**Exhibit 10.4**

 

**GENERAL LOAN AGREEMENT**

 

**Bank Loan ContractNo. 2-0402-2**

 

**Almaty, February 4, 2002**

 

**Open Joint-Stock Company Bank TuranAlem**

represented by ManagingDirector Nurlan Zhetesovich Talkenov

acting on the basis of thePower of Attorney No. 01-62 dated October 10, 2001

 

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

represented by General DirectorNurzhan Sarsekenovich Kurmanov

acting on the basis of theCharter

 

**Transmeridian Exploration, Inc. BVI**

represented by Lorrie T.Olivier

acting on the basis of theCharter and Resolution of all

officers of TransmeridianExploration, Inc. (BVI) and

Transmeridian Exploration, Inc.dated January 25, 2002

 

**Kazstroiproekt, Ltd**

Represented by Director IrinaVladimirovna Serlina

acting on the basis of theCharter,

 

have entered into thisAgreement with regard to the following:

 

**Agreement**

 

**Terms and Definitions**

 

Unless otherwise directlyspecified by this Agreement, capitalized terms and definitions used hereinshall have the following meanings:

 

1.                                       Lender – Bank TuranalemOJSC

 

2.                                       Borrower – CaspiNeft TME SOJSC

 

3.                                       Seller –Transmeridian Exploration Inc., BVI

 

4.                                       Buyer –Kazstroiproekt, Ltd;

 

5.                                       Parties – BankTuranalem OJSC, Caspi Neft Tme SOJSC, Transmeridian Exploration, Inc. BVI,And  Kazstroiproekt, Ltd;

 

6.                                       Shares 1 – 9,550(nine thousand and five hundred fifty) common registered shares of theBorrower, par value 1,000 Tenge  (onethousand) with National Identification Number (NIN) KZ1C41630418; issued in thenon-paper form, owned by the Seller;

 

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7.                                       Shares 2 – 9,550(nine thousand and five hundred fifty) common registered shares of theBorrower, par value 1,000 Tenge  (onethousand) with National Identification Number (NIN) KZ1C41630418; issued in thenon-paper form, owned by the Buyer;

 

8.                                       Loan – dollarand tenge loans, financial instruments (guarantees, letters of credit) in theamount of US$20,000,000 (twenty million) dollars granted by the Lender to theBorrower under the terms specified in this Agreement and other agreements, withthe total amount equal to US$20,000,000 (twenty million) dollars.  Loans are given in accordance with theFinancing Chart established by the Parties, the terms of the Chart are set out inthe additional agreements, or a loan debt generated as a result of theBorrower’s failure to fulfill its obligation to the Lender to reimburse the sumof the letter of credit, bank guarantee, interest, and other sums that arecharged by the Lender for opening and servicing the letter of credit, forissuing bank guarantee under the conditions stipulated by this Agreement.

 

9.                                       FinancingChart – loan arrangements in the form of money, U.S. Dollars, financialinstruments (letters of commitment, promissory notes, bank guarantees, bails,letters of credit, underwriting service for placement of the Borrower’ssecurities, and financial leasing).

 

10.                                 Interest – an interestaccrued for the use of the Loan by the Lender to the Borrower at a rate of 15%per annum under provisions of this Agreement.

 

11.                                 Additional Interest –the amount to be paid by the Borrower in accordance with Section 2.6. of thisAgreement.

 

12.                                 End Date of Use ofFunds – July 1, 2003, the date established by this Agreement upon which theLoans, letters of credit, bank guarantees are no longer granted, according tothis Agreement.

 

13.                                 Subsoil Use Right –the right to possess and utilize mineral resources within the Contractualterritory that is given to the Borrower in accordance with the President’sDecree of the Republic of Kazakhstan having the force of Law On Subsoil andSubsoil Use dated January 27, 1996, #2828 and the Contract.

 

14.                                 Contract – thecontract under License No. 1557, issued on April 29, 1999 by the Government ofthe Republic of Kazakhstan (“RK”), for the exploration of hydrocarbons of SouthAlibek oilfield, located in Mugolzhar District, Aktobe Region, Republic ofKazakhstan, entered into between CASPI NEFT and Investment Agency of theRepublic of Kazakhstan on March 7, 2000, and also the Amendment to the Contractdated July 31, 2001 (state registration # 729 as of July 31, 2001); and theAmendment to the Contract dated April 25, 2000 (state registration # 457 datedApril 25, 2000).

 

15.                                 Contractual Territory– the territory identified in the License No. 1557 of April 29, 1999 (ContractState Registration Act as of March 7, 2000, No. 419 by geographicalcoordinates, specified in the annexes #1-1 (geological allotment), #3-1(geological allotment location map), given for prospecting activities (SouthAlibek Oil Field is located in Mugolzhar District, Aktobe Region, Republic ofKazakhstan).

 

16.                                 Security (Collateral)– property, assets, Right of Subsurface Use, property and non-property rightstransferred by the Borrower to secure fulfillment of the Borrower’s

 

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obligations to the Lender under this Agreement and those specified inAnnex#3 to this Agreement.

 

17.                                 Agreement – thisAgreement and all annexes and addenda to it made within the scope of thisAgreement.

 

18.                                 Final Maturity Date –final date for full repayment of the Loan and the Interest (Interest) whichoccurs at the end of 36 (thirty sixth) months of the date of this Agreement.

 

19.                                 Default –non-fulfillment by the Borrower of provisions of this Agreement and otheragreements and contracts entered into within the scope and in pursuance of thisAgreement.

 

20.                                 AdditionalRequirements – justified requirement of the Lender to pledge the Borrower’sequipment, other tangible assets for the amount exceeding Tg 7,600,000 (sevenmillion six hundred thousand tenge) or assign the claim rights for the accountsreceivable, etc.

 

21.                                 Loan Account – aspecial account opened by the Lender to serve the Borrower and to deposit fundsfor repayment of the Borrower’s debt under the Loan and Interest.

 

22.                                 Project – exploration,development and construction activities at South Alibek oil Field located inthe territory of Mugolzhar District, Aktobe Region, RK, according to License,Series AI No.1557 of April 29, 1999, and the Contract for Subsoil Operations onthis field (Act on State Registration of Contract, of March 7, 2000, No. 419),funded by the Lender under this Agreement, as well as other territories towhich the Borrower has been provided the Subsoil Use Right at the moment of signingof this Agreement.

 

23.                                 Bank balance –constant daily irreducible amount of 1,200,000 (one million two hundredthousand) tenge in the borrower’s bank accounts that shall be maintained by theborrower during the entire valid period of this agreement.

