
                                     of BT Globenet Nominees Limited, as nominee for, and
                                     deposited with Deutsche Bank AG, London Branch as the
                                     Common Depositary for Euroclear Bank S.A./N.V., as
                                     operator of the Euroclear System ("Euroclear"), and also
                                     Clearstream Banking, société anonyme ("Clearstream").
                                     Beneficial interests in a Regulation S Global Certificate
                                     may be held only through, and transfers thereof will only be
                                     effected through, records maintained by Euroclear or
                                     Clearstream, at any time. See "Clearing and Settlement".




                                            -37-
                               Each Regulation S Global Certificate will be subject to
                               certain restrictions on transfer set forth therein as described
                               under "Purchase and Sale".                Except in limited
                               circumstances, owners of beneficial interests in a
                               Regulation S Global Certificate will not be entitled to
                               receive Notes in definitive, fully registered, non-global
                               form.
Beneficial Owner:              The holder of a beneficial interest in a Note.
Denominations:                 A minimum denomination of the Notes is US.$ 100,000 or
                               any amount in excess thereof which is an integral multiple
                               of U.S.$1,000.
Ratings:                       The Class A Notes are expected on issue to be assigned a
                               "BBB-" rating by Fitch and a "Baa3" rating by Moody's.
                               The Class B Notes are expected on issue to be assigned a
                               "B" rating by Fitch and a "Ba3" rating by Moody's. The
                               Class C Notes will not be rated.
                               The ratings address the likelihood of timely payment of
                               interest at the applicable rate of interest on each Interest
                               Payment Date on the Class A Notes, the ultimate payment
                               of interest at the applicable rate of interest on the Class B
                               Notes and the ultimate payment of the Principal Amount
                               Outstanding of the Senior Notes at the Final Maturity Date.
                               The ratings do not address the likelihood of the receipt of
                               any Step-Up Amounts.
                               A rating is not a recommendation to buy, sell or hold
                               securities and may be subject to revisions, suspension or
                               withdrawal at any time by the assigning rating
                               organisation
Admission to the Irish Stock   Application has been made to the Irish Financial Services
Exchange:                      Regulatory Authority in its capacity as competent authority
                               under Directive 2003/71/EC for this Prospectus to be
                               approved. Application has been made to the Irish Stock
                               Exchange for the Notes to be admitted to the Official List
                               and trading on its regulated market.
Governing Law:                 The Notes will be governed by English law.
Listing Agent:                 Deutsche Bank Luxembourg S.A.




                                      -38-
                                          RISK FACTORS
The following is a summary of certain aspects of the issue of the Notes about which prospective
Noteholders should be aware. The summary is not intended to be exhaustive and prospective
Noteholders should read the detailed information set out in the section entitled "Credit Structure" and
elsewhere in this Prospectus.
Risks Relating to the Notes
The Issuer's Ability to Meet its Obligations under the Notes
The ability of the Issuer to meet its obligations on time and in full in respect of payments of interest
and principal on the Notes, its operating expenses and its administration expenses, including
following the occurrence of any Event of Default by the Issuer, is wholly dependant upon and is
limited to (a) the receipt by it of funds, through the Asset Manager or the Standby Asset Manager (if
applicable), from Borrowers in respect of the Assets, (b) the receipt by the Issuer of interest on the
Issuer Account or otherwise from certain Authorised Investments, (c) in certain circumstances, funds
provided under the Facility by way of the Reserve Fund, the PRI Reserve Fund, the Contingency
Reserve Fund and the Set-Off Reserve Fund, (d) the receipt by the Issuer of funds from the Interest
Rate Cap Provider under the Interest Rate Cap Agreement and (e) amounts available to the Issuer
under the PRI Policy.
The Issuer will not have any other funds available to it to meet its obligations under the Notes or any
other payments ranking in priority to, or pari passu with, the Notes.
The payment of interest and principal on the Class A Notes will rank in priority to payments of all
amounts payable on the Class B Notes, the Class C Notes and the Facility. The payment of interest
and principal on the Class B Notes will rank in priority to payments of all amounts payable on the
Class C Notes and the Facility. The payment of interest and principal on the Class C Notes will rank
in priority to payments of all amounts payable on the Facility. Due to their subordination, the Class C
Notes bear a greater credit risk than the Senior Notes.
On enforcement of the Security, the obligation of the Issuer to repay monies due and owing to the
Noteholders will depend upon whether the Assets can be realised to obtain an amount sufficient to
effect repayment thereof.
Insufficient Issuer Funds and the Effect of Interest Deferral Events
As a result of, inter alia, default by Borrowers, and despite the exercise by the Trustee and/or the
Asset Manager of all available remedies under any Assets, the Issuer may not receive the full amounts
due from those Borrowers and therefore, the funds available to the Issuer may not be sufficient, after
making the payments to be made in priority thereto, to pay, in full or at all, interest due on and/or
principal of the Notes. There can be no assurance that sufficient amounts from the Assets, in the
event of enforcement of the Security, can be realised to obtain an amount sufficient to pay all amounts
of interest and principal in respect of the Notes.
Any failure to pay the Class A Step-Up Amounts or interest on the Class B Notes (including the
Class B Step-Up Amounts) or the Class C Notes when due will not be an Event of Default in respect
of the Class A Notes, the Class B Notes or the Class C Notes (as the case may be) so long as any
Class A Notes are outstanding. Any failure to pay interest on the Class C Notes when due will not be
an Event of Default in respect of the Class C Notes as long as any Senior Notes are outstanding.
Enforcement Action in respect of the Notes
Upon enforcement of the Security, the Trustee will have recourse only to the Assets and any other
assets of the Issuer then in existence. The Issuer, the Trustee or any receiver will have no recourse to
the Originator, other than as provided in the Sale Agreement in respect of a breach of a Warranty (see
"The Sale of the Assets — Warranties and Repurchase" below). There can be no assurance that the
Assets will realise an amount sufficient to redeem all of the Notes in full. The Issuer, the Trustee




                                                 -39-
and/or any receiver may not be able to sell the Assets on appropriate terms should any of them be
required to do so.
The terms on which the Security will be held will provide that, upon enforcement, payments will rank
in the order of priority set out in Condition 2(g) (Post-Enforcement Priority of Payments) of the
Notes. In the event that the Security is enforced, no amounts will be paid to the Class B Noteholders
or the Class C Noteholders until all amounts owing to the Class A Noteholders have been paid in full
and no amounts will be paid to the Class C Noteholders until all amounts owing to the Senior
Noteholders have been paid in full.
Early Redemption
In the event that the Issuer or any Paying Agent would be required to deduct or withhold from any
payment of principal or interest any amount for or on account of any present or future taxes, duties,
assessments or governmental charges of whatever nature imposed, levied, collected, withheld or
assessed by the United Kingdom or any political subdivision thereof or any authority thereof or
therein, or the Issuer would, by virtue of a change in the law (or the application or officially published
interpretation thereof) not be entitled to relief for United Kingdom tax purposes for any material
amount which is currently relievable and which it is obliged to pay under the Notes and/or the
Transaction Documents, then the Issuer may but shall not be obliged to, redeem all, but not some
only, of the Notes on any subsequent Interest Payment Date at their Principal Amount Outstanding
together with accrued interest to (but excluding) the date of redemption.
In the event that the Notes are optionally redeemed in accordance with the provisions of Condition 5
(Redemption and Post-Enforcement Call Option) (including as described above), such early
redemption may result in an early return of the investment made by the Noteholders. No premium
will be paid in the event of an exercise of such optional redemption. In the event therefore that an
optional redemption is exercised by the Issuer and principal is repaid with respect of the Notes,
holders of Notes may not be in a position to reinvest such principal at the rate of return similar to that
on the relevant Class of Notes.
Rating
The ratings assigned to the Notes upon their issuance by the Rating Agencies are based on, among
other things, the projected revenues from the Assets and other relevant structural features of the
transaction, which only reflect the Rating Agencies' current views. The ratings address the likelihood
of timely payment of interest at the applicable rate of interest on each Interest Payment Date on the
Class A Notes, the ultimate payment of interest at the applicable rate of interest on the Class B Notes
and the ultimate payment of the Principal Amount Outstanding of the Senior Notes at the Final
Maturity Date. The ratings do not address the likelihood of the receipt of any Step-Up Amounts.
A security rating is not a recommendation to buy, sell or hold the Senior Notes, inasmuch as such
rating does not comment as to a market price or suitability for a particular investor. Any Rating
Agency may lower its rating or withdraw its rating on any of the Senior Notes if, in the sole judgment
of that Rating Agency, the credit quality of the Senior Notes has declined or is in question or for other
tangible or intangible reasons. There can be no assurance that the rating assigned to the Senior Notes
on the Issue Date will be the same for the duration of the life of the Senior Notes. If any rating
assigned to any of the Senior Notes is lowered or withdrawn, no person or entity is obliged to provide
any additional support or credit enhancement with respect to the Notes and the market value of such
may be reduced.
Lack of Liquidity; Absence of Secondary Market; Market Value
Prior to their issuance, there will have been no market for the Notes. Although application has been
made to list and admit to trading each class of Notes on the Irish Stock Exchange, there can be no
assurance that such a listing or admission to trading will be obtained.




                                                  -40-
There is currently no secondary market for the Notes and there can be no assurance given that such a
market will develop or, if such a market does develop, that it will provide the holders of the Notes
with liquidity or that it will continue for the life of the Notes. Consequently, any purchaser of the
Notes must be prepared to hold such Notes for an indefinite period of time or until final redemption or
maturity of such Notes. While the Lead Manager may make a market in the Notes upon their
issuance, the Lead Manager is under no obligation to do so.
Lack of liquidity could result in a significant reduction in the market value of the Notes. In addition,
the market value of the Notes at any time may be affected by many factors, including then prevailing
interest rates and the then perceived riskiness of asset backed securities relative to other investments.
Consequently, a sale of the Notes in any secondary market which may develop may be at a discount
from par value or from their purchase price.
The global securitisation markets are currently experiencing severe disruptions worldwide resulting
from reduced investor demand for asset-backed securities and increased investor yield requirements
for those securities. There can be no assurance as to whether or when market conditions will improve.
A prolonged reduction in demand for asset-backed or other debt securities, alone or in combination
with the continuing increase in prevailing market interest rates, may adversely affect the market value
of the Notes and may adversely affect the ability of the Noteholders to sell the Notes.

Yield and Prepayment Considerations
The yield to maturity of the Notes of each class will depend on, among other things, the amount and
timing of payment of principal (including prepayments, sale proceeds arising on enforcement of a
Pledge, and repurchases by the Originator due to, for example, breaches of representations and
warranties on the Loans and the price paid by the holders of the Notes. Such yield may be adversely
affected by a higher or lower than anticipated rate of prepayments on the Loans.
The rate of prepayment of loans in emerging market countries and in particular Ukraine is highly
unpredictable. The rate of prepayment of the Loans cannot be predicted and is influenced by a wide
variety of economic, social and other factors, including prevailing lending market interest rates, the
availability of alternative financing, local and regional economic conditions and homeowner mobility.
Therefore, no assurance can be given as to the level of prepayment that the Assets will experience
(See "Estimated Weighted Average Lives of the Senior Notes" below).
Notes are obligations of the Issuer only
The Notes will not be obligations or responsibilities of any person other than the Issuer. In particular,
without limitation, the Notes will not be obligations or responsibilities of, or be guaranteed by the
Originator, the Asset Manager, the Initial Purchaser, the Standby Asset Manager, the Cash Manager,
the Account Bank, the PECO Holder, the Agent Bank, the Corporate Services Provider, the PRI
Provider, the Interest Rate Cap Provider, the Facility Provider, the Paying Agent, the Registrar, the
Trustee, the Data Custodian or the Lead Manager and none of such persons accepts any liability
whatsoever in respect of any failure by the Issuer to make payment of any amount due in respect of
the Notes.
Conflict between Classes of Noteholders
The Trust Deed and the Deed of Charge contain provisions requiring the Trustee to have regard to the
interests of the Noteholders as regards all powers, trusts, authorities, duties and discretions of the
Trustee (except where expressly provided otherwise), but requiring the Trustee in any such case to
have regard only to the interests of the holders of the Class A Notes (the "Class A Noteholders") if in
the Trustee's opinion, there is or may be a conflict between the interests of the Class A Noteholders
and/or the holders of the Class B Notes (the "Class B Noteholders") and to have regard only to the
interests of the Class B Noteholders if in the Trustee's opinion, there is or may be a conflict between
the interest of the Class B Noteholders and/or the holders of the Class C Notes (the "Class C
Noteholders") and to have regard only to the interests of the Class C Noteholders if all of the Senior
Notes have been redeemed in full.




                                                  -41-
Registered Global Form of the Notes
The Notes will be represented by beneficial interests in Regulation S Global Certificates in fully
registered form without interest coupons. Therefore the beneficial ownership of the holders of each
Class of Notes will only be registered, directly or indirectly, in book entry form with Euroclear or
Clearstream. The lack of physical Notes could, among other things: (a) result in payment and other
delays with regard to the Notes because distributions on the Notes will be made to Euroclear or
Clearstream instead of directly to the relevant Noteholder and the holders of the Notes are therefore
required to rely on the procedures of Euroclear or Clearstream with respect to payments of interest
and principal on the Notes, the transfer of such Notes and any notices given by the Issuer through the
clearing systems; (b) make it difficult for a holder of a Note to pledge or otherwise grant security over
such Notes if physical securities are required by the party demanding the pledge or other security; and
(c) hinder the ability of a Noteholder to resell the Notes if the transferee is unwilling to purchase
securities that are not in physical form.
Restrictions on Transfer
The Notes have not been, and will not be, registered under the Securities Act or with any securities
regulatory authority of any state or other jurisdiction of the United States of America. The offering of
the Notes will be made pursuant to exemptions from the registration provisions of the Securities Act
and from state securities laws. No person is obliged to register the Notes under the Securities Act or
any state securities laws. Accordingly, and pursuant also to applicable legislation of other
jurisdictions, offers and sales of the Notes are subject to the restrictions described under "Purchase
and Sale". These restrictions may hinder the Noteholders' ability to sell the Notes.
No Gross Up for Taxes
If required by law, payments under the Notes will be made after deduction of any applicable
withholding taxes or other deductions. However, none of the Issuer, the Trustee, the Originator, the
Asset Manager, the Lead Manager, the Initial Purchaser, the Standby Asset Manager, the Cash
Manager, the Account Bank, the Agent Bank, the Corporate Services Provider, the PRI Provider, the
Interest Rate Cap Provider, the Facility Provider or the Data Custodian or other parties to the
Transaction Documents will be required to gross up payments in respect of any withholding or
deduction. In addition, if the Issuer incurs any taxes, it will be required to pay them from the funds
available to it, which may reduce the payments to Noteholders in respect of the Notes.
A Ukrainian withholding tax (currently at the rate of 15%) will not apply to any proceeds of the
Assets payable by the Asset Manager or any substitute asset manager to the Issuer (or, as the case may
be, the Trustee) only to the extent that, in the calendar year when such payment is made and prior to
such payment, the Issuer (or, as the case may be, the Trustee) provides the Asset Manager with a
certificate dated such year, issued by the tax authority in the United Kingdom and confirming the
Issuer's (or, where applicable, the Trustee's) tax residency in the United Kingdom for purposes of the
Convention between the Government of Ukraine and the Government of the United Kingdom of
Great Britain and Northern Ireland for the Avoidance of Double Taxation and the Prevention of Tax
Evasion in Respect of Taxes on Income and Capital, dated 10 February 1993. Such certificate is to be
obtained and delivered once every calendar year prior to the first payment of proceeds of the Assets
by the Asset Manager or a substitute asset manager to the Issuer or the Trustee in such calendar year.
The Asset Management Agreement and the Standby Asset Management Agreement contain
arrangements to ensure that such certificates are provided in the beginning of each such calendar year
prior to any such payment. Any failure to provide or delay in providing such a certificate may result
in the Asset Manager or a substitute asset manager being required to apply the Ukrainian withholding
tax to that payment to the Issuer which is affected by such failure or delay. In case of insufficiency of
funds of the Issuer to cover the resulting shortfall, such withholding may reduce the corresponding
payment to Noteholders in respect of the Notes.
Change of Law
The structure of the issue of the Notes and the ratings which are to be assigned to them are based on
English law and administrative practice in effect as at the date of this Prospectus. No assurance can



                                                  -42-
be given as to the impact of any possible change to English law or administrative practice after the
date of this Prospectus, nor can any assurance be given as to whether any such change could adversely
affect the ability of the Issuer to make payments under the Notes.
Insolvency Risks
Insolvency of the Issuer
The Issuer is a limited liability company incorporated under the laws of England & Wales and
managed by TMF Management (UK) Limited. Accordingly, insolvency proceedings with respect to
the Issuer would likely proceed under, and be governed by, the insolvency laws of England & Wales.
The following factors should be taken into consideration:
Insolvency Act 2000
The Insolvency Act 2000 introduced significant changes to the UK insolvency regime, certain
provisions of which came into force on 1 January 2003. Under the Insolvency Act 2000, certain
"small" companies (which are defined by reference to certain financial and other tests) are able, as
part of the company voluntary arrangement procedure, to obtain moratorium protection from their
creditors for a period of up to 28 days with the option for creditors to extend the moratorium for a
further two months. The Issuer would not be eligible for the moratorium under current law, given
both the present definition of "small company" and the availability of an exception for companies
which are party to a "capital market arrangement" under current regulations. However, it is possible
that the Secretary of State for Trade and Industry may by regulation modify any eligibility
requirements for the optional moratorium and can make different provisions for different cases. Thus,
the Secretary of State has the power to extend or amend the definition of "small" companies in the
future so that additional companies and/or "capital market arrangements" come within the ambit of
any relevant legislation. No assurance can be given that this will not be detrimental to the interests of
the Noteholders.
Reform of UK Insolvency Regime
On 15 September 2003, the corporate insolvency provisions of the Enterprise Act 2002 (the
"Enterprise Act") came into force, amending certain provisions of the Insolvency Act 1986.
The Enterprise Act inserts a new Section 72A into the Insolvency Act 1986. Under section 72A of the
Insolvency Act a secured lender does not have the power to appoint an administrative receiver unless
it has a qualifying floating charge which is taken prior to 15 September 2003 or falls within an
exception set out in sections 72B to 72G of the Insolvency Act. In particular section 72B sets out an
exception in relation to the capital market transactions. The Deed of Charge falls within the capital
market exception at section 72B on the following basis.
Firstly, the Deed of Charge includes a qualifying floating charge and is part of a "capital market
arrangement". An arrangement will be a capital market arrangement if, inter alia, it involves a grant
of security to a person who holds that security as trustee for a party to the arrangement in connection
with the issue of a capital market investment. The role of the Trustee falls within this description.
Secondly, the Notes will constitute "capital market investments" given that inter alia they are debt
instruments within Article 77 of the Financial Services and Markets Act 2000 (Regulated Activities)
Order 2001 and are rated by an internationally recognised rating agency.
Thirdly, debt of more than £50 million or its currency equivalent will be incurred under the Notes.
It should be noted that the government may amend the exceptions in the future by way of statutory
instrument.
The Enterprise Act also removes the Crown's preferential rights in all insolvencies (section 251) and
makes provision to ensure that unsecured creditors take the benefit of this change (section 252).
Under this latter provision the unsecured creditors will have recourse to the floating charge assets up
to a fixed amount (the "prescribed part") in priority to the holder of the floating charge concerned.




                                                  -43-
The floating charge assets must be worth at least £10,000 before the prescribed part will apply. The
prescribed part will be 50 per cent. of the first £10,000; then 20 per cent. of the rest up to a total of
£600,000. The prescribed part will apply to all floating charges created on or after 15 September
2003 regardless as to whether they fall within one of the exceptions or not. However, this provision is
unlikely to be of practical significance in the case of a special purpose entity such as the Issuer which
is subject to substantial restrictions on its activities (see Condition 3 (Covenants)). As a result of
those restrictions the Issuer will only have a limited ability to incur unsecured liabilities (as would any
holding company of the Issuer which is subject to similar restrictions).
Any of the above rules or measures may impair the ability of the Noteholders or the Trustee to
exercise their rights with respect to the Issuer or the Security which may impact the ability of the
Noteholders to be fully repaid in case of the insolvency of the Issuer.
Effects of Temporary Administration Introduced in Respect of the Originator
The Notes are solely the obligations of the Issuer. However, in the event that the National Bank of
Ukraine (the "NBU") introduces a temporary administration in respect of the Originator (for reasons
of a significant threat to the Originator's solvency or otherwise), this may have an adverse effect on
the value of the Notes and the ability of the Issuer to make payments of principal and interest in
respect of the Notes on time and in full.
The NBU would be required by law to introduce a temporary administration in respect of the
Originator if the NBU determines that there exists a "significant threat to the solvency" of the
Originator. In addition, the NBU would have discretion to impose a temporary administration in
respect of the Originator if (i) the Originator systematically violates any legitimate requests or
demands of the NBU, (ii) the Originator's regulatory capital decreases by 30 per cent. over a 6 month
period if, at the same time, the Originator is in breach of any of the mandatory economic ratios,
(iii) the Originator fails to discharge 10 per cent. or more of its aggregate overdue liabilities and such
failure continues for at least 15 Business Days, (iv) any member of the management of the Originator
is arrested for or convicted of a criminal offence, (v) the Originator commits any act aimed at the
concealment of any accounts, assets, registers, reports or other documents, (vi) the Originator without
legitimate grounds refuses to submit to authorised representatives of the NBU any documents or
information specified in the Law of Ukraine On "Banks and Banking Activity" (the "Banking Law"),
(vii) there is a public conflict within the management of the Originator, or (viii) the Originator itself
requests the NBU to introduce the temporary administration.
The temporary administrator, appointed by the NBU, would substitute all governing bodies of the
Originator for the whole period of the temporary administration (up to one year with possible
extension for another year – the latter may apply to the Originator as a large bank), and would be
authorised to carry out any acts aimed at the financial rehabilitation of the Originator, including but
not limited to (i) suspending any ongoing operation of the Originator (without terminating or
invalidating the relevant agreement itself), and (ii) terminating, in accordance with Ukrainian
legislation, any agreement of the Originator which contains outstanding obligations of any party and,
in the opinion of the temporary administrator, is loss-making or "unnecessary" for the Originator. An
implementing regulation of NBU indicates that the temporary administrator can suspend only that
ongoing operation of the Originator which is "low profit", "loss-making" or "involves a significant
degree of risk" for the Originator. As the applicable legislation does not provide clear criteria for
determining "low profit", "loss-making" or "significant risk" operations or "loss-making" or
"unnecessary" agreements, their interpretation is left to the temporary administrator.
A dissatisfied counterparty of the Originator under the affected operation or agreement would be
entitled to challenge in court the relevant decision of the temporary administrator and, where
applicable, to demand compensation from the Originator for losses resulting from any such decision.
During the temporary administration of the Originator, but not for longer than six months, the NBU
may impose a moratorium on the discharge by the Originator of its payment obligations to creditors.
Such moratorium would affect payment obligations of the Originator which became due prior to
either the appointment of the temporary administrator or the introduction of the moratorium (as a




                                                   -44-
result of poor drafting of the relevant provisions of the Banking Law, both interpretations are possible
although the former is more likely). Although applicable legislation exempts certain payments from
the regime of the moratorium, it is unlikely that any payments due from the Originator to the Issuer or
any other party under the Transaction Documents may fall under such exemptions. During the term
of the moratorium, the accrual of any financial sanctions for non-performance of payment obligations
(default interest, penalties, fines etc.), as well as any enforcement action for the recovery of debts
would be suspended (and would resume upon the lifting of the moratorium). The introduction of the
moratorium may affect the performance by the Originator of its obligations under the Transaction
Documents, including the transfer to the Issuer of collections from the Borrowers under the Assets.
Additionally, in order to revert the disposal of the Originator's assets that took place prior to its
appointment, the temporary administrator may apply to a Ukrainian court for the invalidation of the
Sale Agreement based on certain specific grounds provided in the Banking Law. Such grounds which
potentially may apply to the Sale Agreement include, inter alia, the following: (a) if the asset transfer
and/or the payment by the Originator to the Issuer under the Sale Agreement has taken place within
the six months preceding the appointment of the temporary administrator and such transfer and/or the
payment to the Issuer is regarded to have been made with the purpose of ensuring a privileged
position of the Issuer as compared to the other creditors of the Originator (i.e. where the asset transfer
was not carried out on an arms-length basis and/or was carried out on better terms as compared to the
other creditors of the Originator); or (b) if the value of the Loan Claims transferred to the Issuer is
regarded to have been significantly higher than the purchase price paid by the Issuer to the Originator
and such transfer has taken place within the three years preceding the appointment of the temporary
administrator; or (c) if the transfer of the Loan Claims to the Issuer is regarded to have been made
with the purpose of concealing the Originator's assets from the other creditors or with the purpose of
violating the rights of the Originator's creditors, and such transfer has taken place within the three
years preceding the appointment of the temporary administrator. Such provisions of the Banking Law
have not been uniformly interpreted by the courts of Ukraine.
If the Sale Agreement is declared invalid by a court order, the Originator and the Issuer will be
required to carry out a full restitution thereunder. Namely, the Originator will be required to repay to
the Issuer all amounts received from the Issuer under the Sale Agreement and the Issuer will be
required to return the transferred assets and all receipts thereunder to the Originator (or, if such return
is not possible, to pay to the Originator the value of the respective assets).
Effects of Bankruptcy Proceedings and Liquidation Proceedings against the Originator or the
Asset Manager and Revocation of its Banking Licence
The initiation of bankruptcy or liquidation proceedings against the Originator may have an adverse
effect on the Asset Management, value and the ability to collect on the Assets.
The Originator may be liquidated at the initiative of the NBU (following the revocation of the
Originator's banking licence), at the initiative of the Originator's creditors (supported by the NBU) or
at the initiative of the Originator's shareholders.
In certain cases, the NBU may revoke the Originator's banking licence, which would also result in the
initiation of the Originator's liquidation. Upon revocation of the Originator's banking licence and
appointment of a liquidator:
(i)     all of the Originator's payment obligations existing prior to the revocation of the banking
        licence would be deemed due and payable. Such payment obligations would be discharged in
        accordance with the procedure and priority established by Ukrainian legislation.
(ii)    no interest and default penalties, provided in the agreements with, and payable by, the
        Originator, shall accrue and be payable;
(iii)   the Originator would be precluded from making payments to third parties, except for limited
        categories of payments (including maintenance and utility payments, wages etc.); and




                                                   -45-
(iv)    the Originator would be precluded from accepting and making payments for the benefit (at
        the instruction) of its clients.
In a liquidation procedure a liquidator would be entitled to refuse to perform and unilaterally to
terminate any agreement of the Originator which has not been performed by such time. Depending on
whether any obligations remain undischarged by any party under the Sale Agreement, such
performance refusal/termination rights of a liquidator may apply to such Sale Agreements.
In bankruptcy proceedings, a liquidator may arguably apply to a Ukrainian court for the invalidation
of the Sale Agreement based on certain specific grounds set forth in Ukrainian bankruptcy legislation.
Such potential grounds include, inter alia, (a) a situation where the Sale Agreement is regarded to be a
loss-making transaction for the Originator or (b) a situation where the transfer of the Assets to the
Issuer is regarded to have put the Issuer in a privileged position as compared to the Originator's other
creditors if such transfer has taken place within the six months preceding the institution of the
liquidation proceedings. If the court declares the Sale Agreement invalid, the Originator will be
required to repay to the Issuer all amounts received from the Issuer under the Sale Agreement and the
Issuer will be required to return the transferred assets and all receipts received thereunder to the
Originator or, if such return is not possible, to pay to the Originator the value of the respective assets.
Therefore, if bankruptcy or liquidation proceedings are instituted against the Originator or the
Originator's banking licence is revoked by the NBU, the Issuer may not be able to make payments in
respect of the Notes. Under the Transaction Documents the Trustee shall not be responsible or in any
way liable for any consequences associated with the Ukrainian courts or the NBU taking such actions.
From (and inclusive of) the Initial Transfer Date, the Asset Manager will collect payments from the
Borrowers in the Asset Management Account, as prescribed by Ukrainian legislation for the purposes
of accumulating and accounting proceeds of the assets which are under the management of a
Ukrainian commercial bank such as the Asset Manager and carrying out settlements under the
agreements such as the Asset Management Agreement. Payment from the Borrowers will normally
be collected in the Asset Management Account on the scheduled monthly repayment dates set out in
the Loans or on the next following business days in Kyiv. Although such position has not yet been
tested in practice and in the Ukrainian courts, the applicable regulations of the NBU indicate that any
funds collected from the Borrowers in respect of the Assets, held and accounted in the Asset
Management Account in accordance with Ukrainian legislation and the Asset Management
Agreement would not be commingled with any assets, and would not form part of the liquidation
estate of the Asset Manager in the event of its liquidation (as a result of insolvency or otherwise). On
the next Business Day following the Issue Date, and thereafter not later than on the next Business Day
following the collection of any such funds in the Asset Management Account, the Asset Manager will
transfer such funds into the Issuer Account. However, any funds collected in a currency other than
U.S. dollars will be transferred from the Asset Management Account to the Issuer Account within
three (3) Business Days following collection thereof and after such funds have been converted by the
Asset Manager into U.S. dollars. See "Management of the Assets - Payments from Borrowers".
Trustee
The Trustee will not be liable for any failure to make any investigations which might be made by a
security holder in relation to the Security and the Trustee shall not be bound to inquire into or be
liable for any defect or failure in the right or title of the Issuer or the Originator to the Security (or any
of the assets comprised therein or represented thereby or otherwise) whether such defect or failure
was known to the Trustee or might have been discovered upon examination or enquiry or was capable
of remedy or not, nor will the Trustee have any liability for the enforceability of the Security or any
other security created in favour of the Trustee pursuant to any of the Transaction Documents whether
as a result of any failure, omission or defect in registering or filing or otherwise protecting or
perfecting the Security or such other security. The Trustee does not have any responsibility for the
value of the Security or such other security.
The Trustee shall not be responsible for (a) exercising the rights of the Issuer, the Asset Manager, the
Standby Asset Manager, the Originator or any other party to the Transaction Documents or




                                                    -46-
(b) monitoring compliance by the Issuer, the Asset Manager, the Standby Asset Manager (or any other
successor Asset Manager) or the Originator with their respective obligations under the Transaction
Documents or (c) considering the basis on which approvals or consents are granted by the Issuer, the
Asset Manager, the Standby Asset Manager (or any other successor Asset Manager) or the Originator
under the Transaction Documents or (d) evaluating the security granted with respect to the
Transaction Documents either initially or on a continuing basis.
As further provided in the Trust Deed, certain provisions, including the following, shall apply in
relation to any request for any consent, approval, acknowledgement, modification or waiver to be
given or made by the Trustee:
(i)     it shall be the responsibility of any party requesting the Trustee to give its consent or to agree
        to any modification or waiver to provide to the Trustee all Transaction Documents, reports,
        opinions, financial calculations or other items that may be required to evidence any state of
        affairs or to support any request for a consent, approval, acknowledgement, modification or
        waiver of any kind;
(ii)    the Trustee will not consider any such request until it determines that it has adequate
        information to consider the request;
(iii)   the Trustee shall be entitled to seek the opinions or views of any person as to any matter
        which is the subject of a requested consent, approval, acknowledgement, modification or
        waiver (including where the conditions on which a consent, approval, acknowledgement,
        modification or waiver will be given or made are set out in the relevant Transaction
        Document); and
(iv)    the Trustee shall be required to respond to any request for any consent, approval,
        acknowledgement, modification or waiver within a maximum period of three months of
        receiving such request.
The Trust Deed and the Deed of Charge provide that the Trustee may rely on certificates or reports
from auditors, valuers and/or any other experts whether or not any such certificate or report or
engagement letter or other Transaction Document entered into by the Trustee and such auditors,
valuers or such other experts in connection therewith contains any limit on liability (monetary or
otherwise) of the auditors, valuers or such other experts.
Interest Rate Cap Agreement
The Issuer will enter into the Interest Rate Cap Agreement with the Interest Rate Cap Provider in
order to mitigate the interest rate risk between the fixed interest payable by Borrowers on the Loans
and the floating interest rate applicable to the Senior Notes. Accordingly, the ability of the Issuer to
make payments on the Senior Notes to some extent will depend upon the Interest Rate Cap Provider
complying with its obligations under the Interest Rate Cap Agreement and upon no withholding tax
being deducted from payments made to the Issuer by the Interest Rate Cap Provider.
The Interest Rate Cap Agreement may be terminated early if, inter alia, withholding taxes are
imposed on payments made by the Issuer or the Interest Rate Cap Provider under the Interest Rate
Cap Agreement; if there is a failure by the other party to pay any amount due under the Interest Rate
Cap Agreement; or upon the occurrence of certain other events with respect to either party to the
Interest Rate Cap Agreement, including but are not limited to, any insolvency or changes in law
resulting in illegality. Upon any such early termination of the Interest Rate Cap Agreement, the
Interest Rate Cap Provider may be liable to make an early termination payment to the Issuer
(regardless of which of such parties may have caused the termination) or no payment may be due to
the Issuer, depending on prevailing and anticipated future interest rates.
If the Interest Rate Cap Agreement is terminated prior to repayment in whole of the principal on the
Senior Notes, the Issuer's interest rate risk position will be unhedged. In such circumstances the
Issuer will become obliged to enter into an agreement on similar terms with a new interest rate cap
provider, subject to certain rating criteria being applicable to the new interest rate cap provider. The




                                                  -47-
ability of the Issuer to make payments on the Senior Notes in such circumstances will depend upon
whether the Loans are repaid in full or are otherwise realised for an adequate sum and the amount of
the early termination payment (if any) which may be due from the Interest Rate Cap Provider to the
Issuer under the Interest Rate Cap Agreement.
Further, there can be no assurance that the Issuer will be able to enter into a replacement hedging
agreement, or if one is entered into, that the credit rating of the replacement interest rate cap provider
will be sufficiently high to prevent a downgrade of the then current rating of any of the Notes by the
Rating Agencies.
The Asset Manager
The Issuer's ability to make payments on the Notes will be dependent on the Asset Manager
performing its obligations under the Asset Management Agreement to, inter alia, collect amounts due
and payable by Borrowers and to transfer such amounts to the Issuer. There can be no assurance that
the Asset Manager will diligently perform its obligations. The appointment of PrivatBank as Asset
Manager under the Asset Management Agreement may be terminated as a result of, among other
things, a default by it in performing its obligations under the Asset Management Agreement, its
insolvency, introduction of its temporary administration, revocation of its banking licence,
enforcement of the Security against the Assets or if notice of termination is given by the Asset
Manager and the Trustee consents to such termination (see "Asset Manager Substitution", below).
The Asset Manager is obligated to administer the Assets with the same diligence and skill as would
any of the five largest (measured by assets) commercial banks in Ukraine engaged in the consumer
lending business (each a "Prudent Lender"). See also "Legal Considerations related to the
Management of the Assets" and "Management of the Assets", below.
Asset Manager Substitution
In the event of the termination of the appointment of the Asset Manager by reason of the occurrence
of certain events set out below and in the Asset Management Agreement (each, an "Asset Manager
Termination Event" – see " Management of the Assets – Payments from Borrowers"), the Standby
Asset Manager will be appointed to substitute the Asset Manager and to carry out the management of
the Assets on the basis of the Standby Asset Management Agreement.
If: (i) a temporary administrator is appointed by the NBU to manage the Asset Manager's banking
activity or (ii) the unsecured, unsubordinated and unguaranteed rating of the Asset Manager falls
below "CCC" or "Caa1" from Fitch and Moody's respectively, and such event remains unremedied for
thirty (30) days (each such event being an Asset Manager Termination Event), the appointment of the
Asset Manager will be terminated by the Issuer (with the prior written consent of the Trustee) or the
Trustee and the Standby Asset Manager will commence management of the Assets and will perform
the duties set out in the Standby Asset Management Agreement. If the unsecured, unsubordinated and
unguaranteed rating of the Asset Manager is reduced below "B-" or "B3" for a period longer than
seven (7) Business Days by Fitch and Moody's respectively (a "Downgrade Event"), (i) the Asset
Manager will provide the Data Custodian with an updated set of notification letters in the form
attached as Schedule 3 of the Asset Management Agreement (the "Notification Letters") to be sent to
the Borrowers upon the occurrence of an Asset Manager Termination Event, (ii) the Asset Manager
will deliver to the Data Custodian a current database of the Assets in electronic (CD-Rom) format (the
"Assets Data") on a weekly basis (rather than on a quarterly basis, as required under the Asset
Management Agreement until a Downgrade Event occurs), (iii) the Data Custodian will then deliver
to the Issuer the Assets Data on a weekly basis, and (iv) the Issuer or its nominee will then deliver the
Assets Data to the Standby Asset Manager on a weekly basis. If an Asset Manager Termination
Event occurs and the Asset Manager must be removed and the Standby Asset Manager appointed with
immediate effect, the Data Custodian will promptly deliver the Assets Data then held by the Data
Custodian to the Standby Asset Manager.
The Asset Manager relies on its highly trained staff to maintain efficient collection procedures. The
Standby Asset Manager does not have the same experience working with this particular asset group,
which may result in less efficient collection procedures on the Assets. Also, if the Asset Manager is




                                                  -48-
removed, the processing of payments on the Assets may be delayed and there may be losses in
collection while the Standby Asset Manager assumes its responsibilities. The ability of the Standby
Asset Manager (or any successor Asset Manager) to fully perform its duties (including duties in
relation to any Defaulted Loan) would depend on the information and records available to it and it is
possible that there could be an interruption in the administration of the Assets during the course of the
Asset Manager substitution (for instance, due to the necessity to deliver the Transfer Notices to all of
the Borrowers, the delivery of which may be delayed due to the Ukrainian postal service and the
necessity to retrieve from the Asset Manager the documents evidencing the Assets which may cause
losses or delays in payments on the Notes.
Furthermore, if the Standby Asset Manager is not appointed following an Asset Manager Termination
Event or in the event of the termination of the appointment of the Standby Asset Manager by reason
of the occurrence of certain events set out in the Standby Asset Management Agreement or because it
fails to meet or maintain the criteria set out in the Standby Asset Management Agreement (each, a
"Standby Asset Manager Termination Event"), it would be necessary for the Issuer to appoint
another successor asset manager. There is no guarantee that a successor asset manager could be found
who would be willing to manage the Assets on the terms of the Asset Management Agreement. Any
delays or other adverse effects caused by Asset Manager substitutions (for example, delays in delivery
of the documentation evidencing the Assets to the substitute asset manager, including the Standby
Asset Manager) may negatively impact the ability of Noteholders to receive timely payments and may
result in losses in respect of the Notes.
The Trustee shall have no liability or responsibility for monitoring the activities and obligations of the
Asset Manager and shall be entitled to assume, unless it has actual knowledge to the contrary, that the
Asset Manager is properly carrying out its responsibilities and obligations. The Trustee will not, at
any time, carry out any of the responsibilities or obligations of the Asset Manager itself.
For details on the substitution of the Asset Manager following the enforcement by the Trustee of the
Security against the Assets, see "Legal Considerations - Enforcement of the Property Rights Pledge
Agreement by the Trustee" and "Legal Considerations - Ukrainian Law Considerations related to the
Deed of Charge" below.
Reliance on Third Parties
The Issuer has engaged PrivatBank to manage the Assets pursuant to the Asset Management
Agreement. While the Asset Manager is under contract to discharge services under the Asset
Management Agreement, there can be no assurance that it will be willing or able to perform such
services in the future. Although the Standby Asset Manager has been engaged to provide equivalent
services under the Standby Asset Management Agreement in the event the appointment of the Asset
Manager is terminated, there can be no assurance that the transition of Asset Management will occur
without adverse effect on investors or that an equivalent level of performance on collections and
administration of the Loans can be maintained by the Standby Asset Manager as many of the Asset
Management and collections techniques currently employed were developed by the Asset Manager
(See "Management of the Assets").
Pursuant to the Interest Rate Cap Agreement, the Interest Rate Cap Provider has agreed to provide the
Issuer with hedging against certain interest rate fluctuations (See "Credit Structure – Interest Rate
Cap Agreement").
Pursuant to the PRI Policy, the PRI Provider has agreed to provide the Issuer with an insurance policy
providing coverage against certain currency convertibility and currency transfer events in Ukraine as
well as certain expropriatory acts by the Ukrainian government (See "The PRI Provider and the PRI
Policy"),
In the event that any of the above parties (including the Issuer) were to fail to perform their
obligations under the respective agreements to which they are a party, investors may be adversely
affected.




                                                  -49-
Potential Information Technology Disruptions
The Asset Manager's ability to service the Assets efficiently will depend to a significant extent upon
the functionality of its information technology. There can be no assurance that a disruption (even
short term) to the functionality of the Asset Manager's information technology systems, delays or
increased costs associated with operating such systems will not have an adverse effect on the Asset
Manager's ability to service the Assets.
Risks Related to the Assets
Lack of Information
The Originator has been providing car loans since January 2001. Therefore, the information on the
Assets and the Originator's car loan business presented in this Prospectus is limited in scope and
duration. The Originator does not have any other information which would be useful in evaluating
this transaction, as this is its first sustained car loans programme. Nor is much information available
on the Ukrainian loan industry, as it has only recently emerged on a meaningful scale. To date, the
delinquency and default rates for the car loans have been low, although there can be no assurance that
these rates will reflect the actual performance of the Assets in the future.
None of the Issuer, the Lead Manager nor any other party to the Transaction Documents (other than
the Originator) has undertaken or will undertake any investigation, searches or other actions to verify
the details of the Loans sold to the Issuer, nor has any of such persons undertaken, nor will any of
them undertake, any investigations, searches or other actions to establish the creditworthiness of any
Borrowers.
Eligibility of Borrowers and Loans
The Loans have been selected by the Originator generally in accordance with certain standards
described in "The Assets " below. These standards consider, among other things, a Borrower's status,
authority to enter into and perform its obligations under the Loans, as well as the value of the Motor
Vehicles. However, the emergence of the Ukrainian loan market is a recent phenomenon, and
Ukrainian lenders currently lack the credit scoring tools available in more mature markets. There is
currently no well established system of credit bureaus operating in Ukraine which could help lenders
assess the creditworthiness of potential Borrowers and there is a substantial "grey economy" in
Ukraine which may lead to over–reporting or under–reporting of actual salaries on loan applications.
Although the Originator acts as a Prudent Lender and, in particular, undertakes extensive
investigations before issuing loans, including contacting the Borrower's employer, these may lack the
precision of practices in more developed lending markets. The absence of more sophisticated credit
security may result in more defaults by the Borrowers, which would adversely affect the yield on the
Notes and there can be no assurance that the Loans will not experience higher rates of delinquency,
enforcement and bankruptcy than other loans originated using the same standards.
Recovery Procedures for Defaulted Motor Vehicle Loans

The Originator has specific recovery procedures in place. See "The Originator and its Motor Vehicle
Lending Business – Loan Collection". Event though the non-recoverable loans are uncommon, if, in
the future, the circumstances change, there can be no assurances that the recovery process by the
services of the Originator will proceed successfully. The fact that the Ukrainian legal system is
undeveloped may have a negative impact on the ability to recover Defaulted Loans, which may
adversely affect the ability of the Issuer to make payments of principal and interest in respect to the
Notes. Following the enforcement of the Security, the Trustee would be entirely dependent on the
Asset Manager, the Standby Asset Manager or any successor asset manager (as the case may be) to
carry out any recovery procedures in relation to the Assets.




                                                 -50-
Risks of Losses Associated with Borrowers' Financial Condition and Declining Value of Motor
Vehicles
An investment in the Notes may be affected by, among other things, adverse changes in the
Borrowers' financial condition and, accordingly, their ability to repay the Loans and pay interest
thereunder. Such adverse changes may result from the factors that are not specific to a particular
Borrower and affect generally the economy of a particular region of Ukraine where the Borrower
resides, the economy of Ukraine or the broader (including global) economic situation. In addition,
such adverse changes may result from the factors specific to a particular Borrower, including loss of
earnings, illness, divorce and other similar factors. Any of the foregoing may increase delinquencies
by the Borrowers under the Loans and could ultimately have an adverse impact on the ability of the
Issuer to pay under the Notes.
In addition, in the event of enforcement of the Pledges, the ability to dispose of the Motor Vehicles at
a price sufficient to repay the amounts outstanding under the relevant Loans will depend upon a
number of factors, including the value of such Motor Vehicles in general at that time and the
availability of buyers for the Motor Vehicle. Motor Vehicles are generally subject to significant
devaluation with the passage of time, and no assurance can be given that, at the time of enforcement
of the Pledges, the value of the relevant Motor Vehicles will be sufficient to satisfy the respective
outstanding Loan Claims.
The Borrowers and the Motor Vehicles are located in different regions of Ukraine. Although each of
the Asset Manager and the Standby Asset Manager has collection divisions throughout Ukraine, the
broad national distribution of the Assets and the Motor Vehicles may increase the commingling risk
and cash in transit risk, and may cause difficulties in enforcement as a result of the geographical
remoteness of certain Borrowers and Motor Vehicles from the Asset Manager or the Standby Asset
Manager.
Warranties
Neither the Issuer nor the Trustee has undertaken nor will undertake any investigations, searches or
other actions in respect of the Loans and their related Pledges, and each will rely instead on the
representations and warranties given by the Originator in favour of the Issuer in the Sale Agreement
(the "Warranties"). The sole remedy (save as described below) of each of the Issuer and the Trustee
in respect of a breach of Warranty which could have a material adverse affect on the relevant Loans
and their related Pledges (other than where such breach was disclosed at the point of sale to the Issuer
(see "Sale of the Assets – Warranties and Repurchase")), shall be the requirement that the Originator
repurchase, or substitute a similar loan in replacement for, any Loans which is the subject of any
breach, provided that this shall not limit any other remedies available to the Issuer and/or the Trustee
if the Originator fails to repurchase a Loan when obliged to do so. However, there can be no
assurance that the Originator will have the financial resources to honour its obligation to repurchase
any Loan in respect of which such a breach of Warranty arises. Prior to the Transfer Date, the
Originator will arrange an audit of a sample of Loans relating to the Loan Claims comprising part of
the Assets to ensure, as far as practicable, that the Assets will not be the subject of a breach of any
Warranty.
Prepayments on the Loans
Under the terms of each Loan, a Borrower may prepay its Loan in full without the consent of the
Originator. Borrowers' defaults and certain other events may also result in acceleration of the Loans.
The rate of prepayment of Loans, which is affected by a wide variety of social, economic, and other
factors, cannot be accurately predicted. Prepayments may have the effect that any surplus amounts
will be lower than would be the case in the absence of prepayments. This may adversely affect the
ability of the Issuer to make payments of principal and interest in respect of the Notes.
Currency Exchange Rate Risk
While the Notes and the Loans are denominated in U.S. dollars, certain payments under the Assets
will be made in UAH, including, inter alia, fees, commissions and penalties under the Loans,




                                                 -51-
insurance proceeds, as well as proceeds from enforcement of the Pledges. Such UAH funds will need
to be converted by the Asset Manager or the Standby Asset Manager (as the case may be) into U.S.
dollars prior to their transfer to the Issuer Account. Fluctuations in the currency exchange rate may
negatively impact the Noteholders' ability to receive full payment on the Notes. There is no hedging
arrangement in place to mitigate the risk of such fluctuations. Currently, UAH continues to be pegged
to the U.S. dollar, and the UAH/U.S.$ exchange rate remains without significant changes for a
significant time (see "Risks Relating to Ukraine–Economic Considerations"). However, there is no
guarantee that such currency policy will be sustained by the National Bank of Ukraine.
Lack of Control by Holders
The management of the Assets will be carried out by the Asset Manager. Noteholders will have no
right to consent to, or approve of, any actions set forth in the Asset Management Agreement. (See "
Management of the Assets – Asset Management Agreement".)
Limited Liquidity – the Loans
The ability of the Issuer to redeem all of the Notes in full, including following an Event of Default (as
described in Condition 9 (Events of Default)), while any amounts payable under the Loans are still
outstanding, may depend upon whether the Assets can be realised to obtain an amount sufficient to
redeem the Notes. There is not at present an active and liquid secondary market for consumer loans
of this type in Ukraine and the Trustee or any receiver may not, following the delivery of an
Enforcement Notice, be able to sell the Assets on appropriate terms should it be required to do so.
This may negatively impact the Noteholders' ability to receive full payment on the Notes. The
Trustee shall not be responsible or in any way liable for any failure to sell the Assets as aforesaid.
Legal Considerations
Regulation of Securitisation in Ukraine

Securitisation structures, especially international securitisation arrangements, are new in Ukraine and
have not been tested in the Ukrainian courts, and some of the key concepts of securitisation are
unfamiliar or inconsistently applied in Ukraine. While the Transaction Documents are (i) mostly
governed by English law and (ii) subject to international arbitration or the jurisdiction of the English
courts, and such choice of law and jurisdiction should be respected as a matter of Ukrainian law, there
can be no assurance as to whether Ukrainian courts would uphold the choice of arbitration or
jurisdiction in the Transaction Documents, particularly in the event of the Originator's insolvency (in
which case the Transaction Documents may be considered on their merits by Ukrainian courts), as to
whether Ukrainian courts would apply English law (Ukrainian courts may apply Ukrainian law if they
fail to establish how the relevant matter is regulated by foreign law or if the relevant foreign law
regulation contradicts the public order or mandatory provisions of Ukrainian law) and as to the
approach that Ukrainian courts may adopt to the structures and concepts reflected in the Transaction
Documents, which may adversely affect the ability of the Noteholders to recover their investments in
the Notes. Furthermore, contractual undertakings and commitments directed towards protecting
against the insolvency or bankruptcy of the Issuer, in particular by limiting the resources and remedies
of the other Transaction Parties to and against the Issuer, and the contractual subordination of certain
claims against the Issuer, might not be honoured if Ukrainian law were to be applied to their review.
In addition, certain English law concepts like "representation", "warranty" and "indemnity" have no
distinctive legal meaning under Ukrainian law.
Ukrainian Regulation of the Transfer of the Assets is Unclear
In many instances the Ukrainian law and court practice on sale and assignment of rights of claim
(such as those comprising the Assets) is unclear or untested. In particular:
(a)     it is unclear whether the lender's monetary or other claims arising from loans granted by
        banks to individual borrowers are assignable to third parties which are not banks or financial
        institutions (the Issuer is not a bank or a financial institution). However, Ukrainian legislation
        may be seen to prohibit such an assignment only when it is carried out pursuant to a




                                                  -52-
        Ukrainian law-governed factoring agreement, where only a bank or financial institution may
        be the factor. Ukrainian legislation does not prescribe factoring as the only vehicle for
        transferring monetary or other claims arising from bank loans to third parties. The Sale
        Agreement does not provide for a factoring transaction, but instead, relies on the provisions of
        the Civil Code of Ukraine governing sale-purchase transactions. Ukrainian legislation
        permits a Ukrainian resident such as the Originator to enter into any kind of business
        agreements with a foreign counterparty such as the Issuer to the extent that such business
        agreements are not directly and expressly prohibited by the laws of Ukraine. Sale-purchase
        agreements such as the Sale Agreement are not subject to any such prohibition;
(b)     Ukrainian legislation prohibits the assignment of the so-called "personal claims" – i.e., any
        claims which are "inseparably connected to the identity" of the original owner (creditor).
        Ukrainian law does not provide a list of specific criteria for the determination of whether a
        particular claim may be regarded as a "personal claim". Accordingly, a Ukrainian court
        would exercise discretion in making such a determination with reference to a particular case
        and circumstances. However, a fair reading of applicable legislation suggests that the Loan
        Claims and the Pledge Claims may not be regarded as "personal claims". Thus, Ukrainian
        legislation contains provisions indicating that the lender's monetary claims under a loan
        agreement and the pledgee's claims under the related pledge agreement (such as, respectively,
        the Loan Claims and the Pledge Claims) are generally capable of assignment; accordingly,
        such claims should not be regarded as being "inseparably connected to the identity" of a
        particular lender or pledgee. The standard form Loan agreement for each Loan (the
        "Standard Form Loan") expressly permits the assignment of the Loan Claims and the
        standard form pledge agreement (the "Standard Form Pledge") does not prohibit the
        assignment of the Pledge Claims (and neither of these documents requires the relevant
        Borrower's consent to such assignment). In light of the foregoing, the Loan Claims and the
        Pledge Claims should not be regarded as "personal claims" of the Originator and, accordingly,
        the transfer of the Loan Claims and the Pledge Claims as contemplated under the Sale
        Agreement should not fall under the above specified prohibition.
The above risks, as well as the risks discussed in the following sections, may negatively affect the
transfer of the Assets to the Issuer, which, in turn, may adversely affect the ability of the Noteholders
to recover their investment in the Notes.
The Transfer of the Pledges
The Sale Agreement provides for the sale of the Loan Claims only, and contains an acknowledgement
that, upon such sale, the relevant Pledges will continue in full force and effect for the benefit of the
Issuer. Such position in respect of the Pledges is based on Article 27 of the Law of Ukraine "On
Pledges" dated 2 October 1992 (the "Pledge Law"), which provides that, upon an assignment of the
underlying secured claims (such as the Loan Claims) by the initial creditor (such as the Originator as
lender under the Loans) to a new creditor (such as the Issuer) in a manner permitted by law (such as
the sale under the Sale Agreement), the pledge which secures such claims (such as each of the
Pledges) remains in effect. Although the Pledge Law does not stipulate that, in such situation, the
pledge inures for the benefit of the assignee of the underlying secured claims, this appears to be the
only fair interpretation because, under Ukrainian law, the pledge can inure for the benefit of the
creditor (as the "owner" of) under the underlying secured claims only, and the assignee would be such
creditor upon the assignment. The Originator and the Issuer have obtained professional advice
indicating that there is no established court practice or binding interpretation which would support a
different conclusion. In addition, Article 23 the Law of Ukraine "On Security for Creditors' Claims
and Registration of Encumbrances" dated 18 November 2003 (the "Encumbrances Law") provides
that, upon an assignment of the underlying secured claims by the beneficiary of the security interest to
another person, all of the assignor's rights to the collateral which is subject to such security interest
transfer to the assignee. Neither the Pledge Law nor the Encumbrances Law requires the execution of
any agreement or other document to effect the transfer of the benefit of the pledge to the assignee of
the underlying secured claims. Accordingly, the risk that the Issuer would not be seen to become the
beneficiary of the Pledges for the reason that the Sale Agreement provides for the sale (and




                                                  -53-
assignment) of the Loan Claims only, and does not stipulate the sale (or assignment) of the Pledge
Claims, is negligible.
Notarisation of the Sale Agreement
Article 513 (1) of the Civil Code of Ukraine provides that an agreement for the transfer of the rights
of claim (such as the Loan Claims and the Pledge Claims comprising the Assets) must be notarially
certified if the agreements from which such rights of claim arise (e.g., the Loans and the Pledges)
have been notarially certified. As observed above, the Sale Agreement expressly provides for the
transfer (sale) of the Loan Claims only. Given that the Loans are not notarially certified (and such
certification is not required under the applicable law), the Sale Agreement is not notarially certified,
accordingly. Certain Pledges are notarially certified (which is not required by law but is optional for
the parties, and the Originator has chosen to exercise such option with respect to certain Borrowers).
However, the Sale Agreement does not stipulate any transfer of the Pledge Claims but merely
acknowledges the transfer of the relevant Pledges to the Issuer by operation of law, as a consequence
of the transfer of the Loan Claims. It is uncertain whether, such provisions of the Sale Agreement
notwithstanding, the Sale Agreement may be viewed by a Ukrainian court or other competent dispute
resolution forum as providing for the transfer of the Pledge Claims in addition to the Loan Claims. If
such view is taken, then the Sale Agreement may be seen to contravene the above specified notarial
certification requirement (and this can be a basis for challenging the validity of the Sale Agreement).
However, Ukrainian legislation does not prescribe a transfer agreement (such as the Sale Agreement)
as the only means of transfer of the rights of claim, such as the Pledge Claims, from one person to
another. As discussed above, Article 27 of the Pledge Law and Article 23 of the Encumbrances Law
may be seen to support the position that the pledgee's rights under a pledge agreement transfer to the
assignee of the underlying secured claims by operation of law, as a consequence of the assignment of
the underlying secured claims. Accordingly, there is a strong basis under the applicable Ukrainian
legislation for the position that the Sale Agreement should be seen to provide for the transfer of the
Loan Claims only, while the Pledges transfer to the Issuer by operation of law rather than on the terms
of the Sale Agreement. From this standpoint, the Sale Agreement does not need to be notarially
certified, even if certain Pledges have been notarized. The Originator and the Issuer have obtained
professional advice indicating that there is no established court practice or binding interpretation
which would support a different conclusion. As a result, the risk that the validity of the Sale
Agreement may be challenged for the reason that it is not notarially certified, is remote. Even in the
unlikely event that such risk materializes, this would affect only those Offers which concern notarially
certified Pledges, and would not affect the other Offers or the Sale Agreement as a whole.
Amendment of Registration of the Pledges
A risk exists that the Issuer will not obtain legally effective and perfected first ranking claims under
the Pledges unless and until the registrations of the Pledges in the State Register of Encumbrances
over Movable Property in Ukraine (the "Encumbrances Register"), existing at the date of the Sale
Agreement, will have been amended by registering the Issuer as pledgee under the Pledges instead of
the Originator. In this connection, it should be observed that Ukrainian legislation requires that any
change of a pledge's registration in the Encumbrances Register (including any change of pledgee)
must be registered in the Encumbrances Register within five (5) days (the "Statutory Change
Registration Term") from the date when the change occurs. Because of a significant number of the
Pledges, it may be impossible in practice to complete all the required amending registrations within
the Statutory Change Registration Term, which begins to run from the relevant Transfer Date under
the Sale Agreement. For this reason, the Sale Agreement provides the Originator's best efforts
obligation to complete all such registrations within the Statutory Change Registration Term, but if this
appears to be not feasible, permits an extension of the term for such registrations for the maximum of
forty (40) days from the Initial Transfer Date for the Initial Assets, and twenty five (25) days from the
relevant Subsequent Transfer Date for any Subsequent Assets. The applicable legislation is uncertain
as regards the legal consequences of a failure to perform such amending registrations within the
Statutory Change Registration Term. Article 20 of the Encumbrances Law may be seen to provide
that, if the change of pledgee results from an assignment of the pledgee's rights under the respective
pledge agreement, the assignee would not obtain the assignor's (the original pledgee's) rights with
respect to the pledged collateral, and would not benefit from the original registered ranking of the



                                                  -54-
pledge, unless the change is registered in the Encumbrances Register within the Statutory Change
Registration Term. The applicable legislation does not expressly stipulate the same adverse
consequence for the situations where the change of the pledgee occurs on any basis other than an
assignment of the pledgee's rights under the pledge agreement; the only consequence expressly
provided by legislation in such situations appears to be the right of any person, adversely affected by
the absence of registration, to claim the compensation of the relevant damages by the pledgee. As
observed above, the Sale Agreement does not provide for the assignment of the Pledge Claims by the
Originator to the Issuer. Accordingly, based on a literal reading of the Encumbrances Law, the
adverse consequences specified in its Article 20 should not apply with respect to the transfer of the
Pledge Claims to the Issuer. Although there can be no assurance that such literal interpretation of the
Encumbrances Law would be applied by a court or other competent dispute resolution forum in the
circumstances of a particular case, the Originator and the Issuer have obtained a professional advice
that there is no established court practice or binding interpretations which would support a different
position.
The Sale Agreement provides that, in case of failure by the Originator to complete registrations in the
Encumbrances Register within the prescribed time period, the Issuer may require the Originator to
repurchase the relevant Assets from the Issuer in accordance with the repurchase procedure set out in
the Sale Agreement.
Registration of the Transfer
To avoid any potential issues resulting from imprecise provisions of the Encumbrances Law, the Sale
Agreement requires the registration of the transfer of the Loan Claims (the "Transfer"), in the
Encumbrances Register. Such registration will be made in respect of each Offer within five (5) days
after the relevant Transfer Date. Although it is unclear whether such registration is required for an
assignment which effects a direct transfer of the rights of claim by the assignor to the assignee (such
as that contemplated under the Sale Agreement) rather than an encumbrance of such rights of claim in
favour of any party, such registration has been carried out in order to avoid an adverse interpretation
or application of the poorly drafted provisions of the Encumbrances Law which fail to distinguish
between these two types of assignment and provide that any assignment would obtain legal
significance for third parties only upon its registration in the Encumbrances Register. However,
notwithstanding such registration, the Sale Agreement contains an express statement to the effect that
the parties intend to effect thereunder a sale of the Loan Claims by the Originator to the Issuer and not
a security assignment or other similar encumbrance over the Loan Claims or the Pledge Claims.
Notification of the Borrowers
Ukrainian legislation requires the Originator to notify each Borrower of the assignment of the Loan
Claims to the Issuer, but does not prescribe any time period or procedure for such notification, and
does not make the validity of the assignment dependent on the provision of such a notice. Apart from
such statutory position, the Standard Form Loan requires the Originator to give a written notice of
assignment of the relevant Loan Claims (the "Transfer Notice") to the Borrower within five (5) days
from the date when such assignment occurs. Any failure of the Originator to give (or delay in giving)
such Transfer Notice would not affect the validity of the assignment of the Loan Claims. However,
the Issuer as assignee would bear any negative consequences of such failure. In particular, the
respective Borrower would have the right to (i) discharge its obligations in respect of the Assets to the
Originator and not to the Issuer until and unless the Borrower has received a Transfer Notice,
(ii) make such objections against the claims of the Issuer in respect of the Assets as the Borrower
would be entitled to make against the Originator as of the date of receipt of a Transfer Notice or, in
the absence of such receipt, as of the date when the Issuer makes its claims, and (iii) set-off against
the monetary claims of the Issuer certain of the Borrower's monetary claims to the Originator which
have arisen from the grounds that existed at the date of the receipt by the Borrower of a Transfer
Notice or, in the absence of such receipt, at the date when the Issuer makes its claims (see "Set-off"
below). In the Sale Agreement, the Originator undertakes to give a Transfer Notice to each Borrower
within five days from the relevant Transfer Date.




