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EXECUTION COPY
Operation Number 36384
 
AGREEMENT ON PLEDGE OF MONIES AT THE BANK ACCOUNTS
 
between
 
BALYKSHY L.L.P.
 
and
 
JOINT STOCK COMPANY "BANK CENTERCREDIT"
 
and
 
EUROPEAN BANK FOR
 
RECONSTRUCTION AND DEVELOPMENT
 
Dated 15 August 2008

 
 

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TABLE OF CONTENTS

ARTICLE I. DEFINITIONS AND INTERPRETATION
7
SECTION 1.01 DEFINITIONS
7
SECTION 1.02 INTERPRETATION
14
ARTICLE II. SECURED OBLIGATIONS
15
SECTION 2.01 SECURED OBLIGATIONS
15
SECTION 2.02 TERM
16
ARTICLE III. ESTABLISHMENT OF THE PLEDGE
17
SECTION 3.01 ESTABLISHMENT OF PLEDGE
17
SECTION 3.02 PLEDGE
17
SECTION 3.03 VALUE OF PLEDGED ASSETS
18
SECTION 3.04 FIRST RANKING PLEDGE
19
SECTION 3.05 RIGHT TO USE THE PLEDGED ASSETS
19
SECTION 3.06 ACKNOWLEDGEMENT AND CONSENT TO PLEDGE BY ACCOUNTS BANK
19
SECTION 3.07 DELIVERY OF DOCUMENTS
20
SECTION 3.08 RECORDING IN PLEDGE REGISTER
21
ARTICLE IV IRREVOCABLE OBLIGATIONS
22
SECTION 4.01 IRREVOCABLE OBLIGATIONS
22
SECTION 4.02 LIMITATION OF RIGHTS
22
ARTICLE V. REPRESENTATIONS AND WARRANTIES
23
SECTION 5.01 FIRST RANKING PLEDGE
23
SECTION 5.02 DUE REGISTRATION; POWER AND AUTHORITY
23
SECTION 5.03 RIGHTS IN THE PLEDGED ASSETS; NO OTHER LIENS
23
SECTION 5.04 CONSENTS
24
SECTION 5.05 No VIOLATIONS
24
SECTION 5.06 No LITIGATION
25
SECTION 5.07 No MATERIAL ADVERSE EFFECT
25
SECTION 5.08                                REPEATED REPRESENTATIONS AND
WARRANTIES
25

 
 

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SECTION 6.01 SECTION 6.02 SECTION 6.03 SECTION 6.04 SECTION 6.05 SECTION 6.06
SECTION 6.07 SECTION 6.08 SECTION 6.09 SECTION 6.10 SECTION 6.11 SECTION 6.12
SECTION 6.13 SECTION 6.14
 
ARTICLE VII.
 
SECTION 7.01 SECTION 7.02 SECTION 7.03 SECTION 7.04 SECTION 7.05
 
ARTICLE VIII.
 
SECTION 8.01 SECTION 8.02 SECTION 8.03
ARTICLE IX.

COMPLIANCE WITH LAW 26
 
MAINTENANCE OF FUNDS IN THE BANK ACCOUNTS 26
 
INFORMATION; RIGHT OF INSPECTION 26
 
INFORMATION; STATEMENTS 26
 
PAYMENT OBLIGATIONS 27
 
LIMITATIONS 27
 
CONSENTS; REGISTRATIONS 28
 
REPLACEMENT OF THE BANK ACCOUNTS 30
 
GOVERNMENTAL EXPROPRIATION 30
 
GENERAL NOTICES 31
 
FURTHER ASSURANCES 31
 
POWERS OF ATTORNEY 32
 
DEFENCE OF PLEDGE 33
 
NEGATIVE COVENANTS BY THE PLEDGOR 33
 
DEFAULT; REMEDIES 35
 
RIGHTS UPON DEFAULT 35
 
RIGHTS ABSOLUTE 36
 
FURTHER RIGHTS UPON DEFAULT 36
 
EXPENSES 36
 
No RESPONSIBILITY FOR LOSS 36
 
APPLICATION OF PROCEEDS 37
 
PRIORITY OF MONIES APPLICATION 37
 
SURPLUS 37
 
DEFICIENCY 37
 
TERMINATION; RELEASE 38
 

 

 

 
TERMINATION PROVISIONS 38
 
 

TERMINATION AND RELEASE   38  

 
 

 
SECTION 9.01
 
SECTION 9.02
 

ARTICLE X. INDEMNITY 38

 
 

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SECTION 1 0.0 1
 
SECTION 10.02
 
SECTION 10.03
 
ARTICLE XI.
 
ARTICLE XII.
 
SECTION 12.01 SECTION 12.02 SECTION 12.03 SECTION 12.04 SECTION 12.05 SECTION
12.06 SECTION 12.07 SECTION 12.08 SECTION 12.09 SECTION 12.10 SECTION 12.11
SECTION 12.12 SECTION 12.13 SECTION 12.14 SECTION 12.15 SECTION 12.16 SECTION
12.17 SECTION 12.18 SECTION 12.19 SECTION 12.20 SECTION 12.21
 
SCHEDULE 1

INDEMNIFICATION OF PLEDGEHOLDER AND OTHERS38
 
UNENFORCEABILITY; MAXIMUM PERMITTED SATISFACTION. 39
 
REIMBURSEMENTS UNPAID DEEMED SECURED OBLIGATIONS. 39
 
COSTS 40
 
MISCELLANEOUS 40
 
TERM OF AGREEMENT 40
 
ENTIRE AGREEMENT; AMENDMENT AND WAIVER 40
 
PLEDGOR'S OBLIGATIONS; ACCOUNT BANK'S OBLIGATIONS 41
 
NOTICES 41
 
ENGLISH LANGUAGE 42
 
INDEMNITY AND EXPENSES 43
 
RIGHTS, REMEDIES AND WAIVERS 43
 
GOVERNING LAW 44
 
ARBITRATION AND JURISDICTION 44
 
PRIVILEGES AND IMMUNITIES OF THE PLEDGEHOLDER 46
 
WAIVER OF SOVEREIGN IMMUNITY 46
 
RELIANCE 48
 
SUCCESSORS AND ASSIGNS 48
 
RIGHTS OF THIRD PARTIES 48
 
NO PARTNERSHIP OR AGENCY 48
 
AGREEMENT AS PROPERTY OF THE PLEDGEHOLDER 49
 
CONFLICT 49
 
SEVERABILITY 49
 
DISCLOSURE 49
 
LANGUAGE AND COUNTERPARTS 50
 
SURVIVAL 50
 
 53
 

 
SCHEDULE 2 61

 
 

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This AGREEMENT ON PLEDGE OF MONIES AT THE BANK ACCOUNTS (the "Agreement") is
dated 15 August 2008 and is made between:
 
(1)  
BALYKSHY L.L.P., a limited liability partnership organized and existing under
the laws of the Republic of Kazakhstan with registered address at 12 Murat
Uskenbaev Street, Atash Village, Tupkaragan District, Mangistau Region, the
Republic of Kazakhstan (the "Pledgor");

 
(2)  
JOINT STOCK COMPANY "BANK CENTERCREDIT", having its registered address at 100,
Shevchenko Str., 050022, Almaty, Republic of Kazakhstan represented by the
Director of the Almaty city branch of JSC "Bank CenterCredit" (the "Accounts
Bank"); and

 
(3)  
EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT, an international organization
organized and existing pursuant to the Agreement Establishing the European Bank
for Reconstruction and Development dated 29 May 1990 and located at One Exchange
Square, London EC2A 2JN, United Kingdom (the "Pledgeholder").

 
The Pledgor, the Accounts Bank and the Pledgeholder are referred to herein as
the "Parties" and each as a "Party".
 
RECITALS
 
WHEREAS:
 
(A)By way of a loan agreement dated 21 December 2006 between the Pledgeholder
 
and the Pledgor, as amended by an amendment agreement dated 28 June 2007, the
Pledgeholder has agreed to extend to the Pledgor a loan in the total aggregate
amount of thirty two million Dollars (US$32,000,000) (the "Loan"), subject to
the terms and conditions set forth therein (as amended, restated, novated or
supplemented from time to time, the "Loan Agreement");

 
 

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(B)  
The Pledgor hereby provides security to the Pledgeholder as security for the
prompt payment when due of all amounts payable by the Pledgor to the
Pledgeholder under the Loan Agreement and any other Financing Agreements (as
defined below); and

 
(C)  
It is a condition precedent to the making of the first Disbursement (as defined
below) under the Loan Agreement that the Pledgor shall have duly executed,
perfected and delivered this Agreement.

 
NOW, THEREFORE the Parties have agreed as follows:
 
ARTICLE I. DEFINITIONS AND INTERPRETATION Section 1.01 Definitions
 
(a) Unless the context otherwise requires, capitalized terms not otherwise
defined in this Agreement (including in the Recital) shall have the respective
meanings given to them in the Loan Agreement.
 
(b) In this Agreement, the following capitalized terms shall have the following
meanings:
 
"Account Agreements"
 
"Accounts Bank"
 
"Amendment Agreement" "Applicable Law"

means each of the bank account agreements between the Pledgor and the Accounts
Bank, each dated 11 June 2008;
 
means Joint Stock Company "Bank CenterCredit", unless amended in accordance with
Section 6.08 (Replacement of the Bank Accounts);
 
has the meaning given to it at Section 6.08 (a);
 
means all laws, ordinances, regulations, judgments,

 
 

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decrees, decisions, writs, awards, orders, rules, directives, guidelines (to the
extent that such guidelines have the force of law or the compliance with which
is in accordance with general practice) and policies of any Authority, and
international treaties or any other agreements to which an Authority is a party,
to the extent applicable to the Pledgor, including the laws of Kazakhstan, its
business and financial operations or that otherwise relate to the subject matter
thereof or the exercise by the Pledgeholder of its rights under the Loan
Agreement;
"Authority"
means any national, supranational, regional or local government or governmental,
administrative, fiscal, judicial or government owned body, department,
commission, authority, tribunal, agency or entity or central bank (or any
person, whether or not government owned and howsoever constituted or called,
that exercise the functions of a central bank);

 
"Bank Accounts" means each of the Cash Sweep Accounts, the Debt Service Reserve
Accounts, and the Revenue Accounts;
 
"Cash Sweep Accounts" means the Pledgor's Tenge denominated account, number
731467931 and the Pledgor's Dollar denominated account number 731070331, each
designated as such in accordance with Section 5.16 (Cash Sweep) of the Loan
Agreement;
 
"Debt Service Reserve means the Pledgor's Tenge denominated account,
 
 
Accounts" number 731467232 and the Pledgor's Dollar denominated account number
731070632, each designated as such in accordance with Section 5.15

 
 

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(Debt Service Reserve Account) of the Loan Agreement;
 
"Default" means any event of default under any Financing Agreement;

 
"Disbursement" "Dollars", "USD" or "S'
 
has the meaning as set out in the Loan Agreement;
 
means the lawful currency of the United States of America from time to time;
 
"Financing Agreements"
 
means
 
(a)  
this Agreement;

 
(b)  
the Loan Agreement, as described in Sections 2.01(a) and 2.02(b) below;

 
(c)  
the Investment Agreement dated 28 June 2007, pursuant to which the Pledgeholder
agrees to make certain equity investments in the Pledgor, specifically by
acquiring a twenty two per cent. (22%) participation interest in the Pledgor and
by increasing the charter capital of the Pledgor by a Tenge amount equivalent to
ten million Dollars (USD 10,000,000);