 

24.                                 Potential Default onObligations - an event causing the Agreement to be invalid, or suspension ofthe Contract for more than 20 (twenty) Work days, decision of the Competent orGovernment bodies  to unilaterally cancelthe Agreement, as well as an effective court decision on recovery of the amountfrom the Borrower exceeding Tg 456,000,000 (four hundred fifty six milliontenge).

 

25.                                 Auditor – a companyhaving a relevant license as well as any other permit documents stipulated bythe legislation of the Republic of Kazakhstan to engage in and implementauditing activities in the territory of the Republic of Kazakhstan for theperiod of five (5) years or more based on the advanced national andinternational accounting and auditing practice and approved by the Parties.

 

26.                                 Shares Sale andPurchase Agreement – the Sale and Purchase Agreement of the Borrower’s Sharesof November 30, 2001, entered into between the Seller and the Buyer.

 

27.                                 Banking Service –provision of a full range of banking operations specified by the effectivelegislation of the Republic of Kazakhstan and offered on contractual termsbetween the Lender and the Borrower on a paid-term basis, according to servicerates approved in the established order.

 

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28.                                 Business Day – a dayof banking operations, i.e. the time period during which the bank receivesinstructions to transfer money and orders to suspend or revoke suchinstructions from the Borrower, delivers money-transfer messages to the Borrower.

 

29.                                 Reimbursement Date –the date of repayment of the Loan amount and the accrued Interest, which is anyBusiness Day falling on the day specified in the payment schedule, which is anintegral part of this Agreement.  If theReimbursement Date is not a Business Day it shall be transferred to thefollowing day, which is a Business Day.

 

30.                                 Production – the wholepackage of works (operations) relating to extraction of oil and gas from theSubsoil onto the earth’s surface.

 

31.                                 Subsoil – for the purposesof this Agreement this term is defined as in the RK President’s Decree havingthe force of Law On Subsoil and Subsoil Use, of January 27, 1996, No. 2828.

 

32.                                 Loan Currency – U.S.Dollars.

 

33.                                 Government Agencies –bodies of state power (representative, executive and judicial), National Bankof Kazakhstan, vested with power authority, competence and necessaryinstruments to gain the country’s objectives.

 

34.                                 Competent Body – RKgovernmental executive body that is delegated the rights directly relating toconclusion and execution of the Contract, as well as to registration of theCollateral of Subsoil Use Right.

 

35.                                 Affiliate – means,when used in relation to any Person, any other Person which shall be at thattime directly or indirectly in control of, or controlled by, or under commoncontrol with, such Person, and for the purposes of this definition:

 

a.               a company is directly controlled byanother company or individual holding shares carrying, in the aggregate, themajority of votes exercisable at general meetings; and

 

b.              a particular company is indirectlycontrolled by a company or companies (“the parent company or companies”) if aseries of companies can be specified, beginning with the parent company orcompanies and ending with the particular company, so related that each companyof the series, except the parent company or companies, is directly controlledby one or more of the companies earlier in the series.

 

c.               Officers, shareholders owning 10 (ten)or more per cent of voting shares or interest in the authorized capital.

 

36.                                 Investments – purchaseof securities, shares, bonds, promissory notes, equity interests, creation ofany legal entities, consortiums, purchase of other assets not related toimplementation of the Work Program or the Project, except placement of funds orcurrency values to deposits in Bank TuranAlem OJSC.

 

37.                                 Appropriation of funds– Appropriation of the Loan to implement the Work Program in accordance withthe Contract.

 

38.                                 Work Program – alltypes of plans, prepared by the Borrower to implement works for Projectdevelopment as well as other types of plans to be approved in the CompetentBody according to the legislation of the Republic of Kazakhstan.

 

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39.                                 Cross-default – non-executionof contractual and other obligations by the Borrower to the third partiestotally exceeding Tg 400,000,000 (four hundred million tenge).

 

40.                                 Pledge of the Right ofSubsurface Use – Agreement on Pledge of Subsurface Use entered into between theLender and the Borrower dated February 4, 2002.

 

41.                                 License – License#1557 dated April 29, 1999, held by the Borrower to use subsurface in theRepublic of Kazakhstan

 

**1.****                                      Representationsand Warranties**

 

1.1.                              The Borrower representsand warrants that:

 

1.1.1.                     being a legal entity pursuant tolegislation of the Republic of Kazakhstan, the Borrower is entitled to enterinto this Agreement on its behalf;

 

1.1.2.                     this Agreement is an effective andvalid obligation of the Borrower subject to be fulfilled in accordance with theterms and conditions set forth in this Agreement;

 

1.1.3.                     the contents of this Agreement andproper execution of the terms and conditions of this Agreement will notconstitute a reason for the violation of the Charter and/or any provision ofany agreement or document to which the Borrower is a participant or under whichthe Borrower has obligations, or any legislative act, normative legal acts,rules, court decision related to the Borrower;

 

1.1.4.                     on the date of signing of thisAgreement, the Borrower has no liabilities on outstanding local and nationaltaxes for the amount not exceeding Tg 456,000,000 (four hundred fifty sixmillion tenge);

 

1.2.                              The Lender represents andwarrants that:

 

1.2.1.                     being a legal entity pursuant tolegislation of the Republic of Kazakhstan, the Lender is entitled to enter intothis Agreement on its behalf;

 

1.2.2.                     this Agreement is an effective andvalid obligation of the Lender to be fulfilled in accordance with the terms andconditions set forth in this Agreement;

 

1.2.3.                     the contents of this Agreement andproper execution of the terms and conditions of this Agreement will notconstitute a reason for the violation of requirements of the currentlegislation and the Lender’s Charter;

 

1.3.                              The Seller represents andwarrants that:

 

1.3.1.                     being a legal entity pursuant tolegislation of the British Virgin Islands, the Operator is entitled to enterinto this Agreement on its behalf;

 

1.3.2.                     this Agreement is an effective andvalid obligation of the Seller to be fulfilled in accordance with the terms andconditions set forth in this Agreement;

 

1.3.3.                     the contents of this Agreement andproper execution of the terms and conditions of this Agreement will notconstitute a reason for the violation of the Charter and/or any provision ofany agreement or document.

 

1.4.                              The Buyer represents andwarrants that:

 

1.4.1.                     being a legal entity pursuant tolegislation of the Republic of Kazakhstan, the Buyer is entitled to enter intothis Agreement on its behalf;

 

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1.4.2.                     this Agreement is an effective andvalid obligation of the Buyer subject to be fulfilled in accordance with theterms and conditions set forth in this Agreement;

 

1.4.3.                     the contents of this Agreement andproper execution of the terms and conditions of this Agreement will notconstitute a reason for the violation of the Charter and/or any provision ofany agreement or document.

