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EXECUTION COPY
 

___________________________________________________________________________
 

 
Operation Number 36384
 

 

 
AMENDMENT AGREEMENT NO. 1 TO
 
AGREEMENT ON PLEDGE OF MOVABLE PROPERTY
 

 
between
 

 
BALYKSHY L.L.P.
 
and
 
EUROPEAN BANK
 
FOR RECONSTRUCTION AND DEVELOPMENT
 

 

 
Dated 22 October 2009
 
___________________________________________________________________________
 

 
 

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This AMENDMENT AGREEMENT (the "Amendment Agreement") is dated 22 October
2009 and is made between:

 (1)
BALYKSHY L.L.P., a limited liability partnership organised and existing under
the laws of the Republic of Kazakhstan, with its registered address at 12 Murat
Uskenbaev Street, Atash Village, Tupkaragan District, Mangistau Region, the
Republic of Kazakhstan (the "Pledgor"); and

 
(2)
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 and the Pledgeholder are referred to herein as the "Parties" and
each as a "Party".

RECITALS
 
WHEREAS:
 
(A)
The Pledgor and the Pledgeholder have entered into a loan agreement dated 21
December 2006, as amended by First Amendment to Loan Agreement dated 28 June
2007 and by Second Amendment to Loan Agreement dated 22 October 2009 (the "Loan
Agreement"), pursuant to which the Pledgeholder agreed, inter alia, to make
available to the Pledgor a loan in an amount not to exceed eighteen million six
hundred thousand Dollars (US$18,600,000), upon the terms and subject to the
conditions of the Loan Agreement; and

 
(B)
The Pledgor and the Pledgeholder have entered into an agreement on pledge of
movable property dated 15 August 2008 (the "Agreement on Pledge of Movables"),
pursuant to which the Pledgor agreed, inter alia, to establish a pledge on the
Pledged Assets for the benefit of the Pledgeholder and as security for the
Secured Obligations; and

 
(C)
The Pledgor and the Pledgeholder wish to make certain changes to the Agreement
on Pledge of Movables as set forth below.

 
NOW, THEREFORE, the Parties agree as follows:
 
ARTICLE I.  DEFINITIONS
 
Section 1.01 Definitions
 
In this Amendment Agreement (including the recitals hereof), terms used and not
otherwise defined herein shall have the meanings ascribed to them in the
Agreement on Pledge of Movables.
 
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Section 1.02 Interpretation
 
In this Amendment Agreement, unless the context otherwise requires:
 
(a) a reference to "Secured Obligations" or "Pledged Assets" shall include a
reference to any part of them.
 
(b) 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;
 
(c) a reference to a specified Article, Section or Schedule shall be construed
as a reference to that specified Article, Section of, or Schedule to, this
Amendment Agreement;
 
(d) 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;
 
(e) a reference (i) to an amendment or to an agreement being amended includes a
supplement, variation, assignment, novation, restatement or re-enactment, 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;
 
(f) the headings are inserted for convenience of reference only and shall not
affect the interpretation of this Amendment Agreement;
 
(g) a Default is outstanding or continuing until it has been remedied or waived
by the Pledgeholder in writing;
 
(h) 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;
 
(i) 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;
 
(j) the terms "include" and "including" shall be deemed to be followed by the
words "without limitation" where not so followed; and
 
(k) all exhibits, supplements and amendments hereto shall form an integral part
of this Amendment Agreement.
 
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ARTICLE II. AMENDMENT TO THE AGREEMENT ON PLEDGE OF MOVABLES
 
Section 2.01 Variation of definition of "Financing Agreements" of the Agreement
on Pledge of Movables
 
The definition of "Financing Agreements" of the Agreement on Pledge of Movables
shall be amended by deleting it in its entirety and replacing it with the
following:
 
"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 6 August 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 6 August 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 6 August 2008,
pursuant to which the Sponsor (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;

 
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(g) the Share Retention Deed, dated 3 October 2008, 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 6 August 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
Agreement;
(i) the Agreement on Pledge of Monies at the Bank Accounts, dated 15 August
2008, pursuant to which the Pledgor pledges its bank accounts 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;
(j) the Agreement on Mortgage of Immovable Property, dated 15 August 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;

