Exhibit 10.6

 

GENERAL LOAN AGREEMENT

 

Bank Loan Contract No. 2000/03/40

 

Almaty, June 2, 2003

 

Open Joint-Stock Company Bank TuranAlem

represented by its Vice Chief Executive Officer Mr. Saparov Arsen Kuandykovich
acting on the basis of the Power of Attorney #01-191 dated December 27, 2002

 

Subsidiary Open Joint-Stock Company Caspi Neft TME

represented by Chief Executive Officer Mr. Anatole Kunevich, acting on the basis
of the Charter

 

TransMeridian Exploration Inc. (BVI)

represented by the President Mr. Lorrie Olivier, acting on the basis of the
Articles of Associations

 

The Company BRAMEX MANAGEMENT INK

represented by Mr. Sadykov K., acting on the basis of the Power of Attorney
dated October 22, 2002,

 

have signed this Agreement as follows:

 

Agreement

 

Terms and definitions used in this Agreement

 

If this Agreement does not provide otherwise clearly, terms and definitions
starting from uppercase letters used throughout the Agreement, have the
following meanings:

 

1.                            The Creditor – OJSC Bank TuranAlem:

 

2.                            The Borrower – SOJSC Caspi Neft TME;

 

3.                            The Shareholder 1 – TransMeridian Exploration Inc.
(BVI)

 

4.                            The Shareholder 2 – BRAMEX MANAGEMENT INK.

 

5.                            The Parties – OJSC Bank TuranAlem, SOJSC Caspi
Neft TME, TransMeridian Exploration Inc. (BVI) and BRAMEX MANAGEMENT INK.

 

6.                            Shares 1 – 9,550 (nine thousand five hundred and
fifty) common registered shares of the Borrower, with NIN (National
Identification Number) KZ1C41630418, par value KZT 1,000 (one thousand), issued
in uncertified form and owned by the Shareholder 1, as per the proprietary
right;

 

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7.                            Shares 2 – 9,550 (nine thousand five hundred and
fifty) common registered shares of the Borrower, with NIN (National
Identification Number) KZ1C41630418, par value KZT 1,000 (one thousand), issued
in uncertified form and owned by the Shareholder 2, as per the proprietary
right;

 

8.                            The Loan Limit – an amount of $30,000,000.00
(thirty million U.S. dollars) assigned for the Borrower. Within the limit of
this amount during the currency of this Agreement the Borrower can receive
currency and Tenge loans (credits), financial instruments (guarantees, L/Cs
etc.) granted by the Creditor to the Borrower on the irreplaceable basis and on
the conditions stipulated by this Agreement and the Credit Contracts.

 

9.                            The Credit – financial (credit) resources allotted
to the Borrower by the Creditor on conditions stipulated by Credit Contracts and
this Agreement, in total amount not exceeding the Loan Limit. Credits shall be
allotted in accordance with the Financing Scheme stipulated by an agreement of
the Parties, terms and conditions of which are fixed by each Credit Contract
separately.

 

10.                     The Credit Contract – Credit Contracts, Bank Loan
Agreements, Agreements for L/C special servicing, Backing Agreements (aval of
the Bill of Sales), Bank Guarantee Agreements, Agreements for purchase of the
Borrower’s bonds for the purpose of their further placement, or acting as the
underwriter, the Overdraft Limit Agreement, Agreements for discounting of the
bills, and other agreements signed between the Creditor and the Borrower within
this Agreement, as well as the Bank Loan Agreement # 2000/03/100/147 dated April
17, 2003, Bank Loan Agreement No. 2000/03/100/161 dated April 23, 2003 and the
Bank Loan Agreement # 200/03/100/197 dated May 12, 2003, signed by the Borrower
and Creditor prior to signing of this Agreement.

 

Credit Contracts, including contracts signed prior to signing this Agreement
shall be concluded for the total amount not exceeding $30,000,000, and shall be
considered as an integral part of this Agreement.

 

Herewith the Parties have agreed that all Credit Contracts signed under this
Agreement shall include a reference to it.

 

11.                     The Financing Scheme – allotting the Credit in the form
of money (cash financing) or other financial instruments, letters of guarantee,
backings, pawns, L/Cs, rendering of underwriting services on placement of the
Borrower’s securities, and other services.

 

12.                     Interest – remuneration accrued by the Creditor to the
Borrower for using of the loan funds:

 

a) In Tenge: at a rate of 15% (fifteen percent) per annum, with application of
the indexation coefficient for the Credits the maturity of which is over a year;

b) In U.S. dollars: 15% (fifteen percent) per annum.

 

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c) the amount of Commission for the Credits allotted as L/Cs, guarantees, pawns
and backing is 5% (five percent) per annum or/and stipulated by the Credit
Contracts.

 

13.                     Additional interest – an amount due from the Borrower
pursuant to paragraphs 2.3. and 2.6 of this Agreement.

 

14.                     Utilization Deadline – the date established by this
Agreement after which the Credits, L/Cs, bank guarantees under the terms of this
Agreement shall not be allotted. The Utilization Deadline is May 31, 2005.

 

15.                     Final maturity Date – 31 May 2008, the final date for
full repayment of the amounts of Loan and Interests accrued for using of the
Loan, commission remuneration stipulated by the terms of every Credit Contract. 
Terms of repayment stated by every Credit Contract executed within currency of
loan limit shall not exceed the Final Maturity Date as per this Agreement.

 

In case the Final Maturity Date is not a Business Day, it shall be shifted to
the next Business Day. In case the next Business Day, following the non-business
day, falls to the following calendar month, the payment shall be executed on a
Business Day preceding such payment date.  This shift of payment terms will be
taken into consideration on accruement of the Interest for using of the Loan;
i.e. the Interest will be accrued at the rate established by this Agreement till
the date of actual transfer of funds to the Creditor’s account.

 

16.                     Subsoil Use Right (Right of Subsoil Use) – the right to
own and use subsoil within the limits of the Contract Territory granted to the
Borrower according to the Decree of the President of the Republic of Kazakhstan
having a Law force “On subsoil and subsoil use” #2828 dated January 27, 1996,
and the Contract.

 

17.                     The Contract – the contract for hydrocarbon exploration
at the oilfield South Alibek located in Mugalzharsky district, Aktubinsk Oblast,
Kazakhstan, signed on March 7, 2000 between the Investment Agency of the
Republic of Kazakhstan and OJSC Caspi Neft according to the License Series
#1557, issued on April 29, 1999 by the Government of the Republic of Kazakhstan,
as well as the Agreement on changes made to the Contract dated July 31, 2001
(state registration #729 dated 31.07.2001) and the Agreement on changes made to
the Contract dated April 25, 2000 (state registration #457 dated 25.04.2000),
other agreements on amending of the Contract.

 

18.                     The Contract Territory – means the territory stipulated
by the License Series #1557 dated 29.04.1999 (State registration certificate of
the Contract #419 dated 07.03.2000) with geographic coordinates stated in
Appendixes #1-1 (geological allotment), #3-1 (Geological location cartogram),
allotted for exploration works (at the oilfield South Alibek located in
Mugalzharsky district, Aktubinsk Oblast, Kazakhstan).

