Document:

ex1049k093010.htm

  

  

  

EXECUTION COPY

 

___________________________________________________________________________

 

 

Operation Number 36384

 

 

 

AMENDMENT AGREEMENT NO. 1 TO

 

 

AGREEMENT ON PLEDGE OF MONIES AT THE BANK ACCOUNTS

 

 

 

 

between

 

 

 

 

BALYKSHY L.L.P.

 

 

and

 

 

JOINT STOCK COMPANY "BANK CENTERCREDIT"

 

 

and

 

 

EUROPEAN BANK FOR

 

 

RECONSTRUCTION AND DEVELOPMENT

 

 

 

 

Dated 22 October 2009

 

___________________________________________________________________________

 

 

ALMATY - 12376.03

 

  

  

  

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

	
(1)

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

	
(2)

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

	
(3)

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

The Pledgor, the Accounts Bank and the Pledgeholder are referred to herein as the "Parties" and each as a "Party".

 

RECITALS

 

WHEREAS:

 

	
(A)

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

 

	
(B)

	
The Pledgor, the Accounts Bank and the Pledgeholder have entered into an agreement on pledge of monies at the bank accounts dated 15 August 2008 (the "Agreement on Pledge of Monies at the Bank Accounts"), pursuant to which the Pledgor agreed, inter alia, to establish a pledge on the Pledged Assets for the benefit of the Pledgeholder and as security for the Secured Obligations; and

 

	
(C)

	
The Pledgor, the Accounts Bank and the Pledgeholder wish to make certain changes to the Agreement on Pledge of Monies at the Bank Accounts as set forth below.

 

NOW, THEREFORE, the Parties agree as follows:

 

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ARTICLE I.  DEFINITIONS

 

Section 1.01 Definitions

 

In this Amendment Agreement (including the recitals hereof), terms used and not otherwise defined herein shall have the meanings ascribed to them in the Agreement on Pledge of Monies at the Bank Accounts.

 

Section 1.02 Interpretation

 

In this Amendment Agreement, unless the context otherwise requires:

 

(a) a reference to "Secured Obligations" or "Pledged Assets" shall include a reference to any part of them.

 

(b) unless the context otherwise requires, words denoting the singular include the plural and vice versa, words denoting gender include all gender, and words denoting persons include natural persons, corporations, partnerships, joint ventures, or trusts, unincorporated organisations, authorities or any other entity whether acting in an individual, fiduciary or other capacity, and references to a person include its successors and permitted assigns and/or transferees;

 

(c) a reference to a specified Article, Section or Schedule shall be construed as a reference to that specified Article, Section of, or Schedule to, this Amendment Agreement;

 

(d) a reference to an agreement includes any contract, concession, deed, undertaking, instrument or other contractual arrangement, and any annexes, exhibits, schedules thereto, and the side letters or other instruments issued in connection therewith;

 

(e) a reference (i) to an amendment or to an agreement being amended includes a supplement, variation, assignment, novation, restatement or re-enactment, and (ii) to an agreement shall be construed as a reference to such agreement as it may be amended, restated, supplemented or novated from time to time;

 

(f) the headings are inserted for convenience of reference only and shall not affect the interpretation of this Amendment Agreement;

 

(g) a Default is outstanding or continuing until it has been remedied or waived by the Pledgeholder in writing;

 

(h) any reference to "law" means any law (including, any common or customary law) and any treaty, constitution, statute, legislation, decree, normative act, rule, regulation, judgment, order, writ, injunction, determination, award or other legislative or administrative measure or judicial or arbitral decision in any jurisdiction which has the force of law or the compliance with which is in accordance with general practice in such jurisdiction;

 

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(i) any reference to a provision of law, statute, rule or regulation is a reference to that provision as from time to time amended or re-enacted;

 

(j) the terms "include" and "including" shall be deemed to be followed by the words "without limitation" where not so followed; and

 

(k) all exhibits, supplements and amendments hereto shall form an integral part of this Amendment Agreement.

 

ARTICLE II. AMENDMENT TO THE AGREEMENT ON PLEDGE OF MONIES AT THE BANK ACCOUNTS

 

Section 2.01 Variation of definition of "Financing Agreements" of the Agreement on Pledge of Monies at the Bank Accounts

 

The definition of "Financing Agreements" of the Agreement on Pledge of Monies at the Bank Accounts shall be amended by deleting it in its entirety and replacing it with the following:

 

	
"Financing Agreements"

 

 

 

 

	
means

(a) this Agreement;

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

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

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

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

 

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(f) the Deed of Financial and Performance Guarantee, dated 6 August 2008, pursuant to which the Sponsor (as guarantor) provides an irrevocable completion and performance guarantee of amounts owing to the Pledgeholder under the Financing Agreements and amounts needed by the Pledgor for the Project;

