Document:

Exhibit 10.1

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

EXECUTIVE EMPLOYMENT
AGREEMENT, effective January 1, 2004, by and between SPORT-HALEY, INC., a
Colorado corporation (the “Company”) and MARK MALEY (the “Executive”).

 

WHEREAS, the Company desires
to employ the Executive on a full-time basis, and the Executive desires to be
so employed by the Company, from and after the date of this Agreement.

 

NOW,
THEREFORE, in consideration of the mutual covenants contained herein, the
parties agree as follows:

 

ARTICLE I

 

EMPLOYMENT DUTIES AND BENEFITS

 

Section 1.1  Employment.  The Company hereby employs the
Executive in the position described on Schedule 1 hereto as an executive
officer of the Company.  The Executive
accepts such employment and agrees to perform the duties and responsibilities
assigned to him pursuant to this Agreement.

 

Section 1.2  Duties and Responsibilities.  The
Executive shall hold the position with the Company which is specified on
Schedule 1, which is attached hereto and incorporated herein by reference.  The Executive is employed pursuant to the
terms of this Agreement and agrees to devote full-time to the business of the
Company.  The Executive shall perform
the duties set forth on Schedule 1 while employed as an executive officer,
and such further duties as may be determined and assigned to him from
time-to-time by the Chief Executive Officer or the Board of Directors of the
Company.

 

Section 1.3  Working Facilities.  The Executive shall be
furnished with facilities and services suitable to the position and adequate
for the performance of the Executive’s duties under this Agreement.

 

Section 1.4  Vacations.  The Executive shall be entitled each year to
a reasonable vacation of not less than two weeks in accordance with the
established practices of the Company now or hereafter in effect for executive
personnel, during which time the Executive’s compensation shall be paid in
full.

 

Section 1.5  Expenses.  The Executive is authorized to incur
reasonable expenses for promoting the domestic and international business of
the Company in all respects, including expenses for entertainment, travel and
similar items.  The Company will
reimburse the Executive for all such expenses upon the presentation by the
Executive, from time-to-time, of an itemized account of such expenditures.

 

Section 1.6  Relocation Expenses.  Except as set forth in this
Section 1.6, until the Executive completes his relocation to Denver,
Colorado, on or before May 31, 2005 the Company shall pay to the Executive (i)
all expenses incurred by the Executive for temporary living quarters while the

 

1

 

Executive
is relocating to Denver, Colorado, (ii) all moving and storage expenses for
household goods in connection with the Executive’s relocation, (iii)  all travel expenses of the Executive and his
spouse for up to six separate round trips related to the Executive’s search for
a residence in the Denver, Colorado area, and (iv) all expenses incurred by
Executive in the sale of Executive’s residence in Houston, Texas, including the
real estate commission paid by Executive. 
The Executive shall present to the Company an itemized account of such
expenditures, and repayment of such expenses by the Company shall be amortized
throughout the effective term of this Agreement.  In the event the Executive terminates his employment without
cause pursuant to Section 3.5 hereof, the non-amortized portion of such
expenses shall be reimbursed to the Company by the Executive.

 

Section 1.7  Benefit Plans.  From the effective date of
this Agreement, the Executive shall be entitled to participate in all existing
benefit plans provided to the Company’s executive employees including, to the
extent now or hereafter in effect, medical, health, dental, vision, disability,
life insurance and death benefit plans, in accordance with the terms of such
plans.

 

ARTICLE II

 

COMPENSATION

 

Section 2.1  Base Salary.  The Company shall pay to the
Executive a base salary of not less than the amount specified on
Schedule 1, subject to annual review and raises in such base salary.  The base salary may be raised by action of
the Board of Directors, and such raises shall thereafter be included in the
Executive’s base salary as defined for purposes of this Agreement and the
Company’s bonus plan.

 

Section 2.2  Bonus and Bonus Plan Participation.  The
Executive shall be entitled to receive a bonus at such time or times as may be
determined by the Board of Directors and Compensation Committee of the
Company.  The Executive shall also be
entitled to receive bonuses of up to 40% of the Executive’s base salary in
accordance with the provisions of the Company-wide bonus plan as in effect from
time to time, at the discretion and approval of the Compensation Committee.

 

ARTICLE III

 

TERM OF EMPLOYMENT AND TERMINATION

 

Section 3.1  Term.  This Agreement shall be for a term which is
specified on Schedule 1, commencing on its effective date, subject,
however, to termination during such period as provided in this Article.  Provided that the Executive is in compliance
with all of his obligations hereunder, the term of the Executive’s employment
shall be extended automatically for one additional year at the end of each year
of the term or extended term of this Agreement on the same terms and conditions
as contained in this Agreement, unless either the Company or the Executive
shall, at least 90 days prior to the expiration of the initial term or of any
renewal term, give written notice of the intention not to renew this
Agreement.  If the Company gives such
written notice of non-renewal, the provisions of

 

2

 

Section 3.3
shall apply; if the Executive gives such written notice of non-renewal, the
provisions of Section 3.5 shall apply. 
Automatic renewals shall be effective in subsequent years on the same
day of the same month as the original effective day and month of this
Agreement.

 

Section 3.2  Termination by the Company With Cause.  The
Company may terminate the Executive, at any time, upon ten days’ written notice
and opportunity for Executive to remedy any non-compliance with the terms of
this Agreement (if such non-compliance is capable of being remedied; if not,
the Company’s notice of termination shall be effective immediately), for Cause.  In such event, the Board of Directors shall
provide in writing to the Executive an opinion of the Board of Directors,
signed by each member voting in favor of termination of the Executive, which
shall specify with particularity the basis for such termination.  Upon the date of such termination, the
Company’s obligation to pay compensation and benefits shall terminate, at which
time the Company shall be responsible for compensating the Executive for any
vacation time not taken.  Subject to
this exception and the obligation of the Company to compensate the Executive
through the notice period, no other compensation shall be payable to the
Executive should this Agreement be terminated pursuant to this
Section 3.2.