                                                  -55-
Ukrainian legislation permits the Borrowers not to discharge their payment obligations in respect of
the Assets to the Issuer until and unless the Issuer or the Originator has provided such Borrowers with
"evidence" of the transfer of the Assets to the Issuer. Ukrainian legislation and court practice are silent
as to what would sufficiently constitute such "evidence". In the absence of any established court
practice indicating the contrary, it is fair to assume that the Transfer Notices contemplated under the
Sale Agreement should qualify as a sufficient "evidence" of the transfer of the Assets to the Issuer.
In the Sale Agreement, the Originator undertakes to give a Transfer Notice to each Borrower within
five days from the relevant Transfer Date.
The Sale Agreement provides that, in case of failure by the Originator to serve Transfer Notices to the
Borrowers within such time period, the Issuer may require the Originator to repurchase the relevant
Assets from the Issuer in accordance with the repurchase procedure set out in the Sale Agreement.
Delivery of the Documents Evidencing the Assets to the Issuer
Ukrainian legislation requires that when transferring the Assets to the Issuer, the Originator delivers to
the Issuer the documents evidencing such Assets. While failure to transfer such documents to the
Issuer would not affect the validity of the transfer of the Assets, it may, however, affect the ability of
the Issuer to collect payments under the Assets in the absence of the underlying documentation.
Under the Asset Management Agreement, the Issuer appointed the Originator as the custodian in
relation to the documentation related to the Assets and in such capacity the Originator would be
required to transfer such documentation to the Issuer or its nominee in the circumstances described in
the Asset Management Agreement. In addition, the Data Custodian will be appointed by the Issuer as
at the Issue Date to safeguard the Assets Data and will be required pursuant to the terms of the Data
Custodian Agreement to deliver such data without the consent or cooperation of the Originator to the
Issuer or its nominee (normally, the replacement Asset Manager, including the Standby Asset
Manager) upon the termination of the appointment of the Asset Manager.
Restrictions on Transfer Arising as of the Transfer Date
The Sale Agreement is a master agreement providing for a series of sale transactions, each concluded
by an individual Offer, made by the Originator in respect of the Assets specified therein and accepted
by the Issuer. The Assets specified in an Offer are transferred to the Issuer on the date of acceptance
of the Offer by the Issuer, which is the Transfer Date in relation to such Assets. The transfer of any
Assets to the Issuer may be hindered or prevented by any encumbrance or restriction affecting such
Assets or such transfer on the relevant Transfer Date, even if no such encumbrance or restriction
exists on the date of the Sale Agreement or the date of the Offer. For example, although this issue is
not entirely certain under Ukrainian legislation, a risk exists that, if a tax pledge is imposed over the
Originator's property and is in effect on the Transfer Date, the Originator may be required to seek a
consent of the Ukrainian tax authorities for the transfer of the Assets specified in the respective Offer.
A tax pledge may be imposed if, in the opinion of the tax authorities, the Originator failed to
discharge in time its liabilities in respect of the payment of taxes or other mandatory statutory
payments. If, in such situation, no consent for the Transfer is granted by the tax authorities, the
validity or effectiveness of the Transfer may be challenged. However, such risk would affect only the
Assets specified in the particular Offer. In addition, there is no established court practice to confirm
that such consent of the tax authorities as specified above should be sought for the transfer of such
assets or that the absence of such consent may be a basis for challenging the transfer.
Under the Sale Agreement, any such challengeable transfer or such challenge would result in the
relevant Assets becoming the Ineligible Assets and would entitle the Issuer to require the payment by
the Originator to the Issuer of an amount equal to the current outstanding principal balance of such
Ineligible Assets (without taking into account any reduction thereof as a result of the breach of any
representation and/or warranty or other matter which has made such Assets the Ineligible Assets) as of
the date of such payment.
Bank Secrecy and Personal Information




                                                   -56-
Ukrainian legislation expressly requires an assignor to provide the assignee with the documents
evidencing the assignor's claims as well as to disclose information which is relevant for the exercise
by the assignee of its rights vis-à-vis the debtor. The transaction will require that information on the
Loans and the Borrowers be, or, potentially be, disclosed to various parties at different stages of the
transaction. Under Ukrainian legislation, banks are required to preserve bank secrecy and are
prohibited from unauthorised disclosure of personal data on clients. Although it is unclear under
Ukrainian law how bank secrecy and personal data protection rules interact with the general right of
banks to assign their claims under consumer loans, a limited disclosure of information on loan
agreements, related security documents and the borrowers by the bank-lender to the respective
assignee should be permissible for the following reasons.
The Loans expressly permit the Originator to assign the Loan Claims to a third party, which can be
viewed as the Borrower's permission for the disclosure by the Originator to such third party of certain
documents and information that must be disclosed by an assignor to the assignee under the applicable
law. Accordingly, upon the sale of the Loan Claims, the Originator would be permitted (and, in fact,
required by law) to transfer to the Issuer the Loans, the Pledges (together, the "Loan Documents") and
other documents and information required for the exercise by the Issuer of its rights vis-à-vis the
Borrower under the Loan Documents. In light of the foregoing, the transfer/disclosure of the Loan
Documents and certain information on the Borrowers by the Originator to the Issuer should not be
viewed as a violation of the Ukrainian banking secrecy and personal data protection requirements. In
addition, under Ukrainian legislation, certain information on the Loans, the Pledges and the
Borrowers should be regarded as public information because it is subject to registration in the
Encumbrances Register which is open for public review and for this reason such information should
not be seen as falling under the banking secrecy or personal data protection requirements. The
Encumbrances Register contains records on pledges of movable property, including the name of the
borrower and the pledgor, his/her place of residence, description of collateral, amount and term of the
secured obligations, and information on the lender/pledgee. Accordingly, the disclosure of such
information in the Sale Agreement cannot be viewed as violation of the requirement of banking
secrecy and personal data protection.
Although, based on the foregoing, the Originator believes that the disclosure of information on the
Loans and the Borrowers in connection with this transaction should not breach the Ukrainian bank
secrecy and personal data protection laws, there can be no assurance that the NBU and/or Ukrainian
courts would not take a different view. Sanctions for improper disclosure of such information may
include, among other things, compensation by the Originator of the losses incurred by the affected
Borrower, written reprimand by the NBU and temporary removal from the duties of the Originator's
officer(s) responsible for such disclosure. In adverse situation, the officials of the Originator found
guilty of the illegal use and disclosure of the information that falls under bank secrecy, may be subject
to criminal sanctions. While an improper disclosure of such information should not affect the validity
of the Sale Agreement, this issue is not entirely clear due to the lack of an established court practice
on this matter.
In addition, neither any of the Loans nor Ukrainian legislation contains any indication that a similar
disclosure of information is permissible by the Originator to the Standby Asset Manager. However,
Ukrainian banking secrecy requirements would not prohibit the Issuer, after having acquired such
information pursuant to the Sale Agreement, to make it available to the Standby Asset Manager for
the sole purpose of the latter rendering such services to the Issuer as set out in the Standby Asset
Management Agreement.
Set-off
In certain circumstances, a Borrower may set-off certain of its monetary claims to the Originator
(arising from any bank account, deposit or other contractual relationship between the Borrower and
the Originator) against the Issuer's Loan Claims and/or Pledge Claims to the Borrower. In order to be
eligible for set-off, the Borrower's monetary claims should meet the following two requirements:
(i) they should arise from the grounds (e.g., an account opening agreement or a deposit agreement)
which exist at the time (the "Transfer Notice Date") of the Borrower's receipt of the Originator's
written notice of transfer of the Assets to the Issuer, and (ii) they should either mature (become



                                                  -57-
payable) before the Transfer Notice Date or should have no specified term of maturity or should
mature on demand (note that, under Ukrainian law, an individual is entitled to demand the repayment
of his/her bank deposit before its stated maturity). The occurrence of the Transfer Notice Date would
limit the number and amount of the Borrower's monetary claims that can be set-off against the Loan
Claims and/or the Pledge Claims, to those monetary claims which satisfy the two requirements
specified above. If the Transfer Notice Date does not occur for any reason, the relevant Borrower
would be able to set-off against the Loan Claims and/or the Pledge Claims a broader range of the
Borrower's monetary claims to the Originator – namely, any monetary claims arising from the
grounds (e.g., an account opening agreement or a deposit agreement) which exist at the time when the
Borrower is requested by the Issuer (or by the Asset Manager, the Standby Asset Manager or other
authorised person on the Issuer's behalf) to make a payment in respect of the Loan Claims and/or the
Pledge Claims to the Issuer. The Sale Agreement obligates the Originator, within five (5) days from
the date thereof, to provide the Transfer Notice to each Borrower by registered mail with delivery
receipt requested. The Originator will also, to the extent and where feasible, collect (and to deposit
with the Data Custodian) registered mail receipts of delivery of the Transfer Notice to the Borrower,
which would evidence the occurrence of the relevant Transfer Notice Date. In addition, each Transfer
Notice requests the Borrower to countersign and deliver it to the Originator upon the Borrower's
earliest visit to PrivatBank or any of its branches or offices, which would be an additional evidence of
the occurrence of the relevant Transfer Notice Date.
The Subsequent Assets Eligibility Criteria set out in the Prospectus and in the Sale Agreement provide
that no Borrower should have outstanding deposits placed with the Originator. In addition, in the Sale
Agreement, the Originator represents and warrants to the Issuer that the Assets sold to the Issuer on a
Subsequent Transfer Date comply with this requirement and the other Eligibility Criteria. If the
Assets are found not to comply with this or other Eligibility Criteria, the Originator will be required to
repurchase or substitute the relevant Assets in accordance with the terms of the Sale Agreement.
Insurance of Motor Vehicles
On or about the date of disbursing each Loan and concluding the respective Pledge, the Originator
obtains from each Borrower an agreement between a Borrower and an insurer under an Insurance
Contract (as defined below) (the "Insurer") for the insurance of a Motor Vehicle, the purchase of
which by the Borrower is financed by a respective Loan and which is subject to a respective Pledge
(the "Insurance Contract") with respect to the relevant Motor Vehicle, naming the Originator as
beneficiary. The Loans and the Pledges require that such insurance must be maintained in effect
during the term of the respective Loans and Pledges. Upon the occurrence of an insured event, the
insurance proceeds will be paid to the Originator as beneficiary, for the satisfaction of its then
outstanding claims under the Loan.
The Originator's rights and claims under the Insurance Contracts will not be sold or assigned pursuant
to the Sale Agreement (and Ukrainian legislation is uncertain as to whether such sale and assignment
would be permissible). However, in the Sale Agreement, the Originator undertakes to procure that the
Issuer is named as beneficiary under all Insurance Contracts within one year of the date of the relevant
Transfer Notice. Under Ukrainian legislation and the terms of the Insurance Contracts, the
appointment of the Issuer as such beneficiary would require amendment of the Insurance Contracts by
agreement in writing between the relevant Borrowers and Insurers. The Transfer Notices, which the
Originator is required to serve pursuant to the Sale Agreement upon each sale of the Loan Claims will
be sent to each Borrower and the relevant insurer, and will require the Borrower and the insurer to
execute such amendment of the Insurance Contract. There is a risk that the Originator would not be in
a position to compel the Borrower and the insurer to execute, or otherwise would not be in a position
to obtain, such amendments within the term prescribed in the Sale Agreement, or at all. However, in
such event, the Issuer, upon having become the pledgee under the Pledges, should also obtain the
benefit of the relevant Insurance Contracts by operation of law, as discussed below.
Ukrainian legislation provides that, upon the occurrence of an insured event in respect of a Motor
Vehicle, the Borrower's rights of claim to insurance proceeds would become pledged under the
Pledge. In addition to such statutory position, the Pledges provide that, upon the occurrence of an
insured event in respect of the pledged Motor Vehicle, the pledgee would be entitled to the



                                                  -58-
satisfaction of its claims secured by the Pledge from the insurance proceeds "on a priority basis".
Although the procedure for the exercise of such rights of the pledgee is not clearly defined under the
applicable legislation, the pledgee's entitlement to the insurance proceeds in such situation would not
be questionable under Ukrainian law. Upon the relevant Transfer and registration of the Issuer as
pledgee under the Pledges in the Encumbrances Register, such entitlement should transfer from the
Originator to the Issuer in relation to such Pledges. Although Ukrainian legislation does not expressly
resolve a conflict that may possibly arise when the pledgee which is entitled to the insurance proceeds
by operation of law and the beneficiary named in the Insurance Contract are different persons, a
proper legal interpretation would favour the pledgee's rights as the pledge generally secures the
pledgee's priority in respect of the relevant asset (in this case, insurance proceeds). In addition, even
if the insurance proceeds were to be paid to the Originator as the designated beneficiary and not to the
Issuer, the Originator would be required, under the terms of the Sale Agreement and the Asset
Management Agreement, to pay all such amounts to the Issuer.
Notwithstanding the terms of the Sale Agreement requiring that the Issuer be named as beneficiary
under the Insurance Contracts, the Standard Form Pledge prohibits the Borrower from replacing the
Originator as beneficiary under the respective Insurance Contract until the full discharge of the
Borrower's obligations under the Loan. However, such contractual prohibition will not result in the
invalidity of any designation of the Issuer as beneficiary under the Insurance Contract. Given that the
Sale Agreement requires the Originator to ensure such designation, the Originator will not make any
claims against the Borrower for the latter's violation of the above specified prohibition under the
Pledge by naming the Issuer instead of the Originator as beneficiary under the Insurance Contract.
The Transfer Notices will contain a specific waiver of the Originator's claim to the Borrower in this
respect.
In accordance with the market practice in Ukraine, an Insurance Contract is normally concluded for
the term of 1 year, and will only be renewed or extended for the next 1 year term if the relevant
Borrower (or any other person on the Borrower's behalf) will have timely paid the relevant insurance
premium to the insurer. Certain Loans provide that the Originator will make additional loan advances
by payment of the required insurance premium to the insurer to maintain the effectiveness of the
Insurance Contract, to the extent that such insurance premiums have not been timely paid by the
Borrower. A risk exists that by reason of non-payment of the insurance premium or for other reasons
certain Insurance Contracts will not be extended or renewed upon expiry, as a result of which the
relevant Motor Vehicles would not have the insurance coverage. This, however, will not affect the
validity and enforceability of the Loans and Pledges.
Legal Considerations related to the Management of the Assets
Any Assets purchased by the Issuer will be managed by the Asset Manager pursuant to the Asset
Management Agreement, which is governed by Ukrainian law. In its capacity as the Asset Manager,
PrivatBank will administer the assets with the same diligence and skill as would a Prudent Lender,
and would essentially continue to perform the same monitoring, servicing, collection, enforcement
and other acts and procedures in respect of the Assets as have been performed by PrivatBank in its
capacity as the bank-lender before the transfer of the Assets to the Issuer, except that, following the
transfer, all such acts and procedures will be carried out by PrivatBank for the benefit of the Issuer or
the Trustee (as the case may be), and all proceeds of the Assets will be transferred to the Issuer as
discussed in "Management of the Assets - Payments from Borrower". The duties of the Asset
Manager are described in more detail in "Management of the Assets - Asset Management Agreement".
If the appointment of the Asset Manager terminates by reason of the occurrence of an Asset Manager
Termination Event (see "Risks related to the Notes - Asset Manager Substitution"), the Standby Asset
Manager will undertake the management of the Assets instead of the Asset Manager, on the basis of
the Standby Asset Management Agreement the terms of which are substantially similar to the terms of
the Asset Management Agreement.
The transaction described in this Prospectus is the first in Ukraine utilising the asset management in
the context of securitisation of auto loans and in the context of international securitisation.
Management by a bank (or another company) of assets owned by another person is a well recognized
concept under Ukrainian legislation, including the accounting rules. However, this concept is



                                                  -59-
relatively new and is largely untested in the Ukrainian courts, and there is no established or uniform
practice of its implementation in the market generally. In addition, Ukrainian legislation provides a
detailed regulation of the asset management in the context of domestic securitisations of mortgage
loans only, and does not provide a similarly detailed and specific regulation for securitisations of
other types of assets (including the rights of claim under the auto loans, like the Loan Claims), and for
international securitisation. Although analogies with the relatively developed regulations in the
mortgage lending area provide comfort, Ukrainian legislation and the court system cannot offer any
assurance that, in a particular situation, a Ukrainian court or regulator would rely on, and properly
apply, such analogies. Finally, no regulations exist in Ukraine to govern specifically the procedure
for cross-border settlements under an asset management agreement, like payments by the Asset
Manager or the Standby Asset Manager to the Issuer or the Trustee (as the case may be) under the
Asset Management Agreement or the Standby Asset Management Agreement (as the case may be)
(see "Management of the Assets - Payments from Borrowers"). The foregoing creates the risk of
inconsistent or erroneous application of the relevant legislation by the Ukrainian courts or regulators.
If such risk materializes, this may hinder the timely payment of proceeds of the Assets to the Issuer or
the Trustee (as the case may be).
Notwithstanding the foregoing, PrivatBank and the Issuer have been advised by Ukrainian counsel
that Ukrainian law provides no basis for challenging the Issuer's ownership of the Assets or
entitlement to the proceeds of the Assets for the reason that the Assets have been transferred into the
management of the Asset Manager or the Standby Asset Manager on the terms of, respectively, the
Asset Management Agreement or the Standby Asset Management Agreement. The same applies to
the rights which may be acquired by the Trustee with respect to the Assets pursuant to the Deed of
Charge and the Property Rights Pledge Agreement. PrivatBank believes that the Asset Management
Agreement and the Standby Asset Management Agreement provide the safest, best regulated and
most efficient arrangement for the administration/servicing of, and collection under, the Assets from
amongst the options available in the Ukraine. Even in the event that the Asset Management
Agreement or the Standby Asset Management Agreement or any payment arrangements thereunder
would cease to operate as contemplated therein, the owner of the Assets (the Issuer or the Trustee as
the case may be) will be entitled to enter into a replacement arrangement with PrivatBank, the
Standby Asset Manager or any other eligible banks in the Ukraine for the management or servicing of
the Assets.
For the discussion of the risk that the Asset Management Agreement may terminate upon the
enforcement by the Trustee of the Security against the Assets, see "Enforcement of the Property
Rights Pledge Agreement by the Trustee" and "Ukrainian Law Considerations related to the Deed of
Charge" below.
From (and including) the Initial Transfer Date, the Asset Manager will collect payments from the
Borrowers in the Asset Management Account, as prescribed by Ukrainian legislation for the purposes
of accumulating and accounting proceeds of the assets which are under the management of a
Ukrainian commercial bank such as the Asset Manager and carrying out settlements under the
agreements, such as the Asset Management Agreement. The Asset Management Account will be
established specifically for the management of the Assets pursuant to the requirements of Ukrainian
legislation and on the terms of the Asset Management Agreement.
Payments from the Borrowers will normally be collected in the Asset Management Account on the
scheduled monthly repayment date set out in the Loans or on the next following business day in Kyiv.
Although this position has not yet been tested in practice (in Ukrainian courts, in particular),
Ukrainian legislation stipulates that any funds collected from the Borrowers in respect of the Assets
held and accounted in the Asset Management Account in accordance with the applicable Ukrainian
legislation and the Asset Management Agreement would not be commingled with any assets of the
Asset Manager and would not form part of the liquidation estate of the Asset Manager in the event of
its liquidation (as a result of insolvency or otherwise). On the next Business Day following the Issue
Date, and thereafter not later than on the next Business Day following the collection of any such funds
in the Asset Management Account, the Asset Manager will transfer such funds into the Issuer
Account. However, any funds collected in a currency other than U.S.$ will, after such funds have
been converted by the Asset Manager into U.S.$, be transferred from the Asset Management Account



                                                  -60-
to the Issuer Account within three (3) Business Days following collection thereof. See "Management
of the Assets - Payments from Borrowers".
Ukrainian legislation provides no possibility for the collection of proceeds of the Assets by the Issuer
or the Trustee (as the case may be) directly from the Borrowers without the mediation of the Asset
Manager, the Standby Assets Manager or a similar Ukrainian commercial bank acting as manager or
servicer of the Assets under a proper agreement with the owner of the Assets (the Issuer or the
Trustee, as the case may be).
Repatriation of Payments related to the Assets
When collecting, converting into foreign currency (if required) and transferring to the Issuer Account
any funds in respect of the Assets, the Asset Manager (or, as the case may be, the Standby Asset
Manager) and the Issuer will rely on the treatment of the purchase by the Issuer of the Loan Claims
under the Sale Agreement as the Issuer's foreign investment in Ukraine made in the form of
acquisition of the Loan Claims. Such treatment of the purchase transaction would enable the
repatriation from Ukraine of such funds in accordance with the repatriation guarantee provided to
foreign investors under the applicable laws of Ukraine and, in addition, on the basis of the NBU
regulations which govern the making in Ukraine, and repatriation from Ukraine, of foreign investment
and proceeds thereof. Ukrainian legislation governing foreign investments describes the permitted
types, forms and objects of foreign investment in very broad terms and, in particular, broadly permits
investments by acquisition for foreign convertible currency of movable property and property rights in
Ukraine (which concepts include the rights of claim such as Loan Claims), except when the
acquisition of any particular property or property rights is prohibited by a law of Ukraine (no such
prohibition exists in respect of the Loan Claims). Notwithstanding such general permissive
provisions of foreign investment legislation, there is no specific regulation of foreign investment by
acquisition of any rights of claim, including rights of claim such as the Loan Claims. In addition,
there is no established court practice to confirm the treatment of such an acquisition as an instance of
foreign investment. Accordingly, when collecting, converting into foreign currency (if required) and
transferring to the Issuer Account any funds in respect of the Assets, the Asset Manager (or, as the
case may be, the Standby Asset Manager) and/or the Issuer will implement an approach which, while
having a fair basis under the applicable legislation of Ukraine, is novel, is not specifically addressed
in the NBU regulations, has not been tested in the courts of Ukraine and has not been broadly applied
in the market generally.
By a letter issued to the Originator (the "NBU Letter"), the NBU has confirmed that the purchase by
the Issuer of the Loan Claims may be regarded as the Issuer's foreign investment in Ukraine. The
NBU Letter confirms the foreign investment treatment in respect of the purchase of the Loan Claims
only, and the Ukrainian legislation and the NBU Letter are silent as to the treatment, for purposes of
statutory cross-border payment controls, of any payments which are related to, but do not arise
directly under the Loan Claims (e.g. any payments resulting from the Pledge Claims or claims under
the Insurance Contracts).
The NBU Letter, as any individual explanatory letter of the NBU, does not have the status of
legislation or any legally binding effect. In practice, such letters of the NBU are broadly relied on by
Ukrainian commercial banks and companies in Ukraine in their business transactions. However, a
risk exists that the NBU Letter may be revoked, replaced or disregarded by the NBU or other
Ukrainian state authorities or courts in the future. If such risk materialises, this would not affect the
validity of the transfer of the Assets (and/or the conversion and payment of proceeds of the Insurance
Contracts) under the Sale Agreement, but may hinder or prevent the payment of proceeds of the
Assets to the Issuer as contemplated under the Transaction Documents. In such situation, such
payment may require an individual permission (license) of the NBU, and there can be no assurance
that such a permission will be granted or will be granted within a reasonable time. The relevant
currency conversion and repatriation risks are mitigated by the PRI Policy (See "The PRI Provider
and The PRI Policy").
Given that Ukrainian legislation contains no specific regulation of foreign investment by acquisition
of the rights of claim, such as the Loan Claims, there is uncertainty as to the proper application of the




                                                  -61-
requirements and procedures provided by the applicable legislation for foreign investments generally
to this specific type of foreign investment. In particular, there is uncertainty as to the proper
procedure for the collection in Ukraine and repatriation from Ukraine of proceeds of the rights of
claim acquired by a foreign investor, such as the Loan Claims. In respect of any such collections in
UAH (e.g. collections under the Insurance Contracts), there is uncertainty as to the requirements and
procedure for the conversion of such UAH amounts into foreign currency for the purposes of its
further payment from Ukraine abroad. The foregoing uncertainties also concern the proper collection,
conversion and repatriation procedures under asset management arrangements such as the Asset
Management Agreement or the Standby Asset Management Agreement. Although each of the Issuer
and the Asset Manager (or the Standby Asset Manager, as the case may be) will act prudently when
implementing the relevant repatriation (and, where required, conversion) procedures, there can be no
assurance that the NBU or other Ukrainian authorities may not disagree with a particular act or
procedure as applied in a particular situation.
Under a conservative reading of the applicable Ukrainian legislation, the Asset Manager, the Standby
Asset Manager, the Issuer or the Trustee (as the case may be) would be entitled to repatriate the
proceeds of the Assets from Ukraine abroad, and to perform any currency conversion for such
purpose, only to the extent that the Issuer's foreign investment in Ukraine, made in the form of
acquisition of the Assets, will have been registered by the Issuer (or on its behalf) with the appropriate
local state authority responsible for the registration of foreign investments. In the Sale Agreement,
the Originator has undertaken to provide the Issuer with any assistance required to obtain such
registration.
Although any actual or alleged non-compliance by the Issuer and/or the Asset Manager (or the
Standby Asset Manager, as the case may be) with the regulations of the NBU governing the procedure
for the making and repatriation of payments in respect of foreign investments may not by itself affect
the validity of the Sale Agreement or any transfer of the Assets to the Issuer contemplated thereunder,
such non-compliance may hinder or prevent the payment of proceeds under the Assets to the Issuer as
contemplated under the Transaction Documents.
Consumer Protection Laws in Ukraine
Although there are no consumer protection laws specifically concerning loans, recent changes were
introduced to the Law of Ukraine "On the Protection of Consumer Rights" (the "Consumer
Protection Law") to govern legal relationships arising out of consumer loan agreements between a
bank or other financial institution and an individual. As a result of such changes, the Consumer
Protection Law would apply to the Loan Agreements. In particular, the Consumer Protection Law
contains a vague provision which may be interpreted as allowing the Borrowers to terminate its Loan
and to request compensation of damages if, at the time of conclusion of the Loan, the Originator failed
to provide the Borrower with all of the information prescribed by the Consumer Protection Law.
Such information includes, inter alia: (i) purpose of the Loan, (ii) types of collateral securing the
Loan, (iii) available forms of lending, (iv) types of interest rate, (v) maximum maturity of the Loan,
(vi) approximate aggregate costs of the Loan to the Borrower, including interest rate and expenses
related to receipt, servicing and repayment of the Loan, and (vii) options for the Loan repayment
(including the possibility of prepayment).
Apart from the foregoing, certain provisions of consumer loan agreements and the related security and
insurance agreements (such as the Loans, the Pledges and the Insurance Contracts) may be amended
or declared invalid by a Ukrainian court at the request of the Borrower if such provisions are viewed
as unfair or in violation of the consumers' rights established by the Consumer Protection Law. To the
extent that amendment or invalidation of any such provisions would be deemed to require an
amendment of any further provisions of the respective agreement, the court may, at the Borrower's
request, order such further amendment or declare the agreement invalid. However, based on a fair
reading of the applicable legislation (and absent any established court practice indicating the
contrary), it appears that, even if any provisions of a Loan, a Pledge or an Insurance Contract are
successfully challenged by a respective Borrower in a court on the basis discussed in this paragraph,
this may not result in the invalidation of the Pledge, the Loan or the Insurance Contract.




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Furthermore, the Consumer Protection Law provides that if, as a result of a default by the consumers,
the lender demands prepayment of the Loan or acceleration of amortisation in respect of such loan,
the consumer can make the required payment within thirty (30) days from the date of receipt of such
demand. If the consumer remedies its default under the consumer loan agreement within that 30-day
period, the lender may no longer request such prepayment or acceleration. Such requirement may
make the collection of defaulted loans or penalties under the Loans more difficult, and thus may
adversely affect the ability of the Issuer to make payments on the Notes.
In addition, the Loans, the Pledges and the Insurance Contracts are so-called "contracts of adhesion"
(i.e., contracts, the terms and conditions of which, are unilaterally determined by the Originator and
which the Borrowers may not negotiate and may enter into only by adhering to the standard form
proposed by the Originator). To the extent that a Ukrainian court would find that any such Loan,
Pledge or Insurance Contract deprives the Borrower of the rights usually granted under agreements of
such type, excludes or limits the liability of the Originator for the breach of its obligations or
otherwise contains terms that are clearly "burdensome" for the adhering party (the Borrower or
another debtor, as the case may be), which it would not have accepted with reference to its reasonable
interests if it had the ability to negotiate such terms, the court may permit the adhering party to
terminate or amend the Loan, the Pledge or the Insurance Contract. Without prejudice to the
generality of the foregoing, such terms may include (without limitation) unreasonably high
commissions, heavy penalties, indemnities and damages payable under the Loan, the Pledge or the
Insurance Contract. As of the date hereof, there is no established court practice in Ukraine which
could be relied on in order to determine whether the Standard Form Loan, the Standard Form Pledge
Agreement or the relevant standard form Insurance Contract contains any provisions which would
entitle the Borrower to seek their amendment or termination on the grounds discussed above. To the
extent that the Borrowers successfully challenge the respective Loans, Pledges or Insurance Contracts
on such grounds, this could have a material adverse effect on the ability of the Issuer to make
payments on the Notes.
Enforcement of Pledges under Ukrainian Law
Even assuming that Pledges over the Motor Vehicles provide adequate security for the Loans, delays
could be encountered in connection with enforcement of the Pledges and recovery of the Loans, with
corresponding delays in the receipt of related proceeds by the Issuer, which may ultimately delay
payments by the Issuer in respect of the Notes.
Loans are secured by Pledges over the Motor Vehicles.
Under Ukrainian law, the validity and effectiveness of the Pledges is dependent on the validity and
effectiveness of the underlying Loans; accordingly, a Pledge would cease to exist once the underlying
Loan has become invalid or ineffective for any reason.
Under Ukrainian law, a pledgee whose pledge is validly created and duly registered in accordance
with Ukrainian legislation is entitled to satisfy its claims from the value of the pledged property in
accordance with the priority ranking determined based on the time of registration of the pledge in the
Encumbrances Register.
In general, a pledge granted by an individual borrower to secure his/her car loan can be enforced
through one of the following options: (i) out-of-court procedures, (ii) court procedures (or arbitration
procedures, where the relevant arbitration agreement exists between the parties to the pledge), and
(iii) a notarial writ procedure. The latter option is available only when the pledge agreement has been
notarised at signing.
In order to commence enforcement under any of the above options, the pledgee must register the
relevant enforcement information in the Encumbrances Register.
Before commencing an out-of-court enforcement procedure and simultaneously with the registration
of the enforcement information in the Encumbrances Register, the pledgee must provide a written
notice of default to the pledgor and to each person in whose favour an encumbrance over the same
property is registered in the Encumbrances Register. From the date of receipt of such notice, a 30-day




                                                 -63-
grace period begins to run, during which the borrower may either remedy the default or deliver the
pledged collateral into the pledgee's possession for pledge enforcement purposes. Upon delivery of
the pledged collateral by the pledgor, the pledgee can satisfy its secured claims by either (i) obtaining
ownership rights to the collateral in full satisfaction of all of the claims or (ii) receiving the proceeds
of sale of the collateral by private sale or public auction. If the pledgor neither remedies the default
nor transfers the property to the pledgee within the above specified grace period, the pledgee would
need to apply to a court to enforce the pledge (and would not be entitled to exercise any self-help for
purposes of such enforcement).

Before commencing a court enforcement procedure, the pledgee must provide a written enforcement
notice to each person in whose favor an encumbrance over the same property is registered in the
Encumbrances Register. Enforcement of pledge through the court would involve fully fledged
hearings, i.e., the relevant court would review all the merits of the dispute. Enforcement of a court
judgment is performed by the State Enforcement Service of Ukraine, unless the defendant/pledgor
fulfills the court decision voluntarily with the term specified by the enforcement officer. Commonly,
the pledgee's claims are satisfied from the proceeds of sale of the pledged property through a public
auction, unless a different foreclosure method is indicated in the court judgment (e.g., transfer of title
to the property). Before the public auction takes place, the pledgor has the right to discharge the
secured obligations and to reimburse the pledgee for all expenses in relation to the enforcement of the
pledge and the public auction. In such event, the enforcement procedure would terminate.

While enforcement through the out-of-court procedure appears to be more effective and less time and
cost consuming, it is only viable if the pledgee cooperates with the pledgor. The enforcement through
a court procedure can be time consuming.

Ukrainian legislation seems to permit enforcement of a pledge of movable property through
arbitration if the parties to the pledge have the relevant arbitration agreement. Although the procedure
for such arbitration is not clearly regulated, the requirements set out above in respect of the
registration of enforcement information and the provision of notices during the court procedures
should also apply to any pledge enforcement through arbitration.

Enforcement through a notarial writ procedure is an easier and faster means of enforcement as
compared to the court enforcement procedure. However, the notarial writ procedure is available only
with respect to those pledges that are documented by notarised pledge agreements. To enforce a
pledge through the notarial writ procedure, the pledgee would obtain from a notary an execution order
(notarial execution writ) when the notary affixes an execution note on the original copy of the pledge
agreement pursuant to which the collateral may be realised by public auction. Such public auction,
similarly to the sale of collateral on the basis of a court judgment, proceeds through the State
Enforcement Service of Ukraine. The notarial writ procedure may not be available if the pledgee fails
to provide the notary with the documentation confirming the "undisputable fact" of the pledgor's
indebtedness under the underlying agreement creating the secured obligation (the notary cannot
determine the facts based on the review of the merits of the case, as a court would).

If the proceeds of sale of the collateral are not sufficient to satisfy the pledgee's claims in full, the
pledgor may be held liable for deficiency. However, in respect of such deficiency, the pledgee's
claims will be deemed unsecured.

Enforcement of the Property Rights Pledge Agreement by the Trustee
Pursuant to the Property Rights Pledge Agreement, the Issuer will grant, under Ukrainian law, a
pledge (the "Trustee Pledge") in favour of the Trustee over the Assets (the "Pledged Collateral").
Under Ukrainian law, only those rights of claim which are freely assignable by the pledgor to the
pledgee can be made subject to a pledge. In addition such a pledge would be enforceable through the
assignment of the pledged rights of claim to the pledgee. Thus, when the Trustee Pledge will become
enforceable, the Pledged Collateral will need to be assigned to the Trustee as pledgee. Accordingly,
all risks and restrictions discussed in this Prospectus in respect of the assignment or transfer of the



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Assets are relevant in the context of the pledge and assignment of the Pledged Collateral and,
accordingly, in the context of validity and enforceability of the Property Rights Pledge Agreement.
Before enforcing the Trustee Pledge, the Trustee will be required to (i) register information regarding
such enforcement in the Encumbrances Register and (ii) notify the Issuer of the occurrence of an
event of default under the Trustee Pledge and of the enforcement of the Trustee Pledge. In addition,
the Trustee would be required to provide a similar notice to each person in whose favour an
encumbrance over the Pledged Collateral is registered in the Encumbrances Register (note that,
although the Property Rights Pledge Agreement prohibits the Issuer to create or permit to exist any
encumbrances over the Pledged Collateral except the Trustee Pledge, certain encumbrances may arise
by operation of law and outside of the Issuer's control – however, any such encumbrances would be
registered in the Encumbrances Register after the registration of the Trustee Pledge and, accordingly,
would rank lower than the Trustee Pledge).
Upon enforcement of the Trustee Pledge and the resulting assignment of the Assets to the Trustee, the
Issuer or the Trustee would be required to (i) register information regarding such assignment in the
Encumbrances Register, and (ii) give notice of such assignment to each Borrower. The applicable
legislation is unclear whether such a notice should be made by the Issuer or the Trustee (and whether
the Trustee can make such notification instead of the Issuer). Although Ukrainian legislation is
uncertain as to the legal consequences of any failure to give (or delay in giving) such a notice, its fair
reading suggests that the validity of the assignment of the Pledged Collateral to the Trustee cannot be
challenged based on such failure. However, the Trustee as assignee would bear any negative
consequences of such failure (including the affected Borrowers being entitled to continue to discharge
their obligations under the respective Loans and Pledges to the Issuer rather than to the Trustee and to
object to the demands to discharge such obligations to the Trustee).
There is a risk that any failure to provide the above specified notices and registrations may disrupt the
enforcement of the Trustee Pledge.
In addition, there is a risk that, upon enforcement of the Trustee Pledge and the resulting assignment
of the Assets to the Trustee, a Borrower, an Insurer or other relevant Ukrainian debtor will not be
permitted to make any cross-border payment to the Trustee, nor will it be able (where required) to
purchase foreign currency in Ukraine for purposes of any such payment, without having first obtained
an individual licence from the NBU for such payment. Such a licence cannot be obtained in advance
of the enforcement of the Trustee Pledge. It is unclear whether any such cross-border payments to the
Trustee may fall under the exemption from the licensing regime of the NBU available for the
repatriation by a Borrower or other relevant Ukrainian resident debtor of the proceeds of foreign
investment from Ukraine abroad (see "Repatriation of Payments related to the Assets" above).
The Asset Management Agreement provides that, upon enforcement of the Trustee Pledge and the
resulting transfer of the Assets to the Trustee, the Asset Management Agreement will continue to
operate for the benefit of the Trustee as owner of the Assets. This notwithstanding, certain provisions
of Ukrainian legislation may be interpreted as requiring the termination of the Asset Management
Agreement upon such enforcement of the Trustee Pledge. If the Ukrainian authorities or courts insist
on the adverse interpretation and application of such statutory provisions, this would not affect the
Trustee's ownership of the Assets but would require the Trustee to enter into a new agreement for the
management of the Assets with the Asset Manager or any other Ukrainian bank acceptable to the
Trustee or to transfer the Assets into the management of the Standby Asset Manager pursuant to the
Standby Asset Management Agreement.
The Asset Management Agreement provides that, even if its termination is required upon the
enforcement of the Trustee Pledge, the termination date will be the date (or any later date agreed
between the Trustee and the Asset Manager) when the Trustee as a new owner of the Assets notifies
the Asset Manager that the new arrangement for the management of the Assets (either under a new
asset management agreement or the Standby Asset Management Agreement) has become effective
and the Assets have been transferred to such successor asset manager for management. Upon any such
termination, the Asset Manager will be required to pay all proceeds of the Assets held by the Asset
Manager at such date to or to the order of the Trustee.




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In addition, the Sale Agreement, the Asset Management Agreement and the Pledge Agreement
contain an undertaking by the Asset Manager to do all things necessary to ensure that, promptly upon
the enforcement of the Trustee Pledge and in any event not later than within 10 Business Days from
the date of such request thereafter, such new asset management arrangement or the management of
the Assets under the Standby Asset Management Agreement have become effective and fully
operational.
Ukrainian legislation is silent as to the proper treatment of the funds that may be received by the Asset
Manager after the termination of management of the Assets upon the enforcement of the Trustee
Pledge. However, a fair position, indirectly supported by the legislation, appears to be that any such
funds held by the Asset Manager must be segregated from any other assets until release to, or to the
order of, the Trustee. The Sale Agreement, the Asset Management Agreement and the Property
Rights Pledge Agreement each contain an undertaking of the Asset Manager to this effect.
Note that the Asset Management Account will not be, and cannot be under Ukrainian law, subject to
the Trustee Pledge, the security under the Deed of Charge or any other security arrangement (the same
applies to the funds in the Asset Management Account). Ukrainian law does not contain the concept
of pledges of bank accounts. Although it is not uncommon to substitute such pledges with pledges of
the account owner's rights of claim against the account bank for the funds in the account, such
approach cannot be applied in respect of the Asset Management Account. This is because the Asset
Management Account is not the Issuer's "client account" with the Asset Manager, but is a special
statutory account in the books of the Asset Manager designated exclusively for the account of funds
and settlements under the Assets in the management of the Asset Manager. Further, it would not be
appropriate for the Issuer to pledge its rights of claim under the Asset Management Agreement
(including the rights of claim to the funds in the Asset Management Account) to the Trustee, as such
rights are not assignable (and, therefore, cannot be pledged) by the owner of the Assets to any other
person. On the other hand, when the Trustee would become the owner of the Assets following the
enforcement of the Security, the Issuer would have ceased to have any rights of claim in respect of the
Assets and the funds in the Asset Management account and, accordingly, would not be in a position to
assign such rights of claim to the Trustee. (As discussed above, in such situation, the Trustee would
have the benefit of the Asset Management Agreement as the new owner of the Assets or would have
to set up a new management arrangement for the Assets). For similar reasons, the Standby Asset
Management Account (or the funds therein or the rights of claim to such funds) will not be subject to
the Trustee Pledge.
Because of the special status of the Asset Management Account under Ukrainian law, a pledge over
such account (or the funds therein or any rights thereto) will not be a necessary or feasible means of
protecting the funds in the Asset Management Account from the risk of insolvency or liquidation of
the Asset Manager or the Issuer. As discussed in sections "Insolvency Risks - Effects of Bankruptcy
Proceedings and Liquidation Proceedings against the Originator or the Asset Manager and
Revocation of its Banking Licence" and "Management of the Assets - Payments from Borrowers",
although this position has not yet been tested in practice (in courts, in particular), Ukrainian
legislation stipulates that any funds collected from the Borrowers in respect of the Assets, held and
accounted in the Asset Management Account in accordance with the applicable Ukrainian legislation
and the Asset Management Agreement would not be commingled with any assets of the Asset
Manager, and would not form part of the liquidation estate of the Asset Manager in the event of its
liquidation (as a result of insolvency or otherwise). Moreover, on the next Business Day following
the collection of any funds in the Asset Management Account, the Asset Manager will be transferring
such funds into the Issuer Account (located outside of Ukraine).
The Property Rights Pledge Agreement may be deemed invalid and unenforceable to the extent that
any of the Transaction Documents secured thereby is found invalid or unenforceable by a competent
court or arbitration.
Ukrainian Law Considerations related to the Deed of Charge
To ensure its priority and legal significance vis-à-vis third parties, the security created under the Deed
of Charge in respect of the Issuer's assets which may be deemed to be the "Ukrainian assets" (as they




                                                  -66-
concern payment obligations or other liabilities of any Ukrainian resident, i.e., the Borrower, the
Asset Manager, the Standby Asset Manager or any other Ukrainian debtor) will be registered in the
Encumbrances Register, similarly to the registration of the Trustee Pledge. However, except for
requiring such registration, Ukrainian law provides no guidance regarding the perfection and
enforcement of the security contemplated under the Deed of Charge (which is entered into between
non-Ukrainian parties (the Issuer and the Trustee) and is governed by English law).
The Deed of Charge may be seen to create security for the benefit of the Trustee over, among other
things, the Assets which are also pledged to the Trustee under the Property Rights Pledge Agreement.
There is no indication in Ukrainian legislation and court practice as to the interaction and ranking of
such overlapping security arrangements. In addition, Ukrainian legislation provides no guidance as to
the permissibility and operation of the security under the Deed of Charge over the Property Rights
Pledge Agreement. It is unclear whether the above described overlapping and multiple level security
arrangement may prevent or hinder the enforcement of the Security. However, such adverse
consequence is unlikely as the Trustee is the beneficiary of security under each of the Deed of Charge
and the Property Rights Pledge Agreement and will be in a position to apply good judgment and
caution in the exercise of its rights thereunder.
The security under the Deed of Charge extends to the Issuer's "Ukrainian assets" (as above described).
Although this is not entirely clear under Ukrainian law, an argument can be made that the Ukrainian
law requirements and procedures discussed in the section "Enforcement of the Property Rights Pledge
Agreement by the Trustee", above, must be complied with when enforcing such security in respect of
the Issuer's "Ukrainian assets" (including, without limitation, the debtor notification, 30 days waiting
period and registration requirements). In addition, the risks related to the creation, validity and
enforcement of the Trustee Pledge (including the post-enforcement management of, and cross-border
payments in respect of, the Assets) are relevant and apply in respect of the Deed of Charge.
Similarly to the Trustee Pledge, a risk exists that (i) the Asset Management Agreement and the
Standby Asset Management Agreement cannot be subject to the security under the Deed of Charge,
and (ii) the enforcement of the Deed of Charge against the Assets, resulting in the Issuer ceasing to
own the assets, will terminate the Asset Management Agreement (see "Enforcement of the Property
Rights Pledge Agreement by the Trustee", above).
Possible Restrictions on Cross-Border Payments and Currency Conversion
Ukrainian legislation generally restricts a Ukrainian resident's ability to make a payment abroad and,
unless such payment falls under a statutory exemption from the licensing regime of the NBU, the
Ukrainian resident would only be permitted to make the payment after having obtained an individual
license for such payment from the NBU (the "Cross-border Payment License"). It can be argued that
the currently existing statutory exemptions from the licensing regime of the NBU do not extend to such
cross-border payments (the "Restricted Payments") as (i) tax gross-up, tax indemnity, default interest,
indemnity, currency indemnity, costs, charges and expenses reimbursement, and other similar payments
which may have to be made by the Originator, the Asset Manager or the Standby Asset Manager from
Ukraine abroad pursuant to the Transaction Documents, and (ii) any payments which the Originator, the
Asset Manager or the Standby Asset Manager may be required to make pursuant to the PRI Side Letter or
upon enforcement of the Security. As a result, it can be argued that any Restricted Payment may legally
be made only after a Cross-border Payment License has been obtained for such Restricted Payment.
Under the applicable regulations, a Cross-border Payment License would not be granted on a contingency
basis or for a contingency payment, when the exact amount of the payment and its term cannot be
specified. In practice, however, and given the lack of certainty under the relevant NBU regulations,
certain Restricted Payments are often made in the absence of a Cross-border Payment License (especially
when the payer is a commercial bank). If any Restricted Payment is made without a Cross-border
Payment License, this would not by itself affect the validity of the relevant Transaction Document, but
may result in the imposition of fines or other sanctions for the violation of currency control regulations.
Finally, although Ukrainian currency regulations are silent in this respect, the Originator, the Asset
Manager or the Standby Asset Manager (as the case may be) should be permitted to make Restricted
Payments in the absence of a Cross-border Payment License pursuant to a valid and effective order issued




                                                   -67-
by a Ukrainian court (enforcing a foreign arbitral award or adopted as a result of review of the merits of
the dispute) that authorizes the making of such Restricted Payments.

Any conversion of Ukrainian currency funds into foreign currency for purposes of making any Restricted
Payment from Ukraine abroad can be made on the basis of the relevant Cross-border Payment License
and/or a Ukrainian court order authorizing such Restricted Payment.
Fixed Charges Over Accounts May Take Effect under English Law as Floating Charges
The Issuer will purport to grant, inter alia, fixed charges in favour of the Trustee over the Issuer's
interest in the Issuer Account and any other bank account situated in England and Wales in which the
Issuer has an interest.
The fixed charges purported to be granted by the Issuer may take effect under English law as floating
charges only, if, for example, it is determined that the Trustee does not exert sufficient control over
the relevant account or the proceeds thereof for the security to be said to "fix" over those assets.
If the charges take effect as floating charges instead of fixed charges then certain matters, which are
given priority over the floating charge by law, will be given priority over the claims of the floating
chargeholder.
Regulatory Considerations
Banking (Special Provisions) Act 2008
Under the Banking (Special Provisions) Act 2008 the UK Treasury has been given certain powers in
relation to authorised UK deposit takers. These comprise entities incorporated in or formed under the
laws of any part of the United Kingdom who have permission to accept deposits under Part 4 of
FSMA 2000 (or their UK subsidiaries). These powers last until 21st February 2009 and are capable of
having retrospective effect. They can only be exercised in certain circumstances namely: (i) to
maintain the stability of the UK financial system in circumstances where the Treasury considers that
there would be a serious threat to its stability; or (ii) to protect the public interest in circumstances
where financial assistance has been provided by the Treasury to the deposit taker for the purpose of
maintaining the stability of the UK financial system.
The powers are wide ranging and may entail divesting the authorised UK deposit-taker of its assets or
transferring ownership of any securities issued by the authorised UK deposit-taker irrespective of any
encumbrance or trust over them. Accordingly the enforceability of the obligations of the Agent Bank,
the Paying Agent and the Account Bank could be affected if the Treasury were to exercise such
powers.
If such powers were to be exercised the Treasury is required to make provision for compensation or
consideration (depending upon whether a public or private entity has acquired the asset) to be paid, in
the case of securities, to the holder of the assets, which may not be the encumbrancer.
Certain Powers of NBU
NBU Regulation No. 369 dated 28 August 2001 "On Use of Enforcement Measures in Respect of
Violations of the Banking Legislation" ("Regulation 369") provides that, on the basis of the NBU's
audit of the Originator or review of its compliance with the banking legislation, the NBU may impose
restrictions in respect of, suspend or terminate certain banking operations of the Originator, which, in
the opinion of the NBU, qualify as the "operations with a high level of risk" or those which, if
continued, would become "risky" and would threaten the interests of the Originator's creditors or
depositors. Such measures may be applied by the NBU, inter alia, in the situation when the
Originator's collections decrease to the extent adversely affecting the Originator's ability to maintain
the required level of the regulatory capital or the mandatory reserves against active transactions or to
cover the Originator's business losses. Regulation 369 does not provide precise and objective criteria
for determining whether and when a particular banking operation may become subject to the above
specified intervention by the NBU. Although this may not affect the validity of the Sale Agreement,
certain of the Originator's operations under the Transaction Documents may be adversely affected by



                                                  -68-
such NBU intervention (in particular, in the situation when the Originator's financial situation
deteriorates).
Changes to the Basel Capital Accord ("Basel II")
Following the issue of proposals from the Basel Committee on Banking Supervision (the "Basel
Committee") for reform of the 1988 Capital Accord, a framework has been developed which places
enhanced emphasis on market discipline and sensitivity to risk. A comprehensive version of the text
of the proposed framework was published in June 2006 under the title "International Convergence of
Capital Measurement and Capital Standards: A Revised Framework (Comprehensive Version) (the
"Basel II Framework")).

The Basel II Framework is being implemented in stages, the Basel II standard approach and the
Foundation IRB approach for credit risk was implemented from 1 January 2007 and the most
advanced BASEL II IRB approach and the advanced measurement approach (the "AMA") for
operational risks was required to be implemented from 1 January 2008. However, the Basel II
Framework is not self-implementing, and, accordingly, implementation dates in participating
countries are dependent on the relevant national implementing process in those countries. In the
United Kingdom, Basel II and the EU Capital Requirements Directive have been implemented
through the Prudential Sourcebook for Banks, Building Societies and Investments Firms (the
"BIPRU") and the Capital Requirements Regulations 2006 SI 2006/3221, although the most advanced
approaches referred to above have only become available from 1 January 2008.

As and when implemented, the Basel II Framework could affect the risk-based capital treatment of the
Notes for investors who are subject to bank capital adequacy requirements that follow the framework.
Consequently, investors should consult their own advisers as to the consequences of and effect on
them of the implementation of the Basel II Framework. Proposals and guidelines for implementing
Basel II in participating jurisdictions are still in development, and no predictions can be made as to
the precise effects of potential changes on the Notes, the Issuer or any investor.

Transparency Directive
Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the
harmonisation of transparency requirements in relation to information about issuers whose securities
are admitted to trading on a regulated market and amending Directive 2001/34/EC (the
"Transparency Directive") which entered into force on 20 January 2005 was due for implementation
in EU Member States on 20 January 2007. The Transparency Directive has been implemented in
Ireland through primary legislation (Investment Funds, Companies and Miscellaneous Provisions Act
2006) and secondary legislation (Transparency (Directive 2004/109/EC) Regulations 2007). The
Financial Regulator is the competent authority in Ireland for all aspects of the Transparency Directive
other than monitoring compliance by issuers with the relevant financial reporting framework, for
which IAASA is competent authority. The Transparency Directive applies to issuers of the following
securities admitted to listing and trading on the regulated market of the Irish Stock Exchange - shares,
debt securities, derivative securities and closed-end investment funds. If, as a result of the
Transparency Directive or any legislation implementing the Transparency Directive, the Issuer could
be required to publish financial information either more regularly than it otherwise would be required
to or according to accounting principles which are materially different from the accounting principles
which it would otherwise use to prepare its published financial information, the Issuer may seek an
alternative admission to listing, trading and/or quotation for the Notes on a different section of the
Irish Stock Exchange or by such other listing authority, stock exchange and/or quotation system inside
or outside the European Union as it may (with the approval of the Lead Manager and Trustee) decide.
EU Directive on the Taxation of Savings (2003/48/EC)
Under EC Council Directive 2003/48/EC on the taxation of savings income, each Member State is
required, from 1 July 2005, to provide to the tax authorities of another Member State details of
payments of interest or other similar income paid by a person within its jurisdiction to, or collected by
such a person for, an individual resident in that other Member State; however, for a transitional




                                                  -69-
period, Austria, Belgium and Luxembourg may instead apply a withholding system in relation to such
payments, deducting tax at rates rising over time to 35 per cent.. The transitional period is to
terminate at the end of the first full fiscal year following agreement by certain non EU countries to the
exchange of information relating to such payments.
Also with effect from 1 July 2005, a number of non EU countries, and certain dependent or associated
territories of certain Member States, have agreed to adopt similar measures (either provision of
information or transitional withholding) in relation to payments made by a person within its
jurisdiction to, or collected by such a person for, an individual resident in a Member State. In
addition, the Member States have entered into reciprocal provision of information or transitional
withholding arrangements with certain of those dependent or associated territories in relation to
payments made by a person in a Member State to, or collected by such a person for, an individual
resident in one of those territories.
Risks Relating to Ukraine
General
Since obtaining independence in 1991, Ukraine has undergone a substantial political transformation
from a constituent republic of the Soviet Union to an independent sovereign democracy. In parallel
with this transformation, Ukraine is progressively changing from a centrally planned economy to a
market economy. In particular, Ukraine's achievements in market-oriented reforms have recently been
recognised by the European Union (the "EU") which granted Ukraine market economy status at the
end of 2005 followed by the United States of America (the "U.S.") granting Ukraine such status in
February 2006 (see "Relationships with Western Governments and Institutions").
Although some progress has been made since independence in reforming Ukraine's economy and its
political and judicial systems, to a large extent Ukraine still lacks the necessary legal infrastructure
and regulatory framework that is essential to support market institutions, the effective transition to a
market economy and broad-based social and economic reforms. Set forth below is a brief description
of some of the risks incurred by investing in Ukraine, although the list is not an exhaustive one.
Risks Associated with Emerging Markets
Investors in emerging markets such as Ukraine should be aware that these markets are subject to
greater risks than more developed markets, including in some cases significant political, economic
and legal risks. Investors should also note that emerging economies such as Ukraine's are subject to
rapid change and that some or all of the information set out in this Prospectus may become outdated
relatively quickly. Accordingly, investors should exercise particular care in evaluating the risks
involved and must decide for themselves whether, in light of those risks, their investment is
appropriate. Generally, investment in emerging markets such as Ukraine is only suitable for
sophisticated investors who fully appreciate the significance of the risks involved, and investors are
urged to consult with their own legal and financial advisors before making an investment in the Notes.
Official Statistics
Official statistics and other data published by Ukrainian state authorities, including that relating to
loans, may not be as complete or reliable as those of more developed countries. Official statistics and
other data may also be produced on different bases than those used in more developed countries. The
Issuer has not independently verified such official statistics and other data, and any discussion of
matters relating to Ukraine in this Prospectus is, therefore, subject to uncertainty due to questions
regarding the completeness or reliability of such information. Specifically, investors should be aware
that certain statistical information and other data contained in this Prospectus have been extracted
from international and Ukrainian official and governmental sources and have not been prepared in
connection with the preparation of this Prospectus. PrivatBank only accepts responsibility for the
correct extraction and reproduction of such information, and as far as it is aware and is able to
uncertain from the information published, no material facts have been omitted which would render the
reproduced information inaccurate or misleading.




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Political Situation
Since independence in 1991, governmental instability has been a feature of the Ukrainian political
scene and, as a result, there were seventeen Prime Ministers in Ukraine, with various actions and
decisions being taken based primarily on political considerations. Historically, a lack of political
consensus in the Parliament has made it consistently difficult for the Ukrainian government to sustain
a stable coalition of parliamentarians to secure the support necessary to implement a series of policies
intended to foster liberalisation, privatisation and financial stability. The Ukrainian government's
policies and the political leaders who formulate and implement them, are subject to rapid change.
Following the second round of presidential elections in November 2004, demonstrations and strikes
took place throughout Ukraine to protest against the election process and results. However, tensions
in Ukraine appear to have subsided following the invalidation of the November 2004 election results
by the Supreme Court of Ukraine and the revote of the presidential runoff held on 26 December 2004
resulting in the victory of Mr. Viktor Yuschenko.

On 25 May 2006, the constitutional reform limiting the powers of the President and transferring
certain powers of the President to the Parliament and Prime Minister became effective (with certain
provisions already in effect since 1 January 2006). The reform introduced, in particular, the
requirement to create a majority coalition in Parliament, the right of such coalition to submit
nominations for the roles of the Prime Minister and other members of the Cabinet of Ministers, new
rights of the President to dissolve Parliament, and the extension, from four years to five years, of the
length of terms of both the Parliament and local councils. The reform was intended to provide for a
greater degree of stability and ensure more responsible government policies, although there can be no
assurance that it will achieve these results.

On 2 April 2007, President Yuschenko signed a decree dissolving the Parliament of Ukraine. The
President claimed that the process of forming a majority coalition in the Parliament that had evolved
during the recent months had breached the procedure set out in the Constitution of Ukraine.

On 4 May 2007, President Yuschenko and Prime Minister Yanukovych reached an agreement on
holding early parliamentary elections and established a working group, comprising the representatives
of the President, the parliamentary coalition and the opposition, for negotiating the details for holding
the elections. Further to recommendations of the working group, on 27 May 2007, President
Yuschenko, Prime Minister Yanukovych and Speaker of the Parliament Moroz, reached an agreement
to hold early parliamentary elections on 30 September 2007.

Based on official results of the elections, announced on 15 October 2007 by the Central Election
Commission the Party of Regions led by Viktor Yanukovych obtained 34.37 per cent. of the votes
(175 seats out of 450 total seats), while the Yuliya Tymoshenko Block obtained 30.71 per cent. (156
seats), the pro-presidential Our Ukraine – People's Self-Defense Block obtained 14.15 per cent. (72
seats), the Communist Party of Ukraine obtained 5.39 per cent. (27 seats) and the moderate centrist
block headed by the former parliament Speaker Volodymyr Lytvyn had 3.96 per cent. (20 seats). All
other parties and blocks failed to reach the three per cent. mark of the total vote necessary for
proportional representation in the Parliament.

On 29 November 2007, the Yuliya Tymoshenko Block and the pro-presidential Our Ukraine –
People's Self-Defense Block signed an official coalition agreement to form a majority in the newly
elected parliament and appoint the government. According to this agreement, the Yuliya Tymoshenko
Block receives control over economical sectors (including tax and custom state bodies) and fuel and
energy complex in the government. The Our Ukraine – People's Self-Defence Block will control
humanitarian and military/interior blocks of government and obtained the right to propose a candidate
for the position of the Speaker of the new Ukrainian Parliament. On 4 December 2007, the Parliament
elected Arseniy Yatseniuk as a new Speaker of the Parliament. On 18 December 2007, the new
Ukrainian Parliament appointed Mrs. Yuliya Tymoshenko as Prime Minister, as was envisaged by the
coalition agreement, and endorsed a new government.




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Viktor Yanukovych, whose Party of Regions no longer has a majority in the newly elected
Parliament, declared that his party was moving into the opposition and did not plan to participate in
the formation of a new government.
There is no certainty that the new government's policies of Yuliya Tymoshenko will succeed or that
political stability will be achieved. No assurance can be given that reforms and economic growth will
not be hindered as a result of any further disruption of government continuity, any dissent in the
government and the Parliament or any other changes affecting the stability of the government or
involving a rejection or reversal of reform policies favouring privatisation, industrial restructuring and
administrative reform. Political instability in Ukraine may have negative effects on the economy and
thus on the business of the Originator, the Borrowers and consequently, the Noteholders.
Economic Considerations
In recent years, the Ukrainian economy has continued to face a number of factors which could lead to
economic instability, including a relatively weak banking system, providing limited liquidity to
Ukrainian enterprises, instability of tax laws, widespread tax evasion and the presence of black and
grey-market economy, a high level of loss-making enterprises that continue to operate due to the lack
of effective bankruptcy proceedings, a high level of monopolisation and a poor competitive
environment, a high level of corruption, significant capital flight, a real estate market which may be
fully valued and rising but relatively low wages for a large portion of the Ukrainian population.

Although the Ukrainian government has generally been committed to economic reform, the
implementation of reform has consistently been impeded by lack of political consensus, controversies
over privatisation (including the privatisation of land in the agricultural sector and of large industrial
enterprises), the restructuring of the energy sector, the removal of exemptions and privileges for
certain state-owned enterprises or for certain industry sectors, and the limited extent of cooperation
with international financial institutions.
While Ukrainian economy has improved in a number of areas since 1999, there has historically been
no clear consensus between the government and the Parliament as to the scope, pace and content of
economic and political reform. Although most political analysts believe the new government of
Yuliya Tymoshenko will continue the initiated reforms, no assurance can be given that current reform
policies favouring privatisation, industrial restructuring, administrative and tax reform will continue to
be implemented and, even if implemented, that those policies will be successful, or that the economy
in Ukraine will improve.
While Ukraine has made significant gains in increasing its gross domestic product ("GDP"),
decreasing inflation, stabilising its currency, increasing real wages and improving its trade balance,
the political instability in the forth quarter of 2004 and in the second and third quarter of 2007
negatively impacted on the main economic indicators at that time. However, Ukraine's economy has
in the main withstood the 2004 and the 2007 political upheaval.
According to the State Statistics Committee of Ukraine, the rate of inflation in the four months ended
30 April 2008 was 13.1 per cent., compared 1.3 per cent. for the same period in 2007 and 2.3 per cent.
in 2006. Ukraine's GDP growth rate in four months ended 30 April 2008 amounted to 6.2 per cent.,
compared to GDP growth of 7.9 per cent. for the same period in 2007 and 2.7 per cent for 2006.
Industrial output growth in the four months ended 30 April 2008 amounted to 8.0 per cent., compared
to 12.8 per cent. growth for the same period in 2007 and 0.7 per cent. in 2006.
In August 2007, the Government approved its forecast for Ukraine's economic and social
development for 2008 which was amended in November 2007. This forecast estimated Ukraine's
GDP growth rate and the rate of inflation to be 6.8 per cent. and 9.6 per cent., respectively, in 2008.
An economic downturn may have an adverse effect on the business and financial condition of the
Originator, the Borrowers and, consequently, the Noteholders.
In April 2005, the NBU revalued the hryvnia by setting the UAH/U.S.$ exchange rate at UAH 5.05 to
U.S.$1.00 compared with UAH 5.28 to U.S.$1.00 at the beginning of April 2005 which has
negatively impacted on the Ukrainian exports and the economy generally. In order to reduce inflation,



                                                  -72-
in May 2008, the NBU has further revalued the hryvnia by setting the UAH/U.S.$ exchange rate at
UAH 4.85 to U.S.$ 1.00. However, such NBU's decision is challenged by the Council of NBU
arguing that the Management Board of NBU had no right to exceed the rate range between UAH 4.95
and 5.25 to U.S.$ 1.00 established in the NBU guiding monetary policy principles in 2008. Any future
currency revaluations may have further adverse effects, which may in turn have an adverse effect on
the business of the Originator, the Borrowers and consequently, the Noteholders.
Relationship with Western Governments and Institutions
Ukraine is a WTO member starting from 16 May 2008.
Ukraine continues to pursue the objectives of a closer relationship with the North Atlantic Treaty
Organisation (the "NATO").
During his recent visit on 1 April 2008 to Ukraine, the US President, George Bush, supported
Ukraine's objective to joint NATO.
At the Bucharest Summit held on 2-4 April 2008, NATO leaders adopted Bucharest Summit
Declaration which welcomes Ukraine's aspiration to become a NATO member in the future. NATO
will work with Ukraine to address outstanding questions regarding its application to join the
Membership Action Plan, which will be reviewed by NATO foreign ministers in December 2008.
The formal basis for NATO-Ukraine relations is provided by the 1997 NATO-Ukraine Charter on a
Distinctive Partnership. The Charter identified areas for consultation and cooperation and established
the NATO-Ukraine Commission (NUC) to take work forward. A national referendum held after
Ukraine has fulfilled its pre-accession formalities may be required as a final step towards the
Ukraine's accession to NATO.
EU relations with Ukraine are based on the Partnership and Co-operation Agreement (PCA) which
entered into force in 1998 (for an initial ten year period renewable by consent of the parties). A
number of specific agreements in particular policy areas such as trade, science and technology, and
nuclear energy are also in place. The TACIS programme has been the framework for technical
assistance since the early 1990s, supporting the transition process towards democracy and market
economy. The European Neighbourhood and Partnership Instrument (ENPI) which replaced TACIS
programmes on 1 January 2007, was created to implement the European Neighbourhood Policy.
Ukraine is considered a priority partner country within the European Neighbourhood Policy (ENP). A
joint EU-Ukraine Action Plan was endorsed by the EU-Ukraine Cooperation Council on 21 February
2005.
With effect from 30 December 2005, the EU granted Ukraine market economy status and on 5 March
2007 the EU and Ukraine officially launched negotiations on a new enhanced agreement providing
for, inter alia, a free trade area between the parties.
On 27 October 2006, the 10th EU-Ukraine Summit took place in Helsinki. The Summit reviewed the
implementation of the EU-Ukraine Action Plan of 2005 and took stock of progress in relation to joint
work and initiatives launched in areas such as energy and border-related issues. Other topics on the
agenda related to co-operation on foreign and security matters, nuclear safety issues and justice,
freedom and security. The EC-Ukraine readmission and visa facilitation agreements were initialled
aiming at opening the way for easier travel and people-to-people contacts across Europe, while at the
same time fighting illegal migration.
On 14 September 2007, the 11th EU-Ukraine Summit took place in Kyiv. The Summit reviewed the
implementation of the EU-Ukraine Action Plan of 2005, the political situation in Ukraine and further
strategic cooperation between the EU and Ukraine.
In November 2007, the European Parliament and the Council or the European Union approved the
conclusion of the agreement which simplifies the procedure for obtaining entry visas to the EU
counties by Ukrainian citizens, and ratification by the Ukrainian Parliament followed in January 2008.
The agreement is expected to enter into force in the first half of 2008.