 

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

 

2.1.                              The Lender is obligatedto grant the Loan for the amount of US$20,000,000 (twenty million) Dollars forthe Borrower on the terms and conditions of this Agreement, as well as on theterms of expedient utilization, promptness, redemption, repayment and security.

 

2.1.1.                     The Loan shall be made availableto the Borrower if the Borrower carries out the following conditions:

 

2.1.1.1.                      the Borrower fulfills allrequirements, provided by legislation of the Republic of Kazakhstan, withregard to execution of major transactions;

 

2.1.1.2.                      the Borrower pledges to the Lenderthe Subsoil Use Right and duly registers the Subsoil Use Right Pledge Agreementwith the Competent Body, and provides the registration certificate of thepledge of the Right of Subsurface Use. The registration of the Right ofSubsurface Use in the Competent Body shall be executed by the Borrower notlater than 60 (sixty) days of signing of this Agreement.

 

2.1.1.3.                      the Borrower transfers all bankaccounts to Bank TuranAlem OJSC;

 

2.1.1.4.                      before receiving the Loan, theBorrower pledges the Security, and the proceeds from the sale of the producedcrude oil that will become the Borrower’s property in future; moreover, theregistration of these pledge agreements, excluding the registration of theagreement on pledge of the Right of Subsurface Use, is not the reason for notissuing the Loan;

 

2.1.2.                     The Lender shall undertake togrant the Loan to the Borrower only after the Borrower fulfills all the terms of Section 2.1.1., as follows:

 
| **Loan  Reimbursement Date** |                                                                                                          | **Loan Amount** |
|------------------------------|---------------------------------------------------------------------------------------------------------------|-----------------|
|                         |                                                                                                          |            |
| a)                           | Within 3 days from the date  of registration of the Subsoil Use Right Pledge Agreement in the Competent  Body |            | US$5,000,000 (five million  dollars) |
|                         |                                                                                                          |            |   |
| b)                           | Before April 30, 2002                                                                                         |            | US$7,000,000 (seven  million dollars) |
|                         |                                                                                                          |            |   |
| c)                           | Before July 30, 2002                                                                                          |            | US$5,400,000 (five million  four hundred thousand dollars) |
|                         |                                                                                                          |            |   |
| d)                           | Before October 30, 2002                                                                                       |            | US$2,600,000 (two million  six hundred thousand dollars) |

 

2.2.                              The Lender shall grantthe Loan to the Borrower pursuant to the Financing Chart not later than the EndDate of Use of Funds and final maturity date of any amount granted pursuant tothis Agreement, or fulfillment of other obligations of the Borrower arisen outof this Agreement, but not later than the Final Maturity Date, unless otherterms (deadlines) are determined due to occurrence of events specified inArticle 5 of this Agreement, or by a supplementary agreement of the Parties.

 

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2.3.                              The Borrower shall pay tothe Lender a Commitment fee (hereinafter the “Fee”) equal to 0,5% (zero point fivepercent) lump sum payment of an unused amount of the Loan registered on thedate of Fee payment.  The Borrower shallpay the Commitment Fee quarterly within three (3) Work days upon receipt of awritten Lender’s request.

 

2.4.                              For the use of the Loan granted,the Borrower undertakes to pay to the Lender the Interest in the amount offifteen percent (15%) per annum, following the procedures set out in thisAgreement.

 

2.5.                              For the purpose of thisAgreement one year will last 365 days.

 

2.6.                              When granting the Loanthe Borrower shall additionally pay to the Lender:

 

Up-front fee –a commission fee for raising financial resources, equal to 1% (one) percent ofthe amount of raised financial or currency resources. The fee is to be paidwithin 3 (three) Work days after receipt of any part of the loan by theBorrower.

 

2.7.                              The Loan shall be grantedfor 36 (thirty six) months, the specified term can be changed in the eventsprovided for in this Agreement.

 

**3.****                                      LoanPurpose**

 

3.1.                              The purpose of the Loanis to finance the Project to carry out further commercial oil and gasProduction on the Contractual Territory.

 

3.2.                              The Loan shall be grantedprovided the Borrower observes all Lender’s requirements to execute documentsspecified herein, to pledge Shares 1 and Shares 2 and the Right of SubsurfaceUse.

 

3.3.                              The Loan may also begranted in other ways determined in each specific case by the agreement of theParties in accordance with the Financing Chart.

 

3.4.                              All contracts concludedin pursuance of this Agreement shall contain a reference to this Agreement.

 

3.5.                              The Borrower shall beobligated to meet requirements of the Lender related to execution of documents,submitting of contracts, agreements, feasibility studies, business-plans,documents confirming the Appropriation the funds requested, provision of otherinformation necessary for the Lender to control the Loan use. The Lenderacknowledges that, on the date of signing of this Agreement, he has receivedall financial studies and reports required and no further reports anddocumentation are required for the disbursement of the specified amountsspecified in Section 2.1.2. of this Agreement.

 

3.6.                              In pursuance of thisAgreement, the Lender shall take all actions necessary to grant the Loan fundsto the Borrower and to its repayment, including:

 

3.6.1.                     the Lender shall receive allinformation necessary to fulfill its obligations;

 

3.6.2.                     the Lender shall provide theBanking Service to the Borrower, including accounting on the Loan granted (onthe principal and the Interest);

 

3.6.3.                     the Lender shall control theAppropriate utilization of the Loan funds and repayment thereof;

 

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3.7.                              Upon signing of thisAgreement according to the date specified in this Agreement, the Lender shallmake the Loan available on the terms of this Agreement.  A day of writing-off money from theBorrower’s Loan account shall be the Date of Interest Accrual.

 

3.8.                              Repayment of the Loangranted under this Agreement, Interest and any other payments shall be made tothe Lender’s account in the amounts and term specified in this Agreement.

 

3.9.                              The Borrower undertakesto submit to Kazakhstan Legal Group LLP all necessary documents and decisionsof general meetings in the event the Borrower changes its legal corporatestructure.  All changes in theBorrower’s legal corporate structure shall be made by Kazakhstan Legal GroupLLP, a legal counsel of the Lender or be approved by it.  After such approval with Kazakhstan LegalGroup LLP, changes in the legal corporate structure can be made by othercompany at the Borrower or the Buyer’s choice.

 

3.10.                        In order to efficientlyimplement this Agreement and carry out the control over the appropriateutilization of the Loan funds, the Borrower shall undertake to maintain all itsaccounts at the Lender, including branches and subsidiary companies.

