Document:

EX-10.1

 

CONFIDENTIAL SEPARATION AGREEMENT

AND GENERAL RELEASE OF ALL CLAIMS

     This Confidential Separation Agreement and General Release of All Claims (“Separation Agreement”)
is made by and between OpenTV Corp. (“Company”) and James Chiddix (“Executive”) with respect to the
following facts:

     A. Pursuant to an Employment Agreement between the above referenced parties dated March 23,
2004, (“Employment Agreement”), Executive was employed by Company as Chief Executive Officer and
served as Chairman of its Board of Directors. However, Executive and Company have agreed to the
following terms of this Separation Agreement with respect to Executive’s separation from
employment. Accordingly, Executive acknowledges and agrees that upon execution of this Separation
Agreement, the Employment Agreement shall be null and void and of no force or effect, provided,
however, the Employee Proprietary Information and Inventions Agreement, signed by Executive and
referenced therein, shall remain in full force and effect. In consideration for the benefits
offered to the Executive under this Separation Agreement, Executive waives and relinquishes any and
all rights and claims under the Employment Agreement. The parties further agree that this
Separation Agreement supersedes the Employment Agreement and any other prior agreements between the
parties which purport to govern the terms and conditions of Executive’s employment and separation
from employment with Company.

     B. Executive’s employment with OpenTV ceased effective April 17, 2007 (“Separation Date”). At
that time, Executive received all wages due, including payment of all accrued but unused vacation,
and reimbursement for all expenses through the Separation Date.

     C. Executive resigned his position as Chairman of the Board, but retains his position as a
Director and has been appointed as Vice Chairman of the Board.

     D. Upon approval by the Board of Director’s, during Executive’s service as a Director,
Executive will receive annual Director and Vice Chairman fees in the amount of One Hundred Thousand
Dollars ($100,000.00), will be permitted to participate as a Director in Company’s group health
plan as long as he remains eligible, and will be permitted reasonable use of an office space at
Company’s San Francisco office.

     E. Executive and Company are parties to two Stock Option Agreements dated March 23, 2004 (the
“Option Agreements”), granting Executive the right to purchase a combined total of one million five
hundred thousand (1,500,000) shares of Company’s Class A Ordinary Shares (collectively, the
“Option”), subject to the vesting schedules and other restrictions on exercise as set forth in the
Option Agreements and Company’s 2003 Incentive Plan (the “Stock Option Plan”).

     F. The parties desire to settle all claims and issues that have, or could have been raised, in
relation to Executive’s employment with Company and arising out of or in any way related to the
acts, transactions or occurrences between Executive and Company
to date, including, but not limited to, Executive’s employment with Company or the termination
of that employment, on the terms set forth below.

     THEREFORE, in consideration of the promises and mutual agreements hereinafter set forth, it is
agreed by and between the undersigned as follows:

 

 

     1. Severance Package. Company agrees to provide Executive with the following
payments and benefits (“Severance Package”) to which he is not otherwise entitled. Executive
acknowledges and agrees that this Severance Package constitutes adequate legal consideration for
the promises and representations made by him in this Separation Agreement.

          1.1 Severance Payment. Company agrees to pay Executive the equivalent of
12 months base salary, or Four Hundred Seventy-Five Thousand Seven Hundred
Eighty-One Dollars ($475,781.00) less all appropriate federal and state
income and employment taxes and other lawful deductions (“Severance
Payment”). The Severance Payment will be made in a lump sum payment on or
as soon as administratively practicable after January 2, 2008.

          1.2 Supplemental Payment. Company agrees to provide Executive with a
supplemental severance payment in the amount of Ten Thousand Five Hundred
Seventy-Three Dollars ($10,573.00), less all appropriate federal and state
income and employment taxes and other lawful deductions, on or as soon as
administratively practicable after January 2, 2008.

          1.3 Termination of Option. Executive hereby surrenders the Option to
Company and relinquishes any and all rights and claims under the Option
Agreements effective upon the Effective Date. Executive agrees that the
Option shall terminate as of the Effective Date as to all outstanding
 shares (whether vested or unvested) subject to the Option. Executive
agrees that the Option and the Option Agreements shall be null and void
and of no further force or effect as of and subsequent to the Effective
Date.

          1.4 Bonus Payment. Company shall make a bonus payment to Executive in the
amount of One Hundred Sixty Seven Thousand Two Hundred Nineteen Dollars
($167,219), less all appropriate federal and state income and employment
taxes and other lawful deductions, on or as soon as administratively
practicable after the Effective Date.

     2. Section 409A Compliance. The parties intend for this Separation Agreement and the
Employment Agreement (collectively, this “Agreement”) to satisfy the requirements of Section 409A
of Internal Revenue Code of 1986, as amended, and all applicable guidance promulgated thereunder
(together, “Section 409A”) by virtue of being paid at a specified time (or specified times) or
pursuant to a fixed schedule, and this Agreement shall be construed and interpreted accordingly.
This Separation Agreement shall operate as a timely amendment to the Employment Agreement to bring
the Employment
Agreement into good faith compliance with Section 409A and shall replace and supersede any
inconsistent provisions of the Employment Agreement.

