Document:

Exhibit 10.2

                 DIRECTOR AND OFFICER INDEMNIFICATION AGREEMENT
                 ----------------------------------------------

      This  Agreement is made and entered into this 7th day of January 2006 (the
"Agreement"),  by and between US Global Nanospace,  Inc., a Delaware corporation
(the  "Company",  which term shall include,  where  appropriate,  any Entity (as
hereinafter defined) controlled directly or indirectly by the Company) and Kevin
Cronin (the "Indemnitee").

      WHEREAS,  the Indemnitee has been offered  employment as an officer of the
Company;

      WHEREAS,  as an officer of the Company,  the  Indemnitee may be exposed to
significant  litigation  risks and expenses,  and the Company does not currently
carry directors and officers liability insurance;

      WHEREAS,  in light of the  foregoing,  the Company  desires to provide the
Indemnitee with specific  contractual  assurance of the  Indemnitee's  rights to
full indemnification  against litigation risks and expenses  (regardless,  among
other things, of any amendment to or revocation of any the Company's Certificate
of Incorporation or by-laws or any change in the ownership of the Company or the
composition of its Board of Directors); and

      NOW,  THEREFORE,  in  consideration  of the  promises  and  the  covenants
contained herein, the Company and the Indemnitee do hereby covenant and agree as
follows:

      1. Definitions.

            (a)  "Corporate  Status"  describes  the  status of a person  who is
serving or has served (i) as a director of the Company, including as a member of
any committee thereof, (ii) as an officer of the Company,  (iii) in any capacity
with respect to any employee benefit plan of the Company, or (iv) as a director,
partner, trustee, officer, employee, or agent of any other Entity at the request
of the Company. For purposes of subsection (iv) of this Section 1(a), an officer
or director of the Company who is serving or has served as a director,  partner,
trustee,  officer, employee or agent of a Subsidiary (as defined below) shall be
deemed to be serving at the request of the Company.

            (b)  "Entity"  shall  mean  any  corporation,  partnership,  limited
liability company, joint venture, trust, foundation,  association,  organization
or other legal entity.

            (c) "Expenses"  shall mean all direct and indirect  fees,  costs and
expenses of any nature whatsoever actually and reasonably incurred in connection
with the investigation, preparation of a defense, appeal of or settlement of any
Proceeding  (as  defined  below),  including,  without  limitation,   reasonable
attorneys fees, disbursements and retainers (including,  without limitation, any
such fees,  disbursements and retainers  incurred by the Indemnitee  pursuant to
Sections  8 and  11(c) of this  Agreement),  fees and  disbursements  of  expert
witnesses,  private investigators and professional advisors (including,  without
limitation,  accountants and investment bankers), court costs, transcript costs,
fees of experts,  travel  expenses,  duplicating,  printing  and binding  costs,
telephone and fax transmission charges, postage, delivery services,  secretarial
services and other disbursements and expenses;  provided, however, that Expenses
shall not include judgments, fines, penalties or amounts paid in settlement of a
Proceeding.

<PAGE>

            (d)  "Indemnifiable  Expenses",   "Indemnifiable   Liabilities"  and
"Indemnifiable  Amounts"  shall have the  meanings  ascribed  to those  terms in
Section 3(a) below.

            (e)  "Liabilities"  shall  mean  judgments,   damages,  liabilities,
losses, penalties, excise taxes, fines and amounts paid in settlement.

            (f)  "Proceeding"  shall mean any  threatened,  pending or completed
claim,  action,  suit,   arbitration,   alternate  dispute  resolution  process,
investigation,  administrative hearing, appeal, or any other proceeding, whether
civil, criminal, administrative, arbitrative or investigative, whether formal or
informal,  whether or not he is serving in such capacity at the time any Expense
or Liability  is incurred  for which  indemnification  or  reimbursement  can be
provided  under  this  Agreement,   including  a  proceeding  initiated  by  the
Indemnitee  pursuant to Section 11 of this Agreement to enforce the Indemnitee's
rights hereunder or an action brought by or in the right of the Company.

            (g) "Subsidiary"  shall mean any corporation,  partnership,  limited
liability  company,  joint  venture,  trust or other Entity of which the Company
owns  (either  directly or through or together  with another  Subsidiary  of the
Company) either (i) a general partner, managing member or other similar interest
or (ii) (A) 50% or more of the voting power of the voting capital stock or other
voting  equity  interests of any  corporation,  partnership,  limited  liability
company,  joint venture or other Entity,  or (B) 50% or more of the  outstanding
voting  capital  stock or other  voting  equity  interests  of any  corporation,
partnership, limited liability company, joint venture or other Entity.

      2.  Services  of the  Indemnitee.  This  Agreement  shall not  impose  any
obligation on the Indemnitee or the Company to continue the Indemnitee's service
to the  Company  beyond  any  period  otherwise  required  by  law  or by  other
agreements or commitments of the parties, if any.

      3. Agreement to Indemnify.  The Company agrees to indemnify the Indemnitee
as follows:

      (a)   Subject to the  exceptions  contained in Section 4(a) below,  if the
            Indemnitee  was or is a party or is threatened to be made a party to
            any  Proceeding  (other  than an  action  by or in the  right of the
            Company)  by  reason of the  Indemnitee's  Corporate  Status,  or by
            reason of any personal  guarantee  provided by the Indemnitee or any
            Entity  controlled by the Indemnitee  with respect to any obligation
            of the Company,  the Indemnitee  shall be indemnified by the Company
            against  all  Expenses  and  Liabilities  incurred  or  paid  by the
            Indemnitee in connection with such Proceeding (referred to herein as
            "Indemnifiable    Expenses"   and    "Indemnifiable    Liabilities",
            respectively, and collectively as "Indemnifiable Amounts").

      (b)   To the fullest extent permitted by applicable law and subject to the
            exceptions contained in Section 4(b) below, if the Indemnitee was or
            is a party or is threatened to be made a party to any  Proceeding by
            or in the right of the Company to procure a judgment in its favor by
            reason of the Indemnitee's Corporate Status, the Indemnitee shall be
            indemnified  by the Company  against all  Indemnifiable  Expenses as
            well as against any amount paid by  Indemnitee  in settlement of the
            Proceeding.