 

19.                     Security (Pledge) - property, assets, the right of
subsoil use, proprietary and non-proprietary rights the Borrower transfers to
secure fulfillment of its obligations to the

 

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Creditor under this Agreement, as well as 100% of the Borrower’s shares owned by
the Shareholder 1 and the Shareholder 2.

 

20.                     Default – failure to fulfill or improper fulfillment by
the Borrower of provisions of this Agreement, General Loan Agreement as well as
agreements and contracts signed under and in pursuance of this Agreement.

 

21.                     Additional Requirements – justified requirement of the
Creditor to pledge the equipment purchased by the Borrower and other tangible
assets for the amount exceeding seven million six hundred thousands
(7,600,000.00) KZ Tenge or transfer the right of claim for the accounts
receivable.

 

22.                     Loan account – a special account opened by the Creditor
and intended for servicing the Borrower. From this account the loans are granted
and to this account will be received the money transmitted to pay off the
Borrower’s debt on the Credit and Interest.

 

23.                     The Project – means exploration, development and
facilities construction at South Alibek oilfield located in Mugalzharsky
district, Aktubinsk Oblast, Republic of Kazakhstan, according to the License
Series #1557 dated April 29, 1999 and the Contract for subsoil use operations at
the said oilfield (State registration certificate of the Contract # 419 dated
07.03.2000), as well as within other territories for which the Borrower has been
granted the right of subsoil use on the moment of this Agreement’s signing,
financed by the Creditor pursuant to provisions of this Agreement.

 

24.                     The irreducible balance – an amount of KZT 1,200,000.00
(one million two hundred thousand Tenge) of the permanent daily irreducible
balance of money on the Borrower’s bank accounts, which the Borrower shall
maintain throughout the period of validity of this Agreement.

 

25.                     Potential default – means an occurrence that causes
admittance of invalidity of the Contract initiated by either Party, suspension
of the Contract for over 20 (twenty) business days, a resolution of the
Competent Body or State Bodies to terminate the Contract unilaterally, as well
as a court decision in effect to collect from the Borrower an amount exceeding
KZT 456,000,000.00 (four hundred fifty six million Tenge).

 

26.                     The Auditor – a company having a respective license as
well as other permissive documents provided for by the laws of the Republic of
Kazakhstan to perform auditing activities and conducting the latter within the
Republic of Kazakhstan within at least 5 (five) years meeting the advanced
Kazakhstani and international accounting and audit practice and approved by the
Parties.

 

27.                     Shares Sale and Purchase Agreement – Sale and Purchase
Agreement for the shares of the Borrower concluded between shares between the
Shareholder 1 and the Shareholder 2 dated November 20, 2001.

 

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28.                     Banking services – performance of the complete list of
bank operations stipulated by the current legislation of the Republic of
Kazakhstan to be rendered on the contractual basis between the Creditor and the
Borrower, on the paid basis according to tariffs of services approved in the
stated order.

 

29.                     A business day – an operational day, i.e. a period of
time within which the bank receipts instructions related to money transfer and
to suspend or cancel such instructions from the Borrower, and sending the latter
notifications concerning money transfers.

 

30.                     Reimbursement Date – the date of repayment of the Loan
amount and accrued Interest and it means any Business Day falling on the day,
specified in this Agreement. In case the Reimbursement Date is not a Business
Day, it shall be shifted to the following Business Day.

 

31.                     Production – a series of jobs/operations related to oil
and gas extraction from the Subsoil to the surface.

 

32.                     Subsoil – for the purposes of this Agreement this term
has a definition given it in the Decree of the President of the Republic of
Kazakhstan having a Law force “On soils and soil-use” #2828 dated January 27,
1996.

 

33.                     The Credit Currency – means U.S. dollars and Tenge.

 

34.                     State Agencies – state power agencies: representative,
executive, judicial, and the National Bank of the Republic of Kazakhstan vested
with power authorization, certain competence and necessary means to perform
tasks the state shall fulfill.

 

35.                     Competent Body – an executive state body of the Republic
of Kazakhstan which is delegated rights directly related to signing and
execution of the Contract, as well as registration of the pledge for the Subsoil
Use Right.

 

36.                     Affiliated company – means as it is stipulated by
Article 64 of the law “On Joint-Stock Companies” dated May 13, 2003.

 

37.                     Investments - purchasing of securities, shares, bonds,
bills of exchange, equities in share capitals; establishment of any legal
entities, consortiums; purchasing of other assets that are not associated with
fulfillment of the Work Program or the Project, save for placement of money or
hard currencies on deposits in OJSC Bank TuranAlem.

 

38.                     Intended use of assets – utilization of the Credit to
fulfill the Work Program in accordance with the Contract

 

39.                     The Work Program – all kinds of plans prepared for the
Borrower to perform works related to development of the Project, as well as all
kinds of plans those pursuant to the legislation of the Republic of Kazakhstan
shall be approved by the Authorized Body.

 

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40.                     Cross-default – non-fulfillment of contractual and other
obligations to third persons by the Borrower, which in aggregate exceed the
amount of KZT 400,000,000.00 (four hundred million Tenge).

 

41.                     The License – the license for the right to use Subsoil
in the Republic of Kazakhstan Series #1557 dated April 29, 1999, held by the
Borrower.

 

42.                     BLA (Basic Loan Agreement) - General Loan Agreement
(bank loan agreement) # 2-0402-2 dated February 4, 2002 concluded between OJSC
‘Bank TuranAlem’, SOJSC ‘Caspi Neft TME’ the Company ‘TransMeridian Exploration
Inc.’ (BVI) and OJSC ‘Kazstroiproject’.

 

43.                     Equipment – property of the Borrower given as a pledge
to the Creditor under the Pledge Agreement for the capital assets concluded
between the Creditor and Borrower.

 

1.                                      Representations and Guarantees

 

1.1                                 The Borrower represents and guarantees that:

 

1.1.1.                     being a legal entity according to the legislation of
the Republic of Kazakhstan, it is entitled to sign this Agreement on its own
behalf;

 

1.1.2                        this Agreement has been sanctioned and is being
fulfilled properly by it and constitutes an effective and having a legal force
obligation of the Borrower being subject to fulfillment according to terms and
conditions stipulated in this Agreement;

 

1.1.3                        provisions of this Agreement and proper fulfillment
of its terms and conditions will not cause breaking of the Charter and/or ant
provision contained in any agreement or document under which the Borrower is a
party, or according to which it has commitments, or any act of law, standard
legal documents, regulations, or judgment related to it;

 

1.1.4                        at the moment of signing this Agreement it has no
commitments on outstanding local and federal taxes for the amount not more than
KZT 456,000,000.00 (four hundred fifty six million Tenge);

 

1.2                                 The Creditor represents and guarantees that:

 

1.2.1                        being a legal entity according to the legislation
of the Republic of Kazakhstan it is entitled to sign this Agreement on its own
behalf;

 

1.2.2                        this Agreement has been sanctioned and is being
fulfilled by it properly, and is and effective and having legal force obligation
of the Creditor, being subject to fulfillment pursuant to terms and conditions
stipulated in this Agreement;

 

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1.2.3                        provisions of this Agreement and proper fulfillment
of its terms and conditions will not cause breaking of provisions of the current
legislation or the Creditor’s Charter;

 

1.3.                              The Shareholder 1 represents and guarantees
that:

 

1.3.1                        being a legal entity according to the legislation
of the British Virgin Islands it is entitled to sign this Agreement on its own
behalf;

 

1.3.2                        this Agreement has been sanctioned and is being
fulfilled by it properly and is an effective and having legal force obligation
of the Shareholder 1, being subject to fulfillment in accordance with terms and
conditions stipulated in this Agreement;

 

1.3.3                        provisions of this Agreement and proper fulfillment
of its terms and conditions will not cause breaching the Charter and/or ant
provision contained in any agreement or document.