          2.1 To ensure satisfaction of the requirements of Section
409A(b)(3) of the Internal Revenue Code of 1986, as amended, assets shall
not be set aside, reserved in a trust or other arrangement, or otherwise
restricted for purposes of the payment of amounts payable under this
Agreement.

          2.2 Company hereby informs Executive that the federal, state, local and/or foreign
tax consequences (including without limitation those tax consequences
implicated by Section 409A) of this Agreement are complex and subject to
change. Executive hereby acknowledges that Company has advised him that
he should consult with his own personal tax or financial advisor in
connection with this Agreement and its tax consequences. Executive
understands and agrees that Company has no obligation and no
responsibility to provide Executive with any tax or other legal advice in
connection with this Agreement. Executive agrees that he shall bear sole
and exclusive responsibility for any and all adverse federal, state,

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local
and/or foreign tax consequences (including without limitation those tax
consequences implicated by Section 409A) of this Agreement.

     3. General Release.

          3.1 Executive unconditionally, irrevocably and absolutely releases and discharges
Company, and any parent and subsidiary corporations, divisions and
affiliated corporations, partnerships or other affiliated entities of
Company, past and present, as well as Company’s employees, officers,
directors, agents, successors and assigns (collectively, “Released
Parties”), from all claims related in any way to the transactions or
occurrences between them to date, to the fullest extent permitted by law,
including, but not limited to, Executive’s employment with Company, the
termination of Executive’s employment, and all other losses, liabilities,
claims, charges, demands and causes of action, known or unknown, suspected
or unsuspected, arising directly or indirectly out of or in any way
connected with Executive’s employment with Company. This release is
intended to have the broadest possible application and includes, but is
not limited to, any tort, contract, common law, constitutional or other
statutory claims, including, but not limited to alleged violations of the
California Labor Code or the federal Fair Labor Standards Act, Title VII
of the Civil Rights Act of 1964 and the California Fair Employment and
Housing Act, the Americans with Disabilities Act, the Age Discrimination
in Employment Act of 1967, as amended, and all claims for attorneys’ fees,
costs and expenses. However, this General Release is not intended to bar
any claims that, by statute, may not be waived, such as claims for
workers’ compensation benefits, unemployment insurance benefits, statutory
indemnity, and any challenge to the validity of
Executive’s release of claims under the Age Discrimination in Employment
Act of 1967, as amended, as set forth in this Agreement.

          3.2 Executive acknowledges that he may discover facts or law different from, or in
addition to, the facts or law that he knows or believes to be true with
respect to the claims released in this Separation Agreement and agrees,
nonetheless, that this Separation Agreement and the release contained in
it shall be and remain effective in all respects notwithstanding such
different or additional facts or the discovery of them.

          3.3 Executive declares and represents that he intends this Separation Agreement to
be complete and not subject to any claim of mistake, and that the release
herein expresses a full and complete release and Executive intends the
release herein to be final and complete. Executive executes this release
with the full knowledge that this release covers all possible claims
against the Released Parties, to the fullest extent permitted by law.

          3.4 Executive expressly waives Executive’s right to recovery of any type, including
damages or reinstatement, in any administrative or court action, whether
state or federal, and whether brought by Executive or on Executive’s
behalf, related in any way to the matters released herein.

     4. California Civil Code Section 1542 Waiver. Executive expressly acknowledges and
agrees that all rights under Section 1542 of the California Civil Code are expressly waived. That
section provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT
THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST

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HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR.

     5. Representation Concerning Filing of Legal Actions. Executive represents that, as
of the date of this Separation Agreement, he has not filed any lawsuits, charges, complaints,
petitions, claims or other accusatory pleadings against Company or any of the other Released
Parties in any court or with any governmental agency.

     6. Nondisparagement. Executive agrees that he will not make any voluntary statements,
written or oral, or cause or encourage others to make any such statements that defame, disparage or
in any way criticize the personal and/or business reputations, practices or conduct of Company or
any of the other Released Parties.

     7. Confidentiality and Return of Company Property.

          7.1 Confidential Separation Information. Executive agrees that the terms
and conditions of this Separation Agreement, as well as the discussions
that led to the terms and conditions of this Separation Agreement
(collectively referred to as the “Confidential Separation Information”)
are intended to remain confidential between Executive and Company.
Executive further agrees that he will not disclose the Confidential
Separation Information to any other persons, except that Executive may
disclose such information to his immediate family members and to his
attorney(s) and accountant(s), if any, to the extent needed for legal
advice or income tax reporting purposes. When releasing this information
to any such person, Executive shall advise the person receiving the
information of its confidential nature. Neither Executive, nor anyone to
whom the Confidential Separation Information has been disclosed will
respond to, or in any way participate in or contribute to, any public
discussion, notice or other publicity concerning the Confidential
Separation Information. Without limiting the generality of the foregoing,
Executive specifically agrees that neither he, his immediate family, his
attorney nor his accountant, if any, shall disclose the Confidential
Separation Information to any current, former or prospective employee of
Company. Nothing in this section will preclude Executive from disclosing
information required in response to a subpoena duly issued by a court of
law or a government agency having jurisdiction or power to compel such
disclosure, or from giving full, truthful and cooperative answers in
response to a duly issued subpoena.