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Ukraine has recently strengthened its relationship with the U.S. and was part of the coalition that
dispatched troops to Iraq in support of the U.S.-backed military campaign there. Although, in late
2004, the Ukrainian Parliament decided to withdraw Ukrainian troops from Iraq, which was
confirmed by the adoption of a presidential decree in April 2005, this did not adversely affect
Ukraine's relationship with the United States.
Shortly after the visit of President Yuschenko to Washington, D.C. in April 2005, the U.S. Senate
allocated an additional U.S.$60 million of financial assistance to Ukraine, which was subsequently
approved by the U.S. House of Representatives. In August 2005, the U.S. administration lifted 100
per cent. tariff sanctions that had been in place since 2002 on U.S.$75 million worth of Ukrainian
exports to the U.S. due to Ukraine's failure to enact legislation to prevent the illegal production and
trade of compact discs and digital versatile discs. In January 2006, the office of the U.S. Trade
Representative announced that the U.S. will reinstate the benefits of the Generalised System of
Preferences for Ukraine and lower Ukraine's designation from "Priority Foreign Country" to "Priority
Watch List". With effect from 1 February 2006 the U.S. granted Ukraine market economy status, and
on 23 March 2006 the Jackson-Vanik amendment that restricted Ukrainian exports was repealed in
relation to Ukraine.
Notwithstanding the positive trends in Ukraine's relations with Western governments and institutions,
there can be no assurance that Ukraine will continue to pursue closer relations with Western
governments and institutions. Any adverse changes in Ukraine's relations with Western governments
and institutions may have negative effects on the Ukrainian economy and on the business of the
Originator and the Borrowers and, consequently, the Noteholders.
Regional Relationships
Ukraine generally maintains positive relations with its neighbours. Taking into account its
geographical position and history, Ukraine's closest relations are with the Russian Federation and
Poland. Significant relationships have also been developed with other countries of the EU (including
Germany, Hungary, Slovakia and Romania), members of the Commonwealth of Independent States
(the "CIS") (including Belarus and Georgia), as well as Turkey.
As an energy-dependent country, Ukraine relies to a significant extent on supplies of energy resources
from, and deliveries of such resources through, Russia. Consequently, as has been demonstrated in
recent years, any major improvements or declines in the relationship between the two countries were
reflected by the quality of their relations in the energy sphere. In the beginning of August 2004, the
Gosudarstvennaya Duma (Parliament) of the Russian Federation adopted a law amending certain
provisions of Russia's Tax Code. As a result of these amendments, exports of oil and gas from Russia
to Ukraine since 1 January 2005 have been subject to a zero per cent. value added tax rate instead of
the previously effective 18 per cent. value added tax rate, which was generally perceived as an
incentive offered to Ukraine to develop a closer economic integration with Russia. However, the
outcome of the 2004 Ukrainian presidential elections has, to a certain extent, negatively affected
relations between Ukraine and Russia. Since 2005 Russia has repeatedly increased its oil export duty.
For example, Russian oil export duty rose from U.S.$101.00 per tonne as of 1 December 2004 to
U.S.$179.60 per tonne as of 1 December 2005 and U.S.$237.60 per tonne as of 1 October 2006.
Following the decreases in world oil prices, Russian oil export duty was decreased to U.S.$180.70 per
tonne from 1 December 2006, and to U.S.$156.40 from 1 April 2007, in line with the general decrease
in export duties for various oil products. However, the Russian oil export duty was increased to
U.S.$250.30 per tonne from 1 October 2007 and U.S.$340.10 per tonne from 1 April 2008.
In addition, gas prices in Ukraine have risen as a result of recent disagreements in 2005, early 2006
and October 2007 between Open Joint-Stock Company "Gazprom", the Russian gas monopoly
("Gazprom") and National Joint-Stock Company "Naftogas of Ukraine", the Ukrainian monopoly
state-owned oil and gas company ("Naftogas"), over the prices and methods of payment for gas
delivered by Gazprom to, or for transportation through, Ukraine. Thus, on 1 January 2006, Gazprom
temporarily stopped supplies of natural gas to Naftogas in connection with a dispute over an increase
in prices which were resumed on 4 January 2006 when Gazprom, Naftogas and RosUkrEnergo AG, a
gas trading company incorporated in Switzerland, entered into a series of new agreements for the




                                                 -74-
supply of natural gas to Ukraine by RosUkrEnergo AG. During 2007 RosUkrEnergo AG supplied
natural gas to Ukrgaz-Energo, a 50/50 joint venture of RosUkrEnergo AG and Naftogas (the
"Ukrgaz-Energo"), at a price of US$130 per 1,000 cubic metres. The total volume of gas supplied by
RosUkrEnergo AG to Ukraine for domestic consumption in 2007 has been agreed at no less than 55
billion cubic metres. According to the 4 December 2007 agreement with Gazprom, the imported gas
price for Ukraine in 2008 increased to U.S.$ 179.5 per 1,000 cubic metres, which is 38 per. cent
higher than the price in 2007. At the same time, Ukraine increased the fee it charges to Gazprom for
transporting gas to Europe through the territory of Ukraine in 2008 to U.S.$1.7 per 1,000 cubic metres
per 100 km (compared to U.S.$ 1.6 per 1,000 cubic metres per 100 km in 2007).
In early 2008, the government announced its intention to remove intermediaries from the gas supply
arrangements. On 8 January 2008, the National Electricity Regulatory Commission of Ukraine (the
"NERC") limited the volume of gas which may be supplied by Ukrgaz-Energo to 5.04 billion cubic
metres per annum, and on 6 February 2008, Cabinet of Ministers of Ukraine repealed its resolution
which approved the establishment of Ukrgaz-Energo. However, on 18 April 2008, limitation
established by the NERC was cancelled by the District Administrative Court in the City of Kyiv upon
the claim of Ukrgaz-Energo which currently continues to supply natural gas to industrial customers in
Ukraine. As of today, the issue of liquidation of Ukrgaz-Energo is postponed until October 2008.
On 19 March 2008, the Cabinet of Ministers of Ukraine generally approved the Agreement on the
Development of Relations in the Gas Sector between Gazprom and Naftogas signed on 12 March
2008. The agreement provides for the establishment of a Gazprom subsidiary for purposes of supply
of natural gas to Ukrainian consumers in the amount of 7.5 billion cubic metres per annum. In line
with the new gas agreement, Gazprom registered its wholly-owned subsiadiary, Gazprom Sbyt
Ukraine Ltd. On 24 April 2008, the NERC issued a one-year licence to Gazprom Sbyt Ukraine Ltd.
on supplies of 7.5 billion cubic metres of natural gas in Ukraine. Starting from 1 May 2008, Gazprom
Sbyt Ukraine Ltd. began to supply natural gas to certain Ukrainian industrial companies.

As of the date of this Prospectus, natural gas is sold to industrial customers in Ukraine by a number of
gas traders, including Ukrgaz-Energo, SC "Gas of Ukraine", a subsidiary of Naftogas, and Gazprom
Sbyt Ukraine Ltd.

Relations between Ukraine and Russia have also been affected, from time to time, by controversy
over the stationing of the Russian Chernomorskiy Flot (The Black Sea Fleet) in Ukraine, including the
amount payable to Ukraine for such stationing, the return of certain navigational facilities to Ukraine
and compliance with Ukrainian environmental legislation by the Black Sea Fleet. Further, in January
2006, Russia banned imports of Ukrainian livestock and dairy products on the basis of the alleged
violation of veterinary and sanitary standards by Ukrainian producers. Following inspections of
Ukrainian exporters of such products by the Russian authorities, the ban was lifted in relation to a
number of Ukrainian companies. The final settlement of the matter is currently underway.
More than 20 per cent. of Ukrainian exports of goods currently go to Russia, while much of Russia's
exports of energy resources are delivered to the EU via Ukraine. The considerable dependence of the
Ukrainian economy on Russian exports of energy resources, accompanied by the increase of the price
for natural gas by Russia, may adversely affect the pace of economic growth of Ukraine and,
consequently, the business of the Originator and the Borrowers. Further, the gas price increases have
put additional pressure for reforms in the energy sector and modernisation of major energy-consuming
industries of Ukraine through the implementation of energy-efficient technologies and modernisation
of production facilities. However, there can be no assurance that this will take place.
Although it is perceived that the relationship between Ukraine and Russia has generally improved in
2006, further risk of politically motivated disputes in the energy sector has increased as a result of the
policies of the new Ukrainian government led by Yuliya Tymoshenko and any major changes in
Ukraine's relations with Russia, in particular any such changes adversely affecting the supply of
energy resources from Russia to Ukraine and/or Ukraine's export revenues derived from transit
charges for Russian oil and gas, may also have negative effects on the Ukrainian economy and thus
may adversely affect the business of the Originator and the Borrowers and consequently, the
Noteholders.



                                                  -75-
External Debt
Due to high domestic interest rates and a lack of demand for domestic treasury bonds, the Ukrainian
government has been dependent to a significant degree on the receipt of substantial financial
assistance from foreign private creditors, certain foreign governments and international organisations,
including the International Monetary Fund (the "IMF") and the World Bank. In 2000, Ukraine
undertook a comprehensive debt restructuring exercise to alleviate its rising external debt burden
resulting from the accumulation of large payments on external debt coming due in 2000 and 2001.
Since the conclusion of this debt restructuring exercise, the ratio of external debt servicing (including
principal, interest and fees but excluding debt owed to the IMF) to gross domestic product ("GDP")
has risen from approximately 1.9 per cent. as at 31 December 2001 to approximately 2.3 per cent. as
at 31 December 2002 and approximately 2.7 per cent. as at 31 December 2003, although it has fallen
to approximately 2.1 per cent. as at 31 December 2004 and to approximately 1.7 per cent. as at 31
December 2005, approximately 1.4 per cent. in 2006 and is estimated to be approximately 1.0 per
cent. in 2007, based on official government sources. Total government external debt servicing
(excluding payments to the IMF and payments under state guarantees) was approximately U.S.$1.4
billion in 2003, U.S.$1.3 billion in 2004, U.S.$1.5 billion in 2005, U.S.$1.5 billion in 2006 and is
estimated to be approximately U.S.$1.2 billion in 2007, based on official government sources. There
can be no assurance that adverse changes in global or domestic political and economic conditions or
in the international capital markets would not place renewed pressure on Ukraine's foreign exchange
reserves and its ability to service its external debt.
In 2005, the International Bank for Reconstruction and Development and Ukraine entered into five
facility agreements for the implementation of systemic and investment projects, the aggregate amount
of which totalled approximately U.S.$716 million. Further, in June 2006, the World Bank approved a
U.S.$150 million loan for the "Access to Financial Services Project for Ukraine" (which is aimed to
increase access to financial services in rural areas) and in July 2006, the World Bank approved
another U.S.$154.5 million loan for the "Second Export Development Project for Ukraine" (which is
aimed to support export and real sector growth in Ukraine by providing working capital and
investment finance to Ukrainian private exporting enterprises and to develop financial intermediation
in the Ukrainian banking sector). In August 2007, the World Bank approved two loans in the amounts
of U.S.$200 million and U.S.$140 million to Ukraine aimed at improvement of power supply and
urban infrastructure in Ukraine. On 20 December 2007, the World Bank approved a U.S.$300 million
loan for the Second Development Policy Loan to support Ukraine's key reforms in improving the
investment climate, creating an economic environment to foster public investment through more
efficient management of public finances and improved public service delivery and greater social
inclusion. On 8 January 2008, the World Bank approved a US$50 million loan for the "Public Finance
Modernisation Project" aimed at strengthening the efficiency and transparency of public financial
management. On 6 May 2008, the World Bank approved a loan for "Alchevsk Steel Mill Revamping
and Modernisation" for purpose of financing oxygen converters and casting.
Although Ukraine has been able to access international capital markets, raising new financing in the
years 2003 through 2007, and its long-term credit rating has been periodically upgraded from "B2" to
"B1" by Moody's in November 2003, from "B+" to "BB-" by Standard and Poor's Rating Service, a
division of the McGraw Hill Companies Inc. ("S&P") in May 2005 and from "B+" to "BB-" by Fitch
in January 2005 with its long-term credit rating improved by Fitch and Moody's from "stable" to
"positive" in October 2006 and November 2006, respectively. However, in April 2007, Ukraine's
long-term credit rating by S&P was revised from "stable" to "negative". In March 2008, Fitch
affirmed Ukraine's long-term foreign and local Issuer Default Ratings (IDR) at "BB-" with Positive
Outlooks. Fitch also affirmed the "Country Ceiling" at "BB-" and the Short-term IDR at "B", but in
May 2008, Fitch Ratings revised Ukraine's Outlooks to Stable from Positive. Ukraine's Long-term
foreign and local Issuer Default Ratings (IDR) are affirmed at "BB-" (BB minus). The Country
Ceiling is affirmed at "BB-" (BB minus) and the Short-term foreign currency IDR at "B". The absence
of a deep and liquid market for domestic treasury bonds means that Ukraine remains vulnerable
should access to international capital markets not be possible for any reason in the future. Under such
circumstances, any failure of Ukraine to receive support from sovereign or private creditors or



                                                  -76-
international financial institutions (such as the IMF and the World Bank) could adversely affect
Ukraine's financing of its budget deficit, the level of inflation and/or the value of the hryvnia, which in
turn may adversely affect the Ukrainian economy as a whole and thus the business of the Originator
and the Borrowers and, consequently, the Noteholders.
Fluctuations in the Global Economy
Ukraine's economy is vulnerable to market downturns and economic slowdowns elsewhere in the
world. In addition, as Ukraine is a major producer and exporter of metal and agricultural products,
the Ukrainian economy is especially vulnerable to world commodity prices and/or the imposition of
import tariffs by the U.S., the EU or by other major export markets. Any of such developments may
have negative effects on the economy and thus on the business of the Originator, the Borrowers and,
consequently, the Issuer's ability to make payments of interest and principal to the Noteholders.
Lack of Continued Access to Foreign Trade and Investment
In 2005 and 2006, the Ukrainian economy experienced a record inflow of foreign direct investment,
which was mainly due to the sale of the largest Ukrainian metallurgical plant OJSC "Kryvorizhstal" to
Mittal Steel Germany GmbH for US$4.8 billion (OJSC "Kryvorizhstal" is currently known as Arcelor
Mittal Kryviy Rih). In addition, the period from 2005 to date of this Prospectus has seen a
considerable increase of foreign investment in the Ukrainian banking sector, including acquisitions of
controlling stakes in a number of Ukrainian banks by foreign banks. Notwithstanding improvements
in the Ukrainian economy in recent years, cumulative foreign direct investment remains low for a
country of the size of Ukraine. As has happened in the past, an increase in the perceived risks
associated with investing in Ukraine could decrease foreign direct investment in Ukraine and
adversely affect the Ukrainian economy. No assurance can be given that Ukraine will remain
attractive to foreign trade and investment. Further, although the government has repeatedly
emphasized that the plans announced in early 2005 to review the privatisation of a number of major
companies are no longer under consideration, any future attempts to re-privatise or nationalise private
enterprises could adversely affect the climate for foreign direct investment. Any deterioration in the
climate for foreign direct investment in Ukraine could have an adverse effect on the economy of
Ukraine which in turn may adversely affect the business of the Originator and the Borrowers and,
consequently, the Noteholders.
Corruption and Money Laundering Issues
Independent analysts have identified corruption and money laundering as problems in Ukraine. In
accordance with Ukrainian anti-money laundering legislation which came into force in June 2003, the
NBU and other state authorities, as well as various entities carrying out financial transactions, are
required to monitor certain financial transactions more closely for evidence of money laundering. As
a result of the implementation of this legislation, the Financial Action Task Force on Money
Laundering removed Ukraine from its list of Non-Cooperative Countries and Territories in
February 2004 and ended the formal monitoring of Ukraine in January 2006. However, any future
allegations of corruption in Ukraine or evidence of money laundering could have a negative effect on
the ability of Ukraine to attract foreign investment and thus have a negative effect on the economy of
Ukraine, on the Borrowers' ability to repay the Loans, and consequently on the business of the
Originator and on the Issuer's ability to make payments of interest and principal to the Noteholders
under the Notes.
Ukraine's Business Environment and the Lack of Liquidity
Ukrainian enterprises have a limited history of operating in free-market conditions and have had
limited experience (compared with companies in more developed jurisdictions) of entering into and
performing contractual obligations. Ukrainian enterprises, when compared to businesses operating in
more developed jurisdictions, are often characterised by management that lacks experience in
responding to changing market conditions and limited capital resources with which to develop their
operations. In addition, Ukraine has a limited infrastructure to support a market system, with
communications, banks and other financial infrastructure being less well developed and less well
regulated than their counterparts in more developed jurisdictions. Ukrainian enterprises face



                                                   -77-
significant liquidity problems due to a limited supply of domestic savings, few foreign sources of
funds, high taxes, limited lending by the banking sector to the industrial sector and other factors.
Many Ukrainian enterprises cannot make timely payments for goods or services and owe large
amounts in taxes, as well as wages to employees. A deterioration in the business environment in
Ukraine could have a material adverse effect on the Originator's business, on the Borrower's ability to
repay the Loans, and on the market price of the Notes.
Social Instability in Ukraine
The failure of the Ukrainian government and many private enterprises to pay full salaries on a regular
basis and the failure of salaries and benefits generally to keep pace with the rapidly increasing cost of
living have led in the past, and could lead in the future, to labour and social unrest. Labour and social
unrest may have political, social and economic consequences, such as increased support for a renewal
of centralised authority or, on the contrary, for federalisation of the State, increased nationalism, with
restrictions on foreign ownership in the economy of Ukraine, and violence. Any of these events could
materially adversely affect the Originator's ability to conduct its business effectively, the Borrower's
ability to repay the Loans, and the market price of the Notes. Notwithstanding the above, PrivatBank
is not in arrears of payment of salaries to employees.
Developing Legal System
Risks associated with the Ukrainian legal system include, but are not limited to:
●       inconsistencies between and among Ukraine's Constitution, its laws, presidential decrees, and
        Ukrainian governmental, ministerial and local orders, decisions, resolutions and other acts;

●       provisions in laws and regulations that are ambiguously worded or lack specificity and
        thereby raise difficulties when implemented or interpreted;

●       a lack of judicial and administrative guidance on the interpretation of Ukrainian legislation,
        including the complicated mechanism through which the Constitutional Court of Ukraine
        exercises its constitutional jurisdiction;

●       general inconsistency in the judicial interpretation of Ukrainian legislation in the same or
        similar cases;

●       corruption within the judiciary; and

●       a high degree of discretion on the part of governmental authorities, which could result in
        arbitrary actions.

Furthermore, several fundamental Ukrainian laws either have only relatively recently become
effective or are still pending hearing or adoption by the Ukrainian Parliament. For example, with
effect from 2004 and 2005, Ukraine adopted a new civil code, a new civil procedural code, a new
economic code, a new code on administrative procedure, new pledge and mortgage finance laws, a
new law on personal income tax, a new law on state registration of proprietary rights to immovable
property and a new law on international private law. In June 2005, the Ukrainian Parliament adopted
a new law on credit histories and credit bureaus which entered into force in January 2006. With effect
from 2006, a new law on securities and stock market, a new law on holding companies and a new law
on mortgage bonds were adopted and the laws on mortgage and real estate construction financing
instruments were significantly amended. In January 2006, Ukraine ratified the UNIDROIT
Convention on International Financial Leasing and the UNIDROIT Convention on International
Factoring. The relatively recent origin of much of Ukrainian legislation, the lack of consensus about
the scope, content and pace of economic and political reform and the rapid evolution of the Ukrainian
legal system in ways that may not always coincide with market developments place the enforceability
and underlying constitutionality of laws in doubt and result in ambiguities, inconsistencies and
anomalies. In addition, Ukrainian legislation often contemplates implementing regulations. Often
such implementing regulations have either not yet been promulgated, leaving substantial gaps in the




                                                  -78-
regulatory infrastructure, or have been promulgated with substantial deviation from the principal rules
and conditions imposed by the respective legislation, which results in a lack of clarity and growing
conflicts with regulatory authorities.
These weaknesses in the Ukrainian legal system could materially adversely affect the Originator's
ability to conduct its business effectively, a Borrower's ability to repay the Loans, and the market
price of the Notes.
Uncertainties Relating to the Judicial System
The independence of the judicial system and its immunity from economic and political influences in
Ukraine remain questionable. Although the Constitutional Court of Ukraine is the only body
authorised to exercise constitutional jurisdiction and has mostly demonstrated the impartiality of its
judgments, the system of constitutional jurisdiction itself remains too complicated to ensure the
smooth and effective removal of discrepancies between the Constitution of Ukraine and applicable
Ukrainian legislation on the one hand and among various laws of Ukraine on the other hand.
The court system is under-staffed and under-funded. Judicial precedents under Ukrainian law
generally have no binding effect on subsequent decisions. Moreover, courts themselves are generally
not bound by earlier decisions taken under the same or similar circumstances, which results in the
inconsistent application of Ukrainian legislation to resolve the same or similar disputes. Not all
Ukrainian legislation is readily available to the public or organised in a manner that facilitates
understanding. Presently, only a limited number of judicial decisions are publicly available and,
therefore, the role of judicial decisions as guidelines in interpreting applicable Ukrainian legislation to
the public at large is limited. However, according to a new law on "Access to Court Decisions" which
became effective on 1 June 2006, decisions of courts of general jurisdiction in civil, economic,
administrative and criminal matters have now become publicly available through the Unified State
Register of Court Decisions.
The Ukrainian judicial system has become more complicated and hierarchical as a result of the
recently introduced judicial reforms. The generally perceived result of the judicial reforms is that the
Ukrainian judicial system has become even slower than before. All of these factors make judicial
decisions in Ukraine difficult to predict and effective redress uncertain. In addition, court claims are
often used to further political aims. The Issuer or the Originator may be subject to such claims and
may not be able to receive a fair hearing.
The enforcement of court orders and judgments can, in practice, be very difficult in Ukraine. The
State Enforcement Service of Ukraine, a body independent of the Ukrainian courts, is responsible for
the enforcement of court orders and judgments, as well as arbitration awards in Ukraine. Often,
enforcement procedures are very time-consuming and may fail for a variety of reasons, including the
defendant lacking sufficient bank account funds or property, the complexity of auction procedures for
the sale of the defendant's property or the defendant undergoing bankruptcy proceedings. In addition,
the State Enforcement Service of Ukraine has limited authority to enforce court orders and judgments
quickly and effectively. Ukrainian enforcement agencies are bound by the method of execution
envisaged by the relevant court order or judgment and may not independently change such method
even if it proves to be inefficient or unrealisable. Furthermore, notwithstanding the successful
execution of a court order or a judgment, a higher court could reverse the court order or judgment and
require that the relevant funds or property be restored to the defendant. Moreover, in practice, the
procedures employed by the State Enforcement Service of Ukraine often have to comply with
ambiguous or imprecise legal requirements, resulting in delays or failures in the enforcement of court
orders and judgments.
These uncertainties also extend to certain rights, including investor rights. In Ukraine, there is no
established history of investor rights or responsibility to investors and in certain cases, the courts may
not enforce these rights. In the event courts take a consistent approach in protecting rights of investors
granted under applicable Ukrainian legislation, the legislature of Ukraine may attempt legislatively to
overrule any such court decisions by backdating such legislative changes to a previous date.




                                                   -79-
Any uncertainties relating to the judicial system could have a negative effect on the economy, on the
Borrower's ability to repay the Loans, and on the business of the Originator and the ability of the
Issuer to make payments of interest and principal to Noteholders under the Notes.
Uncertainties Relating to the Ukrainian Tax System
Ukraine currently has a number of laws relating to various taxes imposed by both central and local
authorities. Applicable taxes include value added tax, corporate income tax (profits tax), customs
duties, personal income tax, payroll (social) taxes and other taxes. These tax laws have not been in
force for significant periods of time as compared to more developed market economies, and often
result in unclear regulations. Moreover, tax laws in Ukraine are subject to frequent changes and
amendments, which can result in either a friendlier environment or unusual complexities for the
Originator and the Borrowers. For example, with effect from 1 January 2004, personal income tax has
been reformed by the introduction of a new flat tax of 13 per cent. increased to 15 per cent. from 1
January 2007 for almost all levels of income. In addition, with effect from 1 January 2004, the rate of
corporate profits tax was reduced from 30 per cent. to 25 per cent. Also, a new withholding tax of 5
per cent. on interest accrued on deposits held by individuals in Ukrainian banks will be imposed
starting from 1 January 2010. The amendments to the 2005 State Budget Law effective 31 March
2005 abolished different tax preferences, including, inter alia, those for domestic and foreign
investors, which may become grounds for numerous lawsuits against the State. Differing opinions
regarding legal interpretation often exist both among and within governmental ministries and
organisations, including the tax authorities, creating uncertainties and areas of conflict. The
Parliament of Ukraine plans to introduce a comprehensive Tax Code that is to replace the existing
plethora of often contradicting tax legislation. It is planned that the Tax Code will also eliminate the
numerous ambiguities in Ukrainian tax laws and protect businesses from aggressive and dubious tax
collection procedures.

Tax declarations/returns, together with other legal compliance areas (for example, such as customs
and currency control matters), are subject to review and investigation by a number of authorities,
which are authorised by law to impose severe fines, penalties and interest charges. These
circumstances generally create tax risks in Ukraine substantially more significant than those typically
found in countries with more developed tax systems. Generally, the Ukrainian tax authorities may re-
assess tax liabilities of taxpayers only within a period of three years after the filing of the relevant tax
declaration. However, this statutory limitation period may not be observed or may be extended in
certain circumstances. While the Originator believes that it is currently in compliance with the tax
laws affecting its operations, it is possible that relevant authorities could take differing positions with
regard to interpretative issues, which may result in a material adverse effect on the Originator's results
of operations and financial condition and which could have a consequential material adverse effect on
Noteholders under the Notes.

For further information as to taxation in Ukraine, please see the section entitled "Ukrainian taxation".

Disclosure and Reporting Requirements and Fiduciary Duties
Disclosure and reporting requirements have only recently been enacted in Ukraine. Anti-fraud
legislation has only recently been adapted to the requirements of a market economy and remains
largely untested. Most Ukrainian companies do not have corporate governance procedures that are in
line with U.S. standards, including the standards set forth in the U.S. Sarbanes-Oxley Act of 2002.
The Banking Law introduced the concept of fiduciary duties owned by a bank's management to the
bank and its clients, which concept was further elaborated in the Guidelines for the Improvement of
Corporate Governance in Ukrainian Banks, adopted by the NBU in March 2007. However, the
concept of fiduciary duties of management or members of the board to their companies or
shareholders remains undeveloped in Ukraine. Violations of disclosure and reporting requirements or
breaches of fiduciary duties by the Originator's directors could significantly affect the receipt of
material information or result in inappropriate management decisions, materially adversely affecting
the value of an investment in the Notes.




                                                   -80-
Enforceability of Judgments
Ukrainian courts will not recognise and/or enforce any judgment obtained in a court established in a
country other than Ukraine unless such recognition and/or enforcement is envisaged by an
international treaty ratified by Ukrainian Parliament between such country and Ukraine or by an "ad
hoc" arrangement providing for enforcement of such judgments on a reciprocal basis and only in
accordance with the terms of such treaty or arrangement. There is no such treaty in effect between
Ukraine and the United Kingdom. Ukraine is a party to the 1958 New York Convention on the
Recognition and Enforcement of Foreign Arbitral Awards (the "New York Convention").
Consequently, a foreign arbitral award obtained in a state which is party to that convention, such as
the United Kingdom, should be recognised and enforced by a Ukrainian court (under the terms of the
New York Convention). Since each of the Transaction Documents to which the Originator, the Asset
Manager or the Standby Asset Manager is a party contains a provision allowing for arbitration of
disputes in London, United Kingdom, as the designated seat of arbitration, respective arbitral awards
may be enforced in Ukraine under provisions of the New York Convention.
Currency Instability in Ukraine
Currency devaluation in Ukraine could have a significant effect on the Issuer's ability to make interest
payments or repay the Notes, as the income earned by the Borrowers are generally denominated in
Hryvnia while the Loans are denominated in U.S.$. This may result in delays in payments by the
Borrowers or even defaults.
The risk of devaluation is mitigated by the unofficial pegging of many salaries in Ukraine to the
U.S.$. Since many of the salaries of the Borrowers are pegged to the U.S.$, they will be less sensitive
to devaluations, since their Hryvnia salaries would rise as the value of the Hryvnia relative to the
U.S.$ fell. However, in the event of devaluation, these factors may not be sufficient to prevent delays
in Borrower payments or Borrower defaults.
Systemic Banking Crisis in Ukraine and the Ukrainian Banking System's Undercapitalisation
A systemic banking crisis and the Ukrainian banking system's undercapitalisation (particularly
amongst medium to small Ukrainian banks) could adversely affect the operational activity of the
Asset Manager or the Standby Asset Manager. Ukrainian banking and other financial systems are still
in a state of transition when compared with the banking and other financial systems of more
developed countries and the Ukrainian banking system is, on occasion, subject to inconsistent
regulation and supervision. A crisis in the Ukrainian banking industry may adversely affect the
ability of the Issuer to make interest payments or repay the Notes.




                                                 -81-
                                         CREDIT STRUCTURE
The Notes will not be obligations of the Originator, the Asset Manager, the Initial Purchaser, the
Standby Asset Manager, the Cash Manager, the Account Bank, the Agent Bank, the Corporate
Services Provider, the Interest Rate Cap Provider, the Facility Provider, the Paying Agent, the PRI
Provider, the Rating Agencies, the Registrar, the Trustee, the Data Custodian, the Lead Manager or
anyone else other than the Issuer and will not be guaranteed by any such party. None of the
Originator, the Asset Manager, the Initial Purchaser, the Standby Asset Manager, the Cash Manager,
the Account Bank, the Agent Bank, the Corporate Services Provider, the Interest Rate Cap Provider,
the Trustee, the Facility Provider, the Paying Agent, the Data Custodian, the Lead Manager or anyone
other than the Issuer will accept any liability whatsoever in respect of any failure by the Issuer to pay
any amount due under the Notes.
As a condition to the issue of the Notes, the Class A Notes are each to be rated "BBB-" by Fitch and
"Baa3" by Moody's. The Class B Notes are each to be rated "B" by Fitch and "Ba3" by Moody's. The
Class C Notes are not rated.
A security rating is not a recommendation to buy, sell or hold securities and may be subject to
revision, downgrade, qualification, suspension or withdrawal at any time by any of the Rating
Agencies. The structure of the credit arrangements may be summarised as follows:
Receipts in respect of the Loans
The Issuer will be required to record:
(a)     all "Principal Receipts", being principal amounts received from Borrowers in respect of the
        Loans representing monthly repayments of principal in a separate ledger for that purpose (the
        "Principal Ledger");
(b)     all "Revenue Receipts", being all amounts, other than Principal Receipts, received from
        Borrowers in respect of the Loans or otherwise paid or recovered in respect of the Loans
        (including, without limitation, for the avoidance of doubt, (i) finance charges, (ii) late
        charges, (iii) prepayment fees or other fees, and (iv) net amounts representing Principal
        Recovery on, or after, the date on which any debit is made to the Principal Deficiency Ledger
        and the Revenue Ledger in respect of the relevant Loans in a separate ledger for that purpose
        (the "Revenue Ledger").
Credit Support for the Notes Provided by "Available Revenue Funds"
The interest rates payable by Borrowers in respect of the Loans vary in respect of different Borrowers
and different types of Loans. It is anticipated that, on the Issue Date, the weighted average interest
rate payable by Borrowers on the Loans will, assuming that all of the Loans are fully performing and
that no extraordinary expenses have been incurred by the Issuer, exceed the amounts payable under
items (i) (one) to (vii) (seven) of the Revolving Period Revenue Priority of Payments or under
items (i) (one) to (vii) (seven) of the Amortisation Period Revenue Priority of Payments by an amount,
calculated as a percentage of the principal balance of the Assets, which is, under certain scenarios,
approximately 4 per cent. (the "Excess Spread"). The actual amount of the excess will vary during
the life of the Notes; the key factors determining such variations are the level of delinquencies and
defaults experienced, the weighted average interest rate, the level of prepayments and the level of
recoveries achieved following enforcement against Borrowers, in each case, on the Assets. Available
Revenue Funds may be applied (after making payments or provisions ranking higher in the Pre-
Enforcement Revenue Priority of Payments) on each Interest Payment Date towards reducing any
Principal Loss in the Principal Deficiency Ledger (as defined below).
The "Available Revenue Funds" comprises the credit balance of the Revenue Ledger established by
the Issuer for the purpose of recording the funds held by the Issuer and to be disbursed according to
the Revolving Period Revenue Priority of Payments or the Amortisation Period Revenue Priority of
Payments, as applicable. On an Interest Payment Date, the Available Revenue Funds will include:
(a)     the Revenue Receipts on the immediately preceding Determination Date;



                                                  -82-
(b)     if applicable, all amounts standing to the credit of the Reserve Ledger on the immediately
        preceding Determination Date (as described in "Income Deficiency" below);
(c)     if applicable, all amounts standing to the credit of the Contingency Reserve Ledger, the Set-
        Off Reserve Ledger on the immediately preceding Determination Date;
(d)     if applicable, during the first 180 days of a PRI Event, all amounts standing to the credit of
        the PRI Ledger on the immediately preceding Determination Date;
(e)     if applicable, any amounts received from the PRI Provider;
(f)     if applicable, any Principal Addition Amount (as described in "Income Deficiency" below);
(g)     any amount received by the Issuer from the Interest Rate Cap Provider under the Interest Rate
        Cap Agreement from (but excluding) the immediately preceding Interest Payment Date to
        (and including) that Interest Payment Date other than (i) any termination payment payable by
        the Interest Rate Cap Provider to the Issuer, to the extent such termination payment is payable
        to a suitably rated replacement counterparty in consideration for such counterparty entering
        into a suitable replacement hedging agreement and (ii) any premium payable to an interest
        rate cap counterparty upon a replacement of the Interest Rate Cap Provider, to the extent that
        such premium is not paid to the outgoing counterparty as a termination payment);
(h)     any amount received by the Issuer from the Account Bank in respect of interest on the credit
        balance of the Issuer Account or any interest earned on the credit balance of the Issuer
        Account for the relevant Interest Period; and
(i)     any amount received by the Issuer in respect of Authorised Investments (as described in
        "Authorised Investments" below) from (but excluding) the immediately preceding Interest
        Payment Date to (and including) that Interest Payment Date.
On each Interest Payment Date, the Available Revenue Funds on such date will be applied to
discharge the payments and provisions set out in the Revolving Period Revenue Priority of Payments
or the Amortisation Period Revenue Priority of Payments, as applicable. Following such application
of the Available Revenue Funds in accordance with the Revolving Period Revenue Priority of
Payments or the Amortisation Period Revenue Priority of Payments, as applicable, it is not intended
that any surplus will be accumulated in the Issuer.
To the extent that the amount of Available Revenue Funds standing to the credit of the Revenue
Ledger on each Interest Payment Date exceeds the amount required to meet items (i) (one) to (vii)
(seven) of the Revolving Period Revenue Priority of Payments or items (i) (one) to (vii) (seven) of the
Amortisation Period Revenue Priority of Payments, such funds are available to replenish the Reserve
Fund and the PRI Reserve Fund in accordance with the Revolving Period Revenue Priority of
Payments or the Amortisation Period Revenue Priority of Payments, as applicable. The Reserve Fund
is available to be drawn upon on any Interest Payment Date upon which there exists any Income
Deficiency (as defined below) or any Principal Loss. The PRI Reserve Fund is available to be drawn
upon on any Interest Payment Date (during the first 180 days of a PRI Event) upon which there exists
any Income Deficiency as a result of a PRI Event.
Income Deficiency
On each Determination Date, the Issuer will determine whether the credit balance of the Revenue
Ledger (the "Initial Available Revenue") (excluding the PRI Reserve Fund (as defined below) and
amounts received from the PRI Provider under the PRI Policy) is sufficient to pay or provide for
payment of items (i) (one) to (vii) (seven) (including) of the Revolving Period Revenue Priority of
Payments or items (i) (one) to (vii) (seven) (including) of the Amortisation Period Revenue Priority of
Payments. To the extent that the credit balance is insufficient (the amount of any deficiency being an
"Income Deficiency"), the Issuer shall pay or provide for such Income Deficiency (i) firstly, in the
case of a PRI Event, by applying amounts received from the PRI Provider under the PRI Policy, but
only to the extent permitted, (ii) secondly, in the case of the first 180 days of a PRI Event by applying
all amounts standing to the credit of the PRI Ledger, (iii) thirdly, by applying amounts standing to the



                                                  -83-
credit of the Reserve Ledger, and (iv) fourthly, in transferring from the Principal Ledger to the
Revenue Ledger on the relevant Interest Payment Date any further amount (which would otherwise be
available for distribution as principal payments under the Notes) necessary to meet such Income
Deficiency (each such amount, a "Principal Addition Amount").
Any Principal Addition Amount so utilised shall be re-allocated as a Revenue Receipt by being
debited to the Principal Ledger and credited to the Revenue Ledger so that it is available for
application on the relevant Interest Payment Date in accordance with the Revolving Period Revenue
Priority of Payments or the Amortisation Period Revenue Priority of Payments, as applicable. At the
same time it will be recorded in the Principal Deficiency Ledger as a debit.
Use of Revenue Receipts to make good Principal Deficiencies
Amounts up to the total debit balance on the Principal Deficiency Ledger (including any Principal
Addition Amount utilised as referred to in "Income Deficiency" above) shall be covered by crediting
the Principal Deficiency Ledger from the Revenue Ledger under item (viii) (eight) of the Revolving
Period Revenue Priority of Payments or under item (viii) (eight) of the Amortisation Period Priority of
Payments to the extent sufficient funds are available for such purpose on any Interest Payment Date (a
"Revenue Addition Amount").
Use of Principal Recovery
Principal received in respect of Loans after a debit entry has been recorded in respect thereof on the
Revenue Ledger ("Principal Recovery") will be added to the Revenue Ledger.
Reserve Fund
In order to provide limited coverage for Income Deficiency and Principal Loss, including Interest
Shortfall on the Notes arising from time to time and Principal Loss arising on the Notes, the Issuer
will establish a reserve fund (the "Reserve Fund") to be maintained in an amount equal to (i) 4 per
cent. of the Principal Amount Outstanding of the Senior Notes as at the Issue Date or (ii) PROVIDED
THAT that the Principal Amount Outstanding of the Class A Notes has been reduced to 50 per cent.
of the Principal Amount Outstanding of the Class A Notes as at the Issue Date and the Portfolio
Cumulative Net Default Ratio has not been breached, 4 per cent. of the Principal Amount Outstanding
of the Senior Notes on any such Interest Payment Date provided further that the amount shall not, in
any event, be reduced to an amount less than U.S.$ 1,000,000 (the "Reserve Fund Required
Amount"). The Reserve Fund will be funded on the Issue Date by part of Tranche B of the Facility,
as described below, and from time to time through the distribution of Available Revenue Funds (in
accordance with Condition 2(c) (Revolving Period Revenue Priority of Payments) and Condition 2(e)
(Amortisation Period Revenue Priority of Payments).
PRI Reserve Fund
In order to maintain timeliness of payment during the first 180 days of a PRI Event, the Issuer will
establish a political risk insurance reserve fund (the "PRI Reserve Fund") to be applied towards
(i) payments under items (i) (one) to (v) (five) (inclusive) of the Revolving Period Revenue Priority of
Payments or items (i) (one) to (v) (five) (inclusive) of the Amortisation Period Revenue Priority of
Payments, as applicable, up to an amount equal to approximately U.S.$ 135,000 (the "Senior
Expenses"), and (ii) interest payments due under the Class A Notes for the first 180 days of such
Expropriation or Currency Inconvertibility, as applicable, occurring. The PRI Reserve Fund will be in
an amount (the "PRI Reserve Required Amount") equal to the sum of: (i) the aggregate Principal
Amount Outstanding of the Class A Notes at the immediately preceding Interest Payment Date
multiplied by the average of: (x) the Interest Rate Cap (as defined in "Credit Structure - Interest Rate
Cap Agreement" below), and (y) the Class A Step-Up Margin (as defined in Condition 4 (Interest))
and (ii) the Senior Expenses outstanding on any Determination Date (as defined below).




                                                 -84-
Use of Revenue Receipts to make good the Reserve Fund Required Amount and the PRI
Reserve Required Amount
On any Interest Payment Date to the extent that amounts are available after payment of any amounts
under items (i) (one) to (vii) (seven) (inclusive) of the Revolving Period Revenue Priority of Payments
or under items (i) (one) to (vii) (seven) (inclusive) of the Amortisation Period Revenue Priority of
Payments], the excess, if any, will be deposited, on a pro rata basis, in the (a) Reserve Fund to the
extent necessary to replenish and maintain the Reserve Fund Required Amount and (b) the PRI
Reserve Fund to the extent necessary to replenish and maintain the PRI Reserve Required Amount as
item (ix) (nine) of the Revolving Period Revenue Priority of Payments or as item (ix) (nine) of the
Amortisation Period Revenue Priority of Payments, as applicable. All amounts credited to the
Reserve Fund will be recorded in a ledger for that purpose (the "Reserve Ledger") and all amounts
credited to the PRI Reserve Fund will be recorded in a ledger for that purpose (the "PRI Ledger").
On any Interest Payment Date on which the Notes are redeemed in full, the Reserve Fund and the PRI
Reserve Fund will be applied towards Available Revenue Funds.
Contingency Reserve Fund
On the Issue Date, the Issuer will establish a contingency reserve fund from part of Tranche B of the
Facility (the "Contingency Reserve") in the amount of U.S.$ 250,000, for the purposes of holding an
amount to cover exceptional extraordinary expenses that may arise whilst the Notes are outstanding
and are not as at the Issue Date identifiable costs. The amount of the balance standing to the credit of
the Contingency Reserve Fund shall not otherwise be included as Available Revenue Funds prior to
enforcement of the Security.
Set-Off Reserve Fund
On the Issue Date, the Issuer will establish a set-off reserve fund from part of Tranche B of the
Facility (the "Set-Off Reserve Fund") in an amount equal to U.S.$ 880,000 (the "Set-Off Reserve
Required Amount"), for the purposes of holding an amount to cover any risk that a Borrower may
set-off its monetary claims to the Originator against any monetary claims of the Issuer if the
Originator fails to give to such Borrower, or the Borrower fails to receive for any reason whatsoever,
a Transfer Notice. (See "Risk Factors—The Transfer of the Assets").
As the Principal Amount Outstanding of each Asset reduces to zero, the Set-Off Reserve Required
Amount will from time to time be reduced accordingly based on the information provided by the
Asset Manager.
Residual Revenue
Subject to the prior payment in full, on the relevant Interest Payment Date, of amounts then due in
priority pursuant to the Revolving Period Revenue Priority of Payments or the Amortisation Period
Revenue Priority of Payments, as applicable, the Issuer shall, on such Interest Payment Date, pay to
PrivatBank, as an adjustment to the purchase price payable under the Sale Agreement and the Master
Securitisation Deed, an amount distributed after payment of items (i) (one) to (xiv) (fourteen) of the
Revolving Period Revenue Priority of Payments or items (i) (one) to (xiv) (fourteen) of the
Amortisation Period Revenue Priority of Payments have been repaid in full (the "Residual
Revenue").
Asset Management Account
The Asset Manager has established in its books an asset management account (the "Asset
Management Account"), as required by Ukrainian legislation and the Asset Management
Agreement, for the receiving of collection of the scheduled monthly repayments by the Borrowers
pursuant to the terms of the Loans and other collections with respect to the Assets, and for settlements
under the Asset Management Agreement. The Asset Management Account will be maintained in
accordance with the terms of the Asset Management Agreement.




                                                 -85-
From (and inclusive of) the Initial Transfer Date, the Asset Manager will collect payments from the
Borrowers in the Asset Management Account. Payments from the Borrowers will normally be
collected in the Asset Management Account on the scheduled monthly repayment dates set out in the
Loans or on the next following business day in Kyiv. On the next Business Day following the Issue
Date, and thereafter not later than on the next Business Day following the collection of any such funds
in the Asset Management Account, the Asset Manager will transfer such funds into the Issuer
Account.
However, any funds collected in a currency other than U.S.$ will, after such funds have been
converted by the Asset Manager into U.S.$, be transferred from the Asset Management Account to
the Issuer Account within three (3) Business Days following collection thereof.
Issuer Account
All amounts collected in the Asset Management Account will be transferred, initially on the next
Business Day following the Issue Date and thereafter on the Business Day following the date of
collection in the Asset Management Account, to the Issuer's bank account (the "Issuer Account") in
the name of the Issuer at Deutsche Bank AG, London Branch (the "Account Bank"), acting through
its branch at Winchester House, 1 Great Winchester Street, London EC2N 2DB and opened pursuant
to the issuer account bank agreement (the "Issuer Account Bank Agreement"), between the Issuer,
the Cash Manager, the Account Bank and the Trustee. The short term, unsecured, unguaranteed and
unsubordinated debt obligations of the Account Bank are currently rated "F1+" by Fitch and "P-1" by
Moody's. In the event that the Account Bank's short term unsecured, unguaranteed and
unsubordinated debt obligations are downgraded below "F1" by Fitch and "P-1" by Moody's, the
Issuer shall procure that the Issuer Account is transferred to a financial institution having a short term
unsecured debt rating of at least "F1" by Fitch and "P-1" by Moody's pursuant to an agreement with
such institution in substantially the same form as the Issuer Account Bank Agreement within a period
not exceeding thirty (30) days from the date on which such downgrade occurs. However, any funds
collected in a currency other than U.S.$ will, after such funds have been converted by the Asset
Manager into U.S.$ be transferred from the Asset Management Account to the Issuer Account within
three (3) Business Days following collection thereof. The Asset Management Account and the Issuer
Account shall together be referred to as the "Bank Accounts".
Issuer Corporate Account
The cash representing the Issuer's paid up share capital has been deposited in the Issuer's corporate
account (the "Issuer Corporate Account") in the name of the Issuer at Deutsche Bank AG, London
Branch (the "Account Bank"), acting through its branch at Winchester House, 1 Great Winchester
Street, London EC2N 2DB and opened pursuant to the issuer account bank agreement (the "Issuer
Corporate Account Agreement"), between the Issuer and the Account Bank. The funds held in the
Issuer Corporate Account are not available for distributions pursuant to the Pre-Enforcement Priority
of Payments or the Post-Enforcement Priority of Payments and may only be released when and if
permitted by the Issuer in accordance with the terms of the Issuer Corporate Account Agreement.
Interim Collections
During the period between the date of the Asset Management Agreement and the Issue Date, pursuant
to the terms of the Asset Management Agreement, the Asset Manager will collect payments from the
Borrowers, deposit all such collections into the Asset Management Account and, on the next Business
Day following the Issue Date, transfer such collections into the Issuer Account.
Standby Asset Management Account
Upon commencing the management of the Assets in accordance with the Standby Asset Management
Agreement, the Standby Asset Manager will establish a standby asset management account, in its
books, in the name of the Standby Asset Manager (the "Standby Asset Management Account") for
the collection of the scheduled monthly repayments by the Borrowers pursuant to the terms of the
Loans and other collections with respect to the Assets. The Standby Asset Management Account will
be maintained pursuant to the terms of the Standby Asset Management Agreement.




                                                  -86-
Facility
Pursuant to a facility agreement (the "Facility Agreement") to be entered into on or about the Issue
Date between PrivatBank (in this capacity the "Facility Provider"), the Issuer and the Trustee,
PrivatBank will make available to the Issuer a facility (the "Facility"), which will comprise of two
tranches. The first tranche of the Facility ("Tranche A") will be an amount of U.S.$1,162,360 and
will be initially credited to a ledger established for such purposes (the "Facility Costs Ledger") to be
applied in or towards payment of the costs and expenses incurred by the Issuer in connection with the
issue of the Notes. The second tranche of the Facility ("Tranche B") will be an amount of U.S.$
11,499,625 to be used in providing funding as at the Issue Date for the PRI Reserve Fund, the
Contingency Reserve Fund, the Set-Off Reserve Fund and the Reserve Fund, and will be credited to
the Issuer Account (with a corresponding credit to the Reserve Ledger, the Contingency Reserve
Ledger, the Set-Off Reserve Ledger and the PRI Ledger).
The Facility will bear fixed interest payable quarterly in arrear in U.S.$ on each Interest Payment Date
(the amount so payable on an Interest Payment Date at a rate of 9 per cent. per annum on the
outstanding principal amount of the Facility). Interest will be paid on the Facility to the extent of
available funds under item (xiii) (thirteen) of the Revolving Period Revenue Priority of Payments or
under item (xiii) (thirteen) of the Amortisation Period Revenue Priority of Payments, as applicable.
Such interest is paid subject to any applicable withholding tax and there is no obligation on the Issuer
to gross up any payment in respect of any such withholding. The principal amount outstanding on the
Facility will be repaid to the extent of available funds in accordance with the Amortisation Period
Principal Priority of Payments, and will be fully repaid on the Final Discharge Date.
PrivatBank will not be entitled to sell or assign its rights under the Facility Agreement .
Authorised Investments
The Cash Manager will deposit funds of the Issuer into the Issuer Account and, if in the opinion of the
Issuer the rate of interest earned is likely to exceed the rate of interest paid on the Issuer Account, the
Cash Manager, in accordance with the Issuer's written instructions, will invest on any given Interest
Payment Date in accordance with applicable laws and regulations all such funds standing to the credit
of the Issuer Account in Authorised Investments. The Authorised Investments mature upon the next
succeeding Interest Payment Date when they will be used as Available Revenue Funds and applied in
accordance with the Revolving Period Revenue Priority of Payments or the Amortisation Period
Revenue Priority of Payments, as applicable.
"Authorised Investments" means any U.S.dollar denominated unsecured, unsubordinated debt
security, debt investment, commercial paper, bank account or other debt instrument issued by or fully
and unconditionally guaranteed by an Authorised Investment Qualifying Institution (as defined
below) or any other U.S. dollar denominated deposit with a Qualified Institution which matures upon
the next succeeding Interest Payment Date, which is not subject to any withholding or other tax and
in respect of which a security interest can be created pursuant to the Deed of Charge.
"Authorised Investment Qualifying Institution" means an institution the short-term, unsecured,
unsubordinated and guaranteed debt obligations of which are rated at least: (a) "F1+" by Fitch, if the
Authorised Investments have a maturity less than 30 days, "F1+" by Fitch, if the Authorised
Investments have a maturity of 30 days or more up to 365 days, or "AAA" by Fitch, if the Authorised
Investments have a maturity of more than 365 days; and (b) "MR1+" by Moody's in respect of money
market funds, if the Authorised Investments have a maturity of less than 365 days, "Aaa" by Moody's
in respect of money market funds, if the Authorised Investments have a maturity of more than 365
days, or "P-1" and "A1" by Moody's other than in respect of money market funds, if the Authorised
Investments have a maturity of less than 3 months.
"Qualified Institution" means a reputable bank, a broker/dealer, insurance company, structured
investment company or derivative product company.




                                                   -87-
The Class B Notes and the Class C Notes
In the event that, on any Determination Date, there are insufficient Available Revenue Funds to make
payment in full of interest amounts due and payable on the Class B Notes and/or the Class C Notes
then, to that extent, interest shall be deferred until the next Interest Payment Date on which there are
sufficient Available Revenue Funds, as more fully set out in Condition 4(j) (Deferral of Interest).
The Class A Notes, the Class B Notes and the Class C Notes will be constituted by the Trust Deed and
will share the same security, although, upon enforcement, the Class A Notes will rank in priority to
the Class B Notes and the Class B Notes will rank in priority in the Class C Notes. The Class A Notes
will rank pari passu without preference or priority amongst themselves for all purposes. The Class A
Notes will rank in priority to the Class B Notes as to payment of interest and, to the extent set out in
Condition 2 (Status, Security and Administration) and Condition 5 (Redemption and Post-
Enforcement Call Option) below, principal. The Class B Notes will rank in priority to Class C Notes
as to payment of interest and, to the extent set out in Condition 2 (Status, Security and Administration)
and Condition 5 (Redemption and Post-Enforcement Call Option) below, principal. The Class C
Notes will rank pari passu without preference or priority amongst themselves for all purposes.
Interest on the Notes will be payable in arrear as described on the cover page.
The Trust Deed and the Deed of Charge contain provisions requiring the Trustee to have regard to the
interests of the Class A Noteholders, the Class B Noteholders and the Class C Noteholders as regards
all powers, trusts, authorities, duties and discretions of the Trustee (except where expressly provided
otherwise), but requiring the Trustee in any such case to have regard only to the interests of (i) the
Class A Noteholders if, in the Trustee's opinion, there is a conflict between the interests of the Class A
Noteholders and the interests of the Class B Noteholders and/or the Class C Noteholders, (ii) the Class
B Noteholders if, in the Trustee's opinion, there is a conflict between the interests of the Class B
Noteholders and the interests of the Class C Noteholders and to have regard only to the interests of the
Class C Noteholders if all of the Senior Notes have been redeemed in full.
Interest Rate Cap Agreement
The Senior Notes are floating rate whilst the Loans relating to the Loan Claims comprising part of the
Assets are fixed rate. To mitigate itself against possible variation in LIBOR to a rate in excess of
7.25 per cent. (the "Interest Rate Cap"), the Issuer will enter into an agreement in the form of an
ISDA 1992 Master Agreement (Multi-Currency Cross Border) together with a schedule thereto, and
confirmation thereunder (the "Interest Rate Cap Agreement") with UBS AG, London Branch (the
"Interest Rate Cap Provider"). Under the Interest Rate Cap Agreement, amounts equal to the
excess of (a) the amount produced by applying three months LIBOR for the relevant calculation
period to the agreed notional amount for the relevant period in respect of the Interest Rate Cap (the
"Interest Rate Cap Notional Amount") over (b) the amount produced by applying 7.25 per cent. to
the Interest Rate Cap Notional Amount for the same period in respect of the Interest Rate Cap will be
paid (if such figure is positive) by the Interest Rate Cap Provider to the Issuer on the next following
payment date under the Interest Rate Cap Agreement.
If the unsecured, unsubordinated and unguaranteed rating of the Interest Rate Cap Provider falls
below "BBB-" from Fitch or below "Baa3" from Moody's, the Interest Rate Cap Provider will be
obliged to take one or more of the following actions: (i) procure a guarantee of its obligations under
the Interest Rate Cap Agreement from an appropriately rated entity; (ii) procure a replacement
counterparty being another appropriately rated entity who takes a transfer or enters into a replacement
cap; or (iii) take such other actions as will result in the rating of the Senior Notes following such
action being rated no lower than the rating of the relevant Senior Notes immediately prior to the
downgrade. The Interest Rate Cap Provider will make a close-out payment based on the cost of
replacing the Interest Rate Cap Provider and entering into a new interest rate cap agreement with a
new counterparty. The timing, extent and availability of such action required to be taken may vary
based on the level to which the rating of the Interest Rate Cap Provider has been downgraded.
The hedging arrangements for this transaction may introduce some incremental risk to the ratings of
the Notes by Moody's in the event the ratings of the Interest Rate Cap Provider declines.




                                                  -88-
The Issuer and the Interest Rate Cap Provider will each represent and warrant in the Interest Rate Cap
Agreement that, under current applicable law, each of them is entitled to make all payments required
to be made by them under the Interest Rate Cap Agreement free and clear of, and without deduction
for on account of, any taxes, assessments, or other governmental charges. However, neither the Issuer
nor the Interest Rate Cap Provider will be required to indemnify the other party for any withholding or
other taxes, charges or assessments (other than stamp, registration, documentation or similar taxes)
imposed by any governmental or other taxing authority on payments under the Interest Rate Cap
Agreement as a result of a change in applicable law.
If any withholding or other taxes, charges or assessments (other than stamp, registration,
documentation or similar taxes) would be imposed by any governmental or other taxing authority on
any payments made or required to be made under the Interest Rate Cap Agreement as a result of a
change in applicable law and the obligation to deduct or withhold cannot be avoided by the Interest
Rate Cap Provider, the affected party may terminate the Interest Rate Cap Agreement, but only in the
case of the Issuer if the Issuer has been directed to do so in accordance with Condition 5 (i).
Apart from for reason of the imposition of withholding tax, the Interest Rate Cap Agreement may be
terminated by:
(a)     the Interest Rate Cap Provider in circumstances including, broadly, inter alia, where the
        Issuer is in default by reason of failure by the Issuer to make payments, upon certain
        insolvency related events affecting the Issuer or acceleration or redemption of the Notes prior
        to their stated maturity or enforcement of the Security; and
(b)     the Issuer in circumstances, broadly, inter alia, where the Interest Rate Cap Provider is in
        default by reason of failure by the Interest Rate Cap Provider to make payments, certain
        insolvency related or corporate reorganisation events which affect the Interest Rate Cap
        Provider, acceleration or redemption of the Notes prior to their stated maturity or enforcement
        of the Security.
Upon any such termination, an amount may be due from the Interest Rate Cap Provider calculated in
accordance with typical ISDA provisions. The Issuer will be obliged to enter into a replacement
interest rate cap agreement if any such agreement is subject to an early termination.
Use of Available Principal Funds for Mandatory Redemption in part of the Notes
On each Interest Payment Date on which the Issuer has Available Principal Funds (and Available
Revenue Funds remaining after payments are made in accordance with the Revolving Period Revenue
Priority of Payments or the Amortisation Period Revenue Priority of Payments, as applicable), such
funds will be used by the Issuer to effect an early mandatory redemption in part of the Notes in the
order of priority set out in the Conditions (See "Terms and Conditions of the Notes – Condition 5(b)
(Mandatory Redemption in Part of the Class A Notes, the Class B Notes and the Class C Notes)").
As a result of the above, the average life of the Notes will depend, among other things, on the rate at
which Principal Receipts are received by the Issuer.
Ledgers
The Cash Manager, on behalf of the Issuer, will be required to maintain the following Ledgers as
records in the books of the Issuer:
(1)     The Revenue Ledger, which will be used to record as a credit entry, inter alia, Revenue
        Receipts, amounts received from the PRI Provider, payments made by the Interest Rate Cap
        Provider to the Issuer under the Interest Rate Cap Agreement (if any) and any interest
        accruing in respect of sums standing to the credit of the Issuer Account from time to time,
        together with amounts (if any) transferred from the Reserve Ledger as the Reserve Fund, from
        the Principal Ledger as Principal Addition Amount, from the PRI Ledger, from the
        Contingency Reserve Ledger, from the Set-Off Reserve Ledger and from the Facility Costs
        Ledger.




                                                 -89-
      The amounts so recorded as a credit entry will, inter alia, be debited in accordance with the
      Revolving Period Revenue Priority of Payments or Amortisation Period Revenue Priority of
      Payments, as applicable.
(2)   The Principal Ledger, which will be used to record as a credit entry, inter alia, Principal
      Receipts. The amount so recorded, as a credit entry will, inter alia, be debited in accordance
      with the Revolving Period Revenue Priority of Payments or Amortisation Period Revenue
      Priority of Payments, as applicable. (See "Terms and Conditions of the Notes – Condition 5(b)
      (Mandatory Redemption in Part of the Class A Notes, the Class B Notes and the Class C
      Notes)").
(3)   The Reserve Ledger, which will be used to record (a) as a credit entry, the deposit of part of
      Tranche B of the Facility as the Reserve Fund and any amounts transferred from the Revenue
      Ledger in accordance with the Revolving Period Revenue Priority of Payments or the
      Amortisation Period Revenue Priority of Payments, as applicable; and (b) as a debit entry,
      any transfer of the Reserve Fund to the Revenue Ledger on an Interest Payment Date to be
      applied as Available Revenue Funds and on the Final Discharge Date, the amount standing to
      the credit of the Reserve Ledger, which will be applied as Available Revenue Funds.
(4)   The PRI Ledger, which will be used to record (a) as a credit entry, the deposit part of
      Tranche B of the Facility as the PRI Reserve Fund; and (b) if a PRI Event occurs, as a debit
      entry, any transfer of the PRI Reserve Fund to the Revenue Ledger on an Interest Payment
      Date which will be applied towards the repayment of the Senior Expenses and interest
      payments due under the Class A Notes for a period of 180 days and on the Final Discharge
      Date, the amount standing to the credit of the PRI Ledger, which will be applied as Available
      Revenue Funds.
(5)   The Contingency Reserve Ledger, which will be used to record (a) as a credit entry, the
      deposit of part of Tranche B of the Facility as the Contingency Reserve Fund; and (b) as a
      debit entry, any transfer of the Contingency Reserve Fund to the Revenue Ledger on an
      Interest Payment Date to be applied as Available Revenue Funds and on the Final Discharge
      Date, the amount standing to the credit of the Contingency Reserve Ledger, which will be
      applied as Available Revenue Funds.
(6)   The Set-Off Reserve Ledger, which will be used to record (a) as a credit entry, the deposit of
      part of Tranche B of the Facility as the Set-Off Reserve Fund; and (b) as a debit entry, any
      transfer of the Set-Off Reserve Fund to the Revenue Ledger on an Interest Payment Date to
      be applied as Available Revenue Funds and on the Final Discharge Date, the amount standing
      to the credit of the Set-Off Reserve Ledger, which will be applied as Available Revenue
      Funds.
(7)   The Facility Costs Ledger, which will be used to record (a) as a credit entry, the deposit of
      the amount of U.S.$ 1,162,360 (the "Facility Costs Amount") to be applied in or towards
      payment of the costs and expenses incurred by the Issuer in connection with the issue of the
      Notes (following the drawdown of Tranche A of the Facility under the Facility Agreement);
      and (b) as a debit entry, the transfer of the Facility Costs Amount to the relevant parties as
      payment for the costs and expenses incurred by the Issuer in connection with the issue of the
      Notes.
(8)   The Principal Deficiency Ledger, which will be used to record from time to time, by debit
      entries, amounts of any Principal Loss in respect of Loans relating to the Loan Claims
      comprising part of the Assets and any Principal Addition Amount transferred from the
      Principal Ledger to the Revenue Ledger to reduce or eliminate any Income Deficiency. The
      Principal Deficiency Ledger will be credited a sum equal to any debits to the Revenue Ledger
      to reduce or make good any debit balance on the Principal Deficiency Ledger.




                                              -90-
Cash Manager Performance Report
The Cash Manager will compile a report (the "Cash Manager Performance Report") containing
certain information with respect to inter alia (i) the Notes, including the amounts outstanding thereon,
and (ii) the Assets. The Cash Manager Performance Report will be delivered by the Cash Manager to
the Issuer, the Trustee, the Asset Manager, the Rating Agencies and the Noteholders on the fifth
Business Day after each Interest Payment Date and will also be freely available on the website of the
Cash Manager at www.tss.db.com/invr.




                                                 -91-
                                             THE ISSUER
Introduction
The Issuer was incorporated and registered in England and Wales under the Companies Acts 1985
with limited liability as a public limited company on 13 February 2008 with registered number
6502734 as a special purpose vehicle or entity for the purpose of issuing asset backed securities.
The issued share capital of the Issuer comprises 50,000 ordinary shares of £1.00 each, of which
49,999 are held by Ukrainian Auto Loan Options Limited (the "PECO Holder") and 1 of which is
held by Financial Trustees Limited (the "Nominee Trustee") as nominee for the PECO Holder. The
Issuer has no subsidiaries.
Directors
The directors of the Issuer and their respective business addresses and principal activities outside the
Issuer are:
Name                               Address                             Principal Activities
Joint   Corporate       Services Pellipar House, 1st Floor, 9          Company Director
Limited                          Cloak Lane, London, EC4R
                                 2RU
Praxis Mgt. Limited                Pellipar House, 1st Floor, 9        Company Director
                                   Cloak Lane, London, EC4R
                                   2RU
The Secretary of the Issuer is Joint Secretarial Services Limited of Pellipar House, 1st Floor, 9 Cloak
Lane, London, EC4R 2RU.
The registered office of the Issuer is at Pellipar House, 1st Floor, 9 Cloak Lane, London, EC4R 2RU,
telephone number: +44 (0)20 7367 8930.
Activities
The Issuer has been established specifically to acquire the Assets consisting of (amongst other things)
Loans originated by the Originator and financed by the issue of the Notes.
Pursuant to Article 4 of the Issuer's Memorandum of Association, the Issuer's objects are, inter alia:
(a)     to acquire, hold and manage financial assets, to lend or advance money and to give credit to
        any persons for any purpose whatsoever within the United Kingdom or elsewhere, and
        whether secured (on any such property or otherwise) or unsecured, to carry on business as a
        financial institution, money lender, banker, capitalist, financier and investor and to undertake
        all kinds of loans, financial commitments and other operations;
(b)     to manage and administer the loan portfolios of persons in the United Kingdom or elsewhere
        and to manage or administer the businesses of any other third parties, whether or not within
        the United Kingdom, in whole or in part and whether or not they are similar to any businesses
        of the Issuer; and
(c)     to borrow, raise and secure the payment of money in any manner that the Issuer thinks fit,
        including without limitation, by the creation and issue of bonds, debentures or debenture
        stock, notes or other securities, perpetual or otherwise, charged on the whole or any part of
        the Issuer's property or assets (present or future) including its uncalled capital, and to
        purchase, redeem and pay off those securities and to accept money on deposit and to secure
        the discharge of any debt or other obligation of or binding on the Issuer by mortgage, charge,
        lien or other security upon the whole or any part of the Issuer's property or assets (present or
        future), including its uncalled capital, and collaterally or further to secure any obligations of
        the Issuer by a trust deed or other assurance or pledge.