 
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(k) the Participation Interest Pledge Agreement, dated 15 August 2008, as
amended on 31 March 2009, 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;
(l) the Insurance Assignment, dated 12 September 2008, 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 5 August 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, 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;

 
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(o) the Contribution Account Agreement, dated 7 November 2008, as amended by
Supplementary Agreement No. 1 dated 12 December 2008, relating to an account
opened by the Pledgor with Joint Stock Company "Bank Centercredit" as specified
therein for purposes of (i) the Pledgeholder's payment of its contribution to
the Pledgor's charter capital, and (ii) the payment by the Shareholder of its
contribution to the Pledgor's charter capital;
(p) the Assignment of Site Lease Agreement, dated 20 November 2008, pursuant to
which the Pledgor assigns by way of security in favour of the Pledgeholder the
benefit of the Site Lease Agreement dated 9 October 2008, entered into by and
between the Pledgor and MOBY;
(q) the Pledge Agreement over CREL Account, dated  12 December 2008, pursuant to
which the Shareholder pledges its bank accounts 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; and
(r) any other agreement designated as a Financing Agreement by the Pledgor (in
its capacity as Borrower) and the Pledgeholder pursuant to the Loan Agreement,
 
and any of the above may individually be referred to as a "Financing
Agreement";"

 
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Section 2.02 Variation of Sub-Section (a) of Section 2.01 (Secured Obligations)
 
Sub-Section (a) of Section 2.01 (Secured Obligations) of the Agreement on Pledge
of Movables shall be amended by deleting it in its entirety and replacing it
with the following:
 
"(a)           The Pledge under this Agreement secures (i) the principal amount
of eighteen million six hundred thousand Dollars (USD 18,600,000) 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 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."
 
Section 2.03 Variation to Sub-Section (b) of Section 2.02 (Term)
 
Sub-Section (b) of Section 2.02 (Term) of the Agreement on Pledge of Movables
shall be amended by deleting it in its entirety and replacing it with the
following:
 
"(b)           Without prejudice to Section 2.02(a) or any rights of the
Pledgeholder under the Loan Agreement or any other Financing Agreement, the
Pledgor in its capacity as borrower shall repay the Loan in eight (8) 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 the immediately succeeding Business Day).  The
first repayment of the Loan shall be made on 20 November 2011 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."
 
ARTICLE III. MISCELLANEOUS
 
Section 3.01 Delivery of Documents
 
(a) 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):
 
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(i)  
on the date hereof, a notarized copy of the resolution of the General Meeting of
the participants of the Pledgor, approving the amendment to the Agreement on
Pledge of Movables and the execution of this Amendment Agreement; and

 
(ii)  
as promptly as practicable after the date hereof, 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 the Agreement on Pledge of Movables.

 
Section 3.02 Representations and Warranties
 
The Pledgor hereby represents and warrants to the Pledgeholder as follows:
 
(a) It has the full corporate power, authority and right to execute and deliver,
to perform its obligations under, and to grant the Pledge over the Pledged
Assets pursuant to this Amendment Agreement and has taken all necessary
corporate action to authorise the execution, delivery and performance of, and
grant of the Pledge over the Pledged Assets. This Amendment Agreement has been
duly executed by the duly authorised representatives of the Pledgor and
constitutes the valid and legally binding obligation of it enforceable in
accordance with its terms;
 
(b) the execution, delivery and performance of this Amendment Agreement will not
violate any applicable law nor will they violate any provision of the Charter of
the Pledgor, nor conflict with or breach or require any consent under any
agreement or instrument to which the Pledgor is a party or by which the Pledgor
is bound; and
 
(c) other than the acts described in Section 3.03 (b) of this Amendment
Agreement, no consent, authorization, filing, or other act is required in
connection with the execution, delivery, performance, validity, perfection or
enforceability of this Amendment Agreement.
 