 

1.4.                              The Shareholder 2 represents and guarantees
that:

 

1.4.1.                     being a legal entity according to the legislation of
the British Virgin Islands it is entitled to sign this Agreement on its own
behalf;

 

1.4.2.                     this Agreement has been sanctioned and is being
fulfilled by it properly and is an effective and having legal force obligation
of the Shareholder 2, being subject to fulfillment in accordance with terms and
conditions stipulated in this Agreement;

 

1.4.3.                     provisions of this Agreement and proper fulfillment
of its terms and conditions will not cause breaking the Charter and/or ant
provision contained in any agreement or document.

 

2.                                      Subject of the Agreement

 

2.1.                              The Creditor fix for the Borrower the loan
limit in amount $30,000,000.00 US Dollars on the terms of specified utilization,
urgency, payment, recoverability, and security. Thus, the amounts granted under
the Credit Contract # 2000/03/100/147 dated April 17, 2003 and the Credit
Contract # 2000/03/100/161 dated April 23, 2003, Bank Loan Agreement #
200/03/100/197 (credit agreement) dated May 12, 2003 shall be deemed a utilized
portion of the Loan Limit.

 

2.1.1.                     Credits shall be allotted to the Borrower if the
Borrower meets the following conditions:

 

2.1.1.1.            The Borrower meets all requirements stated by legislation of
the Republic of Kazakhstan for performance of large deals;

 

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2.1.1.2               The Borrower provides the Security, in connection with
which it shall sign and have the respective changes registered by authorized
state bodies to increase the principal liability, to the following agreements:

 

•                  The Pledge Agreement for the Right of Subsoil Use #52/z dated
February 4, 2002 signed between the Creditor and the Borrower;

 

•                  The Pledge Agreement for the Capital Assets #68/z dated
February 4, 2002 signed between the Creditor and the Borrower,

 

and shall submit to the Creditor respective certificates confirming such
registration.

 

2.1.1.3.            The Borrower shall transfer and keep all settlement accounts
in OJSC ‘Bank TuranAlem’;

 

2.1.1.4.            The Borrower shall perform an independent estimation of the
Equipment to be pledged, and in connection with this it shall insert changes and
initiate state registration of respective changes to the Pledge Agreement for
the Capital Assets #68/z dated February 4, 2002 signed between the Creditor and
the Borrower.

 

2.1.1.5.            The Shareholder 1 and the Shareholder 2 shall provide the
Security. In connection with it they shall sign and register respective changes
for increase of the principal liability with the register-keeper, into the
following agreements:

 

•                  The Share Pledge Agreement #54/z dated February 4, 2002
signed between the Creditor and the Borrower, and the Shareholder 1;

 

•                  The Share Pledge Agreement 6/H dated November 4, 2002 signed
between the Creditor, the Borrower, and the Shareholder 2;

 

and shall submit respective confirmation documents.

 

2.2.                              The Creditor shall grant to the Borrower
Credits pursuant to the Credit Contracts not later the Utilization Deadline and
the final date of repayment of any amount allotted under this Agreement, or
fulfillment of other Borrower’s obligations arousing from this Agreement not
later than Final Maturity Date, if other terms are not caused by occurrence of
events mentioned in Article 7 of this Agreement, or in an additional agreement
between the Parties.

 

2.3.                              The Borrower shall pay to the Creditor
Commitment fee (hereinafter referred to as the Commission) in the amount of 0.5%
of the unutilized amount of the Loan recorded as of the date of payment of the
Commission.  The Borrower shall pay the Commission quarterly within 3 (three)
Business Days upon receipt of the Creditor’s written request.

 

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2.4.                              For the use of the Loan within the Loan Limit
the Borrower undertakes to pay to the Creditor the Interest in accordance with
this Agreement and Credit Contracts.

 

2.5.                              For the purposes of this Agreement one year
shall be deemed to consist of 365 days.

 

2.6.                              When Credits are allotted, the Borrower shall
additionally pay to the Creditor:

Up-front-fee – commission for mobilization of monetary resources consisting of
1% per cents from the amount of mobilized monetary and currency recourses. It
shall be paid within 3 (three) Business Day after acceptance of any Loan by the
Borrower.

 

2.8.                              Hereby the Parties agree that obligation of
Shareholder 2 to repay for the Borrower a portion of the Loan, allotted to it
under the Basic Loan Agreement, in amount of $15,000,000.00 (15 million) USD as
it was established by the paragraph 5.1.1. a) of Basic Loan Agreement, is
replaced now by the obligation of Shareholder 2 to allot to the Borrower the
Loan in the same amount, namely $15,000,000.00 USD on contractual terms. The
Parties agreed that this provision cancels all previous provisions and
agreements established Shareholder 2’s obligation to repay for the Borrower the
mentioned above portion of the Loan in amount $15,000,000.00 (fifteen million)
USD, irrespectively what documents contain these provisions;

 

3.                                      Purpose for Allotting the Loan Limit

 

3.1.                              The purpose for of allotting the Loan Limit is
to finance the Project for further industrial oil and gas Production within the
Contract Territory.

 

3.2.                              The Credits shall be allotted if the Borrower
meets the Creditor’s all requirements for execution of the documents mentioned
in this Agreement, execution of pledge for Shares 1 and Shares 2, Equipment and
the Subsoil Use Right as a Security of obligations under this Agreement.

 

3.3.                              The Credit may be allotted as well in other
ways agreed by the Parties in every particular case according to the Financing
Scheme.

 

3.4.                              All Credit Contracts shall include a reference
to this Agreement.

 

3.5.                              The Borrower shall meet the Creditor’s
requirements for execution of documents, submission of contracts, agreements,
the technical and economic feasibility, business plans, and documents confirming
Intended Use of requested credit resources, submission of other information
required by the Creditor to monitor using of the Loan.

 

3.6.                              Under and in pursuance of this Agreement, the
Creditor shall perform all necessary actions to allot the Credits to the
Borrower and to ensure their repayment, including:

 

3.6.1.                     shall receive all necessary information to fulfill
its obligations;

 

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3.6.2.                     shall render bank services to the Borrower, including
calculations on the Credits allotted (on the principal debt amount and on the
Interest);

 

3.6.3.                     shall control Intended Use of Credit resources and
their repayment;

 

3.7.                              After signing of this Agreement in accordance
with the date stated in this Agreement, the Creditor shall allot the Credits on
conditions stipulated by the Credit Contracts. The date when money is paid off
from the Borrower’s Loan Account shall be deemed as the Date of charging of the
Interest.

 

3.8.                              The Loans allotted within the limits of this
Agreement and the Interest to be paid and any other due payments shall be wired
to the Creditor’s account within the terms and in amounts provided by this
Agreement and Credit Contracts.