(g) the Share Retention Deed, dated 3 October 2008, pursuant to which, inter alia, (i) the Shareholder agrees not to effect any change in its equity interest in, or transfer any of its shares in the capital of, the Pledgor (in its capacity as Borrower) without the prior written consent of the Pledgeholder and (ii) the Sponsor agrees not to effect any change in its equity interest in, or transfer any of its shares in the capital of, the Shareholder without the prior written consent of the Pledgeholder;

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

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

 

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

(k) the Participation Interest Pledge Agreement, dated 15 August 2008, as amended on 31 March 2009, pursuant to which the Shareholder pledges the participation interest it owns in the Pledgor to the Pledgeholder as security for the prompt payment when due of all amounts payable by the Pledgor to the Pledgeholder under the Loan Agreement and any other Financing Agreement;

(l) the Insurance Assignment, dated 12 September 2008, pursuant to which the Pledgor assigns by way of security in favour of the Pledgeholder the benefit of all contracts of insurance and insurance policies and any amounts payable under such contracts and policies and any other insurance amounts payable by insurers to the Pledgor;

(m) the Deed of Assignment of Contracts, dated 5 August 2008, pursuant to which the Pledgor assigns by way of security in favour of the Pledgeholder the benefit of the Construction Contract entered into by and between the Pledgor and Datoba Construction LLP on 7 November 2006; all service contracts which have been entered into or will be entered into by and between the Pledgor and marine base service users; and all performance bonds, warranties, guarantees, undertakings and such other agreements which have been entered into or will be entered into by the Pledgor and any other person;

 

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(n) the Disbursement applications made by the Pledgor under the Loan Agreement and any notices, certificates and applications issued by the Pledgor (in its capacity as Borrower) or any other party to the Pledgeholder in each case in connection with the Loan Agreement or any other Financing Agreement;

(o) the Contribution Account Agreement, dated 7 November 2008, as amended by Supplementary Agreement No. 1 dated 12 December 2008, relating to an account opened by the Pledgor with the Accounts Bank as specified therein for purposes of (i) the Pledgeholder's payment of its contribution to the Pledgor's charter capital, and (ii) the payment by the Shareholder of its contribution to the Pledgor's charter capital;

(p) the Assignment of Site Lease Agreement, dated 20 November 2008, pursuant to which the Pledgor assigns by way of security in favour of the Pledgeholder the benefit of the Site Lease Agreement dated 9 October 2008, entered into by and between the Pledgor and MOBY;

(q) the Pledge Agreement over CREL Account, dated  12 December 2008, pursuant to which the Shareholder pledges its bank accounts as specified therein to the Pledgeholder as security for the prompt payment when due of all amounts payable by the Pledgor to the Pledgeholder under the Loan Agreement and any other Financing Agreement; and

 

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

 

and any of the above may individually be referred to as a "Financing Agreement";"

 

 

Section 2.02 Variation of Sub-Section (a) of Section 2.01 (Secured Obligations)

 

Sub-Section (a) of Section 2.01 (Secured Obligations) of the Agreement on Pledge of Monies at the Bank Accounts shall be amended by deleting it in its entirety and replacing it with the following:

 

"(a)           The Pledge under this Agreement secures (i) the principal amount of eighteen million six hundred thousand Dollars (USD 18,600,000) payable by the Pledgor in its capacity as borrower under the Loan Agreement plus interest thereon and (ii) all present and future obligations and liabilities (whether actual or contingent, whether owed jointly or severally or in any other capacity whatsoever) of the Pledgor under or in connection with the Loan Agreement, including the payment of fees, charges, taxes, duties or other imposts, damages, losses, costs and expenses (including legal fees and court costs) including, for the avoidance of doubt, any expenses related to enforcing of the provisions of the Loan Agreement, any payments made under the Loan Agreement which are thereafter avoided or required to be restored in an insolvency, liquidation or otherwise, and any obligation to indemnify the Pledgeholder."

 

Section 2.03 Variation to Sub-Section (b) of Section 2.02 (Term)

 

Sub-Section (b) of Section 2.02 (Term) of the Agreement on Pledge of Monies at the Bank Accounts shall be amended by deleting it in its entirety and replacing it with the following:

 

"(b)           Without prejudice to Section 2.02(a) or any rights of the Pledgeholder under the Loan Agreement or any other Financing Agreement, the Pledgor in its capacity as borrower shall repay the Loan in eight (8) equal (or as nearly as equal as possible) semi-annual installments on each of 20 May or 20 November (provided, however, if such date falls on a day which is not a Business Day, the payment date shall be the immediately succeeding Business Day).  The first repayment of the Loan shall be made on 20 November 2011 and the final repayment of the Secured Obligations is scheduled for 20 May 2015 (the "Scheduled Repayment Date") as these terms may be amended, restated, supplemented or novated from time to time pursuant to the terms and conditions of the Loan Agreement."