 

**4.****                                      LoanGranting Terms**

 

4.1.                              The Loan will beavailable if:

 

4.1.1.                     Prior to signing of thisAgreement, the Seller shall transfer the Shares 2 to the Buyer and also fulfillother obligations specified in the Share Sale and Purchase Agreement.

 

4.1.2.                     The Borrower shall pledge theRight of Subsurface Use to the Lender, register the Right of Subsurface Use inthe Competent Body and execute other obligations set out in Section 2.1.1. ofthis Agreement.

 

4.2.                              The Borrower, afterreceipt of US$2,000,000 (two million) dollars as specified in section 4.1.2. ofthis Agreement, shall retire the loan received under the Loan Agreement#30/11-01 dated November 30, 2001 in the amount of US$1,500,000 (one millionfive hundred thousand) dollars as well as the interest accrued on the foregoingamount.

 

4.3.                              Any amount of the Loanwill be released by OJSC Bank TuranAlem only if the documents bear twosignatures – the signature of the Chairman of the Finance Management of theBorrower and the signature of the Deputy Chairman of the Finance Management ofthe Borrower, one of whom must be the Buyer’s representative. In the event OJSCBank TuranAlem receives payment orders and documents to make transactions fromthe Borrower’s account without two signatures – of the Chairman of the FinanceManagement of the Borrower and the signature of the Deputy Chairman of theFinance Management of the Borrower , one of whom must be the Buyer’srepresentative, then OJSC Bank TuranAlem has the right not to execute suchinstructions of the Borrower and must inform the Seller and the Buyer ofviolation of the specified term.

 

**5.****                                      Peculiaritiesof the Loan Repayment**

 

5.1.                              Taking into considerationthe terms and conditions of the Sale and Purchase Agreement, the Parties havearrived to the conclusion that:

 

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5.1.1.                     In the event the Buyer decides toretain the ownership right to the Shares 2, the Loan shall be repaid asfollows:

 

a)                                      TheBuyer shall repay, for the Borrower a part of the Loan in the amount ofUS$15,000,000 (fifteen million) dollars, at the same time the Interest accruedon US$15,000,000 (fifteen million) dollars shall be repaid by the Borrower onits own, on the terms set out in this Agreement.

 

b)                                     TheSeller shall repay a part of the Loan in the amount up to US$2,233,000 (twomillion two hundred thirty three thousand) dollars and the Interest accrued onthis amount, in the terms specified in this Agreement.

 

5.1.2.                     In the event the Buyer decides towaive the ownership right to the Shares 2 and refuses to further participate inthe Project,  The Borrower shall returnthe Loan according to repayment schedule of the principal and Interest.

 

5.1.3.                     The Interest shall be accrued andpaid in accordance with Article 6 of this Agreement

 

**6.****                                      InterestAccrual and Payment**

 

6.1.                              Interest shall be accruedon the outstanding Loan amount based on the actual number of days of use of theLoan, including the first day of use and excluding the day of repayment of theLoan.

 

6.2.                              The term of the Interestaccrual shall commence as of the day of writing-off of the Loan funds from theLoan Account and transferring them to Borrower’s account or any third partynamed by the Borrower.

 

6.3.                              The Interest shall bepaid by the Borrower in the following order:

 

6.3.1.                     The interest accrued onUS$2,233,000 (two million, two hundred thirty three thousand) dollars shall bepaid on the last date of the 18th (eighteen) month period of thedate of receipt of the above mentioned amount.

 

6.3.2.                     The interest accrued onUS$17,767,000 (seventeen million, seven hundred sixty seven thousand) dollars,(or on other amount of the loan that the Borrower has actually received in thespecified period), shall be paid by the Borrower the last date of the 24(twenty four) month period of signing of this Agreement

 

6.3.3.                     The interest accrued on the actualamount of the Loan received and unredeemed by the Borrower in the third validyear of the Loan Agreement shall be redeemed during the specified third year bymonthly equal parts.  Such interestrepayment will be affected not later than the last date of each month.

 

6.4.                              In the event of early(advance) repayment of the Loan at the Borrower’s initiative, the Interestshall be accrued and paid as follows:

 

6.4.1.                     if the Borrower,  in accordance with the terms and conditionsof this Agreement, transfers the Loan amount prior to the date specified, inits notification on advance Loan repayment, then the Borrower shall beobligated to pay the Interest

 

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for the period up to the date specified in its notification, as well asany other payments set out in this Agreement;

 

6.4.2.                     if the event of early  Loan repayment the Lender shall guaranteerecalculation of the amount of accrued Interest for the actual period of use of the Loan including the date ofentry of the entire Loan amount to the Lender’s account,

 

**7.****                                      Repaymentof the Loan**

 

7.1.                              The Lender shall beentitled to take any measures provided for in the legislation and required toensure that the Borrower executes its obligations specified in this Agreement.

 

7.2.                              Upon Final Maturity Date,the Lender may request the Borrower to repay all or any debts under this Agreement.

 

7.3.                              Extension of the term ofthis Agreement must be set in a written agreement of the Parties.

 

7.4.                              Repayment of the Loanunder this Agreement, the Interest and any other payments shall be made to theLoan Account in the following order:

 

7.4.1.                     The part of the Loan in the amountof US$2,233,000 (two million, two hundred thirty three thousand) dollars shallbe redeemed the last date of the 18th (eighteen) period of the dateof receipt of any amount of loan by the Borrower.

 

7.4.2.                     The remaining part of the Loanshall be redeemed monthly by equal parts within the third valid year of theLoan Agreement, but not later than the Final Maturity Date, unless an earlierterm has been provided for by the Lender based on the provisions set out inthis Agreement.  Redemption of any suchpart of the Loan shall be effected not later than the last date of each month.

 

7.5.                              The amounts paid by theBorrower under the terms and conditions of this Agreement shall be directed bythe Lender to pay the debts in the following order:

 

7.5.1.                     repayment of forfeit amount on theInterest;

 

7.5.2.                     repayment of forfeit amount on theprincipal (the amount of utilized Loan);

 

7.5.3.                     repayment of the past due Interestamount;

 

7.5.4.                     repayment of the Interest amount;

 

7.5.5.                     repayment of the principal amountof debt.

 

7.6.                              In the event the paymentterm of the Loan and (or) accrued Interest occurs on holiday, then the Borrowershall transfer the money to repay the debt the next Workday following after theholiday.  In the event the Workday nextafter the holiday falls on the next calendar month, then the payment shall bemade on a Workday preceding such payment. Such transfer of the payment terms shall be taken into account whencalculating the Interest for utilization of the Loan, i.e. the Interest shallbe calculated at the rate provided for in this Agreement until the date whenthe monies will actually enter the Lender’s account.