<PAGE>

      4.  Exceptions  to  Indemnification.  Upon  receipt  of  a  written  claim
addressed to the Board of Directors for  indemnification  pursuant to Section 3,
the Company shall determine by any of the methods set forth in Section 145(d) of
the  Delaware  General  Corporation  Law  whether  the  Indemnitee  has  met the
applicable  standards of conduct which makes is permissible under applicable law
to indemnify the Indemnitee. If it is determined that the Indemnitee is entitled
to  indemnification,  the Indemnitee  shall be entitled to such  indemnification
under  Sections  3(a)  and  3(b)  above  in all  circumstances  other  than  the
following:

      (a)   If  indemnification  is requested under Section 3(a) and it has been
            determined  that, in connection  with the subject of the  Proceeding
            out  of  which  the  claim  for   indemnification  has  arisen,  the
            Indemnitee  failed to act (i) in good faith and (ii) in a manner the
            Indemnitee  reasonably  believed to be in or not opposed to the best
            interests of the Company and, with respect to any criminal action or
            proceeding,  the Indemnitee had reasonable cause to believe that the
            Indemnitee's  conduct  was  unlawful,  the  Indemnitee  shall not be
            entitled to payment of Indemnifiable Amounts hereunder.

      (b)   If indemnification is requested under Section 3(b) and

                  (i) it has  been  determined  that,  in  connection  with  the
            subject of the Proceeding out of which the claim for indemnification
            has arisen,  the Indemnitee  failed to act (A) in good faith and (B)
            in a  manner  the  Indemnitee  reasonably  believed  to be in or not
            opposed to the best interests of the Company,  the Indemnitee  shall
            not be entitled to payment of Indemnifiable Expenses hereunder; or

                  (ii) it has  determined  that the  Indemnitee is liable to the
            Company with respect to any claim,  issue or matter  involved in the
            Proceeding out of which the claim for indemnification has arisen, no
            Indemnifiable  Expenses  shall be paid with  respect to such  claim,
            issue or matter  unless the Court of  Chancery  or another  court in
            which such Proceeding was brought shall  determine upon  application
            that, despite the adjudication of liability,  but in view of all the
            circumstances  of the  case,  Indemnitee  is fairly  and  reasonably
            entitled to indemnity  for such  Indemnifiable  Expenses  which such
            court shall deem proper.

      5. Procedure for Payment of  Indemnifiable  Amounts.  The Indemnitee shall
submit to the Company a written request specifying the Indemnifiable Amounts for
which the  Indemnitee  seeks payment  under Section 3 of this  Agreement and the
basis for the claim.  The Company  shall pay such  Indemnifiable  Amounts to the
Indemnitee  within ten (10)  calendar  days of receipt  of the  request.  At the
request of the Company,  the  Indemnitee  shall furnish such  documentation  and
information  as is  reasonably  available  to the  Indemnitee  and  necessary to
establish that the Indemnitee is entitled to indemnification hereunder.

      6.  Indemnification  for  Expenses  of a Party  Who is  Wholly  or  Partly
Successful.  Notwithstanding any other provision of this Agreement,  and without
limiting any such provision,  to the extent that the Indemnitee is, by reason of
the Indemnitee's  Corporate Status, a party to and is successful,  on the merits
or otherwise, in any Proceeding, the Indemnitee shall be indemnified against all
Expenses  reasonably incurred by the Indemnitee or on the Indemnitee's behalf in
connection  therewith.  If the  Indemnitee  is not  wholly  successful  in  such
Proceeding but is successful,  on the merits or otherwise, as to one or more but
less than all claims,  issues or matters in such  Proceeding,  the Company shall
indemnify  the  Indemnitee  against  all  Expenses  reasonably  incurred  by the
Indemnitee or on the  Indemnitee's  behalf in connection with each  successfully
resolved claim, issue or matter. For purposes of this Agreement, the termination
of any claim, issue or matter in such a Proceeding by dismissal, with or without
prejudice,  shall be deemed to be a successful result as to such claim, issue or
matter.

<PAGE>

      7. Effect of Certain  Resolutions.  Neither the settlement nor termination
of any Proceeding nor the failure of the Company to award  indemnification or to
determine that  indemnification  is payable shall create an adverse  presumption
that the Indemnitee is not entitled to indemnification  hereunder.  In addition,
the termination of any proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent  shall not create a presumption
that  the  Indemnitee  did not act in  good  faith  and in a  manner  which  the
Indemnitee  reasonably  believed to be in, or not opposed to, the best interests
of the  Company or,  with  respect to any  criminal  action or  proceeding,  had
reasonable cause to believe that the Indemnitee's action was unlawful.

      8. Agreement to Advance Expenses; Conditions. The Company shall pay to the
Indemnitee all  Indemnifiable  Expenses incurred by the Indemnitee in connection
with any  Proceeding,  including a Proceeding by or in the right of the Company,
in  advance  of the  final  disposition  of such  Proceeding,  as the  same  are
incurred.  In making any such  advance,  the ability of the  Indemnitee to repay
shall not be a factor.  To the extent  required by Delaware law, the  Indemnitee
hereby  undertakes  to repay the amount of  Indemnifiable  Expenses  paid to the
Indemnitee if it is finally determined by a court of competent jurisdiction that
the  Indemnitee is not entitled  under this  Agreement to  indemnification  with
respect to such Expenses. This undertaking is an unlimited general obligation of
the Indemnitee.

      9. Procedure for Advance Payment of Expenses.  The Indemnitee shall submit
to the Company a written request specifying the Indemnifiable Expenses for which
the Indemnitee seeks an advance under Section 8 of this Agreement, together with
documentation  evidencing  that the Indemnitee  has incurred such  Indemnifiable
Expenses.  Payment of  Indemnifiable  Expenses  under Section 8 shall be made no
later than ten (10) calendar days after the Company's receipt of such request.

