**Exhibit 10.6**

** **

**GENERAL LOAN AGREEMENT**

 

**Bank Loan ContractNo. 2000/03/40**

 

**Almaty, June 2, 2003**

 

**Open Joint-Stock Company Bank TuranAlem**

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

 

**Subsidiary Open Joint-Stock Company CaspiNeft TME**

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

 

**TransMeridian Exploration Inc. (BVI)**

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

 

**The Company BRAMEX MANAGEMENT INK**

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

 

have signed this Agreement asfollows:

 

**Agreement**

 

**Terms and definitions used in this Agreement**

 

If this Agreement does notprovide otherwise clearly, terms and definitions starting from uppercaseletters used throughout the Agreement, have the following meanings:

 

**1.****                           **TheCreditor – OJSC Bank TuranAlem:

 

**2.****                           **TheBorrower – SOJSC Caspi Neft TME;

 

**3.****                           **TheShareholder 1 – TransMeridian Exploration Inc. (BVI)

 

**4.****                           **TheShareholder 2 – BRAMEX MANAGEMENT INK.

 

**5.****                           **TheParties – OJSC Bank TuranAlem, SOJSC Caspi Neft TME, TransMeridian ExplorationInc. (BVI) and BRAMEX MANAGEMENT INK.

 

**6.****                           **Shares1 – 9,550 (nine thousand five hundred and fifty) common registered shares ofthe Borrower, with NIN (National Identification Number) KZ1C41630418, par valueKZT 1,000 (one thousand), issued in uncertified form and owned by the Shareholder1, as per the proprietary right;

 

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**7.****                           **Shares2 – 9,550 (nine thousand five hundred and fifty) common registered shares ofthe Borrower, with NIN (National Identification Number) KZ1C41630418, par valueKZT 1,000 (one thousand), issued in uncertified form and owned by theShareholder 2, as per the proprietary right;

 

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

 

**9.****                           **TheCredit – financial (credit) resources allotted to the Borrower by the Creditoron conditions stipulated by Credit Contracts and this Agreement, in totalamount not exceeding the Loan Limit. Credits shall be allotted in accordancewith the Financing Scheme stipulated by an agreement of the Parties, terms andconditions of which are fixed by each Credit Contract separately.

 

**10.****                    **TheCredit Contract – Credit Contracts, Bank Loan Agreements, Agreements for L/Cspecial servicing, Backing Agreements (aval of the Bill of Sales), BankGuarantee Agreements, Agreements for purchase of the Borrower’s bonds for thepurpose of their further placement, or acting as the underwriter, the OverdraftLimit Agreement, Agreements for discounting of the bills, and other agreementssigned between the Creditor and the Borrower within this Agreement, as well asthe Bank Loan Agreement # 2000/03/100/147 dated April 17, 2003, Bank LoanAgreement No. 2000/03/100/161 dated April 23, 2003 and the Bank Loan Agreement# 200/03/100/197 dated May 12, 2003, signed by the Borrower and Creditor priorto signing of this Agreement.

 

CreditContracts, including contracts signed prior to signing this Agreement shall beconcluded for the total amount not exceeding $30,000,000, and shall beconsidered as an integral part of this Agreement.

 

Herewith theParties have agreed that all Credit Contracts signed under this Agreement shallinclude a reference to it.

 

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

 

**12.****                    **Interest– remuneration accrued by the Creditor to the Borrower for using of the loanfunds:

 

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

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

 

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

 

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

 

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

 

**15.****                    **Finalmaturity Date – 31 May 2008, the final date for full repayment of the amountsof Loan and Interests accrued for using of the Loan, commission remunerationstipulated by the terms of every Credit Contract.  Terms of repayment stated by every Credit Contract executedwithin currency of loan limit shall not exceed the Final Maturity Date as perthis Agreement.

 

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

 

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

 

**17.****                    **TheContract – the contract for hydrocarbon exploration at the oilfield SouthAlibek located in Mugalzharsky district, Aktubinsk Oblast, Kazakhstan, signedon March 7, 2000 between the Investment Agency of the Republic of Kazakhstanand OJSC Caspi Neft according to the License Series #1557, issued on April 29,1999 by the Government of the Republic of Kazakhstan, as well as the Agreementon changes made to the Contract dated July 31, 2001 (state registration #729dated 31.07.2001) and the Agreement on changes made to the Contract dated April25, 2000 (state registration #457 dated 25.04.2000), other agreements onamending of the Contract.

 

**18.****                    **TheContract Territory – means the territory stipulated by the License Series #1557dated 29.04.1999 (State registration certificate of the Contract #419 dated07.03.2000) with geographic coordinates stated in Appendixes #1-1 (geologicalallotment), #3-1 (Geological location cartogram), allotted for explorationworks (at the oilfield South Alibek located in Mugalzharsky district, AktubinskOblast, Kazakhstan).