 

7.7.                              All payments under thisAgreements in the Lender’s favor must be executed by the Borrower in a mannerthat ensures the Lender receives the full amount due under this Agreement, netof further taxes, charges, fees, commission and other deductions timely, exceptwhen such taxes, charges, fees and other deductions are required by the

 

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Government onthe payments made by the Borrower before such taxes, charges, fees and otherdeductions entered into force.

 

7.8.                              The principal debt amountshall be retired according to the terms of this Agreement.

 

**8.****                                      EarlyRepayment of the Loan**

 

8.1.                              The Lender mayunilaterally decline further execution of this Agreement, as well as call backthe full amount of the Borrower’s debt along with the accrued Interest upon 24(twenty four) months of the time of signing of this Agreement in the event:

 

8.1.1.                     of Default or Cross-Default;

 

8.1.2.                     the Borrower has no funds to makea regular repayment under the Loan and there are no prospects that they will bereceived  five  (5) calendar days prior to the date of regular repayment;

 

8.1.3.                     of attachment or recovery againstthe property and bank accounts of the Borrower;

 

8.1.4.                     of Borrower’s non-execution of anyobligations under this Agreement;

 

8.1.5.                     of re-organization or changes inthe legal status of  the Borrowerwithout Lender’s approval, full or partial transfer (sale) of the Borrower’sshares to third parties, termination of the Borrower’s activity due to itsre-organization, liquidation, bankruptcy, including rehabilitation procedures,etc.;

 

8.1.6.                     the Borrower has received loans inthe other banks without Lender’s consent.

 

8.1.7.                     the Borrower has violated theprovisions of the charter, agreement on the Pledge of the Right of SubsurfaceUse;

 

8.1.8.                     the Borrower has not fulfilled theobligations specified in Section 9.1. and Section 9.2. of this Agreement.

 

8.2.                              Despite the terms ofSection 8.1. of this Agreement, the Lender may at any time  unilaterally decline further execution ofthis Agreement, as well as immediately and in advance recover against the fullamount of the Borrower’s debt along with the accrued Interest in the event:

 

8.2.1.                     of a Potential Default inObligations, as it is defined in Section 24 of Article on terms and definitionsof this Agreement;

 

8.2.2.                     of non-appropriate use of the Loanfor the amount more than Tg 456,000,000 (four hundred fifty six million tenge);

 

8.2.3.                     Default in payment of the Interestand principal set out in Clause 6 and 7 of this Agreement within 3 (three)months;

 

8.2.4.                     Re-organization of the Borrowerwithout Lender’s permission.

 

8.2.5.                     the Shares Sale and PurchaseAgreement has been admitted as non-valid at Seller’s guilt or initiative;

 

8.2.6.                     the Contract or License has beenadmitted as non-valid, suspension of the Contract or License validity for morethan 20 (twenty) Work days, resolution of

 

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the Competent Body or Government to cancel the Contract unilaterally orcall back the License.

 

8.3.                              The Lender has the rightto resume financing within 5 (five) Work days after the Borrower has eliminatedall circumstances that caused suspension of financing.

 

8.4.                              The Borrower may fulfillits obligations to repay the Loan amounts, the letter of credit, the bankguarantee, the Interest, and other early payments only upon a prior writtennotice to the Lender.

 

8.5.                              The Borrower must notifythe Lender at least prior to 15 (fifteen) Work days prior to the proposed dateof early repayment of any Loan amount and the Interest partially or in full.

 

**9.             Rightsand Obligations of the Parties**

 

9.1.          The Borrower shall assume the following obligations:

 

a)                                      to use in fullall its financial, commercial, information, administrative and other resourcesto ensure effective implementation and proper execution of obligationshereunder in compliance with the prevailing legislation of the Republic ofKazakhstan, as well as ecological regulations and standards, safety standardsand provide necessary resources, conditions, services and other resourcesrequired for execution hereof in a timely manner;

 

b)                                     not to make anyamendments to foundation documents without the Lender’s written consent andsuch consent shall not be unreasonably withheld, reasonable refusal is apossibility to the Borrower to avoid its obligations under this Agreement aftermaking such changes;

 

c)                                      during the termhereof not to carry out its own restructuring (merger, accession, de-merger,spin-off, reorganization) without the Lender’s consent.

 

d)                                     to comply with theLender’s substantiated requirements, made in accordance with the terms and conditionshereof;

 

e)                                      to maintainrecords and accountbooks in accordance with the advanced accounting practice,execute financial operations and prepare financial reports (balance sheet andprofit and loss account) for each financial year;

 

f)                                        to have its ownfinancial report (balance sheet and profit and loss account) for each financialyear verified by independent Auditors;

 

g)                                     to submitcertified copies of its financial reports for the reporting year, as well as anaudit report prepared by independent Auditors to the Lender in the scope anddetails as deemed necessary by the Lender and not later than 90 (ninety) Workdays after the end of the financial year;

 

h)                                     to submitquarterly reporting with regards to financial performance and operationalreports, as well as monthly reports on operations during the term hereof within30 (thirty) Workdays from the end of each reporting period (month, quarter,year);

 

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i)                                         to submitnecessary information to the Lender that the latter may request hereunderwithin 30 (thirty) calendar days, if it is at all practical to comply with suchrequest;

 

j)                                         not to makeany Investment without the Lenders consent;

 

k)                                      not to re-pledgethe Security provided to secure execution of obligations hereunder and not totransfer any proprietary interests in property owned by the Borrower without aspecial permission by the Lender within the term hereof;

 

l)                                         not to reducethe Borrower’s property without a special Lender’s written permission issued onterms and conditions provided for herein;

 

m)                                   not to receive anyloans in other banks until full repayment of the Loan and Interest without theLender’s consent;

 

n)                                     to dischargefinancial obligations hereunder prior to any other financial obligations thatexist on the date of signing hereof and may emerge in the future within theterm hereof, except the obligations under the loan agreement # 30/11-01 datedNovember 30, 2001, and those liabilities of the Borrower existing prior togranting the loans under this Loan Agreement;

 

o)                                     to make allactions required to ensure safety of the Security and not to allow its loss;

 

p)                                     not to effect anytransaction and (or) any interrelated transactions with regard to direct orindirect purchase or alienation of property with book value exceeding an amountequivalent to Tg 400,000,000 (four hundred million tenge) without the Lender’swritten consent;

 

q)                                     not to effect anytransaction and / or any interrelated transactions with regard to redemption orsale, including issue (emission) and placement of securities, debt instrumentsof the Borrower without the Lender’s consent;

 

r)                                        to reassign allits rights for accounts receivable to the Lender within 10 (ten) Work days uponits first request;

 

s)                                      to inform theLender within 10 (ten) work days of any claims of proprietary nature raised bya third party with respect to the Borrower and that may lead to a PotentialDefault in Obligations;

 

t)                                        not to increaseits obligations for an aggregate amount exceeding Tg 400,000,000  (four hundred million tenge) without theLender’s consent, and such consent may be given by the member of the board ofthe Lender or by an authorized person; all the Borrower’s notices of itsintention to effect such transactions shall be made in writing and submitted tothe Lender to the following address:

 

Bank TuranAlemOJSC, 97 Samal-2, 480099 Almaty

Tel.: 504 021,504 016, 505 115, 505 100

Fax: 500 224,or to any other address or telephone / fax number that will be conveyed by theLender to the Borrower in writing.