 

As used herein, the term
“Cause” shall be limited to any of the following from and after the date
hereof: (i) any willful breach of any material written policy of the Company
that results in material and demonstrable liability or loss to the Company;
(ii) the engaging by Executive in conduct involving moral turpitude that causes
material and demonstrable injury, monetarily or otherwise, to the Company,
including, but not limited to, misappropriation or conversion of assets of the
Company (other than immaterial assets); (iii) conviction of or entry of a plea
of nolo contendere to a felony; or (iv) a material breach of this Agreement by
engaging in action in violation of the restrictive covenants in this
Agreement.  No act or failure to act by
the Executive shall be deemed “willful” if done, or omitted to be done, by him
in good faith and with the reasonable belief that his action or omission was in
the best interests of the Company.

 

Section 3.3  Termination by the Company Without Cause.  The
Company may terminate the Executive’s services without cause at any time upon
90 days’ written notice.  In such event,
in addition to compensating the Executive during such 90-day notice period, the
Company shall be obligated to compensate the Executive with severance pay equal
to twelve additional months’ compensation as of the date of such
termination.  Accordingly, in the event
the Company terminates this Agreement without cause or chooses not to renew
this Agreement upon its expiration, the Executive shall receive an aggregate of
fifteen months’ salary from and after the date of the Executive’s receipt of a
notice of termination through and including the date of termination.  In addition to the foregoing, the Executive
shall receive a bonus which shall be equivalent to 50% of the annual bonus last
received by the

 

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Executive,
if any.  Such bonus provision shall be
in addition to the compensation and severance package hereinabove specified.

 

Section 3.4  Termination by the Executive With Cause.  The
Executive may terminate his employment with the Company at any time, upon ten
days’ written notice and opportunity for the Company to remedy any
non-compliance, by reason of (i) the Company’s material failure to perform its
duties pursuant to this Agreement, or (ii) any material diminishment in the
duties and responsibilities, working facilities, or benefits as described in
Article I of this Agreement.  The
Executive shall not be entitled to the severance compensation and other
benefits described in Section 3.7 below in the event of termination of
this Agreement pursuant to this Section 3.4, except as otherwise provided
in Section 3.7(a), but shall be entitled to the compensation provided in
Section 3.3 upon a determination that the Company has failed to perform
its duties pursuant to this Agreement and that such failure is material or a
determination that the duties and responsibilities, working facilities, or
benefits as described herein have been materially diminished. Such
determination shall be made by the Board of Directors in their best good faith.

 

Section 3.5  Termination by the Executive Without Cause.  The
Executive, without cause, may terminate this Agreement upon 90 days’ written
notice to the Company.  In such event,
the Executive shall not be required to render the services required under this
Agreement following such 90-day period. 
Compensation for vacation time not taken by the Executive shall be paid
to the Executive at the date of termination. 
The Executive shall not be entitled to the severance compensation and
other benefits described in Section 3.7 below in the event of termination
of this Agreement pursuant to this Section 3.5, except as described in
Section 3.7(a), and shall not be entitled to the compensation provided in
Section 3.3.

 

Section 3.6  Termination upon Death of the Executive.  In
addition to any other provision relating to termination, this Agreement shall
terminate upon the Executive’s death. 
In such event, all unpaid compensation and bonuses, compensation for
vacation time not taken by the Executive and all expense reimbursements due to
the Executive shall be paid to the Executive’s estate.

 

Section 3.7  Severance Compensation and Continuation of Benefits.

 

(a)                                  Notwithstanding
any other provisions hereof, in the event of a non-negotiated change in control
of the Company and either the Executive or the Company terminate this Agreement
within 60 days of such non-negotiated change in control, the Executive shall
receive severance compensation, payable in a lump sum within 30 days of such
non-negotiated change in control, equal to three times his annual salary and
incentive or bonus payments, if any, as shall have been paid to the Executive
during the most recent 12-month period concluded prior to the date of his
termination or resignation.  If the
total amount of the non-negotiated change of control compensation were to
exceed three times the

 

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Executive’s base
compensation (the average annual taxable compensation of the Executive for the
five years preceding the year in which the change of control occurs), the
Company and the Executive will reduce the lump sum compensation to be received
by the Executive in order to avoid the imposition of the golden parachute tax
as provided in the Tax Reform Act of 1984, as amended by the Tax Reform Act of
1986.  The foregoing provisions shall
not apply in the event of a negotiated change in control of the Company.

 

(b)                                 In the event
the Executive is required to hire counsel to negotiate on his behalf in
connection with his termination or a change in control of the Company, or in
order to enforce the rights and obligations as provided herein, the Company
shall reimburse to the Executive all reasonable attorney’s fees which may be
expended by the Executive in seeking to enforce the terms hereof.  Such reimbursement shall be paid by the
Company every 30 days after the Executive provides to the Company copies of
invoices from the Executive’s counsel. 
Such invoices may be redacted to preserve the attorney-client privilege
or attorney-client confidentiality.

 

(c)                                  So long as the
Executive is receiving severance compensation pursuant to this
Section 3.7, the Executive shall be entitled to continue to participate,
at the Company’s cost, in all existing benefit plans provided to the Company’s
executive employees at the time of the Executive’s termination or
resignation.  Such plans shall include,
but are not limited to, then-existing medical, health, dental, vision,
disability, life insurance and death benefit plans.  If the terms of such plans expressly prohibit the Executive from
continuing as a participant in such plans following the date of resignation or
termination, the Company will provide the Executive with benefits equivalent
to, or exceeding, those offered by the then-existing benefit plans offered to
the Company’s executive employees, all at the Company’s cost, for the duration
of the Executive’s right to severance compensation hereunder.

 

Any compensation to be paid
to the Executive under the foregoing provisions of this Section 3.7 shall
be subject to the Executive complying with the non-compete provisions of
Section 4.1(c) below.  In the event
the Executive does not so comply, the Company shall be released from any
obligations to the Executive under this Section 3.7.