 

**19.****                    **Security(Pledge) - property, assets, the right of subsoil use, proprietary andnon-proprietary rights the Borrower transfers to secure fulfillment of itsobligations to the

 

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

 

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

 

**21.****                    **AdditionalRequirements – justified requirement of the Creditor to pledge the equipmentpurchased by the Borrower and other tangible assets for the amount exceedingseven million six hundred thousands (7,600,000.00) KZ Tenge or transfer theright of claim for the accounts receivable.

 

**22.****                    **Loanaccount – a special account opened by the Creditor and intended for servicingthe Borrower. From this account the loans are granted and to this account willbe received the money transmitted to pay off the Borrower’s debt on the Creditand Interest.

 

**23.****                    **TheProject – means exploration, development and facilities construction at SouthAlibek oilfield located in Mugalzharsky district, Aktubinsk Oblast, Republic ofKazakhstan, according to the License Series #1557 dated April 29, 1999 and theContract for subsoil use operations at the said oilfield (State registrationcertificate of the Contract # 419 dated 07.03.2000), as well as within otherterritories for which the Borrower has been granted the right of subsoil use onthe moment of this Agreement’s signing, financed by the Creditor pursuant toprovisions of this Agreement.

 

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

 

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

 

**26.****                    **TheAuditor – a company having a respective license as well as other permissivedocuments provided for by the laws of the Republic of Kazakhstan to performauditing activities and conducting the latter within the Republic of Kazakhstanwithin at least 5 (five) years meeting the advanced Kazakhstani andinternational accounting and audit practice and approved by the Parties.

 

**27.****                    **SharesSale and Purchase Agreement – Sale and Purchase Agreement for the shares of theBorrower concluded between shares between the Shareholder 1 and the Shareholder2 dated November 20, 2001.

 

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**28.****                    **Bankingservices – performance of the complete list of bank operations stipulated bythe current legislation of the Republic of Kazakhstan to be rendered on thecontractual basis between the Creditor and the Borrower, on the paid basisaccording to tariffs of services approved in the stated order.

 

**29.****                    **Abusiness day – an operational day, i.e. a period of time within which the bankreceipts instructions related to money transfer and to suspend or cancel suchinstructions from the Borrower, and sending the latter notifications concerningmoney transfers.

 

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

 

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

 

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

 

**33.****                    **TheCredit Currency – means U.S. dollars and Tenge.

 

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

 

**35.****                    **CompetentBody – an executive state body of the Republic of Kazakhstan which is delegatedrights directly related to signing and execution of the Contract, as well asregistration of the pledge for the Subsoil Use Right.

 

**36.****                    **Affiliatedcompany – means as it is stipulated by Article 64 of the law “On Joint-StockCompanies” dated May 13, 2003.

 

**37.****                    **Investments- purchasing of securities, shares, bonds, bills of exchange, equities in sharecapitals; establishment of any legal entities, consortiums; purchasing of otherassets that are not associated with fulfillment of the Work Program or theProject, save for placement of money or hard currencies on deposits in OJSCBank TuranAlem.

** **

**38.****                    **Intendeduse of assets – utilization of the Credit to fulfill the Work Program inaccordance with the Contract

 

**39.****                    **TheWork Program – all kinds of plans prepared for the Borrower to perform worksrelated to development of the Project, as well as all kinds of plans thosepursuant to the legislation of the Republic of Kazakhstan shall be approved bythe Authorized Body.

 

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

 

**41.****                    **TheLicense – the license for the right to use Subsoil in the Republic ofKazakhstan Series #1557 dated April 29, 1999, held by the Borrower.

 

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

 

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

 

**1.****                                      Representationsand Guarantees**

 

1.1                                 TheBorrower represents and guarantees that:

 

1.1.1.                     beinga legal entity according to the legislation of the Republic of Kazakhstan, itis entitled to sign this Agreement on its own behalf;

 

1.1.2                        thisAgreement has been sanctioned and is being fulfilled properly by it andconstitutes an effective and having a legal force obligation of the Borrowerbeing subject to fulfillment according to terms and conditions stipulated inthis Agreement;

 

1.1.3                        provisionsof this Agreement and proper fulfillment of its terms and conditions will notcause breaking of the Charter and/or ant provision contained in any agreementor document under which the Borrower is a party, or according to which it hascommitments, or any act of law, standard legal documents, regulations, orjudgment related to it;

 

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

 

1.2                                 TheCreditor represents and guarantees that:

 

1.2.1                        beinga legal entity according to the legislation of the Republic of Kazakhstan it isentitled to sign this Agreement on its own behalf;

 

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

 

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1.2.3                        provisionsof this Agreement and proper fulfillment of its terms and conditions will notcause breaking of provisions of the current legislation or the Creditor’sCharter;

 

1.3.                              TheShareholder 1 represents and guarantees that:

 

1.3.1                        beinga legal entity according to the legislation of the British Virgin Islands it isentitled to sign this Agreement on its own behalf;

 

1.3.2                        thisAgreement has been sanctioned and is being fulfilled by it properly and is aneffective and having legal force obligation of the Shareholder 1, being subjectto fulfillment in accordance with terms and conditions stipulated in thisAgreement;

 

1.3.3                        provisionsof this Agreement and proper fulfillment of its terms and conditions will notcause breaching the Charter and/or ant provision contained in any agreement ordocument.