 

u)                                     Any notice or anyother information shall be considered as given to the Lender upon itstransmission in the following manner:

 

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1.               when delivered by hand or by courier, atthe date of delivery;

 

2.               when transmitted by telex;

 

3.               when transmitted by fax, provided thatthe Lender consequentially receives an original notification signed by anauthorized person of the Borrower sent via DHL, Express mail and etc.

 

v)                                     Any notice servedby the Borrower about its intention to effect the transaction exceeding Tg400,000,000 (four hundred million tenge) must be reviewed by the Lender within2 (two) work days.  The Borrower mayeffect the transaction provided for in this Section only if it has an originalcopy of written permission of the Lender signed by the Lender.  Any violation of the said provision by theBorrower shall serve as a basis for termination of Project financing and shallgive the Lender a right to demand that the Borrower reimburses all fundsreceived hereunder, as well as redeems all his debt instruments, bonds andother securities within 60 (sixty) days upon receipt of such Lender’s demand,with observance of regulations of the Section 8.1. of this Agreement.

 

9.2.          The Borrower shall assume an obligation not to make thefollowing actions without a prior consent of the Lender:

 

a)                                      to announcepayment of dividends, pay out dividends, in the event that and until:

 

1.               commencement of the Final Maturity Date;

 

2.               the Borrower makes untimely paymentsunder this Agreement;

 

b)                                     to enter intoagreements relating to financial leasing and leasing of its equipment;

 

c)                                      to assume anyother debt that is not provided for herein, except for obligatory payment tothe budget of the Republic of Kazakhstan;

 

d)                                     to guaranteeobligations of third parties;

 

e)                                      to issue anybails for obligations of third parties;

 

f)                                        to allow anyrights of retention for debts to take place, except for the Loan PaymentSecurity or rights derived from the law or routine business;

 

g)                                     to enter into anyagreements causing the business or operations of the Lender to be managed bythird party;

 

h)                                     to amend itsCharter or amend the amount of share capital;

 

i)                                         to cancel,amend or reject any provisions hereof;

 

j)                                         sell,transfer, rent or dispose of any part of its property for the amount in exceedsof Tg 400,000,000 (four hundred million tenge) a month, except the produced oiland gas;

 

9.3.                              The Lender may:

 

9.3.1.                     demand Additional Requirementsfrom the Borrower related to implementation of this Agreement and uponnon-fulfillment of such requirements, the Lender may terminate financing of theProject and take measures to the Borrower specified in this Agreement includingbut not limited to request to early and prompt

 

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repayment of the amounts received by the Borrower before, taking intoaccount the regulations of the Section 8.1.

 

9.3.2.                     request any information ordocumentation of the Borrower;

 

9.3.3.                     to request that the Borrower reimbursesthe Lender for all the costs (business trips’ expenses, consultancy and legalservices), incurred by the Lender due to financing the Project, but notexceeding Tg 100,000 (one hundred thousand tenge) a month;

 

9.3.4.                     to restructure the Loan debt of theBorrower in books, both debt in Tenge, and in U.S. Dollars (or in any othercurrencies), and vice versa;

 

9.3.5.                     in the event of default ormaterial improper execution of obligations by the Borrower to repay  the charged Interest  and accrual of arrears, the Lender shallunilaterally stop charging the Interest, if duration of arrears of payments ofthe Interest  equals to 30 (thirty)calendar days;

 

9.3.6.                     to resume charging the Interestunilaterally from the date of termination of arrears accrual;

 

9.3.7.                     not to stop charging the Interest;

 

9.3.8.                     to suspend and resume unilaterallycharging of a penalty for delay in repayments of the principal amount of theLoan, as well as for delay in payments of the Interest.

 

9.4.                              The Seller shall assumean obligation:

 

9.4.1.                     to act as the Lender’s guarantorfor obligations of the Borrower deriving hereunder upon the first request ofthe Lender;

 

9.4.2.                     to agree to provide the Security;

 

9.4.3.                     not to carry out its restructuringand liquidation during the term hereof and until fulfillment of its obligationsunder the Shares Sale and Purchase Agreement without the Lender’s consent;

 

9.4.4.                     within the term hereof and untilfull discharge of its obligations under the Shares Sale and Purchase Agreementnot to allow reorganization or liquidation of the Borrower, except for thecases when  the Lender has granted itspermission for such reorganization;

 

9.4.5.                     not to resign as a participant ofin the Borrower or alienate all or part of Shares 1 of the Borrower without theLender’s consent;

 

9.4.6.                     without the Lender’s consent notto enter into any agreements that may cause the Borrower’s business oroperations  to be managed by the thirdparty, except for cases provided for herein,

 

9.4.7.                     without the Lender’s consent notto introduce any changes or amendments or allow introduction of changes to thecharter  of the Borrower, as well as notto make changes in the authorized capital of the Borrower;

 

9.4.8.                     during the term hereof not tosell, resale, transfer, manage, assign, pledge or somehow encumber a full or apart of the Shares 1 of the Borrower except to the

 

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Lender or its representative, as well as not to make any action causingchange of Shares 1 or rights extending to all or any of the Shares 1, withoutreceipt of a prior written Lender’s consent.

 

9.5.                              The Buyer shall assume anobligation:

 

9.5.1.                     to act as a  guarantor for obligations of the Borrowerderiving hereunder upon the first request of the Lender;

 

9.5.2.                     to agree to provide the Security;

 

9.5.3.                     without the Lender’s consentwithin the term hereof and until full discharge of its obligations under theShares Sale and Purchase Agreement not to allow reorganization or liquidationof the Borrower, except for the cases when the Lender has given its permission for such reorganization,

 

9.5.4.                     not to resign as a participant ofthe Borrower or alienate all or a part of Shares 2 of the Borrower without theLender’s consent;

 

9.5.5.                     without the Lender’s consent notto enter into any agreements that may cause the Borrower’s business oroperations  to be managed by the thirdparty, except for cases provided for herein,

 

9.5.6.                     without the Lender’s consent notto introduce any changes or amendments or allow introduction of changes to thecharter  of the Borrower, as well as notto make changes in the authorized capital of the Borrower;

 

9.5.7.                     during the term hereof not tosell, transfer, manage, assign, pledge or somehow encumber a full or a part ofthe Shares 2 of the Borrower except to the Lender or its representative, aswell as not to make any action causing change of Shares 2 or rights extendingto all or any of the Shares 2, without receipt of a prior written Lender’sconsent.