 

Section 3.8  Options.  In the event of a non-negotiated change in
control of the Company and either the Executive or the Company terminate this
Agreement within 60 days of such non-negotiated change in control as provided
in Section 3.7(a) of this Agreement, any and all options granted to the
Executive to purchase Common Stock of the Company shall become fully vested and
exercisable on the date of termination of this Agreement.  In the event of termination or non-renewal
by either party without cause in accordance with Sections 3.3 or 3.5 of this
Agreement, any and all options granted to the Executive to purchase Common
Stock of the Company will vest and become exercisable on a

 

5

 

pro-rated
basis from the date of grant to the date of termination of this Agreement based
on the number of months during which this Agreement has been in effect from the
date of grant and the Company’s established thirty six month vesting
period.  For example, options granted to
purchase 20,000 shares on the effective date of this Agreement would become
vested and exercisable at a rate of 555.55 shares per month for each month
during which this Agreement is in effect. 
In the event this Agreement is terminated by the Company for cause,
options will vest and be exercisable pursuant to the terms of the applicable
Stock Option Plan or any successor plan under which such options are granted
(the “Plan”) regarding termination of employment for cause.  This provision shall serve as a contractual
modification of any option grants or agreements between the Executive and the
Company and is hereby incorporated by reference into each such option grant or
agreement.

 

ARTICLE IV

 

CONFIDENTIALITY AND COMPETITION

 

Section 4.1  Further Obligations of the Executive During and After
Employment.

 

(a)                                  The Executive
agrees that during the term of his employment under this Agreement, he will
engage in no other business activities which are or may be competitive with, or
which might place him in a competing position to that of, the Company or any
subsidiary of the Company.

 

(b)                                 The Executive
realizes that during the course of his employment, the Executive will have
produced and/or have access to confidential business plans, information,
business opportunity records, notebooks, data, formula, specifications, trade
secrets, customer lists, account lists and inventions of the Company and its
affiliates.  Therefore, during or
subsequent to his employment by the Company, or by an affiliate, the Executive
agrees to hold in confidence and not to directly or indirectly disclose or use
or copy or make lists of any such information, except to the extent authorized
by the Company in writing.  All records,
files, business plans, documents, equipment and the like, or copies thereof,
relating to Company’s business, or the business of an affiliated company, which
the Executive shall prepare, or use, or come into contact with, shall remain
the sole property of the Company, or of an affiliated company, and shall not be
removed from the Company’s or the affiliated company’s premises without its
written consent, and shall be promptly returned to the Company upon termination
or resignation of employment with the Company or its affiliated companies.

 

(c)                                  Because of his
employment by the Company, the Executive will have access to trade secrets and
confidential information about the Company, its business plans, its business
accounts, its business opportunities, its expansion plans into other geographic
areas and its methods of doing business. 
The Executive agrees that for a period of twelve months after
termination or resignation of his employment (except if the Executive
terminates this Agreement for cause under Section 3.4 hereof or without
cause under Section 3.5 hereof), he will not, directly or indirectly,
compete with the Company

 

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or its affiliates in the
business of designing, merchandising, marketing or contracting for the
manufacture of men’s and women’s golf apparel and golf outerwear within the
United States.  This non-compete
agreement shall be void and of no further force or effect in the event
termination occurs under Section 3.3 or Section 3.7 hereof and the
Company fails to pay the Executive amounts required under Section 3.3 or
Section 3.7 hereof.

 

(d)                                 In the event
this Agreement is terminated by the Company without cause pursuant to
Section 3.3, then Executive shall have the right to terminate the
non-compete agreement contained in Section 4.1(c) by releasing the Company
from its obligation to pay Executive any severance compensation, employee
benefits or other form of compensation which might otherwise be payable under
this Agreement.  Executive shall make
such election upon five days’ written notice to the Company.  The Executive’s obligations under the
non-compete agreement and the Company’s obligation to pay severance
compensation, employee benefits and other compensation shall all terminate as
of the effective date of the notice described above.

 

(e)                                  In the event a
court of competent jurisdiction finds any provision of this Section 4.1 to
be so overbroad as to be unenforceable, then such provision shall be reduced in
scope by the court, but only to the extent deemed necessary by the court to
render the provision reasonable and enforceable, it being the Executive’s
intention to provide the Company with the broadest protection possible against
harmful competition.

 

ARTICLE V

 

DISABILITY AND ILLNESS

 

Section 5.1  Disability and Salary Continuation.

 

(a)                                  Definition of Total Disability.  For
purposes of this Agreement, the terms “totally disabled” and “total disability”
shall mean disability as defined in any total disability insurance policy or
policies, if any, in effect with respect to the Executive.  If no insurance policy is in effect, “total
disability” shall mean a medically determinable physical or mental condition
which in the opinion of two independent physicians renders the Executive unable
to perform substantially all of the duties required pursuant to this Agreement.  Total disability shall be deemed to have
occurred on the date of the disabling injury or onset of the disabling illness,
as determined by the two independent physicians.

 

(b)                                 Salary Continuation.  If
the Executive becomes totally disabled during the term of this Agreement, his
full salary shall be continued for 360 days from the date of the disabling
injury or onset of the disability illness.

 

Section 5.2  Illness.  If the Executive is unable to perform the
services required under this Agreement by reason of illness or physical injury
not amounting to total disability, as defined in this Article, the compensation
otherwise payable to the Executive under this Agreement shall be continued

 

7

 

in
full for the remaining term or renewed term of this Agreement, but in no event
for a period exceeding one year.

 

ARTICLE VI

 

GENERAL MATTERS

 

Section 6.1  Governing Law.  This Agreement shall be
governed by the laws of the State of Colorado and shall be construed in
accordance therewith.