Section 3.03 Covenants
 
The Pledgor hereby covenants to the Pledgeholder and agrees that during the
Security Period, it shall do all of the following:
 
(a) The Pledgor shall keep and maintain, at its sole cost and expense, the
Authorisations referred to in Section 3.03 (b) in full force and effect
throughout the Security Period (or, if required, effect the renewal of such
Authorisations);
 
(b) The Pledgor shall at its own cost and account within ten (10) Business Days
of the execution of this Amendment Agreement, register the amendment to the
Pledge with the Registration Authority and/or elsewhere if required by
Applicable Law.  The Pledgor shall ensure that such registration is a first in
time priority in any and all registers or records of the
 
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 Registration Authority, to secure the first ranking of the Pledge as
contemplated in Section 7.01 (First Ranking Pledge) of the Agreement on Pledge
of Movables.  The Pledgor shall within ten (10) days after the registration of
the amendment to 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 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) 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 Amendment
Agreement, 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 the Agreement on Pledge of
Movables and this Amendment 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.
 
Section 3.04 Costs
 
All costs, taxes, charges and duties relating to the Pledge over the Pledged
Assets and to the execution, registration, filings, authorizations, consents,
notarizations and enforcement of this Amendment Agreement and any of the rights
of the Pledgeholder provided for in it 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.
 
Section 3.05 Term of Agreement
 
The parties hereto agree that this Amendment Agreement shall take effect as of
the date hereof.  This Amendment Agreement shall continue in full force until
full and irrevocable discharge of the Secured Obligations pursuant to the terms
of the Financing Agreements.
 
Section 3.06 Continuing Agreement
 
This Amendment Agreement is an integral part of the Agreement on Pledge of
Movables and is supplemental to, and shall be construed as one with the
Agreement on Pledge of Movables.  After execution of this Amendment Agreement by
both Parties all references to the Agreement on Pledge of Movables and/or in the
Agreement on Pledge of Movables to
 
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 this "Agreement" shall be deemed to be references to the Agreement on Pledge of
Movables as amended hereby starting from the effective date referred to in
Section 3.05 (Term of Agreement).  The Parties hereby confirm that the Agreement
on Pledge of Movables remains unchanged and shall continue in full force and
effect as expressly amended by this Amendment Agreement.
 
Section 3.07 Incorporation of provisions of the Agreement on Pledge of Movables
 
The provisions of Sections 14.04 (Notices), 14.09 (Arbitration and
Jurisdiction), 14.10 (Privileges and Immunities of the Pledgeholder), 14.11
(Waiver of Sovereign Immunity), 14.12 (Reliance) 14.13 (Successor and Assigns)
and 14.14 (Rights of Third Parties) of the Agreement on Pledge of Movables shall
be deemed incorporated into and to form part of this Amendment Agreement, as if
same were set out herein in full, mutatis mutandis, and (without limitation) as
if references therein to "this Agreement" were references to this Amendment
Agreement.
 
Section 3.08 Entire Agreement; Amendment and Waiver
 
This Amendment Agreement constitutes the entire obligations of the Parties with
respect to the subject matter hereof and shall supersede any prior 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 Amendment Agreement shall be in writing,
signed by the Pledgeholder and, in the case of an amendment, by the Pledgor.
 
Section 3.09 Indemnities and Expenses
 
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 Amendment
Agreement; or

 
 
(ii)
any representation or warranty made in this Amendment Agreement by the Pledgor
having been untrue, incorrect or misleading when made.  

 
Section 3.10 Governing Law
 
This Amendment 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).
 
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Section 3.11 Language and Counterparts
 
(a)           This Amendment Agreement shall be drawn up and executed in the
English language.  This Amendment Agreement can be executed in another language
if it is required by the state authorities for the purpose of registration, in
such case the English language original shall be the governing version among the
Parties.
 
(b)           This Amendment 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.
 
 [Signature Page Follows]
 
 
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IN WITNESS WHEREOF, the Pledgor and the Pledgeholder have caused this Amendment
Agreement to be executed by their duly authorised representatives as of the date
first above written.
 
Executed by                                                      )
BALYKSHY L.L.P. acting by                       )
authorised
signatory                                      )                      _________________________
Name:                                                                                                           [seal]
Title:
 

 
Executed by                                                     )
EUROPEAN BANK                                       )
FOR RECONSTRUCTION                          )
AND DEVELOPMENT                                 )
acting by authorised signatory                   )
 
_________________________
Name:
Title:
 
 
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