 

1.4.                              TheShareholder 2 represents and guarantees that:

 

1.4.1.                     beinga legal entity according to the legislation of the British Virgin Islands it isentitled to sign this Agreement on its own behalf;

 

1.4.2.                     thisAgreement has been sanctioned and is being fulfilled by it properly and is aneffective and having legal force obligation of the Shareholder 2, being subjectto fulfillment in accordance with terms and conditions stipulated in thisAgreement;

 

1.4.3.                     provisionsof this Agreement and proper fulfillment of its terms and conditions will notcause breaking the Charter and/or ant provision contained in any agreement ordocument.

 

**2.****                                      Subjectof the Agreement**

 

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

 

2.1.1.                     Creditsshall be allotted to the Borrower if the Borrower meets the followingconditions:

 

2.1.1.1.            TheBorrower meets all requirements stated by legislation of the Republic ofKazakhstan for performance of large deals;

 

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2.1.1.2               TheBorrower provides the Security, in connection with which it shall sign and havethe respective changes registered by authorized state bodies to increase theprincipal liability, to the following agreements:

 

•                  The PledgeAgreement for the Right of Subsoil Use #52/z dated February 4, 2002 signedbetween the Creditor and the Borrower;

 

•                  The PledgeAgreement for the Capital Assets #68/z dated February 4, 2002 signed betweenthe Creditor and the Borrower,

 

and shall submit to the Creditor respective certificates confirmingsuch registration.

 

2.1.1.3.            TheBorrower shall transfer and keep all settlement accounts in OJSC ‘BankTuranAlem’;

 

2.1.1.4.            TheBorrower shall perform an independent estimation of the Equipment to bepledged, and in connection with this it shall insert changes and initiate stateregistration of respective changes to the Pledge Agreement for the CapitalAssets #68/z dated February 4, 2002 signed between the Creditor and theBorrower.

 

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

 

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

 

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

 

and shall submit respective confirmation documents.

 

2.2.                              TheCreditor shall grant to the Borrower Credits pursuant to the Credit Contractsnot later the Utilization Deadline and the final date of repayment of anyamount allotted under this Agreement, or fulfillment of other Borrower’sobligations arousing from this Agreement not later than Final Maturity Date, ifother terms are not caused by occurrence of events mentioned in Article 7 ofthis Agreement, or in an additional agreement between the Parties.

 

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

 

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

 

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

 

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

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

 

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

 

**3.****                                      Purposefor Allotting the Loan Limit**

 

3.1.                              Thepurpose for of allotting the Loan Limit is to finance the Project for furtherindustrial oil and gas Production within the Contract Territory.

 

3.2.                              TheCredits shall be allotted if the Borrower meets the Creditor’s all requirementsfor execution of the documents mentioned in this Agreement, execution of pledgefor Shares 1 and Shares 2, Equipment and the Subsoil Use Right as a Security ofobligations under this Agreement.

 

3.3.                              TheCredit may be allotted as well in other ways agreed by the Parties in every particularcase according to the Financing Scheme.

 

3.4.                              AllCredit Contracts shall include a reference to this Agreement.

 

3.5.                              TheBorrower shall meet the Creditor’s requirements for execution of documents,submission of contracts, agreements, the technical and economic feasibility,business plans, and documents confirming Intended Use of requested creditresources, submission of other information required by the Creditor to monitorusing of the Loan.

 

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

 

3.6.1.                     shall receiveall necessary information to fulfill its obligations;

 

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3.6.2.                     shallrender bank services to the Borrower, including calculations on the Creditsallotted (on the principal debt amount and on the Interest);

 

3.6.3.                     shall controlIntended Use of Credit resources and their repayment;

 

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

 

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

 

3.9.                              TheBorrower agrees to submit all necessary documents and resolutions of generalmeetings to Kazakhstan Legal Group Ltd., if its organizational and legal formis changed. All changes to the Borrower’s organizational and legal form shallbe made by the Creditor’s Legal Advisor, Kazakhstan Legal Group Ltd., or agreedupon with the latter. Upon such agreement with Kazakhstan Legal Group Ltd.,changes to the organizational and legal form can be executed by anothercompany, at the Borrower’s or the Shareholder 2’s option.