 

Section 6.2  No Waiver.  No provision of this Agreement may be waived
except by an agreement in writing signed by the waiving party.  A waiver of any term or provision shall not
be construed as a waiver of any other term or provision.

 

Section 6.3  Amendment.  This Agreement may be amended, altered or
revoked at any time, in whole or in part, by filing with this Agreement a
written instrument setting forth such changes, signed by each of the parties.

 

Section 6.4  Benefit.  This Agreement shall be binding upon the
Executive and the Company, and shall not be assignable by the Company without
the Executive’s written consent.

 

Section 6.5  Construction.  Throughout this Agreement the
singular shall include the plural, and the plural shall income the singular,
and the masculine and neuter shall include the feminine, wherever the context
so requires.

 

Section 6.6  Text to Control.  The headings of articles and
sections are included solely for convenience of reference.  If any conflict between any heading and the
text of this Agreement exists, the text shall control.

 

Section 6.7  Severability.  If any provision of this
Agreement is declared by any court of competent jurisdiction to be invalid for
any reason, such invalidity shall not affect the remaining provisions.  On the contrary, such remaining provisions
shall be fully severable, and this Agreement shall be construed and enforced as
if such invalid provisions had not been included in the Agreement.

 

Section 6.8  Authority.  The officer executing this Agreement on
behalf of the Company has been empowered and directed to do so by the Board of
Directors of the Company.

 

Section 6.9  Effective Date.  The effective date of this
Agreement shall be January 1, 2004.

 

8

 

	
  SPORT-HALEY,
  INC.

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
   

  
	
  By: /s/ Kevin M Tomlinson

  	
   

  	
  /s/ Mark Maley

  	
   

  
	
  Kevin
  M. Tomlinson,

  	
  Mark
  Maley, Executive

  
	
  Chief
  Executive Officer

  	
   

  
				

 

9

 

SPORT-HALEY, INC.

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

Schedule 1

 

Duties and Compensation

 

	
  Executive:

  	
   

  	
  Mark
  Maley

  
	
   

  	
   

  	
   

  
	
  Position:

  	
   

  	
  Vice
  President – Sales

  
	
   

  	
   

  	
   

  
	
  Base
  Salary:

  	
   

  	
  $135,000
  per year, payable bi-weekly

  
	
   

  	
   

  	
   

  
	
  Bonus:

  	
   

  	
  Participation
  in executive level of Company-wide bonus plan, up to 40% of annual compensation
  per year, at the discretion of the Compensation Committee

  
	
   

  	
   

  	
   

  
	
  Term:

  	
   

  	
  January 1,
  2004 through January 1, 2006, subject to automatic one (1) year
  extensions described in Section 3.1 of the Executive Employment
  Agreement

  
	
   

  	
   

  	
   

  
	
  Stock
  Options:

  	
   

  	
  The
  Company’s Stock Option Plan has expired. 
  When and if the Company creates a new stock option plan, the Executive
  will be allowed to participate in such plan and receive grants of options in
  amounts at the discretion and subject to approval of the Compensation Committee.  Such options to purchase shares typically
  vest in increments of one-third per year and are issued with an exercise
  price of not less than 85% of the fair market value of the Company’s Common
  Stock on date of grant, such date to be determined by the Compensation
  Committee.

  
	
   

  	
   

  	
   

  
	
  Duties
  and Responsibilities:

  	
   

  	
  Management,
  supervision and coordination of all sales activities of the Company

  

 

 

APPROVED:

 

	
  THE
  COMPANY:

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Kevin M Tomlinson

  	
   

  	
  By:

  	
  /s/
  Mark Maley

  	
   

  
	
   

  	
  Kevin
  M. Tomlinson

  	
   

  	
  Mark
  Maley, Executive

  
	
   

  	
  Chief
  Executive Officer

  	
   

  
	
   

  	
   

  
	
  Date:
  February 22, 2004

  	
  Date:
  February 22, 2004

  
						

 

10Exhibit 10.7

 

 

ADDENDUM# 1

to the general loan
agreement (bank loan agreement)

#2-0402-2 dated
February 4, 2002

 

	
  Almaty

  	
  February 18,
  2002

  

 

Open Joint-Stock
Company “Bank Turan Alem”

represented by Managing Director Nurlan Zhetesovich Talkenov acting on
the basis of the Power of Attorney # 01-62, dated October 10, 2001.

 

Subsidiary Open
Joint-Stock Company “Caspi Neft TME”

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

 

TransMeridian
Exploration Inc. BVI

represented by Anatole Kunevich acting on the basis of the power of
attorney dated January 04, 2002,

 

Kazstroiproekt, Ltd

represented by Director Irina Vladimirovna Serlina acting on the basis
of the Charter,

 

have entered into this Agreement with regard to the following:

 

1.              Agreement
Terms and Definitions

 

Unless
otherwise directly stipulated by this Agreement, capitalized terms and
definitions used herein shall have the meanings implied in the General Loan
Agreement (bank loan agreement) #2-0402-2 dated February 4, 2002.

 

2.              Subject
of the Agreement.

 

The parties
agreed to amend and add to the General Loan Agreement (bank loan agreement)
#2-0402-2 dated February 4, 2002 as follows:

 

1.1         To word the term “loan” as follows:

“Loan
– currency values in the amount of US$20,000,000 (twenty million) dollars
granted by the Lender to the Borrower on terms specified herein and in other
agreements equal in total to US$20,000,000 (twenty million) dollars.”

 

1.2         To word the term “Financing Chart” as follows:

“Financing
Chart – loan arrangements in the U.S. Dollars,”

 

 

1.3         To word the term “Loan account” as follows:

“Loan Account
– a special account opened by the Lender to keep track of the Borrower’s
obligations on loan redemption according to the terms of the General Loan Agreement
(bank loan agreement) #2-0402-2 dated February 4, 2002.”