 

3.9.                              The Borrower agrees to submit all necessary
documents and resolutions of general meetings to Kazakhstan Legal Group Ltd., if
its organizational and legal form is changed. All changes to the Borrower’s
organizational and legal form shall be made by the Creditor’s Legal Advisor,
Kazakhstan Legal Group Ltd., or agreed upon with the latter. Upon such agreement
with Kazakhstan Legal Group Ltd., changes to the organizational and legal form
can be executed by another company, at the Borrower’s or the Shareholder 2’s
option.

 

3.10.                        For efficient fulfillment of this Agreement and
control for Intended Use of loan resources, the Borrower agrees to keep all its
accounts at the Creditor, including its subsidiaries and branches.

 

4.                                      Conditions of Allotting the Loan

 

4.1.                              The Credits shall be allotted, if:

 

4.1.1.                     The Shareholder 1:

 

performs all required procedures to sign this Agreement and changes to the
respective Pledge Agreement, including obtains permissions from its internal
management bodies, as well as other agreements from state agencies of the
Shareholder 1’s country, if necessary, and other accommodations;

 

makes a necessary decision for signing of this Agreement by the Borrower and
making amendments to the respective Pledge Agreements and to meeting
requirements of the legislation of RK related to the procedure of concluding
large transactions;

 

fulfill its obligations mentioned in paragraphs 3.1.11., 3.1.12, point 7.2., and
section 10 of the Sale-Purchase Agreement of the Shares;

 

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does not breach its obligations stipulated in paragraphs 5.1.5. and 5.1.3. of
the Sale-Purchase Agreement of the Shares;

 

inserts respective amendments to the Sale-Purchase Agreement of the Shares and
other agreements to free the Shareholder 2 from paying off $15,000,000 on behalf
of the Borrower under Basic Loan Agreement.

 

4.1.2.                                 The Borrower shall transfer Equipment and
the Right of Subsoil Use to the Creditor as the pledge to secure its liabilities
under this Agreement, shall register changes and amendments to the Equipment
Pledge Agreements and the Pledge Agreement for the Right of Subsoil Use with
authorized state agencies, as well as shall fulfill other obligations stipulated
in paragraph 2.1.1. of this Agreement.

 

4.1.3.                                 Shareholder 2:

 

perform all necessary procedures for signing of this Agreements and making
amendments into corresponding pledge agreements, including obtaining of
resolutions of its internal management bodies as well as permissions of state
authorities, if necessary, and other accommodations;

 

makes necessary decision on concluding b the Borrower of this Agreement and
making amendments into the correspond pledge agreements and meeting of the
requirements of RK legislation for the procedure of making large deals;

 

meets the requirements stipulated in paragraph 7.1 in section 10 of Shares Sale
and Purchase Agreement;

 

insert to the Shares Sale and Purchase Agreement as well as other agreements
respective amendments to free the Shareholder 2 from payment of $15,000,000 US
Dollars on behalf of the Borrower under Basic Loan Agreement.

 

4.2.                              Any amounts of the Loan shall be allotted by
OJSC Bank TuranAlem only if documents bear two signatures: signature of the
Borrower’s Chief Executive Officer and signature of either Finance Deputy Chief
Executive Officer, or of the Chairman of its Board of Directors (one of these
signatures shall be of a representative of the Shareholder2). If instructions
and payment documents are received by OJSC Bank TuranAlem to initiate any
operations from the Borrower’s settlement account lacking two signatures (one of
the Chairman of the Borrower’s Board and one of either the Chairman of its Board
of Directors or Finance Deputy Chairman of the Borrower’s Board, one of which
shall be of a representative of the Shareholder2), OJSC Bank TuranAlem shall be
entitled not to fulfill such instructions of the Borrower and shall notify the
Shareholder1 and the Shareholder2 of breaching the said condition.

 

4.3.                            The Loans will be allotted to the Borrower with
correspond execution of the Credit Agreements, where will be stipulated the
particular terms of loans’ granting: volume of the loaned resources, terms,
payment for using of the loan resources (Interest) and

 

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responsibilities of the Parties, etc. In the terms of the Credit Agreements,
except other obligatory provisions, shall be a reference to this Agreement.

 

4.4.                              Any amount of the Loan shall be wired to the
Borrower’s currency account #                 or the Borrower’s settlement
account #                   .

 

4.5.                              The Credits shall be repaid on monthly basis,
by the equal parts in the terms and in the amounts discussed by every Credit
Agreements.

 

5.                                      Calculation and Payment of the Interest

 

5.1.                              The Interest shall be accrued to the amount of
the outstanding debt on the loan, based on the actual number of days of using of
the Loan, including the first day of its using, except for the day the Loan’s
repayment. Payment of the Interest shall be performed as follows:

 

5.1.1.                     Interest calculated for first 24 months of loan using
shall be paid at a time (by one tranche) after expiration of these 24 months;

 

5.1.2.                     Interest, calculated for the rest period of using of
the Loan shall be paid every month of this period.

 

5.2.                              The period for charging of the Interest shall
be committed from the date when credit resources are charged off from the Loan
Account to the Borrower’s account or the account of a third person specified by
the Borrower.

 

5.3.                              In case advance repayment of the Loan by the
Borrower’s initiative, the Interest shall be calculated and paid as follows:

 

5.3.1.                     if the Borrower, pursuant to provisions of this
Agreement transfers the Loan amount prior to the date stipulated in its
notification of the advance repayment of the Loan, it shall pay the Interest as
of the date specified in its such notification, as well as all additional
payments provided for by this Agreement;

 

6.                                      Repayment of the Loan

 

6.1.                              The Creditor shall be entitled to take any
measures provided for by the legislation and required for the Borrower to
fulfill its obligations stipulated in this Agreement.

 

6.2.                              If the Final Maturity Date occurs, the
Creditor shall be entitled to demand from the Borrower to repay the whole or any
debt under this Agreement.

 

6.3.                              Prolongation of the period of validity of this
Agreement shall be made through a written agreement between the Parties.

 

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6.4.                              Repayment of the principal debt under the
allotted Credits will be performed in accordance with the terms of this
Agreement and Credit Agreements every month by equal portions after expiration
of 24 months of provided grace period.

 

6.5.                              Amounts due from the Borrower under this
Agreement shall be used by the Creditor to repay the debt in the following
sequence:

 

6.5.1.                     repayment of the penalty amount on the Interest;

 

6.5.2.                     repayment of the amount of overdue Interest
calculated for using of the Loan;

 

6.5.3.                     repayment of the overdue amount of the principal debt
amount of the Loan;

 

6.5.4.                     repayment of the amount of Interest accrued for using
of the Loan at the date of repayment;

 

6.5.5.                     repayment of the principal debt amount of the Loan.

 

6.6.                              If the date of repayment of the debt on the
Loan and/or accrued Interest occurs on a day off, the Borrower shall transfer
money to repay the debt on the Business Day following such day off. If the
Business Day following such day off occurs in the following calendar month, the
payment shall be made on the Business Day directly preceding such payment. Such
slippage of the payment terms shall be taken into consideration when calculating
the Interest, i.e. the Interest shall be calculated at a rate provided for by
this Agreement as of the date of money’s actual entering in the Creditor’s
account.