      10.  Selection  of Counsel.  In the event the Company  shall be  obligated
under  this  Agreement  to  pay  Indemnifiable  Expenses  with  respect  to  any
Proceeding,  the  Company  shall be  entitled  to  assume  the  defense  of such
Proceeding with counsel approved by the Indemnitee,  which approval shall not be
unreasonably withheld,  upon delivery of written notice to the Indemnitee of the
Company's election to do so. After the Company's  assumption of the defense, the
Company shall not be liable to the Indemnitee  under this Agreement for any fees
of  counsel  subsequently  incurred  by the  Indemnitee  with  respect  to  such
Proceeding;  provided,  however, that (i) the Indemnitee shall have the right to
employ his own counsel in any such Proceeding at the Indemnitee's  expense;  and
(ii) if the  Indemnitee  shall  have  reasonably  concluded  that there may be a
conflict of interest by reason of the  representation  in such Proceeding of the
Indemnitee and the Company and/or any other defendants by the same counsel, then
the  Indemnitee  may retain his own counsel with respect to such  Proceeding and
the fees  and  expenses  of such  counsel  shall  be an  amount  for  which  the
Indemnitee is entitled to indemnification from the Company under this Agreement,
and (iii) if the Company does not retain  counsel after  assuming the defense of
the Proceeding or if counsel does not vigorously defend the Proceeding, then the
Indemnitee  may retain his own counsel with respect to such  Proceeding  and the
fees and expenses of such counsel shall be an amount for which the Indemnitee is
entitled  to  indemnification  from  the  Company  under  this  Agreement.   The
Indemnitee  shall  notify the Company in writing of any matter  with  respect to
which  the  Indemnitee  intends  to seek  indemnification  hereunder  as soon as
reasonably practicable following the receipt by the Indemnitee of written notice
thereof. The written notification to the Company shall be addressed to the Board
of Directors and shall include a description of the nature of the Proceeding and
the  facts  underlying  the  Proceeding  and be  accompanied  by  copies  of any
documents filed with the court in which the Proceeding is pending.  In addition,
the Indemnitee shall give the Company such information and cooperation as it may
reasonably require and as shall be within the Indemnitee's power.

<PAGE>

      11. Remedies of Indemnitee.

      (a)   Right to Petition  Court.  In the event that the Indemnitee  makes a
            request for payment of Indemnifiable  Amounts under Sections 3 and 5
            above, or a request for an advance of  Indemnifiable  Expenses under
            Sections 8 and 9 above,  and the Company  fails to make such payment
            or  advance  in a  timely  manner  pursuant  to the  terms  of  this
            Agreement, the Indemnitee may petition a court of law to enforce the
            Company's obligations under this Agreement.

      (b)   Burden of Proof.  In any judicial  proceeding  brought under Section
            11(a) above,  the Company  shall have the burden of proving that the
            Indemnitee is not entitled to payment of the  Indemnifiable  Amounts
            hereunder.

      (c)   Expenses.  So long as the Indemnitee prevails in any action he files
            pursuant  to  Section  11(a) or if the  Company  and the  Indemnitee
            settle such action,  the Company  agrees to reimburse the Indemnitee
            in full for any Expenses  incurred by the  Indemnitee  in connection
            with investigating, preparing for, litigating, defending or settling
            any action brought by the Indemnitee  under Section 11(a) above,  or
            in connection with any claim or counterclaim  brought by the Company
            in connection therewith.

      (d)   Validity of Agreement. The Company shall be precluded from asserting
            in any Proceeding,  including,  without limitation,  an action under
            Section 11(a) above,  that the  provisions of this Agreement are not
            valid,  binding  and  enforceable  or  that  there  is  insufficient
            consideration  for this Agreement and shall  stipulate in court that
            the Company is bound by all the provisions of this Agreement.

      (e)   Failure to Act Not a Defense.  The failure of the Company (including
            its Board of Directors or any committee  thereof,  independent legal
            counsel or  stockholders)  to make a  determination  concerning  the
            permissibility  of  the  payment  of  Indemnifiable  Amounts  or the
            advance of Indemnifiable  Expenses under this Agreement shall not be
            a defense in any action brought under Section 11(a) above, and shall
            not  create a  presumption  that  such  payment  or  advance  is not
            permissible.

<PAGE>

         12. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Indemnitee as follows:

      (a)   Authority.  The Company has all  necessary  power and  authority  to
            enter into,  and be bound by the terms of, this  Agreement,  and the
            execution, delivery and performance of the undertakings contemplated
            by this Agreement have been duly authorized by the Company.

      (b)   Enforceability.  This Agreement,  when executed and delivered by the
            Company in accordance with the provisions hereof,  shall be a legal,
            valid and binding obligation of the Company, enforceable against the
            Company in accordance with its terms,  except as such enforceability
            may be limited by  applicable  bankruptcy,  insolvency,  moratorium,
            reorganization   or  similar  laws  affecting  the   enforcement  of
            creditors' rights generally.

         13. Insurance. In the event the Company obtains directors and officers
liability insurance, the Company shall use its reasonable best efforts to
maintain such coverage in effect and the Indemnitee shall be named as an insured
in such a manner as to provide the Indemnitee the same rights and benefits as
are accorded to the most favorably insured of the Company's officers and
directors.

      (a)   Inability  to  Obtain or  Maintain  Insurance.  Notwithstanding  the
            foregoing,  the  Company  shall  have no  obligation  to  obtain  or
            maintain  director  and officer  liability  insurance if the Company
            determines  in good  faith  that such  insurance  is not  reasonably
            available, the premium costs for such insurance are disproportionate
            to the amount of coverage  provided,  the  coverage  provided by the
            insurance is limited by exclusions so as to provide an  insufficient
            benefit,   or  the  Indemnitee  is  covered  by  similar   insurance
            maintained by a subsidiary or parent of the Company.

      (b)   Notice to  Insurer.  If, at the time of the receipt of a notice of a
            claim  pursuant to Section 8 hereof,  the Company has  director  and
            officer liability insurance in effect, the Company shall give prompt
            notice of the  commencement  of such  Proceeding  to the insurers in
            accordance with the procedures set forth in the respective policies.
            The Company shall  thereafter take all necessary or desirable action
            to cause such  insurers  to pay,  on behalf of the  Indemnitee,  all
            amounts  payable as a result of such  Proceeding in accordance  with
            the terms of such policies.

      14. Fees and Expenses.  During the term of the Indemnitee's  service as an
officer or director, the Company shall promptly reimburse the Indemnitee for all
reasonable  travel and other reasonable  expenses  incurred by the Indemnitee in
connection with the Indemnitee's  service as an officer or director or member of
any board committee or otherwise in connection with the Company's business.