 

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

 

**4.****                                      Conditionsof Allotting the Loan**

 

4.1.                              TheCredits shall be allotted, if:

 

4.1.1.                     The Shareholder 1:

 

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

 

makes anecessary decision for signing of this Agreement by the Borrower and makingamendments to the respective Pledge Agreements and to meeting requirements ofthe legislation of RK related to the procedure of concluding largetransactions;

 

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

 

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does notbreach its obligations stipulated in paragraphs 5.1.5. and 5.1.3. of theSale-Purchase Agreement of the Shares;

 

insertsrespective amendments to the Sale-Purchase Agreement of the Shares and otheragreements to free the Shareholder 2 from paying off $15,000,000 on behalf ofthe Borrower under Basic Loan Agreement.

 

4.1.2.                                 TheBorrower shall transfer Equipment and the Right of Subsoil Use to the Creditoras the pledge to secure its liabilities under this Agreement, shall registerchanges and amendments to the Equipment Pledge Agreements and the PledgeAgreement for the Right of Subsoil Use with authorized state agencies, as wellas shall fulfill other obligations stipulated in paragraph 2.1.1. of thisAgreement.

 

4.1.3.                                 Shareholder2:

 

perform allnecessary procedures for signing of this Agreements and making amendments into correspondingpledge agreements, including obtaining of resolutions of its internalmanagement bodies as well as permissions of state authorities, if necessary,and other accommodations;

 

makesnecessary decision on concluding b the Borrower of this Agreement and makingamendments into the correspond pledge agreements and meeting of therequirements of RK legislation for the procedure of making large deals;

 

meets therequirements stipulated in paragraph 7.1 in section 10 of Shares Sale andPurchase Agreement;

 

insert to theShares Sale and Purchase Agreement as well as other agreements respectiveamendments to free the Shareholder 2 from payment of $15,000,000 US Dollars onbehalf of the Borrower under Basic Loan Agreement.

 

4.2.                              Anyamounts of the Loan shall be allotted by OJSC Bank TuranAlem only if documentsbear two signatures: signature of the Borrower’s Chief Executive Officer andsignature of either Finance Deputy Chief Executive Officer, or of the Chairmanof its Board of Directors (one of these signatures shall be of a representativeof the Shareholder2). If instructions and payment documents are received byOJSC Bank TuranAlem to initiate any operations from the Borrower’s settlementaccount lacking two signatures (one of the Chairman of the Borrower’s Board andone of either the Chairman of its Board of Directors or Finance Deputy Chairmanof the Borrower’s Board, one of which shall be of a representative of theShareholder2), OJSC Bank TuranAlem shall be entitled not to fulfill suchinstructions of the Borrower and shall notify the Shareholder1 and theShareholder2 of breaching the said condition.

 

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

 

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responsibilitiesof the Parties, etc. In the terms of the Credit Agreements, except otherobligatory provisions, shall be a reference to this Agreement.

 

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

 

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

 

**5.****                                      Calculationand Payment of the Interest**

 

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

 

5.1.1.                     Interestcalculated for first 24 months of loan using shall be paid at a time (by onetranche) after expiration of these 24 months;

 

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

 

5.2.                              Theperiod for charging of the Interest shall be committed from the date whencredit resources are charged off from the Loan Account to the Borrower’saccount or the account of a third person specified by the Borrower.

 

5.3.                              Incase advance repayment of the Loan by the Borrower’s initiative, the Interestshall be calculated and paid as follows:

 

5.3.1.                     ifthe Borrower, pursuant to provisions of this Agreement transfers the Loanamount prior to the date stipulated in its notification of the advancerepayment of the Loan, it shall pay the Interest as of the date specified inits such notification, as well as all additional payments provided for by thisAgreement;

 

**6.****                                      Repaymentof the Loan**

 

6.1.                              TheCreditor shall be entitled to take any measures provided for by the legislationand required for the Borrower to fulfill its obligations stipulated in thisAgreement.

 

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

 

6.3.                              Prolongationof the period of validity of this Agreement shall be made through a writtenagreement between the Parties.

 

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6.4.                              Repaymentof the principal debt under the allotted Credits will be performed inaccordance with the terms of this Agreement and Credit Agreements every monthby equal portions after expiration of 24 months of provided grace period.

 

6.5.                              Amountsdue from the Borrower under this Agreement shall be used by the Creditor torepay the debt in the following sequence:

 

6.5.1.                     repayment ofthe penalty amount on the Interest;

 

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

 

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

 

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

 

6.5.5.                     repayment ofthe principal debt amount of the Loan.