                                                  -92-
Its activities will be restricted by the terms and conditions of the Transaction Documents (as defined
in Condition 3 (Covenants)) and will be limited to the issue of the Notes, the ownership of the Loans
and other assets referred to herein, the exercise of ancillary rights and powers, and other activities
referred to herein or reasonably incidental thereto.
These activities will include (a) the collection of all payments of principal and interest due from
Borrowers under the Loan Claims; (b) the operation of arrears procedures; and (c) the enforcement of
the Loans against Borrowers in default. Substantially all of the above activities will be carried on by
the Asset Manager on an agency basis under the Asset Management Agreement. Additionally, the
Cash Manager will provide cash management services to the Issuer pursuant to the Cash Management
Agreement. The Issuer (with the prior written consent of the Trustee) or the Trustee may revoke the
agency (and, simultaneously, the rights) of the Asset Manager and/or the Cash Manager upon the
occurrence of certain events of default or insolvency or similar events in relation to the Asset
Manager or, as the case may be, the Cash Manager or, in certain circumstances, following an Event of
Default (as described in Condition 9 (Events of Default)) in relation to the Notes. Following such an
event as aforesaid, the Issuer (with the prior written consent of the Trustee) or the Trustee may,
subject to certain conditions, appoint substitute administrators and, in regard to Asset Management
functions to be provided by the Asset Manager only, the Standby Asset Manager has agreed to act as a
substitute Asset Manager pursuant to the provisions of the Standby Asset Management Agreement.
Since its incorporation, the Issuer has not produced any statutory accounts and has not engaged in any
material activities other than those incidental to its registration as a public company, the authorisation
of the issue the Notes, the matters contemplated in this Prospectus, the authorisation of the other
Transaction Documents referred to in this Prospectus in connection with the issue of the Notes and
other matters which are incidental or ancillary to those activities. The Issuer has no employees.
Capitalisation and Indebtedness

The capitalisation and indebtedness of the Issuer as at the date of this Prospectus, adjusted to take
account of the issue of the Notes, is as follows:

Share Capital

 Authorised               Issued        Share Value of each Shares                                      Shares           Paid      Up
 Share Capital            Capital             Share         Fully                                       Quarter          Share Capital
 £                        £                   £             Paid Up                                     Paid Up          £
 50,000                   50,000              1             2                                           49,998           12,501.50

49,999 of the issued shares (being 49,998 shares of £1 each, each of which is paid up as to 25 pence
and one share of £1 which is fully paid) in the Issuer are held by the PECO Holder. The remaining
one share of £1 in the Issuer (which is fully paid) is held by Financial Trustees Limited (the
"Nominee Trustee") as nominee for the PECO Holder. The entire issued share capital of the PECO
Holder is held by Financial Trustees Limited (the "Share Trustee") on the terms of the Share
Declaration of Trust declared by the Share Trustee on or about the Initial Transfer Date.

Loan Capital

Class A Asset Backed Floating Rate Notes due November 2018...............                                   U.S.$ 85,800,000
Class B Asset Backed Floating Rate Notes due November 2018...............                                   U.S.$ 18,700,000
Class C Asset Backed Fixed Rate Notes due November 2018 ...................                                 U.S.$ 5,500,000
Facility Agreement (aggregate of Tranche A and Tranche B)…………....                                           U.S.$ 12,661,985

Total Loan Capital ......................................................................................   U.S.$ 122,661,985
Except as set out above, the Issuer has no outstanding loan capital, borrowings, indebtedness or
contingent liabilities and the Issuer has not created any mortgages or charges nor has it given any
guarantees as at the date of this Prospectus.




                                                                      -93-
The Issuer entered into a corporate services agreement on 23 May 2008 (the "Corporate Services
Agreement") with the PECO Holder and TMF Management (UK) Limited (the "Corporate Services
Provider") its registered office being Pellipar House, 1st Floor, 9 Cloak Lane, London EC4R 2RU.
The Corporate Services Provider's duties under the Corporate Services Agreement include the
provisions of certain administrative and general company secretarial services in relation to providing
such services to the Issuer. The Corporate Services Provider and the Issuer may terminate the
Corporate Services Agreement forthwith by giving notice to the other parties if (a) the Corporate
Services Provider on one hand or the Issuer or the PECO Holder on the other commits a material
breach of any of the terms and/or conditions of the Corporate Services Agreement and fails to remedy
the same within thirty (30) days (or such other period as shall be agreed between the parties) of being
required to do so; or (b) the Corporate Services Provider on one hand or the Issuer or the PECO
Holder on the other enters into liquidation, or compromises with any of its creditors, or has a receiver,
administrative receiver or administrator appointed over all or any part of its assets, or takes or suffers
any similar action in consequence of its debt, or ceases or threatens to cease to carry on its business or
a substantial part thereof, provided that any termination by the Corporate Services Provider shall not
be effective until a replacement corporate services provider is appointed which is acceptable to the
Issuer.




                                                  -94-
                                            PECO HOLDER
PECO Holder was incorporated in England and Wales on 8 February 2008 (registered number
6498487), as a private company with limited liability under the Companies Act 1985. The registered
office of PECO Holder is at Pellipar House, 1st Floor, 9 Cloak Lane, London EC4R 2RU.
Principal Activities

The only purpose of PECO Holder is to hold the Issuer's share capital and the Post-Enforcement Call
Option. The Post-Enforcement Call Option will be granted to PECO Holder by the Trustee on behalf
of all the Noteholders and will permit PECO Holder to acquire from the Noteholders all the Notes
then outstanding for a purchase price of one penny per Note. The Post-Enforcement Call Option will
only be exercised if the Trustee determines (and gives written notice to PECO Holder of such
determination), in its sole opinion and discretion, that all amounts outstanding under the Notes have
become due and payable and that there is no reasonable likelihood of there being any further
realisations (whether arising from an enforcement of the Security or otherwise) being available to pay
amounts outstanding under the Notes. See Condition 5 below.

Directors and Secretary

The directors of PECO Holder and their respective business addresses and other principal activities
are:

Name                                Address                              Principal Activities
Joint   Corporate        Services Pellipar House, 1st Floor, 9 Company Director
Limited                           Cloak Lane, London, EC4R
                                  2RU
Praxis Mgt. Limited                 Pellipar House, 1st Floor, 9 Company Director
                                    Cloak Lane, London, EC4R
                                    2RU
The Secretary of the Issuer is Joint Secretarial Services Limited of Pellipar House, 1st Floor, 9 Cloak
Lane, London, EC4R 2RU.
The registered office of the Issuer is at Pellipar House, 1st Floor, 9 Cloak Lane, London, EC4R 2RU,
telephone number: +44 (0)20 7367 8930.
Capitalisation

The capitalisation of PECO Holder as at the date of this Prospectus is as follows:

Share Capital

 Authorised        Issued     Share Value of each Shares                        Paid Up
 Share Capital     Capital          Share         Fully                         Share Capital
 £                 £                £             Paid Up                       £
 100               3                1             3                             12,501.50
PECO Holder has an authorised share capital of 100 divided into 100 ordinary shares of £1 each.
The aggregate paid up share capital of PECO Holder is £12,501.50 (taking into account the premium
paid for the issued share capital. The Share Trustee holds three (3) shares of PECO Holder pursuant
to the Share Declaration of Trust.

Post-Enforcement Call Option Agreement

Under the terms of the Post-Enforcement Call Option, the PECO Holder, shall, inter alia, represent
and warrant, for the benefit of the Issuer and the Trustee that: (a) it has been, and shall be, resident for
tax purposes solely in, and has had, and shall have, its usual place of abode, in the United Kingdom;



                                                   -95-
(b) all of its issued share capital is held by the Share Trustee and it will not issue any further shares;
and that (c) it will pay all amounts remaining unpaid in respect of the shares it holds in the Issuer
upon the Issuer making a call on PECO Holder for the payment of such amount.




                                                  -96-
                                      USE OF PROCEEDS
The gross proceeds of the issue of the Notes are expected to amount to approximately U.S.$
110,000,000. The expenses (other than a management fee payable to the Lead Manager and a fee
payable to AS "PrivatBank" in respect of the Notes) of the issue of the Notes are estimated not to
exceed U.S.$ 1,162,360 on the Issue Date, and will be met, on the Issue Date, by the Issuer from the
drawing(s) under Tranche A of the Facility Agreement. The funding of the Set-Off Reserve Fund, the
Contingency Reserve Fund, the PRI Reserve Fund and part of the funding for the Reserve Fund will
be met, on the Issue Date, by the Issuer from the drawing(s) under Tranche B of the Facility
Agreement. The net proceeds will be applied by the Issuer towards the payment of the Purchase Price
of the Assets on the Issue Date.




                                               -97-
            THE ORIGINATOR AND ITS MOTOR VEHICLE LOANS BUSINESS
Introduction
The Originator was registered by the NBU in the State Register of Banks on 19 March 1992 under
registration number 92 as a limited liability company in accordance with the laws of Ukraine to
engage in various activities in the banking sector. The Originator was re-organised as a closed joint
stock company and re-registered by the NBU on 4 September 2000. The Originator is registered in
the Unified Register of Enterprises and Organisations of Ukraine (maintained by the State Statistics
Committee of Ukraine) under registration number 14360570. The Originator's activities are governed
by the Banking Law and numerous NBU regulations. The registered office of the Originator is
50 Naberezhna Peremohy Street, 49094 Dnipropetrovsk, Ukraine. The Originator holds a banking
licence and a written permit issued by the NBU allowing the Originator to provide the full range of
banking services.
The Originator, currently rated "B" with stable outlook by Fitch and "B2" with stable outlook by
Moody's, is the largest bank in Ukraine in terms of assets and at 1 January 2008 was a market leader
in most key banking services. As at 1 January 2008, the Originator's assets totalled U.S.$11.13 billion
(according to the official NBU data). It is the most profitable bank in Ukraine for the year of 2007.
The Originator's net profit for 2007 was U.S.$303.79 million (to compare, the closest competitor of
the Originator, Raiffeisen Bank Aval, has estimated net profit for 2007 of U.S.$116.32 million).
According to the official NBU data as at 1 January 2008, the Originator's total revenues for the year of
2007 were U.S.$1.06 billion which accounted for 25.89 per cent. of the aggregate total revenues of the
ten largest banks in Ukraine. Its retail and corporate lending portfolios are well diversified and are
comprised of the high quality granular loans. The Originator's balance sheet is highly liquid with
deposits accounting for the largest part of the funding components. As of 1 January 2008, the
Originator's network included more than 2,808 branches and operating units across Ukraine
(according to the NBU data).

The Originator is controlled by three high-net-worth Ukrainian businessmen, Messrs. Bogolubov,
Martynov and Kolomoisky, who in total own approximately 90 per cent. of the share capital and
whose business interests, besides the bank, include a number of companies in the oil and gas, mining,
metallurgical, chemical and services sectors, as well as companies and banks in Ukraine, Russia and
Latvia.
General
The Originator's motor vehicle loan programme was initiated in 2001 and the Originator experienced
strong growth in its motor vehicle loan business, due to the growth of its loan portfolio and the
number of points-of-sale. The Originator was one of the first banks in Ukraine, who offered its clients
the second hand motor vehicle loans programme. As of 1 January 2008, motor vehicle loans,
mortgage loans, credit card loans and other loans (net of provisions) represented approximately 24.46
per cent., 25.97 per cent., 32.64 per cent. and 16.93 per cent. of the Originator's aggregate consumer
finance portfolio, respectively, compared to approximately 24.26 per cent., 25.74 per cent., 36.40 per
cent. and 13.60 per cent. as of 1 January 2008.
Since the inception of its motor vehicle loan lending activities, the Originator has extended over
100,000 motor vehicle loans. In twelve moths ended 31 December 2007, the Originator extended
approximately 42,341 motor vehicle loans worth in aggregate approximately UAH 2.05 billion
(approximately EUR 0.3 billion or U.S.$ 0.41 billion). In 2004, the Originator began to offer pre-
approved motor vehicle loans to certain customers with established credit histories.
The type of Loans offered by PrivatBank is divided into two categories: (a) Loans for purchases of
new motor vehicles, and (b) Loans for purchases of second hand motor vehicles. The Originator
offers a range of motor vehicle loans to finance purchases of new and second hand automobiles of
Ukrainian and foreign producers and complementary goods and services. Loans for purchase of
second hand motor vehicles can be granted without restrictions on such motor vehicles' age.




                                                 -98-
Motor vehicle loans are granted to Ukrainian citizens, aged 18-60 (provided that if, at the scheduled
repayment date of the applicable Loan, a female Borrower would be older than 55 years of age and a
male Borrower would be older than 60 years of age, the Borrower is required to provide an additional
guarantor), who are resident in regions where the Originator has operations and with high level of
income. The Originator's motor vehicle loans typically have terms of 60 or 84 months and are
limited to UAH 250,000 (approximately EUR 34,800 or U.S.$ 50,000).
PrivatBank accepts the motor vehicle that the Borrower intends to acquire of collateral for motor
vehicle loans (mandatory for all motor vehicle loans).
Until recently, the Originator only permitted its customers to have one outstanding consumer loan or
motor vehicle loan. Since 2005, the Originator has modified its system to allow its customers to have
a number of outstanding loans, the aggregate value of which may not exceed the total credit limit
assigned by Credit Committee of the Originator or manually.
Currently, the Originator has 8 motor vehicle loan products. For those products requiring a down
payment, the Originator's customers on average make a down payment of 20-30 per cent. of the motor
vehicle price. The borrower is also obliged to pay a one-time flat fee in the amount of up to 2 per
cent. of the loan amount. In addition to the interest accruing on the principal, the Originator also
charges a commission for use of funds at the rate of up to 2.04 per cent per annum payable by the
borrower according to the schedule. Until recently, the Originator's motor vehicle loan terms allowed
for prepayment of the loan by the borrower without any prepayment fee. Starting from 25 September
2007 the Originator charges prepayment fee at the rate of up to 6.8 per cent. of the prepaid amount
under a motor vehicle loan granted after such date. Starting from 1 January 2008, such prepayment
fee is not charged. The Originator does not plan any significant changes in terms and conditions of its
motor vehicle loan programmes for 2008.

An overview of the Originator's current motor vehicle loan products is set out in the tables below and
contains current key terms as at 1 January 2008. These products and the current terms may change
overtime and may be consolidated or amended or dispensed with even after the Issue Date and these is
no assurance or requirement that such products or terms will exist during the life of the deal. See "The
Assets".




                                                 -99-
        Product Name          "Consumer and event loans secured by a motor          "SV Loan"                                "Standard Conditions" (for second hand      "Standard Conditions" (for new motor
                              vehicle" (loan amount not in excess of 70 per cent.                                            motor vehicles only)                        vehicles only)
                              of motor vehicle's value)



        Credit                36                                                    60                                       For motor vehicles of Ukrainian and CIS     60
        Period/months                                                                                                        production – up to 36; and for motor
                                                                                                                             vehicles of foreign production (including
                                                                                                                             Daewoo) – up to 60


        Downpayment           -                                                     20 per cent. of motor vehicle's price    30 per cent. of motor vehicle's price       30 per cent. of motor vehicle's price




        Flat Fee              2 per cent. of loan amount                            2 per cent. of loan amount               2 per cent. of loan amount                  2 per cent. of loan amount




        Fee             for   2.04 per cent. per annum                              not charged                              2.04 per cent. per annum                    2.04 per cent. per annum
        Reservation      of




-100-
        Funds



        Termination date      -                                                     -                                        -                                           -
        of the product
        offer



        Conditions      for   Interest Rate: 19.32 per      Projected Return: up    Interest   Monthly Fee: Projected        Interest     Rate: Projected Return: up     Interest Rate:       Projected Return:
        UAH loans             cent./per annum              to 23.62 per cent.       Rate: 9 0.9 per cent. of Return: up to   15.48 per cent./per to 19.18 per cent.      15.48 per cent./per up to 19.18 per cent.
                                                                                    per       loan amount 25.99 per cent.    annum                                       annum
                                                                                    cent./per
                                                                                    annum

        Conditions      for   Interest Rate: 14.28 per      Projected Return: up    Interest   Monthly Fee: Projected        Interest     Rate: Projected Return: up     Interest Rate:         Projected
        USD$ loans            cent./per annum              to 18.76 per cent.       Rate: 9 0.6 per cent. of Return: up to   10.56 per cent./per to 14.48 per cent.      10.56 per cent./per    Return: up to
                                                                                    per       loan amount 20.88 per cent.    annum                                       annum                  14.48 per cent.
                                                                                    cent./per
                                                                                    annum
        Conditions      for   Interest Rate: 13.8 per       Projected Return: up             Not provided in EUR.            Interest     Rate: Projected Return: up     Interest Rate:         Projected
        EUR loans             cent./per annum              to 18.29 per cent.                                                10.56 per cent./per to 14.48 per cent.      10.56 per cent./per    Return: up to
                                                                                                                             annum                                       annum                  14.48 per cent.
        Product Name           "Standard – system partner"               "AutoPrivat"                              "Forfeit"                                         "GREAT WALL - AutoPrivat"




        Credit                 84                                        84                                        84                                                84
        Period/months

        Downpayment            0 per cent                                UAH 100                                   0 per cent                                        UAH 100


        Flat Fee (remitted     2 per cent. of loan amount                2 per cent. of loan amount                2 per cent. of loan amount                        2 per cent. of loan amount
        by the Originator to
        the motor vehicle
        dealer)


        Prepayment Fee for     2.04 per cent. per annum                  2.04 per cent. per annum                  2.04 per cent. per annum                          2.04 per cent. per annum
        Reservation     of
        Funds

        Termination date of    -                                         -                                         -                                                 -
        the product offer




-101-
        Conditions for UAH     Interest Rate: 15.48 Projected Return: up Interest     Rate: Projected Return: up   Not provide in UAH                                          Not provided in UAH.
        loans                  per cent./per annum to 18.77 per cent.    15.48 per cent./per to 18.77 per cent.
                                                                         annum




        Conditions       for   Interest Rate: 10.56 Projected Return:    Interest     Rate: Projected Return: up   Interest Rate: 10.56 per Projected Return: up     Interest Rate:         Projected Return:
        USD$ loans             per cent./per annum up to 14.10 per       10.56 per cent./per to 14.10 per cent.    cent./per annum          to 14.10 per cent.       10.08 per cent./per    up to 13.64 per
                                                    cent.                annum                                                                                       annum                  cent.




        Conditions for EUR     Interest Rate: 10.56 Projected Return:    Interest     Rate: Projected Return: up   Interest Rate: 10.56 per      Projected Return:   Interest Rate:         Projected Return:
        loans                  per cent./per annum up to 14.10 per       10.56 per cent./per to 14.10 per cent.    cent./per annum              up to 14.10 per      10.08 per cent./per    up to 13.64 per
                                                    cent.                annum                                                                  cent.                annum                  cent.
Distribution of Motor Vehicle Loans

As at 1 January 2008, the Originator had an extensive branch network of 39 branches (which have
their own balance sheet and have direct reporting obligations to the NBU), 5 representative offices
and 2,764 sub-branches which, the Originator believes, constituted the second largest branch network
in Ukraine at that time. As at 1 January 2008, the Originator had a network of 4,222 ATMs and
38,551 POS terminals, as well as 4,416 cash points (allowing customers to access cash other than
through an ATM) located in shops, airports, gas stations, businesses or commercial centres. As at 1
January 2008, the Originator owned the largest number of ATMs and POS terminals in Ukraine,
according to the EMA. Under the Originator's distribution network policy all its branches and sub-
branches are authorised to distribute motor vehicle loans.

The Originator distributes its motor vehicle loans through motor vehicle dealership with which it has
developed relationships or to existing customers. The number of such dealers' outlets cooperating with
PrivatBank in the sphere of motor vehicle lending business, has increased from 939 as of 1 January
2007 to 1182 as of 1 January 2008, and the Originator expects further growth in the number of its
distribution relationships with motor vehicle dealers. Occasionally the Originator's employees are
delegated to a dealers' outlets for advertising-consulting purposes.

The Originator has developed and implemented a key client management system whereby a team of
experienced managers is responsible for all aspects of the Originator's relationship with major motor
vehicle dealers.

The Originator cooperates with motor vehicle dealers' outlets on the basis of agreements concluded
between the Originator and the relevant motor vehicle dealer. These distribution agreements are
generally concluded for an indefinite period of time and may require motor vehicle dealers to pay the
Originator a commission, agreed from time to time, based on the amount of credit generated by sales
and on the type of credit product. The Originator expects that commissions paid to it by motor vehicle
dealers will continue to decline, and in some cases the Originator is required to pay commissions to
motor vehicle dealers. Distribution arrangements between the Originator and motor vehicle dealers
are generally not exclusive and can be terminated at will by motor vehicle dealers.

The Originator has distribution agreements with UkrAuto, Avtoinveststroy, Avtotrading, Tehavto,
Toyota Sutsio Ukraine, Audi-Center-Poltava, Avtodom, Avtocredit, Avtolux, Avtomir, Autohouse
Kyiv, Winner Ford Kyiv, Vostok-Avto, Melos and more than 400 other motor vehicle dealerships
which specialise in the sales of vehicles of Ukrainian and foreign producers.

The Originator has designed its desks at the dealers' outlets in the way to allow customers to better
identify the Originator and distinguish them from those of its competitors. Depending on the volume
of sales and range of products offered, the Originator's points at the dealers' outlets are staffed either
with the Originator's loan officers or employees of the Originator's partner dealers . The
responsibilities of such points personnel at the dealers' outlets include both selling and actively
promoting the Originator's brand and the motor vehicle loan products. As of 1 January 2008, 655 of
1184 points at the dealer's outlets were staffed with Originator's loan officers.

Origination and Underwriting Process

The principal body responsible for consideration of motor vehicle loan applications and allocation of
credit limits is the Credit Center of the Originator's Auto Lending Business. Currently a number of
national credit bureaus operate in Ukraine and the Originator established cooperation with the one of
them, the Ukrainian Bureau of Credit Histories.

Verification of the prospective Borrower consists of several stages such as checking of an application
form, credit history check, personal data verification and telephone interview.




                                                  -102-
At the first stage the Originator considers an application form consisting of 8 different fields of
information with attached photocopy of the Borrower's identification document (typically, a passport)
together with a photocopy of the Borrower's identification code. This information is interred into the
Originator's database either by loan officers of the Originator or by authorised employees of its
partner dealers.

A preliminary evaluation of a Borrower's application for motor vehicle loans takes 30 minutes and
considers one of the key advantages of the Originator's motor vehicle loan programme. During the
preliminary evaluation the Originator verify a credit application and financial status of a Borrower
and makes a decision on provision of the motor vehicle loan if any.

Information supplied by the prospective Borrower is verified to the fullest extent possible through the
Originator's client database, which contains over 11.5 million entries. At present, the Originator's
client database does not contain information on outstanding loans from other Ukrainian or
international banks, financial institution or other lenders. The Originator has also entered into access
agreements with a number of Ukrainian state institutions, entities and companies allowing it to verify
some information supplied by applications through these third party databases. As a matter of
practice, information supplied by applicants is verified (where possible) through several different
databases including an address database, a property database and a civil status database. The Ministry
of Internal Affairs and the Security Service of Ukraine distributes blacklists and information on
criminals, terrorists and identity fraud which the Originator also uses in conjunction with its own
blacklists.

The Originator's client database operates 24 hours a day, 7 days a week, and processes approximately
1000 applications daily.

The complete evaluation of a Borrower's application for motor vehicle loans is a one to two business
day process with the following key steps: (a) evaluation of a credit application and financial status of
a Borrower; (b) income verification; (c) motor vehicle appraisal; (d) establishment of loan terms and
loan to value ratio; (e) preparation of related legal documents; and (f) completion of loan closing.

The Regional Subdivision of PrivatBank collects a package of documents from the Borrower
evidencing the Borrower's financial status and credit history as well as information relating to the
relevant motor vehicle. PrivatBank conducts a credit check of each Borrower with the Ukrainian
Bureau of Credit Histories. A loan officer of PrivatBank then conducts a motor vehicle appraisal.

Though such loans will no constitute a part of the Assets transferred to the Issuer under the Sale
Agreement, note that if the car value is greater than U.S.$50,000, the loan application is reviewed by
PrivatBank's VIP Client Business.

Limits for motor vehicle loans are calculated automatically depending on the level of an income of the
prospective borrower, client's credit history and the loan amount requested.

Through phone calls to the contact numbers stated by the prospective borrower in the application form
the employees of the Originator's credit centre confirm the validity of such phone numbers and verify
the income of the applicant if possible.

PrivatBank's evaluation of the credit worthiness of the applicant is based on a scoring model which
considers the following factors: (a) the amount of the loan compared to the Borrower's income; (b) the
Borrower's type of employment and general work experience; (c) the credit period; (d) the credit
history of the Borrower; (e) the maximum loan to value ratio; (f) the age of the Borrower; (g) the
results of Originator's own Credit Bureau Report; (h) the results of the motor vehicle appraisal report
from the internal valuation team; (i) the level of education of the Borrower; (j) the Borrower's term of
residence in applicable area; (k) the Borrower's family status; and (l) the presence of other substantial
property (e.g. automobile or real estate).




                                                 -103-
Based on the analysis described above, the application is then scored and the Borrower is awarded a
credit rating. In order to determine a Borrower's credit rating, the results of the Borrower's
characteristics are summed up separately for each section. The result is then compared with scale for
determination of the Borrower's credit rating.

The evaluation of a proposed motor vehicle is performed by an employee of the Credit Centre. The
evaluation process includes the following components: (a) establishment the underlying collateral and
authenticity and completeness of the documents required for execution of an motor vehicle loan; (b)
verifying whether the collateral can be subject to pledge; (c) inspecting the collateral; (d) receiving
confirmation that the pledge has not been cross collateralised; (e) determining market and pledge
value of the collateral; and (f) determining the possible loan amount. Value of a new vehicle is
determined based on the invoice issued by the dealer's outlet.

Payment from Borrowers
A set monthly repayment date is determined with a Borrower upfront with a four day allowance built
in. In the case of the first month, this period of repayment may be less than a month, depending on the
monthly date agreed upon. Borrower transit distributive accounts are established into which the
monthly repayments are made by the Borrower. At the Borrower's request, the Loan Administrator
may debit the monthly installments from the applicable Borrower's account.
The Borrowers are permitted to make partial and full prepayments. In prepaying, a Borrower must
cover the accrued interest to date, premium and commission charges in accordance with the terms of
the Loan and any penalties due (if applicable).
The Originator's motor vehicle loans can be repaid in the following ways:

    •   Originator's Network. Borrowers can repay their motor vehicle loans through the Originator's
        offices. As at 1 January 2008, the Originator had an extensive branch network of 39 branches
        and 2,764 sub-branches. The payments by the Borrowers made through the Originator's
        offices are allocated the same day. In 2007, the Originator opened 439 addition offices in the
        regions where the Originator is presented.

    •   Electronic banking. The borrowers can repay their loans through the Internet on-line system
        via "Privat 24" and "Privat 48" programs.
Interest Rates and Commission Fees
The mandatory commission for commitment of funds by the Originator is currently set at 2.04 per
cent./per annum from the amount of the loan.
The interest rate and commission fees chargeable are set by Originator's Credit Committee at
Originator's Head Office and depend on the credit risk, the security provided, the cost of Originator's
funding, the demand and other offers existing in the credit market and the term of the Loan.
Loan Collection
The Originator strives to regularly improve its loan collection procedures. In particular, the Originator
has created a multistage collection system that has resulted in greater efficiency in the recovery of
overdue loans.
If a Borrower does not perform its obligations under a loan agreement, it is the responsibility of the
relevant credit officer to take initial actions to determine whether the cause of late payments is
administrative or credit-related in nature. At this stage, the officers of the dedicated monitoring unit
contact the Borrower, request repayment and check the availability of any collateral. The monitoring
unit calls Borrowers to remind them of their repayment obligation several days before the scheduled
repayment date, and after such date to demand repayment (during daytime and night-time). If such
measures do not result in the repayment of the loan and the non-performance exceeds 60 days in the
case of motor vehicle loans to individuals, the loan is classified as a "problem loan". The Risk Control



                                                 -104-
Department, which is able to identify all problem loans in the Originator, issues a banking order each
month to transfer problem loans from the relevant credit unit's books to the Security Service, a
specialised unit within Security Division.

The Security Service is responsible for all loans issued by the Originator classified as "problem
loans", excluding loans where the total debt amounts to less than UAH 1,000 (which continue to be
processed by the monitoring unit). The Security Service obtains and reviews all documentation
relating to the Borrower, performs an official internal investigation to identify the reasons for the
problem, draws up a plan of action for the repayment of the debt and reviews the collateral (which
may entail organising protection). Several approaches are available to the Security Service to enforce
problem loans including negotiations, enforcement of the collateral (by way of requisition for sale or
taking custody of the assets) pending repayment in full, court proceedings or other legal action. In a
number of enforcement actions the Originator initiates court proceedings (including in the event of
any criminal action by the Borrower). The Security Service will often engage in negotiations with the
Borrower over a problem loan either concurrently with, or prior to, initiating court proceedings (court
proceedings would be initiated, for example, to requisition the collateral for sale at auction, to attach
the Borrower's account(s) with another bank or to take possession of property under motor vehicles).
If collateral is available, and upon satisfactory results of an analysis of whether the Borrower is
undergoing purely temporary business difficulties and of that Borrower's willingness and capacity to
repay its debt, negotiations usually aim at debt restructuring and include requirements to obtain
additional collateral, personal guarantees by shareholders and management, increased interest rates
and revised repayment schedules.

Starting from 2006, the Originator cooperates with a collection company "Ukrainian Financial
Agency" "Verus". Other legal actions available to the Originator include executive proceedings for
the enforcement of debt and bankruptcy proceedings. In the event of any criminal action on the part of
the Borrower, irrespective of the Borrower's readiness to repay its debt, the Originator involves the
relevant state authorities (such as the Ministry of Internal Affairs in cases of fraud). The Credit
Committee meets monthly to review the status of non-performing loans.

Contact Centre

The Originator has operated its 24-hour "Contact Centre" providing its banking customers with
assistance for more than five years. The Contact Centre was supported by approximately 1441
operators as at 1 January 2008 and currently serves over 20 million customers of the Originator and of
its subsidiaries in the Russian Federation, Latvia and Georgia. The Contact Centre is accessible to
customers via electronic communication such as chat on-line, e-mail and SMS through its
"PrivatMobile" GSM banking programme, as well as by telephone (including a call-back service).
The Contact Centre receives on average approximately 34,000 calls per day and carries out
approximately 22,000 banking operations and 26,000 outcoming calls. The Contact Centre was
recognised as "Contact Centre of the Year 2005" by Cisco Expo-2006 conference. In August 2007,
the Contact Centre was certified under ISO 2001.

Information Technology

The Originator considers its IT systems to be a significant strength both in terms of hardware and
software and believes that such systems provide the foundation for its banking services. Its principal
IT infrastructure consists of Intel, IBM and Sun server platforms, front-office and back-office
software applications, bank card service systems, a retail service system and a corporate data transfer
and telephone communications network linking all bank branches, sub-branches and other offices
throughout Ukraine using the TCP/IP communication protocol.

The Originator's daily transactions register, which incorporates front-office and back-office functions,
was designed in-house and is based on Sybase technology. It enables centralised storage and
monitoring at the Originator's head office in Dnipropetrovsk of all transactions in all of the
Originator's branches and sub-branches. The Originator backs up the records of all of its daily




                                                 -105-
transactions both at its head office level and at all of its branches. The Originator believes the strength
of its IT systems enables it to more effectively manage risks at the head office and branch level. The
Originator has a card processing centre located in its headquarters which enables the Originator to
handle in-house most aspects of processing the Originator's credit card transactions. The Originator's
bank card service systems, which were designed by CardTech Ltd. and Kompas+, conduct back-office
transactions, such as clearing transactions with international payment systems, and front-office
transactions with ATM and POS-terminal networks. The Originator's "Privat 24" and "Privat 48"
retail service systems incorporate the functions of teller-performed client transactions at bank offices
and internet-based functions where no teller is involved. The Originator believes that it is a leader in
Ukraine for internet banking services. The Originator also offers its customers GSM banking through
its "PrivatMobile" brand whereby customers can, among other things, make payments via mobile
phones by sending coded SMS messages to a server at the Originator.

The Originator maintains an Electronic Business Centre that serves a research and development
function for development of technology in the Originator. The Electronic Business Centre focuses on
using technology for developing new products for new markets and supporting the Originator's
communications with its clients and communications within the Originator's branch network.

In 2007 the Originator installed the HP Integrity Superdome, a technologically advanced computing
solution that allows the Originator to effectively handle multiple operating environments and
workloads, such as online transaction processing, data mining, customer relationship management,
human resources, financial applications, data warehousing, high-performance computing and other
functions.




                                                  -106-
                            THE INTEREST RATE CAP PROVIDER
UBS AG, a company incorporated with limited liability in Switzerland on 28 February 1978
registered at the Commercial Registry Office of the Canton of Zurich and the Commercial Registry
Office of the Canton of Basel-City with Identification No: CH-270.3.004.646-4 having its registered
offices at Bahnhofstrasse 45, 8001 Zurich and Aeschenvorstadt 1, 4051 Basel, Switzerland.
With headquarters in Zurich and Basel, Switzerland, UBS AG operates in over 50 countries and from
all major international centres. As of December 31 2007, UBS AG had total invested assets of CHF
3,189 billion, a market capitalisation of CHF 108.6 billion and employed approximately 83,500
people. As at the date of this Prospectus, UBS AG has a long-term debt credit rating of "AA-" from
Fitch, "Aa1" from Moody's and "AA-" from S&P.
UBS AG is publicly owned, and its shares are listed on the SWS Swiss Exchange, New York Stock
Exchange and Tokyo Stock Exchange. UBS AG is subject to the informational requirements of the
Exchange Act, and, in accordance therewith, files reports and other information with the U.S.
Securities and Exchange Commission (the "Commission"). The reports and other information filed
by UBS AG with the Commission may be inspected (and copied at prescribed rates) at the public
reference facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549. UBS AG's common stock is listed on the New York Stock Exchange
under the symbol "UBS." Reports and other information filed may be inspected at the offices of New
York Stock Exchange at 20 Broad Street, New York, New York 10005 and can also be reviewed by
accessing the Commission's internet site at http://www.sec.gov.
The information contained herein with respect to UBS AG relates to and has been obtained from it.
The delivery of this Prospectus shall not create any implication that there has been no change in the
affairs of UBS AG since the date hereof, or that the information contained or referred to herein is
correct as of any time subsequent to its date.
The information contained in the preceding paragraphs has been provided by UBS AG for use in this
Prospectus. Except for the foregoing paragraphs, UBS AG and their respective affiliates have not
been involved in the preparation of, and do not accept responsibility for, this Prospectus as a whole.




                                                -107-
                          THE PRI PROVIDER AND THE PRI POLICY
PRI Provider
The PRI Policy will be issued through the Steadfast Insurance Company, an insurance company
chartered in the State of Delaware and a wholly-owned subsidiary of the Zurich American Insurance
Company. Steadfast Insurance Company, Zurich American Insurance Company and other affiliated
companies are linked through the Zurich U.S. Insurance Pool, an inter-company arrangement which
aggregates the assets and liabilities of each member. The Zurich U.S. Insurance Pool, led by Zurich
American Insurance Company, has been given a rating of A+ (Excellent) by the A.M. Best Company.
In addition, Zurich American Insurance Company has been given a financial strength rating of AA-
by S&P.
Zurich American Insurance Company is a wholly-owned subsidiary of Zurich Holding Company of
America, which is a subsidiary of Zurich Financial Services. Zurich Financial Services is an
insurance-based financial services provider with a global network of subsidiaries and offices in North
America and Europe as well as in Asia Pacific, Latin America and other markets. Founded in 1872,
Zurich is headquartered in Zurich, Switzerland. Zurich employs approximately 58,000 people serving
customers in more than 170 countries. Based on the consolidated figures for 2006, the Zurich
Financial Services Group had gross premiums of U.S.$46.5 billion and net income of U.S.$4.5 billion.
PRI Policy
The Issuer will have the benefit for a period of 10 years from the Issue Date of an insurance policy for
Expropriation and Currency Inconvertibility (each as defined below) to be dated as at the Issue Date
(the "PRI Policy") issued by Steadfast Insurance Company (the "PRI Provider"). The Trustee shall
be the loss payee thereunder. Subject to the terms of the PRI Policy, the PRI Policy will insure, for a
period of 10 years from the Issue Date, against the Issuer's inability to make (i) payments due with
respect to the Senior Expenses; and (ii) interest payments due under the Class A Notes, in each case,
as a result of an Expropriation or Currency Inconvertibility (each a "PRI Event").
An "Expropriation" means: an act or series of acts taken by the present or any succeeding
government authority in effective control of all or any part of the territory of Ukraine or any political
or territorial subdivision thereof, including for the avoidance of doubt but without limitation, the
National Bank of Ukraine or its agent or successor ("Host Government") that effectively deprives the
Issuer, the Trustee, the Asset Manager acting for the benefit of the Issuer or (following delivery of an
Enforcement Notice) the Trustee or the Standby Asset Manager acting for the benefit of the Issuer or
(following delivery of an Enforcement Notice) the Trustee of the use and control of funds deposited
(either in UAH or U.S. dollars) by or for the benefit of the Issuer, the Trustee, the Asset Manager
acting for the benefit of the Issuer or (following delivery of an Enforcement Notice) the Trustee or the
Standby Asset Manager acting for the benefit of the Issuer or (following delivery of an Enforcement
Notice) the Trustee with a financial institution in Ukraine for the purpose of making (i) payments due
with respect to the Senior Expenses and (ii) interest payments due under the Class A Notes; provided
that such act or acts continue for the duration of at least 180 days.
 "Currency Inconvertibility" means: (a) an act or series of acts by the Host Government that
prevents the Issuer, the Trustee, the Asset Manager acting for the benefit of the Issuer or (following
delivery of an Enforcement Notice) the Trustee or the Standby Asset Manager acting for the benefit of
the Issuer or (following delivery of an Enforcement Notice) the Trustee, for the duration of at least
180 days, from directly or indirectly: (i) converting UAH into U.S. dollars in order to make
(A) payments due in respect of the Senior Expenses and (B) interest payments due under the Class A
Notes; or (ii) transferring outside of Ukraine the U.S. dollar funds as described in (i)(A) and (B)
above; or (b) failure by the Host Government (or by entities authorised under the laws of Ukraine to
operate in the foreign exchange markets) to effect a conversion or transfer under (a) above on behalf
or at the request of the Issuer, the Trustee, the Asset Manager or the Standby Asset Manager.
The PRI Provider's obligation to pay claims under the PRI Policy will be limited to U.S.$ 9,094,800
and is subject to certain conditions, limitations and exclusions that may affect the ability of the
Trustee to receive payments under the PRI Policy.



                                                 -108-
The PRI Policy will not cover the payment of (i) any interest under the Notes, other than the Class A
Notes, or (ii) any principal under the Notes. The Noteholders will not have any direct legal or
equitable right, remedy or claim under the PRI Policy.
The Issuer, the Trustee, the PRI Provider and the Asset Manager will enter into the Agreement
Regarding the Insurance Policy for Expropriation and Currency Inconvertibility (the "PRI Side
Agreement") on the Issue Date which will require that the Asset Manager make certain
representations, warranties and covenants in favour of the PRI Provider and take certain actions in
respect of the PRI Policy. In addition to the representations, warranties and covenants set out in the
PRI Side Agreement, the Issuer will delegate to the Asset Manager, and the Asset Manager will
accept such delegation, certain of the Issuer's duties and responsibilities under the PRI Policy.
Insurance premium tax may be payable by the Issuer in respect of premiums paid under the
PRI Policy.
A copy of the PRI Policy is attached to this Prospectus as Annex A and a copy of the PRI Side
Agreement is attached to this Prospectus as Annex B.




                                                -109-
                                           THE TRUSTEE
TMF Trustee Limited
TMF Trustee Limited (the "Trustee") is a company established and operating under the laws of
England and Wales with its registered office and principal place of business at Pellipar House, 1st
Floor, 9 Cloak Lane, London EC4R 2RU.
The Trustee has extensive professional experience of acting as security trustee and note trustee on
structured finance transactions and regularly works with leading lead managers, originators and other
parties on high value deals involving a broad range of asset classes, asset locations (including Russia,
Eastern Europe and emerging markets) and structures.
The Trustee has been appointed pursuant to the Trust Deed as Trustee for the Noteholders, and may
retire at any time on giving not less than three months' prior notice to the Issuer without being
responsible for any costs occasioned by such retirement. The retirement or removal of the Trustee
shall not become effective until a successor trustee being a trust corporation is appointed.
TMF Group
The Trustee is part of TMF Group, a global management and accounting outsourcing firm, with over
2,500 professionals working from a growing network which presently comprises 77 offices in 60
countries around the world.
The corporate services offered to the special purposes vehicles (the "SPV") incorporated in England
and Wales by TMF Management (UK) Limited, compliment the Trustee's services in the UK
marketplace. Additionally through its global network of offices, TMF offers structured finance
services in all major onshore jurisdictions, including, the Netherlands, Luxembourg, Ireland, Germany
and Italy. TMF also has a strong and unique presence in Central and Eastern Europe.
TMF's Structured Finance Services team focuses on providing management and accounting services
to SPVs in securitizations and other structured finance transactions. The TMF Group has experience
of a broad spectrum of asset classes and ranges from plain-vanilla ABS to repackagings, and from
cash CDO to synthetic or squared CDO. Specific structured finance services offered include,
incorporation of SPV, provision of qualified independent directors, provision of shareholders,
accounting and consolidation services (including the preparation of financial statements under the
appropriate GAAP and IFRS) reporting to investors, trustees and rating agencies, corporate secretarial
services, trustee services and process agent services.
Additional information is available at www.tmf-group.com.




                                                 -110-
                               THE STANDBY ASSET MANAGER
Overview

The Standby Asset Manager is state owned bank headquartered in Kyiv, Ukraine. As at 1 January
2008, according to statistics prepared by the NBU, the Standby Asset Manager was the sixth largest
bank in the Ukraine by authorised share capital (UAH 1,486.0 million), the third largest bank in the
Ukraine by profit after tax (UAH 501.6 million), the fifth largest bank in the Ukraine in terms of loans
to customers (UAH 21,745.0 million) and total assets (UAH 28,594.4 million) and the sixth largest
bank by equity capital (UAH 2,563.4 million), all as calculated under the accounting standards
generally acceptable in the Ukraine ("Ukrainian Accounting Standards").
The Standby Asset Manager is currently the only Ukrainian bank acting on behalf of the Cabinet of
Ministers of the Ukraine (the "Government") as a financial agent (a "Financial Agent") with respect
to loans from foreign financial institutions originated, borrowed or guaranteed by the Ukraine. In
addition, the Standby Asset Manager's principal activities are: corporate banking (including structured
finance, trade finance and project finance), the provision of loans to Ukrainian companies via special
programmes such as the Second Export Development Project with the International Bank for
Reconstruction and Development ("IBRD") and the programme for small and medium sized
enterprises in the Ukraine (the "SME Programme") with Kreditanstalt fur Wiederaufbau ("KfW"),
the provision of services for corporate clients, treasury transactions and retail banking operations.

The Standby Asset Manager possesses a banking license and provides an entire range of banking
services, including foreign exchange transactions, to its clients. The Standby Asset Manager handles a
considerable part of settlements of entities engaged in foreign economic activity, and has the widest
among Ukrainian banks network of correspondents that includes about 800 banking institutions
worldwide.

Historically, the main emphasis among the Standby Asset Manager's commercial operations was
placed on the servicing of export-import transactions. However, the Standby Asset Manager has
diversified its operations over the last decade and currently provides a wide range of banking services,
while retaining a strong focus on its traditional activities. The Standby Asset Manager's customer base
has also expanded and currently consists of about 40,000 businesses, firms and organisations,
including many large private sector and state-owned enterprises.

In recent years the Standby Asset Manager has introduced a number of new products and services,
including serving as a non-state pension fund depository, transactions involving precious metals,
foreign exchange derivatives, new functions of the Financial portal™ (an internet-banking system)
and additional payment card services. It has also recently started active development of its retail
operations. The Standby Asset Manager has more than 660,000 individuals as retail customers. Its
retail banking activities consist primarily of deposit taking, cash settlement transactions and loans to
individuals. The Standby Asset Manager also offers a wide range of bank card products and services
such as debit and credit cards.

The Standby Asset Manager was awarded by the JPMorgan Chase Quality Recognition Award each
year from 2001 to 2007 as one of the best among more than 6,000 of JPMorgan Chase Bank's
correspondents worldwide for the quality of its clearing services in U.S. dollars. In 2007, for the
second successive year S&P and Financial Initiatives Agency named the Standby Asset Manager the
most transparent bank in Ukraine. The Standby Asset Manager was recognized as the best Ukrainian
bank by "The Banker" magazine and by "Global Finance" magazine in 2005 and 2006, respectively.
In 2003 the Standby Asset Manager was awarded by Deutsche Bank AG with a similar accolade as
one of its best correspondent banks in terms of the quality of its clearing services in Euro.

As at 31 December 2006, the Standby Asset Manager had total assets of UAH 18,449.4 million, total
customer deposits of UAH 6,689.5 million and total net customer loans of UAH 13,462.9 million,
compared to total assets of UAH 10,193.2 million, total customer deposits of UAH 4,761.1 million
and total net customer loans of UAH 6,992.7 million as at 31 December 2005. For the year ended 31
December 2006, the Standby Asset Manager had profit before income tax expense of UAH 464.1




                                                 -111-
million and net profit of UAH 334.9 million, compared to profit before income tax expense of UAH
256.2 million and net profit of UAH 184.9 million for the year ended 31 December 2005), all as
calculated under the International Financial Reporting Standards ("International Financial
Reporting Standards").

As at 30 June 2007, the Standby Asset Manager had total assets of UAH 23,295.8 million, total
customer deposits of UAH 8,525.6 million and total net customer loans of UAH 16,720.5 million
compared to total assets of UAH 12,825.7 million, total customer deposits of UAH 5,975.1 million
and total net customer loans of UAH 9,553.1 million for the same period of 2006. For the six month
period ended 30 June 2007, the Standby Asset Manager had income before tax of UAH 326.1 million
and net profit of UAH 235.4 million, compared to income before tax of UAH 265.9 million and net
profit of UAH 191.0 million for the same period of 2006 (International Financial Reporting
Standards).

Strategy

The Standby Asset Manager's strategy includes the following key elements: to maintain its unique
position as Financial Agent of the Government; to maintain its position as one of the leading
Ukrainian banks in foreign trade finance and other related activities; to maintain its international
reputation; to diversify its customer base and strengthen SME business; to diversify its funding
sources, to further develop its risk management system and to develop retail business in certain
limited spheres by, for instance, offering retail services to employees of its corporate customers.

As part of its strategy the Standby Asset Manager intends to continue its cooperation with the IBRD,
which should result in opportunities to finance its export-oriented clients and develop its export
insurance agency functions. The Standby Asset Manager's strategy includes also to continue its
cooperation with the EBRD under attracted in 2007 U.S. dollars credit line for financing energy
efficiency projects and implementation of trade facilitation program (TFP) for financing export-
import projects of its clients, as well as with the Nordic Investment Bank for financing of energy
efficiency and infrastructure projects.

Credit Ratings

Currently, the Standby Asset Manager is rated by two rating agencies, Fitch and Moody's, which have
issued the following credit ratings:

Fitch                                               Moody's
Long-term Issuer Default Rating       "BB–"         Foreign currency long-term deposit "B2"
                                                    rating
Short term rating                     "B"           Outlook                             Positive
Outlook                               Positive      Foreign currency short term deposit NP
                                                    rating
Individual                            D             Financial strength                  D
Support                               3

In addition, in June 2006, Fitch announced the launch of its national rating scale in Ukraine and
assigned to the Standby Asset Manager a national long term rating of "AA (ukr)" with a stable
outlook. This credit rating denotes a very low expected credit risk and a very high ability to repay
financial obligations in due time compared to other issuers or issues in the same country.




                                                 -112-
                                   THE DATA CUSTODIAN
Liza Jane Limited (the "Data Custodian") has been appointed as Data Custodian pursuant to a data
custodian agreement dated on or before the Issue Date (the "Data Custodian Agreement") between
the Issuer, the Data Custodian and the Trustee. The Data Custodian's registered office is at 7 Mill
Bank, Tonbridge, Kent TN9 1PY. The Data Custodian was incorporated and registered in England
and Wales under the Companies Act 1985 with limited liability as a private limited company on 23
August 2004, with registered number 5211842.




                                              -113-
                        THE CASH MANAGER AND PAYING AGENT
Deutsche Bank Aktiengesellschaft ("Deutsche Bank") originated from the reunification of
Norddeutsche Bank Aktiengesellschaft, Hamburg, Rheinisch-Westfälische Bank Aktiengesellschaft,
Duesseldorf and Süddeutsche Bank Aktiengesellschaft, Munich; pursuant to the Law on the Regional
Scope of Credit Institutions, these had been disincorporated in 1952 from Deutsche Bank which was
founded in 1870. The merger and the name were entered in the Commercial Register of the District
Court of Frankfurt am Main on 2 May 1957. Deutsche Bank is a banking institution and a stock
corporation incorporated under the laws of Germany under registration number HRB 30 000.
Deutsche Bank has its registered office in Frankfurt am Main, Germany. It maintains its head office at
Taunusanlage 12, 60325 Frankfurt am Main and branch offices in Germany and abroad including
London, New York, Sydney, Tokyo and an Asia-Pacific head office in Singapore which serve as hubs
for its operations in the respective regions.

Deutsche Bank is the parent company of a group consisting of banks, capital markets companies, fund
management companies, a real estate finance company, instalment financing companies, research and
consultancy companies and other domestic and foreign companies.

"Deutsche Bank AG London Branch" is the London branch of Deutsche Bank AG. On 12 January
1973, Deutsche Bank AG filed in the United Kingdom the documents required pursuant to section
407 of the Companies Act 1948 to establish a place of business within Great Britain. On 14 January
1993 Deutsche Bank registered under Schedule 21A to the Companies Act 1985 as having established
a branch (Registration No. BR000005) in England and Wales. Deutsche Bank AG London Branch is
an authorised person for the person for the purposes of section 19 of the Financial Services and
Markets Act 2000. In the United Kingdom, it conducts wholesale banking business and through its
Private Wealth Management division, it provides holistic wealth management advice and integrated
financial solutions for wealthy individuals, their families and selected institutions.




                                                -114-
                                             THE ASSETS
The Assets
The assets transferred to the Issuer on the Initial Transfer Date and from time to time on any
Subsequent Transfer Date are comprised of the Loan Claims and the Pledge Claims (the "Assets").
The purchase price payable in respect of the Initial Assets (other than the Residual Revenue), pursuant
to the terms of the Sale Agreement, shall be paid by the Issuer to the Originator on the Issue Date.
The purchase price payable in respect of the Subsequent Assets (other than the Residual Revenue),
pursuant to the terms of the Sale Agreement, shall be paid by the Issuer to the Originator on the
relevant Subsequent Transfer Date.
The Loan Claims arise under loans extended by the Originator to individual borrowers in Ukraine
("Borrowers") to finance the acquisition of new or second hand motor vehicles ("Motor Vehicles"),
and are documented by loan agreements between the Originator and the Borrowers (the "Loans"),
concluded on the basis of a standard form Ukrainian law governed loan agreement (the "Standard
Form Loan Agreement").
The Loans are secured by first ranking pledges over the Motor Vehicles (the "Pledges"), which are
documented by pledge agreements between the Originator as pledgee and the Borrowers as pledgors,
concluded on the basis of a standard form Ukrainian law governed pledge agreement (the "Standard
Form Pledge Agreement").
Repayment Terms
Repayment terms under each Loan require monthly instalments covering both interest and principal
being payable until the Loan is fully repaid by its maturity.
Initial Assets Eligibility Criteria
The following Initial Assets Eligibility Criteria will have been applied in respect of the Initial Assets,
and the Originator will represent and warrant that on the Initial Transfer Date the following will be
true and complete:
(a)     each Loan was originated by the Originator;
(b)     the Originator was, at the time of conclusion of each Loan and thereafter until the Transfer
        Date applicable to such Loan, and is, the only lender under the Loan;
(c)     each Loan and each Pledge is entered into with an Eligible Borrower and concerns an Eligible
        Motor Vehicle;
(d)     each Loan and each Pledge is entered into on the basis of, and without any deviation from,
        respectively, the Standard Form Loan Agreement and the Standard Form Pledge Agreement
        (except for such deviations which (i) are required to ensure compliance with the mandatory
        provisions of any applicable legislation or (ii) do not materially modify the scope, content and
        procedure for the exercise of any party's rights or obligations as compared to, respectively, the
        Standard Form Loan Agreement and the Standard Form Pledge Agreement and, further, do
        not adversely affect the legality, validity, effectiveness or enforceability of the Borrower's
        obligations or the lender's/pledgee's rights);
(e)     without limitation of the foregoing, no Loan and no Pledge contains any restriction on such
        sale, assignment or transfer of the Assets as contemplated by the Sale Agreement;
(f)     each Pledge secures all of the relevant Borrower's payment obligations under the respective
        Loan;
(g)     each Loan and each Pledge has been duly executed and complies in all material respects with
        applicable legal and regulatory requirements (including consumer protection regulations) and
        constitutes legal, valid, binding, effective and enforceable obligations of the Originator and
        the relevant Borrower;



                                                  -115-
(h)   all acts have been done to make each Loan and each Pledge admissible in evidence in
      Ukraine;
(i)   each Loan and each Pledge is governed by the laws of Ukraine;
(j)   the execution and performance of each Loan does not cause the Originator to be in conflict
      with or constitute a breach or infringement of any of the terms of, or constitute a default by
      the Originator under:
      (i)     the Originator's constitutional documents;
      (ii)    any requirement of law, any direction or requirement of any governmental authority
              or any court order binding on the Originator; or
      (iii)   any agreement or other document or instrument to which it is a party or which is
              legally binding on it or any of its assets;
(k)   each Loan and each Pledge is entered into in the ordinary course of the Originator's business
      on arm's length commercial terms;
(l)   no Loan has been granted pursuant to any law or regulation which provides for any
      advantageous financial terms and conditions, public financial contributions or grants of any
      kind, discounts pursuant to the law, capped interest rates and/or any other provisions which
      result in advantageous repayment terms or reductions of payment for the Borrower in relation
      to the principal and/or interest under the Loan;
(m)   no Loan arises from the restructuring of any loan or other financing arrangement formerly
      granted by the Originator or any other lender;
(n)   all payments of principal and interest under the Loan are to be made in U.S.$ only and
      without any deduction or discount, and the Loans do not permit any such payments to be
      converted into any other currency;
(o)   each Loan which forms part of Pool 1 Initial Assets has:
      (1) a Principal Amount Outstanding of not less than U.S.$ 500 and not more than U.S.$
          60,000;
      (2) a minimum gross APR of 8 %;
      (3) an original term of not less than 12 months and no more than 84 months;
      (4) a minimum seasoning of 2 months;
      (5) a remaining term of not less than 6 months and not more than 82 months; and
      (6) when added to the Pool 1 Initial Assets not breached the Maximum Pool Concentration
          applicable for Pool 1 Initial Assets;
(p)   each Loan which forms part of Pool 2 Initial Assets has:
      (1) a Principal Amount Outstanding of not less than U.S.$ 500 and not more than U.S.$
          60,000;
      (2) a minimum gross APR of 9 %;
      (3) an original term of not less than 12 months and no more than 84 months;
      (4) a minimum seasoning of 2 months;
      (5) a remaining term of not less than 6 months and not more than 82 months; and




                                              -116-
       (6) when added to the Pool 2 Initial Assets not breached the Maximum Pool Concentration
           applicable for Pool 2 Initial Assets;
(q)    no Loan is a balloon loan (non-amortising loan) and each Loan provides for the repayment of
       its principal amount in full at the expiry of the term of the Loan;
(r)    each Loan provides for fixed monthly repayments of principal;
(s)    the minimum interest on each Loan is 7.00 per cent. per annum;
(t)    interest under each Loan is payable monthly in arrear, and no Loan provides for any deferral
       or waiver of the payment of interest;
(u)    in respect of each Loan:
       (i)     the original loan to value ratio ("OLTV") is calculated by dividing the gross principal
               amount committed at completion of the Loan by the valuation of the Motor Vehicle at
               origination of the Loan or, in some cases, the lower of such valuation and the sale
               price; and
       (ii)    the OLTV of each Loan is no more than 100 per cent.;
(v)    an original of each Loan, signed by each party thereto, was delivered by the Originator to the
       relevant Borrower at least fifteen (15) days before the Transfer Date applicable to such Loan;
       and none of the Borrowers has notified the Originator about the Borrower's refusal to borrow
       the Loan;
(w)    no payment under any Loan is overdue and unpaid;
(x)    at least two payments under each Loan have been made prior to the Transfer Date, and such
       payments have been timely and otherwise duly made by the relevant Borrower;
(y)    the Originator has performed all of its obligations (as lender or otherwise) in all material
       respects under or in connection with each Loan (provided, however, that, under certain Loans,
       the Originator may have to make additional loan advances ("Insurance Advances") by
       payment of insurance premiums to an Insurer to maintain the effectiveness of an Insurance
       Contract in respect of the relevant Motor Vehicle, to the extent that such insurance premiums
       have not been timely paid by the Borrower); and, so far as the Originator is aware, no
       Borrower has threatened or undertaken any action for any failure of the Originator to perform
       any such obligations;
(z)    without limiting the generality of the foregoing, each Loan has been fully disbursed and no
       further loan disbursement is required to be made under the terms of any Loan (except that,
       under certain Loans, an Insurance Advance may need to be made);
(aa)   without limiting the generality of the foregoing, no Loan contains provisions which may give
       rise to a liability on the part of the Originator to make any further payment (other than any
       Insurance Advances) to the Borrower or any other person or to perform any other onerous act;
(bb)   the Originator has not received notice of early repayment with respect to any Loan;
(cc)   each Pledge in respect of a Loan constitutes a duly created and properly registered
       first-ranking pledge over the relevant Motor Vehicle;
(dd)   no Loan and no Pledge has been terminated and, so far as the Originator is aware, no Loan
       and no Pledge has been rescinded or its legality, validity, effectiveness or enforceability has
       been or is challenged by any person or state authority; and
(ee)   all representations and warranties made by the Originator in the Sale Agreement in relation to
       such Loan and such Pledge are true and correct.




                                               -117-
"Eligible Borrower" is a Borrower who:
(a)    is a natural person (an individual, not a company) who, at the time of entering into the
       respective Loan and Pledge, had full legal capacity and authority to enter into and perform
       under the respective Loan and Pledge and any related documents;
(b)    is acting in his/her own name and for his/her own account;
(c)    is a sole borrower under the relevant Loan;
(d)    was at least 18 years of age at the time when the relevant Loan was granted;
(e)    is a tax resident of, and is domiciled in, Ukraine;
(f)    is not an employee or an officer of the Originator;
(g)    did not enter into the relevant Loan within the context of any commercial activity (including,
       without limitation, that aimed at the provision of any transportation or car rental services);
(h)    so far as the Originator is aware, is not insolvent, insane or otherwise lacking the legal
       capacity or authority to enter into the Loan, the Pledge or any related document, and is not
       dead or untraceable; and
(i)    does not have more than two Loans in the Assets.
"Eligible Motor Vehicle" is a Motor Vehicle which satisfies the following requirements:
(a)    it is either a New Motor Vehicle or a Second Hand Motor Vehicle;
(b)    it has been acquired into the ownership of the relevant Borrower on the basis of a duly
       executed, legal, valid and enforceable purchase agreement which has been performed in full
       by each party thereto;
(c)    it is in the ownership of the relevant Borrower and his/her spouse (if any) only, and such
       ownership rights to the Motor Vehicle are duly documented, registered and evidenced in
       accordance with all applicable requirements of Ukrainian legislation and, as far as the
       Originator is aware, are not disputed or challenged by any person or state authority;
(d)    it is not subject to any pledge, security interest or other encumbrance of any nature
       whatsoever other than the respective Pledge;
(e)    it is capable of being made collateral under, and on the terms of, the respective Pledge;
(f)    it is insured (and has been insured throughout the whole period of the relevant Loan):
       (i)     against at least the risks of damage resulting from a traffic accident, illegal action by
               a third party, natural disaster, fall of subjects or attack by animals, fire, explosion,
               illegal seizure by other persons and loss due to theft; and


       (ii)    to an amount not less than the then current balance of the relevant Loan;
(g)    the Originator is named as the sole beneficiary (loss payee) under the relevant Insurance
       Contract until such time when the Issuer is named as the sole beneficiary (loss payee) under
       such Insurance Contract;
(h)    all premiums, fees, taxes and expenses under the Insurance Contract related to the Motor
       Vehicle which have become due and payable have been paid when due in full; and
(i)    the Insurance Contract related to the Motor Vehicle is duly executed, constitutes legal, valid,
       binding and effective obligations of the insurer and is in full force and effect and, as far as the
       Originator is aware, its legality, validity, effectiveness or enforceability has not been and is
       not challenged by any person or state authority.



                                                 -118-
"New Motor Vehicle" is a newly manufactured motor vehicle, purchased directly from a relevant
manufacturer or dealer and which has not been previously owned by any person or entity other than
such manufacturer or dealer.
"Second Hand Motor Vehicle" is a used motor vehicle, purchased from a used motor vehicle dealer
or other previous legal owner.
Subsequent Assets

During the Revolving Period, subject to the terms of the Sale Agreement, it is envisaged that the
Issuer will acquire from the Originator, on any Subsequent Transfer Date the Subsequent Assets
which shall have substantially the same characteristics as the Initial Assets.

Prior to each such Subsequent Transfer Date during the Revolving Period, the Originator shall notify
the Issuer of the Originator's intention to sell Subsequent Assets to the Issuer by submitting a written
Offer in accordance with the terms of the Sale Agreement. Subject to the satisfaction of the
Conditions to Purchase Subsequent Assets (see below "Conditions to Purchase Subsequent Assets"),
the Issuer shall purchase, on each Subsequent Transfer Date during the Revolving Period, the
Subsequent Assets specified in the Offer, using such funds as are available for such purpose in
accordance with the Revolving Period Principal Priority of Payments under item (ii) (two).

Conditions to Purchase Subsequent Assets

The Issuer shall not accept an Offer to purchase Subsequent Assets if, on a Determination Date
immediately following the day of delivery of such Offer, any of the following conditions exist:

(i)     the Subsequent Assets to be purchased do not conform to the Subsequent Assets Eligibility
        Criteria;

(ii)    the Revolving Period has expired or end of the Revolving Period has been triggered;

(iii)   the Maximum Pool Concentration is exceeded;

(iv)    Minimum Pool Weighted Average Interest Rate is less than 11.50 per cent. for either Pool 1
        Subsequent Assets or Pool 2 Subsequent Assets; or

(v)     the Issuer does not have sufficient funds available to accept the Offer to purchase Subsequent
        Assets and pay the relevant Purchase Price.

The Cash Manager shall make the determination if any of the events specified in paragraphs (ii) to (v)
above have occurred on the Determination Date and shall report the results of its determination to the
Issuer and the Originator on the Determination Date.

Also, if, following the Issuer's acceptance of any Offer, it is determined that any of the events
specified in paragraphs (i) to (v) above have occurred this will not result in the relevant Subsequent
Assets not being sold or transferred to the Issuer (in whole or in any part); instead, the Originator will
be required to repurchase or substitute such Subsequent Assets or to pay indemnity to the Issuer in
accordance with the terms of the Sale Agreement (See "Sale of the Assets - Warranties and
Repurchase" and "Sale of the Assets - Substitution", below).

"Pool Concentration" means, on any Interest Payment Date, (i) for Pool 1 Subsequent Assets, the
ratio resulting from dividing the Principal Amount Outstanding of the Pool 1 Subsequent Assets
which are to be purchased (as specified in the Offer) by the sum of the aggregate Principal Amount
Outstanding of each of the Pool 1 Subsequent Assets and the Pool 2 Subsequent Assets; and (ii) for
Pool 2 Subsequent Assets, the ratio resulting from dividing the Principal Amount Outstanding of the
Pool 2 Subsequent Assets which are to be purchased (as specified in the Offer) by the sum of the




                                                  -119-
aggregate Principal Amount Outstanding of each of the Pool 1 Subsequent Assets and the Pool 2
Subsequent Assets.

"Maximum Pool Concentration" shall be maximum 100 per cent. for Pool 1 Initial Assets,
maximum 30 per cent. for Pool 2 Initial Assets, maximum 100 per cent. for Pool 1 Subsequent Assets
and maximum 20 per cent. for Pool 2 Subsequent Assets.

"Minimum Pool Weighted Average Interest Rate" shall be in respect of Pool 1 Subsequent Assets
not less than 11.50 per cent. and in respect of Pool 2 Subsequent Assets not less than 11.50 per cent.

"Pool 1" means the aggregate of Pool 1 Initial Assets and Pool 1 Subsequent Assets.

"Pool 1 Initial Assets" means all Initial Assets provided in relation to the purchase of New Motor
Vehicles (as defined in "The Assets - Initial Assets Eligibility Criteria").

"Pool 1 Subsequent Assets" means at any time all Subsequent Assets provided in relation to the
purchase of New Motor Vehicles.

"Pool 2" means the aggregate of Pool 2 Initial Assets and Pool 2 Subsequent Assets.


"Pool 2 Initial Assets" means all Initial Assets provided in relation to the purchase of Second Hand
Motor Vehicles (as defined in "The Assets - Initial Assets Eligibility Criteria").

"Pool 2 Subsequent Assets" means at any time all Subsequent Assets provided in relation to the
purchase of Second Hand Motor Vehicles.