 

**10.****                               Securityof Obligations**

 

10.1.                        The Lender and the Borroweragree that the Collateral Agreements and other types of Security will contain areference to this Agreement as the principal obligation.

 

10.2.                        Borrower’s non-fulfillment ormaterial improper fulfillment of its obligations under this Agreement concludedunder this Agreement, exceeding Tg 400,000,000 (four hundred million tenge)shall be considered as non-fulfillment or improper fulfillment of thisAgreement.

 

10.3.                        Ifthe Borrower fails to materially fulfill its obligations under this Agreementexceeding Tg 400,000,000 (four hundred million tenge), the Lender shall havethe right to claim the Security by way of its mandatory extra judicial sale inaccordance with the effective legislation and conditions of this Agreement.

 

10.4.                        Security of the Borrower’sobligations under this Agreement shall be:

 

10.4.1.               Shares 1 – 9,550 (nine thousand and fivehundred fifty) common registered shares of the Borrower, par value 1,000Tenge  (one thousand) with NationalIdentification Number (NIN) KZ1C41630418; issued in the non-paper form, ownedby the Seller;

 

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10.4.2.               Shares 2 – 9,550 (nine thousand and fivehundred fifty) common registered shares of the Borrower, par value 1,000Tenge  (one thousand) with NationalIdentification Number (NIN) KZ1C41630418; issued in the non-paper form, ownedby the Buyer;

 

10.4.3.               The Subsoil Use Right to the AlibekYuzhny oil field located in the territory of Mugalzhar District, Aktobe Region,Republic of Kazakhstan, under Collateral Agreement No. 52/Z dated February 4,2002;

 

10.4.4.               All assets of the Borrower, includingthe assets which will be acquired in the future, property rights and any otherproperty which may be claimed in accordance with the prevailing legislation ofthe Republic of Kazakhstan.

 

10.4.5.               Should the Borrower violate conditionsof this Agreement, which will entail claiming the Security, the Pledger may notoppose the Lender when the latter takes any measures to claim the Security inaccordance with this Agreement and the legislation of the Republic ofKazakhstan.  Should the Borrower do so,the Lender shall have the right to have its claim satisfied in the court.  Such being the case, the losing party shallbear all legal costs.

 

10.4.6.               The Borrower shall grant the Lender withthe right to withdraw any debt amounts that has arisen as a result ofBorrower’s non-fulfillment or improper fulfillment of its obligations underthis Agreement or other agreements entered into in pursuance of this Agreement.  The Lender may write off such debt from anybank accounts following the procedure, determined by the acting legislation ofthe Republic of Kazakhstan.

 

10.4.7.               The amount received on the Loan Accountfrom the sale of the pledged property shall be used to settle the Borrower’sdebt to the Lender under the Loan.

 

**11.****                               Liabilityof the Parties**

 

11.1.                        Liability of the parties shallbe determined by this Agreement. In doing so, liability for the materialnon-fulfillment (improper fulfillment) of the obligations under this Agreement,concluded under or in security of this Agreement exceeding Tg 400,000,000 (fourhundred million tenge), shall be considered as liability under this Agreementwhen considering the issue of claiming the Security.

 

11.2.                        The Borrower shall be liablefor non-fulfillment or material improper fulfillment of this Agreement that hasarisen as a result of actions by its employees, agents, representatives, orother authorized persons.

 

11.3.                        Transactions which directlyand/or indirectly violate the requirements and terms of this Agreement shall beconsidered invalid, and the persons concluding such transactions shall be heldliable in accordance with the current legislation of the Republic ofKazakhstan.

 

11.4.                        The Lender shall be liable fornon-fulfillment or improper fulfillment of this Agreement that has arisen as aresult of the Lender’s actions, its employees, representatives or otherauthorized persons.

 

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11.5.                        In the event of untimely fulfillmentof the obligations to pay the Interest (Interest) accrued for the use of theLoan and the principal amount under the Loan the Borrower shall pay to theLender a fine in the amount of 0,8% (zero point eight percent) of the amount ofthe Interest (Interest) or the principal amount under the Loan not paid withinthe established time limits for each day of untimely fulfillment.

 

11.6.                        Payment of the fine (penalties)and compensation of the losses in the event of non-fulfillment or improperfulfillment shall not release the Borrower from the obligation to properlyfulfill this Agreement.

 

11.7.                        Borrower’s obligations to theLender for a certain amount (principal amount, Interest (Interest), forfeit,etc.) which is to be paid under this Agreement shall be canceled at the momentthe relevant amount has been settled.

 

11.8.                        In the event of a materialviolation of the terms and conditions of this Agreement, the Lender mayunilaterally cancel this Agreement and recover from the Borrower the paidamount of the Loan and Interest (Interest) accrued on the basis of the actualperiod of utilization of the Loan taking into account the regulations of thesection 8.1. of this Agreement.

 

11.9.                        In the event of non-fulfillmentof the obligations specified in Section 9.1. and 9.2. herein the Borrower shallpay to the Lender a fine in the amount of 0,8% (zero point eight percent) ofthe principal amount of the Loan for each day of non-fulfillment of the termsas set out in the aforementioned Para, until such terms are fullysatisfied.  Alternatively, the Lendershall reserve the right to claim early repayment of the Loan in accordance withSection 8.1.  of this Agreement.

 

11.10.                  The events of default or materialimproper execution of terms specified in Section 8.1. of this Agreement by theBorrower shall be treated by the Lender as Default.  In the event of Default, the Lender may take any measuresprovided for in the prevailing legislation to protect its interests, includingcompulsory extrajudicial enforcement of claim to the Collateral.

 

11.11.                  In the event of violation of theterms of this Agreement the guilty party shall pay the other party all lossescaused by such violation, including judicial costs, unless otherwise isprovided for in this Agreement.