 

1.4         To add to Article 4 “Loan granting terms” the
clause 4.6. with the following content:

“4.6. Any
amount of the Loan must be placed to the Borrower’s dollar account # 03070727
or to the Borrower’s local account # 024467727

 

1.5         To add to Article 6 “Interest Accrual and
Payment” the clause 6.5 with the following content:

“6.5. Interest
payment shall be made to the transfer account of the Lender # 420076600”

 

1.6         To add to Article 7 “Repayment of the Loan”
the clause 7.9. with the following content:

“7.9.
Repayment of the principal under the Loan shall be made to the Lender’s
transfer account # 420076600.”

 

1.7         To add to Article 11 “Responsibilities of the
Parties” the clause 11.12. with the following content:

“11.12. The
Borrower shall pay penalty in Tenge to the account # 420904101” at the Lender’s
discount rate on the day of payment.

In the event
the Borrower has paid penalty, interest amount and principal amount in Loan
Currency, then the Borrower will order to convert the specified penalty amount
to Tenge with the subsequent placing of this amount to the Lender’s account #
420904101.

The Lender
shall charge a commission according to the Lender’s rates for conversion of
foreign currency into Tenge to pay penalty.”

 

2. Additional Terms

 

2.1. This
agreement is an integral part of the General Loan Agreement (bank loan
agreement) # 2-0204-2 dated February 4, 2002. The regulations of the General
Loan Agreement (bank loan agreement) #2-0204-2 dated February 4, 2002 cannot be
construed without consideration of the contents of this Agreement.

 

2.2. The
Agreement is executed in Russian and English, in two copies, both having equal
legal force. In the event of contradictions, the Russian text of this Agreement
shall have the prevailing force.

 

2.3. This
Agreement shall become effective upon its signing.

 

LEGAL ADDRESSES AND
DETAILS OF THE PARTIES:

 

LENDER:

Bank Turan Alem OJSC,

97
Zholdasbekov St, Micro-district Samal-2,

480099 Almaty,
Republic of Kazakhstan,

 

 

IIK 300166019
with the Payment Systems Office of the National Bank of Kazakhstan

BIK 190501319,
RNN 600900114104

 

BORROWER:

Caspi Neft TME SOJSC,

105 Dostyk
Ave. Alatau Hotel, Almaty,

Republic of
Kazakhstan,

RNN
600900159346,

Settlement
Account 914467060 with the Almaty Branch of Bank Turan Alem OJSC,

BIK 190501306

 

SELLER:

Transmeridian
Exploration Inc. BVI

1811 North
Freeway Suite 500, Houston, Texas, 77060

BUYER:

Kazstroiproekt, Ltd

68 Abai Ave.
Office 74

Almaty,
Kazakhstan

 

SIGNATURES OF THE
PARTIES:

 

FOR THE LENDER:

 

	
  By:

  	
  /s/  Nurlan
  Talkenov

  	
   

  
	
   

  	
  Nurlan
  Talkenov

  
	
   

  	
  Managing
  Director

  

 

FOR THE SELLER:

 

	
  By:

  	
  /s/ Anatole Kunevich

  	
   

  
	
   

  	
  Anatole
  Kunevich

  
	
   

  	
  Chief
  Executive Officer

  

 

FOR THE BORROWER:

 

	
  By:

  	
  /s/ Anatole Kunevich

  	
   

  
	
   

  	
  Anatole
  Kunevich

  
	
   

  	
  Chief Executive
  Officer

  

 

FOR THE BUYER:

 

	
  By:

  	
  /s/ Irina Serlina

  	
   

  
	
   

  	
  Irina
  Serlina

  
	
   

  	
  Director

  

 

 

ADDENDUM # 2

to the general loan
agreement (bank loan agreement)

# 2-0402-2 dated
February 4, 2002

 

	
  Almaty

  	
  May 20, 2002

  

 

Open Joint-Stock
Company “Bank Turan Alem”

represented by Managing Director Nurlan Zhetesovich Talkenov acting on
the basis of the Power of Attorney # 01-62, dated October 10, 2001,

 

Subsidiary Open
Joint-Stock Company “Caspi Neft TME”

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

 

TransMeridian
Exploration Inc. BVI

represented by Nurzhan Sarsekenovich Kurmanov acting on the basis of
the power of attorney dated December 28, 2001,

 

Kazstroiproekt, Ltd

represented by Director Donov A.A. acting on the basis of the Charter,

 

have entered into this Agreement with regard to the following:

 

1.              Agreement
Terms and Definitions

 

Unless
otherwise directly stipulated by this Agreement, capitalized terms and
definitions used herein shall have the meanings implied in the General Loan
Agreement (bank loan agreement) #2-0402-2 dated February 4, 2002.

 

2.              Subject
of the Agreement

 

The Parties
agreed to amend and add to the General Loan Agreement (bank loan agreement)
#2-0402-02 dated February 4, 2002 as follows:

 

1.1.          To word the term “loan” as follows:

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

 

 

1.2.          To word the term “Financing Chart” as
follows:

Financing Chart –
loan arrangements in the form of money, U.S. Dollars, financial instruments
(letters of commitment, promissory notes, bank guarantees, bails, letters of
credit, underwriting service for placement of the Borrower’s securities, and
financial leasing).

 

1.3.          10. To word the term “Financing Chart” as follows:

“Interest – an
interest accrued by the Lender to the Borrower under terms hereof for the use
of the Loan in USD or Tenge at a rate of 15 (fifteen) % per annum. Amount of
interest by Loan granted in the form of letters of credit, guarantees and
warranties shall be determined in separate agreement entered into between the
Lender and Borrower.”

 

1.4.          In definition of the term Security
(Collateral) the words “in Annex #3 to this Agreement” to replace by
“in Annex #1 to this Agreement”.

The following
provision shall be added to Item 2.4 of Clause 2 “Subject of agreement”:

“Amount of
interest by Loan, granted in the form of letters of credit, guarantees and
warranties shall be determined in separate agreements entered into between the
Lender and the Borrower”.