      15. Contract Rights Not Exclusive.  The rights to payment of Indemnifiable
Amounts and  advancement of  Indemnifiable  Expenses  provided by this Agreement
shall be in addition to, but not exclusive of, any other rights which Indemnitee
may have at any time under applicable law, the Company's  by-laws or certificate
of incorporation,  or any other agreement, vote of stockholders or directors (or
a committee  of  directors),  or  otherwise,  both as to action in  Indemnitee's
official  capacity  and as to  action  in any  other  capacity  as a  result  of
Indemnitee's serving as a director or officer of the Company.

<PAGE>

      16.  Successors.  This Agreement  shall be (a) binding upon all successors
and assigns of the Company  (including  any  transferee  of all or a substantial
portion of the  business,  stock and/or  assets of the Company and any direct or
indirect  successor by merger or consolidation or otherwise by operation of law)
and (b)  binding  on and  shall  inure to the  benefit  of the  heirs,  personal
representatives,  executors and  administrators  of  Indemnitee.  This Agreement
shall  continue  for  the  benefit  of  Indemnitee  and  such  heirs,   personal
representatives,  executors and  administrators  after  Indemnitee has ceased to
have Corporate Status.

      17.  Subrogation.  In the event of any  payment of  Indemnifiable  Amounts
under this  Agreement,  the Company  shall be  subrogated  to the extent of such
payment to all of the rights of contribution  or recovery of Indemnitee  against
other  persons,  and Indemnitee  shall take, at the request of the Company,  all
reasonable  action  necessary to secure such rights,  including the execution of
such  documents as are  necessary to enable the Company to bring suit to enforce
such rights.

      18. Change in Law. To the extent that a change in Delaware law (whether by
statute  or  judicial   decision)  shall  permit  broader   indemnification   or
advancement  of expenses than is provided  under the terms of the by-laws of the
Company  and this  Agreement,  Indemnitee  shall  be  entitled  to such  broader
indemnification  and  advancements,  and this  Agreement  shall be  deemed to be
amended to such extent.

      19.  Severability.  Whenever  possible,  each  provision of this Agreement
shall be  interpreted  in such a  manner  as to be  effective  and  valid  under
applicable law, but if any provision of this  Agreement,  or any clause thereof,
shall be determined by a court of competent jurisdiction to be illegal,  invalid
or unenforceable, in whole or in part, such provision or clause shall be limited
or modified in its  application  to the minimum  extent  necessary  to make such
provision or clause valid, legal and enforceable,  and the remaining  provisions
and clauses of this Agreement shall remain fully  enforceable and binding on the
parties.

      20.  Indemnitee as Plaintiff.  Except as provided in Section 11(c) of this
Agreement and in the next sentence,  Indemnitee shall not be entitled to payment
of Indemnifiable  Amounts or advancement of Indemnifiable  Expenses with respect
to any Proceeding brought by Indemnitee against the Company, any Entity which it
controls,  any  director  or officer  thereof,  or any third  party,  unless the
Company has consented to the initiation of such  Proceeding.  This Section shall
not apply to counterclaims or affirmative  defenses asserted by Indemnitee in an
action brought against Indemnitee.

      21. Modifications and Waiver.  Except as provided in Section 18 above with
respect to changes in Delaware law which  broaden the right of  Indemnitee to be
indemnified  by the Company,  no supplement,  modification  or amendment of this
Agreement  shall be binding  unless  executed  in writing by each of the parties
hereto.  No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provisions of this Agreement  (whether or
not similar), nor shall such waiver constitute a continuing waiver.

      22.  Notices.  Any notice or demand  which is  required  or provided to be
given under this Agreement shall be deemed to have been  sufficiently  given and
received  for all purposes  when  delivered  by hand,  telecopy,  telex or other
method of  facsimile,  or five days after being sent by certified or  registered
mail, postage and charges prepaid,  return receipt requested,  or two days after
being sent by overnight delivery providing receipt of delivery, to the following
addresses if to the Company,  2533 N. Carson Street, Suite 5108, Carson City, NV
89706 or at any other  address  designated  by the Company to the  Indemnitee in
writing; if to the Indemnitee,  at the address set forth below such Indemnitee's
name on the signature  page hereto,  or at any other  address  designated by the
Indemnitee to the Company in writing.

<PAGE>

      23.  Governing Law. This Agreement  shall be governed by and construed and
enforced  under the laws of the State of Delaware  without  giving effect to the
provisions thereof relating to conflicts of law.

      24.  Inability  of the  Company to  Indemnify.  Both the  Company  and the
Indemnitee  acknowledge  that in certain  instances  federal  law or  applicable
public  policy may prohibit  the Company from  indemnifying  its  directors  and
officers  under this  Agreement or otherwise.  The  Indemnitee  understands  and
acknowledges that the Company has undertaken or may be required in the future to
undertake with the appropriate state or federal  regulatory agency to submit for
approval any request for indemnification,  and has undertaken or may be required
in the future to undertake with the Securities and Exchange Commission to submit
the  question  of  indemnification  to a court in  certain  circumstances  for a
determination  of the  Company's  right under  public  policy to  indemnify  the
Indemnitee.

      IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as of
the day and year first above written.

                                         COMPANY:

                                         US Global Nanospace, Inc.

                                         By: /s/ Carl Gruenler
                                             -----------------------------------
                                         Name:   Carl Gruenler
                                         Title:  Chief Executive Officer

                                         INDEMNITEE:

                                             /s/ Kevin Cronin
                                             -----------------------------------
                                         Name:   Kevin CroninEXHIBIT 10.1

 

EXHIBIT
10.1

GAS SUPPLY CONTRACT

BETWEEN

BN Munai LLP and «Gaz Impex S.A.»

 

London 2006

 

THE PRESENT GAS SUPPLY CONTRACT is concluded “___5___” __January______________ 2006 in London.

BETWEEN:

	(1)	 	“BN Munai” LLP, (hereinafter referred to as the “Seller”), Registered Number
#38557-1910-TOO (IU) with a principal place of business in the Republic of Kazakhstan in
the person of Ms. L. Mironenko, First Deputy Director, on the one hand,

and

	(2)	 	“Gaz Impex S.A.” (hereinafter referred to as the “Buyer”) an International Company with
a registered address at P.O. Box 146, Road Town Tortola, British Virgin Island’s in the
person of Mr. A.Baizakov, Director, on the other hand,

together referred to as the “Parties” and individually a “Party”.