 

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ARTICLE III. MISCELLANEOUS

 

Section 3.01 Delivery of Documents

 

(a) the Pledgor shall deliver, or cause to be delivered as the case may be, to the Pledgeholder (in form and substance satisfactory to the Pledgeholder):

 

	
(i)  

	
on the date hereof, a notarized copy of the resolution of the General Meeting of the participants of the Pledgor, approving the amendment to the Agreement on Pledge of Monies at the Bank Accounts and the execution of this Amendment Agreement; and

 

	
(ii)  

	
as promptly as practicable after the date hereof, a notarized copy of the certificate of state registration of a movable property pledge and an extract from the pledge register ("reestr zalogov") (the "Pledge Register") expressly reflecting the notation in such Pledge Register of the Pledge in favour of the Pledgeholder pursuant to the Agreement on Pledge of Monies at the Bank Accounts.

 

Section 3.02 Representations and Warranties

 

Each of the Pledgor and the Accounts Bank hereby represents and warrants to the Pledgeholder as follows:

 

(a)           it has all requisite power and authority, corporate or otherwise, to execute, deliver and perform all of its obligations under this Amendment Agreement and the Agreement on Pledge of Monies at the Bank Accounts as amended by this Amendment Agreement;

 

(b)           it has taken all necessary action to authorise the execution, delivery and performance by it of this Amendment Agreement and the Agreement on Pledge of Monies at the Bank Accounts as amended by this Amendment Agreement;

 

(c)           this Amendment Agreement has been duly executed and delivered by it, and subject to the reservations and qualifications set out in the legal opinions of the legal counsels to the Pledgeholder as provided under Article IV (Conditions Precedent) of the Loan Agreement, this Amendment Agreement and the Agreement on Pledge of Monies at the Bank Accounts as amended by this Amendment Agreement constitute its valid and legally binding obligations, enforceable against it in accordance with their respective terms;

 

(d)           all consents, authorisations and actions of any kind necessary for its valid execution, delivery and performance of this Amendment Agreement and the Agreement on Pledge of Monies at the Bank Accounts as amended by this Amendment Agreement have been obtained and are in full force and effect;

 

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(e)           the execution, delivery and performance by it of this Amendment Agreement and the Agreement on Pledge of Monies at the Bank Accounts as amended by this Amendment Agreement do not require the consent or approval of any of its creditors and will not conflict with or constitute a breach or default under or violate any provision of its charter or any agreement, law, rule regulation, order, writ, judgment, injunction, decree, determination or award applicable to it.

 

(f)           the amendment of the Agreement on Pledge of Monies at the Bank Accounts pursuant to this Amendment Agreement shall not in any way diminish or impair the rights, ranking or priorities of the Pledgeholder under the Agreement on Pledge of Monies at the Bank Accounts; and

 

(g)           the representations and warranties in Article V (Representations and Warranties) ("Representations and Warranties") of the Agreement on Pledge of Monies at the Bank Accounts are true and correct on and as of the date hereof with the same effect as though such representations and warranties had been made on and as of the date hereof.

 

Section 3.03 COVENANTS

 

The Pledgor hereby covenants to the Pledgeholder and agrees that during the Security Period, it shall do all of the following:

 

(a) The Pledgor shall keep and maintain, at its sole cost and expense, the Authorisations referred to in Section 3.03 (b) in full force and effect throughout the Security Period (or, if required, effect the renewal of such Authorisations);

 

(b) The Pledgor shall at its own cost and account within ten (10) Business Days of the execution of this Amendment Agreement, register the amendment to the Pledge with the Registration Authority and/or elsewhere if required by Applicable Law.  The Pledgor shall ensure that such registration is a first in time priority in any and all registers or records of the Registration Authority, to secure the first ranking of the Pledge as contemplated in Section 5.01 (First Ranking Pledge) of the Agreement on Pledge of Monies at the Bank Accounts.  The Pledgor shall within ten (10) days after the registration of the amendment to the Pledge with the Registration Authority and/or with any other Authority deliver to the Pledgeholder and permit the Pledgeholder during the Security Period to retain, at the expense and risk of the Pledgor, at any office of the Pledgeholder or with any correspondents or other agents of the Pledgeholder, whether in the United Kingdom, Kazakhstan, or elsewhere, the originals of all related certificates, documents and filings, including this Agreement bearing the registration mark and the certificate of registration of a movable property pledge, confirming such registration.