 

2.                  Additional
Terms

 

2.1.          This Agreement is an integral part of the
General Loan Agreement (bank loan agreement) #2-0204-2 dated February 4, 2002.
The regulations of the General Loan Agreement (bank loan agreement) #2-0204-2
dated February 4, 2002 cannot be construed without consideration of the
contents of this Agreement.

 

2.2.           The Agreement is executed in Russian and
English, in two copies, both having equal legal force. In the event of
contradictions, the Russian text of this Agreement shall have the prevailing
force.

 

2.3.          This Agreement shall become effective upon
its signing.

 

LEGAL ADDRESSES AND
DETAILS OF THE PARTIES:

 

LENDER:

Bank Turan Alem OJSC,

97
Zholdasbekov St, Micro-district Samal-2,

480099 Almaty,
Republic of Kazakhstan,

IIK 300166019
with the Payment Systems Office of the National Bank of Kazakhstan

BIK 190501319,
RNN 600900114104

 

BORROWER:

Caspi Neft TME SOJSC,

563 Seifullina
Ave., Almaty,

Republic of
Kazakhstan,

 

 

RNN
600900159346,

Settlement
Account 024467727 with the Almaty Branch of Bank TuranAlem OJSC,

BIK 190501306

 

SELLER:

Transmeridian
Exploration Inc. BVI

1811 North
Freeway Suite 500, Houston, Texas, 77060

 

BUYER:

Kazstroiproekt, Ltd

68 Abai Ave.
Office 74

Almaty,
Kazakhstan

 

SIGNATURES OF THE
PARTIES:

 

FOR THE LENDER:

 

	
  By:

  	
  /s/  Nurlan
  Talkenov

  	
   

  
	
   

  	
  Nurlan
  Talkenov

  
	
   

  	
  Managing
  Director

  

 

FOR THE SELLER:

 

	
  By:

  	
  /s/ Nurzhan Kurmanov

  	
   

  
	
   

  	
  Nurzhan
  Kurmanov

  

 

FOR THE BORROWER:

 

	
  By:

  	
  /s/ Anatole Kunevich

  	
   

  
	
   

  	
  Anatole
  Kunevich

  
	
   

  	
  Chief
  Executive Officer

  

 

FOR THE BUYER:

 

	
  By:

  	
  /s/ A. Donov

  	
   

  
	
   

  	
  A. Donov

  
	
   

  	
  Director

  

 

 

ADDENDUM # 3

to the general loan
agreement (bank loan agreement)

# 2-0402-2 dated
February 4, 2002

 

	
  Almaty

  	
  August 20,
  2002

  

 

Open Joint-Stock
Company “Bank Turan Alem”

represented by Chief Executive Officer E.Tatishev, acting on the basis
of Charter

 

Subsidiary Open
Joint-Stock Company “Caspi Neft TME”

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

 

TransMeridian
Exploration Inc. BVI

represented by Lorrie Olivier, acting on the basis of the Charter,

 

Kazstroiproekt, Ltd

represented by Director Donov A.A. acting on the basis of the Charter,

 

have entered into this Agreement with regard to the following:

 

3.              Agreement
Terms and Definitions

 

Unless
otherwise directly stipulated by this Agreement, capitalized terms and
definitions used herein shall have the meanings implied in the General Loan
Agreement (bank loan agreement) #2-0402-2 dated February 4, 2002.

 

4.              Subject
of the Agreement

 

The Parties
agreed to amend and add to the General Loan Agreement (bank loan agreement)
#2-0402-02 dated February 4, 2002 as follows:

 

1.1.          Clause 4.3. shall be in the following manner

Any amount of
the Loan will be released by OJSC Bank Turan Alem only if the documents bear
minimum two signatures — the signature of the Chairman of the Company
Management of the Borrower and either the signature of the Deputy Chairman of
the Financial Management of the Borrower, or the Chairman of the Board of
Directors of the Borrower, or their substitutes, one of whom must be the
Buyer’s representative. In the event OJSC Bank Turan Alem receives payment
orders and documents to make transactions from the Borrower’s account without
two signatures - of the of the Chairman of the Company Management of the
Borrower and either the signature of the Deputy Chairman of the Financial
Management of the Borrower, or the Chairman of the Board of Directors of the
Borrower, or their substitutes, one of whom must be the Buyer’s representative,
then OJSC Bank Turan Alem is entitled not to execute such instructions of the
Borrower and shall inform the Seller and the Buyer of violation of the
specified term.

 

 

1.2.          In Article 18 “Legal addresses and details of
the Parties” in details of Lender the words “15 Dostyk Ave. Alatau Hotel” shall
be replaced by “5th floor, 563 Seifullin Ave., 480012.”

 

2.                  Additional
Terms

 

2.1.          This Agreement is an integral part of the
General Loan Agreement (bank loan agreement) #2-0204-2 dated February 4, 2002.
The regulations of the General Loan Agreement (bank loan agreement) #2-0204-2
dated February 4, 2002 shall not be considered and/or construed without
consideration of the contents of this Agreement.

 

2.2.          The Agreement is executed in Russian and
English, in two copies, both having equal legal force. In the event of
contradictions and discrepancies, the Russian text of this Agreement shall have
the prevailing force.