          7.2 Confidential and Proprietary Information. Executive also agrees that
he will not use, remove from Company’s premises, make unauthorized copies
of or disclose any confidential or proprietary information of Company or
any affiliated or related entities, including but not limited to, their
trade secrets, copyrighted information, customer lists, any information
encompassed in any research and development, reports, work in progress,
drawings, software, computer files or models, designs, plans, proposals,
marketing and sales programs, financial projections, and all concepts or
ideas, materials or information related to the business or sales of
Company and any affiliated or related entities that has not previously
been released to the public by an authorized representative of those
companies.

          7.3 Continuing Obligations. Executive has signed an Employee Proprietary
Information and Inventions Agreement and understands that certain terms
and conditions of that agreement survive the termination of Executive’s
employment. As such, Executive agrees to comply with the continuing
obligations set forth in the surviving provisions of the Employee
Proprietary Information and Inventions Agreement.

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          7.4 Return of Company Property. By signing this Separation Agreement,
Executive represents and warrants that he has returned to
Company all Company property, including all confidential and proprietary
information, as described in paragraph 7.2 above, and all materials and
documents containing trade secrets and copyrighted materials, including
all copies and excerpts of the same.

     8. Non-Solicitation. Executive understands and agrees that Company’s employees and
customers and any information regarding Company employees and/or customers is confidential and
constitutes trade secrets. As such, for a period of one year following the Separation Date,
Executive agrees not to, directly or indirectly, separately or in association with others:

          8.1 Interfere with, impair, disrupt or damage Company’s business by soliciting,
encouraging or causing others to solicit or encourage any of Company’s
employees to discontinue their employment with Company.

     9. Enforcement. If Executive breaches any of the terms in paragraphs 6, 7 or 8 above or
their subparts, Company will immediately cease making the separation payments described in
subparagraph 1.1 and 1.2 above, to the extent those payments have not yet been made. This shall in
no way limit Company’s right to pursue all legal and equitable remedies available to it as a result
of Executive’s breach of this Separation Agreement.

     10. Arbitration of Disputes. The parties agree to arbitrate any and all disputes arising
out of or relating to the enforcement of this Separation Agreement, or for the breach hereof, or
the interpretation hereof. The arbitration will be conducted in San Francisco, California and
shall be before a single, neutral arbitrator selected by the parties. If the parties are unable to
agree on a single neutral arbitrator, the arbitrator shall be selected in accordance with the rules
of the American Arbitration Association for Employment Disputes
(available on-line at www.adr.org). The
arbitrator shall have the power to enter any award that could be entered by a judge of a trial
court of the State of California, and only such power, and shall follow the law. The parties agree
to abide by and perform any award rendered by the arbitrator. The arbitrator shall issue the award
in writing and therein state the essential findings and conclusions on which the award is based.
Judgment on the award may be entered in any court having jurisdiction thereof. In no event shall
the demand for arbitration be made after the date when institution of legal or equitable
proceedings based on such claim, dispute or other matter in question would be barred by the
applicable statute of limitations. This agreement to arbitrate shall be specifically enforceable
under the prevailing arbitration law, and shall be in accordance with the procedures established
for arbitration in the California Code of Civil Procedure (available on-line at
www.leginfo.ca.gov/calaw.html). The parties understand that by agreeing to arbitrate their
disputes, they are giving up their right to have their disputes heard in a court of law and, if
applicable, by a jury. Company shall bear the costs of the arbitration filing and hearing fees and
the cost of the arbitrator.

     11. No Admissions. By entering into this Separation Agreement, the Released Parties make
no admission that they have engaged, or are now engaging, in any unlawful conduct. The parties
understand and acknowledge that this Separation Agreement is not an admission of liability and
shall not be used or construed as such in any legal or administrative proceeding.

     12. Older Workers’ Benefit Protection Act. This Separation Agreement is intended to
satisfy the requirements of the Older Workers’ Benefit Protection Act, 29 U.S.C. sec. 626(f).

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Employee, by this Separation Agreement, is advised to consult with an attorney before executing
this Separation Agreement.

          12.1 Acknowledgments/Time to Consider. Executive acknowledges and agrees
that (a) Executive has read and understands the terms of this Separation
Agreement; (b) Executive has been advised in writing to consult with an
attorney before executing this Separation Agreement; (c) that Executive
has obtained and considered such legal counsel as Executive deems
necessary; (d) that Executive has been given twenty-one (21) days to
consider whether or not to enter into this Separation Agreement (although
Executive may elect not to use the full 21-day period at Executive’s
option); and (e) that by signing this Separation Agreement, Executive
acknowledges that Executive does so freely, knowingly, and voluntarily.