 

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(c) The Pledgor shall do, authorise and permit to be done each and every other act or thing and agrees to execute any additional documents or instruments which may be deemed necessary by the Pledgeholder to (i) register the Pledge or any modification, amendment or supplement thereto or any other agreement or document that may be requested by the Pledgeholder in order to implement this Amendment Agreement, to protect or preserve the rights, title and interests of the Pledgeholder with respect to the Pledged Assets and for the purpose of enforcing the Pledgeholder's rights under or in connection with the Agreement on Pledge of Monies at the Bank Accounts and this Amendment Agreement; and (ii) obtain all the consents and authorisations which, in the opinion of the Pledgeholder, are necessary or desirable to comply with Applicable Law with respect to the Pledge.

 

Section 3.04 Costs

 

All costs, taxes, charges and duties relating to the Pledge over the Pledged Assets and to the execution, registration, filings, authorizations, consents, notarizations and enforcement of this Amendment Agreement and any of the rights of the Pledgeholder provided for in it shall be borne by the Pledgor.  Provided that if notwithstanding this provision, the Pledgeholder has paid any such costs, taxes, charges or duties, the Pledgor shall immediately upon request of the Pledgeholder, reimburse the Pledgeholder for all such amounts paid in the currency incurred.

 

Section 3.05 Term of Agreement

 

The parties hereto agree that this Amendment Agreement shall take effect as of the date hereof.  This Amendment Agreement shall continue in full force until full and irrevocable discharge of the Secured Obligations pursuant to the terms of the Financing Agreements.

 

Section 3.06 Continuing Agreement

 

This Amendment Agreement is an integral part of the Agreement on Pledge of Monies at the Bank Accounts and is supplemental to, and shall be construed as one with the Agreement on Pledge of Monies at the Bank Accounts.  After execution of this Amendment Agreement by both Parties all references to the Agreement on Pledge of Monies at the Bank Accounts and/or in the Agreement on Pledge of Monies at the Bank Accounts to this "Agreement" shall be deemed to be references to the Agreement on Pledge of Monies at the Bank Accounts as amended hereby starting from the effective date referred to in Section 3.05 (Term of Agreement).  The Parties hereby confirm that the Agreement on Pledge of Monies at the Bank Accounts remains unchanged and shall continue in full force and effect as expressly amended by this Amendment Agreement.

 

Section 3.07 Incorporation of provisions of the Agreement on Pledge of Monies at the Bank Accounts

 

The provisions of Sections 12.04 (Notices), 12.09 (Arbitration and Jurisdiction), 12.10 (Privileges and Immunities of the Pledgeholder), 12.11 (Waiver of Sovereign Immunity), 12.12 (Reliance) 12.13 (Successor and Assigns) and 12.14 (Rights of Third Parties) of the Agreement on Pledge of Monies at the Bank Accounts shall be deemed incorporated into and to form part of this Amendment Agreement, as if same were set out herein in full, mutatis mutandis, and (without limitation) as if references therein to "this Agreement" were references to this Amendment Agreement.

 

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Section 3.08 Entire Agreement; Amendment and Waiver

 

This Amendment Agreement constitute the entire obligations of the Parties with respect to the subject matter hereof and shall supersede any prior expressions of intent or understandings with respect to this transaction.  Any amendment to, or waiver by the Pledgeholder of any of the terms or conditions of, or consent given by the Pledgeholder under, this Amendment Agreement shall be in writing, signed by the Pledgeholder and, in the case of an amendment, by the Pledgor.

 

Section 3.09 Indemnities and Expenses

 

The Pledgor shall be liable to indemnify the Pledgeholder on demand against any loss or expense sustained or incurred by the Pledgeholder as a result of:

 

	
  

	
(i)

	
a failure by the Pledgor to perform any of its obligations under this Amendment Agreement; or

 

	
  

	
(ii)

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

 

Section 3.10 Governing Law

 

This Amendment Agreement and the rights and obligations of the Parties hereunder shall be governed by and construed in accordance with the laws of Kazakhstan (including any international treaties to which Kazakhstan is a party and which are in force in the territory of Kazakhstan).

 

Section 3.11 Language and Counterparts

 

(a)           This Amendment Agreement shall be drawn up and executed in the English language.  This Amendment Agreement can be executed in another language if it is required by the state authorities for the purpose of registration, in such case the English language original shall be the governing version among the Parties.

 

(b)           This Amendment Agreement may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same agreement.