 

2.3.          This Agreement shall become effective upon
its signing.

 

LEGAL ADDRESSES AND
DETAILS OF THE PARTIES:

 

LENDER:

Bank Turan Alem OJSC,

97
Zholdasbekov St, Micro-district Samal-2,

480099 Almaty,
Republic of Kazakhstan,

IIK 300166019
with the Payment Systems Office of the National Bank of Kazakhstan

BIK 190501319,
RNN 600900114104

 

BORROWER:

Caspi Neft TME SOJSC,

563 Seifullina
Ave., 5th floor. 480012, Almaty,

Republic of
Kazakhstan,

RNN
600900159346,

Settlement Account
024467727 with the Almaty Branch of Bank TuranAlem OJSC,

BIK 190501306

 

SELLER:

Transmeridian
Exploration Inc. BVI

397 North Sam
Houston Pkwy, Suite #300, Houston, Texas, 77060, USA

 

BUYER:

Kazstroiproekt, Ltd

68 Abai Ave.
Office 74

Almaty,
Kazakhstan

 

 

SIGNATURES OF THE
PARTIES:

 

FOR THE LENDER:

 

	
  By:

  	
  /s/  E.Tatishev

  	
   

  
	
   

  	
  E. Tatishev

  
	
   

  	
  Chief
  Executive Officer

  

 

FOR THE SELLER:

 

	
  By:

  	
  /s/ Lorrie Olivier

  	
   

  
	
   

  	
  Lorrie
  Olivier

  
	
   

  	
  President
  and Chief Executive Officer

  

 

FOR THE BORROWER:

 

	
  By:

  	
  /s/ Anatole Kunevich

  	
   

  
	
   

  	
  Anatole
  Kunevich

  
	
   

  	
  Chief
  Executive Officer

  

 

FOR THE BUYER:

 

	
  By:

  	
  /s/ A. Donov

  	
   

  
	
   

  	
  A. Donov

  
	
   

  	
  Director

  

 

 

Supplementary
Agreement No. 4

to the General Loan
Agreement (Bank Loan Contract) No. 2-0402-2 dated

February 4, 2002.

 

	
  Almaty

  	
  February 1,
  2004

  

 

Hereby the Parties of General
Loan Agreement (Bank Loan Contract) No. 2-0402-2 dated February 4, 2002
(hereinafter — the “General Loan Agreement”; on citing of the General Loan
Agreement – “this Agreement”), namely:

 

Open Joint Stock Company “Bank Turan Alem”, represented
by the Managing Director Mr. Saparov Arsen Kuandykovich, acting on the basis of
the Power of Attorney.

 

Subsidiary Open Joint Stock Company “Caspi
Neft TME” represented by Chief Executive Officer Mr.
Anatole Kunevich, acting on the basis of the Charter,

 

TransMeridian  Exploration Inc. BVI, represented by the
President Mr. Lorrie Olivier, acting on the basis of the Articles of
Association, and

 

a legal successor of Limited
Liability Company “Kazstroiproekt” as per Supplementary Agreement No. 2 to the
Shareholders’ Joint Operating Agreement dated November 4, 2002, BRAMEX
MANAGEMENT INC., represented by Mr. Sadykov, acting on the basis of
the Power of Attorney dated October 18, 2003;

 

have entered into this addendum
(hereinafter — the “Addendum”) with regard to the following:

 

1.              Addendum
Terms and Definitions

 

Unless
otherwise directly stipulated by this Addendum, capitalized terms and
definitions used herein shall have the meanings implied in the General Loan
Agreement (bank loan agreement) # 2-0402-2 dated February 4, 2002.

 

2.              Subject
of the Agreement

 

The Parties
agreed to amend the General Loan Agreement as follows:

 

1.               to state paragraph 5.1.1. b) as follows:

“The Seller
shall provide the Borrower with a long-term loan for repayment of the loan
amount of $ 2,233,000.00 (two million two hundred and thirty-three thousand) US
Dollars and the Interest accrued on this amount not later the dates specified
in this Agreement for repayment of the above mentioned amounts”.

At that, the
Parties hereby agree, that after granting of the above mentioned long-term
loan, the Seller’s obligation stated by paragraph 5.1.1. b) of the General Loan
Agreement shall be considered to be fully fulfilled, and after the date when
the above mentioned

 

 

amount is wired
by the Seller to the Borrower, all obligations on repayment of the amount
stipulated by paragraph 5.1.1. b) shall be borne by the Borrower.

 

2.               to state paragraph 6.3.1. as follows:

 

“The Interest
accrued on the amount of US $2,233,000 (two million two hundred and
thirty-three thousand) US Dollars shall be paid not later than the last date of
the 18-months’ period from the date of receipt of the above mentioned amount by
the Borrower from the Creditor under the General Loan Agreement. The amount of
accrued Interest shall be calculated in accordance with the terms of this
Agreement on the date of repayment of the principal amount US $ 2,233,000. In
case of delay in payment, beginning with the date of occurrence of delay in
performance, the Interest shall be accrued at the one and a half (1.5) extended
rate of Interest; at that, the provisions of this Agreement related to charging
of penalty fees and fines shall not be applied.

 

3.               to state paragraph 7.4.1. as follows:

 

“The part of
the Loan in the amount of $2,233,000.00 (two million two hundred and
thirty-three thousand) US Dollars shall be repaid not later than on the last
date of the 24-months period after the date of receipt of this amount of the
Loan by the Borrower”.

 

3.              Additional
Terms

 

4.1. This Addendum
is an integral part of the General Loan Agreement (bank loan agreement)
#2-0204-2 dated February 4, 2002. The regulations of the General Loan Agreement
(Bank Loan Contract) #2-0204-2 dated February 4, 2002 shall not be considered
and/or interpreted without consideration of the contents of this Addendum.

 

4.2. The
Addendum is executed in Russian and English, in four copies, all having equal
legal force. In the event of contradictions and discrepancies, the Russian text
of this Addendum shall have the prevalence.

 

4.3. This
Addendum shall become effective upon signing.

 

LEGAL
ADDRESSES AND DETAILS OF THE PARTIES:

 

OJSC Bank Turan Alem,

97
Zholdasbekov Str., Micro-district Samal-2,

480099 Almaty,
Republic of Kazakhstan,

IIK 300166019
with the Payment Systems Office of the National Bank of Kazakhstan

BIK 190501319,
RNN 600900114104

 

SOJSC Caspi Neft TME,

563 Seifullina
Ave., 5th floor. 480012, Almaty,

Republic of
Kazakhstan,

RNN
600900159346,

Settlement
Account 024467727,

 

 

Dollars
account No. 003070727 with the Almaty Branch of OJSC Bank TuranAlem,

BIK 190501306

 

Transmeridian
Exploration Inc. BVI

397 North Sam
Houston Pkwy, Suite #300, Houston, Texas, 77060, USA

 

BRAMEX MANAGEMENT
INC.