 

6.7.                              All payments due to the Creditor under this
Agreement shall be made by the Borrower so that the Creditor receives an amount
due to it under this Agreement in full, without any taxes, duties, customs,
commissions and other charges deducted later, and in time, save for instances
when such taxes, duties, customs and other charges are to be paid according to
the State Bodies’ request, on payments made by the Borrower prior to the date
such taxes, duties, customs and other charges take effect.

 

7.                                      Advance Repayment of the Loan

 

7.1.                              The Creditor shall have a right in a
unilateral order refuse to fulfill this Agreement further, as well as to demand
repayment of the Borrower’s full debt amount ahead of schedule, along with the
Interest calculated under both this Agreement and Basic Loan Agreement, and to
impose recovery on the Security, if:

 

7.1.1.                     Default of Cross Default occurs;

 

7.1.2.                     the Borrower lacks money to make the next payment on
the Loan, and it is unlikely to receive this payment in 15 (fifteen) calendar
days before the date of the next payment;

 

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7.1.3.                     the Borrower’s property and bank accounts are subject
to arrest or penalty;

 

7.1.4.                     the Borrower fails to fulfill any of its obligations
it is endowed with according to this Agreement;

 

7.1.5.                     the Borrower’s legal status is reorganized or
modified without prior agreement with the Creditor; in case of a change to the
structure of the Borrower’s equity capital, transfer/sale of all or part of
shares of the Borrower to third persons, cessation of the Borrower’s operations
due to reorganization, liquidation, or bankruptcy of the Borrower, including
exoneration procedures etc.

 

7.1.6.                     the Borrower, without prior consent of the Creditor,
receives loans from other banks;

 

7.1.7.                     the Borrower breaches provisions of its Charter,
Pledge Agreements, Credit Agreements, BLA, and other agreements signed under
this Agreement.

 

7.1.8.                     the Borrower fails to fulfill its obligations
provided for by paragraph 8.1. and 8.2. of this Agreement.

 

7.1.9.                     Potential Default occurs,

 

7.1.10.               the Loan is not used for the intended purpose;

 

7.1.11                  terms of repayment of the Loan and payment of the
Interest and other payments are breached.

 

7.1.12.     the Borrower’s reorganization or changes to its Charter without
prior consent of the Creditor,

 

7.1.13.               Shares Sale and Purchase Agreement is acknowledged invalid
through the fault of or on initiative of the Shareholder 1;

 

7.1.14.     the Contract or the License is acknowledged invalid, the Contract or
the License is suspended, the Authorized Body or State Bodies decide to
terminate the Contract in a unilateral manner, or to withdraw the License; or
the Contract is terminated at discretion either Party under the Contract.

 

7.1.15.     The Borrower of the Shareholder 1 fails to meet requirements
provided for by paragraphs 2.1.1. and 4.1 of this Agreement.

 

7.1.16. The Shareholder 1 fails to meet provisions of paragraph 9.4. of this
Agreement.

 

7.2.                              The Creditor shall be entitled to recommence
financing within 5 (five) Business Days after the Borrower remedies all
circumstances that caused suspension of financing.

 

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7.3                                 The Borrower shall be entitled to fulfill
its obligations related to repayment of the Credit amounts, L/C, bank guarantee,
the Remuneration/interest, and other payments ahead of schedule only upon prior
written notification of the Creditor. The Borrower shall notify the Creditor of
such intention to repay a part or the whole Credit amount ahead of schedule at
least 15 (fifteen) days before the supposed date of pre-term repayment of any
portion of the Credit.

 

8.                                      Rights and Obligations of the Parties

 

8.1.                              The Borrower undertakes the following
obligations:

 

a)             to use all its financial, commercial, information, administrative
and other resources in full to ensure effective execution and proper fulfillment
of its obligations under this Agreement, conforming to the current legislation
of the Republic of Kazakhstan, as well as ecological norms and standards, safety
standards, and to promptly provide required assets, conditions, services and
other resources to fulfill this Agreement;

 

b)                                     not to modify its constitutional
documents without the Creditor’s prior written consent; if the Creditor takes a
negative decision, its refusal shall be reasonable, and a sufficient ground for
the refusal shall be deemed possibility that the Borrower can evade fulfillment
of its obligations under this Agreement following such modifications.

 

c)             not to reorganize (merge, incorporate, divide, separate, or
modify) itself during the period of validity of this Agreement.

 

d)                                     to meet the Creditor’s reasonable demands
the Creditor lays pursuant to provisions of this Agreement;

 

e)                                      to keep records and accounts according
to the continuously maintained advanced accounting practice, to perform
accounting operations and prepare financial statements (Balance Sheet and Income
Statement) for each fiscal year;

 

f)                                        to have its own financial statement
(Balance Sheet and Income Statement) for each fiscal year, confirmed by the
independent Auditors;

 

g)                                     to submit to the Creditor notarized
copies of its financial statements for the accounting period, not later than 90
(ninety) Business Days after the end of the fiscal year, as well as the
auditors’ report prepared by the independent Auditors, in such scope and with
such details as the Credit deems necessary;

 

h)                                     to submit reports of its financial
performance and operation reports quarterly, as well as monthly reports of
operations for the period of validity of this Agreement

 

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within 30 (thirty) Business Days from the end of each accounting period (month,
quarter, year);

 

i)                                         to submit to the Creditor all
necessary information which the latter can request under this Agreement, if this
request is practicable, within 30 (thirty) calendar days;

 

j)                                         not to make any Investments without
the Creditor’s prior consent;

 

k)                                      within the period of validity of this
Agreement not to repledge the Security provided to secure its liabilities under
this Agreement, and not to transfer any proprietary interests on the property
owned by the Borrower without the Creditor’s special authorization;

 

l)                                         not to reduce the Borrower’s property
without the Creditor’s prior special written authorization issued on conditions
provided for by this Agreement;

 

m)                                   not to receive credits from other banks
without the Creditor’s prior consent, until the Loan and the Interest are paid
in full;

 

n)                                     to fulfill its liabilities under this
Agreement as the priority in respect to its all other liabilities, both existing
as of the date of signing this Agreement and those which can arouse later,
within the period of validity of this Agreement.

 

o)                                     to take all necessary measures for
keeping of Security’s safety, to prevent it from loss as well as provide and
perform all necessary actions on execution of the pledge all Borrower’s property
and assets, including all rights of claim as a security of Borrower’s
obligations in front of the Creditor under Basic Loan Agreement and this
Agreement, within 30 (thirty) days after these property and assets comes into
the Borrower’s property or origination of the correspond Borrower’s right in
case the pledge of such right is not prohibited by current legislation.