 
(d)  
the Shareholders Agreement, dated August 6, 2008 pursuant to which the
Pledgeholder, the Pledgor, the Shareholder and the Sponsor agree, inter alia,
the manner in which the Pledgor is to be operated;

 
(e)  
the Put Option Agreement, dated August 6, 2008 pursuant to which the
Pledgeholder may require the Sponsor to purchase the participation interest of
the Pledgeholder in the Pledgor within an agreed timeframe and for an agreed
amount;

 
(f)  
the Deed of Financial and Performance Guarantee, dated August 6, 2008 pursuant
to which the Sponsor

 
 

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(as guarantor) provides an irrevocable completion and performance guarantee of
amounts owing to the Pledgeholder under the Financing Agreements and amounts
needed by the Pledgor for the Project;
 
(g)  
the Share Retention Deed to be entered into between the Pledgor, certain
founding individuals of the Sponsor, the Sponsor, the Shareholder and the
Pledgeholder, pursuant to which, inter alia, (i) the Shareholder agrees not to
effect any change in its equity interest in, or transfer any of its shares in
the capital of, the Pledgor (in its capacity as Borrower) without the prior
written consent of the Pledgeholder and (ii) the Sponsor agrees not to effect
any change in its equity interest in, or transfer any of its shares in the
capital of, the Shareholder without the prior written consent of the
Pledgeholder;

 
(h)  
the Subordination Deed, dated August 6, 2008 pursuant to which each of the
Sponsor and the Shareholder agree on the terms thereof to subordinate the
payment of amounts payable by the Pledgor (in its capacity as Borrower) to it
under the Subordinated Debt (as defined in the Loan Agreement) to the payment of
all amounts payable by the Pledgor to the Pledgeholder under the Financing
Agreements;

 
(i)  
the Agreement on Pledge of Movable Property, dated August 15, 2008 pursuant to
which the Pledgor pledges its movable property as specified therein to the
Pledgeholder as security for the prompt payment when due of all amounts payable
by the Pledgor to the Pledgeholder under the Loan

 
 

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Agreement and any other Financing Agreement;
 
(j)  
the                Agreement                             on                Mortgage

 
 
of Immovable Property, dated August 15, 2008 pursuant to which the Pledgor
mortgages its immovable property as specified therein to the Pledgeholder as
security for the prompt payment when due of all amounts payable by the Pledgor
to the Pledgeholder under the Loan Agreement and any other Financing Agreement;

 
(k)  
the Participation Interest Pledge Agreement, dated August 15, 2008 pursuant to
which the Shareholder pledges the participation interest it owns in the Pledgor
to the Pledgeholder as security for the prompt payment when due of all amounts
payable by the Pledgor to the Pledgeholder under the Loan Agreement and any
other Financing Agreement;

 
 
(1) the Insurance Assignment to be entered into, pursuant to which the Pledgor
assigns by way of security in favour of the Pledgeholder the benefit of all
contracts of insurance and insurance policies and any amounts payable under such
contracts and policies and any other insurance amounts payable by insurers to
the Pledgor;

 
 
(m) the Deed of Assignment of Contracts, dated August 6, 2008 pursuant to which
the Pledgor assigns by way of security in favour of the Pledgeholder the benefit
of the Construction Contract entered into by and between the Pledgor and Datoba
Construction LLP on 7 November 2006; all service contracts which have been
entered into or will be entered into by and between the Pledgor and marine base
service users; and all performance bonds, warranties,

 
 

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guarantees, undertakings and such other agreements which have been entered into
or will be entered into by the Pledgor and any other person;
 
(n)  
the Disbursement applications made by the Pledgor under the Loan Agreement and
any notices, certificates and applications issued by the Pledgor (in its
capacity as Borrower) or any other party to the Pledgeholder in each case in
connection with the Loan Agreement or any other Financing Agreement; and

 
(o)  
any other agreement designated as a Financing Agreement by the Pledgor (in its
capacity as Borrower) and the Pledgeholder,

 
and any of the above may individually be referred to as a "Financing Agreement";
 
"Lien" has the meaning as set out in the Loan Agreement;
 
"Kazakhstan" means the Republic of Kazakhstan;
 
"New Bank Account" means the new bank account as referred to at Section 3.02(b);
 
"Pledge" means the pledge as referred to at Section 3.02 (Pledge);
 
"Pledged Assets" has the meaning as set out in Section 3.02 (Pledge);
 
"Proceeds"includes
 
(i) any and all proceeds of any sale, insurance, indemnity, warranty or
guarantee payable to the Pledgor from time to time with respect to any of the
Pledged Assets;
 
(ii) any and all payments (in any form whatsoever) made or due and payable to
the Pledgor from time to time in connection withany requisition,confiscation,

 
 

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condemnation, seizure or forfeiture of all or any part of the Pledged Assets;
 
(iii) any and all other amounts from time to time paid or payable under or in
connection with any of the Pledged Assets; and
 
(iv) any right of the Pledgor to claim any or all of the above;
"Revenue Accounts"
means the Pledgor's Tenge denominated account number 731467533 and the Pledgor's
Dollar denominated account number 731070933, each established by the Pledgor for
the purpose of holding revenues of the Pledgor;

 
"Secured Obligations" has the meaning given to it in Article II (Secured
Obligations);
 
"Security Documents" has the meaning as set out in the Loan Agreement;
 
"Security Period"
 
 
 
 
"Shareholder"
means the period commencing on the date hereof and terminating on (i) the date
upon which the Pledgeholder shall have notified the Pledgor that all of the
Secured Obligations owed to it have been unconditionally and irrevocably paid,
discharged and performed in full in accordance with the respective terms of the
Loan Agreement and any other Financing Agreements, or (ii), if earlier, the date
on which this Agreement has been terminated by agreement between the Parties;
 
 
means Caspian Real Estate Limited, a limited liability company organized and
existing under the laws of the British Virgin Islands;

 
"Sponsor" means Caspian Services Inc., a corporation organized and existing
under the laws of the State of Nevada,  United States of America; and

 
 

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"Tenge" or "KZT" means the lawful currency of Kazakhstan from time to time.
 
Section 1.02 Interpretation
 
In this Agreement, unless the context otherwise requires:
 
(a) unless the context otherwise requires, words denoting the singular include
the plural and vice versa, words denoting gender include all gender, and words
denoting persons include natural persons, corporations, partnerships, joint
ventures, or trusts, unincorporated organisations, authorities or any other
entity whether acting in an individual, fiduciary or other capacity, and
references to a person include its successors and permitted assigns and/or
transferees;
 
(b) a reference to a specified Article, Section or Exhibit shall be construed as
a reference to that specified Article, Section of, or Exhibit to, this
Agreement;
 
(c) a reference to an agreement includes any contract, concession, deed,
undertaking, instrument or other contractual arrangement, and any annexes,
exhibits, schedules thereto, and the side letters or other instruments issued in
connection therewith;
 
(d) a reference (i) to an amendment or to an agreement being amended includes a
supplement, variation, assignment, novation, restatement or re­enactment, and
(ii) to an agreement shall be construed as a reference to such agreement as it
may be amended, restated, supplemented or novated from time to time;
 
(e) the headings and the Table of Contents are inserted for convenience of
reference only and shall not affect the interpretation of this Agreement;

 
 

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(f) a Default is outstanding or continuing until it has been remedied or waived
by the Pledgeholder in writing;
 
(g) any reference to "law" means any law (including, any common or customary
law) and any treaty, constitution, statute, legislation, decree, normative act,
rule, regulation, judgment, order, writ, injunction, determination, award or
other legislative or administrative measure or judicial or arbitral decision in
any jurisdiction which has the force of law or the compliance with which is in
accordance with general practice in such jurisdiction;
 
(h) any reference to a provision of law, statute, rule or regulation is a
reference to that provision as from time to time amended or re-enacted;
 
(i) the terms "include" and "including" shall be deemed to be followed by the
words "without limitation" where not so followed;
 
(j) "the knowledge of the Pledgor", "to the Pledgor's knowledge", or "to the
best of the Pledgor's knowledge" or similar expressions related to the knowledge
of the Pledgor or of the Account Bank shall always include the best knowledge of
such party after due and careful inquiry and investigation; and
 
(k) all exhibits, supplements and amendments hereto shall form an integral part
of this Agreement.
 
ARTICLE II. SECURED OBLIGATIONS
 
Section 2.01 Secured Obligations
 
(a) The Pledge under this Agreement secures (i) the principal amount of thirty
two million Dollars (USD32,000,000) payable by the Pledgor in its capacity as
borrower under the Loan Agreement plus interest thereon and (ii) all present and
future obligations and liabilities (whether actual or contingent, whether owed
jointly or severally or in any other capacity whatsoever) of the Pledgor under
or in connection with the Loan

 
 

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Agreement, including the payment of fees, charges, taxes, duties or other
imposts, damages, losses, costs and expenses (including legal fees and court
costs) including, for the avoidance of doubt, any expenses related to enforcing
of the provisions of the Loan Agreement, any payments made under the Loan
Agreement which are thereafter avoided or required to be restored in an
insolvency, liquidation or otherwise, and any obligation to indemnify the
Pledgeholder.
 
(b) The Pledge under this Agreement secures all present and future obligations
and liabilities (whether actual or contingent, whether owed jointly or severally
or in any other capacity whatsoever) of the Pledgor, the Sponsor and the
Shareholder to the Pledgeholder under any other Financing Agreement (including
this Agreement), including the payment of principal, interest, fees, charges,
taxes, duties or other imposts, damages, losses, costs and expenses (including
legal fees and court costs), including, for the avoidance of doubt, any expenses
related to retaking, holding, preparing for sale, selling or otherwise
foreclosing upon, and disposing of, or realising on the Pledged Assets or
enforcing the provisions of this Agreement or any other Financing Agreement, all
amounts recoverable under a pledge in accordance with Applicable Law, any
payments made under this Pledge which are thereafter avoided or required to be
restored in an insolvency, liquidation or otherwise, and any obligation to
indemnify the Pledgeholder up to the maximum aggregate amount of forty million
Dollars (USD 40,000,000) (the "Secured Obligations").
 
(c) For the avoidance of doubt, (i) the nature, the amount and the terms and
conditions of the Secured Obligations are set forth in the Loan Agreement and
the other Financing Agreements; (ii) the Pledge created hereunder shall remain
in effect for the duration of the Security Period notwithstanding any failure by
the Pledgor in its capacity as borrower to satisfy its payment obligations in
accordance with the payment schedules set forth in the Loan Agreement.
 
Section 2.02 Term
 
(a) The Secured Obligations shall continue in full force until all obligations
of the Pledgor have terminated in accordance with the terms of the Loan
Agreement or, if

 
 

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later, until the date all moneys payable under the Loan Agreement has been fully
paid in accordance with the provisions thereof
 
(b) Without prejudice to Section 2.02(a) or any rights of the Pledgeholder under
the Loan Agreement or any other Financing Agreement, the Borrower shall repay
the Loan in ten (10) equal (or as nearly as equal as possible) semi-annual
installments on each of 20 May or 20 November (provided, however, if such date
falls on a day which is not a Business Day, the payment date shall be changed to
the next succeeding Business Day). The first repayment of the Loan shall be made
on 20 November immediately following 28 June 2010 and the final repayment of the
Secured Obligations is scheduled for 20 May 2015 (the "Scheduled Repayment
Date") as these terms may be amended, restated, supplemented or novated from
time to time pursuant to the terms and conditions of the Loan Agreement.
 
(c) Notwithstanding the foregoing, all obligations of the Pledgor hereunder
shall continue until the later of (i) the Scheduled Repayment Date; or (ii) the
expiration of the Security Period, as confirmed by written notice from the
Pledgeholder to the Pledgor.
 