WHEREAS:

	(A)	 	The Seller has right to carry out petroleum operations under Production License MG 980 (oil)
dated June 12, 1997 (as may be amended from time to time) and Contract #1734 dated May 5, 2005
(as may be amended from time to time) covering the Kyzyloi Gas Field with the possibility of
an extension to cover the Akkulka area at the discretion of the Seller (the “License Area”) in
the Republic of Kazakhstan and owns all Gas produced in the License Area.

	(B)	 	The Buyer wishes and undertakes to buy and pay for Gas supplied by the Seller, and the Seller
wishes and undertakes to supply Gas to the Buyer during the Contract Period on the terms and
conditions set out in the present Contract.

	(C)	 	The Buyer buys the Gas for the purpose of its future sale in foreign countries and CIS.

HEREBY THE PARTIES AGREED AS FOLLOWS:

1. DEFINITIONS

	1.1	 	The following definitions wherever used in this Contract have the following meanings:

“Actual Quantity” means the actual quantity of Gas delivered to the Gas Delivery Point as
measured and verified in accordance with Clause 5 of the present Contract;

“Additional Quantities” means such additional quantities of Gas over and above the Minimum
Monthly Contract Quantity, for which the Buyer may file an application Contract Quantity,
for which the Buyer may file an application according to Article 6.7 of the present
Contract;

“Annual Quantity” means, in the case of the First Contract Year, a quantity of Gas is
equal to the Minimum Monthly Contract Quantity for the First Contract Year multiplied by
the number of Months in the First Contract Year and in the case of a Contract Year, a
quantity of Gas is equal to the Minimum Monthly Contract Quantity for that Contract Year
multiplied by 12;

“Consequential Loss” means any indirect or consequential loss (including loss of
production, loss of profit, loss of revenue, loss of contract, loss of goodwill, loss of
use or liability under other agreements) resulting from the performance or non-performance of
any obligation hereunder, any act of negligence, breach of contract or otherwise by any
party and whether or not such party knew, or ought to have known, that such indirect or
consequential loss would be likely to be suffered as a result of such breach;

2

 

“Contract” means this gas supply contract including the recitals and annexes hereto,
since such recitals and annexes can be added from time to time;

“Contract Period” means the period from the Start Date until the Day on which this
Contract is terminated or expires in accordance with Article 12;

“Contract Price” means the price for the Gas delivered under this Contract as determined
in accordance with Article 7;

“Contract Year” means a period of twelve consecutive months beginning on January 1 and
ending on December 31;

“Day” means a period of twenty four (24) hours beginning at 06.00 AM on any day and ending
at 06.00 AM on the next day and any reference in this Contract to a period beginning or
taking effect on a Day or ending on a Day shall be deemed to refer to the beginning and
end respectively of the Day in question and “Daily” shall be construed accordingly;

“First Contract Year” means period of time beginning on the Start Date and ending on
December 31 immediately following the Start Date;

“Force Majeure” has the meaning in Article 9 of the present Contract;

“Gas” means natural gas produced in Kazakhstan from the License Area and meets the
standards of OCT 51.40-93.

“Gas Delivery Point” means the point at which the Seller’s gas pipeline connects to the
pipeline owned and operated by the Transport Organisation, located at 910 km of
Bukhara-Ural pipeline;

“Gas Delivery Point Measurement Equipment” means such metering and associated equipment
and installations (including matching pipelines, fittings, valves, seals, housing and
mountings) together measuring the whole amount of gas offtaken at the Gas Delivery Point
pursuant to the Technical Agreement;

“LIBOR” means the three (3) months U.S. Dollars London Interbank fixing offer rate quoted
daily in the London Financial Times;

“Make Up Gas” shall have the meaning in Article 6.9;

“MCM” means thousand cubic metres (1,000 m 3);

“Minimum Monthly Contract Quantity” means the minimum amount of Gas which the Seller is
obliged to supply and the Buyer is obliged to take and/or pay for as determined in
accordance with Article 6 of the present Contract;

“Month” means a period beginning at 06.00 AM on the first Day of any calendar month and
ending at 06.00 AM on the first Day of the next calendar month and definition “Monthly”
shall be considered accordingly provided that the first Month of the Contract Period
shall begin at 06.00 AM on the Start Date and shall end at 06.00 AM on the first day of
the following Month and that the final Month of the Contract Period shall end at 06.00 AM
on the date that this Contract terminates;

“Shortfall Amount” means the amount by which any quantity of Gas delivered by the Seller
in any Month is less than the Minimum Monthly Contract Quantity for that Month;

“Start Date” means the date determined in accordance with Article 3.1;

3

 

“Termination Date” means the date on which this Contract expires or terminates in
accordance with Article 12;

“Termination Event” means an event or circumstance giving rise to a right to give a notice
of termination pursuant to Article 12;

“Total Quantity” means, for any Month, a quantity of Gas equal to the Minimum Monthly
Contract Quantity for that Month and any Additional Quantities for that Month;

“Transport Organization” means “Intergas Central Asia” JSC, which is the operator on gas
transportation through the system of gas-main pipeline of the Republic of Kazakhstan;

“USD” or “$” the lawful currency of the United States of America from time to time.

“Technical Agreement’’ means Agreement signed between the Seller and the Transport
Organization;

	1.2	 	Unless the context otherwise requires, words importing the singular only also include the
plural and vice versa.
	 
	1.3	 	Unless the context otherwise requires, references in this Contract to Clauses and Annexes
(Schedules) are Clauses of and Annexes (Schedules) to this Contract.
	 
	1.4	 	The headings to the Clauses and Annexes (Schedules) are only used for convenience and shall not
affect to the construction or validity of this Contract.

The references in this Contract to time are to the time in force at the Gas Delivery Point.

2. SUBJECT OF THE CONTRACT

	2.1	 	Under this Contract, the Seller is obliged to deliver Gas at the Gas Delivery Point during the
Contract Period on the conditions of FCA KC 910 km of the Bukhara — Ural gas — pipeline
according to the international commercial rules “Incoterms 2000”. Delivery of Gas will be carried
out according to the conditions of the Technical Agreement. The Seller is obliged to deliver Gas at
the Gas Delivery Point upon full customs clearance for export and to give Gas at the disposal of
the Transport Company for the further transportation up to the Kazakhstan/Russia border under the
instruction of the Buyer.
	 