Each of Pool 1 and Pool 2 hereinafter also referred to as "Pool".

Subsequent Assets Eligibility Criteria
The following Subsequent Assets Eligibility Criteria shall apply in relation to any purchase of
Subsequent Assets by the Issuer:

On two (2) Business Days prior to and on any Subsequent Transfer Date, the Assets have to meet the
Initial Assets Eligibility Criteria, except for items (o), (p) and (u) which shall be replaced by the
following:
(o)     each Loan which forms Pool 1 has:
            (1)     a Principal Amount Outstanding of not less than U.S.$ 500 and not more than
                    U.S.$ 75,000;
            (2)     a minimum gross APR of 9 %;
            (3)     an original term of not less than 12 months and no more than 90 months;
            (4)     a minimum seasoning of 2 months;
            (5)     a remaining term of not less than 6 months and not more than 90 months; and
            (6)     when added to the Pool 1 not breached the Maximum Pool Concentration
                    applicable for Pool 1 Subsequent Assets;
(p)     each Loan which forms Pool 2 has:
            (1)     a Principal Amount Outstanding of not less than U.S.$ 500 and not more than
                    U.S.$ 70,000;
            (2)     a minimum gross APR of 10.5 %;




                                                 -120-
          (3)     an original term of not less than 12 months and no more than 90 months;
          (4)     a minimum seasoning of 2 months;
          (5)     a remaining term of not less than 6 months and not more than 90 months; and
          (6)     when added to the Pool 2 not breached the Maximum Pool Concentration
                  applicable for Pool 2 Subsequent Assets;
(u)    the OLTV of each Loan which forms Pool 1 Subsequent Assets is no more than 80 per cent.
       and the OLTV of each Loan which forms Pool 2 Subsequent Assets is no more than 50 per
       cent.; and
(ff)   the Borrower under each Loan should have no outstanding deposits placed with the
        Originator.




                                             -121-
                             CHARACTERISTICS OF THE ASSETS
As of the Initial Transfer Date, the Issuer owns the Initial Assets, purchased from the Originator
pursuant to and in accordance with the Sale Agreement. See the relevant sections in "The Parties and
Transaction Documents".
All information and statistical data contained in this section "The Characteristics of the Assets" are
representative of the characteristics of the Assets as at 29 May 2008 (the "Valuation Date") which,
for the avoidance of doubt, may differ from the characteristics thereof at the Transfer Date.
The Assets have the aggregate characteristics indicated in tables A to N below.
The information contained in these tables has been provided by the Asset Manager, is true and
accurate as at the date of this Prospectus and has been the subject of an audit (columns of percentages
may not add up to 100 per cent. due to rounding).
Table A

Summary Data of Aggregate Pool
Aggregate Principal Amount Outstanding:                                            162,488,701.44
Average Principal Amount Outstanding:                                                    9,296.76
Min Principal Amount Outstanding:                                                          504.60
Max Principal Amount Outstanding:                                                       59,932.41
Loan Count:                                                                             17,478.00
Aggregate Original Balance:                                                        206,519,480.13
Weighted Average Gross APR (%):                                                             12.80
Min Gross APR (%):                                                                           8.00
Max Gross APR (%):                                                                          18.90
Weighted Average Original Term:                                                                67
Min Original Term:                                                                             12
Max Original Term:                                                                             84
Weighted Average Seasoning:                                                                    11
Min Seasoning:                                                                                  2
Max Seasoning:                                                                                 54
Weighted Average Remaining Term:                                                               56
Min Remaining Term:                                                                             6
Max Remaining Term:                                                                            82
% New:                                                                                      69.72
% Used:                                                                                     30.28




                                                -122-
Table B

New Motor Vehicles
Aggregate Principal Amount Outstanding:           113,282,109.91
Average Principal Amount Outstanding:                   8,914.24
Min Principal Amount Outstanding:                         505.34
Max Principal Amount Outstanding:                      59,932.41
Loan Count:                                            12,708.00
Aggregate Original Balance:                       146,001,021.79
Weighted Average Gross APR (%):                            12.86
Min Gross APR (%):                                          8.00
Max Gross APR (%):                                         18.90
Weighted Average Original Term:                               72
Min Original Term:                                            12
Max Original Term:                                            84
Weighted Average Seasoning:                                   12
Min Seasoning:                                                 2
Max Seasoning:                                                54
Weighted Average Remaining Term:                              60
Min Remaining Term:                                            6
Max Remaining Term:                                           82

Table C

Used Motor Vehicles
Aggregate Principal Amount Outstanding:            49,206,591.53
Average Principal Amount Outstanding:                  10,315.85
Min Principal Amount Outstanding:                         504.60
Max Principal Amount Outstanding:                      55,417.62
Loan Count:                                             4,770.00
Aggregate Original Balance:                        60,518,458.34
Weighted Average Gross APR (%):                            12.66
Min Gross APR (%):                                         10.00
Max Gross APR (%):                                         18.54
Weighted Average Original Term:                               58
Min Original Term:                                            12
Max Original Term:                                            84
Weighted Average Seasoning:                                   10
Min Seasoning:                                                 2
Max Seasoning:                                                51
Weighted Average Remaining Term:                              48
Min Remaining Term:                                            6
Max Remaining Term:                                           81




                                          -123-
Table D

Original Balance
                                          % of
                                                     Aggregate Outstanding    % of Total
Original Balance           Loan Count     Total
                                                           Balance             Balance
                                          Loans
1,000.00 - 5,999.99               2,630    15.05               8,500,648.72          5.23
6,000.00 - 10,999.99              7,804    44.65              49,663,307.52         30.56
11,000.00 - 15,999.99             3,401    19.46              35,716,627.63         21.98
16,000.00 - 20,999.99             1,801     10.3              26,652,841.70          16.4
21,000.00 - 25,999.99               962       5.5             18,540,277.94         11.41
26,000.00 - 30,999.99               442     2.53               9,985,696.93          6.15
31,000.00 - 35,999.99               207     1.18               5,608,270.74          3.45
36,000.00 - 40,999.99               114     0.65               3,567,691.54           2.2
41,000.00 - 45,999.99                44     0.25               1,440,150.49          0.89
46,000.00 - 50,999.99                39     0.22               1,368,279.05          0.84
51,000.00 - 55,999.99                10     0.06                 365,415.00          0.22
56,000.00 - 60,999.99                10     0.06                 416,499.50          0.26
61,000.00 - 65,999.99                 8     0.05                 402,537.97          0.25
66,000.00 - 70,999.99                 5     0.03                 222,100.05          0.14
71,000.00 - 75,999.99                 1     0.01                  38,356.66          0.02
Total:                           17,478      100             162,488,701.44          100


Table E

Principal Amount Outstanding
                                          % of
Principal Amount                                    Aggregate Outstanding     % of Total
                           Loan Count     Total
Outstanding                                               Balance              Balance
                                          Loans
500.00 - 5,499.99                 5,172    29.59             18,384,654.44          11.31
5,500.00 - 10,499.99              6,961    39.83             52,971,431.32           32.6
10,500.00 - 15,499.99             2,796       16             35,578,756.83           21.9
15,500.00 - 20,499.99             1,407     8.05             25,044,314.51          15.41
20,500.00 - 25,499.99               648     3.71             14,700,612.53           9.05
25,500.00 - 30,499.99               249     1.42              6,896,018.39           4.24
30,500.00 - 35,499.99               135     0.77              4,383,812.93            2.7
35,500.00 - 40,499.99                65     0.37              2,454,583.36           1.51
40,500.00 - 45,499.99                26     0.15              1,107,334.05           0.68
45,500.00 - 50,499.99                10     0.06                478,737.18           0.29
50,500.00 - 55,499.99                 7     0.04                372,742.82           0.23
55,500.00 - 60,499.99                 2     0.01                115,703.08           0.07
Total:                           17,478      100            162,488,701.44            100




                                           -124-
Table F

Original Term
                              % of
                                            Aggregate         % of Total
Original Term    Loan Count   Total
                                       Outstanding Balance     Balance
                              Loans
12-17                    16     0.09              79,909.61            0.05
18 - 23                   6     0.03              30,492.47            0.02
24 - 29                 105      0.6             506,016.28            0.31
30 - 35                   7     0.04              38,269.69            0.02
36 - 41               1,546     8.85           9,289,504.82            5.72
42 - 47                   1     0.01               3,032.83                0
48 - 53                 309     1.77           1,414,883.38            0.87
54 - 59                  20     0.11              91,647.22            0.06
60 - 65              10,379    59.38          88,894,836.08           54.71
66 - 71                   4     0.02              50,887.92            0.03
72 - 77                  84     0.48             971,329.69              0.6
78 - 83                   5     0.03              77,287.28            0.05
84 >=                 4,996    28.58          61,040,604.17           37.57
Total:               17,478      100         162,488,701.44             100

Table G

Remaining Term
                              % of
                                            Aggregate         % of Total
Remaining Term   Loan Count   Total
                                       Outstanding Balance     Balance
                              Loans
6-11                    436     2.49             965,840.26            0.59
12-17                   382     2.19           1,381,805.72            0.85
18 - 23                 650     3.72           3,015,866.91            1.86
24 - 29                 926      5.3           5,718,353.01            3.52
30 - 35               1,142     6.53           7,667,626.98            4.72
36 - 41               1,320     7.55           8,022,992.30            4.94
42 - 47               1,990    11.39          15,710,390.60            9.67
48 - 53               2,574    14.73          25,645,317.54           15.78
54 - 59               3,234     18.5          35,333,912.08           21.75
60 - 65                 782     4.47           7,924,628.81            4.88
66 - 71               1,090     6.24          13,111,584.01            8.07
72 - 77               1,222     6.99          15,230,612.36            9.37
78 - 83               1,730      9.9          22,759,770.86           14.01
Total:               17,478      100         162,488,701.44             100




                                  -125-
Table H

Loan Seasoning

                              % of
                                             Aggregate         % of Total
Loan Seasoning   Loan Count   Total
                                        Outstanding Balance     Balance
                              Loans
=2                      417     2.39            4,681,834.40            2.88
3-8                   6,780    38.79           74,765,586.13           46.01
9-14                  3,918    22.42           37,895,249.33           23.32
15 - 20               3,129     17.9           25,957,180.10           15.97
21 - 26               1,478     8.46           10,323,551.06            6.35
27 - 32                 853     4.88            5,632,916.96            3.47
33 - 38                 257     1.47            1,124,546.85            0.69
39 - 44                 315      1.8            1,279,906.54            0.79
45 - 50                 141     0.81              494,342.50             0.3
51 - 56                 190     1.09              333,587.57            0.21
Total:               17,478      100          162,488,701.44             100


Table I

Gross APR

                              % of
                                             Aggregate         % of Total
Gross APR        Loan Count   Total
                                        Outstanding Balance     Balance
                              Loans
7.01 - 8.00               1     0.01                8,613.05            0.01
9.01 - 10.00            106     0.61            1,891,927.98            1.16
10.01 - 11.00           542       3.1           4,917,894.02            3.03
11.01 - 12.00         7,060    40.39           74,656,314.98           45.95
12.01 - 13.00           817     4.67            5,775,284.22            3.55
13.01 - 14.00         5,988    34.26           53,302,403.90            32.8
14.01 - 15.00         1,375     7.87           11,147,079.43            6.86
15.01 - 16.00           858     4.91            5,998,621.21            3.69
16.01 - 17.00           218     1.25            1,568,511.53            0.97
17.01 - 18.00           499     2.86            3,117,580.89            1.92
18.01 - 19.00            14     0.08              104,470.23            0.06
Total:               17,478      100          162,488,701.44             100




                                   -126-
Table J

New - Used Motor Vehicles
                                                              Aggregate
                                        % of Total                                % of Total
New -Used            Loan Count                              Outstanding
                                         Loans                                     Balance
                                                               Balance
New                         12,708              72.71        113,282,109.91               69.72
Used                         4,770              27.29         49,206,591.53               30.28
Total:                      17,478               100         162,488,701.44                100


Table K

Car Make
                                                                  Aggregate
                                              % of Total                            % of Total
 Car Make (top 15)           Loan Count                          Outstanding
                                               Loans                                 Balance
                                                                   Balance
 DAEWOO                               3,286              18.8     19,481,047.52           11.99
 CHEVROLET                            1,894             10.84     18,398,297.13           11.32
 VAZ                                  3,075             17.59     15,335,747.07            9.44
 MERCEDES                               704              4.03     10,384,971.76            6.39
 MITSUBISHI                             684              3.91     10,363,632.34            6.38
 TOYOTA                                 472                2.7     8,731,712.17            5.37
 VOLKSWAGEN                             650              3.72      8,557,655.33            5.27
 OPEL                                   549              3.14      5,895,789.26            3.63
 SKODA                                  487              2.79      5,456,645.09            3.36
 HYUNDAI                                386              2.21      5,144,063.75            3.17
 NISSAN                                 336              1.92      4,016,557.30            2.47
 MAZDA                                  273              1.56      3,823,618.83            2.35
 GAZ                                    565              3.23      3,813,275.66            2.35
 HONDA                                  230              1.32      3,571,152.32             2.2
 BMW                                    218              1.25      3,315,625.58            2.04
 Other                                3,669             20.99     36,198,910.33           22.28
 Total:                              17,478               100    162,488,701.44             100




                                              -127-
Table L

Year of Production

Year of              Loan        % of Total        Aggregate
                                                                       % of Total Balance
Production           Count        Loans       Outstanding Balance
1997                     241           1.38           2,075,401.17                    1.28
1998                     500           2.86           4,331,732.15                    2.67
1999                     581           3.32           5,723,604.20                    3.52
2000                     518           2.96           5,192,675.64                     3.2
2001                     464           2.65           5,088,297.77                    3.13
2002                     552           3.16           6,218,077.46                    3.83
2003                     942           5.39           7,760,075.85                    4.78
2004                     998           5.71           7,368,537.37                    4.53
2005                   1,975           11.3          14,245,699.96                    8.77
2006                   4,786          27.38          41,695,655.93                   25.66
2007                   5,921          33.88          62,788,943.94                   38.64
Total:                17,478            100         162,488,701.44                     100

Table M

Self Employment Flag
                                       % of           Aggregate
                          Loan
  Employment Type                      Total         Outstanding       % of Total Balance
                          Count
                                       Loans           Balance
N                          16,944        96.94       156,895,879.07                  96.56
Y                             534         3.06          5,592,822.37                  3.44
Total:                     17,478          100       162,488,701.44                    100

Table N

Region
                                       % of           Aggregate
                          Loan
Region                                 Total         Outstanding       % of Total Balance
                          Count
                                       Loans           Balance
Kyiv                           3,276     18.74         30,251,040.78                 18.62
Dnepropetrovsk                 2,294     13.13         24,527,391.40                 15.09
Odessa                         1,442      8.25         15,154,759.45                  9.33
Donetsk                          891       5.1          8,324,555.98                  5.12
Chernovtsy                       763      4.37          7,105,638.19                  4.37
Zakarpatya                       898      5.14          6,362,886.68                  3.92
Zaporozhie                       523      2.99          5,968,666.40                  3.67
Vinnitsa                         615      3.52          5,275,609.65                  3.25
Lviv                             640      3.66          4,992,521.54                  3.07
Sevastopil                       433      2.48          4,789,469.67                  2.95
Kharkiv                          561      3.21          4,775,059.42                  2.94
Poltava                          493      2.82          4,771,646.20                  2.94
Kherson                          492      2.81          4,211,313.58                  2.59
Crimea                           378      2.16          4,080,571.98                  2.51
Lugansk                          483      2.76          4,056,490.01                   2.5
Nikolaev                         360      2.06          3,663,619.82                  2.25
Volyn                            414      2.37          3,644,015.89                  2.24
Ivano-Frankovsk                  456      2.61          3,561,548.92                  2.19
Cherkasy                         400      2.29          3,023,425.61                  1.86
Chernigov                        336      1.92          2,781,844.54                  1.71
Zhitomir                         281      1.61          2,439,220.71                   1.5
Khmelnytsk                       256      1.46          2,244,160.32                  1.38
Ternopil                         312      1.79          2,166,829.06                  1.33
Kirovograd                       214      1.22          2,127,753.49                  1.31
Sumy                             149      0.85          1,175,160.86                  0.72




                                                 -128-
Other       118   0.68             1,013,501.29   0.62
Total:   17,478    100           162,488,701.44    100




                         -129-
                                      TITLE TO THE ASSETS
Transfer of the Assets
The Assets are comprised of the Loan Claims and the Pledge Claims. The Loan Claims are sold and
assigned by the Originator to the Issuer on the terms of the Sale Agreement. The Pledge Claims
transfer to the Issuer as a consequence of the sale and assignment of the Loan Claims. (Note that,
although this prospectus may, from time to time, refer to the sale and/or purchase of the Assets, such
reference is for convenience only and should be understood to refer to the sale of the Loan Claims and
the transfer of the Pledge Claims as described above.)
The sale of the Loan Claims is documented by the Sale Agreement, the transfer provisions of which
are governed by Ukrainian law. The Sale Agreement intends to achieve the true sale of the Loan
Claims.
State Registration
In order to preserve the priority of the Issuer's claims under the Pledges in respect of the Motor
Vehicles against the claims of third party creditors, the transfer of the Pledges will be registered
("State Registration") in the Encumbrances Register. State Registration of the transfer of a Pledge is
completed on the day on which the Issuer is recorded as the pledgee in respect of that Pledge in the
Encumbrances Register.
State Registration must be conducted in connection with:
(a)     the transfer of the Pledges from the Originator to the Issuer in connection with each Offer;
(b)     the reversing of a transfer of any Pledge from the Issuer to the Originator in connection with
        any repurchase by the Originator or substitution of any Ineligible Assets; and
(c)     the transfer of the Assets to the Trustee as a result of enforcement of the Property Rights
        Pledge Agreement or the Deed of Charge (as the case may be).
In addition to the foregoing, the assignment of the Loan Claims by the Originator to the Issuer
pursuant to the Sale Agreement will be registered in the Encumbrances Register. Such registration
will be made in respect of each Offer following the relevant Transfer Date. Although it is unclear
whether such registration is required for an assignment which effects a direct transfer of monetary
claims by the assignor to the assignee rather than an encumbrance of the monetary claims in favour of
any party, such registration will be carried out in order to avoid an adverse interpretation or
application of the poorly drafted provisions of the applicable Ukrainian legislation which fail to
distinguish between these two types of assignment and provide that any assignment would obtain
legal significance for third parties only upon its registration in the Encumbrances Register. However,
notwithstanding such registration, the Sale Agreement contains an express statement to the effect that
the parties intend to effect thereunder a sale of the Loan Claims by the Originator to the Issuer and not
a security assignment or other similar encumbrance over the Loan Claims or the Pledge Claims.
Notification to the Borrowers
Following each sale of the Assets from the Originator to the Issuer on the relevant Transfer Date, each
Borrower under each Loan relating to the Loan Claims will be notified of the transfer. The Borrowers
will be instructed to continue to repay their Loans, and to pay interest, to the Originator (in its
capacity as the Asset Manager), and the monies collected as a result of such payments will be
accounted by the Originator into the Asset Management Account for further remittance to the Issuer
Account.
Approvals
The sale and transfer of the Assets from the Originator to the Issuer required the following principal
approvals:




                                                 -130-
(a)   Corporate Approvals: Under PrivatBank's charter, the transaction was subject to approval by
      the Supervisory Council and the Management Board of PrivatBank, and it has received such
      approvals.
(b)   National Bank of Ukraine: No formal approvals from NBU were required for the sale of the
      Assets pursuant to the Sale Agreement.




                                            -131-
                                        SALE OF THE ASSETS
Warranties and Repurchase
The Sale Agreement contains representations and warranties (the "Warranties") given by the
Originator to the Issuer in relation to the Assets and in respect of certain other matters. No searches,
enquiries or independent investigation of title of the type which a prudent purchaser or pledgee would
normally be expected to carry out have been or will be made by the Issuer or the Trustee, each of
whom is relying upon the Warranties and the results of the audit of the Assets.
If there is an unremedied or irremediable breach of any of the Warranties with respect to any Assets
(the "Ineligible Assets"), then the Originator is (a) required to repurchase the relevant Ineligible
Assets for the price equal to the current outstanding principal balance of the relevant Ineligible Asset
(without taking into account any reduction thereof as a result of the breach of warranty or other matter
which has made such Asset an Ineligible Asset) as of the date of such repurchase plus accrued interest
and all other amounts due and payable to the Issuer at such time under such Loan, related Pledge or
(b) in certain circumstances, may alternatively procure that such Ineligible Assets be substituted as
described under "Substitution" below. Performance of the obligation to repurchase or procure the
repurchase or substitution will be in satisfaction of all of the Originator's liabilities in respect thereof.
"Principal Amount Outstanding" means, in relation to any Loan and on any date, the principal
amount of such Loan advanced to the Borrower and outstanding on such date (excluding, for the
avoidance of doubt, capitalised interest).
The Warranties referred to include statements to the following effect:
(a)     General Corporate and Regulatory
        (i)      the Originator is a bank duly registered and validly existing under the laws of Ukraine
                 and is in compliance in all material respects with all of the applicable legislation
                 relating to its establishment, organisation and principal business;
        (ii)     the Originator has the power and authority to own its assets and to carry on its
                 principal business as it is being conducted;
        (iii)    the Originator has not taken any corporate action nor have any other steps been taken
                 or legal proceedings been started by itself or by any third party for its reorganisation,
                 temporary administration, declaration of bankruptcy, revocation of banking licence or
                 liquidation;
        (iv)     no litigation, arbitration or administrative proceedings of or before any court,
                 arbitration panel or governmental body which, if adversely determined, might
                 reasonably be expected to have a material adverse effect on the Originator have been
                 started or are pending or, so far as the Originator is aware, are threatened against the
                 Originator;
        (v)      no insolvency proceedings have been commenced and are continuing with respect to
                 the Originator;
        (vi)     the Originator's centre of main interests, as that term is used in Article 3(1) of EU
                 Regulation on Insolvency Proceedings No. 1346/2000, is located in Ukraine;
(b)     Assets
        (i)      on the Initial Transfer Date with respect to the Initial Assets, two (2) Business Days
                 prior to any Subsequent Transfer Date and on any Subsequent Transfer Date with
                 respect to the Subsequent Assets, the Assets comply with the applicable Eligibility
                 Criteria;
        (ii)     the particulars of the Assets as set out in the Sale Agreement are complete, true and
                 accurate in all material respects;



                                                   -132-
(iii)    no region of Ukraine accounts for more than 25 per cent. of the aggregate value of the
         Loan Claims;
(iv)     prior to making a Loan to a Borrower, the Originator will have caused its qualified
         in-house lawyers to carry out all investigations, searches and other actions and
         enquiries in relation to the relevant Motor Vehicle which a Prudent Lender or its
         lawyers normally make when lending to an individual on such security of in Ukraine,
         and received a report on ownership and registration of, and the absence of
         encumbrances over, such Motor Vehicle, and the results thereof were such as would
         be acceptable to a Prudent Lender; (iv) prior to the origination of each Loan, the
         relevant Motor Vehicle was valued by an internal professional valuer from the panel
         of valuers from time to time appointed by the Originator;
(v)      other than the Pledges, there are no guarantees, suretyships or any other agreements
         or documents creating security interests in favour of the Originator to secure the
         Borrowers' obligations under the Loans;
(vi)     each Loan has been originated and serviced by the Originator to standards acceptable
         to a Prudent Lender and in accordance with the service procedures summarized in
         Schedule 1 (Service Specification) to the Asset Management Agreement;
(vii)    the Originator has, since the making of each Loan, kept such full and proper accounts,
         books and records showing clearly all transactions, payments, receipts and
         proceedings relating to such Loan as a Prudent Lender would and all such accounts,
         books and records will be up to date and in the possession of or held to the order of
         the Originator on the terms of the Transaction Documents;
(viii)   immediately prior to the relevant date of transfer of the Assets under the Sale
         Agreement, all Loan Files are held by, or to the order of, the Originator, and
         immediately after the date of such transfer, all Loan Files will be held by, or to the
         order of, the Issuer;
(ix)     except as otherwise disclosed in this Prospectus, and by the Originator to the Issuer
         by the Initial Transfer Date in respect of the Initial Assets or any Subsequent Transfer
         Date in respect of the Subsequent Assets, no right of set-off or counterclaim or
         defence or analogous right has been created or arisen between the Originator as
         lender and pledgee and any Borrower which would entitle such Borrower to reduce
         the amount of any payment otherwise due under the relevant Loan and the related
         Pledge and, to the best of the Originator's knowledge, no such right of set-off or
         counterclaim or defence or analogous right has been asserted or applied by any
         Borrower;
(x)      the Originator has not received notice that any act, event or breach of any of the terms
         of any of the Insurance Contracts in respect of a Motor Vehicle has occurred, the
         effect of which in any case is likely to cause such policy or policies to be materially
         adversely affected or that there is any claim outstanding under any of the Insurance
         Contracts (save, in relation to the Insurance Contracts, minor claims not involving the
         destruction of the Motor Vehicle), and the Originator is not aware of any act or thing
         which has occurred which would, or would be likely to, give rise to any claim under
         any of the foregoing;
(xi)     the Originator has not entered into any arrangement which would restrict (i) the
         ability of the lender under any Loan or the pledgee under any Pledge to enforce the
         terms of such Loan or Pledge or (ii) the ability of the Issuer upon the transfer of the
         Assets to enforce the terms of any Loan or Pledge;
(xii)    the Originator has carried out and will carry out its rights and obligations under each
         Loan and Pledge in a manner which may not adversely affect the ability of the Issuer
         to discharge any of its liabilities under the Notes or any Transaction Documents;




                                         -133-
(c)   Transfer
      (i)     immediately prior to the transfer of the Assets, the Originator is the sole owner of the
              Assets;
      (ii)    other than the registrations specified in Clause 4 of the Sale Agreement, no further act
              will be required to effect the transfer of the Assets to the Issuer as contemplated in the
              Sale Agreement and in order to enable the Issuer to require any payment under the
              Assets to the Issuer or to enforce the Issuer's rights to such payment in court;
      (iii)   neither the entry by the Originator into the relevant Transaction Documents nor the
              transfer of the Assets contemplated thereby has adversely affected or will adversely
              affect any of the Loans or the Pledges or has rendered or will render the same
              unenforceable in whole or in part, and the Originator may transfer the Assets without
              breaching any term or condition applying to any Loan or Pledge;
(d)   Disclosure of Information
      the information delivered by the Originator pursuant to, or in connection with, the Sale
      Agreement is in all material respects complete, true and accurate on the date of the Sale
      Agreement;
(e)   Transaction Documents
      (i)     the Originator has full power and authority to enter into, perform and deliver, and has
              taken all necessary actions to authorise its entry into, performance and delivery of, the
              Transaction Documents to which it is a party and the transactions contemplated by
              the Transaction Documents;
      (ii)    without limiting the foregoing, all authorisations, consents, approvals, resolutions,
              licences, exemptions, filings, notarisations or registrations required or desirable:
              (A)     to enable the Originator lawfully to enter into, exercise its rights and comply
                      with its obligations in the Transaction Documents to which it is a party;
              (B)     to ensure that the obligations expressed to be assumed by it in each
                      Transaction Document are legal, valid and binding on the Originator; and
              (C)     to make the Transaction Documents to which the Originator is a party
                      admissible in evidence in Ukraine,
              have been obtained or effected and are in full force and effect, except only for such
              authorisations, consents, approvals, resolutions, licences, exemptions, filings,
              notarisations or registrations which, under the mandatory provisions of Ukrainian
              legislation, can only be obtained after the date of the Sale Agreement (and which the
              Originator will timely and otherwise duly obtain);
      (iii)   the entry into and performance by it of, and the transactions contemplated by, the
              Transaction Documents do not and will not conflict with:
              (A)     any law or regulation applicable to the Originator;
              (B)     the Originator's constitutional documents; or
              (C)     any agreement or instrument binding upon the Originator or any of its assets;
      (iv)    the Sale Agreement and each of the Transaction Documents to which the Originator
              is a party were entered into in good faith on an arm's length basis by the Originator
              and were not entered by the Originator as a result of any fraud, wilful default,
              concealment, misrepresentation, dishonesty, coercion, ill intention, threat or
              deliberate non-disclosure in each case by any person or any material delusion by any




                                               -134-
                 party as to the nature of the transactions contemplated by the Sale Agreement and
                 each Transaction Document to which the Originator is a party;
        (v)      other than the registrations referred to in Clause 4 of the Sale Agreement, it is not
                 necessary that the Sale Agreement or any other Transaction Documents be filed,
                 recorded or enrolled with any court or other authority or register in Ukraine or that
                 any stamp, registration or similar tax be paid on or in relation to the Sale Agreement
                 or the other Transaction Documents or the transactions contemplated thereby the
                 Transaction Documents to ensure the validity, enforceability or admissibility in
                 evidence thereof in the courts of Ukraine;
        (vi)     the Sale Agreement constitutes the direct, unconditional and unsecured general
                 obligations of the Originator and the liabilities that may be incurred by the Originator
                 under the Sale Agreement rank in priority of payment at least pari passu with all
                 other present and future unsecured and unsubordinated indebtedness of the
                 Originator, except for indebtedness which is mandatory preferred by law;
        (vii)    the Sale Agreement and all other Transaction Documents to which the Originator is a
                 party constitute legal, valid, binding and enforceable obligations of the Originator;
                 and
        (viii)   the Sale Agreement and all other Transaction Documents to which the Originator is a
                 party are commercial rather than public or governmental acts and the Originator is not
                 entitled to claim immunity from legal proceedings with respect to itself or any of its
                 assets on the grounds of sovereignty or otherwise under any law or in any jurisdiction
                 where an action may be brought for the enforcement of any of the obligations arising
                 under or relating to the Sale Agreement and other Transaction Documents to which
                 the Originator is a party. To the extent that the Originator or any of its assets has or
                 hereafter may acquire any right to immunity from legal proceedings, attachment prior
                 to judgement, other attachment or execution of judgement on the grounds of
                 sovereignty or otherwise, the Originator hereby to the maximum extent permissible
                 under applicable law irrevocably waives such rights to immunity in respect of its
                 obligations arising under or relating to the Sale Agreement.
If, at any time, there is an unremedied breach or irremediable breach of the Warranties with respect to
any Assets (which results in such Assets becoming the Ineligible Assets), the Originator shall, within
seven (7) Business Days following the date when such determination is made, either:
(a)     repurchase the Ineligible Assets from the Issuer for the price equal to the current outstanding
        principal balance of such Ineligible Assets (without taking into account any reduction thereof
        as a result of the breach of warranty or other matter which has made such Assets the Ineligible
        Assets) as of the date of such repurchase plus accrued interest and all other amounts due and
        payable to the Issuer at such time under such Loan, related Pledge and pay such price to the
        Issuer on the same date. The repurchase of the Ineligible Assets shall be carried out on the
        basis of a sale (assignment) agreement with the Issuer acting as the seller of the Ineligible
        Assets and the Originator acting as the purchaser thereof (provided that the Issuer shall not be
        required to give any representations and/or warranties as to its ownership of such Ineligible
        Assets in connection with their repurchase by the Originator and the repurchase would
        otherwise be without recourse to the Issuer); or
(b)     if the relevant Ineligible Assets prove to be invalid, non-existent or otherwise not capable of
        being assigned or repurchased, pay to the Issuer an amount equal to the current outstanding
        principal balance of such Ineligible Assets (or what the current outstanding principal balance
        would have been had the Ineligible Assets been valid or existing, without taking into account
        any reduction thereof as a result of the breach of any representation and/or warranty or other
        matter which has made such Assets the Ineligible Assets) as of the date of such payment. In
        such case, no repurchase of the Ineligible Assets shall be made by the Originator.




                                                 -135-
Substitution
Substitute Loans
If the Originator is required to repurchase or procure the repurchase of any Ineligible Assets as a
result of an unremedied breach or irremediable breach of the Warranties, the Originator shall be
entitled, by notice in writing to the Issuer, to require the Issuer to purchase and take a transfer and
assignment from the Originator of other Assets ("Substitute Assets") involving a Loan (a "Substitute
Loan") with a Principal Amount Outstanding equal to or greater than the Loan being repurchased or
substituted, instead of receiving cash from the Originator as consideration for the Ineligible Assets
repurchased or substituted, provided that the Issuer shall not be required to purchase any Substitute
Loans unless, inter alia, each of the following conditions is met:
(a)     the final maturity of the relevant Substitute Loans does not extend beyond 2017;
(b)     all conditions set out in the Sale Agreement relating to the transfer of the Substitute Assets
        will be satisfied;
(c)     the interest rate of the Substitute Loan is not less than that of the Loan being repurchased;
(d)     the Substitute Loan has a Principal Amount Outstanding equal to or greater than the Principal
        Amount Outstanding of the Loan being repurchased;
(e)     the Warranties given by the Originator in the Sale Agreement which apply to the sale of
        Substitute Loans by the Originator to the Issuer are true and correct;
(f)     the Initial Assets Eligibility Criteria or the Subsequent Assets Eligibility Criteria, as
        applicable, have been applied to and satisfied in all material respects in respect of the
        Substitute Loan;
(g)     no Enforcement Notice has been given by the Trustee and remains in effect;
(h)     the Principal Amount Outstanding of the Substitute Loan, when added to the sum of the
        aggregate Principal Amount Outstanding of any Substitute Loans purchased during any
        preceding Interest Period, does not exceed 10 per cent. of the aggregate Principal Amount
        Outstanding of the Notes on the first day of that Interest Period;
(i)     there is no Income Deficiency following the application of the Available Revenue Funds in
        accordance with Condition 2(c) (Revolving Period Revenue Priority of Payments) on the
        immediately preceding Interest Payment Date;
(j)     the Originator is not in breach of any obligation on its part to repurchase or procure the
        purchase of any Loan in accordance with the Sale Agreement;
(k)     the relevant Borrower is not in material breach of the obligations on its part of the terms and
        conditions applicable (i) to the relevant Substitute Loan and (ii) the Pledge relating to such
        Substitute Loan;
(l)     the balance of the Reserve Fund is equal to the Reserve Fund Required Amount;
(m)     the balance of the PRI Reserve Fund is equal to the PRI Reserve Required Amount;
(n)     the OLTV of the Substitute Loan is not higher than the OLTV of the Loan being repurchased
        or substituted; and
(o)     the Minimum Pool Weighted Average Interest Rate, following the acquisition of the
        Substitute Loan, to the Pool, shall be the same or higher as the Minimum Pool Weighted
        Average Interest Rate prior to the acquisition of such Substitute Loan to the Pool.




                                                 -136-
Subsequent Purchases
Subsequent Assets
During the Revolving Period, subject to the terms of the Sale Agreement, it is envisaged that the
Issuer will acquire from the Originator, on any Subsequent Transfer Date the Subsequent Assets
which shall have substantially the same characteristics as the Initial Assets.

Prior to each respective Subsequent Transfer Date during the Revolving Period, the Originator shall
notify the Issuer of the Originator's intention to sell Subsequent Assets to the Issuer by submitting a
written Offer in accordance with the terms of the Sale Agreement. Subject to the satisfaction of the
Conditions to Purchase Subsequent Assets (see "Assets - Conditions to Purchase Subsequent
Assets"), the Issuer shall purchase, on each Subsequent Transfer Date during the Revolving Period,
the Subsequent Assets specified in the Offer, using such funds as are available for such purpose in
accordance with the Revolving Period Principal Priority of Payments under item (ii) (two).

If, however, following the Issuer's acceptance of any Offer, it is determined that any of the Conditions
to Purchase Subsequent Assets has not been satisfied (see "Assets - Conditions to Purchase
Subsequent Assets"), this will not result in the relevant Subsequent Assets not being sold or
transferred to the Issuer (in whole or in any part); instead, the Originator will be required to
repurchase or substitute such Subsequent Assets or to pay indemnity to the Issuer in accordance with
the terms of the Sale Agreement (See "Sale of the Assets - Warranties and Repurchase" and "Sale of
the Assets - Substitution", below).




                                                 -137-
                                MANAGEMENT OF THE ASSETS
Asset Management Agreement
The Asset Manager is required to administer the Assets for the benefit of the Issuer or the Trustee (as
the case may be) under the Asset Management Agreement. The Asset Manager will administer the
Assets with the same diligence and skill as would a Prudent Lender. The Asset Manager will
undertake that, in its role as Asset Manager, it will comply with any proper directions, orders and
instructions which the Issuer or the Trustee may from time to time give to the Asset Manager in
accordance with the provisions of the Asset Management Agreement which would not result in the
Asset Manager committing a breach of its obligations under the Transaction Documents to which it is
a party or in an illegal act.
The duties of the Asset Manager include, inter alia:
(a)     making appropriate debit and credit entries in accordance with the terms of the applicable
        Loans and sending each Borrower an account statement upon his/her request;
(b)     as of (and including) the Initial Transfer Date, collecting the scheduled monthly payments
        from the Borrowers due on the Loans in the Asset Management Account, as prescribed by
        Ukrainian legislation for purposes of accumulating and accounting proceeds of the assets
        which are under the management of a Ukrainian commercial bank such as the Asset Manager
        and carrying out settlements under asset management arrangements, and maintaining a
        register of such payments. Payments due on the Loans from the Borrowers are normally
        settled by cash;
(c)     on the next Business Day following the Issue Date, and thereafter not later than on the next
        Business Day following the collection of payments due from the Borrowers in the Asset
        Management Account, transferring such funds from the Asset Management Account into the
        Issuer Account;
(d)     notifying Borrowers of changes in their scheduled monthly payments. When such changes
        take place Borrowers are informed in writing of the new scheduled payments;
(e)     dealing with the administrative aspects of redemption of each Loan;
(f)     dealing with enquiries and requests from Borrowers;
(g)     preparing the Quarterly Asset Manager's Report on the Asset Manager's Report Date for the
        Collection Period;
(h)     obtaining, complying in all material respects with the terms of, and doing all that is
        practicable to maintain in full force and effect all authorisations, approvals, licences and
        consents required in or by the laws, legislation and regulations of Ukraine to enable it
        lawfully to enter into and perform its obligations under the Asset Management Agreement or
        to ensure the legality, validity or enforceability against it of the Asset Management
        Agreement;
(i)     maintaining electronic systems for use in relation to the Assets in normal working order;
(j)     providing, promptly on request, to the Issuer or the Cash Manager (acting on behalf of the
        Issuer) all reasonable information necessary for the operation of the provisions of the Cash
        Management Agreement;
(k)     monitoring Borrowers' compliance with the terms of the Loans and the Pledges;
(l)     monitoring the status of the Pledges and Motor Vehicles and taking all reasonable steps to
        ensure the continued legality, validity and enforceability of the Assets;




                                                -138-
(m)     until a Downgrade Event (as defined below) occurs, on a quarterly basis and, after a
        Downgrade Event occurs, on a weekly basis, delivering to the Data Custodian (which acts on
        behalf of the Issuer) the Assets Data;
(n)     within 30 days of the Issue Date, providing the Data Custodian with a set of the Notification
        Letters, (each in the form attached as Schedule 2 of the Asset Management Agreement), in a
        CD-Rom format or other acceptable electronic format; and
(o)     on a semi-annual basis and upon the occurrence of a Downgrade Event, providing the Data
        Custodian with the updated Notification Letters in a CD-Rom format or other acceptable
        electronic format.
The Asset Manager may subcontract or delegate its obligations pursuant to the provisions of the Asset
Management Agreement provided always that (inter alia): (i) prior written consent of the Trustee to
the proposed subcontracting or delegation arrangement has been obtained and the relevant notification
has been provided to the Rating Agencies; and (ii) the Asset Manager remains liable to the Issuer for
the performance of its services and duties set out in the Asset Management Agreement.
The Asset Manager covenants to maintain sufficient resources and facilities to enable it to fulfil its
obligations under the Asset Management Agreement, and also covenants to give such time and
attention and exercise such reasonable skill, care and diligence in the performance of its duties under
the Asset Management Agreement as it would in Asset Management the Assets if it were the owner
thereof.
The Asset Manager is entitled to charge a fee for its asset management and related administration
services under the Asset Management Agreement, payable on each Interest Payment Date as provided
for in the Priority of Payments.
See also "Legal Consideration - Legal Considerations related to the Management of the Assets".
Registration of the Asset Management
In accordance with the requirements of Ukrainian legislation, the management of the Assets pursuant
to the Asset Management Agreement will be registered by the Asset Manager in the Encumbrances
Register.
Payments from Borrowers
The Asset Manager endeavours to collect all payments due under or in connection with the Assets in
accordance with its own standard procedures and the terms of the Asset Management Agreement
having regard to the circumstances of the Borrower in each case. The Asset Manager may exercise
such discretion with the same diligence and skill as would be exercised by a Prudent Lender.
In accordance with requirements of Ukrainian legislation and the terms of the Asset Management
Agreement, the Asset Manager will establish and maintain the Asset Management Account, which is
a special account designated under Ukrainian legislation for the accounting of proceeds of the assets
under management (i.e. the Assets) and settlements in respect of such assets. Similarly, the Standby
Asset Manager will establish and maintain the Standby Asset Management Account on the terms of
the Standby Asset Management Agreement (the Standby Asset Management Account will be
established when the Assets will be transferred to the Standby Asset Manager for management).
From (and inclusive of) the Initial Transfer Date, the Asset Manager will collect payments from the
Borrowers in the Asset Management Account. Payments from the Borrowers will normally be
collected in the Asset Management Account on the scheduled monthly repayment dates set out in the
Loans or on the next following business day in Kyiv. On the next Business Day following the Issue
Date, and thereafter not later than on the next Business Day following the collection of any such funds
in the Asset Management Account, the Asset Manager will transfer such funds into the Issuer
Account. However, any funds collected in a currency other than U.S. dollars will, after such funds
have been converted by the Asset Manager into U.S. dollars, be transferred from the Asset




                                                -139-
Management Account to the Issuer Account within three (3) Business Days following collection
thereof.
The Asset Manager is responsible for all litigation relating to the Loans on those accounts where
balance remains outstanding after the sale of their related Property or otherwise or when enforcement
by litigation becomes necessary.
The Asset Manager, acting for the benefit of the Issuer, ensures, as customary for a Prudent Lender,
that insurance for each Motor Vehicle is maintained in effect for the term of the relevant Loan and the
Pledge. See "Legal Considerations - Insurance of the Motor Vehicle".
Termination and Substitution of the Asset Manager
If, at any time, inter alia, any of the following events occur (each such event being an Asset Manager
Termination Event) (i) the Asset Manager fails to make a payment when due under the Asset
Management Agreement (subject to a five (5) Business Days grace period); or (ii) the Asset Manager
defaults in performance of any of its other obligations under the Asset Management Agreement,
which, in the opinion of the Trustee, is materially prejudicial to the interest of the Noteholders
(subject to a fourteen (14) day remedy period running from the date of delivery of a written notice by
the Trustee requiring the same to be remedied, if the breach is remediable); then the Trustee or the
Issuer (with the prior written consent of the Trustee), may in each case (but is not obliged to)
terminate the appointment of the Asset Manager.
In addition if, inter alia: (i) a temporary administrator is appointed by the NBU to manage the Asset
Manager's banking activity, or (ii) the unsecured, unsubordinated and unguaranteed rating of the Asset
Manager falls below "CCC" or "Caa1" from Fitch and Moody's respectively, for more than thirty (30)
days, the appointment of the Asset Manager will be terminated by the Issuer (with the prior written
consent of the Trustee) or the Trustee and the Standby Asset Manager will commence performing the
Asset Management duties set out in the Asset Management Agreement.
If the unsecured, unsubordinated and unguaranteed rating of the Asset Manager is reduced below "B-"
or "B3" for a period longer than seven Business Days by Fitch and Moody's respectively (a
"Downgrade Event"), (i) the Asset Manager will provide the Data Custodian with an updated set of
Notification Letters to be sent to the Borrowers upon the occurrence of an Asset Manager Termination
Event, (ii) the Asset Manager will deliver to the Data Custodian a current database of the Assets in
electronic (CD-Rom) format (the "Assets Data") on a weekly basis (rather than on a quarterly basis,
as required under the Asset Management Agreement until a Downgrade Event occurs), (iii) the Data
Custodian will then deliver to the Issuer the Assets Data on a weekly basis, and (iv) the Issuer or its
nominee will then deliver the Assets Data to the Standby Asset Manager on a weekly basis. If an
Asset Manager Termination Event occurs and the Asset Manager must be removed and the Standby
Asset Manager appointed with immediate effect, the Data Custodian will promptly deliver the Assets
Data then held by the Data Custodian to the Standby Asset Manager.
For the discussion of the risk that the Asset Management Agreement may terminate upon the
enforcement by the Trustee of the Security against the Assets, and the issues of substitution of the
Asset Manager in such situation, see "Legal Consideration - Enforcement of the Property Rights
Pledge Agreement by the Trustee" and "Legal Considerations - Ukrainian Law Considerations
related to the Deed of Charge".
The Trustee is under no obligation to act as Asset Manager or to find a replacement Asset Manager.
The Asset Manager may resign its appointment on the expiry of not less than twelve (12) months
notice to the Issuer, the Trustee and the Standby Asset Manager provided that, inter alia,: (i) the
substitute Asset Manager (which may be the Standby Asset Manager) shall commence management
of the Assets with effect from a date immediately following the expiry of such twelve (12) months
period; (ii) such substitute Asset Manager has experience of the auto lending and/or servicing in
respect of the assets, such as the Assets, in Ukraine and receives a prior approval of the Trustee and
the Issuer; and (iii) confirmation that the current ratings of the Notes will not be adversely affected is




                                                  -140-
obtained from the Rating Agencies (other than in circumstances where the Standby Asset Manager
will act as the substitute Asset Manager).
Upon termination in accordance with the previous paragraphs, the Asset Manager will deliver all
relevant data and information relating to the Loans to the Issuer or its nominee (or otherwise as the
Trustee may direct).
Termination of the Standby Asset Manager
The appointment of Ukreximbank as Standby Asset Manager may be (and in certain circumstances,
will be) terminated by the Issuer (with the prior written consent of the Trustee) or the Trustee (in its
discretion and without liability to any person for so doing) upon the happening of certain events of
default or if insolvency or similar events occur in relation to the Standby Asset Manager, provided
that a substitute asset manager shall have been appointed which has experience of the auto lending
and/or servicing in respect of assets, such as Assets with borrowers in Ukraine, or if, following the
giving of an Enforcement Notice in relation to the Notes, the Trustee is entitled to dispose of the
assets comprising the Security in accordance with the Deed of Charge and/or the Property Rights
Pledge Agreement. If the Issuer fails to appoint a substitute asset manager within a reasonable time,
the Trustee may, but is not obliged to do so, at the expense of the Issuer.
Enforcement Procedures
The Asset Manager has established procedures that the Asset Manager is required to adhere to for
managing Loans that are in arrears ("Enforcement Procedures"), including early contact with
Borrowers in order to find a solution to any financial difficulties they may be experiencing. These
same procedures as from time to time varied in accordance with the practice of a Prudent Lender will
continue to be applied in respect of arrears arising on the Loans.
In accordance with the Pledge Law, enforcement of a pledge can be exercised through one of the
following procedures: (i) out-of-court procedures, (ii) court procedures and (iii) notarial writ
procedure. Each of these enforcement procedures is discussed in detail in section "Legal
Considerations – Enforcement of Pledges under Ukrainian Law" above. In practice, the Originator
most often applies the out-of-court procedure procedure with the sale of the collateral primarily
through private sales.




                                                 -141-
                            CASH MANAGEMENT OF THE ASSETS
Deutsche Bank AG, London Branch, banking corporation acting through its London branch whose
principal place of business is at Winchester House, 1 Great Winchester Street, London EC2N 2DB,
will be appointed as cash manager (in this capacity, the "Cash Manager") under the terms of the cash
management agreement (the "Cash Management Agreement") between the Issuer, the Cash
Manager and the Trustee, inter alia, to manage all cash transactions outside of Ukraine and maintain
all cash management ledgers as agent for the Issuer and the Trustee.
For the purpose of the administration of the Assets, the Cash Manager will be authorised to operate
the Bank Accounts for the purpose of the Cash Management Agreement. The duties of the Cash
Manager include, inter alia:
(a)     managing the operation of the Issuer Account;
(b)     making the required Ledger entries;
(c)     maintaining and/or replenishing the Reserve Fund and the PRI Reserve Fund pursuant to the
        terms of the Cash Management Agreement; and
(d)     distributing Available Revenue Funds in accordance with the Priority of Payments and
        making arrangements for the payment by the Issuer of interest and principal in respect of the
        Notes subject to the terms thereof and to the availability of funds.
The Cash Manager is entitled to charge a fee for its services under the Cash Management Agreement,
payable on each Interest Payment Date as provided for in the Priority of Payments.
The appointment of Deutsche Bank AG as Cash Manager may be terminated by the Issuer (with the
prior written consent of the Trustee) or the Trustee, inter alia, if, following the giving of an
Enforcement Notice in relation to the Notes, the Trustee is entitled to dispose of the assets comprised
in the Security. Following any such termination, the Issuer (with the prior written consent of the
Trustee) or, if the Issuer fails to do so within a reasonable time, the Trustee (at the expense of the
Issuer) may appoint a substitute cash manager.




                                                -142-
                   THE MOTOR VEHICLE LOAN MARKET IN UKRAINE
Overview of the Current Situation in the Ukrainian Motor Vehicle Loans Market

In the last five years the number of motor vehicles used in Ukraine increased by more than 1.5
million. From 2001 to 2004, the annual growth rate of this number reached 4 per cent., in 2005 it
reached 5 per cent. and in 2006 7 per cent. Approximately 265.5 thousand motor vehicles were sold
in 2005, and this number rose to over 371 thousand in 2006. The total volume of motor vehicle loan
business in Ukraine reached the level of US$ 4.7 billion for the twelve months of 2007 (with 542,332
thousand vehicles sold). Its rate of growth over the year 2007 accounted for over 46 per cent. as
compared to the same period of 2006 (with 40 per cent. growth in 2005 - 2006.).

Approximately 47 banks of the total number of 175 Ukrainian banks were operating in the motor
vehicle loan market in Ukraine as at 1 January 2008. This market remains very concentrated, with the
top 10 banks controlling almost 74.2 per cent. of the market and the top 5 more than 48.6 per cent]. In
the motor vehicle loan business, PrivatBank's primary competitors are OTP Bank, - Raiffeisen Bank
Aval, UkrSibbank (BNP Paribas), Ukrsotsbank (Unitcredit Group) and Nadra Bank.

Currently, PrivatBank's share in the Ukrainian motor vehicle loan market constitutes 19.3 per cent. (in
terms of number of loans).

Historical Background of Ukraine's Motor Vehicle Market

Before 2001, the import duty for foreign motor vehicles brought to Ukraine was only 2-3 per cent.,
which allowed to keep prices for used motor vehicles imported from abroad at a low enough level.
However, in 2001, a decision was made to restrict the import of used foreign-made vehicles aged over
8 years into Ukraine. In addition, duties and taxes were increased to account for 60% of the vehicle
price at the moment.

The growth in prices for motor vehicles resulted in active development of motor vehicle loan
business, boom of which has started in early 2005., in 2006 Ukraine ranked seventh in Europe in
terms of number of vehicles sold, having left such countries as Austria, Sweden, Greece, Poland and
Portugal far behind. Moreover, Ukraine was ranked second in terms of market growth. Today each
other motor in Ukraine is purchased using a motor vehicle loan.

Transport experts expect the number of motor vehicles to grow by 30 per cent. by 2011 (cars - by 37
per cent.) as compared to 2007. At the same time, the number of motor vehicles used in Ukraine grew
by 45.5 per cent. in 2007 and 39.7 per cent. in 2006. In 2007, it reached 999,214 vehicles (up 28 per
cent. p.a.) with new motor vehicle sales accounting for 54.3 per cent. p.a.

Development of the Ukrainian Motor Vehicle Loan Market

At the moment, the most popular motor vehicle manufacturers among the Bank's clients are
Mitsubishi, Peugeot, Chevrolet, Nissan, Toyota, Skoda, Volkswagen, VAZ Daewoo and loan
programs, which allow to get loans denominated in U.S.$ currency for maximum possible tenor (six-
seven years) without down-payment (approx. 40 per cent. of the total number of loans). By the end of
the year of 2007, interest rates for motor vehicle loans decreased slightly. For example, average
effective rate for motor vehicle loans in the first half of 2007 was 17.9 per cent. p.a. for loans
denominated in domestic currency (UAH) and 13.18 per cent. p.a. for U.S.$ denominated loans, while
in the second half of 2007 the rate was 16.8 per cent. p.a. for loans denominated in UAH and 13.17
per cent. p.a. for U.S.$ denominated loans.

By comparison, in January 2007, market rates were at the level of 17.4 per cent. p.a. for UAH loans
and 13.54 per cent for U.S.$ loans. Average tenor for motor vehicle loans is five-seven years.
However, most loans are actually prepaid earlier - in two-three years.




                                                -143-
In 2007, the motor vehicle loan market increased significantly. Large corporations producing motor
vehicles aim for the share of new vehicles to be at the rate of 50-60 per cent. of the total amount of
vehicles sold.

The sharp increase of motor vehicles sales through motor vehicle loans was observed in December
2007. This may have been stimulated by the implementation of new ecological and safety
requirements to motor vehicles by the European Parliament which had caused a 5-7 per cent. rise in
the cost of production of motor vehicles.

Given the market's strong growth but yet low estimated motor vehicle distribution (130) motor
vehicles per 1,000 population as of the end of 2007), most experts estimate that sales of new motor
vehicles in Ukraine will reach 689,000 motor vehicles in 2008 (up 27 per cent.).




                                                -144-
           ESTIMATED WEIGHTED AVERAGE LIVES OF THE SENIOR NOTES
The estimated weighted average life of the Senior Notes cannot be predicted as the actual rate and
timing at which amounts will be collected in respect of the Assets and a number of other relevant facts
are unknown. Weighted average life refers to the average amount of time that will elapse from the
date of issuance of a security to the date of distribution to the investor of amounts distributed in net
reduction of principal of such security (assuming no losses).
The following table shows the weighted average life of the Senior Notes and was prepared based on
the available statistical portfolio data, the characteristics of the Loans relating to the Loan Claims to
comprise part of the Assets and on the following additional assumptions (the "Modelling
Assumptions"):
(a)     the Issuer will not exercise its option to redeem the Senior Notes in accordance with
        Condition 5(e) (Optional Redemption for Tax Reasons);
(b)     the Issuer will exercise its right to redeem the Notes pursuant to Condition 5(f) (Optional
        Redemption After Step-Up Date) at the Step-Up Date;
(c)     the Issuer will not exercise its right to redeem the Notes pursuant to Condition 5(d) (Optional
        Redemption - at 10 per cent. of the Class A Notes, the Class B Notes and the Class C Notes);
(d)      repayment of principal under the Senior Notes occurs from the Interest Payment Date falling
        in August 2009;
(e)     the Loans are fully performing at all times and no Principal Loss is recorded at any time;
(f)     the Loans are subject to a constant annual prepayment at the rates set out in the table below;
(g)     the Revolving Period ends on the Amortisation Date; and
(h)     the Subsequent Assets added to the Pool during the Revolving Period have similar
        characteristics in terms of weighted average maturity, interest rate and performance as the
        Initial Assets.

Constant prepayment                                Estimated weighted average life
rate in %
                                        Class A Notes                           Class B Notes

 0                                          2.25                                     2.92
 5                                          2.18                                     2.92
10                                          2.11                                     2.92
15                                          2.05                                     2.92
20                                          1.98                                     2.92
25                                          1.91                                     2.92
30                                          1.85                                     2.92


Constant prepayment                                        Estimated maturity
rate in %
                                        Class A Notes                           Class B Notes

 0                                          2.92                                     2.92
 5                                          2.92                                     2.92
10                                          2.92                                     2.92
15                                          2.92                                     2.92
20                                          2.92                                     2.92
25                                          2.92                                     2.92
30                                          2.92                                     2.92

Without the call at the Step-up Date:




                                                   -145-
Constant prepayment                              Estimated weighted average life
rate in %
                                     Class A Notes                            Class B Notes

 0                                        2.40                                     4.61
 5                                        2.29                                     4.44
10                                        2.19                                     4.26
15                                        2.09                                     4.10
20                                        2.00                                     3.93
25                                        1.92                                     3.76
30                                        1.85                                     3.60


Constant prepayment                                      Estimated maturity
rate in %
                                     Class A Notes                            Class B Notes

 0                                        3.92                                     5.42
 5                                        3.92                                     5.42
10                                        3.67                                     5.17
15                                        3.42                                     4.92
20                                        3.42                                     4.67
25                                        3.17                                     4.67
30                                        2.92                                     4.42

The actual characteristics and performance of the Loans are likely to differ from the Modelling
Assumptions used in constructing the table set forth above, which is hypothetical in nature and is
provided only to give a general sense of how the principal cash flows might behave. Any difference
between such assumptions and the actual characteristics and performance of the Loans will cause the
weighted average life and the expected maturity of the Senior Notes to differ (which difference could
be material) from the corresponding information in the table.
The rate of prepayment on loans in emerging market countries and in particular Ukraine is highly
unpredictable.
The expected maturity and the estimated weighted average lives of the Senior Notes are subject
to factors largely outside the control of the Issuer and consequently no assurance can be given
that the assumptions and estimates in this section will prove in any way to be realistic and they
must therefore be viewed with considerable caution.




                                                 -146-
                                 CLEARING AND SETTLEMENT
The information set out below in connection with Euroclear and Clearstream (the "Clearing
Systems") is subject to any change in or reinterpretation of the rules, regulations and procedures of
the Clearing Systems currently in effect. The information in this section concerning the Clearing
Systems has been obtained from sources that PrivatBank believes to be reliable, but none of the
Issuer, PrivatBank, the Trustee, the Initial Purchaser or the Lead Manager takes any responsibility for
the accuracy of the information. Investors wishing to use the facilities of any of the Clearing Systems
are advised to confirm the applicability of the rules, regulations and procedures of the relevant
Clearing System. None of the Issuer, PrivatBank, the Trustee, the Initial Purchaser or the Lead
Manager will have any responsibility or liability for any aspect of the records relating to, or payments
made on account of interests in, the Notes held through the facilities of any Clearing System or for
maintaining, supervising or reviewing any records relating to such beneficial ownership interests.
The Notes will be issued in registered form. Each Class of Notes (or beneficial interests therein) will
be represented by a registered Regulation S Global Certificate. Each Regulation S Global Certificate
will be deposited on or before the Issue Date with Deutsche Bank AG, London Branch, as the
common depositary for and on behalf of the Clearing Systems (the "Common Depositary") and will
be registered in the name of BT Globenet (Nominees) Limited (as nominee for Deutsche Bank AG,
London Branch, as Common Depositary)].
Euroclear and Clearstream
Euroclear and Clearstream each hold securities for their customers and facilitate the clearance and
settlement of securities transactions through electronic book-entry transfer between their respective
accountholders. Indirect access to Euroclear and Clearstream is available to other institutions that
clear through or maintain a custodial relationship with an accountholder of either system. Euroclear
and Clearstream provide various services, including safekeeping, administration, clearance and
settlement of internationally traded securities and securities lending and borrowing. Euroclear and
Clearstream also deal with domestic securities markets in several countries through established
depositary and custodial relationships. Euroclear and Clearstream have established an electronic
bridge between their two systems across which their respective customers may settle trades with each
other. Their customers are world-wide financial institutions, including underwriters, securities brokers
and dealers, banks, trust companies and clearing corporations. Investors may hold their interests in
Regulation S Global Certificates directly through Euroclear or Clearstream, if they are accountholders
("Direct Participants"), or indirectly ("Indirect Participants" and, together with Direct Participants,
"Participants") through organisations that are accountholders therein.
Each Regulation S Global Certificate will have an ISIN and a Common Code and each will be
registered in the name of BT Globenet (Nominees) Limited (as nominee for Deutsche Bank AG,
London Branch, as Common Depositary) and each will be held by Deutsche Bank AG, London
Branch as Common Depositary for and on behalf of Euroclear and Clearstream.
Relationship of Participants with Clearing Systems
Each of the persons shown in the records of Euroclear and Clearstream as the holder of a beneficial
interest in a Note represented by a Regulation S Global Certificate must look solely to Euroclear or
Clearstream (as the case may be) for his share of each payment made by the Issuer to the holder of
such Regulation S Global Certificate and in relation to all other rights arising under the Regulation S
Global Certificate, subject to and in accordance with the respective rules and procedures of Euroclear
or Clearstream (as the case may be). The Issuer expects that, upon receipt of any payment in respect
of Notes represented by a Regulation S Global Certificate, the Common Depositary by whom such
Regulation S Global Certificate is held, or nominee in whose name it is registered, will immediately
credit the Clearing Systems who will credit the relevant Participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the principal amount of the relevant
Regulation S Global Certificate, as shown on the records of the relevant clearing system or its
nominee. The Issuer also expects that payments by Direct Participants in any Clearing System to
owners of beneficial interests in any Regulation S Global Certificate held through such Direct




                                                 -147-
Participants in any clearing system will be governed by standing instructions and customary practices.
Save as aforesaid, such persons shall have no claim directly against the Issuer in respect of payments
due on the Notes, for so long as the Notes are represented by Regulation S Global Certificates and the
obligations of the Issuer will be discharged by payment to the holder of the relevant Regulation S
Global Certificate in respect of each amount so paid. None of the Issuer, the Lead Manager, the
Initial Purchaser or the Trustee will have any responsibility or liability for any aspect of the records
relating to or payments made on account of ownership interests in any Regulation S Global Certificate
or for maintaining, supervising or reviewing any records relating to such ownership interests.
Settlement and Transfer of Notes
Subject to the rules and procedures of each applicable Clearing System, purchases of Notes held
within a Clearing System must be made by or through Direct Participants, which will receive a credit
for such Notes on the Clearing System's records. The ownership interest of each actual purchaser of
each such Note (the "Beneficial Owner") will, in turn, be recorded on the Participant's records.
Beneficial Owners will not receive written confirmation from any Clearing System of their purchase,
but Beneficial Owners are expected to receive written confirmations providing details of the
transaction, as well as periodic statements of their holdings, from the Direct Participant or Indirect
Participant through which such Beneficial Owner entered into the transaction. Transfers of ownership
interests in Notes held within a Clearing System will be effected by entries made on the books of
Participants, acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates
representing their ownership interests in such Notes, unless, and until, interests in any Regulation S
Global Certificate held within a Clearing System are exchanged for definitive Notes.
No Clearing System has knowledge of the actual Beneficial Owners of the Notes held within such
Clearing Systems and their records will reflect only the identity of the Direct Participants to whose
accounts such Notes are credited, which may or may not be the Beneficial Owners. The Participants
will remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by the Clearing Systems to Direct Participants, by
Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to
Beneficial Owners will be governed by arrangements among them, subject to any statutory or
regulatory requirements as may be in effect from time to time.
Initial settlement for the Notes will be in U.S. dollars, following the settlement procedures applicable
to conventional eurobonds, which provide that the Notes will be credited to the securities custody
accounts of Euroclear and Clearstream Participants on the business day following the settlement date
against payment for value on the settlement date.
Secondary market sales of book-entry interests in the Notes held through Euroclear or Clearstream to
purchasers of book-entry interests in the Notes held through Euroclear or Clearstream will be
conducted in accordance with the normal rules and operating procedures of Euroclear and Clearstream
and will be settled using the procedures applicable to conventional eurobonds, which provide for
settlement in same-day funds. Since the purchase determines the place of delivery, it is important to
establish at the time of trading where both the purchaser's and seller's accounts are located to ensure
that settlement can be made on the desired value date.