ARTICLE III. ESTABLISHMENT OF THE PLEDGE
 
Section 3.01 Establishment of Pledge
 
The Parties hereby agree that the Pledgor shall establish a pledge, pursuant to
the terms and on the conditions of this Agreement, on the Pledged Assets for the
benefit of the Pledgeholder and as security for the Secured Obligations.
 
Section 3.02 Pledge
 
As security for the prompt and complete payment and performance when due of the
Secured Obligations in accordance with the terms of the Loan Agreement and the
other Financing Agreements (including this Agreement), the Pledgor hereby
unconditionally and irrevocably establishes and provides to the Pledgeholder a
pledge

 
 

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(the "Pledge") over the following assets:
 
(a) all funds deposited from time to time in the Debt Service Reserve Accounts,
the Cash Sweep Accounts, and the Revenue Accounts and all other sums from time
to time standing to the credit of these accounts in any currency;
 
(b) all funds deposited from time to time in any new Bank Account opened
pursuant to Section 6.08 (Replacement of the Bank Accounts) (each a "New Bank
Account") and all other sums from time to time standing to the credit of such
accounts in any currency;
 
(c) following a Default, all interest credited and accrued on the amounts on
deposit in the Debt Service Reserve Accounts, the Cash Sweep Accounts, the
Revenue Accounts and any New Bank Accounts; and
 
(d) all of the Pledgor's rights and interest in respect of all such funds
against the Accounts Bank or replacement Accounts Bank whether pursuant to the
Account Agreements, any other agreement as between the Pledgor and the Accounts
Bank or replacement Accounts Bank, or Applicable Law, together referred to
herein as the "Pledged Assets". Section 3.03 Value of Pledged Assets
 
In satisfaction of the requirements of Applicable Law, the value of the Pledged
Assets shall be equal to 1 Tenge and for the purpose of complying with Article
307.1 of the Kazakhstan Civil Code shall be equal to the actual amount from time
to time standing to the credit of the Debt Service Reserve Accounts, the Cash
Sweep Accounts and the Revenue Accounts. In the event of any foreclosure on the
Pledged Assets, the Proceeds received by the Pledgeholder may exceed or be less
than the specified assessed value, depending on the actual amount of funds
transferred to and received by the Pledgeholder as a result of the foreclosure.

 
 

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Section 3.04 First Ranking Pledge
 
The Parties to this Agreement hereby acknowledge that upon registration of the
Pledge with the relevant registration authority of the Republic of Kazakhstan
(the "Registration Authority"), the Pledge shall become a first ranking pledge
over the Pledged Assets and shall give first ranking priority to the claims of
the Pledgeholder over the claims of any other person or entity in respect of the
Pledged Assets, other than claims which are preferred by operation of law over
the claim of the Pledgeholder. For the avoidance of doubt, the priority ranking
contemplated by this Section 3.04 shall also apply to any Amendment Agreement
entered into pursuant to Section 6.08 (Replacement of the Bank Accounts) or
Section 12.02 (Entire Agreement; Amendment and Waiver).
 
Section 3.05 Right to Use the Pledged Assets
 
The Pledgor shall retain the right to use the Pledged Assets during the term of
this Agreement and shall have the right to use the Pledged Assets only pursuant
to the terms of the Loan Agreement, the Account Agreements, this Agreement and
the other Financing Agreements provided that the Pledgor shall not withdraw
funds from the Debt Service Reserve Accounts for any purpose without the prior
written consent of the Pledgeholder. Upon the occurrence of any Default or at
any time thereafter, the Pledgeholder shall be entitled to give written notice
of such Default to the Accounts Bank, and upon such notice, the Accounts Bank
shall cease to fulfill the instructions of the Pledgor with respect to the
respective Pledged Assets or Bank Accounts without the prior written consent of
the Pledgeholder. Such notice is irrevocable unless and until Pledgeholder
issues to the Accounts Bank a written notice that such Default has ceased.
 
Section 3.06 Acknowledgement and Consent to Pledge by Accounts Bank
 
(a) This Agreement constitutes a valid notice to the Accounts Bank on the Pledge
of the Pledged Assets and such notice is irrevocable unless and until the
Pledgeholder issues to the Accounts Bank a written notice that this Agreement
has been terminated.
 
(b) The Accounts Bank hereby acknowledges that it is advised of the Pledge

 
 

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by the Pledgor to the Pledgeholder of all of its rights, interests and benefits
in the Pledged Assets. The Accounts Bank confirms that it has received no prior
notice of any pledge, assignment, lien, charge, encumbrance or other claim over
the Pledged Assets.
 
(c) The Accounts Bank and the Pledgor hereby acknowledge and consent that upon
receipt of Pledgeholder's written notice under Section 3.05 (Right to Use the
Pledged Assets), the Accounts Bank shall accept instructions from the
Pledgeholder with respect to operation of the Bank Accounts and the Pledged
Assets.
 
(d) The Accounts Bank and the Pledgor hereby agree that the Pledgeholder and its
authorised representatives shall have the right to use and operate the Pledged
Assets and the Bank Accounts in accordance with this Agreement, and the Accounts
Bank shall accept and act in accordance with all instructions of the
Pledgeholder and their authorised representatives, pursuant to the terms and
conditions set forth in Article VII (Default; Remedies) hereunder and the
Account Agreements.
 
Section 3.07 Delivery of Documents
 
Without prejudice to the Pledgor's obligation to deliver any documents to the
Pledgeholder pursuant to Sections 6.07 (Consents; Registrations) or 6.08
(Replacement of the Bank Accounts), the Pledgor shall deliver, or cause to be
delivered as the case may be, to the Pledgeholder (in form and substance
satisfactory to the Pledgeholder) with copy to the Accounts Bank:
 
(a) on the date hereof, a notarized copy of the resolution of the General
Meeting of the participants of the Pledgor approving the Pledge on the terms and
conditions set forth herein (including a right of the Pledgeholder to foreclose
on the Pledged Assets under a non-judicial procedure);
 
(b) no later than thirty (30) calendar days after the date when any New Bank
Account required to be pledged under the terms of this Agreement is opened, a
notarized copy of the resolution of the General Meeting of the participants of
the Pledgor approving the Pledge over any funds deposited from time to time in
such New Bank Account and all other sums from time to time standing to the
credit of these accounts on the terms and

 
 

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conditions set forth herein (including a right of the Pledgeholder to foreclose
on the Pledged Assets under a non-judicial procedure);
 
(c) as promptly as practicable after the date hereof, but in any event prior to
the date of the first Disbursement (and in the case of a New Bank Account opened
pursuant to Section 6.08 (Replacement of the Bank Accounts) below, as promptly
as practicable after, and in any event within seven (7) days of the date of
registration of the Pledge over the New Bank Account(s)), a notarized copy of
the certificate of state registration of a movable property pledge and an
extract from the pledge register ("reestr zalogov") (the "Pledge Register")
expressly reflecting the notation in such Pledge Register of the Pledge in
favour of the Pledgeholder pursuant to this Agreement (or in the case of a New
Bank Account, the Pledge Register expressly reflecting the notation of the
Pledge in favour of the Pledgeholder pursuant to this Agreement as amended by
the relevant Amendment Agreement);
 
(d) immediately upon receipt, a notarized copy of any document or instrument
evidencing any right or entitlement of the Pledgor to any of the Pledged Assets
existing as of the date hereof or subsequently acquired, and any notice or any
other communication issued by any party to the Pledgor in respect of the Pledged
Assets or Bank Accounts (for avoidance of doubt, this provision will also apply
to New Bank Accounts opened pursuant to Section 6.08 (Replacement of the Bank
Accounts) below); and
 
(e) within two (2) Business Days of demand at any time and immediately upon
Default, original title documents related to the Pledged Assets.
 
Section 3.08 Recording in Pledge Register
 
The Pledgor shall at all times maintain an accurate, updated and complete
notation in the Pledge Register of the Pledge created hereunder over the Pledged
Assets (including registration of any amendments hereto). In the event that the
registration or recording requirements of any Applicable Law shall have been
amended or modified or the corporate form of the Pledgor shall have been
changed, then the Pledgor agrees

 
 

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promptly and at its sole cost and expense to execute and deliver all further
instruments, agreements and other documents, and to take all further action,
that may be necessary, or that the Pledgeholder may reasonably request, in order
to register, record and protect the first priority pledge created hereunder and
to enable the Pledgeholder to exercise and enforce their rights and remedies
hereunder with respect to the Pledged Assets. Any cost or expense resulting from
any of the foregoing actions (including those amounts incurred by the
Pledgeholder) shall be borne by the Pledgor.
 
ARTICLE IV. IRREVOCABLE OBLIGATIONS
 
Section 4.01 Irrevocable Obligations
 
The obligations of the Pledgor under this Agreement are continuing, irrevocable
and shall remain in full force and effect without regard to, and shall not be
released, suspended, discharged, terminated or otherwise affected by, any
circumstance or occurrence whatsoever, including, without limitation (i) any
renewal, extension, amendment, novation or modification of, or addition or
supplement to or deletion from, the Loan Agreement or any other Financing
Agreement or any other instrument or agreement referred to therein, or any
assignment or transfer of any thereof, (ii) any waiver, consent, extension,
indulgence or other action or inaction under or in respect of any such
instrument or agreement or this Agreement or any exercise or non-exercise of any
right, remedy, power or privilege under or in respect of this Agreement, the
Loan Agreement or any other Financing Agreement, (iii) any furnishing of any
additional security, including any additional security or pledge created with
respect to any New Bank Account, to the Pledgeholder or any acceptance thereof
or any sale, exchange, release, surrender or realisation of any security by the
Pledgeholder, or (iv) to the fullest extent permitted by Applicable Law, any
invalidity, irregularity or unenforceability of all or part of any of the
Secured Obligations or of any other security therefor.
 
Section 4.02 Limitation of Rights
 
This Agreement shall not be construed as limiting or in any way precluding

 
 

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the exercise by the Pledgeholder of any or all of their rights for the full and
timely payment of all amounts owing under the Loan Agreement or any other
Financing Agreement or any other rights as set forth in any Applicable Law.
 
ARTICLE V. REPRESENTATIONS AND WARRANTIES
 
The Pledgor hereby represents and warrants to the Pledgeholder as follows:
Section 5.01 First Ranking Pledge
 
The execution of this Agreement and its registration with the Registration
Authority will establish in favor of the Pledgeholder a first ranking pledge
over the Pledged Assets. For the avoidance of doubt, the priority ranking
contemplated by this Section 5.01 shall also apply to any Amendment Agreement
entered into pursuant to Section 6.08 (Replacement of the Bank Accounts) or
Section 12.02 (Entire Agreement; Amendment and Waiver).
 
Section 5.02 Due Registration; Power and Authority
 
It is a limited liability partnership duly organised and validly existing under
the laws of Kazakhstan. It has the full corporate power, authority and right to
execute and deliver, to perform its obligations under, and to grant the Pledge
on the Pledged Assets pursuant to this Agreement and has taken all necessary
corporate action to authorise the execution, delivery and performance of, and
grant of the Pledge. This Agreement has been duly executed by the duly
authorised representatives of the Pledgor, and subject to the reservations and
qualifications set out in the legal opinions of the legal counsels to the
Pledgeholder as provided under Article IV (Conditions Precedent) of the Loan
Agreement, constitutes the valid and legally binding obligation of it
enforceable in accordance with its terms.
 