          12.2 Revocation/Effective Date. This Separation Agreement shall not become
effective or enforceable until the eighth day after Executive signs this
Separation Agreement. In other words, Executive may revoke Executive’s
acceptance of this Separation Agreement within seven (7) days after the
date Executive signs it. Executive’s revocation must be in writing and
received by Mark Beariault, General Counsel, OpenTV, 275 Sacramento
Street, San Francisco, CA 94111-3810, by 5:00 p.m. Pacific Time on the
seventh day in order to be effective. If Executive does not revoke
acceptance within the seven (7) day period, Executive’s acceptance of this
Separation Agreement shall become binding and enforceable on the eighth
day (“Effective Date”). The Severance Package shall become due and
payable in accordance with paragraph 1, provided this Separation Agreement
has not been revoked.

          12.3 Preserved Rights of Executive. This Separation Agreement does not
waive or release any rights or claims that Executive may have under the
Age Discrimination in Employment Act that arise after the execution of
this Separation Agreement. In addition, this Separation Agreement does
not prohibit Executive from challenging the validity of this Separation
Agreement’s waiver and release of claims under the Age Discrimination in
Employment Act of 1967, as amended.

     13. Severability. In the event any provision of this Separation Agreement shall be found
unenforceable by an arbitrator or a court of competent jurisdiction, the provision shall be deemed
modified to the extent necessary to allow enforceability of the provision as so limited, it being
intended that Company shall receive the benefits contemplated herein to the fullest extent
permitted by law. If a deemed modification is not satisfactory in the judgment of such arbitrator
or court, the unenforceable provision shall be deemed deleted, and the validity and enforceability
of the remaining provisions shall not be affected thereby.

     14. Applicable Law. The validity, interpretation and performance of this Separation
Agreement shall be construed and interpreted according to the laws of the United States of America
and the State of California.

     15. Binding on Successors. The parties agree that this Separation Agreement shall be
binding on, and inure to the benefit of, his or its successors, heirs and/or assigns.

     16. Full Defense. This Separation Agreement may be pled as a full and complete defense
to, and may be used as a basis for an injunction against, any action, suit or other proceeding that
may be prosecuted, instituted or attempted by Executive in breach hereof.

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     17. Good Faith. The parties agree to do all things necessary and to execute all further
documents necessary and appropriate to carry out and effectuate the terms and purposes of this
Separation Agreement.

     18. Entire Agreement; Modification. This Separation Agreement, including the Stock Option
Plan and associated grant documents herein incorporated by reference and the Employee Proprietary
Information and Inventions Agreement signed by Executive, is intended to be the entire agreement
between the parties and supersedes and cancels any and all other and prior agreements, written or
oral, between the parties regarding this subject matter. It is agreed that there are no collateral
agreements or representations, written or oral, regarding the terms and conditions of Executive’s
separation of employment with Company and settlement of all claims between the parties other than
those set forth in this Separation Agreement. This Separation Agreement may be amended only by a
written instrument executed by all parties hereto.

THE PARTIES TO THIS SEPARATION AGREEMENT HAVE READ THE FOREGOING SEPARATION AGREEMENT AND
FULLY UNDERSTAND EACH AND EVERY PROVISION CONTAINED HEREIN. WHEREFORE, THE PARTIES HAVE EXECUTED
THIS SEPARATION AGREEMENT ON THE DATES SHOWN BELOW.

	 	 	 	 	 	 	 
	Dated: June 27, 2007

	 	By:
	 	/s/ James Chiddix	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	     James Chiddix	 	 
	 
	 	 	 	 	 	 
	 	 	OpenTV Corp. 
	 
	 	 	 	 	 	 
	Dated: June 27, 2007

	 	By:
	 	/s/ André Kudelski	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	     André Kudelski	 	 
	 

	 	 	 	     Executive Chairman	 	 
	 
	 

	 	By:
	 	/s/ Alan A. Guggenheim	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	     Alan A. Guggenheim	 	 
	 

	 	 	 	     Chief Executive Officer	 	 

7EX-10.1

 

Exhibit 10.1

Dated June 27, 2007

CANARGO ENERGY CORPORATION

and

VAZON ENERGY LIMITED

 

MANAGEMENT SERVICES AGREEMENT

 

 

 