	2.2.	 	According to the terms of this Contract, the Buyer is obliged to accept and pay to the Seller
for the Gas in such quantities, at such time and in such manner as it is established under the
conditions of this Contract.
	 
	2.3.	 	The Seller has the right to partly decrease or suspend the supply of Gas under this Contract
in the event of:

     (a) Force Majeure;

     (b) Repair and maintenance works carried out in respect of its own gas pipeline,,
installations and equipment on production, preparation and transportation of the Gas,
subject to a prior notice of no less than 30 Days;

     (c) A failure on the part of the Buyer to make any payment due under this Contract
within 10 Days of the due date for such payment.

4

 

	2.4.	 	The Buyer has the right to partly decrease or suspend taking and/or paying for Gas in the
event of:

     (a) Force Majeure;

     (b) Repair and maintenance works on gas pipeline of the Transportation Organization,
subject to providing a prior notice of no less than 30 Days to the Buyer.

     (c) Non-compliance of gas quality to requirements of OCT 51.40-93.

     (d) Gas delivery at KC 910 Kilometer of the Bukhara-Ural gas pipeline is in violation
of the technical specifications of the Technical Agreement.

3. START DATE

	3.1	 	The “Start Date” is the date whereof the Seller notifies the Buyer in writing as of the date
of commencing of Gas delivery to the Gas Delivery Point pursuant to this Contract. The Seller shall
provide not less than 10 Days’ notice of the Start Date.
	 
	3.2	 	Within 60 Days after signing this Contract, the Seller shall provide the Buyer with a
non-binding estimate of the date of the commencement of the deliveries of the Gas under this
Contract. The Seller shall keep the Buyer informed in the event there is any change to such
estimate.

4. DELIVERY POINT

	4.1	 	The Gas shall be made available under this Contract at the Gas Delivery Point and shall be
deemed delivered at the Gas Delivery Point to the extent it is delivered in accordance with the
terms of the Technical Agreement relating to gas quality and gas pressure.
	 
	4.2	 	Title and risk of loss or damage to the Gas shall pass to the Buyer once the Gas has passed the
Gas Delivery Point.
	 
	4.3	 	All expenses in relation to the transportation of the Gas to the Gas Delivery Point shall be
for the account of the Seller, and all expenses in relation to the transportation of Gas from the
Gas Delivery Point shall be for the account of the Buyer.

5. GAS QUALITY, DELIVERY PRESSURE, AND MEASUREMENT

	5.1	 	The Seller will deliver Gas to the Gas Delivery Point in accordance with the terms of the
Technical Agreement relating to the gas quality and gas pressure.
	 
	5.2	 	In the case of a dispute over the quality of the Gas delivered, such dispute will be
determined in accordance with the provisions of the Technical Agreement and the Buyer agrees
to be bound by such determination.
	 
	5.3	 	The Seller shall install Measurement Equipment at the Gas Delivery Point, shall operate and
maintain such equipment in good working condition which equipment will be used to measure Gas
delivered to the Buyer under this Contract in accordance with the provisions of the Technical
Agreement.
	 
	5.4	 	In case of malfunction of the Measurement Equipment at the Gas Delivery Point, the
determination of the Actual Quantities of the Gas delivered will be made in accordance with
the provisions of the Technical Agreement and the Buyer agrees to be bound by such
determination.
	 
	5.5	 	The Actual Quantities of Gas delivered by the Seller in any Month shall be confirmed by a
delivery acceptance act (the “Acceptance Act”) between the Seller and the Transport
Organisation. The Acceptance Acts shall for all purposes be conclusive evidence of the Actual
Quantities of Gas delivered in any Month.

5

 

	5.6	 	In the event of any dispute between the Seller and the Transport Organisation with regard to
the Actual Quantities delivered in any Month, the dispute shall be determined in accordance
with the relevant provisions of the Technical Agreement and the Buyer agrees to be bound by
any such determination.

6. QUANTITIES OF GAS

	6.1	 	The Seller estimates that the total volume of Gas it expects to deliver during the Contract
Period is 850,000 MCM. Provided that the Contract Period is for a period of 8 years, the
estimated annual quantities of the gas supplies will be as follows:

	 	 	 
	Contract Year	Annual volumes in MCM
	1

2

3

4

5

6

7

8

	90 000

180 000

180 000

140 000

100 000

70 000

50 000

40 000

The estimated volumes set out above are provided in good faith by the Seller but are for
information purposes only. In the event the Seller fails to deliver all or any of the
estimated volumes referred to above, the Seller shall have no liability to the Buyer in that
regard other than as specifically set out in this Contract.

	6.2.	 	Other than for the First Contract Year, not later than 15th October in a Contract Year
preceding the Contract Year in which the deliveries are to take place, the Seller shall notify
the Buyer of the Minimal Monthly Contract Quantity for each Month in the relevant Contract
Year. Not later than 25th of October of the year preceding the Contract Year in which the
deliveries are to take place, the Seller and the Buyer shall sign a respective Appendix to
this Contract which approves the annual schedule of the gas delivery indicating the Minimum
Monthly Contract Quantity.
	 
	6.3	 	In respect of the First Contract Year, no later than 2 Months before the Start Date, the
Seller shall notify the Buyer of the Minimum Monthly Contract Quantity for each Month in the
First Contract Year.
	 
	6.4	 	The Buyer is obliged to take and/or pay for the Minimum Monthly Contract Quantity in any
Month of Gas delivery according to the Appendix signed in accordance with Article 6.2. of this
Contract. If, other than in circumstances set out in Article 2.4, in any Month of delivery the
Buyer is unable to accept the Minimum Monthly Contract Quantity, the Seller has the right to
demand from the Buyer and the Buyer is obliged to pay for the Minimum Monthly Contract
Quantity.
	 
	6.5	 	If in any Month the Seller does not deliver the Minimum Monthly Contract Quantity,
the Buyer has the right to demand from the Seller to pay the penalty for nondelivery of the
gas in the amount of 5 percent of the cost of the Shortfall Amount. In such circumstances, the
Buyer’s take or pay obligation shall be reduced by the Shortfall Amount.
	 