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

 

 

SIGNATURES OF THE
PARTIES:

 

OJSC Bank Turan Alem:

 

	
  By:

  	
  /s/  Arsen
  Saparov

  	
   

  
	
   

  	
  Arsen
  Saparov

  
	
   

  	
  Managing
  Director

  

 

Transmeridian
Exploration Inc. BVI:

 

	
  By:

  	
  /s/ Lorrie Olivier

  	
   

  
	
   

  	
  Lorrie
  Olivier

  
	
   

  	
  President
  and Chief Executive Officer

  

 

SOJSC Caspi Neft TME:

 

	
  By:

  	
  /s/ Anatole Kunevich

  	
   

  
	
   

  	
  Anatole
  Kunevich

  
	
   

  	
  Chief
  Executive Officer

  

 

BRAMEX MANAGEMENT
INC. :

 

	
  By:

  	
  /s/ K. Sadykov

  	
   

  
	
   

  	
  K. Sadykov

  

 

 

Supplementary
Agreement No. 5

to the General Loan
Agreement (Bank Loan Contract) No. 2-0402-2

dated February 4,
2002.

 

	
  Almaty

  	
  August 19,
  2003

  

 

Hereby the Parties of General
Loan Agreement (Bank Loan Contract) No. 2-0402-2 dated February 4, 2002
(hereinafter – “General Loan Agreement”), namely:

 

Open Joint Stock Company “Bank Turan Alem”, represented
by Chief Executive Officer Mr. Tatishev E.N., acting on the basis of the
Charter,

 

Subsidiary Open Joint Stock Company “Caspi
Neft TME” represented by Chief Executive Officer Mr.
Anatole Kunevich, acting on the basis of the Charter,

 

TransMeridian  Exploration Inc. BVI, represented by the
President, Mr. Lorrie Olivier, acting on the basis of the Charter, and

 

a legal successor of Limited
Liability Company “Kazstroiproekt” as per Supplementary Agreement No. 2 to the
Shareholders’ Joint Operating Agreement dated November 4, 2002, BRAMEX
MANAGEMENT INC., represented by Mr. Sadykov, acting on the basis of
the Power of Attorney dated October 22, 2002;

 

have entered into this Addendum
(hereinafter – the “Supplementary Agreement”) with regard to the following:

 

1.              Agreement
Terms and Definitions

 

Unless
otherwise directly stipulated by this Agreement, capitalized terms and
definitions used herein shall have the meanings implied in the General Loan
Agreement (bank loan agreement) # 2-0402-2 dated February 4, 2002.

 

1.              Subject
of the Agreement

 

The Parties
agreed to amend the General Loan Agreement as follows:

 

1.1.          to state paragraph 5.1.1.a) as follows:

 

“The Buyer
shall provide to the Borrower a long-term loan in amount of 15,000,000.00
(fifteen millions) US Dollars for repayment of the Loan (the term of the
fifteen millions’ loan shall be discussed by the Buyer and Borrower in a
separate loan agreement); at the same time the Interests accrued for
15,000,000.00 (fifteen millions) US Dollars shall be repaid by the Borrower on
its own, on the terms set out in this Agreement.”

 

 

2.              Additional
Terms

 

2.1.          This Agreement is an integral part of the
General Loan Agreement (bank loan agreement) #2-0204-2 dated February 4, 2002.
The regulations of the General Loan Agreement (Bank Loan Contract) #2-0204-2
dated February 4, 2002 shall not be considered and/or construed without
consideration of the contents of this Agreement.

 

2.2.          The Agreement is executed in Russian and
English, in four copies, all having     
equal legal force. In the event of contradictions and discrepancies, the
Russian text of this Agreement shall have the prevalence.

 

2.3.          This Agreement shall become effective upon
signing.

 

LEGAL ADDRESSES AND
DETAILS OF THE PARTIES:

 

OJSC Bank Turan Alem,

97 Zholdasbekov
Str., Micro-district Samal-2,

480099 Almaty,
Republic of Kazakhstan,

IIK 300166019
with the Payment Systems Office of the National Bank of Kazakhstan

BIK 190501319,
RNN 600900114104

 

SOJSC Caspi Neft TME,

563 Seifullina
Ave., 5th floor. 480012, Almaty,

Republic of
Kazakhstan,

RNN
600900159346,

Settlement
Account 024467727 with the Almaty Branch of OJSC Bank TuranAlem,

BIK 190501306

 

Transmeridian
Exploration Inc. BVI

397 North Sam
Houston Pkwy, Suite #300, Houston, Texas, 77060, USA

 

BRAMEX MANAGEMENT
INC.

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

 

 

SIGNATURES OF THE
PARTIES:

 

OJSC Bank Turan Alem:

 

	
  By:

  	
  /s/  E.
  Tatishev

  	
   

  
	
   

  	
  E. Tatishev

  
	
   

  	
  Chief
  Executive Officer

  

 

Transmeridian
Exploration Inc. BVI:

 

	
  By:

  	
  /s/ Lorrie Olivier

  	
   

  
	
   

  	
  Lorrie
  Olivier

  
	
   

  	
  President
  and Chief Executive Officer

  

 

SOJSC Caspi Neft TME:

 

	
  By:

  	
  /s/ Anatole Kunevich

  	
   

  
	
   

  	
  Anatole
  Kunevich

  
	
   

  	
  Chief
  Executive Officer

  

 

BRAMEX MANAGEMENT
INC. :

 

	
  By:

  	
  /s/ K. Sadykov

  	
   

  
	
   

  	
  K. Sadykov

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