	 	 	 	 	 	 	 
	1

	 	DEFINITIONS
	 	 	1	 
	 
	 	 	 	 	 	 
	2

	 	ENGAGEMENT
	 	 	3	 
	 
	 	 	 	 	 	 
	3

	 	TERM
	 	 	3	 
	 
	 	 	 	 	 	 
	4

	 	DUTIES
	 	 	3	 
	 
	 	 	 	 	 	 
	5

	 	HOLIDAY/OVERTIME/SICKNESS/INJURY/RESIDENT BASE/ POINT OF ORIGIN/EXPENSES
	 	 	4	 
	 
	 	 	 	 	 	 
	6

	 	REMUNERATION
	 	 	6	 
	 
	 	 	 	 	 	 
	7

	 	TAX COMPLIANCE
	 	 	6	 
	 
	 	 	 	 	 	 
	8

	 	CONFIDENTIALITY
	 	 	7	 
	 
	 	 	 	 	 	 
	9

	 	PROPERTY OF THE COMPANY
	 	 	7	 
	 
	 	 	 	 	 	 
	10

	 	COVENANTS AGAINST COMPETITION
	 	 	7	 
	 
	 	 	 	 	 	 
	11

	 	TERMINATION FOR EVENT OF DEFAULT
	 	 	8	 
	 
	 	 	 	 	 	 
	12

	 	DISCIPLINARY RULES; GRIEVANCE PROCEDURES; HEALTH
AND SAFETY
	 	 	8	 
	 
	 	 	 	 	 	 
	13

	 	POST-TERMINATION PROVISIONS
	 	 	8	 
	 
	 	 	 	 	 	 
	14

	 	CONSULTANT’S REPRESENTATIONS AND WARRANTIES
	 	 	8	 
	 
	 	 	 	 	 	 
	15

	 	NOTICE
	 	 	9	 
	 
	 	 	 	 	 	 
	16

	 	AMENDMENTS
	 	 	9	 
	 
	 	 	 	 	 	 
	17

	 	SEVERABILITY
	 	 	9	 
	 
	 	 	 	 	 	 
	18

	 	NO WAIVER
	 	 	10	 
	 
	 	 	 	 	 	 
	19

	 	ENTIRE AGREEMENT
	 	 	10	 
	 
	 	 	 	 	 	 
	20

	 	GOVERNING LAW
	 	 	10	 
	 
	 	 	 	 	 	 
	21

	 	DISPUTE RESOLUTION
	 	 	10	 
	 
	 	 	 	 	 	 
	22

	 	ASSIGNMENT
	 	 	10	 
	 
	 	 	 	 	 	 
	23

	 	INTERPRETATION
	 	 	10	 
	 
	 	 	 	 	 	 
	24

	 	MONETARY TERMS
	 	 	10	 
	 
	 	 	 	 	 	 
	25

	 	COUNTERPARTS
	 	 	11	 
	 
	 	 	 	 	 	 
	EXHIBITS	 	 	 	 
	EXHIBIT 1 Specific Duties of Consultant	 	 	 	 

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MANAGEMENT SERVICES AGREEMENT

Dated          2007

between

CANARGO ENERGY CORPORATION, a company incorporated and existing under the laws of Delaware, United
States of America (the “Company”)

and

VAZON ENERGY LIMITED (Company Number 32244) a company incorporated and existing under the laws of
Guernsey, Channel Islands (the “Consultant”).

WHEREAS:

	A.	 	The Company is engaged in the exploration, development, recovery, production, marketing and
sale of oil and gas (“the Business”) throughout the world.
	 
	B.	 	The Consultant has substantial experience in the Business, and is available to render general
and specific services of a management, technical, administrative and/or advisory nature with
respect to the Business, and is prepared to provide such services as and when needed by the
Company.
	 
	C.	 	The Company desires to obtain the services of the Consultant, and the Consultant desires to
provide certain services to the Company in the Territory.

NOW THEREFORE, in consideration of the agreements contained herein and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows:-

	1	 	DEFINITIONS
	 
	1.1	 	In this Agreement and the Exhibit hereto, except where the context otherwise requires, the
words and expressions set forth below shall have the following meanings:-
	 
	 	 	“Act” means the Companies (Guernsey) Law 1994, as amended;
	 
	 	 	“Agreement” means this Management Services Agreement, including Exhibit 1, as the same may
be amended, modified or extended from time to time;
	 
	 	 	“Bank and other Public Holidays” means bank and other public holidays in Guernsey;
	 
	 	 	“Bonus” has the meaning set forth in Clause 6.3;
	 
	 	 	“Board” means the board of directors of the Company from time to time;
	 
	 	 	“Business” has the meaning set forth in the “Preliminary Statements”;
	 
	 	 	“Change of Control” means the acquisition or series of related acquisitions whether by
purchase, transfer, renunciation or otherwise of any interest in the common stock of the
Company by a single party if, upon completion of that acquisition or acquisitions, the
single party, together with persons acting in concert or connected with him, would hold
more than 50 per cent in number of the common stock of the Company;

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	 	 	“Compensation and Nomination Committee” means the Compensation and Nomination Committee of
the Board from time to time;
	 
	 	 	“Confidentiality” has the meaning set forth in Clause 8;
	 
	 	 	“Confidential Information” means all information which is identified or treated by the
Company or any Group Company or any of the Group’s clients or customers as confidential or
which by reason of its character or the circumstances or manner of its disclosure is
evidently confidential including any information about, business plans, proposals relating
to the acquisition or disposal of a company or business or proposed expansion or
contraction of activities, maturing new business opportunities, research and development
projects, designs, secret processes, product or services development and formulae,
know-how, inventions, sales statistics and forecasts, marketing strategies and plans,
costs, profit and loss and other financial information (save to the extent published in
audited accounts), prices and discount structures and the names, addresses and contact and
other details of: (a) employees and their terms of employment; (b) customers and
potential customers, their requirements and their terms of business with the
Company/Group; and (c) suppliers and potential suppliers and their terms of business (all
whether or not recorded in writing or in electronic or other format);
	 
	 	 	“Consultant’s Domicile” has the meaning set forth in Clause 5;
	 