 

 [Signature Page Follows]

 

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

 

Executed by                                                      )

 

BALYKSHY L.L.P. acting by                        )

 

authorised signatory                                        )                      _________________________

 

Name:                                                                                                                                [seal]

 

Title:

 

Executed by                                                      )

 

JOINT STOCK COMPANY                         )

 

"BANK CENTERCREDIT"                           )

 

acting by authorised signatory(ies)              )

 

_________________________

 

Name:                                                                                                                                  [seal]

 

Title:

 

 

Executed by                                                      )

 

EUROPEAN BANK                                         )

 

FOR RECONSTRUCTION                            )

 

AND DEVELOPMENT                                   )

 

acting by authorised signatory                      )

 

_________________________

 

Name:

 

Title:

 

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ALMATY - 12376.03ex1050k093010.htm

  

  

  

Employment Agreement

 

 

	
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LETTER OF ENGAGEMENT

	
1

	
Form of Agreement

	
5

	
    Employee Employment Agreement

	
5

	
Absences

	
5

	
    Compassionate Leave

	
5

	
    Medical Leave

	
5

	
Family Status

	
6

	
    Married Status

	
6

	
    Dependent Children

	
6

	
Children's Educational Assistance

	
6

	
    Eligibility

	
6

	
    Educational Assistance

	
6

	
Housing and Transportation

	
7

	
Remuneration

	
7

	
    Currency of Payment

	
7

	
Health Care Plan

	
8

	
Insurance Plans

	
8

	
Vacation

	  
	
    General

	
9

	
    Vacation Days Accrual

	
9

	
    Vacation Salary

	
9

	
    Vacation Travel Entitlement

	
9

	
Relocation

	
10

	
    Temporary living expenses

	
10

	
    Relocation

	
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    Departures

	
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Business Travel & Related Expenses

	
11

	
    General

	
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    Travel Management

	
11

	
    Travel Class

	
 11

	
    Miscellaneous

	
 11

	
    Entertainment

	
 11

	
    Expense Reports

	
 12

	
Legal Fees and Governing Law

	
12

	
    Legal Fees

	
 12

	
    Governing Law

	
12

	
    Arbitration

	
 12

	
Severance Plan and Stock Options Plan

	
12

	
    Employee Severance Agreement

	
12

	
    Stock Option Grant

	
 14

	
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Form of Agreement

 

Employment Agreement

 

This Employment Agreement, is entered into by and between Caspian Services Incorporated ("Company") incorporated under the laws of the state of Nevada on July 14, 1998 and Mr. Arran Watson ("Employee"), effective the 291" of August 2008 (the "Effective Date").

 

WHEREAS, Company is desirous of employing Employee pursuant to the terms and conditions and for the consideration set forth in this. Agreement, and Employee is desirous of entering the employ of Company pursuant to such terms and conditions and for such consideration.

 

NOW, THEREFORE, for and in consideration of the mutual promises, covenants, and obligations contained herein, Company and Employee agree as follows:

 

Absences

 

Compassionate Leave

 

Employee

In case of death of a direct relative (spouse, child, parent or a brother or sister) of the Employee, Compassionate Leave of up to seven days is granted. Remuneration continues during this leave, and travel expenses (travel class as per vacation) for the Employee to attend the funeral are reimbursed by Company.

Spouse

In case of the death of a direct relative (parent, or a brother or sister) of the Employee's spouse, travel expenses (travel class as per vacation) for the spouse to attend the funeral are reimbursed by Company.

 

Medical Leave

 

Any absence from work arising from temporary incapacity due to an accident or illness is considered as medical leave.

Under this condition, the Employee will receive:

· 100% of remuneration for a maximum period of six months from the day of interruption of work,

· 50% of remuneration for a maximum of six additional months.

 

In the event that employer liability insurance does not cover in full the above specified twelve month remuneration period, the Company will compensate the shortfall. After twelve months of continuous incapacity, the Company Insurance Plan, if any, becomes operative.

Successive periods of medical lease separated by less than six months and occurring within a twelve month period are added together and considered as one continuous period of incapacity.

 

If required and when applicable, in-country Company accommodation continues to be provided for the family.

Vacation/Break does not accrue during the absence from work.

	
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A medical certificate is required as an evidence of the Employee's incapacity. The Company may require the Employee to have a medical examination at any time.

 

Family Status

 

The Family Status of the Employee is defined as "Single". This can be further categorized by the number of "Dependent Children", if any.

The Family Status is used in connection with policies and plans pertaining to housing, transportation, health care, educational assistance, and vacation travel.

 

Married Status

"Married Status" means the Employee is legally married, and the spouse and family live at the place of assignment.

 

Dependent Children

A "Dependent Child" is defined as one who is unmarried, unemployed, in the legal custody

of the Employee, under nineteen years of age and who lives with the Employee in a customary parent-child relationship.

In other cases, such as divorce or re-marriage, the Employee is encouraged to expose his family situation to his/her Employe: Motivation Manager who will consider each case on its own merits.

In all cases, documentary evidence, such as birth certificates, legal custody agreements, proof of alimony payments, etc., are necessary for reimbursement of any expenses.

 

Children's Educational Assistance

 

Eligibility

The Company participates in schooling expenses under the following conditions:

Reimbursement applies to children in the legal custody of Employees under Married Status assigned outside their country of origin.