Section 5.03 Rights in the Pledged Assets; No Other Liens
 
The Pledgor is the sole owner of the Pledged Assets and is the sole owner of

 
 

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the right to receive and withdraw all funds in the Bank Accounts. Except for the
Pledge granted to the Pledgeholder hereby, the Pledgor owns the Pledged Assets
free and clear of any and all encumbrances, including without limitation, Liens,
rights of purchase, rights of first refusal and claims and is not subject to any
dispute or litigation with or claim by any third party actual, or to the
knowledge of the Pledgor threatened or contingent with respect to the Pledged
Assets. Except for the Pledge granted to the Pledgeholder hereby, no other
agreement or other public notice, filing or registration of rights of any third
parties, Liens with respect to all or any part of the Pledged Assets is on file
or on record in any public office legally required to maintain such agreements,
notices, filings or registrations in any territory in which all or any of the
Pledged Assets are maintained.
 
Section 5.04 Consents
 
Other than the acts described in Section 6.07 (Consents; Registrations) of this
Agreement, no consent or authorisation or filing with or other act by or in
respect of any Authority is required in connection with the execution, delivery,
performance, validity or enforceability of this Agreement.
 
Section 5.05 No Violations
 
The terms and conditions of any other agreement between the Accounts Bank and
the Pledgor do not restrict, prohibit and/or adversely impact upon the pledge of
the Pledged Assets and/or any rights of the Pledgeholder hereunder. Each of the
Pledgor and the Accounts Bank represents and warrants with respect to itself
that the execution and performance of this Agreement by it: (i) will not violate
any provision of any Applicable Law or regulation or of any order, judgment,
writ, award or decree of any court, arbitrator or Authority, domestic or
foreign, or of its Charter, or of any securities issued by it, or of any
indenture, lease, agreement, instrument or undertaking to which it is a party or
which purports to be binding upon it or any of its property, assets or rights,
and (ii) will not result in the creation or imposition of any right or Lien on
any of its property or assets except as contemplated by this Agreement.

 
 

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Section 5.06 No Litigation
 
No litigation, investigation or proceeding of or before any arbitrator or
Authority is pending or, to the knowledge of any of the Pledgor or the Accounts
Bank, threatened by or against any of the Pledgor or the Accounts Bank or
against any of its properties or revenues with respect to this Agreement or any
of the transactions contemplated hereby which would have a material adverse
effect upon any of the Pledged Assets or the granting of the Pledge.
 
Section 5.07 No material adverse effect
 
There is no other event which, in relation to the Pledged Assets, or the Pledge
would or is likely to (i) have a material adverse effect on the ability of the
Pledgor to perform its obligations hereunder or (ii) materially and adversely
affect the status and ranking of the Pledgeholder as secured creditor hereunder,
in each case, as reasonably determined by the Pledgeholder.
 
Section 5.08 Repeated Representations and Warranties
 
The representations and warranties provided in this Article V, such
representations and warranties shall be deemed to be automatically repeated by
the Pledgor on the date of submission of the Pledgor's applications for
Disbursement, on every other date on which each Disbursement is made under the
Loan Agreement, on each Interest Payment Date, and on every date when an
amendment agreement is entered into, by reference to the facts and circumstances
then existing..
 
ARTICLE VI. COVENANTS
 
The Pledgor hereby covenants to the Pledgeholder and agrees that during the
Security Period, it shall do all of the following:

 
 

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Section 6.01 Compliance with Law
 
The Pledgor shall comply with all Applicable Law relating to the Pledged Assets
or any part thereof or to the operation of the Pledgor's business.
 
Section 6.02 Maintenance of Funds in the Bank Accounts
 
The Pledgor shall maintain at all times sufficient sums standing to the credit
of or comprising each of the Pledged Assets so as to equal the aggregate amount
of all the moneys required to be held in each Pledged Account in accordance with
the provisions of the Loan Agreement, the Account Agreements and the other
Financing Agreements.
 
Section 6.03 Information; Right of Inspection
 
The Pledgor shall furnish promptly to the Pledgeholder such information
pertaining to the Pledged Assets and the Bank Accounts as referred to in the
Account Agreements and such additional information as the Pledgeholder may from
time to time reasonably request, consistent with the information and access
rights granted to the Pledgeholder by the Pledgor in Section 5.14 (Furnishing of
Information) of the Loan Agreement. Upon reasonable notice from the
Pledgeholder, the Pledgor shall permit representatives of the Pledgeholder
(including, without limitation, any consultants engaged by the Pledgeholder) to
have access to all the books, correspondence and records of the Pledgor
pertaining to the Pledged Assets and the Bank Accounts, and the representatives
of the Pledgeholder may examine the same and make photocopies thereof
 
Section 6.04 Information; Statements
 
Until the Secured Obligations have been repaid in full and all other obligations
of the Pledgor have been discharged by the Pledgor in full, to the satisfaction
of the Pledgeholder, the Pledgor undertakes, from and after (and during the
continuance of) any request in writing from the Pledgeholder therefor, to send
to the Pledgeholder promptly upon receipt from the Accounts Bank copies of all
statements, orders and notices or any other documents given by the Accounts Bank
to the Pledgor in connection with the Pledged Assets and the Bank Accounts and
pursuant to the terms and conditions

 
 

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of the Account Agreements.
 
Section 6.05 Payment Obligations
 
The Pledgor shall pay promptly when due all taxes, duties, assessments,
governmental charges or levies imposed upon the Pledged Assets and the Bank
Accounts or in respect of its income or profits therefrom, as well as all claims
of any kind against or with, respect to the Pledged Assets or the Bank Accounts,
except that a failure to pay such amounts shall not constitute a breach hereof
if (i) the validity thereof is being contested in good faith and by appropriate
proceedings; (ii) such proceedings do not involve any risk of the sale,
forfeiture or loss of all or any part of the Pledged Assets or any interest or
right therein or thereto; (iii) such proceedings do not, pending their
resolution, have a material adverse effect and could not reasonably be expected
to have a material adverse effect; and (iv) in the Pledgeholder's reasonable
opinion, the Pledgor has set aside adequate reserves or has otherwise satisfied
the Pledgeholder, in its sole discretion, that it has unconditional access to
funds, in compliance with the terms of the Financing Agreements, sufficient to
pay promptly in full any amount that the Pledgor is likely to be ordered to pay
on final determination of such proceedings. The Pledgor shall pay, or procure
the payment of, for the duration of the Security Period, all present and future
registration fees, stamp duties and other imposts or transaction taxes in
relation to the creation, maintenance an perfection of the security interest in
the Pledged Assets and the New Bank Account and execution and performance of
this Agreement and any Amendment Agreement shall keep the Pledgeholder
indemnified against any failure or delay in making such payments.
 
Section 6.06 Limitations
 
The Pledgor shall not sell, transfer, assign, lease, mortgage, pledge or
otherwise dispose of any of the Pledged Assets, or attempt, offer or agree to do
so except as expressly permitted by any of the Financing Agreements. Except for
the Pledge granted hereunder, the Pledgor shall not create, incur or permit to
exist, and shall take all commercially reasonable actions to defend the Pledged
Assets against, and will take such other commercially reasonable action as is
necessary to remove, any Lien with respect to

 
 

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the Pledged Assets except to the extent any such Lien is permitted to continue
in accordance with any of the Financing Agreements. The Pledgor shall not
initiate liquidation or reorganisation proceedings without the prior written
consent of the Pledgeholder. The Pledgor further covenants and agrees that it
will take, upon notice to and receipt of consent from the Pledgeholder, all
commercially reasonable actions to defend the Pledgeholder's rights, title and
interest to the Pledged Assets against the claims and demands of all third
parties including any Authority.
 
Section 6.07 Consents; Registrations
 
(a) The Pledgor shall procure that all of its rights in respect of the Pledged
Assets arising during the Security Period including any rights to substitutions
of the Bank Accounts specified herein are pledged in favour of the Pledgeholder
in accordance with this Agreement. The Pledgor shall, without prejudice to
Section 6.08 (Replacement of the Bank Account), do and authorise and permit to
be done each and every act or thing and deliver each and every document or
instrument which may be deemed necessary by the Pledgeholder in accordance with
this Agreement in order to (i) obtain all the consents and authorisations which,
in the reasonable opinion of the Pledgeholder, are necessary or desirable to
comply with laws of Kazakhstan with respect to the Pledge, and (ii) register the
Pledge, to the fullest extent permitted by Applicable Law, with any relevant
governmental agency or authority in Kazakhstan to protect or preserve the right,
title and interests of the Pledgeholder with respect to the Pledged Assets and
for the purpose of enforcing the Pledgeholder's rights under or in connection
with this Agreement.
 
(b) The Pledgor shall at its own cost and account within ten (10) Business Days
of the execution of this Agreement, register the Pledge with the Registration
Authority and/or elsewhere if required by Applicable Law and such registration
shall in any event occur before first Disbursement. The Pledgor shall ensure
that such registration of the Pledge is a first in time priority in any and all
registers or records of the Registration Authority, to secure the first ranking
of the Pledge as contemplated in Section 5.01 (First Ranking Pledge). The
Pledgor shall within ten (10) days after the registration of the Pledge with the
Registration Authority and/or with any other Authority deliver to the
Pledgeholder and permit the Pledgeholder during the Security Period to

 
 

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retain, at the expense and risk of the Pledgor, at any office of the
Pledgeholder or with any correspondents or other agents of the Pledgeholder,
whether in the United Kingdom, Kazakhstan, or elsewhere, the originals of all
related certificates, documents and filings, including this Agreement bearing
the registration mark and the certificate of registration of a movable property
pledge, confirming such registration.
 
(c) For each New Bank Account opened pursuant to Section 6.08 (Replacement of
the Bank Accounts) below, within ten (10) Business Days of the Pledgeholder's
dispatch of the executed five (5) originals of the Amendment Agreement, or where
this Agreement has otherwise been amended in accordance with Section 12.02
(Entire Agreement; Amendment and Waiver), the Pledgor shall register any such
Amendment Agreement with the Registration Authority and/or elsewhere if required
by Applicable Law . The Pledgor shall within ten (10) days after the
registration of the Amendment Agreement with the Registration Authority and/or
with any other Authority deliver to the Pledgeholder and permit the Pledgeholder
during the continuance of this security to retain, at the expense and risk of
the Pledgor, at any office of the Pledgeholder or with any correspondents or
other agents of the Pledgeholder, whether in the United Kingdom, Kazakhstan, or
elsewhere, the originals of all related certificates, documents and filings,
including the Amendment Agreement bearing the registration mark and certificate
of re-registration of movable property, confirming such re-registration.
 
(d) The Pledgor shall do, authorise and permit to be done each and every other
act or thing and agrees to execute any additional documents or instruments which
may be deemed necessary by the Pledgeholder to (i) register the Pledge or any
modification, amendment or supplement thereto or any other agreement or document
that may be requested by the Pledgeholder in order to implement this Agreement
and the transactions as set out herein, to protect or preserve the rights, title
and interests of the Pledgeholder with respect to the Pledged Assets and for the
purpose of enforcing the Pledgeholder 's rights under or in connection with this
Agreement; and (ii) obtain all the consents and authorisations which, in the
opinion of the Pledgeholder, are necessary or desirable to comply with
Applicable Law with respect to the Pledge.
 
(e) The Pledgor undertakes to maintain the Pledge in perfected form at all

 
 

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times during the Security Period.
 