 

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

 

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

 

**7.****                                      AdvanceRepayment of the Loan**

 

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

 

7.1.1.                     Default ofCross Default occurs;

 

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

 

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

 

7.1.4.                     theBorrower fails to fulfill any of its obligations it is endowed with accordingto this Agreement;

 

7.1.5.                     theBorrower’s legal status is reorganized or modified without prior agreement withthe Creditor; in case of a change to the structure of the Borrower’s equitycapital, transfer/sale of all or part of shares of the Borrower to thirdpersons, cessation of the Borrower’s operations due to reorganization,liquidation, or bankruptcy of the Borrower, including exoneration proceduresetc.

 

7.1.6.                     theBorrower, without prior consent of the Creditor, receives loans from otherbanks;

 

7.1.7.                     theBorrower breaches provisions of its Charter, Pledge Agreements, CreditAgreements, BLA, and other agreements signed under this Agreement.

 

7.1.8.                     theBorrower fails to fulfill its obligations provided for by paragraph 8.1. and8.2. of this Agreement.

 

7.1.9.                     PotentialDefault occurs,

 

7.1.10.               the Loan is notused for the intended purpose;

 

7.1.11                  terms ofrepayment of the Loan and payment of the Interest and other payments arebreached.

 

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

 

7.1.13.               SharesSale and Purchase Agreement is acknowledged invalid through the fault of or oninitiative of the Shareholder 1;

 

7.1.14.     the Contract or theLicense is acknowledged invalid, the Contract or the License is suspended, theAuthorized Body or State Bodies decide to terminate the Contract in aunilateral manner, or to withdraw the License; or the Contract is terminated atdiscretion either Party under the Contract.

 

7.1.15.     The Borrower of theShareholder 1 fails to meet requirements provided for by paragraphs 2.1.1. and4.1 of this Agreement.

 

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

 

7.2.                              TheCreditor shall be entitled to recommence financing within 5 (five) BusinessDays after the Borrower remedies all circumstances that caused suspension offinancing.

 

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

 

**8.****                                      Rightsand Obligations of the Parties**

 

8.1.                              TheBorrower undertakes the following obligations:

 

a)             to use all itsfinancial, commercial, information, administrative and other resources in fullto ensure effective execution and proper fulfillment of its obligations underthis Agreement, conforming to the current legislation of the Republic ofKazakhstan, as well as ecological norms and standards, safety standards, and topromptly provide required assets, conditions, services and other resources tofulfill this Agreement;

 

b)                                     notto modify its constitutional documents without the Creditor’s prior writtenconsent; if the Creditor takes a negative decision, its refusal shall bereasonable, and a sufficient ground for the refusal shall be deemed possibilitythat the Borrower can evade fulfillment of its obligations under this Agreementfollowing such modifications.

 

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

 

d)                                     tomeet the Creditor’s reasonable demands the Creditor lays pursuant to provisionsof this Agreement;

 

e)                                      tokeep records and accounts according to the continuously maintained advancedaccounting practice, to perform accounting operations and prepare financialstatements (Balance Sheet and Income Statement) for each fiscal year;

 

f)                                        tohave its own financial statement (Balance Sheet and Income Statement) for eachfiscal year, confirmed by the independent Auditors;

 

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

 

h)                                     tosubmit reports of its financial performance and operation reports quarterly, aswell as monthly reports of operations for the period of validity of thisAgreement

 

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

 

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

 

j)                                         notto make any Investments without the Creditor’s prior consent;

 

k)                                      withinthe period of validity of this Agreement not to repledge the Security providedto secure its liabilities under this Agreement, and not to transfer anyproprietary interests on the property owned by the Borrower without theCreditor’s special authorization;

 

l)                                         notto reduce the Borrower’s property without the Creditor’s prior special writtenauthorization issued on conditions provided for by this Agreement;

 

m)                                   notto receive credits from other banks without the Creditor’s prior consent, untilthe Loan and the Interest are paid in full;

 

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

 

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

 

p)                                     without theCreditor’s written consent not to execute a deal and/or some interrelated dealsassociated with purchase, or direct or indirect alienation of the property, thetotal balance value of which exceeds KZT 400,000,000 (four hundred millionTenge);

 

q)                                     withoutthe Creditor’s prior consent not to execute a deal and/or several interrelateddeals associated with repurchase or sale, including the issue and placement ofthe Borrower’s securities or liabilities;

 

r)                                        immediatelyupon the Creditor’s request to transfer all its rights on its accountsreceivable [debtor indebtedness] to the Creditor, within 10 (ten) BusinessDays;

 

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

 

t)                                        withoutthe Creditor’s prior consent not to increase its liabilities to the amountexceeding in total KZT 400,000,000 (four hundred million Tenge), and suchconsent can be given by a member of the Creditor’s Board or a person authorizedby it; the Borrower’s all notifications of its intention to execute such dealsshall be in written and sent to the Creditor’s following address:

 

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

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

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

 