Reimbursement applies to Dependent Children. It covers that part of the school year following the child's third birthday and is extended until the end of the school year in which the child reaches eighteen.

 

Educational Assistance

 

Two cases are considered depending on the availability and the quality of the local schooling and the age of the child:

1: Schooling facilities available and deemed adequate by Employee at place of assignment.

 

The Employee's child is expected to attend these schools and the Company will reimburse 70% all tuition and registration fees. Not reimbursable are schoolbooks, school insurance, uniforms and transportation costs.

 

2 : Schooling facilities not available or deemed inadequate at place of assignment by Employee.

	
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Employee is authorized to send his/her children outside the place of assignment. In that instance, he/she will be reimbursed as per below:

 

— fifty percent (50%) of the cost of tuition and registration fees. Not reimbursable are school insurance, uniforms, schoolbooks the indirect school expenses (room and board).

 

— one round-trip airfare, per calendar year, per child, at the most economic rate, between the school and the Employee's place of assignment, provided the trip is actually taken. This trip is in addition to the travel entitlement under "vacE.tion" policy.

 

Housing and Transportation

 

The Company provides an allowance to Employee to secure suitable and appropriate accommodation for the Employee and his/her immediate family. The allowance will not exceed $3,000 per month and be fully inclusive: utilities, satellite TV, domestic staff, inter alia.

The allowance will be reviewed by Company and Employee for appropriateness as and when the housing rental market or assignment location changes.

 

Company will provide suitable transportation for the term of employment.

 

Remuneration

 

Currency of Payment

 

The salary for Employee is express.:cl, and paid as below, in US dollars through a dollar transfer according to the Employee's written instructions.

 

Salary is US $12,000.00 (twelve thousand) per month, equating to $144,000 (one hundred and forty four thousand) per annum.

 

This amount is NET. The Republic of Kazakhstan (excludes any home base taxes or social payments) income and social taxes will be paid by the Company.

 

Employee's base salary may thereafter be increased from time to time with the approval of the Board of Directors or its delegate, as applicable. Such increased base salary shall become the minimum base salary under this Agreement and may not be decreased thereafter without the written consent of Employee.

 

Feeding and accommodation costs whilst on work assignment outside place of assignment will be borne by the Company.

 

While employed by Company, Employee shall be allowed to participate, on the same basis generally as other employees of Company, in all general employee benefit plans and programs, including improvements or modifications of the same, which on the Effective Date or thereafter are made available by Company to all or substantially all of Company's similarly situated employees. Such benefits. plans, and programs may include, without limitation, medical,

	
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health, and dental care, life insurance, disability protection, and qualified and non-qualified retirement plans. Except as specifically provided herein, nothing in this Agreement is to be construed or interpreted to increase or alter in any way the rights, participation, coverage, or benefits under such benefit plans or programs than provided to similarly situated employees pursuant to the terms and conditions of such benefit plans and programs. While employed by Company, Employee shall be eligible to receive awards under any plan provided, however, that the foregoing shall not be construed as a guarantee with respect to the type, amount or frequency of such awards, if any, such decisions being solely within the discretion of the Company or its delegate, as applicable.

 

Health Care Plan

 

BUPA International or equivalent.

 

The Health Care Plan covers the Employees and their spouses and dependent children. The Company pays the full cost of the program.

 

The Plan provides comprehensive medical, dental, and vision care coverage. It encourages prevention and offers the possibility of medical evacuation and assistance services, 365 days a year, including off-duty and vacation periods. Coverage is worldwide, except USA, and there are no restrictions on the choice of doctors, laboratories, clinics, or hospitals as long as dealing with recognized medical practitioners and institutions, which are pre-approved by the health care provider.

 

Coverage begins on the Effective Dare of hire. Employees and their spouses and dependent children are covered under this Plan from the first day of their employment with the Company until 180 days after the day of termination or until the day they start working for another Company which ever occurs first.

 

Eligible dependents include spouse, dependent unmarried children up to age eighteen. There is no eligibility age limit for children who are physically or mentally incapacitated before their eighteenth birthday. The Plan or Company shall pay for a check-up a year for each insured person.

 

Insurance Plans

 

The Insurance Plan is designed to help Employees and their dependents meet the financial difficulties which could result from their permanent (partial or total) disability, total work incapacity, or death.

Where the Company does not provide a dedicated Company Insurance Plan, the Employee will have the option to subscribe to a private insurance policy to which the Company shall refund 50% of the cost of premiums of such insurance plan.

 

Rotational Break

 

Rotational Break is intended to provide Employee with the opportunity to take paid leave away from the place of assignment.

	
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General

 

Management schedules Rotational Break in advance, taking into account both the Employee's wishes and work requirements.