Section 6.08 Replacement of the Bank Accounts
 
(a) In the event that any of the Bank Accounts needs to be replaced or
substituted in accordance with Applicable Law (or where there has been a change
in the identity of the Accounts Bank), the Pledgor shall promptly and no later
than ten (10) Business Days from the date when any such New Bank Accounts are
opened, deliver, or cause to be delivered as the case may be, to the
Pledgeholder (in form and substance satisfactory to the Pledgeholder) signed and
sealed by each of the Pledgor and the Accounts Bank four (4) originals of the
amendment agreement to this Agreement, which shall be substantially in the form
of Schedule 1 (Form of Amendment Agreement) hereof (the "Amendment Agreement").
The Pledgor shall then (i) register any Amendment Agreement in accordance with
Section 6.07(c) above and (ii) promptly deliver a fully executed original of the
Amendment Agreement to the Accounts Bank and to the Pledgeholder.
 
(b) In the event that any New Bank Account is opened with a replacement Accounts
Bank, the Pledgor shall procure that the new Accounts Bank enters into and duly
signs and seals five (5) originals of an Amendment Agreement agreeing to be
bound by all the terms and conditions of this Agreement.
 
Section 6.09 Governmental Expropriation
 
In the event that the Pledged Assets or the Bank Accounts are claimed, arrested
(frozen) or seized by or pursuant to any Authority or through the exercise of a
purported right of an Authority to requisite, expropriate, take or nationalise
the Pledged Assets, or if any Authority withdraws or suspends withdrawal of the
Pledged Assets from the Bank Accounts or the Pledged Assets are taken through
any governmental action or inaction which affects the use of the Bank Accounts
or the use or value of the Pledged Assets, the Pledgor and the Pledgeholder
shall join and co-operate at the Pledgor's cost, in prosecuting their respective
claims, including claims for damages. All Proceeds

 
 

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awarded as compensation for government requisition, expropriation, taking or
nationalisation shall be paid to the Pledgeholder and retained by the
Pledgeholder as part of the Pledged Assets . If such Proceeds for any reason
whatsoever are in fact received by the Pledgor, the Pledgor shall immediately
pay them to the Pledgeholder or immediately provide to the Pledgeholder other
security, acceptable to the Pledgeholder.
 
Section 6.10 General Notices
 
The Pledgor shall advise the Accounts Bank (if applicable) and the Pledgeholder
promptly and in reasonable detail of any event which affects, or could
reasonably be expected to affect the value of any of the Pledged Assets, the
Pledge granted hereby or any part of the Pledgeholder's rights under this
Agreement, including (i) any Lien asserted against any of the Pledged Assets,
(ii) any event or circumstance which in any material way affects or alters any
of the terms on which the Accounts Bank operate or service the Pledged Assets or
the Bank Accounts, (iii) any proposals concerning the obligatory acquisition or
transfer by any person or entity of all or any part of the Pledged Assets or the
Bank Accounts or any proposals concerning the obligatory transfer to any person
or entity of the right of ownership to all or any part of the Pledged Assets,
(iv) any court proceeding (or any other proceeding or bringing of suits, claims
or notices which might lead to a court proceeding) with respect to all or any
part or parts of the Pledged Assets, and, exclusively at the Pledgor's sole
expense, and (v) the occurrence of any other event which could reasonably be
expected to affect the value of the Pledged Assets or on the Pledge granted
hereby. The Pledgor shall in each of the above cases immediately upon becoming
aware of any of the above and, at the Pledgor's sole expense take such measures
and undertake such actions with respect to the aforesaid Lien, proposals,
applications, court proceedings, other proceedings, suits, claims, events and
the like which may reasonably be required to protect the interests of the
Pledgor and the Pledgeholder with regard thereto.
 
Section 6.11 Further Assurances
 
The Pledgor shall execute all such other documents and instruments and do all
such other acts and things as the Pledgeholder may determine are necessary or
desirable

 
 

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for the purposes of ensuring the validity, legality and first ranking of the
Pledge given in this Agreement or to enable the Pledgeholder to exercise any of
the rights and powers granted to it under this Agreement. In addition, the
Pledgor agrees at any time and from time to time upon the reasonable request of
the Pledgeholder and at the sole expense of the Pledgor, to promptly and duly
sign a replacement pledge agreement which the Pledgeholder may prepare
containing a description of the Pledged Assets in such detail as may be required
by the Pledgeholder.
 
Section 6.12 Powers of Attorney
 
For the purposes of securing the rights of the Pledgeholder to the Pledged
Assets and the performance of all of the obligations and duties of the Pledgor
to the Pledgeholder under this Agreement, the Loan Agreement and any other
Financing Agreements, the Pledgor shall within 3 (three) Business Days of the
execution of this Agreement and thereafter upon the first demand of the
Pledgeholder appoint by a power of attorney, substantially in the form as set
out in Schedule 2 (Form of Power of Attorney) hereto the Pledgeholder or any
other person designated by the Pledgeholder as the representative or
representatives of the Pledgor. The Pledgeholder or such representative shall
possess the full right to appoint deputies and the right to delegate further any
powers with respect to all or part of the Pledged Assets or Bank Accounts of the
Pledgor. The Pledgor shall be obliged to renew such power of attorney or powers
of attorney when necessary in order to ensure the continuing validity of the
powers of attorney within the Security Period. The Pledgeholder or the
representative shall be further entitled on behalf and in the name of the
Pledgor or otherwise to sign legally binding documents or to perform actions
having legally binding consequences, which it (or its deputies or other
empowered persons) considers, in its opinion, to be appropriate in connection
with the exercise of any rights of the Pledgeholder pursuant to any of this
Agreement, the Loan Agreement or any other Financing Agreement or which the
Pledgor is obliged to create for the benefit of the Pledgeholder in accordance
with this Agreement, the Loan Agreement or any other Financing Agreement. The
Pledgeholder may only use such power of attorney to the extent that the Pledgor
has not taken any action requested by the Pledgeholder pursuant to Section 6.07
(Consents; Registrations),

 
 

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unless a Default has occurred, in which case such power of attorney may be
exercised in the sole discretion of the Pledgeholder. All powers of attorney
described in this Section 6.12 shall be issued in the Russian and English
language, in the manner required by the Charter of the Pledgor and Applicable
Law, shall be substantially in the form as set out in Schedule 2 (Form of Power
of Attorney) and as agreed by the Pledgeholder, shall bear the corporate seal of
the Pledgor and shall be notarized and apostilled.
 
Section 6.13 Defence of Pledge
 
Save to the extent allowed under Section 6.06 (Limitations), the Pledgor shall,
at its sole cost and expense, defend the Pledged Assets and the Pledge created
hereunder in favour of the Pledgeholder against all claims, demands, attachments
or any legal or administrative proceedings made, commenced or threatened by any
person at any time claiming the same or any interest therein, and promptly
notify the Pledgeholder of any such claims or demands.
 
Section 6.14 Negative Covenants by the Pledgor
 
Until the Secured Obligations have been repaid or discharged in full to the
satisfaction of the Pledgeholder, the Pledgor shall not, without the
Pledgeholder's prior written consent:
 
(a) subject to Section 6.08 (Replacement of the Bank Accounts), terminate,
amend, supplement or otherwise modify the terms of any agreement with the
Accounts Bank relating to the Pledged Assets (including the Account Agreements);
 
(b) close any of the Bank Accounts;
 
(c) transfer any or all funds at any time deposited in the Bank Accounts in any
way that is not expressly permitted under this Agreement, the Account
Agreements, the Loan Agreement and any other Financing Agreement;
 
(d) release, grant time or indulgence or compound with any third party or suffer
to arise any set-off (except set-off by the Accounts Bank for charges and fees

 
 

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associated with the maintenance of the Bank Accounts, provided that following
the exercise of any such set-off right by the Accounts Bank, the Pledgor shall
promptly deposit in the relevant Pledged Account an amount equal to the amount
in respect of which such right of set-off was exercised) or other adverse rights
against the whole or any part of any of the Pledged Assets nor do or omit to do
anything which may delay or prejudice the right of the Pledgeholder to receive
payment of any sums from time to time standing to the credit of the Bank
Accounts or comprising any of the Pledged Assets; or
 
(e) except for the Pledge created hereunder, create, incur or permit to exist
any Lien with respect to any of the Pledged Assets, and, in furtherance thereof,
the Pledgor shall take all necessary action under Applicable Law to defend the
Pledged Assets against, and shall take all such other action as is necessary to
remove, any such Lien with respect to the Pledged Assets. The Pledgor shall not
be deemed to be in breach of this covenant in the event that a Permitted Lien,
as described in Section 6.05(2) of the Loan Agreement, is established, provided
that the Pledgor will take all such action as is necessary to remove any such
Permitted Lien in accordance with the terms of the Loan Agreement;
 
(0 take or permit the taking of any action (corporate or otherwise) that: (i)
has or is likely to have a material adverse effect on the ability of the Pledgor
to perform its obligations hereunder; or (ii) result in a breach of the covenant
in paragraph (c) of Section 6.06 (Limitations); or (iii) materially and
adversely affect the status and ranking of the Pledgeholder as secured creditor
hereunder, in each case, as reasonably determined by the Pledgeholder;
 
(g) initiate liquidation or insolvency proceedings or any reorganisation of the
Pledgor;
 
(h) without prejudice to the Pledgeholder's rights under Section 6.09
(Governmental Expropriation), settle:
 
(i) suits or claims pertaining to all or any part of the Pledged Assets (other
 
than the settlement of such suits or claims where such suits and claims
themselves

 
 

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do not constitute a Default); or
 
(ii)suits or claims with regard to any insurance agreements in respect of all or
any part of the Pledged Assets (if such insurance is retained), or any other
compensation or insurance payments pertaining thereto other than as permitted
pursuant to the Loan Agreement or the other Financing Agreements.
 
(i) do any act, or omit to do any act, if that act or omission would adversely
affect the rights of the Pledgeholder under this Agreement, the Loan Agreement
or any other Financing Agreement.
 
ARTICLE VII. DEFAULT; REMEDIES
 
Section 7.01 Rights upon Default
 
If a Default has occurred and is continuing, the Pledge hereby constituted shall
become immediately enforceable and the Pledgeholder may foreclose on the Pledged
Assets under a non-judicial procedure and upon written notice to the Pledgor and
the Accounts Bank informing the Pledgor of the amount due, and upon performance
of all other requirements of Applicable Law, take one or more of the following
actions with respect to all or part of the Pledged Assets, in its discretion:
 
(a) collect, receive or withdraw funds deposited in or income related to the
Bank Accounts, whether accrued before or after the date of such notice;
 
(b) if elected by the Pledgeholder in its discretion, levy execution upon the
Pledged Assets through judicial proceedings in accordance with the laws of
Kazakhstan;
 
(c) if elected by the Pledgeholder in its discretion, levy execution upon the
funds available in the Bank Accounts through non-judicial proceedings to the
extent permitted by the laws of Kazakhstan;
 
(d) to the extent permitted by the laws of Kazakhstan, retain and operate the

 
 

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Bank Accounts; and/or
 
(e) pursue any and all other rights and remedies against the Bank Accounts,
Pledged Assets and the Pledgor, as provided by Applicable Law, the Account
Agreements and any other Financing Agreements.
 
Section 7.02 Rights Absolute
 
To the fullest extent permitted by Applicable Law, the Pledgeholder may enforce
or request enforcement of any provision of this Agreement and the rights granted
hereunder without having first to exhaust any other remedy or to enforce any
other Lien that the Pledgeholder may otherwise have against the Pledgor or any
other property or assets of the Pledgor. For the purposes hereof, and to the
fullest extent permitted by Applicable Law, the Pledgor hereby expressly waives
any requirement of presentment, demand, protest or other notice of any kind.
 