 

**12.****                               SpecialConditions**

 

12.1.                        During the term of thisAgreement, the Borrower, when entering into subcontracts, other transactionsfor an amount not less than Tg 400,000,000 (four hundred million tenge) relatedto purchase or sale of any stocks of materials and equipment or components,finished products, shall be signed on a tender basis, or upon the Lender’swritten consent  to such transaction, onconditions which do not violate the provisions of this Agreement. Tenders willnot be required for equipment that has a sole provider or standardization orequipment requires a sole provider, or long lead times and urgency of deliverywould limit the time to properly tender for such materials or services.  In this cases, the Lender will be consultedand informed of the mitigating circumstances to effect the prompt purchase ofthe material or service.

 

12.2.                        Any transaction made inviolation of the requirements of this article for the amount exceeding Tg400,000,000 (four hundred million tenge) shall be the ground for

 

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termination of funding of the Project on conditions of this Agreement,taking into account the regulations of Section 8.1. of this Agreement.

 

**13.****                               DisputeSettlement Procedure and Applicable Law**

 

13.1.                        All disputes arising betweenthe Parties shall be settled through negotiations with a view to achieving amutually acceptable solution.

 

13.2.                        The Parties have agreed tosettle all disputes (disagreements) arising in connection with and out of thisAgreement in the standing court of arbitration at Law Firm Digesta LLP, in theevent Bank TuranAlem OJSC calls to initiate such proceedings, then it chooseseither the standing court of arbitration at Law Firm Digesta LLP or in a courtof general jurisdiction of the Republic of Kazakhstan.

 

13.3.                        The applicable law shall be thelegislation of the Republic of Kazakhstan.

 

**14.****                               ValidPeriod of this Agreement**

 

14.1.                        This Agreement shall enter intoeffect from the moment of its signing by authorized representatives of theParties.

 

14.2.                        This Agreement shall be ineffect until all obligations of the Parties stipulated in this Agreement havebeen duly fulfilled, after which all provisions of this Agreement shall bedeemed no longer effective.

 

**15.****                               Compliancewith Requirements of Environment Protection, Health and Safety Legislation**

 

15.1.                        The Borrower shall guaranteethat for the whole period of validity of this Agreement its activities,operations, assets (wherever placed and however expressed) shall be incompliance with the norms of all applicable laws and subordinate legislation ofthe Republic of Kazakhstan on environment protection, health and safety.  The Borrower shall confirm that as of thedate of signing of this Agreement it has obtained all necessary licenses,permits, certificates, and approvals regarding emissions into the atmosphere,water and land pollution, liquid and solid water drains, usage, transportation,storage, and destruction of toxic and harmful substances, waste, or otherecological, health and safety issues, required to conduct operations under theProject prior to the date of signing this Agreement, having paid allappropriate taxes and other compulsory payments to the budget, and that it hasno notifications, decisions and other demands on behalf of authorized stateagencies regarding elimination violations of requirements of the environmentprotection, health and safety legislation of the Republic of Kazakhstan whichthe Borrower had not eliminated.

 

The licenses,permits, certificates, and approvals mentioned in the present article shall bevalid for the whole period of validity of this Agreement.

 

15.2.                        For the whole period ofvalidity of this Agreement, the Borrower shall undertake to conduct itsactivities in compliance with the established requirements to public health,labor protection and safety of its workers. The Borrower shall undertake to ensure working conditions for itsworkers in compliance with the labor legislation, to observe legislationrequirements, including but not limited to those concerning working hours,rest, minimum wages, work quota setting, insurance of liability for inflictingdamage to health and life of workers when the latter were fulfilling theirlabor responsibilities.

 

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**16.****                               Confidentiality**

 

16.1.                        The Parties shall have no rightto disclose or use for whatever purposes any information which they receiveunder this Agreement (hereinafter referred to as “Confidential Information”),except in cases where:

 

16.1.1.               A prior written consent of the otherParty has been obtained for this; and

 

16.1.2.               Such can become necessary according tolegislation requirements or in connection with a relevant decision taken by theauthorized Government Agencies.

 

16.2.                        Confidential Information shallnot include information:

 

16.2.1.               Which had been available to generalpublic by the time of its use or disclosure;

 

16.2.2.               Which was handed over to the Parties bya party who had legally obtained access to this information and who has legalright to disseminate such information.

 

**17.****                               AdditionalConditions**

 

17.1.                        Making changes and amendmentsto this Agreement shall be allowed with consent of the Parties, according tothe procedure stipulated by this Agreement.

 

17.2.                        This Agreement may not bechanged, amended and/or terminated unilaterally, except for the casesstipulated by this Agreement.

 

17.3.                        This Agreement is executed in 4(four) copies, all of equal legal force, in the Russian and English languages.In the event of discrepancies, the text of this Agreement in Russian shallprevail.

 

17.4.                        All conditions and provisionsof this Agreement shall be binding upon or used in the interest of the Parties.

 

17.5.                        The Party may assign its rightsand obligations under this Agreement (in part or in whole) only after havingreceived a written consent of the other Party.

 

**18.          LEGALADDRESSES AND DETAILS OF THE PARTIES**:

 

LENDER: 

Bank TuranAlem OJSC,

97 Zholdasbekov St,Micro-district Samal-2,

480099 Almaty, Republic ofKazakhstan,

IIK 300166019 with the PaymentSystems Office of the National Bank of Kazakhstan, BIK

190501319, RNN 600900114104.

 

BORROWER:

Caspiy Neft TME SOJSC,

105 Dostyk Ave. Alatau Hotel,Almaty,

Republic of Kazakhstan,

RNN 600900159346,

Settlement Account 914467060

with the Almaty Branch

of Bank TuranAlem OJSC,

BIK 190501306

 

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SELLER: 

Transmeridian Exploration Inc.BVI

11811 North Freeway Suite 500,

Houston, Texas, 77060

 

BUYER: 

Kazstroiproekt, Ltd

68 Abai Ave. Office 74

Almaty, Kazakhstan

 

 

**SIGNATURES OF THE PARTIES:**

 
| FOR THE  LENDER:                          |   |
|-------------------------------------------|--------|
|                                      |   |
|   /s/ Nurlan Zhetesovich Talkenov    |   |
| Nurlan  Zhetesovich Talkenov              |   |
|                                      |   |
| FOR THE  SELLER:                          |   |
|                                      |   |
|                                      |   |
|   /s/ Lorrie T. Olivier              |   |
| Lorrie  T.Olivier                         |   |
|                                      |   |
| FOR THE  BORROWER:                        |   |
|                                      |   |
|                                      |   |
|   /s/ Nurzhan Sarsekenovich Kurmanov |   |
| Nurzhan  Sarsekenovich Kurmanov           |   |
|                                      |   |
| FOR THE  BUYER:                           |   |
|                                      |   |
|                                      |   |
|   /s/ Irina Vladimirovna Serlina     |   |
| Irina  Vladimirovna Serlina               |   |

 

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