Rotational Break starts on the first day the Employee is not available for work and ends on the day prior to returning to work.

 

At the close of the calendar year Company and Employee will agree whether to pay off any unused Rotational Break days or to roll over the amount of days into to following year. Payment is at the discretion of the Company.

 

Rotational Break Days Accrual

 

Rotational Break Days are accrued as follows:

2:1 whereby 2 days worked accrues 1 Rotational Break Day. Normal working week 6 days per week with Sunday considered a dead day with regard work rotation calculations.

 

Rotational Break Salary

 

Rotational Break salary is paid at the current salary rate.

In case of termination of employment, prorated Rotational Break is computed and paid in the Employee's final pay-check.

 

Rotational Break Travel Entitlement

 

The Rotational Break Travel Entitlement is intended to cover the travel costs when an Employee, his/her spouse and Dependent children travel for Rotational Break. Although the entitlement is computed on the basis of travel to tie Employee's Home Base, it may be used for travel to any destination.

 

Computation of Entitlement:

The allocated entitlement amount is based on the cost of standard fare economy class round trip air tickets per person from the assignment location to the home base origin (as specified in the letter of employment) of the Employee as quoted by IATA, and confirmed by the Company (location closest international airport to city of origin closest international airport). The Employee's spouse and Dependent children residing in the assigned location are included in the computation. In some cases, a Dependent Child (Children) may not be residing in the assigned location because schooling facilities are either not available or deemed inadequate at place of assignment. In these cases, the entitlement for such a child (children) will be computed as though they were residing in the assigned location.

 

For children, airlines quote the cosi for the aforementioned ticket as follows:

— under 2 years of age charged 10% of adult rate,

— 2-12 years of age charged 50% of adult rate — above 12 years of age charged at adult rate.

 

The Company will maintain the same rules as the airlines.

If a portion of the trip requires ground travel, then this will be computed as first class train fare ("single" berth), or other equivalent transport.

	
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Reimbursable Expenses

Any travel expenses related to Rotational Break travel incurred by the Employee, his/her spouse and dependent children may be claimed up to the allocated entitlement.

Reimbursable expenses are:

— Tickets for public transport - planes, trains, buses, etc.

— Excess luggage,

 

Miscellaneous travel expenses such as taxis, airport taxes, or meals and single night of hotel for transit purposes are reimbursed through expense reports, provided they are justified, reasonable and actually incurred. All other expenses are not reimbursable.

 

Reimbursement procedure

The Employee prepares an expense report respecting the following:

	
—  

	
expenses should be supported by an invoice or receipt. For public transport, only tickets must be provided.

	
—  

	
expenses should be less than three months old.

	
—  

	
although multiple trips may be made, no more than 2 expense reports may be submitted each year.

 

Resignation / Termination

In the case of resignation or termination, all outstanding travel entitlements are lost. If the Employee resigns while on Rotational Break, expenses will be reimbursed up to a one-way economy ticket from place of assignment to Home Base.

 

Relocation

 

This section applies to the Employee relocating to the assignment location. 

 

Temporary living expenses

The Company will reimburse, upon presentation of supporting documents, temporary living expenses (rental car, food and lodging) for Employees and their families while locating and settling into adequate housing in their new assignment.

 

Relocation

 

The Company pays for the Employee, his/her spouse and Dependent children to travel to the assigned location.

The Company also pays for the shipping of personal effects to the assignment location.

 

Departures

 

Redundancy / Termination

The Company pays for the Employee, his/her spouse and Dependent children to return to the Employee's country of origin as per the rules stated in this Section under 'Vacation'. The Company also pays for the shi aping of personal effects back to the Employee's country of origin.

	
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Lease cancellation

The Company will reimburse costs arising from the cancellation of an unexpired lease agreement on any rented accommodation at the sending location.

 

Business Travel & Related Expenses

 

This section applies to travel other than that pertaining to vacation or relocation. 

 

General

During the Term, Company shall pay or reimburse Employee for all actual, reasonable and customary expenses incurred by Employee in the course of their employment; including, but not limited to, travel, entertainment, subscriptions and dues associated with Employee's membership in professional, business and civic organizations; provided that such expenses are incurred and accounted for in accordance with Company's applicable policies and procedures.

 

Travel Management

All business travel must be coordinated and approved through the Employee's direct Manager. 

 

Travel Class

Air

 

International outside flights

< 8 hours Economy class (i.e. to/from Europe), unless approved for upgrade by CEO/COO

> 8 hours Economy class (i.e. Transatlantic), unless approved for upgrade by CEO/COO

 

Domestic flights -  Business Class

 

Rail

First class, and, when applicable, a single sleeping berth.

 

Miscellaneous

 

Additional travel expenses such as taxis, airport fees, hotel and meals between connecting flights are refunded by the Company provided they are actually incurred and reasonable.