                                                 -148-
                          TERMS AND CONDITIONS OF THE NOTES
The following is the text of the terms and conditions of the Notes (the "Conditions") which (subject to
amendment and completion) will be endorsed or attached on each Regulation S Global Certificate
and each Definitive Note (if applicable) and (subject to the provisions thereof) will apply to each such
Note.
The Asset Backed Notes due November 2018 of Ukraine Auto Loan Finance No. 1 PLC (the
"Issuer") comprising U.S.$ 85,800,000 Class A Asset Backed Floating Rate Notes due November
2018 (the "Class A Notes"), U.S.$ 18,700,000 Class B Asset Backed Floating Rate Notes due
November 2018 (the "Class B Notes" and together with the Class A Notes, the "Senior Notes") and
U.S.$ 5,500,000 Class C Asset Backed Fixed Rate Notes due November 2018 (the "Class C Notes"
and, together with the Senior Notes, the "Notes") are constituted by, are subject to, and have the
benefit of a trust deed (the "Trust Deed") to be dated on or about 29 May 2008 (the "Issue Date")
between the Issuer and TMF Trustee Limited (the "Trustee"), which expression includes the trustee
or trustees for the time being under the Trust Deed, as trustee for the Noteholders (as defined below).
The Issuer and Trustee, inter alios, have entered into a master securitisation deed (the "Master
Securitisation Deed") to be dated on or about the Issue Date the schedules to which contain the
Master Definitions Schedule applicable to all Transaction Documents. The Notes will have the
benefit of (to the extent applicable) a paying agency agreement to be dated on or about the Issue Date
(the "Paying Agency Agreement"), as amended or supplemented from time to time between the
Issuer, the Trustee, Deutsche Bank AG, London Branch as paying agent (the "Paying Agent") and as
agent bank (the "Agent Bank") and Deutsche Bank Luxembourg S.A as registrar (the "Registrar").
In these Conditions, all references to "Registrar" and "Paying Agent" shall mean any registrar,
transfer or additional paying agents appointed from time to time in accordance with the Paying
Agency Agreement and shall include any successors thereto or to the Paying Agent appointed from
time to time in accordance with the Paying Agency Agreement and any reference to an "Agent" or
"Agents" shall mean any or all (as applicable) of the above persons.
In these Conditions, capitalised words and expressions shall, unless otherwise defined below, have the
same meanings as those given to them in the master definitions schedule as set out in Schedule 1 to
the Master Securitisation Deed (the "Master Definitions Schedule").
These Conditions include summaries of, and are subject to, the detailed provisions of the Trust Deed,
the Paying Agency Agreement, a property rights pledge agreement (the "Property Rights Pledge
Agreement") dated on or about the Issue Date plus, inter alios, the Issuer and the Trustee, a deed of
charge and assignment (the "Deed of Charge") dated on or about the Issue Date between, inter alios,
the Issuer and the Trustee. Copies of the Trust Deed, the Paying Agency Agreement, the Deed of
Charge and the Property Rights Pledge Agreement are available for inspection during usual business
hours at the registered office of the Trustee at Pellipar House, 1st Floor, 9 Cloak Lane,
London EC4R 2RU and at the specified office of the Paying Agent being Deutsche Bank AG, London
Branch. The holders of the Class A Notes and the Class B Notes (the "Class A Noteholders" and the
"Class B Noteholders", respectively, being together the "Senior Noteholders") and the holders of the
Class C Notes (the "Class C Noteholders" and together with the Senior Noteholders, the
"Noteholders" and each, a "Noteholder") are entitled to the benefit of the Trust Deed and are bound
by, and are deemed to have notice of, the provisions of the Trust Deed, the Paying Agency
Agreement, the Deed of Charge, the Property Rights Pledge Agreement and the Master Securitisation
Deed.
1.      Form, Denomination, Title and Transfer
        (a)     Form and Denomination
                The Notes are in registered form in the denomination of U.S. dollars. The Notes may
                be held in denominations of U.S.$ 100,000 or any amount in excess thereof which is
                an integral multiple of U.S. 1,000 (each an "Authorised Denomination").




                                                 -149-
(b)   Title
      Each Noteholder shall (except as otherwise required by law) be treated as the absolute
      owner for all purposes (including the making of any payment) of the relevant Note
      whether or not any payment is overdue and regardless of any notice of ownership,
      trust or any other interest therein, any writing on the Note relating thereto (other than
      the endorsed form of transfer) or any notice of any previous loss or theft of such Note
      and no person shall be liable for so treating such Noteholder.
(c)   Register
      The Registrar will maintain the register in respect of the Notes in accordance with the
      provisions of the Paying Agency Agreement (the "Register").
(d)   Transfers
      Subject to Conditions 1(f) (No Charge) and 1(g) (Closed Periods) below, a Note may
      be transferred upon surrender of the relevant Note, with the endorsed form of transfer
      duly completed, at the specified office of the Registrar, together with such evidence
      as the Registrar may reasonably require to prove the title of the transferor and the
      authority of the individuals who have executed the form of transfer. Where not all
      the Notes represented by the surrendered Note are the subject of the transfer, a new
      Note in respect of the balance of the Notes will be issued to the transferor.
(e)   Registration and Delivery of Note Certificates
      Within five business days of the surrender of a Note in accordance with
      Condition 1(d) (Transfers) above, the Registrar will register the transfer in question
      and deliver a new Note of a like Principal Amount Outstanding to the Notes
      transferred to each relevant Noteholder at its specified office or (at the request and
      risk of any such relevant Noteholder) by uninsured first class mail (airmail if
      overseas) to the address specified for the purpose by such relevant Noteholder. In
      this paragraph, "business day" means a day on which commercial banks are open for
      business (including dealing in foreign currencies) in the city where the Registrar has
      its specified office.
(f)   No Charge
      The transfer of a Note will be effected without charge by or on behalf of the Issuer, or
      the Registrar but against such indemnity as the Registrar may required in respect of
      any tax or other duty of whatsoever nature which may be levied or imposed in
      connection with such transfer.
(g)   Closed Periods
      Noteholders may not require transfers to be registered during any period of 15 days
      ending on the due date for any payment of principal or interest in respect of the
      Notes.
(h)   Regulations concerning Transfers and Registration
      All transfers of Notes and entries on the Register are subject to the detailed
      regulations concerning the transfer of Notes scheduled to the Paying Agency
      Agreement. The regulations may be changed by the Issuer with the prior written
      approval of the Trustee and the Registrar. A copy of the current regulations will be
      mailed (free of charge) by the Registrar to any Noteholder who requests in writing a
      copy of such regulations.




                                       -150-
     (i)    Application of Funds
            On each Interest Payment Date, the Issuer shall apply Available Revenue Funds and
            Available Principal Funds in or towards satisfaction of amounts in the order of the
            priority of payments set out below as applicable to the Revolving Period, the
            Amortisation Period and following an enforcement of the security (the "Priority of
            Payments").
2.   Status, Security and Administration
     (a)    Status and relationship between classes of Notes
            (i)     The Class A Notes, the Class B Notes and the Class C Notes constitute direct,
                    secured (as more particularly described in the Deed of Charge) and
                    unconditional obligations of the Issuer and rank pari passu without
                    preference or priority amongst Notes of the same class, subject always to the
                    Class A Notes ranking in priority to the Class B Notes and the Class B Notes
                    ranking in priority to the Class C Notes.
            (ii)    In accordance with the provisions of this Condition 2 but subject always to
                    the provisions of Condition 5(b) (Mandatory Redemption in Part of the Class
                    A Notes, the Class B Notes and the Class C Notes), the Trust Deed and the
                    Deed of Charge, payments of principal and interest on the Class C Notes are
                    subordinated to, inter alia, payments of principal and interest on the Senior
                    Notes and payments of principal and interest on the Class B Notes are
                    subordinated to, inter alia, payments of principal and interest on the Class A
                    Notes.
            (iii)   The Notes are constituted by the Trust Deed and are secured by the same
                    security, but the Class A Notes will rank in priority to the Class B Notes and
                    the Class B Notes will rank in priority to the Class C Notes in point of
                    security pursuant to the Deed of Charge (the security created in favour of the
                    Trustee contained in or granted pursuant to the Deed of Charge and the
                    Property Rights Pledge Agreement being together, the "Security"). The
                    Trust Deed and the Deed of Charge contain provisions requiring the Trustee
                    to have regard to the interests of the Class A Noteholders, the Class B
                    Noteholders and the Class C Noteholders as regards all powers, trusts,
                    authorities, duties and discretions of the Trustee (except where expressly
                    provided otherwise), but requiring the Trustee in any such case to have regard
                    only to the interests of (i) the Class A Noteholders if, in the Trustee's opinion,
                    there is a conflict between the interests of the Class A Noteholders and the
                    interests of the Class B Noteholders and/or the Class C Noteholders, (ii) the
                    Class B Noteholders if, in the Trustee's opinion, there is a conflict between
                    the interests of the Class B Noteholders and the interests of the Class C
                    Noteholders and to have regard only to the interests of the Class C
                    Noteholders if all of the Senior Notes have been redeemed in full.
            (iv)    The Trust Deed contains provisions limiting the powers of the Class B
                    Noteholders and the Class C Noteholders, inter alia, to request or direct the
                    Trustee to take any action or to pass any Extraordinary Resolution (as defined
                    in the Trust Deed) according to the effect thereof on the interests of the
                    Class A Noteholders. Except in certain circumstances, the Trust Deed
                    imposes no such limitations on the powers of the Class A Noteholders, the
                    exercise of which will be binding on the Class B Noteholders and the Class C
                    Noteholders, irrespective of the effect thereof on their interests.
            (v)     The Trust Deed contains provisions limiting the powers of the Class C
                    Noteholders, inter alia, to request or direct the Trustee to take any action or
                    to pass any Extraordinary Resolution (as defined in the Trust Deed)



                                             -151-
             according to the effect thereof on the interests of the Class B Noteholders.
             Except in certain circumstances, the Trust Deed imposes no such limitations
             on the powers of the Class B Noteholders, the exercise of which will be
             binding on the Class C Noteholders, irrespective of the effect thereof on their
             interests.
      (vi)   The Trust Deed contains provisions to the effect that, so long as any of the
             Notes are outstanding, the Trustee shall not be required, when exercising its
             powers, authorities and discretions, to have regard to the interests of any
             persons (other than the Noteholders) having the benefit of the security
             constituted by the Deed of Charge and the Property Rights Pledge Agreement
             and, in relation to the exercise of such powers, authorities and discretions, the
             Trustee shall have no liability to such persons as a consequence of so acting.
(b)   Security
      (i)    As security for the payment of all moneys payable in respect of the Notes and
             otherwise under the Trust Deed (including the remuneration, expenses and
             any other claims of the Trustee and any receiver appointed under the Deed of
             Charge) and in respect of certain amounts payable to the Asset Manager
             under the Asset Management Agreement, the Cash Manager under the Cash
             Management Agreement, the Interest Rate Cap Provider under the Interest
             Rate Cap Agreement, the Paying Agent, the Agent Bank, and the Registrar
             under the Paying Agency Agreement, the Account Bank under the Issuer
             Account Bank Agreement, the Standby Asset Manager under the Standby
             Asset Management Agreement, the Corporate Services Provider under the
             Corporate Services Agreement, the Data Custodian under the Data Custodian
             Agreement and the Facility Provider under the Facility Agreement, the Issuer
             will enter into the Deed of Charge, creating the following security in favour
             of the Trustee for itself and on trust for the other persons expressed to be
             secured parties thereunder:
             (A)     an assignment in favour of the Trustee of the Issuer's present and
                     future right, title, interest and benefit in, to and under the Master
                     Securitisation Deed, the Paying Agency Agreement, the Cash
                     Management Agreement, the Issuer Account Bank Agreement, the
                     Standby Asset Management Agreement, the Asset Management
                     Agreement, the Data Custodian Agreement, the Corporate Services
                     Agreement, the Sale Agreement, the Interest Rate Cap Agreement,
                     the Facility Agreement, the Subscription Agreement, the PRI Policy
                     and the PRI Side Agreement (the "Charged Obligation
                     Documents") and all other contracts, agreements, deeds and
                     documents, present and future, to which the Issuer is or may become
                     a party, or pursuant to which the Issuer has an interest (other than the
                     Trust Deed, the Deed of Charge, the Property Rights Pledge
                     Agreement, the Issuer Corporate Account Agreement and the Post-
                     Enforcement Call Option Agreement (and any deed expressed to be
                     supplemental thereto)) including without limitation all rights to
                     receive payment of any amounts which may become payable to the
                     Issuer thereunder, all payments received by the Issuer thereunder, all
                     rights to serve notices and/or make demands thereunder and/or to
                     take such steps as are required to cause payments to become due and
                     payable thereunder and all rights of action in respect of any breach
                     thereof and all rights to receive damages or obtain other relief in
                     respect thereof;
             (B)     a first fixed charge in favour of the Trustee, for the payment or
                     discharge of the Secured Amounts, with full title guarantee and



                                     -152-
                       subject to the proviso for redemption thereafter contained, over the
                       Issuer's right, title, benefit and interest present and future in, to and
                       under the Issuer Account, and any other bank account in which it has
                       an interest from time to time (other than the Issuer Corporate
                       Account), and all sums of money which may now be or hereafter are
                       from time to time standing to the credit of the Issuer Account, and
                       any other bank account in which it has an interest from time to time
                       (other than the Issuer Corporate Account), together with all interest
                       accruing from time to time thereon and the debts represented thereby
                       and the benefit of all covenants relating thereto and all powers and
                       remedies for enforcing the same;
               (C)     a first fixed charge in favour of the Trustee, for the payment or
                       discharge of the Secured Amounts, with full title guarantee and
                       subject to the proviso for redemption thereafter contained, over all
                       the Issuer's right, title, interest and benefit, present and future in, to
                       and under the Authorised Investments and all moneys, income and
                       proceeds to become payable thereunder or thereon and the benefits of
                       all covenants relating thereto and all powers and remedies for
                       enforcing the same; and
               (D)     a first floating charge in favour of the Trustee, for the payment or
                       discharge of the Secured Amounts, with full title guarantee and
                       subject to the proviso for redemption thereafter contained, over the
                       whole of its undertaking and all its property and assets, whatsoever
                       and wheresoever, present and future, including without limitation its
                       uncalled capital, except for the assets specifically secured by means
                       of fixed charge under (A), (B) or (C) above or otherwise assigned as
                       security under Clause 3 of the Deed of Charge or under the Property
                       Rights Pledge Agreement, present and future.
      (ii)     As security for the payment of all moneys payable in respect of the Notes and
               otherwise under the Trust Deed (including the remuneration, expenses and
               any other claims of the Trustee), the Issuer will enter into the Property Rights
               Pledge Agreement, which shall be governed by Ukrainian Law, creating in
               favour of the Trustee for itself and on trust for the other persons expressed to
               be secured parties thereunder a pledge over the Assets.


(c)   Revolving Period Revenue Priority of Payments
      During the Revolving Period and prior to the Security becoming enforceable, the
      Issuer is required to apply the Available Revenue Funds (as defined below) calculated
      as at the immediately preceding Determination Date (and taking into account any
      payments to be made or received from that date up to and including the immediately
      following Interest Payment Date) in or towards the satisfaction of the following
      amounts in the following order of priority (the "Revolving Period Revenue Priority
      of Payments"):
       (i)      first, in no order of priority inter se, but pro rata to the respective amounts
                then due and payable by the Issuer, to pay (A) any Expenses; and (B) any
                amounts to the Trustee in accordance with the Transaction Documents;
       (ii)     second, to pay all fees and other amounts payable to the PRI Provider under
                the PRI Policy, if applicable;
       (iii)    third, to pay, pro rata, (a) the Asset Manager fee in the amount equal to
                0.30 per cent. per annum of the aggregate Principal Amount Outstanding of
                the Loans in the Pool on the first day of the immediately preceding Interest



                                       -153-
                Period, together with related costs and expenses up to the Asset Manager
                Costs payable to the Asset Manager pursuant to the Asset Management
                Agreement, (b) the fees payable to the Cash Manager pursuant to the Cash
                Management Agreement, (c) the amounts due to the Paying Agent, the
                Agent Bank and Registrar under the Paying Agency Agreement and the
                Account Bank under the Issuer Account Bank Agreement and under the
                Issuer Corporate Account Agreement, (d) the amounts payable to the Data
                Custodian under the Data Custodian Agreement and (e) the amounts payable
                to the Corporate Services Provider under the Corporate Services Agreement;
       (iv)     fourth, to pay the due and payable Standby Asset Manager fees pursuant to
                the Standby Asset Management Agreement;
       (v)      fifth, to pay any premium payable to an interest rate cap counterparty under
                an interest rate cap agreement upon any replacement of the Interest Rate
                Cap Provider, to the extent that such premium is not paid to the outgoing
                counterparty as a termination payment;
       (vi)     sixth, to pay pro rata amounts of interest payable in respect of the Class A
                Notes (other than the Class A Step-Up Amounts);
       (vii)    seventh, to pay pro rata amounts of interest payable in respect of the Class
                B Notes (other than the Class B Step-Up Amounts);
       (viii)   eighth, to pay Revenue Addition Amount to be credited to the Principal
                Deficiency Ledger until the balance of the Principal Deficiency Ledger has
                reached zero;
       (ix)     ninth, to pay pro rata amounts (a) to the Reserve Ledger until the balance of
                the Reserve Fund reaches the Reserve Fund Required Amount; and (b) to
                the PRI Ledger until the balance of the PRI Reserve Fund reaches the PRI
                Reserve Fund Required Amount;
       (x)      tenth, to pay pro rata Class A Step-Up Amounts (if any);
       (xi)     eleventh, to pay pro rata Class B Step-Up Amounts (if any);
       (xii)    twelfth, to pay pro rata amounts of interest payable in respect of the Class C
                Notes;
       (xiii)   thirteenth, to pay interest due on the amount advanced under the Facility
                Agreement;
       (xiv)    fourteenth, to pay to the Issuer an amount equal to the Issuer Margin for
                such Interest Period which amount may be distributed by the Issuer at its
                election to its shareholders by way of dividend payment; and
       (xv)      fifteenth, to pay the Originator, as an adjustment to the purchase price
                payable under the Sale Agreement and the Master Securitisation Deed, the
                Residual Revenue.
(d)   Revolving Period Principal Priority of Payments
      During the Revolving Period and prior to the Security becoming enforceable, on each
      Interest Payment Date, other than the Interest Payment Date on which the Notes are
      to be redeemed under Condition 5(a) (Final Redemption of the Notes), Condition 5(d)
      (Optional Redemption – at 10 per cent. of the Class A Notes, the Class B Notes and
      the Class C Notes), Condition 5(e) (Optional Redemption for Tax Reasons) or
      Condition 5(f) (Optional Redemption After Step Up Date), the Issuer shall apply an
      amount equal to the Available Principal Funds (as defined below) as at the date which
      falls two Business Days prior to such Interest Payment Date (each such date a



                                       -154-
      "Determination Date"), in making the payments in the following priority (the
      "Revolving Period Principal Priority of Payments"):
       (i)     first, in transferring to the Revenue Ledger, the Principal Addition Amount
               necessary to meet any Income Deficiency;
       (ii)    second, in respect of any Offer accepted by the Issuer, to pay to the
               Originator any amount due as purchase price for any Subsequent Assets
               purchased on such Interest Payment Date; and
       (iii)   third, any surplus to be invested in the Authorised Investment until the next
               succeeding Interest Payment Date.
(e)   Amortisation Period Revenue Priority of Payments
      During the Amortisation Period and prior to the Security becoming enforceable, on
      each Interest Payment Date, other than the Interest Payment Date on which the Notes
      are to be redeemed under Condition 5(a) (Final Redemption of the Notes),
      Condition 5(d) (Optional Redemption – at 10 per cent. of the Class A Notes, the
      Class B Notes and the Class C Notes), Condition 5(e) (Optional Redemption for Tax
      Reasons) or Condition 5(f) (Optional Redemption After Step Up Date), the Issuer
      shall apply an amount equal to the Available Revenue Funds (as defined below) as at
      the date which falls two Business Days prior to such Interest Payment Date (each
      such date a "Determination Date"), in making the payments in the following priority
      (the "Amortisation Period Revenue Priority of Payments"):
       (i)     first, in no order of priority inter se, but pro rata to the respective amounts
               then due and payable by the Issuer, to pay (A) any Expenses; and (B) any
               amounts due and payable to the Trustee in accordance with the Transaction
               Documents;
       (ii)    second, to pay all fees and other amounts payable to the PRI Provider under
               the PRI Policy, if applicable;
       (iii)   third, to pay, pro rata, (a) the Asset Manager fee in the amount equal to
               0.30 per cent. per annum of the aggregate Principal Amount Outstanding of
               the Loans in the Pool on the first day of the immediately preceding Interest
               Period, together with related costs and expenses up to the Asset Manager
               Costs payable to the Asset Manager pursuant to the Asset Management
               Agreement, (b) the fees payable to the Cash Manager pursuant to the Cash
               Management Agreement, (c) the amounts due to the Paying Agent, the
               Agent Bank and Registrar under the Paying Agency Agreement and the
               Account Bank under the Issuer Account Bank Agreement and under the
               Issuer Corporate Account Agreement, (d) the amounts payable to the Data
               Custodian under the Data Custodian Agreement and (e) the amounts payable
               to the Corporate Services Provider under the Corporate Services Agreement;
       (iv)    fourth, to pay the due and payable Standby Asset Manager fees pursuant to
               the Standby Asset Management Agreement;
       (v)     fifth, to pay any premium payable to an interest rate cap counterparty under
               an interest rate cap agreement upon any replacement of the Interest Rate
               Cap Provider, to the extent that such premium is not paid to the outgoing
               counterparty as a termination payment;
       (vi)    sixth, to pay pro rata amounts of interest payable in respect of the Class A
               Notes (other than the Class A Step-Up Amounts);
       (vii)   seventh, provided that the Portfolio Cumulative Net Default Ratio is less
               than 5 per cent, to pay pro rata amounts of interest payable in respect of the



                                      -155-
                Class B Notes (other than the Class B Step-Up Amounts); and, if the
                Portfolio Cumulative Net Default Ratio is greater than 5 per cent. and any
                Class A Notes are outstanding, any amount otherwise payable pursuant to
                this item (vii) shall be credited to the Principal Ledger to form part of the
                Available Principal Funds to be applied in accordance with the Principal
                Priority of Payments;
       (viii)   eighth, to pay Revenue Addition Amount to be credited to the Principal
                Deficiency Ledger until the balance of the Principal Deficiency Ledger has
                reached zero;
       (ix)     ninth, to pay pro rata amounts (a) to the Reserve Ledger until the balance of
                the Reserve Fund reaches the Reserve Fund Required Amount; and (b) to
                the PRI Ledger until the balance of the PRI Reserve Fund reaches the PRI
                Reserve Fund Required Amount;
       (x)      tenth, to pay Class A Step-Up Amounts (if any);
       (xi)     eleventh, to pay Class B Step-Up Amounts (if any);
       (xii)    twelfth, provided that the Portfolio Cumulative Net Default Ratio is less than
                3.5 per cent, to pay pro rata amounts of interest payable in respect of the
                Class C Notes; and, if the Portfolio Cumulative Net Default Ratio is greater
                than 3.5 per cent. and any Class B Notes are outstanding, any amount
                otherwise payable pursuant to this item (xii) shall be credited to the
                Principal Ledger to form part of the Available Principal Funds to be applied
                in accordance with the Principal Priority of Payments;
       (xiii)   thirteenth, to pay interest due on the amount advanced under the Facility
                Agreement;
       (xiv)    fourteenth, to pay to the Issuer an amount equal to the Issuer Margin for
                such Interest Period (less any amount sent aside at item (i) (one) above for
                corporation tax in respect of that Interest Period) which amount may be
                distributed by the Issuer at its election to its shareholders by way of
                dividend payment; and
       (xv)     fifteenth, to pay the Originator, as an adjustment to the purchase price
                payable under the Sale Agreement and the Master Securitisation Deed, the
                Residual Revenue.
(f)   Amortisation Period Principal Priority of Payments
      During the Amortisation Period and prior to the Security becoming enforceable, on
      each Interest Payment Date, other than the Interest Payment Date on which the Notes
      are to be redeemed under Condition 5(a) (Final Redemption of the Notes),
      Condition 5(d) (Optional Redemption – at 10 per cent. of the Class A Notes, the
      Class B Notes and the Class C Notes), Condition 5(e) (Optional Redemption for Tax
      Reasons) or Condition 5(f) (Optional Redemption After Step Up Date), the Issuer
      shall apply an amount equal to the Available Principal Funds (as defined below) as at
      the date which falls two Business Days prior to such Interest Payment Date (each
      such date a "Determination Date"), in making the payments in the following priority
      (the "Amortisation Period Principal Priority of Payments"):
       (i)      first, in transferring to the Revenue Ledger, the Principal Addition Amount
                necessary to meet any Income Deficiency;
       (ii)     second, to pay pari passu and pro rata in or towards repayment in full, of
                the Principal Amount Outstanding of the Class A Notes;




                                       -156-
       (iii)   third, to pay pari passu and pro rata in or towards repayment in full, of the
               Principal Amount Outstanding of the Class B Notes;
       (iv)    fourth, pay pari passu and pro rata in or towards repayment in full, of the
               Principal Amount Outstanding of the Class C Notes; and
       (v)     fifth, pay pari passu and pro rata in or towards repayment in full, of the
                amount outstanding under the Facility Agreement.
(g)   Post-Enforcement Priority of Payments
      After the Trustee has given notice to the Issuer pursuant to Condition 9 (Events of
      Default) declaring the Notes to be due and repayable, the Trustee shall, to the extent
      that such funds are available, use funds standing to the credit of the Bank Accounts,
      (after making payments of certain moneys which properly belong to third parties or
      owing to the Originator as accrued interest), to make payments in the following order
      of priority (the "Post-Enforcement Priority of Payments") pursuant to, in
      accordance with and as set out more fully in the Deed of Charge:
       (i)     first, to pay, pro rata, payments in satisfaction of any tax incurred by the
               Issuer and the fees, costs, charges, expenses and liabilities incurred by the
               Trustee or any receiver in preparing and executing the trusts hereunder
               (including any taxes required to be paid, the costs of realising any security
               and the Trustee's remuneration);
       (ii)    second, to pay any amounts due to the PRI Provider under the PRI Policy, if
               applicable (inclusive of insurance premium tax, if any);
       (iii)   third, to pay, pro rata, the fees, costs, expenses and liabilities due to the
               Asset Manager, the Cash Manager, the Standby Asset Manager, the Paying
               Agent, the Agent Bank, the Registrar, the Account Bank, the Rating
               Agencies, the Corporate Services Provider and the Data Custodian
               (inclusive or exclusive of value added tax, as the case may be);
       (iv)    fourth, to pay amounts due to the Interest Rate Cap Provider in connection
               with an early termination of the Interest Rate Cap Agreement (other than
               where such early termination results from a default by the Interest Rate Cap
               Provider or a rating downgrade termination event);
       (v)     fifth, to pay, pro rata:
               (a)      all amounts of interest then due and payable in respect of the Class
                        A Notes (pro rata according to the respective interest entitlements of
                        the Class A Noteholders) in accordance with Condition 4 (Interest);
                        and
               (b)      all amounts of principal due thereon until redemption in full of the
                        Class A Notes (pro rata according to the respective entitlements of
                        the Class A Noteholders);
       (vi)    sixth, to pay, pro rata:
               (a)      all amounts of interest then due and payable in respect of the Class
                        B Notes (pro rata according to the respective interest entitlements
                        of the Class B Noteholders) in accordance with Condition 4
                        (Interest); and
               (b)      all amounts of principal due thereon until redemption in full of the
                        Class B Notes (pro rata according to the respective entitlements of
                        the Class B Noteholders);




                                          -157-
              (vii)     seventh, to pay, pro rata:
                        (a)     all amounts of interest then due and payable in respect of the Class
                                C Notes (pro rata according to the respective interest entitlements of
                                the Class C Noteholders) in accordance with Condition 4 (Interest);
                                and
                        (b)     all amounts of principal due thereon until redemption in full of the
                                Class C Notes (pro rata according to the respective entitlements of
                                the Class C Noteholders);
              (viii)    eighth, to pay amounts of interest (including any applicable withholding tax
                        payable) in respect of the Facility Agreement;
              (ix)      ninth, to pay all amounts of principal due thereon until redemption in full of
                        the Facility Agreement;
              (x)       tenth, in or towards payments of amounts due to the Interest Rate Cap
                        Provider in connection with an early termination of the Interest Rate Cap
                        Agreement where such early termination results from a default by the
                        Interest Rate Cap Provider or a rating downgrade termination event;
              (xi)      eleventh, to pay to the Issuer an amount equal to the Issuer Margin, which
                        amount may be distributed by the Issuer at its election to its shareholders by
                        way of dividend payment; and
              (xi)      twelfth, to pay the Originator, as an adjustment to the purchase price payable
                        under the Sale Agreement and the Master Securitisation Deed, the Residual
                        Revenue.
3.   Covenants
     Save with the prior written consent of the Trustee or as provided in or envisaged by any of the
     Trust Deed, the Master Securitisation Deed, the Deed of Charge, the Property Rights Pledge
     Agreement, the Subscription Agreement, the Paying Agency Agreement, the Facility
     Agreement, the Asset Management Agreement, the Cash Management Agreement, the
     Standby Asset Management Agreement, the Sale Agreement, the Post-Enforcement Call
     Option Agreement, the Interest Rate Cap Agreement, the Data Custodian Agreement, the
     Corporate Services Agreement, the PRI Side Agreement, the PRI Policy, the Issuer Account
     Bank Agreement and the Issuer Corporate Account Agreement (together the "Transaction
     Documents"), the Issuer shall not, so long as any Note remains outstanding (as defined in the
     Trust Deed) inter alia:
     (a)     Negative Pledge
             create or permit to subsist any mortgage, pledge, security, lien or other form of
             encumbrance or security interest (unless arising by operation of law) or charge upon
             the whole or any part of its assets, present or future (including any uncalled capital)
             or its undertaking;
     (b)     Restrictions on Activities
             (i)       engage in any activity which is not reasonably incidental to any of the
                       activities which the Transaction Documents provide or envisage that the
                       Issuer will engage in;
             (ii)      open any account whatsoever with any bank other than the Accounts held
                       with the Account Bank or other financial institution, save where such account
                       is immediately charged in favour of the Trustee so as to form part of the
                       Security described in Condition 2 (Status, Security and Administration) and
                       where an acknowledgement is received from such other bank of the security



                                               -158-
               rights and interests of the Trustee and an agreement that it will not exercise
               any right of set-off it might otherwise have against the account in question;
      (iii)    have any subsidiaries or employees or premises; or
      (iv)     act as a director of any company;
(c)   Dividends or Distributions
      pay any dividend or make any other distribution to its shareholders or issue any
      further shares;
(d)   Borrowings
      incur any indebtedness in respect of borrowed money whatsoever (other than with
      respect to the Facility) or give any guarantee in respect of any obligation of any
      person;
(e)   Merger
      consolidate or merge with any other person or convey or transfer its properties or
      assets substantially or as an entirety to any other person;
(f)   Disposal of Assets
      transfer, sell, lend, part with or otherwise dispose of or deal with, or grant any option
      over or present or future right to acquire, any of its assets or undertaking or any
      interest, estate, right, title or benefit therein;
(g)   Tax Grouping
      (i)      become a member of a group of companies for the purposes of value added
               tax;
      (ii)     surrender or consent to the surrender of any amounts by way of group relief
               within the meaning of Chapter IV of Part X of the United Kingdom Income
               and Corporation Taxes Act 1988;
(h)   UK Establishment
      maintain an "establishment" (as that expression is used in the EU/Insolvency
      Regulation) in any jurisdiction other than England and Wales;
(i)   Centre of Main Interests
      take any action or authorise any action which would cause its "centre of main
      interests" (as that term is referred to in Article 3(1) of Council Regulation (EC) No.
      1346/2000 on Insolvency Proceedings) to be outside England and Wales; and
(j)   Other
      permit its Memorandum and Article of Association, any of the Transaction
      Documents or the priority of the security interests created thereby to be amended,
      invalidated, rendered ineffective, terminated or discharged, or consent to any
      variation thereof, or exercise of any powers of consent or waiver in relation thereto
      pursuant to the terms of the Trust Deed and these Conditions, or permit any party to
      any of the Transaction Documents or any other person whose obligations form part of
      the Security to be released from such obligations, or dispose of any Loans save as
      envisaged in the Transaction Documents.
      In giving any consent to the foregoing, the Trustee may require the Issuer to make
      such modifications or additions to the provisions of any of the Transaction




                                       -159-
            Documents or may impose such other conditions or requirements as the Trustee may
            deem expedient in the interests of the Noteholders.
4.   Interest
     (a)    Period of Accrual
            Each Note of each class bears interest from (and including) the Issue Date. Each
            Note shall cease to bear interest from its due date for redemption unless, upon due
            presentation, payment of the relevant amount of principal is improperly withheld or
            refused. In such event, interest will continue to accrue thereon in accordance with
            this Condition (as well after as before any judgment) up to (but excluding) the date on
            which all sums due in respect of such Note up to that day are received by or on behalf
            of the relevant Noteholder, or (if earlier) the seventh day after notice is duly given by
            the Principal Paying Agent to the holder thereof (in accordance with Condition 15
            (Notice to Noteholders)) that it has received all sums due in respect of such Note
            (except to the extent that there is any subsequent default in payment).
     (b)    Interest Payment Dates and Interest Periods
            Subject to Condition 6 (Payments), interest on the Notes is payable on 20th August
            2008, and thereafter quarterly in arrear on the 20th of November, February, May and
            August of each calendar year unless such day is not a Business Day, in which case
            interest shall be payable on the following Business Day (each such date an "Interest
            Payment Date"). The period from (and including) an Interest Payment Date (or the
            Issue Date) to (but excluding) the next or First Interest Payment Date is called an
            "Interest Period" in these Conditions. "Business Day" means a day (other than
            Saturday or Sunday) on which banks are open for business in Kyiv, London, New
            York City, Dublin and Luxembourg.
     (c)    Rate of Interest on the Notes
                    Subject to Condition 7 (Prescription), the rate of interest payable from time
                    to time on Class A Notes (the "Class A Notes Rate of Interest"), Class B
                    Notes (the "Class B Notes Rate of Interest)" and Class C Notes (the "Class
                    C Notes of Interest") and together with the Class A Notes Rate of Interest
                    and the Class Notes Rate of Interest (the "Rate of Interest") will be
                    determined on the basis of the provisions set out below:
                    (A)     on the second Business Day preceding each Interest Payment Date
                            or, in the case of the first Interest Period, the Issue Date (each a
                            "Determination Date", the Agent Bank will determine the offered
                            quotation to leading banks in the London interbank market for three
                            months U.S. dollar deposits, or in the case of the first Interest Period,
                            a linear interpolation of the offered quotations for two and three
                            months U.S. dollar deposits in the London interbank market by
                            reference to the display as quoted on the Telerate Screen Page
                            No. 3750 (or (a) such other page as may replace Telerate Screen Page
                            No. 3750 on that service for the purpose of displaying such
                            information or (b) if that service ceases to display such information,
                            such page as displays such information on such service (or, if more
                            than one, that one previously approved in writing by the Trustee) as
                            may replace the Telerate Monitor) as at or about 11.00 a.m. (London
                            time) on that date (the "Screen Rate"). If, on the relevant
                            Determination Date, the Screen Rate is unavailable, the Agent Bank
                            will request the principal London office of each of the Reference
                            Banks (as defined in Condition 4(i) (Reference Banks and Agent
                            Bank) below) to provide the Agent Bank with its offered quotation as
                            at or about 11.00 a.m. (London time) on that date to leading banks for



                                             -160-
                     three months U.S. dollar deposits, or, in the case of the first Interest
                     Period relevant where such rates for three months U.S. dollar
                     deposits which shall be interpolated. The Rate of Interest for such
                     Interest Period shall, subject as provided below, be the Relevant
                     Margin (as defined below) above the Screen Rate or, as the case may
                     be, above the arithmetic mean (rounded if necessary to the nearest
                     0.0001 per cent., 0.00005 per cent. being rounded upwards) of the
                     quotations of the Reference Banks;
             (B)     if, on the relevant Determination Date, the Screen Rate is unavailable
                     and only two of the Reference Banks provide such quotations, the
                     Rate of Interest for the relevant Interest Period shall be determined
                     on the basis of the quotations of the two quoting Reference Banks.
                     If, on the relevant Determination Date, the Screen Rate is unavailable
                     and only one or none of the Reference Banks provides such a
                     quotation, then the Rate of Interest for the relevant Interest Period
                     shall be the Reserve Interest Rate. The "Reserve Interest Rate"
                     shall be the rate per annum which the Agent Bank determines to be
                     either (a) the Relevant Margin above the arithmetic mean (rounded if
                     necessary to the nearest 0.0001 per cent. 0.00005 per cent., being
                     rounded upwards) of the lending rates which leading banks in
                     London (selected by the Agent Bank in its absolute discretion) are
                     quoting, as at or about 11.00 a.m. (London time) on the relevant
                     Determination Date in respect of the relevant currency in which the
                     Senior Notes are denominated for the relevant Interest Period to the
                     Reference Banks or those of them (being at least two in number) to
                     which such quotations are in the sole opinion of the Agent Bank
                     being so made or (b) if the Agent Bank certifies that it cannot
                     determine such arithmetic mean, the Relevant Margin above the
                     average of the lending rates in respect of the relevant currency in
                     which the Notes are denominated which leading banks in London
                     (selected by the Agent Bank in its absolute discretion) are quoting on
                     the relevant Determination Date to leading banks which have their
                     head offices in London for the relevant Interest Period provided that
                     if the Agent Bank certifies as aforesaid and further certifies that none
                     of the banks selected as provided in (b) above is quoting to leading
                     banks as aforesaid, then the Reserve Interest Rate shall be the Rate of
                     Interest, as applicable, in effect for the Interest Period ending on the
                     relevant Determination Date.
(d)   For the purpose of these Conditions, the "Relevant Margin" means:
      (i)    in respect of the Class A Notes:
             (A)     from the period from (and including) the Issue Date up to (but
                     excluding) the Interest Payment Date falling in May 2011 (the
                     "Step-Up Date") 5.50 per cent. per annum (the "Class A Original
                     Margin"); and
             (B)     thereafter, 6.88 per cent. per annum (the "Class A Step-Up
                     Margin"), the difference between the amount of interest accruing at
                     the Class A Step-Up Margin and the amount of interest accruing at
                     the Class A Original Margin being the "Class A Step-Up
                     Amounts");




                                     -161-
      (ii)    in respect of the Class B Notes:
              (A)     from the period from (and including) the Issue Date up to (but
                      excluding ) the Step-Up Date, 7.50 per cent. per annum (the "Class B
                      Original Margin"); and
              (B)     thereafter, 9.38 per cent. per annum, the difference between the
                      amount of interest accruing at the Relevant Margin in this
                      sub-paragraph (ii) and the amount of interest accruing at the Relevant
                      Margin in sub-paragraph (i) above being the "Class B Step-Up
                      Amounts" and together with the Class A Step-Up Amounts , the
                      "Step-Up Amounts",
              for the avoidance of doubt, the Class A Step-Up Amount and the Class B
              Step-Up Amount will be equal to 125 per cent. of the Class A Original
              Margin and the Class B Original Margin, respectively;
      (c)     in respect of the Class C Notes, 12.0 per cent. per annum.
(e)   Determination of Rates of Interest and Calculation of Interest Amounts
      The Agent Bank shall, on each Determination Date, determine and notify the Issuer,
      the Asset Manager, the Cash Manager, the Standby Asset Manager, the Trustee, the
      Irish Stock Exchange and the Paying Agent of (i) the Class A Notes Rate of Interest,
      the Class B Notes Rate of Interest and the Class C Notes Rate of Interest applicable to
      the relevant Interest Period in respect of each Class A Note, Class B Note and Class C
      Note, as applicable and (ii) the amount of interest (the "Interest Amount") payable in
      respect of each Note for such Interest Period. The Interest Amount will be calculated
      by applying the Rate of Interest for such Interest Period to the Principal Amount
      Outstanding of such Note on the first day of such Interest Period (after taking into
      account any redemptions occurring in respect of such Note on such Interest Payment
      Date), multiplying the product by the actual number of days in such Interest Period
      divided by 360 and rounding the resulting figure to the nearest cent (half a penny,
      being rounded upwards).
(f)   Publication of Rate of Interest, Interest Amount and other Notices
      As soon as practicable after receiving notification thereof, the Issuer will cause the
      Class A Notes Rate of Interest and Class B Notes Rate of Interest and the Interest
      Amount for each Interest Period and the immediately succeeding Interest Payment
      Date to be notified to each stock exchange (if any) on which the Notes are then listed
      and will cause notice thereof to be given in accordance with Condition 15 (Notice to
      Noteholders). The Interest Amount and Interest Payment Date so notified may
      subsequently be amended (or appropriate alternative arrangements made by way of
      adjustment) without notice in the event of any extension or shortening of the Interest
      Period.
(g)   Lack of Determination or Calculation by Agent Bank
      If the Agent Bank does not at any time for any reason determine the Rate of Interest
      and/or calculate the Interest Amount in accordance with the foregoing paragraphs, the
      Interest Amount for the immediately preceding Interest Period shall continue to apply
      until such time as the Agent Bank shall make the determination or calculation as
      provided in these Conditions.
(h)   Notifications to be Final
      All notifications, opinions, determinations, certificates, calculations, quotations and
      decisions given, expressed, made or obtained for the purposes of this Condition,
      whether by the Reference Banks (or any of them) or the Agent Bank shall (in the



                                      -162-
      absence of fraud, wilful default, bad faith or manifest error) be final and binding on
      the Issuer, the Cash Manager, the Reference Banks, the Agent Bank, the Trustee and
      all Noteholders and (in such absence as aforesaid) no liability to the Trustee or the
      Noteholders shall attach to the Issuer, to the Reference Banks, the Agent Bank or the
      Trustee in connection with the exercise or non exercise by them or any of them of
      their powers, duties and discretions hereunder.
(i)   Reference Banks and Agent Bank
      The Issuer shall ensure that, so long as any of the Notes remains outstanding, there
      shall at all times be three reference banks and an Agent Bank. The initial reference
      banks shall be the principal London office of each of The Royal Bank of Scotland
      PLC, Barclays Bank PLC and HSBC Bank plc (and together with any successors
      appointed by the Issuer and approved by the Trustee, the "Reference Banks", and
      each a "Reference Bank"). The initial Agent Bank shall be Deutsche Bank AG,
      London Branch. In the event of the principal London office of any such bank being
      unable or unwilling to continue to act as a Reference Bank or in the event of
      Deutsche Bank AG, London Branch being unwilling to act as the Agent Bank, the
      Issuer shall appoint such other bank as may be approved in writing by the Trustee to
      act as such in its place. The Agent Bank may not resign until a successor approved
      by the Trustee has been appointed.
(j)   Deferral of Interest
      The Class A Step-Up Amounts and interest on the Class B Notes (including the
      Class B Step-Up Amounts) and the Class C Notes shall be payable in accordance
      with this Condition 4 and Condition 6 (Payments) subject to the following terms of
      this Condition 4(j) (Deferral of Interest).
      In the event that the Available Revenue Funds available to the Issuer on any Interest
      Payment Date for application in or towards the payment of the Class A Step-Up
      Amounts which is, subject to this Condition 4(j) (Deferral of Interest), due on the
      Class A Notes on such Interest Payment Date (such aggregate available funds being
      referred to in this Condition 4(j) (Deferral of Interest) as the "Class A Step-Up
      Residual Amount") are not sufficient to satisfy in full the aggregate amount of the
      Class A Step-Up Amounts which is, subject to this Condition 4(j) (Deferral of
      Interest), due on the Class A Notes on such Interest Payment Date, there shall be
      payable on such Interest Payment Date, by way of the Class A Step-Up Amounts on
      each Class A Note, a pro rata share of the Class A Step-Up Residual Amount.
      In the event that the Available Revenue Funds available to the Issuer on any Interest
      Payment Date for application in or towards the payment of interest which is, subject
      to this Condition 4(j) (Deferral of Interest), due on the Class B Notes (including the
      Class B Step-Up Amounts) on such Interest Payment Date (such aggregate available
      funds being referred to in this Condition 4(j) (Deferral of Interest) as the "Class B
      Note Residual Amount") are not sufficient to satisfy in full the aggregate amount of
      interest which is, subject to this Condition 4(j) (Deferral of Interest), due on the
      Class B Notes (including the Class B Step-Up Amounts) on such Interest Payment
      Date, there shall be payable on such Interest Payment Date, by way of interest on
      each Class B Note, a pro rata share of the Class B Note Residual Amount.
      In the event that the Available Revenue Funds available to the Issuer on any Interest
      Payment Date for application in or towards the payment of interest which is, subject
      to this Condition 4(j) (Deferral of Interest), due on the Class C Notes on such Interest
      Payment Date (such aggregate available funds being referred to in this Condition 4(j)
      (Deferral of Interest) as the "Class C Note Residual Amount") are not sufficient to
      satisfy in full the aggregate amount of interest which is, subject to this Condition 4(j)
      (Deferral of Interest), due on the Class C Notes on such Interest Payment Date, there




                                       -163-
           shall be payable on such Interest Payment Date, by way of interest on each Class C
           Note, a pro rata share of the Class C Note Residual Amount.
           In the event that, by virtue of the provisions of this Condition 4(j) (Deferral of
           Interest), a pro rata share of the Class A Step-Up Residual Amount, the Class B Note
           Residual Amount or the Class C Note Residual Amount is paid to Noteholders of the
           relevant class in accordance with such provisions, the Issuer shall create provisions in
           its accounts for the shortfall equal to the amount by which the aggregate amount of
           the Class A Step-Up Amounts or interest paid on the Class B Notes or the Class C
           Notes, as the case may be, on any Interest Payment Date in accordance with this
           Condition 4(j) (Deferral of Interest) falls short of the aggregate amount of the
           Class A Step-Up Amounts or interest payable on the relevant class of Notes but for
           this Condition 4(j) (Deferral of Interest). Such shortfall (the "Interest Shortfall")
           shall not accrue interest. A pro rata share of such shortfall thereon shall be
           aggregated with the amount of, and treated for the purpose of this Condition 4(j)
           (Deferral of Interest) as if it were, subject to this Condition 4(j) (Deferral of Interest),
           the Class A Step-Up Amounts due on the Class A Notes or interest due on each
           Class B Note or Class C Note, as the case may be, on the next succeeding Interest
           Payment Date. This provision shall cease to apply on the Interest Payment Date
           referred to in Condition 5(a) (Final Redemption of the Notes) at which time all
           accrued interest shall become due and payable. Any deferral of the Step-Up Amounts
           or interest pursuant to this Condition 4(j) (Deferral of Interest) shall not constitute an
           Event of Default pursuant to Condition 9 (Events of Default).
5.   Redemption and Post-Enforcement Call Option
     (a)   Final Redemption of the Notes
           Unless previously redeemed as provided in this Condition, the Issuer shall redeem the
           Notes at their Principal Amount Outstanding, together with accrued and unpaid
           interest on the Final Maturity Date.
           The Issuer may not redeem Notes in whole or in part prior to that date except as
           provided in paragraphs (b), (c), (d), (e) or (f) of this Condition but without prejudice
           to Condition 9 (Events of Default).
     (b)   Mandatory Redemption in Part of the Class A Notes, the Class B Notes and the
           Class C Notes
           Prior to enforcement of the Security, on each Interest Payment Date, other than the
           Interest Payment Date on which the Class B Notes and the Class C Notes are to be
           redeemed under paragraph (a) above or (d), (e) or (f) below, the Issuer shall apply an
           amount equal to the Available Principal Funds (as defined below) (and the Available
           Revenue Funds remaining after payments are made in accordance with the Revolving
           Period Revenue Priority of Payments or the Amortisation Period Revenue Priority of
           Payments, if applicable) as at the Determination Date, in redeeming the Notes in
           accordance with the Principal Priority of Payments.
           The Cash Manager is responsible, pursuant to the Cash Management Agreement, for
           determining the amount of the Available Principal Funds (and the Available Revenue
           Funds, if applicable) as at any Determination Date and each determination so made
           shall (in the absence of negligence, fraud, wilful default, bad faith or manifest error)
           be final and binding on the Issuer, the Asset Manager, the Trustee and all
           Noteholders, and no liability to the Noteholders, shall attach to the Issuer, the Trustee
           or (in such absence as aforesaid) to the Cash Manager in connection therewith.
           "Available Principal Funds" means as at any Determination Date: (i) the amount
           standing to the credit of the Principal Ledger; plus (ii) the amount (if any) calculated




                                             -164-
      on that Determination Date to be the amount by which the Principal Deficiency
      Ledger is expected to be reduced by the application of the Available Revenue Funds.
(c)   Note Principal Payments, Principal Amount Outstanding and Pool Factor
      The principal amount redeemable in respect of each Note of each class of Notes (the
      "Note Principal Payment") on any Interest Payment Date under paragraph (b) above
      shall be the amount of the Available Principal Funds (and the Available Revenue
      Funds remaining after payments are made in accordance with the Revolving Period
      Revenue Priority of Payments or the Amortisation Period Revenue Priority of
      Payments, if applicable) on the Determination Date immediately preceding that
      Interest Payment Date to be applied in redemption of Notes of that class, rounded
      down to the nearest U.S. dollar, divided by the number of Notes of that class
      outstanding on the relevant Interest Payment Date; provided always that no such Note
      Principal Payment may exceed the Principal Amount Outstanding of the relevant
      Note.
      With respect to each Note on (or as soon as practicable after) each Determination
      Date, the Issuer shall determine (or cause the Cash Manager to determine) (i) the
      amount of any Note Principal Payment due on the Interest Payment Date next
      following such Determination Date, (ii) the principal amount outstanding of each
      such Note of such class on the Interest Payment Date next following such
      Determination Date (after deducting any Note Principal Payment due to be made on
      that Interest Payment Date) (the "Principal Amount Outstanding") and (iii) the
      fraction expressed as a decimal to the sixth point (the "Pool Factor"), of which the
      numerator is the Principal Amount Outstanding of a Note of that class (as referred to
      in (ii) above) and the denominator is 100,000. Each determination by or on behalf of
      the Issuer of any Note Principal Payment, the Principal Amount Outstanding of a
      Note and the Pool Factor shall in each case (in the absence of fraud, wilful default,
      bad faith or manifest error) be final and binding on all persons.
      With respect to each of the classes of Notes, the Issuer will cause each determination
      of a Note Principal Payment, Principal Amount Outstanding and Pool Factor to be
      notified forthwith to the Trustee, the Paying Agent, the Agent Bank and (for so long
      as the Notes are listed on one or more stock exchanges) the relevant stock exchanges,
      and will immediately cause notice of each such determination to be given in
      accordance with Condition 15 (Notice to Noteholders) by not later than two (2)
      Business Days prior to the relevant Interest Payment Date. If no Note Principal
      Payment is due to be made on the Notes of any class on any Interest Payment Date a
      notice to this effect will be given to the Noteholders. If the Issuer does not at any
      time for any reason determine (or cause the Cash Manager to determine) with respect
      to each of the classes of Notes, a Note Principal Payment, the Principal Amount
      Outstanding or the Pool Factor in accordance with the preceding provisions of this
      paragraph, such determination may (in its sole discretion but without any obligation
      to do so) be made by the Trustee in accordance with this paragraph and each such
      determination or calculation shall be deemed to have been made by the Issuer and in
      the absence of fraud, wilful default, bad faith or manifest error shall be final and
      binding and in such absence of fraud, wilful default, bad faith or manifest error, no
      liability to the Noteholders shall attach to the Trustee in connection with the exercise
      or non exercise by the Trustee of its powers, duties, determinations and discretions
      under this Condition.
(d)   Optional Redemption – at 10 per cent. of the Class A Notes, the Class B Notes and
      the Class C Notes
      On any Interest Payment Date on which the aggregate Principal Amount Outstanding
      of the Class A Notes, Class B Notes and Class C Notes is less than 10 per cent. of the
      initial aggregate Principal Amount Outstanding of the Class A Notes, Class B Notes




                                      -165-
      and Class C Notes the Cash Manager on behalf of and in accordance with the written
      instructions of the Issuer, shall give not more than 60 nor less than 30 days' notice to
      the Trustee and the Noteholders (in accordance with Condition 15 (Notice to
      Noteholders)) and following the giving of such notice the Issuer shall be obliged to
      redeem all (but not some only) of the Class A Notes, the Class B Notes and the
      Class C Notes at their Principal Amount Outstanding together, in each case, with
      accrued and unpaid interest, provided that no such notice shall be given unless the
      Trustee is satisfied prior to the notice of redemption being given that (i) the Issuer
      will be in a position to fully repay (at least) interest and principal on the Senior Notes
      and the amounts payable pursuant to the Priority of Payments to be paid in priority to
      the interest and principal on the Senior Notes, and (ii) if applicable, the Assets were
      or will be, as the case may be, sold to a bona fide purchaser at fair market value.
(e)   Optional Redemption for Tax Reasons
      If the Issuer satisfies the Trustee immediately prior to the giving of the notice referred
      to below that either (i) on the next Interest Payment Date the Issuer would be required
      by reason of a change in law, or the interpretation or administration thereof, to deduct
      or withhold from any payment of principal or interest on the Notes (other than in
      respect of default interest), any amount for or on account of any present or future
      taxes, duties, assessments or governmental charges of whatever nature imposed,
      levied, collected, withheld or assessed by the United Kingdom or any political sub
      division thereof or any authority thereof or therein or (ii) the total amount payable in
      respect of interest in relation to any of the Loans during an Interest Period ceases to
      be receivable (whether by reason of any Borrower, the Asset Manager or the Standby
      Asset Manager, as the case may be, being obliged to deduct or withhold any amount
      in respect of tax therefrom or otherwise, and whether or not actually received) by the
      Issuer during such Interest Period or (iii) amounts payable by the Interest Rate Cap
      Provider to the Issuer will be subject to deduction or withholding on account of any
      present or future taxes, duties, assessments or governmental charges of whatever
      nature and are not otherwise subject to a gross up payment on the part of the Interest
      Rate Cap Provider and, in all cases, the Issuer will be in a position at the relevant
      Interest Payment Date on which the Notes are to be redeemed to fully repay (at least)
      interest and principal on the Senior Notes and the amounts payable pursuant to the
      Priority of Payments to be paid in priority to the interest and principal on the Senior
      Notes, then the Cash Manager shall on behalf of and in accordance with the written
      instructions of the Issuer, give not more than 60 nor less than 30 days' notice to the
      Trustee and the Noteholders (in accordance with Condition 15 (Notice to
      Noteholders)) ending on the subsequent Interest Payment Date and following the
      giving of such notice the Issuer shall redeem on that Interest Payment Date all (but
      not some only) of the Notes at their Principal Amount Outstanding with accrued and
      unpaid interest, provided that the Trustee is satisfied prior to the notice of redemption
      being given that the Issuer will be in a position to fully repay (at least) interest and
      principal on the Senior Notes and the amounts payable pursuant to the Priority of
      Payments to be paid in priority to the interest and principal on the Notes.
      Prior to giving any such notice of redemption, the Issuer shall deliver to the Trustee:

      (A) a certificate signed by two directors of the Issuer stating that (i) it will have the
      funds, not subject to the interest of any other person, required to redeem all the
      relevant Notes as aforesaid and, as the case may be, (ii) the requirement referred to in
      (e) above will apply on the next Interest Payment Date and cannot be avoided by the
      Issuer taking reasonable measures available to it; and

      (B) a legal opinion (in form and substance satisfactory to the Trustee) from a firm of
      solicitors in the United Kingdom (approved in writing by the Trustee) opining on the
      relevant change in tax law (or interpretation or administration or practice thereof).




                                       -166-
      Any certificate or legal opinion given by or on behalf of the Issuer may be relied
      upon by the Trustee and shall be conclusive and binding on the Noteholders.

(f)   Optional Redemption After Step-Up Date
      On any Interest Payment Date after the Step-Up Date, the Issuer may give not more
      than 60 nor less than 30 days' notice to the Trustee and the Noteholders (in
      accordance with Condition 15 (Notice to Noteholders)) and following the giving of
      such notice the Issuer shall be obliged to redeem all (but not some only) of the Notes
      at their Principal Amount Outstanding, together in each case, with accrued and
      unpaid interest, provided that no such notice shall be given unless the Trustee is
      satisfied prior to the notice of redemption being given that (i) the Issuer will be in a
      position to fully repay (at least) interest and principal on the Senior Notes and the
      amounts payable pursuant to the Priority of Payments to be paid in priority to the
      interest and principal on the Senior Notes, and (ii) if applicable, the Assets were or
      will be, as the case may be, sold to a bona fide purchaser at fair market value.
(g)   Notice of Redemption
      Any such notice as is referred to in paragraph (d), (e) or (f) above shall be irrevocable
      and, upon the expiration of such notice, the Issuer shall be bound to redeem the Notes
      at their Principal Amount Outstanding plus accrued and unpaid interest.
(h)   Purchase
      The Issuer shall not purchase any Notes.
(i)   Cancellation
      All Notes redeemed will be cancelled upon redemption, and may not be resold or
      re-issued.
(j)   Post-Enforcement Call Option
      All of the Noteholders will, at the request of the PECO Holder, sell all (but not some
      only) of their holdings of the Notes (including all accrued interest in respect of each
      such Note), as the case may be, to the PECO Holder pursuant to the option granted to
      it by the Trustee (for the benefit of the Noteholders and as authorised by the
      Noteholders in accordance with this Condition 5 (j) (Redemption and
      Post-Enforcement Call Option)) to acquire all (but not some only) of the Notes
      outstanding (including all accrued interest in respect of each such Note), for the
      consideration of one cent in the event that the Security for the Notes is enforced, at
      any time after the date upon which the Trustee, following service of an Enforcement
      Notice, determines (in its sole discretion and without liability to any person for so
      doing) and notifies the PECO Holder, that the proceeds of enforcement are
      insufficient, after payment of all other claims ranking in priority to the Notes, and
      after application of any such proceeds to the Notes under the Deed of Charge, to pay
      any further principal and interest and any amounts whatsoever due in respect of the
      Notes plus all interest accrued thereunder.
      Furthermore, each of the Noteholders acknowledges that the Trustee has the authority
      and the power to bind the Noteholders in accordance with the terms and conditions
      set out in the Post-Enforcement Call Option Agreement and each Noteholder, by
      subscribing for or purchasing the relevant Note(s), agrees to be so bound.
      The Trustee shall have no liability to the Noteholders or any of them or any other
      person in respect of any action taken by it or omitted to be taken by it pursuant to this
      Condition.