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

 

v)                                     Anynotification or other information shall be deemed sent to the Creditor once itis handled out as follows:

 

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

 

2.                                       ifsent by telex;

 

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

 

w)                                   Anynotification by the Borrower of its intention to execute a deal worth over KZT400,000,000 (four hundred million Tenge) shall be considered by the Creditorwithin 2 (two) Business Days. The Borrower shall be entitled to execute dealsmentioned in this paragraph only if the Creditor’s original consent isavailable to it. Any breach of the said condition by the Borrower can causesuspension of financing of the Project and enables the Creditor to demand fromthe Borrower to repay all funds it received earlier under this Agreement aswell as to repay the Borrower’s liabilities, bonds and other securities within60 (sixty) days upon receipt of such demand from the Creditor, under thisAgreement.

 

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

 

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

 

1.                                       thePayment Deadline occurs;

 

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

 

b)                                     signagreements for finance leasing and leasing of its equipment;

 

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

 

d)                                     toguarantee third parties’ liabilities;

 

e)                                      toissue pawns on third persons’ liabilities;

 

f)                                        tocause any rights of retention of the property for debts, save for the Securityof Credit Repayment, or rights based on the law and arousing from the routinebusiness conduct;

 

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

 

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

 

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

 

j)                                         tosell, transfer, lease, or dispose of any part of its property worth over KZT400,000,000 (four hundred million Tenge) per month, except for oil and gasproduced.

 

8.3.                              TheCreditor shall be entitled to:

 

8.3.1.                     laidAdditional Requirements to the Borrower related to fulfillment of thisAgreement, and if the Borrower fails to fulfill such Requirements – to stopfinancing of the Project and take measures against the Borrower provided for bythis Agreement, including but not limited to demands of pre-term and immediaterepayment of funds by the Borrower the latter received earlier under thisAgreement or Basic Loan Agreement ;

 

8.3.2.                     to requestany information or documents from the Borrower;

 

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

 

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

 

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

 

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

 

8.3.6.                     torecommence calculating the Interest in a unilateral manner, from the datecalculation was ceased;

 

8.3.7.                     not to stopcalculating the Remuneration/interest;

 

8.3.8.                     tosuspend and recommence calculation of the fine in a unilateral manner, fordelays of both repayment of the principal amount of the Credit and payments onthe Remuneration/interest.

 

8.4.                              TheShareholder 1 agrees:

 

8.4.1.                     toact as a guarantor of the Borrower’s liabilities arousing from this Agreementimmediately upon the Creditor’s request;

 

8.4.2.                     to give itsconsent to providing the Security;

 

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

 

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

 

8.4.5.                     notto drop out from the Borrower’s participants or alienate all or a part of theBorrower’s Shares 1, without the Creditor’s prior consent;

 

8.4.6.                     withoutthe Creditor’s prior consent not to sign any agreements due to which theBorrower’s business or operations would be managed by the third party, saveinstances stipulated by this Agreement;

 

8.4.7.                     withoutthe Creditor’s prior consent, within the period of validity of this Agreementnot to introduce any changes or amendments, or to authorize any

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

 

8.4.8.                     withinthe period of validity of this Agreement not to sell, or transfer, or disposeof, or assign, or pledge, or encumber in another way the whole or a part of theBorrower’s Shares 1, save to the Creditor or its representative, as well as notto take any actions which can cause a change to Shares 1 or rights covering allor one of the Shares 1, unless the Creditor’s prior written consent to this isreceived.

 

8.5.                              TheShareholder2 agrees:

 

8.5.1.                     toact as a guarantor of the Borrower’s liabilities arousing from this Agreementimmediately upon the Creditor’s request;

 

8.5.2.                     to give itsconsent to providing the Security;

 

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

 

8.5.4.                     withoutthe Creditor’s prior consent not to drop out of the Borrower’s participants orto alienate all of a part of the Borrower’s Shares 2;

 

8.5.5.                     withoutthe Creditor’s agreement not to sign any agreements due to which the Borrower’sbusiness or operations would be managed by the third party, save for instancesstipulated by this Agreement

 

8.5.6.                     withoutthe Creditor’s prior consent, within the period of validity of this Agreementnot to introduce any changes or amendments, or to authorize any changes to theBorrower’s Charter, or to cause a change to the Borrower’s share capital

 

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

 

**9.****                                      Securityof Fulfillment of Obligations**

 

9.1.                              TheCreditor and the Borrower agree that the Pledge Agreements and other kinds ofSecurity shall include a reference to this Agreement to as the principalliability.

 

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

 

9.3.                              Ifthe Borrower fails to fulfill its obligations related to repayment of theCredit, the Creditor shall be entitled to impose a penalty on the Securitythrough its the forced extrajudicial sale pursuant to requirements of thecurrent legislation and provisions of this Agreement.