 

Entertainment

 

The main purpose of entertainment is to help improve customer relations.

For reimbursement of entertainment expenses, name, Company affiliation, job title and the purpose of the business entertainment should identify the guest.

	
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Expense Reports

All requests for the reimbursement of expenses, whatever their nature, must be made on expense reports.

The Employee prepares an expense report respecting the following:

— expenses should be supported by an invoice or receipt;

— expenses should be less than three months old

Expenses are reimbursed in US Dollars.

 

Legal Fees and Governing Law

 

Legal Fees

In the event of any dispute, each pa-ty shall bear without limitation its own legal costs unless otherwise awarded in a ruling by a competent court or tribunal.

 

Governing Law

This Agreement shall be governed by and construed in accordance with the laws of England, Company and Employee agree that all disputes between the parties shall be litigated only therein.

 

Arbitration

Any further dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in England, or in such other location as may be agreed to by Company and Employee.

 

 Severance Plan and Stock Options Plan

 

The Deferred Benefits package consists of the following plans: 

— Severance Plans

— Stock Option Plan

 

Employee Severance Agreement

 

The Employee shall be eligible for termination compensation and benefits described below terminated under the following conditions:

 

(a) The Employee's employment is Involuntarily Terminated or Voluntarily Terminated;

 

(b) A Change in Control occurs with the result that the Employee's employment is Involuntarily or Voluntarily Terminated within six (6) months following the date of the Change in Control;

 

(c) A Change in Control occurs with the result that the Employee's employment is Involuntarily or Voluntarily Terminated within six (6) months prior to the date of the Change in Control; or

	
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The Employee shall not be eligible for the termination compensation and benefits described below terminated under the following conditions:

 

(a) The Employee's employment is Terminated for Cause

 

(b) The Employee Resigns, except for reasons detailed under Voluntary Termination.

 

Benefits Upon Termination. If the Employee becomes eligible for benefits under the above section, the Company shall pay or provide to the Employee the following compensation and benefits:

 

(a) Salary. The Employee will continue to receive his current salary for two (2) month period following the Employee's date of termination in the same manner as it was being paid as of the date of termination. For purposes hereof, the Employee's "current salary" shall be the highest rate in effect during the twelve-month period prior to the Employee's termination.

 

Termination for Cause

 

Cause shall mean:

 

(i) the Employee's material fraud, malfeasance, gross negligence, or wilful misconduct with respect to business affairs of the Company that is directly or materially harmful to the business or reputation of the Company or any subsidiary of the Company, or

 

(ii) Employee's conviction of or failure to contest prosecution for a felony or a crime involving moral turpitude.

 

A termination of Employee for "Cause" based on clause (1) or (ii) of the preceding sentences shall take effect thirty (30) days after the Company gives written notice of such termination to Employee specifying the conduct deemed to qualify as Cause, unless Employee shall, during such 30-day period, remedy the events or circumstances constituting cause to the reasonable satisfaction of the Company.

 

Voluntary Termination shall mean termination of employment that is voluntary on the part of the Employee but is due to:

 

(i) a significant reduction of the Employee's responsibilities, title or status resulting from a formal change in such title or status, or from the assignment to the Employee of any duties inconsistent with his title, duties, or responsibilities;

 

(ii) a reduction in the Employee's compensation, remuneration or benefits; or

 

(iii) a Company-required involuntary relocation of Employee's place of residence or a significant increase in the Employee's travel requirements.

 

A termination shall not be considered voluntary within the meaning of this Agreement if such termination is the result of Cause, Disability, or death of the Employee.

 

Involuntary Termination shall mean termination of employment that is the decision of the Company for reasons other than Cause.

	
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Change in Control shall mean:

 

(i) An acquisition by any Person or Group wherein that Person or Group end up beneficially owning fifty percent (50%) or more of the Company Shares Outstanding or fifty percent (50%) or more of the combined voting power of the Company. or

 

(ii) The approval of the shareholders of the Company of a reorganization, merger, consolidation, complete liquidation, or dissolution of the Company, the sale or disposition of all or substantially all of the assets of the Company or any similar corporate transaction.

 

Stock Grant

 

At the Company's discretion you will be considered for discretionary stock grants determined by the Compensation Committee or in the absence of a Compensation Committee the Board of Directors.

 

Grants vest over three years, exerci ;able within five years of full vesting.

 

      Percentage of Shares

Number of Full Years                                             Vested

 

Less than           1 year                                                0%

 I year                                                33

2 years                                             67%

                                            3 years                                             100%

 

In witness hereof the parties hereto have executed this Agreement the day and year above first written.

	  

	
For Company

	
/s/ 

 

For Employee

 

/s/

 

	
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