Section 7.03 Further Rights upon Default
 
The Pledgor agrees, and the Accounts Bank confirms that it is aware, that in
addition to the rights of the Pledgeholder hereunder, the Pledgeholder shall on
the occurrence of a Default have all the rights granted to it pursuant to the
Account Agreements.
 
Section 7.04 Expenses
 
The costs and expenses incurred by the Pledgeholder in connection with the
exercise of any of its rights under this Article VII shall be immediately
payable to the Pledgeholder by the Pledgor upon demand by the Pledgeholder and
any such costs and expenses shall be included and form part of the Secured
Obligations hereunder.
 
Section 7.05 No Responsibility for Loss
 
The Pledgeholder shall not bear any responsibility for any loss, damage or harm
which may result from the exercise, or the failure to exercise, or the
impossibility to exercise, or the delay in exercising any of the Pledgeholder's
rights and powers pursuant

 
 

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to this Agreement.
 
ARTICLE VIII. APPLICATION OF PROCEEDS
 
Section 8.01 Priority of Monies Application
 
To the fullest extent permitted by Applicable Law, all proceeds from any
foreclosure on the Pledged Assets, together with all monies received by the
Pledgeholder hereunder, shall be applied to make payments in the following
order:
 
(a) first, to the payment of all costs and expenses incurred by the Pledgeholder
in connection with such sale or disposition or any other enforcement action
taken pursuant to Article VII (Default; Remedies) above, and/or the collection
of any such monies (including, without limitation, legal fees and expenses)
and/or the exercise by the Pledgeholder of any other of its rights and/or powers
under this Agreement or in respect of the dissolution or liquidation of the
Pledgor; and
 
(b) second, the balance of such money shall be applied to the payment of the
Secured Obligations as described in Section 2.01 (Secured Obligations).
 
Section 8.02 Surplus
 
Any surplus of cash proceeds remaining after the termination of the Loan
Agreement and the payment in full of the amounts described in Section 8.01
(Priority of Monies Application) shall be paid over to the Pledgor or to such
person or entity as is lawfully entitled thereto.
 
Section 8.03 Deficiency
 
In the event that the proceeds collected or received by the Pledgeholder
hereunder are insufficient to pay the all amounts to which the Pledgeholder is
legally entitled in the currency provided for in the Loan Agreement (whether
before or after payments are made pursuant to Section 8.01(a) above) the Pledgor
shall remain liable for

 
 

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any deficiency, together with interest thereon, at the applicable rate set forth
in Section 3.06 (Default Interest) of the Loan Agreement.
 
ARTICLE IX. TERMINATION; RELEASE
 
Section 9.01 Termination Provisions
 
At the end of the Security Period, this Agreement and all rights and interests
hereunder shall terminate; provided, however, that the obligations of the
Pledgor under Article X (Indemnity) shall survive the termination of this
Agreement.
 
Section 9.02 Termination and Release
 
Upon termination of this Agreement, the Pledgeholder, at the written request and
sole expense of the Pledgor, shall execute and deliver to the Pledgor all
agreements, documents or instruments that are reasonably necessary to
acknowledge the satisfaction, termination and release of this Agreement and the
Pledge created hereby. Any such satisfaction, termination and release shall be
without recourse upon or warranty by the Pledgeholder.
 
ARTICLE X. INDEMNITY
 
Section 10.01Indemnification of Pledgeholder and Others
 
(a) The Pledgor assumes full liability for, and agrees to and shall indemnify
and hold harmless the Pledgeholder and its officers, directors, employees,
representatives and agents (individually referred to as an "Indemnitee" and
collectively as "Indemnitees") against and from, any and all liabilities,
obligations, losses, damages (compensatory, punitive or otherwise), penalties,
claims, actions, Taxes, suits, costs and expenses (including, reasonable legal
counsel's fees and expenses and costs of investigation) of whatsoever kind and
nature, including, without prejudice to the

 
 

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generality of the foregoing, those arising in contract or tort (including,
negligence) or by strict liability or otherwise, which are imposed on, incurred
by or asserted against the Pledgeholder or any of its officers, directors,
employees, agents or servants (whether or not also indemnified by any other
person under any other document) and which in any way relate to or arise out of,
whether directly or indirectly:
 
(i) any of the transactions contemplated by any Financing Agreement or Project
Agreement or the execution, delivery or performance thereof;
 
(ii) the operation or maintenance of the Pledgor's facilities or the ownership,
control or possession thereof by the Pledgor; or
 
(iii)the exercise by the Pledgeholder of any of its rights and remedies under
any of the Financing Agreements;
 
provided that the Pledgeholder shall not have any right to be indemnified
hereunder for its own gross negligence or willful misconduct.
 
(b) The Pledgor shall pay or procure the payment for the duration of the
Security Period of all present and future registration fees, stamp duties and
other imposts or transaction taxes in relation to the execution, delivery and
performance of this Agreement and the maintenance of the Pledge provided for
hereby and shall keep the Pledgeholder indemnified against any failure or delay
in paying them.
 
Section 10.02Unenforceability; Maximum Permitted Satisfaction.
 
If and to the extent that the obligations of the Pledgor under this Article X
are unenforceable for any reason, the Pledgor hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under Applicable Law.
 
Section 10.03Reimbursements Unpaid Deemed Secured Obligations.
 
Any amounts paid by any Indemnitee as to which such Indemnitee has the

 
 

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right to reimbursement shall constitute, to the extent permitted by Applicable
Law, obligations secured by the Pledged Assets. The indemnity obligations of the
Pledgor contained in this Article X shall continue in full force and effect
notwithstanding the full payment of all loans made under the Loan Agreement and
other amounts secured under this Agreement. For avoidance of doubt, the Parties
hereby agree that the Pledgor shall not be entitled to repudiate this
obligation.
 
ARTICLE XI. COSTS
 
All costs, taxes, including moveable property taxes, charges and duties relating
to the Bank Accounts and the Pledged Assets and to the execution, registration,
filings, authorizations, consents, notarizations and enforcement of this
Agreement and any of the rights of the Pledgeholder provided for in it
(including, but not limited to, duties, expenses and fees (including legal
fees)) shall be borne by the Pledgor; provided that if notwithstanding this
provision, the Pledgeholder has paid any such costs, taxes, charges or duties,
the Pledgor shall immediately upon request of the Pledgeholder, reimburse the
Pledgeholder for all such amounts paid in the currency incurred.
 
ARTICLE XII. MISCELLANEOUS
 
Section 12.01 Term of Agreement
 
This Agreement shall continue in full force until full and irrevocable discharge
of the Secured Obligations pursuant to the terms of the Financing Agreements
(but without prejudice to Article IX (Termination; Release)).
 
Section 12.02 Entire Agreement; Amendment and Waiver
 
(a) This Agreement and each of the other Financing Agreements and any other
documents referred to herein or therein constitute the entire obligations of the
parties hereto with respect to the subject matter hereof and shall supersede any
prior

 
 

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expressions of intent or understandings with respect to this transaction. Any
amendment to, or waiver by the Pledgeholder of any of the terms or conditions
of, or consent given by the Pledgeholder under, this Agreement (including,
without limitation, under this Section 12.02) shall be in writing, signed by the
Pledgeholder and, in the case of an amendment, by the Pledgor and the Accounts
Bank.
 
(b) In any event, this Agreement may be changed, waived, discharged, or
terminated only by an instrument in writing signed by the Parties in
substantially the same form of the Amendment Agreement set out in Schedule 1
(Form of Amendment Agreement) hereto. To the fullest extent permitted by
Applicable Law, no failure or delay on the part of the Pledgeholder in
exercising any of the rights or remedies granted to it hereunder shall
constitute a waiver thereof.
 
Section 12.03 Pledgor's Obligations; Account Bank's Obligations
 
The Pledgor and the Accounts Bank each agree to be bound by the terms and
provisions of this Agreement, to make no payments or distributions contrary to
the terms and provisions hereof and to do every other act and thing necessary or
appropriate to carry out such terms and provisions.
 
Section 12.04 Notices
 
Any notice, application or other communication to be given or made under this
Agreement shall be in writing. Except as otherwise provided in this Agreement,
such notice, application or other communication shall be deemed to have been
duly given or made when it is delivered by hand, airmail or facsimile
transmission to the party to which it is required or permitted to be given or
made at such party's address specified below or at such other address as such
party designates by notice to the party giving or making such notice,
application or other communication:
 
 
 

--------------------------------------------------------------------------------

 
 
For the Pledgor:
 
Balykshy L.L.P.
3rd Floor
174B Furmanov Street Almaty
Republic of Kazakhstan
Attention: Paul A. Roberts, Director
Fax: +7 (327) 272 8450
 
For the Accounts Bank:
 
92/87, Abylai Khan/Kabanbai batyr Street 050010, Almaty
Republic of Kazakhstan
Fax: +7 727 237 8601
Attention: Private Banking Office Branch Manager
 
For the Pledgeholder:
 
European Bank for Reconstruction and Development
One Exchange Square
London EC2A 2JN
United Kingdom
Fax: + 44 20 7338 6100
Attention: Operation Administration Unit
 
Section 12.05 English Language
 
All documents to be furnished or communications to be given or made by the
Pledgor or the Accounts Bank under this Agreement shall be in the English
language or, if in another language, shall be accompanied by a translation into
English certified by the Pledgor or the Accounts Bank, as the case may be, which
translation shall be the governing version among the Pledgor or the Accounts
Bank and the Pledgeholder.

 
 

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Section 12.06 Indemnity and Expenses
 
(a) The Pledgor shall be liable to indemnify the Pledgeholder on demand against
any loss or expense sustained or incurred by the Pledgeholder as a result of:
 
(i)  
a failure by the Pledgor to perform any of its obligations under this

 
 
Agreement; or

 
(ii)  
any representation or warranty made in this Agreement by the Pledgor

 
 
having been untrue, incorrect or misleading when made.

 
(b) The indemnities contained in this Agreement, including Section 12.06 and
Article X (Indemnity), shall survive the termination of this Agreement.
 
Section 12.07 Rights, Remedies and Waivers
 
(a) For the avoidance of doubt, any misrepresentation or breach of any right or
remedy hereunder by the Pledgor shall be deemed a Default;
 
(b) The rights and remedies of the Pledgeholder in relation to any
misrepresentation or breach of warranty on the part of the Pledgor or the
Accounts Bank shall not be prejudiced by any investigation by or on behalf of
the Pledgeholder into the affairs of the Pledgor or the Accounts Bank, by the
execution or the performance of this Agreement or by any other act or thing
which may be done by or on behalf of the Pledgeholder in connection with this
Agreement and which might, apart from this Section, prejudice such rights or
remedies.
 
(c) No course of dealing and no delay in exercising, or omission to exercise,
any right, power or remedy accruing to the Pledgeholder upon any default under
this Agreement or any other agreement shall impair any such right, power or
remedy or be construed to be a waiver thereof or an acquiescence therein. No
single or partial exercise of any such right, power or remedy shall preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy. No action of the Pledgeholder in respect of any such default, or
acquiescence by them therein, shall affect or impair any

 
 

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right, power or remedy of the Pledgeholder in respect of any other default.
 
(d) The rights and remedies provided in this Agreement and the other Financing
Agreements are cumulative and not exclusive of any other rights or remedies,
whether provided by Applicable Law or otherwise.
 
(e) In addition to the Pledgeholder's right to foreclose on the Pledged Assets
under a non-judicial procedure, the Pledgeholder may proceed to protect and
enforce their rights hereunder in any court or other tribunal by an action at
law, suit in equity or other appropriate proceedings, whether for damages, the
specific performance of any term hereof or otherwise, or in aid of the exercise
of any power granted hereby or by law. The Pledgor and the Accounts Bank hereby
agree to pay to the Pledgeholder on demand such amount in the Loan Currency as
shall be sufficient to reimburse the Pledgeholder for its costs and expenses
related to, or arising out of, any such action or remedies, including,
reasonable fees and expenses of legal counsel.
 