 

p)                                     without the Creditor’s written consent
not to execute a deal and/or some interrelated deals associated with purchase,
or direct or indirect alienation of the property, the total balance value of
which exceeds KZT 400,000,000 (four hundred million Tenge);

 

q)                                     without the Creditor’s prior consent not
to execute a deal and/or several interrelated deals associated with repurchase
or sale, including the issue and placement of the Borrower’s securities or
liabilities;

 

r)                                        immediately upon the Creditor’s
request to transfer all its rights on its accounts receivable [debtor
indebtedness] to the Creditor, within 10 (ten) Business Days;

 

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s)                                      within 10 (ten) Business Days to notify
the Creditor of any claims of a proprietary nature suited against the Borrower
by the third party and that can cause a Potential Default;

 

t)                                        without the Creditor’s prior consent
not to increase its liabilities to the amount exceeding in total KZT 400,000,000
(four hundred million Tenge), and such consent can be given by a member of the
Creditor’s Board or a person authorized by it; the Borrower’s all notifications
of its intention to execute such deals shall be in written and sent to the
Creditor’s following address:

 

OJSC Bank TuranAlem, 97, microdistr. Samal-2, Almaty 480099,

Tel.: 50-51-31, 50-01-19, 50-01-16, 50-51-00

Fax: 50-02-24, or to another address or telephone/fax number which the Creditor
will notify the Borrower about in written.

 

u)                                     the Borrower undertakes never held its
general meetings without participation of the Creditor’s representative. Thus,
the Contractor shall notify the Contractor in written form not later than in two
weeks before holding of the general meeting. This notification shall be drafted
in form established by legislation for notification of the shareholders, and it
shall be accompanied with all materials related to the general meeting’s agenda.
Failure to meet this requirement shall be considered as a basis for termination
of the financing by the creditor, collecting of the indebtedness under the Basic
Loan Agreement and this Agreement ahead of the schedule as well as levy
execution to the pledges and other securities.

 

v)                                     Any notification or other information
shall be deemed sent to the Creditor once it is handled out as follows:

 

1.                                       if handled out in person or through the
messenger on the date of delivery;

 

2.                                       if sent by telex;

 

3.                                       if sent by fax, if the Creditor
receives later the original notification signed by an authorized representative
of the Borrower sent through DHL, Express etc.

 

w)                                   Any notification by the Borrower of its
intention to execute a deal worth over KZT 400,000,000 (four hundred million
Tenge) shall be considered by the Creditor within 2 (two) Business Days. The
Borrower shall be entitled to execute deals mentioned in this paragraph only if
the Creditor’s original consent is available to it. Any breach of the said
condition by the Borrower can cause suspension of financing of the Project and
enables the Creditor to demand from the Borrower to repay all funds it received
earlier under this Agreement as well as to repay the Borrower’s liabilities,
bonds and other securities within 60 (sixty) days upon receipt of such demand
from the Creditor, under this Agreement.

 

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8.2.                              The Borrower, without the Creditor’s prior
consent, agrees not to:

 

a)             announce about payment of dividends, or to pay them, if and
until:

 

1.                                       the Payment Deadline occurs;

 

2.                                       the Borrower fails to make payments
under this Agreement in time;

 

b)                                     sign agreements for finance leasing and
leasing of its equipment;

 

c)                                      undertake another liability which is not
provided for by this Agreement, save for obligatory payments to the budget of
the Republic of Kazakhstan;

 

d)                                     to guarantee third parties’ liabilities;

 

e)                                      to issue pawns on third persons’
liabilities;

 

f)                                        to cause any rights of retention of
the property for debts, save for the Security of Credit Repayment, or rights
based on the law and arousing from the routine business conduct;

 

g)                                     to make any agreements or transactions
resulted with transfer of management of Borrower’s business or Operations to the
third party;

 

h)                                     to modify its Charter or to change the
sum of its share capital;

 

i)                                         to cancel, change, or waive any
provision of this Agreement;

 

j)                                         to sell, transfer, lease, or dispose
of any part of its property worth over KZT 400,000,000 (four hundred million
Tenge) per month, except for oil and gas produced.

 

8.3.                              The Creditor shall be entitled to:

 

8.3.1.                     laid Additional Requirements to the Borrower related
to fulfillment of this Agreement, and if the Borrower fails to fulfill such
Requirements – to stop financing of the Project and take measures against the
Borrower provided for by this Agreement, including but not limited to demands of
pre-term and immediate repayment of funds by the Borrower the latter received
earlier under this Agreement or Basic Loan Agreement ;

 

8.3.2.                     to request any information or documents from the
Borrower;

 

8.3.3.                     to demand from the Borrower repayment of all costs
(business tour expenses, exporters’ services, lawyer’s fee) the Creditor
incurred in respect to financing of

 

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the Project, but not more than KZT 100,000.00 (one hundred thousand Tenge) per
month;

 

8.3.4.                     to reenter the Borrower’s loan debt on the Credit in
account books as a debt in both Tenge and U.S. dollars (or in other currencies),
and vise versa;

 

8.3.5.                     if the Borrower fails to fulfill or fulfills its
obligations related to repayment of the amount of the Remuneration/interest
calculated in a materially improper way, and if an overdue debt occurs the
Creditor shall stop calculating the Remuneration/interest on the unilateral
basis, if duration of the delay of payments on the Interest makes up 30 (thirty)
calendar days;

 

8.3.6.                     to recommence calculating the Interest in a
unilateral manner, from the date calculation was ceased;

 

8.3.7.                     not to stop calculating the Remuneration/interest;

 

8.3.8.                     to suspend and recommence calculation of the fine in
a unilateral manner, for delays of both repayment of the principal amount of the
Credit and payments on the Remuneration/interest.

 

8.4.                              The Shareholder 1 agrees:

 

8.4.1.                     to act as a guarantor of the Borrower’s liabilities
arousing from this Agreement immediately upon the Creditor’s request;

 

8.4.2.                     to give its consent to providing the Security;

 

8.4.3.                     during the period of validity of this Agreement and
until its obligations under the Agreement for purchase/sale of shares are
fulfilled in full, not to initiate its reorganization or liquidation without the
Creditor’s prior consent;

 

8.4.4.                     for the period of validity of this Agreement and
until its obligations under the Agreement for purchase/sale of shares are
fulfilled in full, to prevent reorganization or liquidation of the Borrower,
save in instances, when the Creditor has agreed with such reorganization;

 

8.4.5.                     not to drop out from the Borrower’s participants or
alienate all or a part of the Borrower’s Shares 1, without the Creditor’s prior
consent;

 

8.4.6.                     without the Creditor’s prior consent not to sign any
agreements due to which the Borrower’s business or operations would be managed
by the third party, save instances stipulated by this Agreement;

 

8.4.7.                     without the Creditor’s prior consent, within the
period of validity of this Agreement not to introduce any changes or amendments,
or to authorize any

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changes to the Borrower’s Charter, or to cause a change to the Borrower’s share
capital;

 

8.4.8.                     within the period of validity of this Agreement not
to sell, or transfer, or dispose of, or assign, or pledge, or encumber in
another way the whole or a part of the Borrower’s Shares 1, save to the Creditor
or its representative, as well as not to take any actions which can cause a
change to Shares 1 or rights covering all or one of the Shares 1, unless the
Creditor’s prior written consent to this is received.