	 	 	“Engagement” means the engagement of the Consultant for the Term by the Company pursuant
to this Agreement;
	 
	 	 	“Event of Default” has the meaning set forth in Clause 12;
	 
	 	 	“Exhibit” means an exhibit to this Agreement;
	 
	 	 	“Fees” has the meaning set forth in Clause 6;
	 
	 	 	“Group” means the Company, any holding company or undertaking of the Company and any
subsidiaries and subsidiary undertakings of the Company or such holding company or
undertaking;
	 
	 	 	“Group Company” means any company within the Group;
	 
	 	 	“Section” means a Clause of this Agreement;
	 
	 	 	“Tax” or “Taxes” has the meaning set forth in Clause 7;
	 
	 	 	“Term” has the meaning set forth in Clause 3; and
	 
	 	 	“Territory” means any geographic area in which the Company pursues business activities.
	 
	 	 	“Working Time Percentage” means the approximate maximum working time of the Chairman on
the business of the Company as defined from time-to-time and specified currently in
Exhibit 2.
	 
	1.2	 	In this Agreement unless otherwise specified or the context otherwise requires:-
	 
	1.2.1	 	references to this Agreement shall include the Recitals;

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	1.2.2	 	words importing any gender shall include the other genders;
	 
	1.2.3	 	words importing natural persons shall include corporations and vice versa;
	 
	1.2.4	 	words importing the singular only shall include the plural and vice versa;
	 
	1.2.5	 	words importing the whole shall be treated as including a reference to any part thereof; and
	 
	1.2.6	 	any word or expression the definition of which is contained in or referred to in the Act
shall be construed as having the meaning attributed to it.
	 
	1.3	 	In this Agreement the headings to the Sections are inserted for convenience only and shall
not affect the construction of this Agreement.
	 
	2	 	ENGAGEMENT
	 
	 	 	For and during the Term, and subject to the terms and conditions hereinafter set forth,
the Company hereby appoints the Consultant to perform the duties set out herein
(including, without limitation, Exhibit 1) and the Consultant agrees to procure that Dr
David Robson, currently residing at Concordia, Montville Road, St. Peter Port, Guernsey,
GY1 1BQ, Channel Islands, shall serve as the Chairman of the Board of the Company. For
the purposes of this Agreement “Chairman” shall be deemed to mean Dr David Robson, acting
in the capacity of Chairman of the Board of the Company. The Company agrees that for the
purposes of the Company’s length of service definitions, and for benefit schemes,
including the Company’s stock option plans, etc., Dr David Robson will be deemed to be a
“consultant” of the Company.
	 
	3	 	TERM
	 
	3.1	 	Notwithstanding the date hereof, this Agreement shall commence on the 26th___ June
2007 and shall terminate upon the earliest to occur of:

	 	(i)	 	either party giving to the other not less than six (6) months written
notice to terminate the Agreement, in which case the Agreement shall terminate six
(6) months after the receipt of the notice;
	 
	 	(ii)	 	the liquidation or dissolution of the Company;
	 
	 	(iii)	 	the mutual agreement of the parties to terminate this Agreement; or
	 
	 	(iv)	 	the occurrence of an Event of Default.

	 	 	The period during which this Agreement is in effect shall be known as the “Term”.
	 
	4	 	DUTIES
	 
	 	 	During the Term, the Consultant will procure that the Chairman will:

	 	(a)	 	perform to the best of his ability all the duties of the Chairman of the
Board, including, without limitation those duties specified in Exhibit 1 and such
other functions, being not inconsistent with his position as Chairman of the Board as
the Board may require;
	 
	 	(b)	 	comply promptly with all lawful directions and instructions given by or
with the authority of the Board;

3

 

	 	(c)	 	attend and act at any premises of the Company and travel and act in the
Territory and such other locations as may be required for the proper fulfilment of
his duties, provided such locations are deemed, in the reasonable opinion of the
Consultant, do not involve undue risk of kidnap, civil insurrection, war, or other
bodily risk.

	5	 	HOLIDAY/OVERTIME/SICKNESS/INJURY/RESIDENT BASE/ POINT OF ORIGIN/EXPENSES
	 
	5.1	 	Holiday Entitlement
	 
	5.1.1	 	The holiday year runs from 1st January to 31st December the same year.
	 
	5.1.2	 	In addition to Bank and other Public Holidays the Chairman shall be entitled to 25 working
days holiday (multiplied by the Working Percentage) in every calendar year to be taken at such
time or times as may be approved by the Company. If the full holiday entitlement is not taken
during calendar year, the holiday entitlement will accumulate thereafter and each day of
unused holiday entitlement may, at the request of the Consultant, be bought out at the
equivalent of the Chairman’s fee for that year (plus pension contributions), divided by the
number of working days in that year.
	 
	5.1.3	 	In the event of extended work during weekends or Bank and other Public holidays, the
Chairman shall be able to take an equivalent time off as additional leave in lieu, this to be
taken as soon as is possible after the event.
	 