Section 12.08 Governing Law
 
This Agreement and the rights and obligations of the Parties hereunder shall be
governed by and construed in accordance with the laws of Kazakhstan (including
any international treaties to which Kazakhstan is a party and which are in force
in the territory of Kazakhstan).
 
Section 12.09 Arbitration and Jurisdiction
 
(a) Any dispute, controversy or claim arising out of or relating to this
Agreement, or the breach, termination or invalidity hereof, shall be settled by
arbitration in accordance with the UNCITRAL Arbitration Rules as at present in
force. There shall be one (1) arbitrator and the appointing authority shall be
LCIA (London Court of International Arbitration). The seat and place of
arbitration shall be London, England and the English language shall be used
throughout the arbitral proceedings. The parties hereby waive any rights under
the Arbitration Act 1996 or otherwise to appeal any arbitration award to, or to
seek determination of a preliminary point of law by, the courts of England. The
arbitral tribunal shall not be authorised to take or provide, and each of

 
 

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the Pledgor and Accounts Bank agree that it shall not seek from any judicial
authority, any interim measures of protection or pre-award relief against the
Pledgeholder, any provisions of the UNCITRAL Arbitration Rules notwithstanding.
The arbitral tribunal shall have authority to consider and include in any
proceeding, decision or award any further dispute properly brought before it by
the Pledgeholder (but no other party) insofar as such dispute arises out of any
Financing Agreement, but, subject to the foregoing, no other parties or other
disputes shall be included in, or consolidated with, the arbitral proceedings.
In any arbitral proceeding, the certificate of the Pledgeholder as to any amount
due to the Pledgeholder under any Financing Agreement shall be prima facie
evidence of such amount.
 
(b) Notwithstanding Section 12.09(a), this Agreement and the other Financing
Agreements, and any rights of the Pledgeholder arising out of or relating to
this Agreement or any other Financing Agreement, may, at the option of the
Pledgeholder, be enforced by the Pledgeholder in the courts of Kazakhstan or in
any other courts having jurisdiction. For the benefit of the Pledgeholder, each
of the Pledgor and the Accounts Bank hereby irrevocably submits to the
non-exclusive jurisdiction of the courts of England with respect to any dispute,
controversy or claim arising out of or relating to this Agreement or any other
Financing Agreement, or the breach, termination or invalidity hereof or thereof.
Each Pledgor and the Accounts Bank hereby irrevocably consents to the service of
process or any other legal summons out of such courts by mailing copies thereof
by registered airmail postage prepaid to its address specified herein. Each of
the Pledgor and the Accounts Bank covenants and agrees that, so long as it has
any obligations under this Agreement, it shall maintain a duly appointed agent
to receive service of process and any other legal summons in England for
purposes of any legal action or proceeding brought by the Pledgeholder in
respect of any Financing Agreement and shall keep the Pledgeholder advised of
the identity and location of such agent. Nothing herein shall affect the rights
of the Pledgeholder to commence legal actions or proceedings against Pledgor or
the Accounts Bank in any manner authorised by the laws of any relevant
jurisdiction. The commencement by the Pledgeholder of legal actions or
proceedings in one or more jurisdictions shall not preclude the Pledgeholder
from commencing legal actions or proceedings in any other jurisdiction, whether
concurrently

 
 

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or not. Each of the Pledgor and the Accounts Bank irrevocably waives any
objection it may now or hereafter have on any grounds whatsoever to the laying
of venue of any legal action or proceeding and any claim it may now or hereafter
have that any such legal action or proceeding has been brought in an
inconvenient forum.
 
Section 12.10 Privileges and Immunities of the Pledgeholder
 
Nothing in this Agreement shall be construed as a waiver, renunciation or other
modification of any immunities, privileges or exemptions of the Pledgeholder
accorded under the Agreement Establishing the European Bank for Reconstruction
and Development, international convention or any Applicable Law. Notwithstanding
the foregoing, the Pledgeholder has made an express submission to arbitration
under Section 12.09 (a) and accordingly, and without prejudice to its other
privileges and immunities (including, without limitation, the inviolability of
its archives), it acknowledges that it does not have immunity from suit and
legal process under Article 5(2) of Statutory Instrument 1991, No. 757 (The
European Bank for Reconstruction and Development (Immunities and Privileges)
Order 1991), or any similar provision under English law, in respect of the
enforcement of an arbitration award duly made against it as a result of its
express submission to arbitration pursuant to Section 12.09 (a).
 
Section 12.11 Waiver of Sovereign Immunity
 
Each of the Pledgor and the Accounts Bank represents and warrants to the
Pledgeholder that this Agreement, the Loan Agreement, and any other Financing
Agreements and the undertakings by the Pledgor and the Accounts Bank under any
such Financing Agreements to which it is a party are commercial rather than
public or governmental acts and that neither the Pledgor nor the Accounts Bank
is 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
Applicable Law or in any jurisdiction where an action may be brought for the
enforcement of any of the obligations arising under or relating to this
Agreement or the other Financing Agreements. To the extent that any of the
Pledgor or the Accounts Bank or any of their assets has or hereafter may acquire
any right to immunity from set-off, legal proceedings, attachment prior to
judgment, other attachment or execution of judgment on the grounds of
sovereignty or otherwise, each of the Pledgor and the Accounts Bank hereby
irrevocably waives such rights to immunity in respect of its obligations arising
under or relating to this Agreement, the Loan Agreement or any other Financing
Agreements.

 
 

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Section 12.12 Reliance
 
Each of the Pledgor and the Accounts Bank acknowledges that the Pledgeholder is
entering into this Agreement, and has acted, solely in its capacity as a lender
under the Loan Agreement, and not as an advisor to the Pledgor or the Accounts
Bank. Each of the Pledgor and the Accounts Bank represents and warrants that, in
entering into this Agreement, it has engaged and relied upon advice given to it
by its own legal, financial and other professional advisors and it has not
relied on and will not hereafter rely on any advice given to it by the
Pledgeholder.
 
Section 12.13 Successors and Assigns
 
(a) This Agreement binds and inures to the benefit of the respective successors,
assignees and permitted transferees of the parties hereto.
 
(b) Neither the Pledgor nor the Accounts Bank may assign or otherwise transfer
all or any part of its rights or obligations under this Agreement without the
prior written consent of the Pledgeholder.
 
(c) The benefit of this Agreement may be freely and unconditionally assigned,
transferred or otherwise disposed of, in whole or in part, by the Pledgeholder
to any other person.
 
Section 12.14 Rights of Third Parties
 
A person who is not a party to this Agreement has no rights under any Applicable
Law to enforce or enjoy the benefit of any term of this Agreement (except as
provided for in Section 12.13 (Successors and Assigns).
 
Section 12.15 No Partnership or Agency
 
Nothing in this Agreement (or any of the arrangements contemplated hereby) shall
be deemed to constitute a partnership between the parties hereto nor save as
expressly provided herein constitute any party the agent of any other for any
purpose.

 
 

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Section 12.16 Agreement as property of the Pledgeholder
 
This Agreement is and will remain the property of the Pledgeholder after any
release, settlement, discharge or arrangement relating to the liability of the
Pledgor or the Accounts Bank under this Agreement.
 
Section 12.17 Conflict
 
In the event of any conflict between:
 
(a) the terms of the Loan Agreement, the Account Agreements and this Agreement,
the provisions of the Loan Agreement shall prevail; and
 
(b) the terms of the Account Agreements and this Agreement, the provisions of
the Account Agreements shall prevail.
 
Section 12.18 Severability
 
Each of the provisions of this Agreement shall be severable and distinct from
one another and if at any time any one or more of those provisions (or any part
thereof) is or becomes invalid, illegal or unenforceable the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired. In this event, to the extent practicable under the circumstances,
the parties to this Agreement shall negotiate in good faith to replace the void,
illegal or unenforceable provision with a valid, legal and enforceable provision
which corresponds as far as possible to the spirit and purpose of the void,
illegal or unenforceable provision.
 
Section 12.19 Disclosure
 
(a) the Pledgeholder may disclose such documents, information and records
regarding the Pledgor or any other party to a Financing Agreement and this
transaction (including, without limitation, copies of this Agreement and any
Financing Agreement) as the Pledgeholder deems appropriate in connection with
any dispute involving the Pledgor or any other party to a Financing Agreement,
for the purpose of preserving or enforcing any of the Pledgeholder 's rights
under any Financing Agreement

 
 

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or collecting any amount owing to the Pledgeholder or in connection with any
proposed Participation or any other proposed sale, transfer, assignment,
novation or other disposal contemplated by above Section 12.14 (Successors and
Assigns).
 
(b) Except as required by Applicable Law, neither the Pledgor nor the
 
Accounts Bank shall disclose any documents, information and records regarding
itself, the Pledgeholder or any other party to a Financing Agreement and this
transaction (including without limitation, copies of this Agreement and any
Financing Agreements).
 
Section 12.20 Language and Counterparts
 
(a) This Agreement shall be drawn up and executed in the English language.
 
(b) This Agreement may be executed in several counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same agreement.
 
Section 12.21 Survival
 
Notwithstanding termination of this Agreement, (i) the representations and
warranties given by the Pledgor in Article V (Representations and Warranties);
(ii) the covenants of the Pledgor in Article VI (Covenants) and Section 6.14
(Negative Covenants of the Pledgor); and (iii) the provisions set forth in
Section 6.05 (Payment Obligations) and XII (Miscellaneous) and of this Section
12.21, shall survive and remain in full force and effect until the Secured
Obligations have been fully and irrevocably discharged strictly in accordance
with the provisions of the Financing Agreements, as evidenced by a written
instrument signed by the Pledgeholder.
 
The parties hereto agree that this Agreement shall take effect as of the date
first written above.
 
[Signature Page Follows]

 
 

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IN WITNESS WHEREOF, the Pledgor, the Accounts Bank and the Pledgeholder have
caused this Agreement to be executed by their duly authorised representatives as
of the date first above written.
 

Executed byBALYKSHY L.L.P. acting by authorised signatory )))     Name:
Position:    

 

Executed by
JOINT STOCK COMPANY
"BANK CENTERCREDIT" acting by authorised signatory(ies)
Name:
Title: Name: Title:
 
 

 
 

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Executed by
 
EUROPEAN BANK
 
FOR RECONSTRUCTION AND DEVELOPMENT acting by (authorised signatory)

 
 
Name: Title:
 

 
 

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SCHEDULE 1
 
FORM OF AMENDMENT AGREEMENT
 
AMENDMENT AGREEMENT NO. [ ]
 
TO AGREEMENT ON PLEDGE OF BANK ACCOUNTS
 
between
 
BALYKSHY L.L.P.
 
and
 
JOINT STOCK COMPANY " BANK CENTERCREDIT "
 
and
 
[NEW ACCOUNTS BANK]
 
and
 
EUROPEAN BANK FOR
 
RECONSTRUCTION AND DEVELOPMENT
 
Dated [ ]

 
 

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This AMENDMENT AGREEMENT NO. [ ] dated [ ] (this "Agreement") is made between:
 
(1) BALYKSHY L.L.P., a limited liability partnership organized and existing
under the laws of the Republic of Kazakhstan, with registered address at 12
Murat Uskenbaev Street, Atash Village, Tupkaragan District, Mangistau Region,
the Republic of Kazakhstan (the "Pledgor");
 
(2) EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT, an international
organisation established by treaty ("EBRD")[; and]
 
(3) JOINT STOCK COMPANY "BANK CENTERCREDIT" (the "Accounts Bank")[; and]
 
[(4) NEW ACCOUNTS BANK (the "New Accounts Bank").]
 