 

8.5.                              The Shareholder2 agrees:

 

8.5.1.                     to act as a guarantor of the Borrower’s liabilities
arousing from this Agreement immediately upon the Creditor’s request;

 

8.5.2.                     to give its consent to providing the Security;

 

8.5.3.                     during the period of validity of this Agreement and
until its obligations under the Agreement for purchase/sale of shares are
fulfilled in full, to prevent the Borrower’s reorganization or liquidation
without the Creditor’s prior consent, save for instances when the Creditor has
agreed with such reorganization;

 

8.5.4.                     without the Creditor’s prior consent not to drop out
of the Borrower’s participants or to alienate all of a part of the Borrower’s
Shares 2;

 

8.5.5.                     without the Creditor’s agreement not to sign any
agreements due to which the Borrower’s business or operations would be managed
by the third party, save for instances stipulated by this Agreement

 

8.5.6.                     without the Creditor’s prior consent, within the
period of validity of this Agreement not to introduce any changes or amendments,
or to authorize any changes to the Borrower’s Charter, or to cause a change to
the Borrower’s share capital

 

8.5.7.                     within the period of validity of this Agreement not
to sell, or transfer, or dispose of, or assign, or pledge, or encumber in
another way the whole or a part of the Borrower’s Shares 2, save to the Creditor
or its representative, as well as not to take any actions which can cause a
change to Shares 1 or rights covering all or one of the Shares 1, unless the
Creditor’s prior written consent to this is received.

 

9.                                      Security of Fulfillment of Obligations

 

9.1.                              The Creditor and the Borrower agree that the
Pledge Agreements and other kinds of Security shall include a reference to this
Agreement to as the principal liability.

 

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9.2.                              Non-fulfillment or improper fulfillment if its
obligations under agreements signed under this Agreement by the Borrower shall
be deemed as non-fulfillment or improper fulfillment of this Agreement.

 

9.3.                              If the Borrower fails to fulfill its
obligations related to repayment of the Credit, the Creditor shall be entitled
to impose a penalty on the Security through its the forced extrajudicial sale
pursuant to requirements of the current legislation and provisions of this
Agreement.

 

9.4.                              The Security of fulfillment of the Borrower’s
obligations under this Agreement is:

 

9.4.1.                     Shares 1 –9,550 (nine thousand five hundred and
fifty) common registered shares of the Borrower, with NIN (National
Identification Number) KZ1C41630418, and KZT 1,000 (one thousand Tenge) par
value, issued in uncertified form and owned by the Shareholder 1 as per the
proprietary right;

 

9.4.2.                     Shares 2 – 9,550 (nine thousand five hundred and
fifty) common registered shares of the Borrower, with NIN (National
Identification Number) KZ1C41630418, and KZT 1,000 (one thousand Tenge) par
value, issued in uncertified form and owned by the Shareholder 1 as per the
proprietary right;

 

9.4.3.                     The Right of Subsoil Use for the oilfield South
Alibek located in Mugalzharsky district, Aktyubinsk Oblast, Republic of
Kazakhstan, pursuant to the Pledge Agreement # 52/z dated February 4, 2002;

 

9.4.4.                     The Borrower’s all assets, including those will be
purchased in future, proprietary rights and any other property which can be
imposed a penalty on according to the current legislation of the Republic of
Kazakhstan;

 

9.4.5.                     If the Borrower breaches provisions of this Agreement
which causes a penalty imposed on the Security, the Pledger shall not be
entitled to oppose the Creditor in any way when the Creditor takes measures to
impose a penalty on the Security pursuant to provisions of this Agreement and
the legislation of the Republic of Kazakhstan. If the Borrower opposes any
measures required to impose a penalty on the Security, the Creditor shall be
entitled to satisfy its demand judicially. In this case, all costs shall be
borne by the unsuccessful Party.

 

9.4.6.                     The Borrower entitles the Creditor to withdraw in
acceptance-free way any sums of debts/money formed because of non-fulfillment or
improper fulfillment of the Borrower’s obligations under this Agreement or other
agreements signed under this Agreement, by the Borrower. Such debt can be
charged off from any bank accounts of the Borrower in the order specified by the
current legislation of the Republic of Kazakhstan.

 

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9.4.7.                     An amount received to the Loan Account from the sale
of the pledged property shall be used to repay the Borrower’s current debt to
the Creditor on the Credit allotted.

 

10.                               Responsibilities of the Parties

 

10.1                           Conditions of the Parties’ responsibility shall
be provided for by this Agreement. Responsibility for non-fulfillment/improper
fulfillment of obligations under the Credit Contracts and Pledge Agreements is
deemed as responsibility under this Agreement when considering the issue on
imposing execution on the Security.

 

10.2                           The Borrower shall bear responsibility for
substantial non-fulfillment of improper fulfillment of provisions of this
Agreement aroused because of actions by its employees, agents, representatives
or other persons it designated.

 

10.3                           Transactions which directly and/or indirectly
breach requirements and provisions of this Agreement shall be ineffective, and
persons being guilty of execution of the same, shall bear responsibility
provided for by the current legislation of the Republic of Kazakhstan.

 

10.4                           The Creditor shall bear responsibility for
non-fulfillment or improper fulfillment of provisions of this Agreement aroused
because of actions by the Creditor, its employees, representatives or other
persons it designated.

 

10.5                           In case of an untimely fulfillment of obligations
related to payment of the Remuneration/interest calculated for the Credit’s
utilization and the principal debt on the Credit, the Borrower shall to pay to
the Creditor the fine of 0.8% (point eight percent) of the due
Remuneration/interest amount per each day of untimely fulfillment of the
Borrower’s obligations or of the principal debt on the Credit.

 

10.6                           Payment of fines/penalty and compensation of
damages in case of non-fulfillment or improper fulfillment of obligations do not
exempt the Borrower from proper fulfillment of provisions of this Agreement.

 

10.7                           The Borrower’s liabilities to the Creditor on a
stated amount (principal debt, the Remuneration/interest, forfeit etc.) which
are due under this Agreement shall be cancelled from the date the respective
amount is paid off.

 

10.8                           For a material breach of provisions of this
Agreement the Creditor shall be entitled to terminate this Agreement in a
unilateral manner, the Credit amount and the Remuneration/interest calculated on
the actual period of utilization of the Credit charged from the Borrower.

 

10.9                           If obligations stipulated by paragraphs 8.1. and
8.2. of this Agreement are not fulfilled, the Borrower shall pay to the Creditor
the fine of 0.8% (point eight percent) of the principal debt amount on the
Credit per each day of non-fulfillment of provisions

 

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stipulated by the said paragraphs, until these provisions are completely met, or
the Creditor reserves the right to demand repayment of the Credit ahead of
schedule.

 

10.10                     Cases of non-fulfillment or material improper
fulfillment of provisions of this Agreement by the Borrower shall be deemed by
the Creditor as the Default. If a Default occurs, the Creditor shall be entitled
to take any measures provided for by the current legislation to protect its
interests, including forced extrajudicial recovery from the Security.

 

10.11                     If provisions of this Agreement are breached by either
Party, the guilty Party shall compensate all damages to the other Party caused
by such breach, including legal costs, unless this Agreement provides otherwise.

 

10.12                     The Borrower shall pay the penalty in Tenge at the
Creditor’s current exchange rate on the date of payment.

 

If money is transferred to the Creditor in a hard currency and the Creditor uses
this money to repay the forfeit, the Borrower shall entrust the Creditor to
convert the said sum to Tenge. In case of payment of the forfeit, the Creditor
shall charge commissions from the Borrower for the conversion of a foreign
currency to Tenge, at the Creditor’s tariffs.