	5.1.4	 	On termination of this Agreement, the Company may require the Chairman to take any unused
holidays accrued at that time during any notice period. Alternatively, the Company may, at
its discretion, make a payment in lieu of accrued contractual holiday entitlement. The
Chairman will be required to make a payment to the Company in respect of any holidays taken in
excess of his holiday entitlement accrued at the termination of this Agreement. Any sums so
due may be deducted from any money owing to the Chairman by the Company.
	 
	5.2	 	Payment during sickness/injury

	 	(a)	 	If the Chairman is unable to attend at work by reason of sickness or injury
or other unauthorised reason the Chairman must notify (if possible) an Officer of the
Company or other representative at his place of work not later than 11.00am on the
first day of absence and, in the case of absence of uncertain duration, the Chairman
must keep an appropriate person at his place of work regularly informed of the reason
for his continued absence and his likely date of return.
	 
	 	(b)	 	If the Chairman’s absence is due to sickness or injury which continues for
more than seven consecutive days (whether or not working days) he must provide the
Board with a doctor’s statement from the eighth consecutive day of sickness or
injury.
	 
	 	(c)	 	Immediately following the Chairman’s return to work after any period of
absence the Chairman will be required to complete a self-certification form available
from his place of work.
	 
	 	(d)	 	If the Chairman’s absence is due to sickness or injury, the Company will
pay any Statutory Sick Pay (“SSP”) in accordance with any relevant statutory
provisions in the Consultant’s Domicile. For SSP purposes, qualifying days are
Monday to Friday inclusive.

4

 

	 	(e)	 	In addition, in the event of the Chairman being absent from work due to
sickness or injury, the Company will pay sick pay to the Chairman as follows:-

	 	(i)	 	The Fees, minus any SSP paid to the Consultant by the
Company, and minus any other State sickness benefit recoverable by the
Chairman, will be paid in full for the first 10 weeks absence in any twelve
month period;
	 
	 	(ii)	 	Thereafter, one half of the Fees, minus any SSP paid to
the Consultant by the Company, and minus any other State sickness benefit
recoverable by the Chairman, will be paid for a further 10 weeks’ absence in
the same twelve month period.
	 
	 	(iii)	 	After a total period of 20 weeks absence in the same
twelve month period, then provisions of the sickness and disability
insurance cover to be arranged by the Company for the Chairman (as in Clause
6 of the Agreement) shall apply and the only fees which shall be payable by
the Company to the Chairman shall be an amount equal to the difference
between the amount received by the Chairman under the sickness and
disability cover referred to above and the amount which the Chairman would
have received had he not been receiving payment under the sickness and
disability cover.

	5.3	 	Residence and Point of Origin
	 
	 	 	For the purpose of this Clause 5, the Consultant’s Domicile shall refer to the Chairman’s
place of habitation and shall be located in Guernsey, Channel Islands (“Residence”) and
the point of origin shall be the same (“Point of Origin”).
	 
	 	 	The Company shall provide and pay all costs (multiplied by the Working Percentage) of an
office with all necessary equipment and services for the Chairman and Consultant to carry
out their duties, and provide for the employment of a suitable Personal Assistant (PA) at
the Point of Origin. Accommodation appropriate for a Chairman or person of similar
standing will be provided at the Company’s expense for the Consultant for time spent away
from Point of Origin. Any travel for the Consultant or Chairman on Company business will
be provided by the Company or any costs reimbursed to the Consultant in full, and shall be
at an appropriate class of travel and accommodation consistent with the Chairman’s
position (business class if available) on short haul routes and first class (if available)
if the flight time is in excess of 5 hours, and with the requirements of the duties of the
Consultant or Chairman. The Chairman may take with him such staff as required to perform
his duties, in similar class of travel if required by the Chairman.
	 
	 	 	If urgent or difficult travel is required the company shall provide a suitable form of
transport to enable the Chairman to carry out his duties in an efficient, timely, safe and
effective manner. At the request of the Chairman, the Company shall provide security,
close protection and related support to the Chairman and his party.
	 
	5.4	 	Expenses
	 
	 	 	The Company shall reimburse to the Consultant all out of pocket expenses properly incurred
by the Consultant and the Chairman in the course of the Engagement. No expenses shall be
reimbursed, however, unless they are incurred in the ordinary course of business and are
supported, where possible, by receipts or other appropriate justification.

5

 

	 	 	The Company shall provide the Chairman with appropriate credit cards for such expenses
(and if required cash advances).
	 
	6	 	REMUNERATION
	 
	6.1	 	The Company shall pay the following to the Consultant for the Engagement:-

	 	(a)	 	A Fee to be paid in the Channel Islands (“Channel Islands”) for work
performed in the amount of £6,250 per calendar month (the “Fees”) to be paid in
advance on the 1st of each month for the duration of the Term (subject to
the provisions of this Agreement). These Fees shall be paid to the Consultant either
by cheque, or by bank transfer, with the full value of the Fees being received at the
Consultant’s bank. The Consultant will advise of bank details from time to time.
	 
	 	(b)	 	The Company will also pay at the same time as the Fees a monthly
contribution to the Consultant for the Chairman’s pension requirements, equal to nine
per cent 9% of the Consultant’s Fees.
	 