	6.6	 	In addition to the Minimum Monthly Contract Quantity, no later than the 10th Day
of the Month before the Month of delivery, the Seller may notify the Buyer of such additional
quantities of Gas as it expects to be able to deliver during the relevant Month at the Gas
Delivery Point.

6

 

	6.7	 	No later than the 20th Day of the Month before the Month of delivery, the Buyer
may send a confirmation to the Seller of the acceptance of the quantities of Gas over and
above the Minimum Monthly Contract Quantity (the “Additional Quantities”).
	 
	6.8	 	If the Buyer shall fail to confirm any Additional Quantities in accordance with the provision
of Article 6.7, the Seller shall deliver the Minimum Monthly Contract Quantities only.
	 
	6.9	 	If in any Contract Year the Buyer the volume of the gas accepted by the Buyer is less than
the volume of the gas stipulated according to the present terms of the Contract then the not
accepted volume of each Contract Year will be recorded in a make-up act signed by the Buyer
and the Seller (the “Make-Up Act”). If in any subsequent Contract Year the Buyer has accepted
obligatory volume till the end of the current Contract Year the Buyer can start to take gas at
the Make-Up Price, up to the amount stated in the Make-Up Acts (hereinafter “Make-Up Gas”).

7. PRICE

	7.1	 	The Contract Price of the Gas supplied hereunder shall be determined as follows:

First Period:

For the period from the Start Date to the date being the last Day in the Month
occurring 36 Months after the Start Date, the Contract Price per MCM of the Gas delivered
under this Contract shall be US$28.00 (twenty eight US dollars).

Second Period:

For the next 12 Month period immediately following the first period referred to above,
the Price per MCM of Gas delivered under this Contract shall be US$32.00 (thirty two US
dollars).

Third Period:

For the next 24 Month period immediately following the second period referred to above, the
Price per MCM of Gas delivered under this Contract shall be US$33.50 (thirty three US
dollars and fifty cents).

Remaining Period:

After the third period referred to above, for every subsequent two year period the Contract
Price for the Gas shall increase by US$2.50 (two US dollars and fifty cents) per MCM. For
the avoidance of doubt, for the 24 Month period immediately following the third period
referred to above the Contract Price shall be US$36.00 (thirty six US dollars) per MCM.

	7.2	 	Unless otherwise stated, all payments under this Contract are deemed to be exclusive of
Value Added Tax (“VAT”) and any other duty or tax which may be payable in respect of the
supply of Gas under this Contract. The Seller shall be entitled to charge the Buyer VAT on
all supplies of Gas according to the applicable law of the Republic of Kazakhstan. Where VAT
is payable, it shall be paid by the Buyer to the Seller’s nominated account in due time in
appropriate currency as the Seller may reasonably specify.

	7.3	 	In any Contract Year, the applicable price for Make-Up Gas shall be USD $10.00 (ten US
dollars) per MCM excluding VAT.

7

 

8. PAYMENT TERMS

	8.1	 	No later than the 25th Day of the Month before the start of any Month, the Seller
shall deliver to the Buyer a statement detailing the Total Quantities of Gas for that Month
(the “Credit Support Invoice”). The Buyer shall no later than the 30th Day of the
Month before the start of any Month in which deliveries are to be made, to provide for the
benefit of the Seller a letter of credit, in a form reasonably acceptable to the Seller and
from a Kazakh bank reasonably acceptable to the Seller, for such total amount as appears in
the Credit Support Invoice. Such letter of credit shall remain in place and in full force and
effect until payment of the corresponding Payment Invoice for the Month in question is
received by the Seller.

	8.2	 	No later than 5 Days following verification of the Actual Quantities pursuant to Article 5,
the Seller shall render an invoice in respect of the Actual Quantities (the “Payment
Invoice”).

	8.3	 	Each Payment Invoice shall include the following items hereunder in respect of the
Month to which it relates:

     a) the Actual Quantity of the Gas delivered in that Month as verified pursuant to
Article 5;

     b) the price payable per MCM of Gas calculated by reference to Article 7;

     c) the total price payable in USD for the Actual Quantities delivered in the
relevant Month;

     d) details of the Seller’s bank account into which payment is to be made; and

     e) details of the Seller’s bank account into which VAT payments (if any) are to be
made.

	8.4	 	Payment of the Payment Invoice shall made in full for value on the date of payment being no
later than 30th of the Month in which the Payment Invoice is sent by the Seller to
the Buyer.

	8.5	 	Where payments are not made on the due date interest shall be payable from the due date until
the date such payment is made at LIBOR plus 5 (five) per cent per annum.

	8.6	 	All sums payable under this Contract shall be paid free and clear of any deductions,
withholdings, set-offs or counterclaims.

	8.7	 	The Seller is obliged to deliver to the Buyer the following documents in the month following the month of
delivery:

     - Certificate of gas origin ( CT-1 form);

     - The original of the 4th copy of the full Customs declaration in the export regime;

     - Quality Passport made in accordance with the form stated in the Exhibit 1 of
the present Contract;

     - Certificate of Conformance.

	8.8	 	The Buyer is obliged to present to the Seller the following documents confirming the
export of the Gas:

     - Invoice of the Transport Company confirming the cost of Gas transportation from KC
“10” to the Kazakh — Russian border. 

     - Every month not later than 15th the Act of the monthly volume of Gas from
KC 10 to the Kazakh — Russian border signed by Transport Company and the Buyer

8

 

9. FORCE MAJEURE

	9.1	 	The Parties will be relieved from their obligations under this Contract to the extent
performance of such obligations is prevented or delayed in whole or in part by Force Majeure.

	9.2	 	“Force Majeure” for the purpose of this Contract means any event or circumstance occurring
after the signing of the Contract which is beyond the reasonable control of a Party including
but not limited by the flood, earthquake, landslip, fire and other acts of nature, accident at
gas pipelines, act of terrorism, war and military actions, blockade, strike, actions of the
monopoly commercial organizations, actions of bodies of the government as the legislative and
other acts essentially complicating performance by the Parties of the obligations under the
present Contract.

	9.3	 	The Party which is unable to carry out its obligation under the Contract (the “Affected
Party”), shall as soon as practicable but in any event not later than 10 (ten) days from the
date on which the Force Majeure arose, provide written notification of the Force Majeure to
the other Party (the “non-Affected Party”). In the notice, the nature and effect of the Force
Majeure and their probable consequences should be described. The Affected Party shall as soon
as practicable and in any event no later 10 (ten) days from the moment of the termination of
such circumstances, inform the non-Affected Party that the Force Majeure has ended.