 

11.                               Special Conditions

 

11.1.                        Within the period of validity of this Agreement,
any subcontracts, other deals worth at least KZT 400,000,000 (four hundred
million Tenge) related to purchase or sale of any tangible assets or components,
or finished products shall be entered by the Borrower on the tender basis, and
on conditions that do not contradict to this Agreement. Tenders are not
required, if there is the only supplier of the necessary equipment, or
standardization or equipment require a single supplier, or urgency of the
supplies limits proper holding of the tender. In such cases, the Creditor shall
be consulted with and notified of such mitigating circumstances to perform
urgent purchase of material or services.

 

11.2.                        Any transaction concluded in defiance of provisions
of this article shall be deemed as a reason to stop financing of the Project
under this Agreement.

 

12.                               Order of Settlement of Disputes and the
Applicable Laws

 

12.1.                        All disputes arousing between the Parties shall be
settled by negotiating in order to achieve a mutually acceptable decision.

 

12.2                           The Parties have agreed to consider all
disputes/discrepancies arousing in connection with or in respect of this
Agreement at the permanent Arbitration at the law firm Digesta Ltd., and upon
request of OJSC Bank TuranAlem, at its option: either at the permanent
Arbitration at the law firm Digesta Ltd., or at a court of common jurisdiction,
pursuant to the legislation of the Republic of Kazakhstan.

 

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12.3.                        The Parties agreed to execute the judgments of the
Arbitration at the law firm Digesta Ltd. voluntary. In case of any Party’s
refusal to execute the arbitration’s judgment voluntary, the successful party
has a right to file to the court of common jurisdiction for enforcement of the
arbitration judgment. Non-fulfillment of the arbitration judgment by the Party
shall be considered as non-fulfillment of contract obligations.

 

12.4.                        The applicable laws are the legislation of the
Republic of Kazakhstan.

 

13.                               Period of Agreement’s Validity

 

13.1                           This Agreement shall take effect from the date it
is signed by the Parties’ authorized representatives.

 

13.2.                        This Agreement shall be in effect until the Parties
properly fulfill their obligations provided for by this Agreement, after which
all its provisions are to be deemed ceased to be effective.

 

14.                               Meeting Requirements of the Laws on
Preservation of Environment, Health and Safety

 

14.1.                        The Borrower guarantees that throughout the term of
this Agreement its activities, operations, assets (wherever they are located or
whatever they are) will meet provisions of all applicable laws and by-laws of
the Republic of Kazakhstan related to preservation of environment, health and
safety. The Borrower verifies that on the date of signing of this Agreement it
has obtained all necessary licenses, permissions, certificates, and approvals
related to atmospheric emissions, pollution of aquatic environment, soil, liquid
and solid water drains, use, transportation, storage, and disposal of hazardous
substances, wastes, or other environmental matters, matters concerning health
and safety, which are required to perform jobs under the Project, prior to the
date of signing of this Agreement, and has paid all respective taxes and other
obligatory payments to the budget, as well as it has not received any
notifications, decisions or other demands from state bodies to remedy any
breaches of requirements of the laws of the Republic of Kazakhstan on
preservation of environment, health and safety, which the Borrower has not
remedied.

 

14.2                           Licenses, permissions, certificates, and
approvals mentioned above in this paragraph, shall be in effect throughout the
term of this Agreement.

 

14.2.                        Throughout the term of this Agreement, the Borrower
agrees to perform its activities in accordance with specified requirements for
public health, labor protection and safety for its employees. The Borrower
agrees to provide its employees with working conditions meeting requirements of
the laws, including but not limited to, those concerning labor hours, rest
period, minimum salaries, work measurement, insurance of liability for damage
caused to employees’ health and lives when the latter perform their duties.

 

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15.                               Confidentiality

 

15.1                           The Parties shall not be entitled to disclose or
use for any purposes any information they obtained under this Agreement
(hereinafter referred to as the Confidential Information), save when:

 

15.1.1. the other Party’s prior written consent to this is available;

 

15.1.2. this can be necessary according to requirements of the laws or in
connection with a respective decision taken by the authorized State Agencies.

 

15.2                           The Confidential Information does not include the
following dates:

 

15.2.1. which have been public by the time they are used or disclosed;

 

15.2.2. submitted to the Parties by a person to which they became available in a
legal way and who has a legal right to distribute such information.

 

16.                               Additional Terms

 

16.1.                        This Agreement can be changed or amended upon
agreement between the Parties in the order specified by this Agreement.

 

16.2.                        This Agreement cannot be changed, amended and/or
terminated in a unilateral manner, save for cases provided for by this
Agreement.

 

16.3.                        This Agreement is made in 5 originals which have
equal legal force, in Russian and English. If case of any discrepancies, this
Agreement in Russian language shall prevail.

 

16.4.                        All terms and conditions of this Agreement are
binding upon the Parties or shall be applied to for the Parties’ benefit.

 

16.5.                        Either Party shall be entitled to assign its rights
and obligations under this Agreement (either fully or partially) only upon
receipt of the other Party’s written consent.

 

16.6.                        Provisions of this Agreement cover the Bank Loan
Agreement #2000/03/100/147 dated April 17, 2003 and the Bank Loan Agreement
#2000/03/100/161 dated April 23, 2003, Bank Loan Agreement (credit agreements)
#200/03/100/197 dated May 12, 2003 those were signed by the Borrower and
Creditor deemed as signed within the limits of this Agreement and are integral
parts of this Agreement.

 

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17.                               Legal Addresses and Bank Details of the
Parties:

 

THE CREDITOR:

OJSC Bank TuranAlem,

480099 Republic of Kazakhstan,

Almaty, microdistr. Samal 2,

97, Zholdasbekov St., IIK 300166019 in the Payment System Department of the
National Bank of the Republic of Kazakhstan, BIK 190501319, RNN 600900114104

 

THE BORROWER:

SOJSC ‘CASPI NEFT TME’

Republic of Kazakhstan,

248 Dostyk Avenue #12

Almaty, Kazakhstan 480020

RNN 600900159346, Account 914467060

In the Almaty subsidiary of OJSC Bank TuranAlem

BIK 190501306

 

THE SHAREHOLDER 1:

Transmeridian Exploration Inc.

397 N. Sam Houston Pkwy East, Suite 300, Houston, Texas, 77060

 

THE SHAREHOLDER 2:

BRAMEX MANAGEMENT INC.

Sea Meadow House, Blackburn Highway, P.O.B. 116, Road Town, Tortola,

British Virgin Islands

 

SIGNATURES OF THE PARTIES:

 

ON BEHALF OF THE CREDITOR:

 

/s/ A. K. Saparov

 

A. K. Saparov

 

 

ON BEHALF OF THE BORROWER:

 

 

/s/ A. Kunevich

 

A. Kunevich

 

 

 

/s/ M. K. Sarkytayev

 

M. K. Sarkytayev

 

 

 

ON BEHALF OF THE SHAREHOLDER 1:

 

/s/ L. Olivier

 

L. Olivier

 

 

 

ON BEHALF OF THE SHAREHOLDER 2:

 

 

/s/ K. Sadykov

 

K. Sadykov

 

 

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