 

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

 

9.4.1.                     Shares1 –9,550 (nine thousand five hundred and fifty) common registered shares of theBorrower, with NIN (National Identification Number) KZ1C41630418, and KZT 1,000(one thousand Tenge) par value, issued in uncertified form and owned by theShareholder 1 as per the proprietary right;

 

9.4.2.                     Shares2 – 9,550 (nine thousand five hundred and fifty) common registered shares ofthe Borrower, with NIN (National Identification Number) KZ1C41630418, and KZT1,000 (one thousand Tenge) par value, issued in uncertified form and owned bythe Shareholder 1 as per the proprietary right;

 

9.4.3.                     TheRight of Subsoil Use for the oilfield South Alibek located in Mugalzharskydistrict, Aktyubinsk Oblast, Republic of Kazakhstan, pursuant to the PledgeAgreement # 52/z dated February 4, 2002;

 

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

 

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

 

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

 

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9.4.7.                     Anamount received to the Loan Account from the sale of the pledged property shallbe used to repay the Borrower’s current debt to the Creditor on the Creditallotted.

 

**10.****                               Responsibilitiesof the Parties**

 

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

 

10.2                           TheBorrower shall bear responsibility for substantial non-fulfillment of improperfulfillment of provisions of this Agreement aroused because of actions by itsemployees, agents, representatives or other persons it designated.

 

10.3                           Transactionswhich directly and/or indirectly breach requirements and provisions of thisAgreement shall be ineffective, and persons being guilty of execution of thesame, shall bear responsibility provided for by the current legislation of theRepublic of Kazakhstan.

 

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

 

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

 

10.6                           Paymentof fines/penalty and compensation of damages in case of non-fulfillment orimproper fulfillment of obligations do not exempt the Borrower from properfulfillment of provisions of this Agreement.

 

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

 

10.8                           Fora material breach of provisions of this Agreement the Creditor shall beentitled to terminate this Agreement in a unilateral manner, the Credit amountand the Remuneration/interest calculated on the actual period of utilization ofthe Credit charged from the Borrower.

 

10.9                           Ifobligations stipulated by paragraphs 8.1. and 8.2. of this Agreement are notfulfilled, the Borrower shall pay to the Creditor the fine of 0.8% (point eightpercent) of the principal debt amount on the Credit per each day ofnon-fulfillment of provisions

 

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

 

10.10                     Casesof non-fulfillment or material improper fulfillment of provisions of thisAgreement by the Borrower shall be deemed by the Creditor as the Default. If aDefault occurs, the Creditor shall be entitled to take any measures providedfor by the current legislation to protect its interests, including forcedextrajudicial recovery from the Security.

 

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

 

10.12                     TheBorrower shall pay the penalty in Tenge at the Creditor’s current exchange rateon the date of payment.

 

If money istransferred to the Creditor in a hard currency and the Creditor uses this moneyto repay the forfeit, the Borrower shall entrust the Creditor to convert thesaid sum to Tenge. In case of payment of the forfeit, the Creditor shall chargecommissions from the Borrower for the conversion of a foreign currency toTenge, at the Creditor’s tariffs.

 

**11.****                               SpecialConditions**

 

11.1.                        Withinthe period of validity of this Agreement, any subcontracts, other deals worthat least KZT 400,000,000 (four hundred million Tenge) related to purchase orsale of any tangible assets or components, or finished products shall beentered by the Borrower on the tender basis, and on conditions that do notcontradict to this Agreement. Tenders are not required, if there is the onlysupplier of the necessary equipment, or standardization or equipment require asingle supplier, or urgency of the supplies limits proper holding of thetender. In such cases, the Creditor shall be consulted with and notified ofsuch mitigating circumstances to perform urgent purchase of material orservices.

 

11.2.                        Anytransaction concluded in defiance of provisions of this article shall be deemedas a reason to stop financing of the Project under this Agreement.

 

**12.****                               Orderof Settlement of Disputes and the Applicable Laws**

 

12.1.                        Alldisputes arousing between the Parties shall be settled by negotiating in orderto achieve a mutually acceptable decision.

 

12.2                           TheParties have agreed to consider all disputes/discrepancies arousing inconnection with or in respect of this Agreement at the permanent Arbitration atthe law firm Digesta Ltd., and upon request of OJSC Bank TuranAlem, at itsoption: either at the permanent Arbitration at the law firm Digesta Ltd., or ata court of common jurisdiction, pursuant to the legislation of the Republic ofKazakhstan.

 

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12.3.                        TheParties agreed to execute the judgments of the Arbitration at the law firm DigestaLtd. voluntary. In case of any Party’s refusal to execute the arbitration’sjudgment voluntary, the successful party has a right to file to the court ofcommon jurisdiction for enforcement of the arbitration judgment.Non-fulfillment of the arbitration judgment by the Party shall be considered asnon-fulfillment of contract obligations.