RECITALS
 
WHEREAS:
 
(A)  
By an agreement on pledge of bank accounts dated [ ] 2008 (the "Agreement on
Pledge of Bank Accounts"), between the Pledgor, the Accounts Bank and EBRD, the
Pledgor has agreed, subject to the terms and conditions set forth therein, to
pledge in favour of EBRD (the "Pledgeholder") all of its rights, title and
interest in and to the funds in the Bank Accounts;

 
(B)  
[The Agreement on Pledge of Bank Accounts was amended on [ ]; and pursuant to
the Amendment Agreement No.1 to the Agreement on Pledge of Bank Accounts between
the Pledgor, the Accounts Bank and EBRD (the "Amendment Agreement No.!"); and

 
 

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(C)] The Pledgor, the Accounts Bank[, the New Accounts Bank] and EBRD have
agreed to amend the Agreement on Pledge of Bank Accounts [further], subject to
the terms and conditions of this Agreement.

 
 
NOW, THEREFORE, the Parties hereto agree as follows: Section 1.Definitions

 
Wherever used in this Agreement, unless the context shall otherwise require, the
terms defined in the Agreement on Pledge of Bank Accounts shall have the same
meanings when used in this Agreement.
 
Section 2. Amendments to the Agreement on Pledge of Bank Accounts
 
(a) Section [ ] of the Agreement on Pledge of Bank Accounts [as amended by
 
Amendment Agreement No. [ ]] shall be amended by replacing the phrase "[]" with
it[]ib;
 
(b) Section [ ] of the Agreement on Pledge of Bank. Accounts [as amended by
 
Amendment Agreement No. []] shall be deleted in its entirety and replaced with
the following:
 
"[ ]".,
 
(c) [pursuant to [Section 10] of the Account Agreements [ ] has been replaced by
[ ] as Accounts Bank, and [ as the new Accounts Bank hereby agrees to be bound
by all the terms and conditions of the Agreement on Pledge of Bank Accounts as
if it were the original Accounts Bank named therein.]
 
[0]
 
Section 3. Representations and Warranties
 
Each of the Pledgor[, the New Accounts Bank] and the Accounts Bank

 
 

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represents and warrants to the Pledgeholder as follows:
 
(a) it has all requisite power and authority, corporate or otherwise, to
execute, deliver and perform all of its obligations under this Agreement and the
Agreement on Pledge of Bank Accounts as amended by this Agreement;
 
(b) it has taken all necessary action to authorise the execution, delivery and
performance by it of this Agreement and the Agreement on Pledge of Bank Accounts
as amended by this Agreement;
 
(c) this Agreement has been duly executed and delivered by it, and subject to
the reservations and qualifications set out in the legal opinions of the legal
counsels to the Pledgeholder as provided under Article IV (Conditions Precedent)
of the Loan Agreement, this Agreement and the Agreement on Pledge of Bank
Accounts as amended by this Agreement constitute its valid and legally binding
obligations, enforceable against it in accordance with their respective terms;
 
(d) all consents, authorisations and actions of any kind necessary for its valid
execution, delivery and performance of this Agreement and the Agreement on
Pledge of Bank Accounts as amended by this Agreement have been obtained and are
in full force and effect;
 
(e) the execution, delivery and performance by it of this Agreement and the
Agreement on Pledge of Bank Accounts as amended by this Agreement do not require
the consent or approval of any of its creditors and will not conflict with or
constitute a breach or default under or violate any provision of its charter or
any agreement, law, rule regulation, order, writ, judgment, injunction, decree,
determination or award applicable to it.
 
(f) the amendment of the Agreement on Pledge of Bank Accounts pursuant to this
Agreement shall not in any way diminish or impair the rights, ranking or
priorities of the Pledgeholder under the Agreement on Pledge of Bank Accounts;
and
 
(g) the representations and warranties in Article V (Representations and

 
 

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Warranties) ("Representations and Warranties") of the Agreement on Pledge of
Bank Accounts are true and correct on and as of the date hereof with the same
effect as though such representations and warranties had been made on and as of
the date hereof
 
Section 4. Miscellaneous
 
(a) All references to the Agreement on Pledge of Bank Accounts in the Agreement
on Pledge of Bank Accounts and other Financing Agreements and all other
instruments and agreements executed or contemplated hereby or thereby shall for
all purposes refer to the Agreement on Pledge of Bank Accounts as amended by
this Agreement.
 
(b) This Agreement is limited as specified and shall not constitute a
modification acceptance or waiver of any other provision of the Agreement on
Pledge of Bank Accounts or any other document or agreement.
 
(c) Except to the extent expressly amended by the terms of this Agreement, all
terms and conditions of the Agreement on Pledge of Bank Accounts and other
Financing Agreements and all other instruments and agreements executed or
contemplated hereby or thereby remain in full force and effect.
 
(d) This Agreement may be amended only by an instrument in writing signed by the
Pledgor, the Accounts Bank and the Pledgeholder.
 
(e) This Agreement may be executed in five(5) counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same agreement.
 
Section 5. Governing Law; Dispute Resolution
 
This Agreement shall be governed by the laws of Kazakhstan. Any dispute,
controversy or claim arising out of or relating to this Agreement shall be
resolved as provided in Section 12.09 (Arbitration and Jurisdiction) of the
Agreement on Pledge of Bank Accounts, which shall be incorporated into this
Agreement, mutatis mutandis.

 
 

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Section 6. Privileges and Immunities of EBRD
 
Nothing in this Agreement shall be construed as a waiver, renunciation or other
modification of any immunities, privileges or exemptions of EBRD accorded under
the Agreement Establishing the European Bank for Reconstruction and Development,
international convention or any Applicable Law. Notwithstanding the foregoing,
EBRD has made an express submission to arbitration under Section 12.09 (a) of
the Agreement on Pledge of Bank Accounts and accordingly, and without prejudice
to its other privileges and immunities (including, without limitation, the
inviolability of its archives), it acknowledges that it does not have immunity
from suit and legal process under Article 5(2) of Statutory Instrument 1991, No.
757 (The European Bank for Reconstruction and Development (Immunities and
Privileges) Order 1991), or any similar provision under English law, in respect
of the enforcement of an arbitration award duly made against it as a result of
its express submission to arbitration pursuant to Section 12.09 (a) of the
Agreement on Pledge of Bank Accounts.

 
 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorised representatives on the day and year first above
written.
 
)
)
)
 
Executed by
 
BALYKSHY L.L.P. acting by authorised signatory
 
Name: Authorised Signatory
 
Title:[seal]
 
Executed by
 
JOINT STOCK COMPANY
 
"BANK CENTERCREDIT " acting by authorised signatory(ies)
 
Name: Authorised Signatory
 
Title:[seal]
 
 
Name: Authorised Signatory
 
Title:
 
Executed by )
 
[NEW ACCOUNTS BANK] acting )
 
authorised signatory(ies) )
 
Name: Authorised Signatory
 
Title:[seal]
 
 
Name: Authorised Signatory

 
 

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Title:
 
Executed by
 
EUROPEAN BANK
 
FOR RECONSTRUCTION AND DEVELOPMENT
 
acting by (authorised signatory)
 
 
Name: Authorised Signatory
 
Title:

 
 

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SCHEDULE 2
 
FORM OF POWER OF ATTORNEY
 
[Letterhead of Pledgor]
 
Power of Attorney'
 
BY THIS POWER OF ATTORNEY, made on this [ ] day of [ ], in
 
[ ] by Balykshy L.L.P., a limited liability partnership organised and existing
 
under the laws of the Republic of Kazakhstan and having its registered address
at 12 Murat Uskenbaev Street, Atash Village, Tupkaragan District, Mangistau
Region, the Republic of Kazakhstan ("Principal"), hereby authorises the European
Bank for Reconstruction and Development ("EBRD"), to be the Principal's true and
lawful attorney with the power and authority to do, for and on behalf and at the
expense of the Principal, the following acts:
 
(i)to exercise all rights of the Principal with respect to:
 
a)  
any and all bank accounts, which have been opened as of the date hereof or will
be opened from time to time after the date hereof with any and all banks and
other financial organizations in the Republic of Kazakhstan and outside the
Republic of Kazakhstan (the "Bank Accounts");

 
b)  
all funds deposited from time to time in the Bank Accounts;

 
To be executed in Russian and English languages.

 
 

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c)  
all other sums from time to time standing to the credit of the Bank Accounts in
any currency; and

 
d)  
all interest credited and accrued on the amounts on deposit in the Bank Accounts
(collectively referred to as the "Property").

 
(ii)  
to collect, receive or withdraw any funds or any part thereof deposited in or
income related to the Bank Accounts;

 
(iii)  
to retain and operate any and all of the Bank Accounts;

 
(iv)  
to sign legally binding documents or to perform actions with respect to the
Property or any part thereof, having legally binding consequences which EBRD
considers, in its opinion, necessary and proper;

 
(v)  
to establish and to register any encumbrances or any amendments thereto with
respect to the Property or any part thereof with the relevant governmental
agency or authority in Kazakhstan;

 
(vi)  
to obtain all consents and authorisations with respect to any encumbrances over
the Property or any part thereof;

 
(vii)  
to enter into actual possession of the Property or any part thereof;

 
(viii)  
to have unlimited access to the Property or any part thereof and to take
possession thereof;

 
(ix)  
to dispose of the Property or any part thereof or any of the rights of the
Principal thereto on such conditions (including deferred payments or payment by
installments) as EBRD considers necessary and proper;

 
 

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(x)  
to insure and to take measures with regard to the protection and preservation of
the Property or any part thereof;

 
(xi)  
to bring or defend claims in court, submit to arbitration, conduct negotiations
and settle by agreement of the parties and terminate, withdraw and settle any
suits, claims, disputes and examinations relative to all or to any part of the
Property;

 
(xii)  
to terminate, release from, or come to an agreement with respect to any other
security interest of the Principal in the Property or any part thereof which
might have priority or identical force in relation to EBRD;

 
(xiii)  
to conclude insurance and/or reinsurance agreements or obtain insurance and/or
reinsurance policies with respect to the Property or any part thereof;

 
(xiv)  
to delegate any or all of the rights and powers conferred by this Power of
Attorney to EBRD to any other person;

 
(xv)  
to defend the rights of the Principal to the Property or any part thereof, and
EBRD's rights hereunder, against all claims, demands, attachments or any legal
or administrative proceedings made, commenced or threatened by any person at any
time;

 
(xvi)  
to enforce any rights of the Principal to the Property or any part thereof;

 
(xvii)  
to have any other rights that the Principal has as the holder or owner of the
Property; and

 
(xviii)  
to sign, execute, deliver and receive all documents, contracts, deeds,
agreements and other instruments and to take all such other actions as are
necessary or desirable for the purpose of exercising the authority referred to
in the preceding paragraphs of this Power of Attorney.

 
 

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This Power of Attorney shall be governed by the laws of the Republic of
Kazakhstan.
 
This Power of Attorney and all power and authority conferred on the attorney
under this Power of Attorney shall be valid for three year period starting from
the date written above and shall terminate on [ [2.
 
Balykshy L.L.P.
 
[Seal]
 
Title:
Name:
[notarization] [apostille]
Title: Chief Accountant Name:
   

 
2 3 years from date of POA.

 
 

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