                                       -167-
           The Trustee shall not be required to act without being indemnified and/or secured to
           its satisfaction.
6.   Payments
     (a)   Regulation S Global Certificates
           Payments of interest and principal in respect of any Regulation S Global Certificate
           will be made against presentation (and, in the case of final redemption, surrender) of
           such Regulation S Global Certificate at the specified office of the Paying Agent. A
           record of each payment so made will be endorsed on the schedule to the relevant
           Regulation S Global Certificate by or on behalf of the Paying Agent, which
           endorsement shall be prima facie evidence that such payment has been made.
           Payments in respect of the Notes will be made in U.S. dollars to a dollar account (or
           any other account to which U.S. dollars may be transferred) in respect of the Notes
           maintained by the payee with a bank in London.
     (b)   Definitive Notes
           Payments of interest and principal in respect of Definitive Notes will be made by
           dollar cheque drawn on a bank in New York City in respect of the Notes, mailed to
           the holder (or to the first named of joint holders) of such Definitive Notes at the
           address shown on the Register not later than the due date for such payment. For the
           purposes of this Condition 6(b) (Definitive Notes), the holder of a Definitive Note
           will be deemed to be the person shown as the holder (or the first named of joint
           holders) on the Register on the 20th day before the due date for such payment (the
           "Record Date").
           Upon application by the holder of a Definitive Note to the specified office of the
           Registrar not later than the Record Date for any payment in respect of such Definitive
           Note, such payment will be made by transfer to a dollar account in respect of the
           Notes. Any such application for transfer to such an account shall be deemed to relate
           to all future payments in respect of the Definitive Notes which become payable to the
           Noteholder who has made the initial application until such time as the Registrar is
           notified in writing to the contrary by such Noteholder.
           No payment due on the Interest Payment Date falling in November 2018 in respect of
           the Notes or such earlier date as the Definitive Notes may become repayable in full
           shall be made in respect of any Definitive Note unless and until such Definitive Note
           has been surrendered at the specified office of the Paying Agent or the Registrar.
     (c)   Payments of principal and interest in respect of the Notes are subject in all cases to
           any fiscal or other laws and regulations applicable thereto.
     (d)   If payment of principal and interest is improperly withheld or refused on or in respect
           of any Note or part thereof, the interest which continues to accrue in respect of such
           Note in accordance with Condition 4 (Interest) will be paid to the extent received
           against (in respect of any Regulation S Global Certificate) presentation of such Note
           at the specified office of the Paying Agent and (in respect of any Definitive Note) in
           accordance with Condition 4 (Interest). If any payment due in respect of any Note is
           not paid in full, the Principal Paying Agent will (in respect of a Regulation S Global
           Certificate) endorse a record of the amount (if any) so paid on the relevant Note and
           the Registrar will (in respect of a Definitive Note) annotate the Register with a record
           of the amount (if any) so paid.
     (e)   The initial Paying Agent and its initial specified offices are listed at the end of the
           Regulation S Global Certificate or Definitive Note to which these Conditions are
           attached or endorsed. The Issuer reserves the right, subject to the prior written
           approval of the Trustee, at any time to vary or terminate the appointment of the




                                           -168-
             Paying Agent and to appoint additional or other Agents. The Issuer will at all times
             maintain a Paying Agent with a specified office in continental Europe (if the Notes
             are issued in definitive form or the Issuer is obliged to issue Notes in definitive form
             and so long as the Notes are listed on the ISE) and an Agent Bank. The Issuer will
             cause at least 30 days' notice of any change in or addition to any of the Agents or
             their specified offices to be given in accordance with Condition 15 (Notice to
             Noteholders).
     (f)     If any Regulation S Global Certificate is presented for payment on a day which is not
             a Business Day, no further payments of additional amounts by way of interest,
             principal or otherwise shall be due in respect of such Regulation S Global Certificate.
             No holder of a Definitive Note will be entitled to any interest or other payment for
             any delay in receiving the amount due as a result of the due date not being a business
             day, the relevant Noteholder being late in surrendering its Definitive Note (if required
             to do so) or a cheque mailed in accordance with this Condition 6 arriving after the
             due date for payment or being lost in the mail.
     (g)     If, upon due presentation upon a relevant Interest Payment Date, payment of the
             relevant amount of principal or interest is improperly withheld or refused on or in
             respect of any Note or part thereof by the Trustee or the Paying Agent, the Issuer will
             indemnify and/or secure the Trustee on behalf of the relevant affected Noteholders by
             paying to the Trustee on behalf of such Noteholders a sum calculated as the amount
             so withheld or refused plus an amount calculated as equal to the amount of interest
             which would have accrued in accordance with Condition 4 (Interest) if payment of
             such amount and a sum in respect of the Trustee's own remuneration, expenses and
             liabilities in respect thereof as determined solely by the Trustee had been paid by the
             Issuer to the Noteholders on the relevant Interest Payment Date (as well after as
             before any judgment) up to (but excluding) the date on which all sums due in respect
             of such Note up to that day are received by the relevant Noteholder, payment under
             such indemnity and/or security to be due without demand from the relevant Interest
             Payment Date.
7.   Prescription
     A Regulation S Global Certificate shall become void unless presented for payment of
     principal within a period of ten years from the relevant date in respect thereof and five years
     in respect of payment of interest. Claims in respect of principal and interest in respect of
     Definitive Notes shall become void unless made within a period of ten years, in the case of
     principal, and five years, in the case of interest, from the appropriate relevant date on which
     such sums became due and payable. After the date on which a Note becomes void in its
     entirety, no claim may be made in respect thereof. In this Condition, the "relevant date", in
     respect of a Note is the date on which a payment in respect thereof first becomes due or (if the
     full amount of the monies payable in respect of all the Notes due on or before that date has
     not been duly received by the Paying Agent or the Trustee on or prior to such date) the date
     on which the full amount of such monies having been so received, notice to that effect having
     been duly given to the Noteholders in accordance with Condition 15 (Notice to Noteholders).
8.   Taxation
     All payments in respect of the Notes will be made without withholding or deduction for, or on
     account of, any present or future taxes, duties or charges of whatsoever nature unless the
     Issuer or the Paying Agent is required by applicable law to make any payment in respect of
     the Notes subject to any withholding or deduction for, or on account of, any present or future
     taxes, duties or charges of whatsoever nature. In that event, the Issuer or the Paying Agent
     shall make such payment after such withholding or deduction has been made and shall
     account to the relevant authorities for the amount so required to be withheld or deducted.
     NONE OF THE ISSUER, THE PAYING AGENT, ANY OTHER AGENT, NOR ANY




                                              -169-
     OTHER PERSON WILL BE OBLIGED TO MAKE ANY ADDITIONAL PAYMENTS TO
     HOLDERS OF NOTES IN RESPECT OF SUCH WITHHOLDING OR DEDUCTION.
9.   Events of Default
     (a)    The Trustee at its absolute discretion may, and if so requested in writing by the
            holders of not less than 25 per cent. of the aggregate Principal Amount Outstanding
            of the Class A Notes or if no Class A Notes are outstanding, the Class B Notes or if
            no Class B Notes are outstanding, the Class C Notes, or if so directed by or pursuant
            to an Extraordinary Resolution (as defined in the Trust Deed) of the holders of the
            Class A Notes, or if no Class A Notes are outstanding, the Class B Notes, or if no
            Class B Notes are outstanding, the Class C Notes (in all cases subject to the Trustee
            being indemnified and/or secured to its satisfaction) shall, give notice to the Issuer
            declaring the Notes to be due and repayable (an "Enforcement Notice") at any time
            after the happening of any of the following events (each an "Event of Default"):
            (i)     default being made for a period of three Business Days in the payment of the
                    principal of or any interest on any Note when and as the same ought to be
                    paid in accordance with these Conditions, provided that a deferral of interest
                    in accordance with Condition 4(j) (Deferral of Interest) shall not constitute a
                    default in the payment of such interest for the purposes of this Condition 9
                    (Events of Default); or
            (ii)    the Issuer failing duly to perform or observe any other obligation binding
                    upon it under the Notes or the Trust Deed or any other Document or the
                    Issuer, the Asset Manager or the Cash Manager failing duly to perform or
                    observe any obligation binding on it under the Asset Management
                    Agreement, the Cash Management Agreement, or the Deed of Charge and, in
                    any such case (except where the Trustee certifies that, in its opinion, such
                    failure is incapable of remedy when no notice will be required) such failure is
                    continuing for a period of 30 days following the service by the Trustee on the
                    Issuer, the Asset Manager or the Cash Manager (as the case may require) of
                    notice requiring the same to be remedied; or
            (iii)   the Issuer, otherwise than for the purposes of such amalgamation or
                    reconstruction as is referred to in sub paragraph (iv) below, ceasing or,
                    through an official action of the Board of Directors of the Issuer, threatening
                    to cease to carry on business or being unable to pay its debts as and when
                    they fall due; or
            (iv)    an order being made or an effective resolution being passed for the winding
                    up of the Issuer except a winding up for the purposes of or pursuant to an
                    amalgamation or reconstruction the terms of which have previously been
                    approved by the Trustee in writing or by an Extraordinary Resolution of the
                    holders of the Class A Notes or if no Class A Notes are outstanding, the
                    Class B Notes or if no Class B Notes are outstanding, the Class C Notes; or
            (v)     proceedings being otherwise initiated against the Issuer under any applicable
                    liquidation, insolvency, composition, reorganisation or other similar laws
                    (including, but not limited to, presentation of a petition or filing documents
                    with the court or making an application for the appointment of an
                    administrator or liquidator or serving or receiving a notice of intent to appoint
                    an administrator) and such proceedings not, in the opinion of the Trustee,
                    being disputed in good faith with a reasonable prospect of success, or an
                    administrator being appointed, or a receiver, liquidator or other similar
                    official being appointed in relation to the Issuer or in relation to the whole or
                    any substantial part of the undertaking or assets of the Issuer, or an
                    encumbrancer taking possession of the whole or any substantial part of the




                                            -170-
                       undertaking or assets of the Issuer, or a distress, execution, diligence or other
                       process being levied or enforced upon or sued out against the whole or any
                       substantial part of the undertaking or assets of the Issuer and such possession
                       or process (as the case may be) not being discharged or not otherwise ceasing
                       to apply within 30 days, or the Issuer initiating or consenting to proceedings
                       relating to itself under applicable liquidation, insolvency, composition,
                       reorganisation or other similar laws or making a conveyance or assignment
                       for the benefit of its creditors generally,
              Provided that, in the case of each of the events described in sub paragraph (ii), (iii) or
              (v) of this paragraph (a), the Trustee shall have certified to the Issuer that such event
              is, in its opinion, materially prejudicial to the interests of the Noteholders.
      (b)     Upon any declaration being made by the Trustee in accordance with paragraph (a)
              above that the Notes are due and repayable, the Notes shall immediately become due
              and repayable at their Principal Amount Outstanding together with accrued interest as
              provided in the Trust Deed.
10.   Enforcement of Notes
      The Security will become enforceable upon the occurrence of an Event of Default (as
      described in Condition 9 (Events of Default) and the Trustee giving notice to the Issuer
      declaring the Notes to be due and repayable, provided that, if the Security has become
      enforceable otherwise than by reason of a default in payment of any amount due on the Notes,
      the Trustee will not be entitled to dispose of the assets comprised in the Security or any part
      thereof unless either a sufficient amount would be realised to allow discharge in full of all
      amounts owing in respect of the Class A Notes or the Trustee is of the opinion, reached after
      considering at any time and from time to time the advice of an investment bank or other
      financial adviser selected by the Trustee in its sole discretion and having been prefunded to its
      satisfaction as to the costs and expenses of such investment bank or financial adviser, that the
      cash flow prospectively receivable by the Issuer will not (or that there is a significant risk that
      it will not) be sufficient, having regard to any other relevant actual, contingent or prospective
      liabilities of the Issuer, to discharge in full in due course all amounts owing in respect of the
      Class A Notes. The Trustee shall not be required to act unless indemnified and/or secured to
      its satisfaction.
      At any time after the Notes have become due and repayable and without prejudice to its rights
      of enforcement in relation to the Security, the Trustee may, in its absolute discretion and
      without further notice, take such proceedings against the Issuer as it may think fit to enforce
      payment of the Notes together with accrued interest, but it shall not be bound to take any such
      proceedings unless: (a) it shall have been so directed by an Extraordinary Resolution of the
      Noteholders of the relevant class provided that no Extraordinary Resolution of the Class B
      Noteholders or the Class C Noteholders shall be effective unless there is an Extraordinary
      Resolution of the Class A Noteholders or a direction of the Class A Noteholders to the same
      effect or none of the Class A Notes remain outstanding, (b) if no Class A Notes remain
      outstanding, no Extraordinary Resolution of the Class C Noteholders or any request of the
      Class C Noteholders shall be effective unless there is an Extraordinary Resolution of the
      Class B Noteholders to the same effect or none of the Class B Notes remain outstanding and
      (c) it shall have been indemnified and/or secured to its satisfaction. No Noteholder shall be
      entitled to proceed directly against the Issuer unless the Trustee, having become bound so to
      do, fails to do so within a reasonable period and such failure shall be continuing.
11.   Meetings of Noteholders; Modifications; Consents; Waiver
      The Trust Deed contains provisions for convening meetings of Class A Noteholders, Class B
      Noteholders and Class C Noteholders to consider any matter affecting their interests,
      including the sanctioning by an Extraordinary Resolution of such Noteholders of the relevant
      class of any modification of the Notes of the relevant class (including these Conditions as




                                                -171-
they relate to the Notes of such relevant class (as the case may be)) or the provisions of any of
the Transaction Documents, provided that no modification of certain terms by the
Noteholders of any class including, inter alia, the date of maturity of the Notes of the relevant
class or a modification which would have the effect of postponing any day for payment of
interest in respect of such Notes, the reduction or cancellation of the amount of principal
payable in respect of such Notes, the alteration of the Rate of Interest applicable in respect of
such Notes or the alteration of the majority required to pass an Extraordinary Resolution, the
alteration of the currency of payment of such Notes or any alteration of the priority of
redemption of such Notes (any such modification in respect of any such class of Notes being
referred to below as a "Basic Terms Modification") shall be effective unless such
Extraordinary Resolution complies with the relevant terms of the third schedule to the Trust
Deed. The Class A Notes, the Class B Notes and Class C Notes are each deemed to comprise
a separate class of Notes.
The Trust Deed provides that:
(i)     an Extraordinary Resolution which, in the opinion of the Trustee, affects the interests
        of the holders of the Class A Notes, the Class B Notes or the Class C Notes
        respectively shall be deemed to have been duly passed if passed at a meeting of the
        holders of the Notes of that class;
(ii)    an Extraordinary Resolution which, in the opinion of the Trustee, affects the interests
        of the holders of the Class A Notes, the Class B Notes or the Class C Notes
        respectively but does not give rise to a conflict of interest between the holders of such
        classes, shall be deemed to have been duly passed if passed at a single meeting of the
        holders of the Class A Notes, the Class B Notes or the Class C Notes respectively;
        and
(iii)   an Extraordinary Resolution which, in the opinion of the Trustee, affects the interests
        of the holders of the Class A Notes, the Class B Notes or the Class C Notes
        respectively and gives or may give rise to a conflict of interest between the holders of
        such classes, shall be deemed to have been duly passed, in lieu of being passed at a
        single meeting of the holders of the Class A Notes, the Class B Notes or the Class C
        Notes respectively only if passed at separate meetings of the Class A Notes, the
        Class B Notes or the Class C Notes respectively.
The quorum at any meeting of the Noteholders of any class of Notes for passing an
Extraordinary Resolution shall be two or more persons holding or representing over 50 per
cent. of the aggregate Principal Amount Outstanding of the Notes of the relevant class or, at
any adjourned meeting, two or more persons being or representing the Noteholders of the
relevant class whatever the aggregate Principal Amount Outstanding of the Notes of the
relevant class except that, at any meeting the business of which includes the sanctioning of a
Basic Terms Modification, the necessary quorum for passing an Extraordinary Resolution
shall be two or more persons holding or representing not less than 75 per cent., or at any
adjourned such meeting not less than 25 per cent., of the aggregate Principal Amount
Outstanding of the Notes of the relevant class. The quorum at any meeting of the Noteholders
of any class of Notes for all business other than voting on an Extraordinary Resolution shall
be two or more persons holding or representing in the aggregate not less than 5 per cent. of
the aggregate Principal Amount Outstanding of the Notes of the relevant class or, at any
adjourned meeting, two or more persons being or representing the Noteholders of the relevant
class, whatever the aggregate Principal Amount Outstanding of the Notes of the relevant class
so held. In the event there is one Noteholder of a Regulation S Global Certificate, the quorum
at any meeting of the Noteholders for passing an Extraordinary Resolution shall be one
person.
An Extraordinary Resolution (subject to the foregoing) of the Class B Noteholders shall be
effective when, inter alia, the Trustee is of the opinion that it will not be materially
prejudicial to the interests of the Class A Noteholders or it is sanctioned by an Extraordinary




                                         -172-
      Resolution of the Class A Noteholders. Except in certain circumstances the Trust Deed
      imposes no such limitations on the powers of the Class A Noteholders the exercise of which
      will be binding on the Class B Noteholders irrespective of the effect on their interests.
      An Extraordinary Resolution (subject to the foregoing) of the Class C Noteholders shall be
      effective when, inter alia, the Trustee is of the opinion that it will not be materially
      prejudicial to the interests of the Class B Noteholders or it is sanctioned by an Extraordinary
      Resolution of the Class B Noteholders. Except in certain circumstances the Trust Deed
      imposes no such limitations on the powers of the Class B Noteholders the exercise of which
      will be binding on the Class C Noteholders irrespective of the effect on their interests.
      An Extraordinary Resolution passed at any meeting of the Noteholders of any class of Notes
      shall be binding on all Noteholders of the relevant class, whether or not they are present at the
      meeting. The majority required for an Extraordinary Resolution, including the sanctioning of
      a Basic Terms Modification, shall be not less than 75 per cent. of the votes cast on that
      Extraordinary Resolution. The Trustee may agree, without the consent of the Noteholders of
      any class, (a) to any modification (except a Basic Terms Modification) of, or to the waiver or
      authorisation of any breach or proposed breach of, the Notes of such class (including these
      Conditions) or any of the Transaction Documents, which is not, in the opinion of the Trustee,
      materially prejudicial to the interests of the Noteholders of such class or (b) to any
      modification of the Notes of such class (including these Conditions) or any of the Transaction
      Documents, which in the Trustee's opinion is to correct a manifest error or is of a formal,
      minor or technical nature. In respect of each class of Notes, the Trustee may also, without the
      consent of the Noteholders of such class, determine that any Event of Default or any
      condition, event or act which, with the giving of notice and/or lapse of time and/or the issue
      of a certificate and/or the making of any determination, would constitute an Event of Default
      shall not, or shall not subject to specified conditions, be treated as such (but the Trustee may
      not make any such determination of any Event of Default or agree to any such waiver or
      authorisation of any such breach or proposed breach of the Notes (including the Conditions)
      or any of the Transaction Documents in contravention of an express direction of the
      Noteholders given by Extraordinary Resolution or a request under Condition 9 (Events of
      Default)). Any such modification, waiver, authorisation or determination shall be binding on
      the Noteholders of each such class and, unless the Trustee agrees otherwise, any such
      modification shall be notified to such Noteholders in accordance with Condition 14
      (Replacement of Notes) as soon as practicable thereafter.
12.   Indemnification and Exoneration of the Trustee
      The Trust Deed contains provisions governing the responsibility (and relief from
      responsibility) of the Trustee and providing for its indemnification and/or provision of
      security in certain circumstances, including provisions relieving it from taking enforcement
      proceedings or enforcing the Security unless indemnified and/or secured to its satisfaction.
      The Trustee and its related companies are entitled to enter into business transactions with,
      inter alios, the Issuer, the Asset Manager, the Cash Manager and/or related companies of any
      of them without accounting for any profit resulting therefrom. The Trustee will not be
      responsible for any loss, expense or liability which may be suffered as a result of, inter alia,
      any assets comprised in the Security, or any deeds or documents of title thereto, being
      uninsured or inadequately insured or being held by or to the order of the Asset Manager or the
      Standby Asset Manager (as the case may be), the Cash Manager or any agent or related
      company of the Asset Manager or the Standby Asset Manager (as the case may be), the Cash
      Manager or by clearing organisations or their operators or by intermediaries such as banks,
      brokers or other similar persons on behalf of the Trustee. The Trust Deed provides that the
      Trustee shall be under no obligation to monitor or supervise compliance by the Issuer, the
      Asset Manager or the Cash Manager with their respective obligations and may assume these
      are being performed unless it shall have actual knowledge to the contrary.




                                               -173-
13.   Definitive Notes
      Individual registered definitive Notes will only be issued in the following limited
      circumstances:
      (a)     the Trustee has served an Enforcement Notice on the Issuer; or
      (b)     either Euroclear or Clearstream is closed for business for a continuous period of
              14 days (other than by reason of holiday, statutory or otherwise) or announces its
              intention permanently to cease business or does in fact do so; or
      (c)     the Issuer would suffer a material disadvantage in respect of the Notes as a result of a
              change in the laws or regulations (taxation or otherwise) of any applicable
              jurisdiction or payments being made net of tax which would not be suffered were the
              relevant Notes in definitive form and a certificate to such effect signed by two
              directors of the Issuer is delivered to the Trustee; or
      (d)     if, as a result of any amendment to, or change in, the laws or regulations of the United
              Kingdom (or of any political sub-division thereof) or of any authority therein or
              thereof having power to tax or in the interpretation or administration of such laws or
              regulations which becomes effective on or after the Issue Date, the Issuer or any
              Paying Agent is or will be required to make any deduction or withholding from any
              payment in respect of any class of the Notes which would not be required were the
              relevant Notes in definitive form.
      If Notes in individual registered definitive form are issued pursuant to this Condition 13
      (Definitive Notes), definitive Notes in registered form and in an aggregate principal amount
      equal to the Principal Amount Outstanding (as defined in Condition 5(c) (Note Principal
      Payments, Principal Amount Outstanding and Pool Factor)) of the relevant Regulation S
      Global Certificate will be issued in registered form, serially numbered and in Authorised
      Denominations ("Definitive Notes") and the interests represented by each Regulation S
      Global Certificate shall be exchanged by the Issuer for corresponding Definitive Notes in an
      aggregate principal amount equal to the Principal Amount Outstanding of the relevant
      Regulation S Global Certificate, subject to and in accordance with the detailed provisions of
      the Paying Agency Agreement, the Trust Deed and the relevant Regulation S Global
      Certificate. Definitive Notes will not be issued during any period of 15 days ending on the
      due date for any payment of principal or interest in respect of the Notes.
14.   Replacement of Notes
      If any definitive Note is mutilated, defaced, lost, stolen or destroyed, they may be replaced at
      the specified office of any Paying Agent. Replacement of any mutilated, defaced, lost, stolen
      or destroyed Note will only be made on payment of such costs as may be incurred in
      connection therewith and on such terms as to evidence and indemnity as the Issuer may
      reasonably require. Mutilated or defaced Notes must be surrendered before new ones will be
      issued.
15.   Notice to Noteholders
      Any notice to the Noteholders shall be validly given if published in the Irish Times or, if such
      newspaper shall cease to be published or timely publication therein shall not be practicable, in
      such English language newspaper or newspapers as the Trustee shall approve having a
      general circulation in Ireland; provided that if, at any time, the Issuer procures that the
      information concerned in such notice shall appear on a page of the Reuters Screen, or any
      other medium for electronic display of data as may be previously approved in writing by the
      Trustee (in each case a "Relevant Screen"), publication in the Irish Times shall not be
      required with respect to such information. Any such notice shall be deemed to have been
      given to the Noteholders and they shall be deemed to have notice of the content of any such
      notice, in each case, on the date of such publication or, if published more than once or on




                                               -174-
      different dates, on the first date on which publication shall have been made in the newspaper
      or newspapers in which (or on the Relevant Screen on which) publication is required. The
      Trustee shall be at liberty to sanction some other method of giving notice to the Noteholders
      or any category of them if, in its opinion, such other method is reasonable having regard to
      market practice then prevailing and to the requirements of the stock exchange or equivalent
      regulatory authority on which the Notes are then listed and provided that notice of such other
      method is given to the Noteholders in such manner as the Trustee shall require.
16.   Governing Law
      The Transaction Documents and the Notes are governed by, and shall be construed in
      accordance with, English law with the exception of the Asset Management Agreement, the
      Standby Asset Management Agreement, the Property Rights Pledge Agreement and
      provisions of the Sale Agreement governing the transfer of the Assets, which are governed
      by, and shall be construed in accordance with, Ukrainian law.
17.   Jurisdiction
      Any dispute, controversy or claim arising out of or in connection with the Notes or the Trust
      Deed, including any dispute regarding its existence or termination shall be referred to and
      finally resolved by arbitration under the Arbitration Rules of the London Court of
      International Arbitration as at present in force and as modified by this paragraph, which Rules
      shall be deemed incorporated hereof.
18.   Privity of Contract
      No rights are conferred on any person under the Contracts (Rights of Third Parties) Act 1999
      to enforce any terms of the Notes but this does not affect any right or remedy of any person
      which exists or is available apart from that Act.




                                              -175-
                                UNITED KINGDOM TAXATION
The following is a general summary of the Issuer's understanding of current law and practice in the
United Kingdom relating to the taxation of the Notes. Except as mentioned below as regards
withholding tax and stamp duties, it relates only to the position of persons who are the absolute
beneficial owners of the Notes. The summary should therefore be treated with appropriate caution.
Noteholders who are in any doubt as to their tax position or who may be subject to tax in a
jurisdiction other than the United Kingdom should consult their professional advisers.
United Kingdom Withholding Tax
(a)     While the Notes continue to be "listed on a recognised stock exchange" within the meaning of
        section 1005 of the Income Tax Act 2007, payments of interest may be made without
        withholding or deduction for or on account of United Kingdom income tax. "Recognised
        stock exchange" is also defined in section 1005 of the Income Tax Act 2007. Where the
        Notes are included in the official list and admitted to trading on the main market or segment
        of the Irish Stock Exchange, this requirement will be satisfied.
(b)     Persons in the United Kingdom paying interest to or receiving interest on behalf of another
        person may be required to provide certain information to the United Kingdom HM Revenue
        and Customs regarding the identity of a payee or person entitled to the interest and, in certain
        circumstances, such information may be exchanged with tax authorities in other countries.
(c)     If the Notes cease to be listed, interest on the Notes may be paid subject to deduction or
        withholding for or on account of United Kingdom income tax at the basic rate (currently
        20 per cent.) subject to any direction from the United Kingdom HM Revenue and Customs in
        respect of such relief as may be available under the provisions of any applicable double
        taxation treaty and subject to the exemption for payments falling within the scope of
        Section 933 to 937 of the Income Tax Act 2007.
(d)     If the PRI Provider makes any payments under the PRI Policy in respect of the interest on the
        Notes, Noteholders should note that the tax treatment of such payments is unclear, in
        particular, it is uncertain whether such payments would be regarded as interest or as "annual
        payments" for the purpose of United Kingdom taxation. If regarded as interest, the tax
        treatment of such payments will be as set out in the immediately preceding paragraph. If
        regarded as "annual payments" Noteholders should note that such payments would be made
        under deduction of United Kingdom income tax at the basic rate (currently 20 per cent.)
        subject to such relief as may be available under the provisions of any applicable double
        taxation treaty.
Reference is made to "EU Directive on the Taxation of Savings (2003/48/EC)" at the end of this
section. The United Kingdom is one of the Member States that provides to the tax authorities of
another Member State (and certain non-EU countries and territories referred to in that directive) the
details of payments of interest or other similar income paid or secured by a person (as a paying agent
or receiving agent) within the United Kingdom to an individual (and certain other non-corporate
entities) resident in that other Member State (or other non-EU country or territory).
Direct Assessment of Non United Kingdom Resident Noteholders to United Kingdom Tax
Interest on the Notes may be within the charge to United Kingdom tax even if such payments are
made without withholding or deduction for or on account of United Kingdom income tax. By way of
an exception to this, such payments will not be chargeable to United Kingdom tax in the hands of a
Noteholder who is not resident for tax purposes in the United Kingdom unless such person carries on
a trade, profession or vocation in the United Kingdom through a United Kingdom branch or agency,
or such person is a company carrying on a trade through a permanent establishment in the United
Kingdom, in connection with which the income is received or to which the Notes are attributable.
There are exemptions for payments received by certain categories of agent (such as some brokers and
investment managers). An exemption from or reduction of United Kingdom tax payable on such




                                                 -176-
payments might be available in appropriate circumstances under the provisions of an applicable
double taxation treaty.
Accrued Income – Noteholders who are not United Kingdom Corporate Taxpayers
Where there is a transfer or redemption of a Note by a Noteholder who is not within the charge to
corporation tax and is resident or ordinarily resident in the United Kingdom or carrying on a trade in
the United Kingdom through a branch or agency with which the ownership of the Note is connected,
such Noteholder may be chargeable to United Kingdom tax on income in respect of an amount (in
some cases, an amount deemed by HM Revenue and Customs to be just and reasonable) representing
interest accrued on the Note at the time of transfer (under rules relating to accrued income profits
contained in Part 12 of the Income Tax Act 2007).
United Kingdom Corporation Tax – Corporate Noteholders
Noteholders which are companies and are either resident in the United Kingdom for taxation purposes
or hold the Notes for the purposes of a trade carried on in the United Kingdom through a permanent
establishment in the United Kingdom, will, subject to such relief as may be available under the terms
of any applicable double tax treaty, be within the charge to United Kingdom corporation tax in respect
of the Notes. Such Noteholders (other than United Kingdom authorised unit trusts) will be subject to
tax on all profits and gains (including interest) arising on the Notes broadly in accordance with their
statutory accounting treatment. Such profits and gains will normally be charged to tax as income in
respect of each accounting period to which they are allocated for accounting purposes. Relief may be
available in respect of losses, and for related expenses, on a similar basis. Any such Noteholders
should note that any fluctuations in value relating to foreign exchange gains and losses will be taxed
and relieved as income for United Kingdom corporation tax purposes generally in accordance with the
manner in which such gains and losses are recognised in such holders' accounts. Such Noteholders
will be outside the application of the rules described in the paragraph headed "Accrued Income –
Noteholders who are not United Kingdom Corporate Taxpayers" above and the paragraph headed
"United Kingdom Capital Gains Tax – Non corporate Noteholders" below.
United Kingdom Capital Gains Tax – Non corporate Noteholders
The Notes will not constitute qualifying corporate bonds within the meaning of section 117 of the
Taxation of Chargeable Gains Act 1992 because they are denominated in U.S. dollars. Therefore, a
disposal (which includes a redemption) of any such instrument by its holder may give rise to a
chargeable gain or an allowable loss for the purposes of United Kingdom taxation of chargeable
gains.
Stamp Duty and Stamp Duty Reserve Tax
No United Kingdom stamp duty or stamp duty reserve tax is payable on the issue of the Regulation S
Global Certificates, or on the transfer or agreement to transfer an interest in the Regulation S Global
Certificates, or on the issue of or transfer of or agreement to transfer a Definitive Note.
EU Directive on the Taxation of Savings (2003/48/EC)
Under EC Council Directive 2003/48/EC on the taxation of savings income, each Member State is
required, from 1 July 2005, to provide to the tax authorities of another Member State details of
payments of interest or other similar income paid by a person within its jurisdiction to, or collected by
such a person for, an individual resident in that other Member State; however, for a transitional
period, Austria, Belgium and Luxembourg may instead apply a withholding system in relation to such
payments, deducting tax at rates rising over time to 35 per cent. The transitional period is to terminate
at the end of the first full fiscal year following agreement by certain non EU countries to the exchange
of information relating to such payments.
Also with effect from 1 July 2005, a number of non EU countries, and certain dependent or associated
territories of certain Member States, have agreed to adopt similar measures (either provision of
information or transitional withholding) in relation to payments made by a person within its
jurisdiction to, or collected by such a person for, an individual resident in a Member State. In



                                                 -177-
addition, the Member States have entered into reciprocal provision of information or transitional
withholding arrangements with certain of those dependent or associated territories in relation to
payments made by a person in a Member State to, or collected by such a person for, an individual
resident in one of those territories.




                                             -178-
                                     UKRAINIAN TAXATION
The following is a general description of certain Ukrainian tax considerations relating to the Notes
and the Assets. It does not purport to be a complete analysis of all tax considerations relating to the
Notes or the Assets in Ukraine and should be read in conjunction with the section entitled "Risk
Factors – Uncertainties Relating to the Ukrainian Tax System". Prospective purchasers of the Notes
should consult their own tax advisors as to which countries' tax laws could be relevant to acquisition,
holding, and disposition of the Notes and receiving payments of interest, principal and/or other
amounts under the Notes and consequences of such actions under the tax laws of those countries. This
summary is based upon the laws as in effect on the date of this Prospectus (which are subject to
change, possibly with retroactive effect). The information and analysis contained within this section
are limited to taxation issues and prospective investors should not apply any information or analysis
set out below to other areas including (but not limited to) the legality of transactions involving the
Notes.

For the purposes of this section, a "Resident Noteholder" means either an individual or a legal entity
holding the Notes that is a resident for Ukrainian tax purposes.

An individual is considered a resident for Ukrainian tax purposes when he/she is permanently residing
or having a centre of vital interests in Ukraine. If the state of a centre of vital interests cannot be
determined or if an individual does not have a permanent residence in any state, such individual is
considered as resident for Ukrainian tax purposes if he/she is actually present in Ukraine for at least
an aggregate period of 183 days during a calendar year (including days of arrival in and departure
from Ukraine).

A legal entity would be considered as resident for Ukrainian tax purposes if it was established and is
operating under the laws of Ukraine, Ukrainian permanent establishments of non-resident companies
are also treated as tax residents of Ukraine.

A "Non-Resident Noteholder" means either an individual or a legal entity holding the Notes which
does not qualify as a Resident Noteholder as determined above.


Non-Resident Noteholders

Under Ukrainian tax law as presently in effect, payments of principal and interest on the Notes by the
Issuer, where the Issuer is a non-resident entity for taxation purposes in Ukraine, the Non-Resident
Noteholders will not be subject to taxation in Ukraine. Thus, no Ukrainian taxes will be withheld on
such payments.

The Non-Resident Noteholder generally should not be subject to any Ukrainian taxes in respect of
gains or other income realised on the disposal of the Notes outside Ukraine provided that the proceeds
of such disposal of the Notes are not received from a Ukrainian source.

In the event that proceeds from a disposal of the Notes are received from a Ukrainian source, the Non-
Resident Noteholder that is a legal entity will be subject to the Ukrainian withholding tax at a rate of
15 per cent. in respect of gross proceeds from such disposal less any available cost deduction duly
documented (which includes the purchase price of the Notes), subject to any available double tax
treaty relief. The Non-Resident Noteholders that are legal entities should consult their own tax
advisors with respect to any available double tax treaty relief.

If proceeds from a disposal of the Notes are received from a Ukrainian source, a Non-Resident
Noteholder who is an individual will generally be subject to the tax at a rate of 30 per cent, subject to
any available double tax treaty relief, in respect of gross proceeds from such disposal less any
available cost deduction duly documented (which includes the purchase price of the Notes). The Non-
Resident Noteholders that are individuals should consult their own tax advisors with respect to any
available double tax treaty relief.




                                                 -179-
Where proceeds from the disposal of the Notes are received from a Ukrainian source, in order for the
Non-Resident Noteholder, whether an individual or a legal entity, to enjoy the benefits of an
applicable double tax treaty, documentary confirmation of the tax residence of such Non-Resident
Noteholder (the "Tax Residence Certificate") is required prior to payment being made to confirm the
applicability of the double tax treaty. The Tax Residence Certificate must be legalised or apostilled by
a competent authority of the state of residence of the Non-Resident Noteholder. The notarised
translation of the Tax Residence Certificate into Ukrainian will be required. A new Tax Residence
Certificate must be obtained for each tax year (i.e., for each calendar year).

The Non-Resident Noteholders should consult their own tax advisors regarding possible tax credits (if
any) and procedures for obtaining such credits in countries of their residence with respect to any
Ukrainian taxes paid (or withheld).

If a double tax treaty benefit is available, but Ukrainian taxes have nevertheless been withheld from
the income payment at the statutory rate, an application for the refund of taxes withheld may be filed
with the Ukrainian tax authorities within three years from the date when such was withheld or the
right for such refund arose. In practice, the Ukrainian tax authorities may request wide variety of
documents confirming the right to benefits under a double tax treaty, even if such documents are not
explicitly required by law. Refund of taxes withheld can be extremely time-consuming and
burdensome.


Resident Noteholders

The Resident Noteholder is subject to all applicable Ukrainian taxes in respect of gains from the
disposal of the Notes and interest received on the Notes.

Payment of principal and interest on the Notes by the Issuer, where the Issuer is a non-resident entity
for taxation purposes in Ukraine, to a Resident Noteholder will not be subject to Ukrainian
withholding tax.

Payment of interest on the Notes by the Issuer, where the Issuer is a non-resident entity for taxation
purposes in Ukraine, to a Resident Noteholder, who is either an individual or a legal entity, should be
included in the taxable income of such resident of Ukraine and will be subject to either personal
income tax at a rate of 15 per cent. or corporate income tax at a rate of 25 per cent, respectively. If
principal payments received by a Resident Noteholder under the Notes exceed their respective
acquisition basic cost, the capital gain thereof ultimately would be subject to corporate/personal tax in
Ukraine at respective rate of 25 per cent. or 15 per cent.

Generally, tax accounting of operations of legal entities with securities is conducted separately for
each type of security on a "pool basis", while operations conducted by individuals are accounted
separately for each package of securities (one security item or identical securities issued by one
entity).

The Resident Noteholders will be subject to taxation on any gain received from the disposal of the
Notes. Under Ukrainian tax legislation, a gain from the disposal of securities is defined as a positive
difference between the sale and purchase prices of such securities. A gain from the disposal of the
Notes received by a Resident Noteholder that is a legal entity will be subject to corporate income tax
at a rate of 25 per cent., while a gain on the disposal of the Notes received by a Resident Noteholder
who is an individual will be subject to personal income tax at a rate of 15 per cent.

As regards the taxation treatment of any transactions involving the Notes, the Resident Noteholders
should consult their own tax advisors.




                                                 -180-
Taxation of Payments under the Assets

Payments of principal amounts of loan to a non-resident legal entity should not be subject to
Ukrainian withholding tax.

In general, payments of interest to a non-resident legal entity, provided that the interest is not
effectively connected with a permanent establishment of the non-resident entity situated in Ukraine,
are subject to Ukrainian withholding tax at the rate of 15 per cent., absent any reduction or elimination
pursuant to the terms of an applicable tax treaty. Such interest is regarded as a Ukrainian source
income of the non-resident recipient. The payer of such Ukrainian source income is responsible for
withholding such tax on interest payments made in favour of the non-resident. Under the terms of the
Convention between the Government of the Great Britain and Nothern Ireland and the Government of
the Ukraine for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion on Income
and Capital of 10 February 1993 (the "Double Tax Treaty") payments of interest made by a
Ukrainian legal entity acting as an asset manager which has collected such payments from an
individual will not be subject to withholding tax, provided that certain conditions set forth in the
Double Tax Treaty and under applicable Ukrainian law are duly satisfied. However, there can be no
assurance that the exemption from withholding tax under the Double Tax Treaty is, or will continue to
be, available.

Specifically, in order for the exemption from withholding under the Double Tax Treaty to be
applicable, the Issuer must be a resident of the United Kingdom for the purposes of the Double tax
Treaty, as well as the beneficial owner of the interest payments being received in the United Kingdom
and be subject to tax in respect of such interest payments in the United Kingdom. Absent a definition
of beneficial ownership under Ukrainian law and any available interpretation in this respect, there are
no legal grounds to challenge that the Issuer should be treated as the beneficial owner of the income in
question. It is also not clear how the test of taxation of interest payments in the United Kingdom will
be interpreted and applied by the Ukrainian tax authorities in practice. In addition, the notion of
beneficial ownership is not defined in the Ukrainian tax law. As a consequence, different
interpretations are possible and the position could be taken that the Issuer should not be viewed as the
beneficial owner of the interest payments being received in the United Kingdom. However, it is
unlikely that the Ukrainian tax authorities will adopt this view.

In addition, Article 11(7) of the Double Tax Treaty contains a "main purpose" anti-avoidance
provision. While there is no established practice of the Ukrainian tax authorities with respect to
application of this provision, if the Ukrainian tax authorities take a position that one of the main
purposes of selecting a jurisdiction of residence of the Issue is to avail the Originator of the tax
benefits provided under the Double Tax Treaty, the Ukrainian tax authorities may invoke the
mentioned anti-avoidance provision. Under such circumstances, there is a risk that payment of interest
by the Originator would cease to have the benefit of the Treaty.

In order to qualify for the aforementioned relief, the Issuer will also have to submit to the Originator
the Tax Residence Certificate authorized by a tax body of the United Kingdom prior to payment of
such interest. The Tax Residence Certificate should contain all necessary information as it is required
by the effective Ukrainian legislation. The Tax Residence Certificate should be legalised through an
Apostille by a competent authority in the United Kingdom. A notarized translation of the Tax
Residence Certificate into Ukrainian is required as well. The Tax Residence Certificate should be
submitted before the first payment of interest in each year when the interest payment is due,
irrespectively of a number and regularity of payments. A new Tax Residence Certificate must be
obtained for each tax year (i.e., for each calendar year).

As regards commission fees which may be paid under the Loans to the Issuer, such amounts should be
treated as a Ukrainian source income of the Issuer subject to the Ukrainian withholding tax at a rate of
15 per cent. However, withholding tax should be mitigated according to the provisions of the Double
Tax Treaty subject to the conditions and risks as indicated above for the interest income.



                                                 -181-
The prospective investors cannot be assured that they will obtain such exemption from withholding
tax under the Double Tax Treaty upon enforcement of the Security or any part thereof. If, as a result
of the enforcement by the Trustee of the Security or any part thereof, interest under the Assets
becomes payable to the Trustee, the benefit of the Double Tax Treaty may cease and payment of
interest may be subject to the Ukrainian withholding tax at a rate of 15 per cent.

No value added tax should be payable in Ukraine in respect of interest or principal payments under
the Assets.


Risk of Creating a Permanent Establishment for the Issuer

Should the Issuer take all decisions on the legal deals involving the Loan Claims and the Pledge
Claims outside Ukraine, such activity of the Issuer should not give rise to a permanent establishment
(taxable presence) in Ukraine. The activity of the Originator in its capacity as the Asset Manager and
the activity of the Standby Asset Manager should not create a permanent establishment for the Issuer
in Ukraine provided the Asset Manager/the Standby Asset Manager would act as independent agents
(intermediary) in the ordinary course of their business.

The activity of the Originator in its capacity as the Asset Manager and the activity of the Standby
Asset Manager may be treated as the activity of a dependent agent (giving rise to a permanent
establishment of the Issuer) if the Asset Manager/the Standby Asset Manager is acting on behalf of
the Issuer and has, and habitually exercises, in Ukraine an authority to conclude contracts on behalf of
the Issuer, unless the activities of the Asset Manager/the Standby Asset Manager are limited to the
activities of a preparatory or auxiliary character.

Should the activity of the Issuer/Asset Manager/the Standby Asset Manager be acknowledged by the
Ukrainian tax authorities as creating a permanent establishment in Ukraine for the Issuer, all income
of the Issuer attributable to its activity through the Ukrainian permanent establishment should be
taxable in Ukraine at a rate of 25 per cent.




                                                 -182-
                      SUBSCRIPTION AND PURCHASE OF THE NOTES
AS "PrivatBank" (the "Initial Purchaser") has entered into a subscription agreement dated on or
about the Issue Date between UBS Limited (the "Lead Manager"), the Issuer and the Originator (the
"Subscription Agreement"), pursuant to which the Initial Purchaser has agreed with the Issuer to
subscribe and pay for the Notes. The issue price payable by the Initial Purchaser in respect of the
Notes is 100 per cent. of their principal amount. The Initial Purchaser may sell the Notes in the
immediate future for market value. The Issuer will pay a fee for each Class of Notes to the Initial
Purchaser and a management fee to the Lead Manager, in each case, in accordance with the
Subscription Agreement.
The United States
The Notes have not been and will not be registered under the Securities Act or any state securities
laws. The Notes may not be offered, sold or delivered directly or indirectly within the United States
or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the Securities
Act) except pursuant to an exemption from or in a transaction not subject to, the registration
requirements of the Securities Act and applicable state securities laws. Terms used in this paragraph
have the meanings given to them by Regulation S under the Securities Act.
The Notes are subject to U.S. tax law requirements and may not be offered, sold or delivered within
the United States or its possessions or to a United States person, except in certain transactions
permitted by U.S. tax regulations. Terms used in this paragraph have the meaning given to them by
the U.S. Internal Revenue Code of 1986 and regulations thereunder.
The Initial Purchaser has agreed that, except as permitted by the Subscription Agreement, it will not
offer, sell or deliver the Notes, (i) as part of their distribution at any time or (ii) otherwise until
40 days after the later of the date of commencement of the offering and the Issue Date (the
"Distribution Compliance Period"), within the United States or to, or for the account or benefit of a
U.S. person (except in accordance with Rule 903 of Regulation S), and it will have sent to each
distributor, dealer or other person to which it sells the Notes, during the Distribution Compliance
Period a confirmation or other notice setting forth the restrictions on offers and sales of the Notes
within the United States or to, or for the account or benefit of, U.S. persons. Terms used in this
paragraph have the meanings given to them by Regulation S.
In addition, until the expiration of the Distribution Compliance Period, an offer or sale of the Notes
within the United States by any dealer not participating in this offering may violate the requirements
of the Securities Act.
United Kingdom
The Initial Purchaser has represented to and agreed with the Issuer that:
(a)     it has complied and will comply with all applicable provisions of the Financial Services and
        Markets Act 2000 ("FSMA") with respect to anything done by it in relation to the Notes, in,
        from or otherwise involving the United Kingdom; and
(b)     it has only communicated or caused to be communicated and will only communicate or cause
        to be communicated an invitation or inducement to engage in investment activity (within the
        meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of any
        Notes in circumstances in which Section 21(1) of the FSMA does not apply to the Issuer.
European Economic Area
In relation to each Member State of the European Economic Area which has implemented the
Prospectus Directive (each, a "Relevant Member State"), the Initial Purchaser has represented and
agreed that with effect from and including the date on which the Prospectus Directive is implemented
in that Relevant Member State (the "Relevant Implementation Date") it has not made and will not
make an offer of Notes which are subject of the offering contemplated by this Prospectus to the public
in that Relevant Member State other than:



                                                 -183-
(a)      to legal entities which are authorised or regulated to operate in the financial markets or, if not
         so authorised or regulated, whose corporate purpose is solely to invest in securities;
(b)      to any legal entity which has two or more of (1) an average of at least 250 employees during
         the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual
         net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts;
         or
(c)      to fewer than 100 natural or legal persons (other than qualified investors as defined in the
         Prospectus Directive) subject to obtaining the prior consent of the Lead Manager; or
(d)      in any other circumstances falling within Article 3 (2) of the Prospectus Directive
provided that no such offer of the Notes shall require the Issuer, the Lead Manager or the Initial
Purchaser to publish a prospectus pursuant to Article 3 of the Prospectus Directive.
For the purposes of this provision, the expression an "offer of the Notes to the public" in relation to
any Notes in any Relevant Member State means the communication in any form and by any means of
sufficient information on the terms of the offer and the Notes to be offered so as to enable an investor
to decide to purchase or subscribe the Notes as the same may be varied in that Member State by any
measure implementing the Prospectus Directive in that Member State.
The Republic of Ireland
The Initial Purchaser has represented and agreed that:
(a)      it has not underwritten the issue of, or placed the Notes, otherwise than in conformity with the
         provisions of S.I. No. 60 of 2007, European Communities (Markets in Financial Instruments)
         Regulations 2007 (Nos.1 to 3), including, without limitation, Regulations 7 and 152 thereof or
         any codes of conduct used in connection therewith;
(b)      it has not underwritten the issue of, or placed, the Notes, otherwise than in conformity with
         the provisions of the Irish Central Bank Acts 1942 – 2004 (as amended) and any codes of
         conduct rules made under Section 117(1) thereof; and
(c)      it has not underwritten the issue of, placed or otherwise act in Ireland in respect of the Notes,
         otherwise than in conformity with the provisions of the Irish Market Abuse (Directive
         2003/6/EC) Regulations 2005 and any rules issued by the Financial Regulator pursuant
         thereto, and in conformity with the Irish Companies Acts 1963-2006.


France
The Initial Purchaser and the Issuer has represented and agreed that it has not offered or sold and will
not offer or sell, directly or indirectly, the Notes to the public in France, and has not distributed or
caused to be distributed and will not distribute or cause to be distributed to the public in France, this
Prospectus or any other offering material relating to the Notes, and that any offers, sales and
distributions have been and shall only be made in France to (i) providers of investment services
relating to portfolio management for the account of third parties, and/or (ii) qualified investors
(investisseurs qualifiés), all as defined in, and in accordance with, articles L.411-1, L.411-2, D.411-1
of the French Code monétaire et financier.
Italy
The offering of the Notes has not been registered with the CONSOB pursuant to the Italian securities
legislation and, accordingly, the Initial Purchaser and the Issuer has represented and agreed that it has
not offered or sold, and will not offer, sell or deliver any Notes or distribute copies of this Prospectus
or of any other offering material relating to the Notes in the Republic of Italy in a public offer within
the meaning of Article 1.1(t) of Legislative Decree No. 58 of 24 February 1998 ("Decree No. 58"),
other than:




                                                  -184-
        (a)     to "Professional Investors" (operatori qualificati), as defined in Article 31.2 of the
                CONSOB Regulation No. 11522 of July 1998, as amended;

        (b)     in circumstances which are exempted from the rules on public offer pursuant to
                Article 100 of Decree No. 58 and Article 33 of CONSOB Regulation No. 11971 of 14
                May 1999, as amended.

        Any offer, sale or delivery of the Senior Notes or distribution of copies of the Preliminary
        Prospectus or any other document relating to the Senior Notes in Italy under the paragraphs
        above must be:

                (i)     made by investment firms, banks or financial intermediaries permitted to
                        conduct such activities in Italy in accordance with Legislative Decree No.
                        385 of 1 September 1993, as amended ("Decree No. 385"), Decree No. 58,
                        CONSOB Regulation No. 16190 of October 29, 2007 and any other
                        applicable laws and regulations; and

                (ii)    in compliance with all relevant Italian securities, tax and exchange controls
                        and any other applicable laws and regulations.


Pursuant to Article 100-bis of the Decree No. 58, (a) the resale of the Notes that have been offered,
sold or distributed in public offer exempted from the publication of a prospectus is to be deemed an
autonomous and independent public offer where the conditions provided by Article 1.1(t) of the
Decree No. 58 are satisfied and no exemptions pursuant to Article 100 of the Decree No. 58 apply; (b)
to the extent that an offer of the Notes is made solely to Qualified Investors in Italy or abroad, a
public offer is deemed occurring in Italy if the Notes, in the following 12 months, are
systematically transferred to non-professional investors, and such transfer is not exempted
pursuant to Article 100 of the Decree No. 58. In this case, where no prospectus has been
published, the purchaser of the Notes, that was acting for purposes different from its professional
and entrepreneurial activities, is entitled to lodge a claim before a court for the declaration of
voidance of the purchase agreement, and the intermediaries that have sold the Notes may be
liable for damages.

Norway
The Notes may not be offered, sold or distributed in the Kingdom of Norway, except in accordance
with the Norwegian Securities Trading Act of 19 June, 1997, as amended, and all applicable
regulations. The Notes may not be offered, sold or distributed in Norway except in circumstances
which do not constitute a public offer of securities in Norway within the meaning of Norwegian
securities laws and regulations. Neither the Notes nor this Prospectus has been approved and
registered by the Norwegian Stock Exchange or registered with the Norwegian Register of Business
Enterprises.
Sweden
This Prospectus has not been nor will it be registered with or approved by Finansinspektionen (the
Swedish Financial Supervisory Authority). Accordingly, this Prospectus may not be made available,
nor may the Senior Notes offered hereunder be marketed and offered for sale in Sweden, other than
under circumstances which are deemed neither to require a prospectus under the Swedish Financial
Instruments Trading Act (1991:980) (Sw. lag (1991:980) om handel med finansiella instrument).
Accordingly the offering of Notes will only be directed to persons in Sweden who are qualified
investors as defined in the Financial Instruments Trading Act or who acquire securities for a total
consideration of at least EUR 50,000 per investor.




                                                -185-
Russian Federation
The Initial Purchaser represents and agrees that it has not offered or sold or transferred or otherwise
disposed of, and will not offer or sell or transfer or otherwise dispose of, any Notes (as part of their
initial distribution or at any time thereafter) to, or for the benefit of, any persons (including legal
entities) resident, incorporated, established or having their usual residence in the Russian Federation,
or to any person located within the territory of the Russian Federation, unless and to the extent
otherwise permitted by Russian law.
Ukraine
The Initial Purchaser agrees that the Notes shall not be offered for circulation, distribution, placement,
sale, purchase or other transfer in the territory of Ukraine. Accordingly, nothing in this prospectus or
any other document, information or communication related to the Notes shall be interpreted as
containing any offer or invitation to, or solicitation of, any such circulation, distribution, placement,
sale, purchase or other transfer in the territory of Ukraine.
General
Investors in the Notes may be required to pay stamp taxes and other charges in accordance with the
laws and practices of the country of purchase in addition to the offering price of the Notes (or
beneficial interests therein) so purchased.
The Lead Manager is not obligated to facilitate trading in the Notes, (or beneficial interests therein)
and any such activities, if commenced, may be discontinued at any time, for any reason, without
notice. If the Lead Manager does not facilitate trading in the Notes (or beneficial interests therein) for
any reason, there can be no assurance that another firm or person will do so.
No action has been or will be taken in any jurisdiction by the Issuer, the Initial Purchaser or the Lead
Manager that would, or is intended to, permit a public offering of the Notes, or possession or
distribution of this Prospectus or any other offering material, in any country or jurisdiction where
action for that purpose is required.
Persons into whose hands this Prospectus comes are required by the Issuer, the Initial Purchaser and
the Lead Manager to comply with all applicable laws and regulations in each country or jurisdiction in
which they purchase, offer, sell or deliver Notes or have in their possession, distribute or publish this
Prospectus or any other offering material relating to the Notes, in all cases at their own expense.




                                                  -186-
                                                    GENERAL INFORMATION
(1)   The issue of the Notes has been authorised by resolution of the Board of Directors of the
      Issuer passed on 23 May 2008.
(2)   It is expected that the Notes will be listed on the Irish Stock Exchange (the "ISE") on or
      around 29 May 2008.
(3)   The Notes have been accepted for clearance through Euroclear and Clearstream as follows:
                                                                                          Common Code       ISIN
       Class A Notes ..................................................................    036471964    XS0364719640
       Class B Notes ..................................................................    036472014    XS0364720143
       Class C Notes ..................................................................    036472111    XS0364721117

(4)   The Issuer is not and has not been involved in any governmental, legal, arbitration or
      administration proceedings which may have or have had since its date of incorporation a
      significant effect on its financial position nor is the Issuer aware that any such proceedings are
      pending or threatened.
(5)   Since 13 February 2008 (being the date of incorporation of the Issuer), there has been no
      material adverse change in the financial position or prospects of the Issuer and no significant
      change in the trading or the financial position of the Issuer.
(6)   Copies of the following documents may be inspected in electronic form during usual business
      hours at the offices of the Paying Agent and the registered office of the Issuer for the lifetime
      of this Prospectus:
      (a)          the Articles of Association of the Issuer;
      (b)          drafts (subject to modification) or, if available, final versions of the following
                   documents:
                   (i)           the Master Securitisation Deed;
                   (ii)          the Sale Agreement;
                   (iii)         the Asset Management Agreement;
                   (iv)          the Standby Asset Management Agreement;
                   (v)           the Trust Deed;
                   (vi)          the Deed of Charge;
                   (vii)         the Property Rights Pledge Agreement;
                   (viii)        the Paying Agency Agreement;
                   (ix)          the Cash Management Agreement;
                   (x)           the Issuer Account Bank Agreement;
                   (xi)          the Issuer Corporate Account Agreement;
                   (xii)        the Facility Agreement;
                   (xiii)        the Interest Rate Cap Agreement;
                   (xiv)         the Subscription Agreement;
                   (xv)          the Post Enforcement Call Option Agreement;




                                                                          -187-
              (xvi) the Corporate Services Agreement; and
              (xvii)   the Data Custodian Agreement.
(7)   The Issuer does not intend to provide post issuance information in relation to the Assets, and
      all information in regards to the Notes will be provided in the Cash Manager Performance
      Report.
(8)   The Issuer's Memorandum of Association and the covenants made by the Issuer in the
      Transaction Documents are together intended to prevent any abuse of control of the Issuer.
(9)   The approximate estimated total expenses related to the admission of the Notes are U.S.
      dollars equivalent of Euro 5,033. Deutsche Bank Luxembourg Société Anonyme, 2 bd.
      Konrad Adenauer, L-1115 Luxembourg, in its capacity as listing agent of the Issuer, will pay
      such expenses on behalf of the Issuer.




                                              -188-
                     GLOSSARY
Account Bank                                      17, 87      Collection End Date                                   22
Agent                                                 150     Collection Notification Date                          23
Agent Bank                                       17, 150      Collection Period                                 6, 22
Agents                                                150     Collection Start Date                             3, 23
AMA                                                     70    Commission                                             iv
Amortisation Date                                       22    Common Depositary                               iv, 148
Amortisation Period                                     22    Conditions                                    2, 4, 150
Amortisation Period Principal Priority of Payments 7,         Consumer Protection Law                               63
   158                                                        Contingency Reserve                                   86
Amortisation Period Revenue Priority of Payments 7,           Contingency Reserve Fund                              11
   156                                                        Contingency Reserve Ledger                              7
Asset Management Account                            6, 86     contracts of adhesion                                 64
Asset Management Agreement                               6    Corporate Services Agreement                     17, 95
Asset Manager                                           16    Corporate Services Provider                      17, 95
Asset Manager Termination Event                         49    Currency Inconvertibility                        9, 109
Asset Manager's Report Date                              6    Data Custodian                             vi, 16, 114
Assets                                            2, 116      Data Custodian Agreement                       16, 114
Assets Data                                      49, 141      Deed of Charge                                 13, 150
Authorised Denomination                               151     Defaulted Loan                                        37
Authorised Investment Qualifying Institution            88    Definitive Notes                                    175
Authorised Investments                                  88    Delinquent Loan                                       37
Available Principal Funds                        27, 166      Determination Date               ii, 23, 156, 158, 162
Available Revenue Funds                                 83    Determination Period                                    ii
Bank Accounts                                           87    Direct Participants                                 148
Banking Law                                             45    distribution compliance period                        iii
Basel Committee                                         70    Distribution Compliance Period                      184
Basel II                                                70    Double Tax Treaty                                   182
Basel II Framework                                      70    Downgrade Event                                49, 141
Basic Terms Modification                              173     Eligible Borrower                                   119
Beneficial Owner                                      149     Encumbrances Law                                      54
BIPRU                                                   70    Encumbrances Register                                 55
Borrowers                                         2, 116      Enforcement Notice                                  171
business day                                          151     Enforcement Procedures                              142
Business Day                                 ii, 22, 161      Enterprise Act                                        44
Cash Management Agreement                        16, 143      EU                                                    71
Cash Manager                                     16, 143      Euro                                                  vii
Cash Manager Performance Report                     8, 92     Euroclear                                         ii, 38
Charged Obligation Documents                     13, 153      Event of Default                                    171
CIS                                                     75    Excess Spread                                         83
Class A Noteholders                              42, 150      Expropriation                                    9, 109
Class A Notes                                     ii, 150     Facility                                         12, 88
Class A Notes Rate of Interest                   24, 161      Facility Agreement                                    88
Class A Original Margin                          24, 163      Facility Agreement                                    18
Class A Step Up Residual Amount                       165     Facility Costs Amount                                 91
Class A Step-Up Amounts                          24, 163      Facility Costs Ledger                             7, 88
Class A Step-Up Margin                       ii, 24, 163      Facility Provider                                18, 88
Class A Step-Up Residual Amount                         26    Final Discharge Date                                  22
Class B Note Residual Amount                     26, 165      Final Maturity Date                               8, 19
Class B Noteholders                              42, 150      Financial Agent                                     112
Class B Notes                                     ii, 150     First Interest Payment Date                           22
Class B Notes Rate of Interest                   24, 161      Fitch                                            iv, 19
Class B Original Margin                          24, 163      Floating Rate Interest Period                         23
Class B Step-Up Amounts                          24, 163      FSMA                                                184
Class B Step-Up Margin                                   ii   Gazprom                                               76
Class C Note Residual Amount                     26, 165      GDP                                                   73
Class C Noteholders                              42, 150      Government                                          112
Class C Notes                                     ii, 150     Host Government                                  9, 109
Class C Notes Rate of Interest                          24    hryvnia                                               vii
Clean-up Call                                           28    Hryvnia                                               vii
Clearing Systems                                      148     IBRD                                                112
Clearstream                                         ii, 38    IFSRA                                                 iii
Income Deficiency                                 11, 84     OLTV                                                    118
Indirect Participants                                 148    Originator                                                 2
Initial Assets                                          2    Participants                                            148
Initial Assets Eligibility Criteria                     3    Paying Agency Agreement                                 150
Initial Available Revenue                              84    Paying Agent                                      18, 150
Initial Purchaser                            ii, 19, 184     PECO Holder                             15, 18, 38, 93
Initial Transfer Date                                  20    Pledge Claims                                              3
Initial Transfer Date                                   2    Pledge Law                                                54
Insolvency Proceedings                                 22    Pledged Collateral                                        65
Instalment                                             37    Pledges                                             2, 116
Instalment Due Date                                    37    Pool                                                5, 121
Insurance Contract                                     59    Pool 1                                              5, 121
Insurer                                                59    Pool 1 Initial Assets                               5, 121
Interest Amount                                       163    Pool 1 Subsequent Assets                            5, 121
Interest Payment Date                        ii, 22, 161     Pool 2                                              5, 121
Interest Period                                   ii, 161    Pool 2 Initial Assets                               5, 121
Interest Rate Cap                                      89    Pool 2 Subsequent Assets                            5, 121
Interest Rate Cap Agreement                             9    Pool Concentration                                  5, 120
Interest Rate Cap Agreement                            89    Pool Factor                                             166
Interest Rate Cap Notional Amount                      89    Portfolio Cumulative Net Default Ratio                    21
Interest Rate Cap Provider                          9, 89    Portfolio Cumulative Net Default Ratio Event              21
Interest Shortfall                               27, 165     Post-Enforcement Call Option                              38
International Financial Reporting Standards           113    Post-Enforcement Priority of Payments                     29
ISE                                                   188    Post-Enforcement Priority of Payments                     35
Issue Date                                   ii, 19, 150     Post-Enforcement Priority of Payments                   158
Issuer                                       ii, 15, 150     Pre-Enforcement Priority of Payments                       7
Issuer Account                                      6, 87    prescribed part                                           45
Issuer Account Bank Agreement                     17, 87     PRI Event                                           9, 109
Issuer Corporate Account                          17, 87     PRI Ledger                                            7, 86
Issuer Corporate Account Agreement                17, 87     PRI Policy                                     iii, 9, 109
Issuer Margin                                          31    PRI Provider                              iii, vi, 9, 109
KfW                                                   112    PRI Reserve Fund                                    11, 85
Lead Manager                                iii, 19, 184     PRI Reserve Required Amount                         11, 85
Ledger                                                  7    PRI Side Agreement                                10, 110
Ledgers                                                 7    Principal Addition Amount                                 85
LIBOR                                                  24    Principal Amount Outstanding           3, 25, 133, 166
Loan Claims                                             3    Principal Deficiency Ledger                                7
Loan Transfer Notice                                   56    Principal Ledger                                      7, 83
Loans                                             2, 116     Principal Loss                                            37
Master Definitions Schedule                           150    Principal Priority of Payments                             7
Master Securitisation Deed                            150    Principal Receipts                                    6, 83
Maximum Pool Concentration                        5, 121     Principal Recovery                                        37
Member States                                          vii   Priority of Payments                                    152
Minimum Pool Weighted Average Interest Rate 5, 121           PrivatBank                                                15
Modelling Assumptions                                 146    Property Rights Pledge Agreement                  13, 150
Moody's                                            iv, 19    Prospectus Directive                                      iii
Motor Vehicles                                    2, 116     Prudent Lender                                            49
Naftogas                                               76    Purchase Price                                             3
NATO                                                   74    Purchase Termination Event                                20
NBU                                                    45    Qualified Institution                                     89
NBU Letter                                             62    Quarterly Asset Manager's Report                           6
NERC                                                   76    Rate of Interest                                    ii, 161
New York Convention                                    82    Rating Agencies                                           iv
Nominee Declaration of Trust                           18    Record Date                                             169
Nominee Trustee                              15, 18, 93      Recovery                                                  21
Non-Resident Noteholder                               180    Reference Bank                                          164
non-U.S. persons                                        ii   Reference Banks                                         164
Note Principal Payment                           27, 166     Register                                                151
Noteholder                                            150    Registrar                                         19, 150
Noteholders                                       ii, 150    Regulation 369                                            69
Notes                                             ii, 150    Regulation S                                               ii
Offer                                                   4    Regulation S Global Certificate                       ii, 38
Official List                                          iii   Regulation S Global Certificates                     iii, 38
relevant date                                       171    Standard Form Pledge Agreement                2, 116
Relevant Implementation Date                        184    Standby Asset Management Account                  88
Relevant Margin                                     163    Standby Asset Management Agreement                16
Relevant Member State                               184    Standby Asset Manager                             16
Relevant Screen                                     176    Standby Asset Manager Termination Event           50
Reserve Fund                                    11, 85     State Registration                               131
Reserve Fund Required Amount                    11, 85     Statutory Change Registration Term                55
Reserve Interest Rate                               162    Step-Up Amounts                              24, 163
Reserve Ledger                                    7, 86    Step-Up Date                             ii, 24, 163
Resident Noteholder                                 180    Subscription Agreement                       19, 184
Residual Revenue                                     86    Subsequent Assets                                   2
Revenue Addition Amount                         31, 85     Subsequent Assets Eligibility Criteria              3
Revenue Ledger                                    7, 83    Subsequent Transfer Date                          20
Revenue Priority of Payments                          7    Substitute Assets                                137
Revenue Receipts                                  6, 83    Tax Residence Certificate                        181
Revolving Period                                     20    TMF Trustee                                        vi
Revolving Period Principal Priority of Payments 7, 156     Tranche A                                     12, 88
Revolving Period Revenue Priority of Payments 7, 154       Tranche B                                     12, 88
S&P                                                  77    Transaction Documents                        19, 159
Sale Agreement                                        2    Transfer                                          56
Screen Rate                                         162    Transfer Date                                     20
Secured Creditors                                    19    Transfer Notice Date                              59
Securities Act                                        ii   Transparency Directive                            70
Security                                       13, 152     Treaty                                            vii
Senior Expenses                                   9, 85    Trust Deed                                   16, 150
Senior Noteholders                                  150    Trustee                                16, 111, 150
Senior Notes                                    ii, 150    Trustee Pledge                                    65
Set-Off Reserve Fund                            12, 86     U.S.                                              71
Set-Off Reserve Ledger                                7    U.S. dollars                                      vii
Set-Off Reserve Required Amount                 12, 86     U.S.$                                             vii
Share Declaration of Trust                      15, 18     UAH                                               vii
Share Trustee                                   15, 18     UBS                                               iii
SME Programme                                       112    Ukrainian Accounting Standards                   112
SPV                                                 111    Ukreximbank                                   vi, 16
Standard Form Loan                                   54    United States                                     vii
Standard Form Loan Agreement                    2, 116     Valuation Date                                   123
Standard Form Pledge                                 54    Warranties                                   52, 133
                     STEADFAST INSURANCE COMPANY
           Administrative Office: 1400 American Lane, Schaumburg, Illinois 60196-1056
                    Underwritten through: Zurich Emerging Markets Solutions

                                   INSURANCE POLICY FOR
                                      EXPROPRIATION
                                           AND
                                CURRENCY INCONVERTIBILITY

                                           DECLARATIONS


                                                       Policy No. 90-42-438

Item 1a.       Insured and Issuer:                     Ukraine Auto Loan Finance No. 1 PLC

               Address:                                Pellipar House, 1st Floor
                                                       9 Cloak Lane
                                                       London EC4R 2RU
                                                       United Kingdom

Item 1b.       Trustee and Loss Payee:                 TMF Trustee Limited, not in its individual personal
                                                       capacity, but solely as the trustee for holders of the Insured
                                                       Notes, or any successor trustee for the holders of the
                                                       Insured Notes, the Trustee having been appointed by the
                                                       Insured to represent the interests of the holders of the
                                                       Insured Notes, pursuant to the Trust Deed (as such terms
                                                       are defined below)

Item 2.        Asset Manager:                          Closed Joint Stock Company Commercial Bank
                                                       "PrivatBank"

               Address:                                50 Naberezhna Peremohy Street
                                                       Dnipropetrovsk 49094 Ukraine

Item 3.        Host Country:                           Ukraine

Item 4.        Transaction:                            The issuance and sale of the Insured Notes. The Insured
                                                       will use the proceeds of the sale of the Insured Notes to
                                                       purchase a portfolio of Assets from PrivatBank

Item 5.        Principal Amount of Insured Notes:      U.S.$ 85,800,000

Item 6.        Insured Notes:                          Class A Asset Backed Floating Rate Notes due
                                                       November 2018 of the Insured issued on 29 May 2008

Item 7.        Maximum Aggregate Limit of Liability:   U.S.$ 9,094,800

Item 8.        Limit of Liability per coverage:        See Exhibit A

Item 9.        Insured Percentage of the Insured Notes: 100%




                                                                                                      A- 1
Item 10.        Policy Period:                           From: 29 May 2008
                                                         To: 20 November 2018
                (12:01 a.m. Standard Time at the Address of the Insured above in Item 1.)



Item 11.        Policy Currency:                           United States dollars

Item 12.        Waiting Period:                            180 days

Item 13.        Estimated total net premium and fees
                for the Policy Period:                     U.S.$ 204,633.00


Minimum premium for the period shall be U.S.$ 204,633.00 fully earned and payable at inception.

Adjustment premium will be paid on an annual basis beginning with the eighth anniversary of the policy
through the end of the Policy Period. Adjustment premium shall be charged at a per annum rate of 0.75 %
and will be assessed on the insured exposure estimated for the subsequent twelve months. Adjustment
premium shall be paid annually in advance.

By acceptance of this Insurance Policy, the Insured represents to the Underwriter that the statements made by
the Insured contained in the Declarations, the Contract and the Application for Insurance (together the
Declarations, Endorsements and Contract constitute the "Insurance Policy") are the Insured's agreements
and representations and that this Insurance Policy and the Agreement Regarding the Insurance Policy for
Expropriation and Currency Inconvertibility comprise the entire agreement between the Insured and the
Underwriter or any of the Underwriter's agents relating to this insurance. At issuance, this Insurance Policy
includes no Endorsements.

Broker:         USI Southwest
Address:        Three Memorial City Plaza
                840 Gessner Suite 600
                Houston, Texas 77024




                                                                                                        A- 2
IN WITNESS WHEREOF, the Underwriter has caused this Insurance Policy to be signed by its authorized
officers, but this Insurance Policy shall not be valid unless countersigned by a duly authorized representative
of the Insured.



Underwriter:    ____________________________________                       Date: _________




Insured:        ____________________________________                     Date: _________
                (print name and title)

                ____________________________________
                             (signature)




                                                                                                           A- 3
                   ENDORSEMENTS


At issuance this Insurance Policy contains no Endorsements.




                                                              A- 4
                          STEADFAST INSURANCE COMPANY

                                     CONTRACT FOR
                                   EXPROPRIATION AND
                                CURRENCY INCONVERTIBILITY
                                       (the "Contract")

In consideration of the payment of premiums and in reliance upon the written information provided and
statements made by the Insured in the Application for Insurance to Steadfast Insurance Company (the
"Underwriter"), and subject to the Declarations and Endorsements made a part hereof, and the terms,
conditions and limitations set forth in this Contract, the Insured and the Underwriter agree as follows:


ARTICLE I. INSURING AGREEMENT

1.1     The Underwriter shall be liable and shall pay Compensation to the Insured, subject to the exclusions
and limitations set forth in this Insurance Policy, for the Insured Percentage of the Insured's Loss caused

        (a)     principally and directly by an Expropriation; and/or

        (b)     solely and directly by Currency Inconvertibility

                and for which the Date of Loss occurs during the Policy Period.