 

12.4.                        Theapplicable laws are the legislation of the Republic of Kazakhstan.

 

**13.****                               Periodof Agreement’s Validity**

 

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

 

13.2.                        ThisAgreement shall be in effect until the Parties properly fulfill theirobligations provided for by this Agreement, after which all its provisions areto be deemed ceased to be effective.

 

**14.****                               MeetingRequirements of the Laws on Preservation of Environment, Health and Safety**

 

14.1.                        TheBorrower guarantees that throughout the term of this Agreement its activities,operations, assets (wherever they are located or whatever they are) will meetprovisions of all applicable laws and by-laws of the Republic of Kazakhstanrelated to preservation of environment, health and safety. The Borrowerverifies that on the date of signing of this Agreement it has obtained allnecessary licenses, permissions, certificates, and approvals related toatmospheric emissions, pollution of aquatic environment, soil, liquid and solidwater drains, use, transportation, storage, and disposal of hazardoussubstances, wastes, or other environmental matters, matters concerning healthand safety, which are required to perform jobs under the Project, prior to thedate of signing of this Agreement, and has paid all respective taxes and otherobligatory payments to the budget, as well as it has not received anynotifications, decisions or other demands from state bodies to remedy anybreaches of requirements of the laws of the Republic of Kazakhstan onpreservation of environment, health and safety, which the Borrower has notremedied.

 

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

 

14.2.                        Throughoutthe term of this Agreement, the Borrower agrees to perform its activities inaccordance with specified requirements for public health, labor protection andsafety for its employees. The Borrower agrees to provide its employees withworking conditions meeting requirements of the laws, including but not limitedto, those concerning labor hours, rest period, minimum salaries, work measurement,insurance of liability for damage caused to employees’ health and lives whenthe latter perform their duties.

 

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**15.****                               Confidentiality**

 

15.1                           TheParties shall not be entitled to disclose or use for any purposes anyinformation they obtained under this Agreement (hereinafter referred to as theConfidential Information), save when:

 

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

 

15.1.2. this can be necessary according to requirements of the laws orin connection with a respective decision taken by the authorized StateAgencies.

 

15.2                           TheConfidential Information does not include the following dates:

 

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

 

15.2.2. submitted to the Parties by a person to which they becameavailable in a legal way and who has a legal right to distribute suchinformation.

 

**16.****                               AdditionalTerms**

 

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

 

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

 

16.3.                        ThisAgreement is made in 5 originals which have equal legal force, in Russian andEnglish. If case of any discrepancies, this Agreement in Russian language shallprevail.

 

16.4.                        Allterms and conditions of this Agreement are binding upon the Parties or shall beapplied to for the Parties’ benefit.

 

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

 

16.6.                        Provisionsof this Agreement cover the Bank Loan Agreement #2000/03/100/147 dated April17, 2003 and the Bank Loan Agreement #2000/03/100/161 dated April 23, 2003,Bank Loan Agreement (credit agreements) #200/03/100/197 dated May 12, 2003those were signed by the Borrower and Creditor deemed as signed within thelimits of this Agreement and are integral parts of this Agreement.

 

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**17.****                               LegalAddresses and Bank Details of the Parties:**

 

THE CREDITOR:

OJSC BankTuranAlem,

480099Republic of Kazakhstan,

Almaty,microdistr. Samal 2,

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

 

THE BORROWER:

SOJSC ‘CASPINEFT TME’

Republic ofKazakhstan,

248 DostykAvenue #12

Almaty,Kazakhstan 480020

RNN600900159346, Account 914467060

In the Almatysubsidiary of OJSC Bank TuranAlem

BIK 190501306

 

THESHAREHOLDER 1:

TransmeridianExploration Inc.

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

 

THESHAREHOLDER 2:

BRAMEXMANAGEMENT INC.

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

British VirginIslands

 

**SIGNATURES OF THE PARTIES:**

 

ON BEHALF OF THE CREDITOR:

 
| /s/ A. K. Saparov                |   |
|----------------------------------|--------|
| A. K.  Saparov                   |   |
|                             |
| ON BEHALF OF  THE BORROWER:      |
|                             |   |
| /s/ A. Kunevich                  |   |
| A. Kunevich                      |   |
|                             |   |
| /s/ M. K. Sarkytayev             |   |
| M. K.  Sarkytayev                |   |
|                             |   |
| ON BEHALF OF  THE SHAREHOLDER 1: |
|                             |
| /s/ L. Olivier                   |   |
| L. Olivier                       |   |
|                             |   |
| ON BEHALF OF  THE SHAREHOLDER 2: |
|                             |   |
| /s/ K. Sadykov                   |   |
| K. Sadykov                       |   |

 

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