	9.4	 	The existence of the Force Majeure shall be confirmed by the Kazakhstan Chamber of Commerce
and Industry or other competent bodies acting in the place of the Kazakhstan Chamber of
Commerce for the purposes of determining whether a Force Majeure situation has arisen.

	9.5	 	In of the event the Force Majeure continues for a period of more than 3 months the Parties
shall meet to seek to agree the consequences for the Contract of such a prolonged Force
Majeure. If the Parties cannot reach agreement, the non-Affected has the right to terminate
the Contract with immediate effect.

	9.6	 	Notwithstanding the above, the Affected Party shall do all such things as are reasonable
and practicable in the circumstances to rectify or limit the consequences of the Force
Majeure.

10. DISPUTE RESOLUTION

	a)	 	Any dispute, controversy or claim arising out of or in connection with this Contract,
including any question regarding its existence, validity, interpretation, breach or
termination, shall be finally resolved by arbitration under the Rules of the London Court
of International Arbitration (“LCIA”), which Rules are deemed to be incorporated by
reference into this clause.

	b)	 	The tribunal shall consist of a sole Arbitrator.
	 
	c)	 	The seat and venue of the arbitration shall be London, England.
	 
	d)	 	The language of the arbitration shall be English.
	 
	e)	 	The parties hereby agree to waive any right of appeal to any court of law or
other judicial authority insofar as such waiver may be validly made.

9

 

11. LIMITS

	11.1	 	No Party shall be liable for any Consequential Loss caused to another.
	 
	11.2	 	Except as provided in this Agreement, the rights and remedies provided in this Contract are
not exclusive of any rights and remedies provided by law.

12. TERM AND TERMINATION

	12.1	 	Unless terminated earlier in accordance with the terms of
this Clause 12, this Contract will
terminate at 06.00 on (i) 13 June 2014; or (ii) the date on which all contracts and licences
pursuant to which the Gas to be delivered under this Contract terminates, whichever of (i) or
(ii) is the earlier to occur.

	12.2	 	Either Party (the “Non-Defaulting Party”) may cancel this Contract, subject to providing not
less than 10 Days written notice to the other Party (the “Defaulting Party”) in the event the
Non-Defaulting Party shall not have received any payment when due under this Contract and such
failure is not remedied on or before the expiry of the 10 Days notice.

	12.3	 	Each Party shall be entitled to cancel this Contract forthwith upon the giving of notice
to the other Party, in the event of an act of insolvency in respect of the other Party.

	12.4	 	Notwithstanding any other provision of this Contract, the Seller and Buyer shall be
entitled to cancel this Contract only in the circumstances set out in Article 12.

	12.5	 	All rights and obligations of the Parties under this Contract shall cease to have effect
immediately upon termination of this Contract except that termination shall not affect:

     a) the accrued rights and obligations of the Parties at the date of cancellation or
the rights and obligations arising as a consequence of termination;

     b) any right at law which may arise as a result of termination of this Contract in
accordance with Article12.

13. NOTICES

	13.1.	 	Any notice to be given by one Party to the other hereunder shall be delivered by hand or by
recorded delivery letter or by fax to such address or to such fax number as the Party
concerned shall from time to time designate by written notice in accordance with this Article
13 and shall be deemed to be effective when received at the recipients address as
aforementioned. Until further notice, the addresses and fax numbers of the Parties shall be:

	 	 	 
	Seller:

	 	BN Munai LLP
	Address:

	 	65, Tulebaev Street, apartment 43, Almaty, 050000
	Attention:

	 	Mirtskhulava G.
	Phone:

	 	(3272) 507 033
	Fax:

	 	(3272) 507 034
	Buyer:

	 	“GAZ IMPEX S.A.”
	Address:

	 	P.O. Box 146, Road Town Tortola, British Virgin Islands
	Attention:

	 	Baizakov A.

10

 

14. MISCELLANEOUS PROVISIONS, APPLICABLE LAW AND FUTURE CO OPERATION

	14.1	 	Any amendment, change or waiver of this Contract must be in writing and signed by an
authorized representative of each Party.

	14.2	 	A failure or delay in exercising any right, power or privilege in respect of this Contract
will not operate as a waiver of such right, power or privilege. A single or part exercise of
any right, power or privilege will not prevent any later or further exercise of that right
power or privilege or any different right, power or privilege under this Contract.

	14.3	 	This Contract shall be governed by and construed in accordance with the laws of England and
Wales.

	14.4	 	If any part of this Contract is determined to be void, illegal or unenforceable in any
respect under any law, such a decision will not necessarily make any other provisions of this
Contract void, illegal or unenforceable.

	14.5	 	This Contract represents the entire agreement of the Parties with respect to the matter of
this Contract and this Contract overrides and takes the place of any prior agreements between
the Parties in respect of the same subject matter.

11

 

Legal addresses of the Parties

	 	 	 
	Seller

	 	BN Munai LLP
	Address

	 	050000, Almaty city, 65 Tulebaeva Street, apartment 43
	Telephone

	 	8(3272) 50 70 33
	Fax

	 	8(3272) 50 70 34
	Bank details :

	 	Acc. 016070947
ATF Bank, Almaty Branch

TRN 600400081007,

MFO 190501956

KBE 17
	 

	Buyer

Legal address

	 	“GAZ IMPEX S.A.”
P.O. BOX 146, ROAD TOWN
TORTOLA, BRITISH VIRGIN ISLAND’S
	Bank details:
	 	 
	Beneficiary’s bank:

	 	UBS AG, SWIFT:
	 	 	UBSWCHZH80V

PARADEPLATZ 6

CH-8098 ZURICH, SWITZERLAND

	Benefiary:

	 	Acc. No 0206-255.803
GAS IMPEX S.A.

P.O. BOX 146, ROAD TOWN

TORTOLA, BRITISH

VIRGIN ISLAND’S
	Telephone:

	 	8(3272) 59-76-84
	Fax:

	 	8(3272) 59- 76- 85	 	

Seller ____________________

                       s/p

Buyer____________________

                      s/p

12

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