1.2     Compensation shall be determined pursuant to Article IV herein.


ARTICLE II. DEFINITIONS

2.1     "Agreement Regarding the Insurance Policy for Expropriation and Currency Inconvertibility"
means the Agreement Regarding the Insurance Policy for Expropriation and Currency Inconvertibility dated
as of 29 May 2008, among the Underwriter, the Trustee, the Insured and the Asset Manager.

2.2    "Application for Insurance" means the Insured's "Application for Political Risk Insurance" dated as
of 28 May 2008, along with all supporting documentation submitted by the Insured regarding the
Transaction and the Insured Notes, including the Prospectus and the complete copies of the executed
Transaction Documents.

2.3     "Asset Manager" is the entity listed in Item 2 of the Declarations and is the Originator of the Assets
involved in the transaction and the administrator of such Assets on behalf of the Insured. The term Asset
Manager shall include the current Asset Manager listed in Item 2 above, provided that if a subsequent asset
manager (which is not the Standby Asset Manager) is appointed, such subsequent asset manager has been
previously approved by the Underwriter, and further provided that such subsequent asset manager (including
the Standby Asset Manager) so approved accept the terms, conditions, and obligations of the Asset Manager
under the Agreement Regarding the Insurance Policy for Expropriation and Currency Inconvertibility.

2.4     "Assets" means all of the rights of claim (prava vymogy), whether current or future, actual or
contingent, of the Originator as lender against the borrower under a loan, including, without limitation, the
rights of claim in respect of payment of principal, interest and any and all other amounts under a loan (the
"Loan Claims") and all of the rights of claim (prava vymogy), whether current or future, actual or


                                                                                                         A- 5
contingent, of the Originator as pledgee against the borrower as pledgor under the pledge securing a loan (the
"Pledge Claims").

2.5     "Claim" means the Insured's written claim for Compensation submitted in accordance with the
procedures and requirements of Article VII herein.

2.6     "Compensation" means the amount payable to the Insured for a Loss as defined in this Insurance
Policy. The amount to be paid by the Underwriter shall be determined pursuant to Article IV herein.

2.6.1   "Currency Inconvertibility" is defined in Section 3.2 herein.

2.7      "Date of Loss" means a date occurring during the Policy Period, and shall be the later of
(i) the original due date of the Scheduled Payment which corresponds to the Insured Payment that is the
subject of a Claim, and (ii) the date on or before the Insured or the Asset Manager first attempts to convert
Local Currency or transfer Policy Currency in order to make a Scheduled Payment which corresponds to an
Insured Payment or, in the case of acceleration, early redemption or prepayment of the Notes, the Date of
Loss shall be the date of such acceleration, or the date of such attempted early redemption or prepayment.

2.8     "Expropriation" is defined in Section 3.1 herein.

2.9     "Host Country" is identified in Item 3 of the Declarations.

2.10    "Host Government" means:

        (a)   the present or any succeeding government authority (without regard to the method of its
              succession or as to whether it is internationally recognized) in effective control of all or any
              part of the territory of the Host Country or any political or territorial subdivision thereof
              (including any dependent territory), including for the avoidance of doubt but without limitation
              the National Bank of Ukraine or its agency or successor; and/or

        (b)   any other public authority in or of the Host Country on which regulatory powers are conferred
              by the laws of the Host Country.

2.11   "Insured" is the entity identified in Item 1a of the Declarations, and is the issuer of the Insured
Notes pursuant to the and is the Insured under this Insurance Policy.

2.12    "Insured Notes" means the notes described in Item 6 of the Declarations that are subject to Loss
under this Insurance Policy and are the obligations issued by the Insured pursuant to the Trust Deed.

2.13     "Insured Payment" means a payment by the Insured, in accordance with the Trust Deed in respect
of a corresponding Scheduled Payment.

2.14    "Insured Percentage" means the percentage of the interest due and payable in respect of the Insured
Notes insured under this Insurance Policy as set forth in Item 9 of the Declarations.

2.15   "Issuer" is the entity listed in Item 1a of the Declarations, and is the issuer of the Insured Notes
pursuant to the Trust Deed and is the Insured under this Insurance Policy.

2.16    "Limit of Liability" means at any time the maximum amount of Compensation that the Underwriter
will pay for any Loss, subject to the Maximum Aggregate Limit of Liability over the Policy Period. The
Limit of Liability and the corresponding coverage period is set forth in Exhibit A. The Limit of Liability in
effect on the Date of Loss shall be reduced automatically by the amount of any Compensation paid by the
Underwriter to the Insured under this Insurance Policy.

2.17    "Local Currency" means the currency of the Host Country.




                                                                                                         A- 6
2.18    "Loss" means an Unfunded Insured Payment caused by a Political Risk Event, and for which the
Insured seeks Compensation under this Insurance Policy.

2.19    "Loss Payee" is the entity listed in Item 1b of the Declarations and is the Trustee or any of its
successors, assigns, or transferees pursuant to the Trust Deed.

2.20    "Maximum Aggregate Limit of Liability" means the amount set forth in Item 7 of the
Declarations.

2.21    "Noteholder(s)" means the person(s) or entity(-ies) from time to time holding the Insured Notes
(including beneficial interests therein).

2.22    "Policy Currency" means the currency identified in Item 11 of the Declarations.

2.23    "Policy Period" means the period set forth in Item 10 of the Declarations.

2.24    "Political Risk Event" means an Expropriation or Currency Inconvertibility, as defined in Sections
3.1 and 3.2, respectively, either or both of which (or any combination thereof) continues and is in effect
during each day of the Waiting Period.

2.25     "Prospectus" means the prospectus dated 29 May 2008 issued in relation to the issue by the Insured
of the Insured Notes.

2.26     "PRI Reserve Fund" means the PRI Reserve Fund in an amount (the "PRI Reserve Required
Amount") equal to the sum of: (i) the aggregate Principal Amount Outstanding of the Insured Notes at the
immediately preceding Interest Payment Date multiplied by the average of: (x) the Interest Rate Cap, and
(y) the Step Up Margin of the Insured Notes and (ii) the Senior Expenses outstanding on any Determination
Dates, funded through the part of the Tranche B of the Facility and held by the Insured for the benefit of the
Noteholders.

2.27    "Reference Rate of Exchange" means (i) the official exchange rate applied by the central bank or
equivalent entity of the Host Country for the category of remittance that is the subject of a Claim; or, (ii) if
the central bank or equivalent entity does not freely execute conversions of Local Currency into Policy
Currency for such category of remittance, then the Reference Rate of Exchange shall be the effective
exchange rate obtained through the most active legal and normal channel in the Host Country for conversion
of Local Currency into Policy Currency for the category of remittance that is the subject of a Claim. The
most active legal and normal channel shall be agreed by the Underwriter and the Insured. If no exchange
rate can be determined pursuant to (i) or (ii) above, the Reference Rate of Exchange shall mean the last
available official exchange rate applied by the central bank or equivalent entity of the Host Country prior to
the Date of Loss.

2.28    "Scheduled Payment" means all amounts of (A) interest due and payable on the Insured Notes
pursuant to the terms of the Trust Deed and the Insured Notes on (i) the original payment dates set forth in
the Trust Deed (as such payment dates are set forth in Exhibit B hereto), and (ii) payment dates for the
Insured Notes which are established pursuant to the provisions set forth in the Trust Deed allowing for the
extension of the maturity date of the Insured Notes, and, in the case of both (i) and (ii), without regard to any
acceleration, early redemption, or prepayment of the Insured Notes pursuant to the terms of the Trust Deed
and Insured Notes and (B) payable under items (i) (one) to (v) (five) (inclusive) (other than any amounts
payable to the Asset Manager or the Standby Asset Manager) of the Revolving Period Revenue Priority of
Payments (as defined in the Trust Deed) up to an amount equal to approximately U.S. $135,000.

2.29   "Security" means the security created in favour of the Trustee by, and contained in or granted
pursuant to the Deed of Charge and the Property Rights Pledge Agreement together.
2.30   "Standby Asset Manager" means Joint Stock Company "The State Export Import Bank of Ukraine".




                                                                                                            A- 7
2.31    "Transaction" means the transaction described in Item 4 of the Declarations and as further described
in the Application for Insurance.

2.32    "Transaction Documents" means the Insured Notes, as described in Item 6 of the Declarations, the
Trust Deed, the Master Securitisation Deed, the Deed of Charge, the Property Rights Pledge Agreement, the
Subscription Agreement, the Paying Agency Agreement, the Facility Agreement, the Asset Management
Agreement, the Cash Management Agreement, the Standby Asset Management Agreement, the Sale
Agreement, the Post Enforcement Call Option Agreement, the Interest Rate Cap Agreement, the Data
Custodian Agreement, the Corporate Services Agreement, the Issuer Corporate Account Agreement, the
Issuer Account Bank Agreement, the PRI Policy and the Agreement Regarding the Insurance Policy for
Expropriation and Currency Inconvertibility, each as defined in the Prospectus, the complete copies of which
have been provided to the Underwriter.

2.33    "Trustee" is the entity described in Item 1b of the Declarations, not in its individual personal
capacity, but solely as the trustee for the Noteholders, or any successor trustee for the Noteholders, the
Trustee having been appointed by the Insured to represent the interests of the Noteholders, pursuant to the
Trust Deed. The Trustee is also the Loss Payee under this Insurance Policy.

2.34    "Trust Deed" means the document providing for the issuance of the Insured Notes by the Insured to
the Noteholders, dated as of 29 May 2008, as amended or modified from time to time in accordance with the
terms thereof.

2.35    "Unfunded Insured Payment" means, with respect to any Scheduled Payment, the failure of the
Insured to make an Insured Payment, in accordance with the Trust Deed, due to an event of Currency
Inconvertibility or Expropriation.

2.36    "Uninsured Notes" means the Class B Asset Backed Floating Rate Notes due November 2018 and
the Class C Asset Backed Fixed Rate Notes due November 2018 issued by the Insured, or any other notes
which may be issued, from time to time, by the Insured.

2.37    "Waiting Period" means the period set forth in Item 12 of the Declarations, which period shall
commence on the Date of Loss; provided that, for the avoidance of doubt, if the Date of Loss occurs during
the Policy Period, the Waiting Period for a Political Risk Event for which the Underwriter may be liable to
pay Compensation may expire after the expiration of the Policy Period.

         All other terms that appear in this Contract, the Declarations and the Endorsements have the
definitions assigned to them as they appear in those documents.


        ARTICLE III. POLITICAL RISK EVENTS

3.1     Expropriation

         An Expropriation means an act or series of acts taken by the Host Government that effectively
deprives the Insured, the Trustee, or the Asset Manager acting for the benefit of the Insured or (following
delivery of an Enforcement Notice) the Trustee or the Standby Asset Manager acting for the benefit of the
Insured or (following delivery of an Enforcement Notice) the Trustee of the use and control of funds
deposited (either in Local Currency or Policy Currency) by or for the benefit of the Insured, the Trustee, the
Asset Manager acting for the benefit of the Insured or (following delivery of an Enforcement Notice) the
Trustee or the Standby Asset Manager or the Standby Asset Manager acting for the benefit of the Insured or
(following delivery of an Enforcement Notice) the Trustee, with a financial institution in the Host Country,
for the purpose of making an Insured Payment, causing an Unfunded Insured Payment; provided that such
act or acts continue for the duration of at least the Waiting Period.

3.2     Currency Inconvertibility

        Currency Inconvertibility means:


                                                                                                         A- 8
        (a)   an act or series of acts by the Host Government that prevents the Insured, the Trustee, the
              Asset Manager acting for the benefit of the Insured or (following delivery of an Enforcement
              Notice) the Trustee or the Standby Asset Manager acting for the benefit of the Insured or
              (following delivery of an Enforcement Notice) the Trustee, for the duration of at least the
              Waiting Period, from directly or indirectly:

              (i)    converting Local Currency into Policy Currency in order to make an Insured Payment or
                     a portion thereof, including the denial of such conversion in an exchange rate category
                     as favorable as the category applicable to determine the Reference Rate of Exchange; or

              (ii)   transferring outside of the Host Country the U.S. dollar funds including funds converted
                     from Local Currency into Policy Currency as described in (i) above already converted
                     from Local Currency into Policy Currency constituting all or any portion of an Insured
                     Payment; or

        (b) failure by the Host Government (or by entities authorized under the laws of the Host Country to
            operate in the foreign exchange markets) to effect a conversion or transfer under (a) above on
            behalf or at the request of the Insured, the Trustee, the Asset Manager, or the Standby Asset
            Manager.


ARTICLE IV. COMPENSATION FOR POLITICAL RISK EVENTS

4.1     Expropriation

         In the event of Expropriation, the Compensation for a Loss shall be the Insured Percentage of the
lesser of (i) the Policy Currency, or the Policy Currency equivalent of the Local Currency calculated at the
Reference Rate of Exchange in effect on the Date of Loss, of which the Insured, the Trustee, or the Asset
Manager is deprived, or (ii) the amount of the Scheduled Payment corresponding to the Unfunded Insured
Payment. The Policy Currency is the currency of any Compensation payable by the Underwriter to the
Insured.

4.2     Currency Inconvertibility

        In the event of Currency Inconvertibility, the Compensation for a Loss shall be the Insured
Percentage of the Policy Currency equivalent of Local Currency constituting an Insured Payment that could
not be converted; or the Insured Percentage of the amount in Policy Currency constituting an Insured
Payment that could not be transferred. The Policy Currency equivalent shall be determined using the
Reference Rate of Exchange in effect on the Date of Loss. The Policy Currency is the currency of any
Compensation payable by the Underwriter to the Insured.

4.3     Adjustments

        (a)   Compensation for any Loss shall be adjusted for any compensation received by the Insured,
              the Trustee, the Asset Manager or the Standby Asset Manager from the Host Government or
              any other source on account of the Loss, excluding (i) compensation received by the Insured,
              the Trustee, or the Asset Manager in any currency that is not freely convertible into Policy
              Currency; (ii) compensation received by the Insured, the Trustee, or the Asset Manager in
              Policy Currency which is not transferable outside the Host Country; and (iii) any amounts
              withdrawn from the PRI Reserve Fund and paid to the Noteholders by the Insured in
              accordance with the provisions of the Trust Deed. Compensation for any Loss shall not
              exceed the Limit of Liability for the respective coverage on the applicable Date of Loss. In no
              event shall the total amount of Compensation paid by the Underwriter under this Insurance
              Policy exceed the Maximum Aggregate Limit of Liability.

        (b)   No Compensation shall be paid for penalty interest or penalty fees for late payment.


                                                                                                        A- 9
       (c)   In the event of a Claim under this Insurance Policy, if (i) the Insured has issued Uninsured
             Notes, and (ii) subsequent to the Date of Loss for the Unfunded Insured Payment that is the
             subject of the Claim, the Insured makes a payment in respect of the Uninsured Notes, then in
             determining the amount of Compensation, the Underwriter may reduce the amount of
             Compensation by an amount which bears the same proportion to the Compensation as the
             payment to the Uninsured Notes bears to the sum of the outstanding amount of the Insured
             Notes and the Uninsured Notes. Should the Insured have made a payment on such Uninsured
             Notes before its original due date and after the occurrence of a Political Risk Event, the total
             amount of such payment shall be deducted from any Compensation payable by the
             Underwriter. For the purposes of this Section 4.3(c), a payment made by the Insured in respect
             of any Uninsured Notes, which payment derives from the cash proceeds of any collateral or
             other security that was provided by the Insured to secure the Uninsured Notes only and is
             directly related to such Uninsured Notes shall not be subject to the above allocation and
             deduction.

4.4    Acceleration, Redemption and Prepayment

       (a)   The Underwriter shall pay Compensation for an Unfunded Insured Payment in accordance
             with either (i) the respective due dates for such Unfunded Insured Payments corresponding to
             such Scheduled Payments (as set forth in Exhibit B hereto) or (ii) such other due dates for such
             Unfunded Insured Payments as may be provided for pursuant to the terms of the Trust Deed.
             An acceleration, early redemption or prepayment of a Scheduled Payment, if permitted under
             the Trust Deed, shall not give rise to a corresponding acceleration, early redemption or
             prepayment of the Underwriter's obligation to pay Compensation hereunder. However, if a
             Scheduled Payment is accelerated, redeemed early or prepaid in accordance with the Trust
             Deed, and the Insured files a Claim for such accelerated or attempted redeemed or prepaid
             amount, the Underwriter, at its sole discretion, shall have the option, subject to the provisions
             of Section 7.1(a)(ii) of this Insurance Policy, to accelerate or prepay any Compensation for the
             Claim. For the avoidance of doubt, the Underwriter has no ability to require the acceleration,
             prepayment, or redemption of the Insured Notes.

       (b)   Notwithstanding Section 4.4(a) herein, for Scheduled Payments that are accelerated or which
             are attempted to be prepaid or redeemed:

             (i)    the Date of Loss shall be the date of such acceleration, or the date of such attempted
                    redemption or prepayment;

             (ii)   the Waiting Period for Currency Inconvertibility shall commence on the later of (A) the
                    date of such acceleration or redemption or the date such prepayment is to be made, or
                    (B) the date on which the Insured, the Trustee, or the Asset Manager first attempts to
                    convert or transfer the currency pursuant to Section 3.1 herein; and

             (iii) the amount of Compensation shall include (A) accrued and unpaid interest accrued until
                   the date of acceleration or the date of the attempted redemption or prepayment, and (B)
                   subject to the limitations on the total amount of Compensation payable under this
                   Insurance Policy, as such limitations are set forth in Section 4.5 hereof, all other
                   amounts due on the Insured Notes as a result of such acceleration, provided, however,
                   for the avoidance of doubt, that no Compensation shall be paid for penalty interest or
                   penalty fees.

4.5    Maximum Aggregate Limit of Liability

        The amount of Compensation paid by the Underwriter under this Insurance Policy shall not exceed
the Maximum Aggregate Limit of Liability, regardless of the number of Losses incurred or the Policy
Period.



                                                                                                         A-10
4.6     Payment of Compensation

        Compensation paid by the Underwriter under this Insurance Policy shall be paid to the Loss Payee,
for application in accordance with the Trust Deed.

ARTICLE V. EXCLUSIONS

5.1     The Underwriter shall not pay Compensation for any Loss in the event that the Loss was caused by,
or arose from:

        (a)   the Insured's or the Asset Manager's failure to comply with the laws of the Host Country
              applicable to any of them, or from any failure of the Asset Manager to comply with applicable
              environmental, public health and worker safety standards of the Host Country. Failure of the
              Asset Manager to comply with the unreasonable requirements of national or local authorities
              in the Host Country, the stringency of which exceeds that of the comparable environmental,
              public health or worker safety standards of the Host Country, shall not be deemed a failure
              within the meaning of this exclusion;

        (b)   the Insured's material breach of the terms of this Insurance Policy or a material
              misrepresentation by the Insured under this Insurance Policy or in its Application for
              Insurance;

        (c)   the Insured or the Asset Manager or their representatives engaging in any criminal activities,
              or unreasonable actions which provoke the Host Government to the extent that it takes action
              against the Transaction which causes or contributes to a Loss;

        (d)   nuclear reaction, nuclear radiation or radioactive contamination, or the dispersal or application
              of pathogenic, toxic or poisonous biological or chemical elements, under any circumstance,
              including, but not limited to:

              (i)    ionizing radiations from or contamination by radioactivity from any nuclear fuel or from
                     any nuclear waste or from the combustion of nuclear fuel;

              (ii)   the radioactive, toxic, explosive or other hazardous or contaminating properties of any
                     nuclear installation, reactor or other nuclear assembly or nuclear component thereof; or

              (iii) any weapon employing atomic or nuclear fission or fusion or other like reaction or
                    radioactive force or matter, or pathogenic, toxic or poisonous biological or chemical
                    elements;

        (e)   the insolvency, bankruptcy or material financial default of the Insured or the Asset Manager;
              or

        (f)   the material breach by the Insured or the Asset Manager of any contractual agreement with the
              Host Government; the material breach by the Host Government of any contractual agreement
              with the Insured or the Asset Manager; or the Host Government acting in a commercial
              capacity such as a supplier, creditor, shareholder, director or manager of, or purchaser from,
              the Asset Manager.

5.2     An act or series of acts taken by the Host Government which constitutes a bona fide non-
discriminatory measure of general application of a kind that governments normally take in the public interest
shall not be the basis for a Claim of Expropriation.

5.3   No Claim of Currency Inconvertibility shall be accepted or recognized by the Underwriter, and the
Underwriter shall accordingly have no liability under Currency Inconvertibility:




                                                                                                          A-11
        (a)   if the Insured or the Asset Manager would have been unable legally to convert Local Currency
              or transfer Policy Currency at the inception of the Policy Period;

        (b)   if the Insured or the Asset Manager fails to exercise all reasonable efforts to convert Local
              Currency or transfer Policy Currency during the Waiting Period through all lawful
              mechanisms that the Insured or the Asset Manager acting in a reasonable manner could have
              used in the absence of this coverage;

        (c)   if the Insured or the Asset Manager fails to attempt to initiate the conversion or transfer of
              currency pursuant to Section 3.2 herein within twenty (20) days following the due date of the
              Insured Payment;

        (d)   if the currency which cannot be converted or transferred has been the subject of an
              expropriatory action under Section 3.1 herein (in which case a Claim of Expropriation may be
              submitted); or

        (e)   solely for devaluation or fluctuation of the Local Currency.


ARTICLE VI. REPRESENTATIONS, WARRANTIES AND COVENANTS

6.1     The Insured represents, warrants and/or covenants that:

        (a)   as of the date of execution of this Insurance Policy it had no actual knowledge of any
              circumstance which would reasonably be expected to give rise to a Loss under this Insurance
              Policy;

        (b)   all the information that the Insured has provided regarding itself, as the Insured, in the
              Application for Insurance, and that the Insured will provide to the Underwriter in written form,
              is true and correct in all material respects and that no material information has been or will be
              withheld;

        (c)   it has or will obtain valid licenses and permits for the Transaction as required by law and will
              make all applications as required by law to extend, renew or modify such licenses to comply
              with any new requirement promulgated during the Policy Period;

        (d)   it will notify the Underwriter immediately, and in no event after more than thirty (30) days,
              following the occurrence of any event which could give rise to a Claim; and

        (e)   it will, and will use its reasonable efforts, within its rights and authority under the Trust Deed
              and each other Transaction Document, to demand that the Asset Manager (i) take all
              reasonable steps to avoid or minimize any Loss; (ii) cooperate fully with the Underwriter in
              the investigation of any Claim, the resolution of any potential Claim situation and the pursuit
              of any Claim salvage; and (iii) not enter into any agreement concerning a Loss or potential
              Loss without the Underwriter's prior written consent. Prior to any Compensation payment,
              subject to its rights and authority under the Trust Deed and each other Transaction Document,
              and in consultation with the Underwriter, the Insured will, and will use its reasonable efforts to
              demand that the Asset Manager (i) pursue all reasonable diplomatic, legal, administrative,
              judicial and other legal means which may be reasonably available to minimize or recover any
              Loss, and (ii) preserve any legal, judicial and administrative remedies applicable to any Claim
              and furnish reasonable assistance in maintaining any rights or property transferred to the
              Underwriter.

6.2      If there are any material breaches or material misrepresentations (i) of the above by the Insured, or
(ii) under the Agreement Regarding the Insurance Policy for Expropriation and Currency Inconvertibility by
the Asset Manager, the Underwriter may void this Insurance Policy, retain the premium paid and refuse to
compensate the Insured for any Loss.


                                                                                                           A-12
6.3     The Underwriter covenants that it shall pay when due any insurance premium tax applicable to this
PRI Policy and to the Agreement Regarding the Insurance Policy for Expropriation and Currency
Inconvertibility to the HMRC in accordance with applicable UK tax laws.


ARTICLE VII. CLAIMS AND SUBROGATION

7.1     Submission of a Claim

      (a)     (i) The Insured must notify the Underwriter within thirty (30) days of the occurrence of any
              event that could reasonably be expected to give rise to a Claim. The Insured must file a
              written Claim within the period from ninety (90) to hundred and fifteen (115) days after the
              Date of Loss, which Claim must demonstrate to the Underwriter that the Loss was caused by a
              Political Risk Event as defined in this Insurance Policy. Notwithstanding any other provision
              of this Insurance Policy, if a Loss occurs, the Underwriter may demand a Claim filing and an
              assignment and subrogation under Section 7.4 herein, within ten (10) working days, from the
              day of a Claim filing, in exchange for contemporaneous Compensation;

        (b)   The Insured must provide any additional evidence, as reasonably requested by the
              Underwriter, in order to prove the Claim. If the Insured does not provide the additional
              evidence, as reasonably requested by the Underwriter, within thirty (30) days of the date of the
              request, then the Underwriter shall extend the date on which it pays Compensation by the
              number of days more than thirty (30) that the Insured required to provide such additional
              evidence, provided that, if the Insured does not provide the additional evidence, as reasonably
              requested by the Underwriter, within sixty (60) days of the date of the request, the Underwriter
              may deem the Claim withdrawn and shall not pay Compensation and the Insured shall not
              submit another Claim based upon the same Political Risk Event. The responsibility for
              proving a Claim under this Insurance Policy shall at all times rest with the Insured; and

        (c)   The Insured may withdraw a Claim. After the Insured has withdrawn a Claim, the Insured
              may not submit another Claim based on the same Loss.

7.2     Determination of the Validity of a Claim

        The Underwriter shall make a determination regarding the Insured's Claim, and shall pay
Compensation, no later than the later of (i) the expiration of the Waiting Period, including any extension of
the expiration date thereof pursuant to this Section 7.2, and (ii) the due date of the next Scheduled Payment
subsequent to the Date of Loss, provided the Insured has submitted a Claim that meets the requirements of
Section 7.1(a) and further provided that the Insured has provided any additional evidence reasonably
requested by the Underwriter pursuant to Section 7.1(b) within thirty (30) days of such request, which
request will be made not later than one hundred fifteen (115) days after the Date of Loss. If the Insured
provides the additional evidence after a period greater than thirty (30) days, then the Underwriter shall
extend the date on which it pays Compensation by the number of days more than thirty (30) that the Insured
was required to provide such additional evidence. The Underwriter shall notify the Insured no less than ten
(10) days prior to the date on which it will pay Compensation.

7.3     Insured's Challenge of the Determination

        Any action arising out of this Insurance Policy must be brought against the Underwriter within
twelve (12) months from the date of the Underwriter's Claim determination or shall be deemed waived.

7.4     Assignment and Subrogation

        (a)   Contemporaneous with any Compensation payment, the Insured shall assign to the
              Underwriter, and the Underwriter shall be subrogated to (i) all of the Insured's rights of
              recovery against any person or organization in respect of the Loss for which the Compensation


                                                                                                         A-13
              is to be paid and (ii) all of the Insured's right, title and interest in, and its right to receive, all or
              part of the Unfunded Insured Payments(s) that is (are) the subject of the Claim. The above
              assignments and subrogation shall be made in proportion to the amount of Loss for which
              Compensation is to be paid. All such assignments shall be free and clear of all claims,
              defenses, counterclaims, rights of setoff and other encumbrances, except for those defenses
              relating to the Political Risk Event. The Insured shall not release the Asset Manager from its
              obligations to make remittances for Insured Payments under the Trust Deed that are the subject
              of a Claim. The Insured shall execute and deliver all instruments and documents and do
              whatever is necessary to secure such rights for the Underwriter. The Insured shall do nothing
              to materially prejudice the Underwriter's rights.

        (b)   In connection with a Claim under Currency Inconvertibility, as a condition for any
              Compensation payment, the Insured must assign and deliver to the Underwriter, by draft,
              subject to collection, or, at the Underwriter's option, in cash, the inconvertible Local Currency
              or nontransferable Policy Currency that is the subject of the Claim. Without prejudice to
              Section 5.3(d) herein, if the Insured is unable legally to deliver such currency to the
              Underwriter, then, in addition to the assignment requirements of Section 7.4(a) above, the
              Insured shall assign to the Underwriter right, title and interest in such currency.


ARTICLE VIII. GENERAL CONDITIONS

8.1     Accounting Principles

        All financial statements and accounts of the Insured, as well as the calculation of any Loss and the
amount of any Compensation payable hereunder, shall be in accordance with the principles of accounting
generally accepted in the Insured's country, consistently applied and as used by the Insured in its certified
financial statements.

8.2     Assignment of Insurance Policy

         This Insurance Policy and any rights thereunder shall not be assigned by the Insured without the
prior written consent of the Underwriter other than the Insured to the Trustee pursuant to the Deed of
Charge; provided, however, that nothing herein is intended to limit the transfer and sale of the Insured Notes,
the transfer or amendment of this Insurance Policy as a result of the replacement of the Trustee, as trustee for
the holders of the Insured Notes, under the terms of the Trust Deed, or the delegation of the Insured's duties
and obligations pursuant to Section 3 of the Agreement Regarding the Insurance Policy for Expropriation
and Currency Inconvertibility.

8.3     Cancellation of this Insurance Policy

         (A) By the Insured: The Insured may cancel this Insurance Policy by providing 30 days prior
             written notice to the Underwriter. For the avoidance of doubt, there shall be no refund of
             premium.

        (B)   By the Underwriter: Except as provided for in Section 6.2, the Underwriter may cancel this
              Insurance Policy only for the nonpayment of premium, provided that the Underwriter provides
              the Insured with 15 days prior written notice of such cancellation in the event the premium is
              not paid within such 15 day period.

8.4     Complete Agreement of the Parties; Amendment and Waivers

        This Insurance Policy constitutes the complete agreement between the parties, superseding any prior
agreements or understandings. No provision of this Insurance Policy may be modified or supplemented
except by a written agreement executed by authorized representatives of the parties. Neither party shall be
deemed to have waived any of its rights under this Insurance Policy, unless expressly so stated in a written
notice by the party waiving such right to the other party.


                                                                                                                  A-14
8.5     Choice of Law

        Any issue relating to the construction, validity or performance of this Insurance Policy shall be governed
by, read, and construed in accordance with the laws of England.

8.6     Disputes and Arbitration

        Any dispute arising out of or in connection with this Policy, including any question regarding its
existence, validity or termination, shall be referred to and finally resolved by arbitration under the Rules of
the London Court of International Arbitration (the "Court"), which Rules are deemed to be incorporated by
reference into this clause.

        The tribunal shall consist of three arbitrator(s). In accordance with the Rules the Insured shall
nominate one arbitrator, the Underwriter shall nominate one arbitrator and the third arbitrator shall be
appointed by the Court.

        The place of arbitration shall be London.

        The language of the arbitration shall be English.

         The arbitral award shall be in writing, state the reasons for the award, and be final and binding on the
parties. Judgment upon the award may be entered by any court having jurisdiction thereof or having
jurisdiction over the relevant party or asset. The Insured and the Underwriter agree that in no event shall the
total amount of any award issued by the Court against the Underwriter exceed the Maximum Aggregate
Limit of Liability in this Insurance Policy.

8.7     Disclosure of Existence of Insurance Policy

        The Insured shall not disclose the details of this Insurance Policy to any third party, with the
exception of the Insured's insurance broker, bankers, rating agencies, the Irish Stock Exchange, potential
investors, the Noteholders, the Asset Manager, and other professional advisors on a confidential basis, and
except as may be required by law, regulation, legal process or bank examiners, without the prior written
consent of the Underwriter, which consent shall not be unreasonably withheld. Notwithstanding the above,
the Insured is permitted to attach a copy of this Insurance Policy as an annex to the Prospectus.

8.8     False or Fraudulent Statement, Reports or Claims; Concealment

        This Insurance Policy shall become void, and all Claims hereunder shall be forfeited, if the Insured
delivers to the Underwriter any written material statement, report, application or Claim, where the Insured
knew that such written statement, report, application or Claim was false or fraudulent, or if the Insured
knowingly conceals any material fact, including, but not limited to, a material change in the Transaction
Documents or in the implementation of the Transaction.

8.9     Insured's Records

         Upon reasonable notice to the Insured, the Underwriter may, at any time, examine or copy any
records in the possession or control of the Insured relating to or connected with this Insurance Policy, the
Insured, the Asset Manager, and the Transaction. The Insured shall maintain all records until the expiration
of the Transaction. The Insured shall, at the reasonable request of the Underwriter, take all reasonable steps
to obtain for the Underwriter any and all of the aforesaid information in the possession of any third party
relating to or connected with this Insurance Policy. The Underwriter shall not disclose such information to
any third party other than to its professional, financial advisors, legal advisors, and reinsurers, and as except
may be required by law, regulations, legal process or insurance regulators, without the consent of the
Insured, which shall not be unreasonably withheld.

8.10    Modifications


                                                                                                            A-15
        The Insured shall not materially modify the Transaction Documents (including, but not limited to,
modifying the repayment terms of the Insured Notes), without the prior written consent of the Underwriter
(which consent shall not be withheld unreasonably), except such modifications, waivers and amendments
which i) do not change materially the Underwriter's rights and obligations, ii) do not change materially any
rights and obligations to which the Underwriter may be subrogated to in the event of a Claim, or iii) do not
change materially the risks to which the Insured is exposed and that are covered under this Insurance Policy.

8.11    Notices

        All notices under any provision of this Insurance Policy shall be in writing and given by prepaid
express courier, certified mail or fax, for the Underwriter, to: Steadfast Insurance Company, c/o Zurich
Emerging Markets Solutions, 1201 F Street, N.W., Suite 250, Washington, DC 20004; fax number (202)
628-2216; for the Insured, to the Insured at the place indicated in the Declarations and at the fax number
provided by the Insured to the Underwriter, with a copy to the Trustee, TMF Trustee Limited, to: Pellipar
House, 1st Floor, 9 Cloak Lane, London EC4R 2RU, United Kingdom; fax number +44 207 376 8959. In
addition to giving notices to the Underwriter, notices specifically related to a Claim under this Insurance
Policy shall be sent by prepaid express courier, certified mail or fax to: Director of Political Risk Claims,
Zurich CWS, P.O. Box 307010, Jamaica, NY 11430-7010; fax number (212) 732-7659. Notice given as
described above shall be deemed to be received and effective upon actual receipt thereof by the addressee or
one day following the date such notice is sent, whichever is earlier.

8.12    Other Insurance

        If the Insured has any bond, indemnity or insurance which would cover a Loss in whole or in part in
the absence of this Insurance Policy, then this Insurance Policy shall be null and void to the extent of the
amount that could have been recovered or received under such other bond, indemnity, or insurance.
However, this Insurance Policy shall cover such Loss, subject to its exclusions, conditions and other terms,
only to the extent of the amount of such Loss in excess of the amount recoverable or received under such
other bond, indemnity or insurance. For the avoidance of doubt, any funds held by the Insured in the PRI
Reserve Fund or a similar reserve fund shall not be considered a bond, indemnity or insurance for the
purposes of this Section 8.12.

8.13    Payment of Premium

        The Insured shall pay or cause to be paid the premium to the Underwriter in accordance with the
terms of this Insurance Policy. The premium shall be paid to the Underwriter in the Policy Currency.

8.14    Recoveries

        After any Compensation payment hereunder, any sums recovered from any other source in respect of
the Loss shall be paid to the Underwriter until it has completely recovered the following amounts: (i) the
amount of the Compensation payment; (ii) the Underwriter's reasonable and documented expenses associated
with the Claim; and (iii) the Underwriter's reasonable and documented expenses associated with recovery.
Any excess amount remaining after the Underwriter is made whole shall be paid to the Insured.

8.15   No Liability and Non-Petition

        No recourse under any obligation, covenant or agreement of the Insured contained in this Insurance
Policy and any other Transaction Documents to which it is a party shall be had against any shareholder,
officer or director of the Insured as such, by the enforcement of any assessment or by any proceeding, by
virtue of any statute or otherwise; it being expressly agreed and understood that this Insurance Policy and
any other Transaction Documents to which it is a party are corporate obligations of the Insured and no
personal liability shall attach to or be incurred by the shareholders, officers, agents or directors of the Insured
as such, or any of them, under or by reason of any of the obligations, covenants or agreements of the Insured
contained in this Insurance Policy or any other Transaction Documents to which it is a party, or implied
therefrom. Any and all personal liability for breaches by the Insured of any of such obligations, covenants or


                                                                                                              A-16
agreements, either at law or by statute or constitution, of every such shareholder, officer, agent or director is
hereby expressly waived by the parties hereto as a condition of and consideration for the execution of this
Insurance Policy and any other Transaction Documents to which it is a party.

        The Underwriter hereby agrees that, without prejudice to the right of recovery in respect of the funds
specified in Section 7.4 hereof, it shall not, until the expiry of two (2) years and one (1) day after the
payment of all sums outstanding and owing in respect of the latest maturing Insured or Uninsured Note:

(a) take any corporate action or other steps or legal proceedings for the winding-up, dissolution or re-
organisation or for the appointment of a receiver, administrator, administrative receiver, trustee, liquidator,
sequestrator or similar officer of the Insured or of any or all of the Insured's revenues and assets nor join any
person in such action or other steps or legal proceedings; or

(b) have any right to take any steps for the purpose of obtaining payment of any amounts payable to them
under any Transaction Document by the Insured and shall not until such time take any steps to recover any
debts whatsoever owing to them by the Insured.

The terms of this Section 8.15 shall survive the termination of any Transaction Document, including this
Insurance Policy.

8.16   Limited Recourse

        The Underwriter agrees with the Insured that, without prejudice to the right of recovery in respect of
the funds specified in Section 7.4 hereof, all obligations of the Insured to the Underwriter are limited in
recourse as set out below:

(a) it will have a claim only in respect of the Charged Property and will not have any claim, by operation of
law or otherwise, against, or recourse to any of the Insured's other assets or its contributed capital; and

(b) sums payable to the Underwriter in respect of the Insured's obligations to the Underwriter shall be
limited to the lesser of (i) the aggregate amount of all sums due and payable to the Underwriter and (ii) the
aggregate amounts received, realised or otherwise recovered by or for the account of the Insured in respect of
the Security, whether pursuant to enforcement of the Security or otherwise, net of any sums which are
payable by the Insured in accordance with the Payments Priorities in priority to or pari passu with sums
payable to the Underwriter; and

(c) upon the Trustee giving written notice to the Underwriter hereto that it has determined in its sole opinion,
and the Cash Manager having certified to the Trustee, that there is no reasonable likelihood of there being
any further realisations in respect of the Security (whether arising from an enforcement of the Security or
otherwise) which would be available to pay amounts outstanding under the Transaction Documents and the
Notes, the Underwriter shall have no further claim against the Insured in respect of any such unpaid amounts
and such unpaid amounts shall be discharged in full.

8.17    Counterparts

         This Insurance Policy may be executed in separate counterparts, each of which when so executed
shall be an original, and shall together constitute one and the same Insurance Policy.

8.18    Concerning the Trustee


        Nothing herein contained shall be construed as creating any liability on the Trustee, individually or
personally, to perform any covenant either expressed or implied herein, all such liability, if any, being
expressly waived by the parties who are signatories to this Insurance Policy and by any person claiming by,
through, or under such parties. Under no circumstances shall the Trustee be or become personally liable for
the payment of any indebtedness or expenses of the estate created pursuant to the Trust Deed or be




                                                                                                            A-17
personally liable for the breach or failure of any obligation or covenant made or undertaken by the Insured
under this Insurance Policy except to the extent provided otherwise in the Trust Deed.

8.19 Contracts (Rights of Third Parties) Act 1999

        Other than provided in this Policy a person who is not party to this Policy has no right under the
Contracts (Rights of Third Parties) Act 1999 to enforce or enjoy the benefit of any term of this Policy, other
than the Trustee, as a trustee for holders of the Insured Notes (or any successor trustee for the holders of the
Insured Notes) and as Loss Payee under the Insurance Policy.




                                                                                                           A-18
                                  ANNEX B - PRI SIDE AGREEMENT


                       AGREEMENT REGARDING THE INSURANCE POLICY
                    FOR EXPROPRIATION AND CURRENCY INCONVERTIBILITY


This Agreement Regarding the Insurance Policy for Expropriation and Currency Inconvertibility, dated as of
29 May 2008 (the "Agreement"), is entered into by and among (i) TMF Trustee Limited, as Trustee (the
"Trustee" which expression shall, whenever the context so admits, include such company and all other
persons or companies for the time being acting under the Trust Deed in the capacity of trustee or trustees),
(ii) Ukraine Auto Loan Finance No. 1 PLC (the "Insured"), (iii) Closed Joint Stock Company Commercial
Bank "PrivatBank" ("PrivatBank" or, in its capacity as asset manager, the "Asset Manager" which term
shall include any successors or assignees acceptable to the Underwriter in its sole discretion) and (iv)
Steadfast Insurance Company (the "Underwriter"). The Trustee, the Insured, the Asset Manager, and the
Underwriter are herein referred to collectively as the "Parties."

RECITALS


        A.      The Parties contemplate that the Insured will issue certain notes (the "Notes") pursuant to a
Trust Deed, dated as of 29 May 2008 (the "Trust Deed"), between the Insured and the Trustee acting on
behalf of the Noteholders, as may vary from time to time (the "Noteholders").

       B.       The Insured will use the proceeds of the sale of the Notes to purchase the Assets from
PrivatBank. The Asset Manager will manage the Assets for the benefit of the Insured and the Trustee
pursuant to the Asset Management Agreement between PrivatBank, the Insured and the Trustee.

        C.      In connection with the issuance of the Notes, the Underwriter has issued an Insurance Policy
for Expropriation and Currency Inconvertibility (Policy No. xx-xx-xxx), dated as of 29 May 2008, (together
the Declarations and Contract constitute the "Insurance Policy"), the beneficiary of which is the Insured,
and the Loss Payee of which is the Trustee acting on behalf of the Noteholders.

        D.        In connection with the issuance of the Notes, the following agreements have been or will be
entered into: (i) the Trust Deed, (ii) the Sale Agreement between PrivatBank and the Insured, and (iii) such
other agreements as have been defined as the Transaction Documents in the Prospectus.

          E.      The Parties wish to set forth herein certain agreements in connection with the Insurance
Policy.


                                               AGREEMENTS


          The Parties, with the intention of being legally bound, agree as follows:

          1.      Defined Terms.

               Capitalized terms used in this Agreement and not otherwise defined have the meaning assigned
               to such terms in the Insurance Policy (as defined above).


          2.      Representations, Warranties and/or Covenants by the Asset Manager.

          The Asset Manager represents, warrants and /or covenants that:



                                                                                                         B-1
                        (a)     All information that the Asset Manager has provided to the Insured in
                connection with the Application for Insurance is true and correct in all material respects as
                of the date on which it was delivered to the Underwriter, and no material information related
                to such Application for Insurance has been or will be withheld;

                        (b)     All the information that the Asset Manager, as the case may be, will provide
                to the Underwriter, in written form, will be true and correct in all material respects, and no
                material information will be withheld;

                        (c)     It has or will obtain valid licenses and permits for the Transaction as
                required by law and will make all applications as required by law to extend, renew or modify
                such licenses to comply with any new requirement promulgated during the Policy Period,
                including, without limitation, such applications as may be required to convert or transfer
                funds from the Host Country in connection with payments on the Insured Notes; and

                        (d)      It will (i) take all reasonable steps to avoid or minimize any Loss (other than
                any Loss where compensation is excluded or excludable under the terms of Article V of the
                Insurance Policy) (including, without limitation, not applying any payment in respect of
                notes issued under the Trust Deed other than the Insured Notes so as to prefer the payment
                of such other notes over the Insured Notes); (ii) cooperate fully with the Underwriter in the
                investigation of any Claim, the resolution of any potential Claim situation and the pursuit of
                any Claim salvage; and (iii) not enter into any agreement directly concerning a Loss or a
                reasonably foreseeable potential Loss without the Underwriter's prior written consent (which
                shall not be unreasonably withheld). In addition, upon the occurrence of any Loss, the Asset
                Manager will (i) pursue all reasonable diplomatic, legal, administrative, judicial and
                informal means which may be reasonably available to minimize or recover any Loss, and (ii)
                preserve any legal, judicial and administrative remedies applicable to any Claim and furnish
                reasonable assistance in maintaining any rights or property transferred to the Underwriter;
                provided, that nothing herein shall require the Asset Manager to make available U.S. Dollars
                from offshore sources available to it or obtainable by it outside the Host Country.

       3.       Delegation of Insured's Duties and Obligations.

        The Insured hereby delegates to the Asset Manager and the Asset Manager hereby accepts all duties
and obligations of the Insured under the Insurance Policy (the "Delegated Obligations"), excluding, however,
any obligation (i) to apply for the Insurance Policy; (ii) related to cooperation with the Underwriter in the
enforcement of its rights under this Agreement as provided in the Insurance Policy, (iii) related to the
submission of a Claim pursuant to Section 7.1(a) of the Insurance Policy; (iv) related to the assignments and
subrogation to be done by the Insured as provided for in Section 7.4 of the Insurance Policy; (v) related to
the adoption by the Insured of the pertinent accounting principles, as provided for in Section 8.1 of the
Insurance Policy; (vi) not to disclose the details of the Insurance Policy, as provided for in Section 8.7 of the
Insurance Policy; (vii) not to make false or fraudulent statement, reports or claims and not conceal any
material fact, as provided for in Section 8.8 of the Insurance Policy; (viii) not to cause an exclusion under
Article V of the Insurance Policy, insofar as such exclusion would result from an act or omission by the
Insured; (ix) related to limitations on the assignment, amendment or waiver of the Insurance Policy or any
provision thereunder, as provided for in Sections 8.2 and 8.4 of the Insurance Policy; (x) to maintain and
allow the examination of any records related to the Insurance Policy, as provided for in Section 8.9 of the
Insurance Policy; and (xi) related to the payment of recoveries, as provided for in Section 8.14 of the
Insurance Policy.

        The Underwriter hereby agrees to accept performance by the Asset Manager of the duties and
obligations of the Insured under the Insurance Policy as provided for herein. The Underwriter hereby
acknowledges that the information contained in the Application for Insurance has been provided to the
Insured by the Asset Manager.




                                                                                                             B-2
        4.       Material Breaches or Misrepresentations.

        Each of the Parties acknowledges that in the case of any material breaches or misrepresentations of
the representations, warranties and/or covenants set forth in Section 2 above by the Asset Manager, and, in
the case of a breach of Section 2(b), (c) or (d), if such breach continues unremedied for a period of thirty (30)
calendar days following receipt of notice of such breach by the Asset Manager, or, if a substitute asset
manager has been appointed (including the Standby Asset Manager), thirty (30) calendar days following
receipt of notice of such breach by such substitute asset manager (including the Standby Asset Manager),
provided that such substitute asset manager has been appointed as the Asset Manager the Underwriter may
void the Insurance Policy, retain the premium paid in connection therewith and refuse to compensate the
Insured for any Loss.

        5.       Modifications.

        The Insured, the Trustee, and the Asset Manager shall not consent to any modification of the
Transaction Documents without the prior written consent of the Underwriter (which consent shall not be
withheld unreasonably), except that no such prior written consent shall be required as to such modifications
and amendments which (i) do not change materially the Underwriter's rights and obligations, (ii) do not
change materially any rights and obligations to which the Underwriter may be subrogated to in the event of a
Claim, or (iii) do not change materially the risks that are covered under this Insurance Policy to which the
Insured is exposed.

        6.       Acceptance of Terms and Conditions of the Insurance Policy.

        The Asset Manager hereby agrees to and accepts all the terms and conditions of the Insurance
Policy, including but not limited to all duties and obligations which have been expressly imposed on the
Asset Manager thereunder, which duties and obligations it hereby agrees to perform.

        The Parties acknowledge that the Insurance Policy, as further supplemented by this Agreement,
requires in certain instances that the Insured or the Asset Manager engage in certain activities or refrain from
engaging in certain activities, as the case may be, in order to satisfy the terms and conditions of the Insurance
Policy. The Parties further acknowledge that, subject to Section 4 above, if the terms and conditions of this
Agreement and the Insurance Policy are not satisfied, except as otherwise provided herein, the Underwriter
may refuse to compensate the Insured for a Loss under the Insurance Policy.

        7.       General Representations and Warranties of the Parties.

         Each of the Insured, the Trustee, the Asset Manager and the Underwriter hereby represents and
warrants to the other Parties that (i) it has been duly organized and is validly existing and in good standing
under the laws of the jurisdiction of its organization and is qualified to do business in each jurisdiction in
which the nature of the business conducted by it makes such qualification necessary and where the failure to
be so qualified would have a material adverse effect on it, (ii) it is duly authorized to execute and deliver this
Agreement and to perform its obligations hereunder and has taken all necessary action to authorize such
execution, delivery and performance, (iii) the person signing this Agreement on its behalf is duly authorized
to do so on its behalf, (iv) it has obtained all authorizations of any governmental body required on the date
hereof in connection with this Agreement and such authorizations are in full force and effect, (except for
such authorizations which, as a matter of mandatory requirements of any applicable law, can only be applied
for and obtained after the date hereof) (v) the execution, delivery and performance of this Agreement will not
violate any law, ordinance, charter, by-law or rule applicable to it, any agreement by which it is bound or by
which any of its assets are affected, or any judgment, decree or order applicable to it of any court or other
government authority, and (vi) this Agreement constitutes its legal, valid and binding obligation, enforceable
in accordance with its terms, except that the enforceability hereof may be subject to the effects of any
applicable bankruptcy, insolvency, reorganization, moratorium or other similar law now or hereafter in effect
relating to creditors' rights and to general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

        8.       Assignment, Subrogation, and Payment.


                                                                                                              B-3
                (a)      As a condition for any Compensation payment under the Insurance Policy, in
                         addition to any assignments required under Section 7.4 of the Insurance Policy and
                         subject to the limitation that any assignment by the Insured and/or the Asset
                         Manager shall not be in an aggregate amount greater than the amount of
                         Compensation payable by the Underwriter, the Asset Manager shall assign to the
                         Underwriter, and the Underwriter shall be subrogated to all of the Asset Manager's
                         rights under the Transaction Documents, if any, in respect of the Loss for which the
                         Compensation is to be paid and all of the Asset Manager's rights of recovery, if any,
                         against any person or organization (other than the Insured or any Noteholder) in
                         respect of the Loss for which the Compensation is to be paid. The Insured
                         undertakes the obligation to pay the Underwriter, in Policy Currency, an amount
                         equal to the amount of Compensation payable by the Underwriter under the
                         Insurance Policy. Such payment shall be due and payable on the first Interest
                         Payment Date following the termination of the Political Risk Event which caused
                         the Loss for which the Compensation is paid. In connection with such obligation,
                         the Asset Manager undertakes the obligation to remit such funds in such form in
                         accordance with such timeframe. All such assignments shall be free and clear of all
                         claims, defenses, counterclaims, rights of setoff and other encumbrances, except for
                         those defenses relating to the Political Risk Event. Notwithstanding any payments
                         made to the Noteholders from the Reserve Fund in connection with an Unfunded
                         Insured Payment, the Asset Manager shall not be released from its obligation to
                         make remittances associated with the Scheduled Payments (or any part thereof) that
                         are the subject of a Claim. The Insured and the Asset Manager shall execute and
                         deliver all instruments and documents and take all reasonable steps that are
                         necessary to secure such rights for the Underwriter. The Asset Manager shall not
                         knowingly do anything to prejudice the Underwriter's rights.

                (b)      In connection with a Claim under Currency Inconvertibility as a condition for any
                         Compensation payment, in addition to the assignments required in 8(a) above and
                         subject to the limitation that any such assignment by the Insured and/or the Asset
                         Manager shall not be in an aggregate amount greater than the amount of
                         Compensation payable by the Underwriter, the Insured shall, to the extent permitted
                         by applicable law, if requested by the Underwriter, assign to the Underwriter and the
                         Asset Manager shall deliver to the Underwriter, by draft, subject to collection, or, at
                         the Underwriter's option, in cash, the inconvertible Local Currency or non-
                         transferable Policy Currency that is the subject of the Claim. If the Insured is unable
                         legally to assign such currency to the Underwriter or the Asset Manager is unable
                         legally to deliver such currency to the Underwriter, then, in addition to the
                         assignment requirements of Section 8(a) above, the Insured shall, if requested by the
                         Underwriter, assign to the Underwriter its right, title and interest in such currency,
                         provided that any assignment pursuant to this clause (b) together with any
                         assignment pursuant to clause (a) above shall not be in an aggregate amount greater
                         than the amount of Compensation payable by the Underwriter.

        9.      Indemnification by Asset Manager.

         The Asset Manager agrees to indemnify and hold harmless the Trustee and any of its directors,
officers, agents or employees (each such indemnified person, an "Indemnified Party") from and against any
and all liabilities, obligations, losses, damages, penalties, judgments, costs, expenses or disbursements of any
kind whatsoever that may be imposed on or incurred by, or asserted against, such Indemnified Party in any
way relating to or arising out of (i) any action taken or omitted to be taken by such Indemnified Party under
this Agreement or the Insurance Policy (including, without limitation, any action taken or omitted to be taken
before the date hereof by such Indemnified Party in preparation for acting thereunder), or (ii) any action
taken or omitted to be taken by the Asset Manager under this Agreement or the Insurance Policy; provided
that the Asset Manager shall not be liable for any portion of any such amount resulting from (i) the gross
negligence or willful misconduct of such Indemnified Party, (ii) an exclusion by the Underwriter under
Article V of the Insurance Policy which is caused by the Indemnified Party or (iii) any default by the Insurer


                                                                                                            B-4
of its obligations under the Insurance Policy. This section shall survive the termination of the Insurance
Policy and this Agreement for a period of one year.

        10.      Recoveries.

The Asset Manager agrees that after payment in full to the Insured of any Compensation payable under the
Insurance Policy, any sums recovered from any source relating to the Loss shall be paid to the Underwriter
until it has completely recovered the following amounts: (i) the amount of the Compensation paid; (ii) the
Underwriter's reasonably and properly incurred expenses associated with the Claim; and (iii) the
Underwriter's reasonably and properly incurred expenses associated with recovery; provided, that if the
Insured or the Asset Manager is prevented from paying any such amount to the Underwriter due to the same
or a related or substantially similar Political Risk Event that gave rise to the Claim for Compensation or, if
the initial Political Risk Event is continuing, as a result of any other Political Risk Event, regardless of its
relation or similarity to the continuing Political Risk Event, such failure shall not be deemed to be a breach
of this Section 10. Any excess amount remaining after the Underwriter is made whole shall be paid to the
Insured.

        11.      No Liability and Non-Petition.

        No recourse under any obligation, covenant or agreement of the Insured contained in this Insurance
Policy and any other Transaction Documents to which it is a party shall be had against any shareholder,
officer or director of the Insured as such, by the enforcement of any assessment or by any proceeding, by
virtue of any statute or otherwise; it being expressly agreed and understood that this Insurance Policy and
any other Transaction Documents to which it is a party are corporate obligations of the Insured and no
personal liability shall attach to or be incurred by the shareholders, officers, agents or directors of the Insured
as such, or any of them, under or by reason of any of the obligations, covenants or agreements of the Insured
contained in this Insurance Policy or any other Transaction Documents to which it is a party, or implied
therefrom. Any and all personal liability for breaches by the Insured of any of such obligations, covenants or
agreements, either at law or by statute or constitution, of every such shareholder, officer, agent or director is
hereby expressly waived by the parties hereto as a condition of and consideration for the execution of this
Insurance Policy and any other Transaction Documents to which it is a party.

         The Underwriter hereby agrees that, without prejudice to the right of recovery in respect of the funds
specified in Section 7.4 of the Insurance Policy, it shall not, until the expiry of two (2) years and one (1) day
after the payment of all sums outstanding and owing in respect of the latest maturing Insured or Uninsured
Note:

         (a)     take any corporate action or other steps or legal proceedings for the winding-up, dissolution
or re-organisation or for the appointment of a receiver, administrator, administrative receiver, trustee,
liquidator, sequestrator or similar officer of the Insured or of any or all of the Insured's revenues and assets
nor join any person in such action or other steps or legal proceedings; or

       (b) have any right to take any steps for the purpose of obtaining payment of any amounts payable to
them under any Transaction Document by the Insured and shall not until such time take any steps to recover
any debts whatsoever owing to them by the Insured.

The terms of this Section 11 shall survive the termination of any Transaction Document, including this
Insurance Policy.

        12.    Limited Recourse.

         The Underwriter agrees with the Insured that, without prejudice to the right of recovery in respect of
the funds specified in Section 7.4 of the Insurance Policy, all obligations of the Insured to the Underwriter
are limited in recourse as set out below:

         (a) it will have a claim only in respect of the Charged Property and will not have any claim, by
operation of law or otherwise, against, or recourse to any of the Insured's other assets or its contributed
capital; and


                                                                                                               B-5
        (b) sums payable to the Underwriter in respect of the Insured's obligations to the Underwriter shall
be limited to the lesser of (i) the aggregate amount of all sums due and payable to the Underwriter and (ii)
the aggregate amounts received, realised or otherwise recovered by or for the account of the Insured in
respect of the Security, whether pursuant to enforcement of the Security or otherwise, net of any sums which
are payable by the Insured in accordance with the Payments Priorities in priority to or pari passu with sums
payable to the Underwriter; and

        (c ) upon the Trustee giving written notice to the Underwriter hereto that it has determined in its sole
opinion, and the Cash Manager having certified to the Trustee, that there is no reasonable likelihood of there
being any further realisations in respect of the Security (whether arising from an enforcement of the Security
or otherwise) which would be available to pay amounts outstanding under the Transaction Documents and
the Notes, the Underwriter shall have no further claim against the Insured in respect of any such unpaid
amounts and such unpaid amounts shall be discharged in full.

        13. Entire Agreement; Amendment.

         This Agreement constitutes the entire agreement among the Parties with respect to the matters
contemplated herein and supersedes all prior oral and written agreements, memoranda, understandings and
undertakings between the Parties relating to the subject matter of this Agreement. This Agreement shall not
alter the terms of the Insurance Policy and, to the extent that provisions of this Agreement are in conflict or
inconsistent with the provisions of the Insurance Policy, the provisions of the Insurance Policy shall govern.
This Agreement or any provision hereof may not be modified, amended, altered or supplemented except by a
written instrument executed and delivered by each of the Parties and, if such modification or amendment
materially affects the Asset Manager's rights and/or obligations under this Agreement, the Standby Asset
Manager.

        14.      Severability.

         If any provision of this Agreement shall be declared illegal, invalid, or unenforceable in any
jurisdiction, then such provision shall be deemed to be severable from this Agreement (to the extent
permitted by law) and in any event such illegality, invalidity or unenforceability shall not affect the
remainder hereof.

        15.      Notices.

         All communications and notices to be given hereunder shall be made in writing sent by international
overnight courier or delivered by hand or facsimile with receipt acknowledged. Such communications and
notices shall be sent to the addresses and to the attention of the persons specified below, or to such other
address or to the attention of such other person as any of the Parties shall notify to the other Party or Parties,
as the case may be.

        If to the Insured:

                 Pellipar House
                 1st Floor
                 9 Cloak Lane
                 London EC4R 2RU
                          Facsimile:      +44 (0)20 7367 8959
                          Attention:      Directors

        If to the Trustee:

                 TMF Trustee Limited
                 Pellipar House
                 1st Floor
                 9 Cloak Lane
                 London EC4R 2RU
                          Telephone:      +44 (0)20 7376 8930

                                                                                                              B-6
                        Facsimile:      +44 207 376 8959
                        Attention:      Managing Director

        If to the Asset Manager:

                50 Naberezhna
                Peremohy Street,
                Dnipropetrovsk 49094
                Ukraine
                        Telephone:   +380 562 390 454
                        Facsimile:   +380 562 390 477
                        Attention:   Lyudmila Shmalchenko, Deputy Chairman of the Board – Director
                                     of Treasury

        If to the Standby Asset Manager (with respect to Section 11):

                Joint Stock Company "The State Export-Import Bank of Ukraine"
                127 Gorkogo Street, Kyiv 03150
                Ukraine
                        Telephone:     +380 44 247 8049
                        Facsimile:     +380 44 244 0257
                        Attention:     Retail Business Development Division

        If to the Underwriter:

                Steadfast Insurance Company
                c/o Zurich Emerging Markets Solutions
                1201 F Street, N.W., Suite 250
                Washington, D.C. 20004
                        Telephone:      (202) 585-3100
                        Facsimile:      (202) 625-2216
                        Attention:      Managing Director

        The Underwriter shall provide copies to the Insured of all notices sent to the Asset Manager under
the Insurance Policy when such notices are made.

        16.     Counterparts.

         This Agreement may be executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument.

        17.     Language.

        This Agreement has been executed in both the English language and the Ukrainian language. In the
event of any discrepancies between the English and Ukrainian versions of this Agreement, or any dispute
regarding the interpretation of any provision in the English or Ukrainian versions of this Agreement, the
English version of this Agreement shall prevail and any question of interpretation shall be addressed solely
in the English language.

        18.     Survival Rights.

         This Agreement shall be binding upon and inure to the benefit of the Parties and their respective
legal representatives, successors, transferees and assigns.

        19.     Choice of Law.




                                                                                                        B-7
        Any issue relating to the construction, validity or performance of this Insurance Policy shall be governed
by, read, and construed in accordance with the laws of England.

        20.     Disputes and Arbitration.

        Any dispute arising out of or in connection with this Agreement shall be referred to and finally
resolved by arbitration under the Rules of the London Court of International Arbitration (the "Court"), which
Rules are deemed to be incorporated by reference into this clause.

        The tribunal shall consist of three arbitrator(s). In accordance with the Rules the Insured shall
nominate one arbitrator, the Underwriter shall nominate one arbitrator and the third arbitrator shall be
appointed by the Court.

        The place of arbitration shall be London.

        The language of the arbitration shall be English.

         The arbitral award shall be in writing, state the reasons for the award, and be final and binding on the
parties. Judgment upon the award may be entered by any court having jurisdiction thereof or having
jurisdiction over the relevant party or asset.

        21.     Contracts (Rights of Third Parties) Act 1999.

       Other than provided in this Policy a person who is not party to this Policy has no right under the
Contracts (Rights of Third Parties) Act 1999 to enforce or enjoy the benefit of any term of this Policy.




                                                                                                             B-8
              IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly
authorized officers of the parties hereto as of the date first above written.



              By:

              Name:

              Title:


              By:

              Name:

              Title:



              By:

              Name:

              Title:



              STEADFAST INSURANCE COMPANY




              Daniel W. Riordan
              Executive Vice President and Managing Director




                                                                                               B-9
                            REGISTERED OFFICE OF THE ISSUER

                             Ukraine Auto Loan Finance No. 1 PLC
                                          Pellipar House
                                     1st Floor, 9 Cloak Lane
                                       London EC4R 2RU
                                             England
                                         TRUSTEE

                                    TMF Trustee Limited
                                         Pellipar House
                                    1st Floor, 9 Cloak Lane
                                      London EC4R 2RU
                                            England
                             TRANSACTION LEGAL ADVISERS

      As to Ukrainian Law                                             As to English Law

Baker & McKenzie – CIS, Limited                                    Baker & McKenzie LLP
   Renaissance Business Centre                                      100 New Bridge Street
      24 Vorovskoho Street                                           London EC4V 6JA
           Kyiv 01054                                                 United Kingdom
            Ukraine

                       LEGAL ADVISERS TO THE LEAD MANAGER
       As to English Law                               As to Ukrainian Law

      White&Case LLP                                                 Sayenko Kharenko
       5 Old Broad Street                                           10 Museyny Provulok
      London EC2N 1DW                                                   Kiyv 01001
            England                                                       Ukraine


                             LEGAL ADVISER TO THE TRUSTEE
                                     Linklaters LLP
                                     One Silk Street,
                                    London EC2Y 8HQ
                                         England

                             LEGAL ADVISER TO THE ISSUER
                                 Denton Wilde Sapte LLP
                                     One Fleet Place,
                                   London EC4M 7WS
                                        England


INTEREST RATE CAP PROVIDER                                          DATA CUSTODIAN

    UBS AG, London Branch                                            Liza Jane Limited
      1 Finsbury Avenue                                                 7 Mill Bank
      London EC2M 2PP                                                    Tonbridge
           England                                                     Kent TN9 1PY
                                                                          England
  PRINCIPAL PAYING AGENT, AGENT BANK, ACCOUNT BANK AND CASH MANAGER
                              Deutsche Bank AG, London Branch
                                       Winchester House
                                   1 Great Winchester Street
                                      London EC2N 2DB


                             LISTING AGENT AND REGISTRAR
                        Deutsche Bank Luxembourg Société Anonyme
                         2 bd. Konrad Adenauer, L-1115 Luxembourg

				
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