	 	 	 	The Consultant shall also be provided with an insurance policy that will cover
the Chairman for a minimum of (a) life insurance with death cover of 4 times the
annual Fees (not including Bonus), (b) sickness and disability benefits
(permanent health insurance and income protection), and (c) private health care
for the Consultant and his family and (d) comprehensive BUPA Travel Insurance.
	 
	 	(c)	 	The Consultant may also be entitled to payment of a bonus pursuant to the
provisions of Clause 6.3.

	6.2	 	Adjustment of the remuneration package outlined in this Clause 6 during the Term will be in
an upwards direction only as agreed by the Company and the Consultant and shall be as
determined by the Company’s Compensation Committee on at least an annual basis. The
remuneration is denominated in Pounds Sterling.
	 
	6.3	 	The Company accepts that work carried out by the Consultant under this Agreement may
contribute to significant business progress for the Company, including for example without
limitation, the acquisition of new projects, increase of revenue from existing projects,
rationalisation of costs, increase in positive cash flow for the Company, successful corporate
restructuring, merger, takeover or similar, or some such other event which is positive for the
Company (the “Event”), and in these circumstances the Compensation Committee of the Company
may cause the Company to pay a discretionary cash bonus to the Consultant in an amount (if
any) to be determined by the Compensation Committee which will take into account, inter alia,
the value to the Company of the Event.
	 
	7	 	TAX COMPLIANCE
	 
	7.1	 	Compliance with Tax laws
	 
	 	 	The Company will uses its best efforts to comply with all laws, rules and regulations
pertaining to the reporting of the compensation and reimbursable expenses attributable to
Consultant’s Engagement in the Territory.
	 
	7.2	 	Consultant’s taxes
	 
	 	 	The Consultant is responsible for its own taxes. The Consultant undertakes to indemnify
and hold harmless the Company in respect of all such taxes.

6

 

	8	 	CONFIDENTIALITY
	 
	 	 	During the Term of this Agreement and at all times thereafter, Consultant shall hold in
strict confidence, and shall not disclose to any person or entity any Confidential
Information of the Company. For the purpose of this Clause 8, the term “Confidential
Information” shall include without limitation, trade information relating to the Company
research and development, engineering data, seismic data, surveys, specifications, process
formulations, production operations or techniques, planning, purchasing, accounting,
finance, selling, marketing, market research, promotional plans, customers, suppliers, and
other information of a similar nature which may include design specifications and
know-how, in which the Company or its suppliers or distributors have proprietary
interests, and all other information pertaining to the business of the Company that is not
publicly available. Consultant shall not use such Confidential Information except for the
sole benefit of the Company.
	 
	9	 	PROPERTY OF THE COMPANY
	 
	 	 	Promptly upon the termination of this Agreement, Consultant shall surrender to the Company
all written materials (and all copies, extracts and abstracts), all information stored in
computer memories or on microfiche, magnetic tape or diskette, that are at the time in his
direct or indirect possession or control and that pertain to the business or affairs of
the Company.
	 
	10	 	COVENANTS AGAINST COMPETITION
	 
	10.1	 	During the Term, the Consultant has a duty of loyalty to the Company. This duty of loyalty
requires that during the Term all of Consultant’s actions be taken with a view toward and for
the purpose of advancing the interest of the Company. The Consultant agrees to act in
accordance with the Consultant’s duty of loyalty during the Term. In particular, the
Consultant will take no action during the Term to interfere with or adversely affect willingly
and purposely the Company’s relationship with then existing or prospective customers, clients,
suppliers, co-venture, lenders, consultants and professional advisers or otherwise to harm the
interest of the Company.
	 
	10.2	 	During the Term, and for a period of one year following the date of termination of this
Agreement, the Consultant shall not directly or indirectly induce any employee or consultant
of the Company to terminate his or her employment, hire by direct approach any employee or
consultant of the Company, or in any way interfere with the relationship of the Company and
any employee, consultant, agent or representative. This clause will not apply in the
Consultant is approached.
	 
	10.3	 	For a period of one year following the date of termination of this Agreement, the Consultant
shall not directly or indirectly solicit or otherwise divert or attempt to divert from the
Company any Business or any related business:-

	 	(a)	 	which is being conducted by the Company pursuant to any binding oil and gas
exploration and/or production contract in existence during the Term, or
	 
	 	(b)	 	which may be conducted by the Company pursuant to any extension or renewal
of a contract in existence during the Term, or
	 
	 	(c)	 	which is the subject of advanced negotiations (that being a signed binding
Heads of Terms or similar) between the Company and a potential customer or client
during the Term with a view to leading to a contract, in which negotiations the
Chairman participated.

7

 

	10.4	 	At no time, whether during the Term or at any time thereafter shall the Consultant use the
name “CanArgo” or any name likely to cause confusion therewith in the minds of members of the
public for the purposes of a business similar to or competing with any business carried on by
the Company whether by using such name as part of a corporate name or otherwise.
	 
	10.4	 	
	 
	11	 	TERMINATION FOR EVENT OF DEFAULT
	 
	 	 	Notwithstanding the provisions above, the Company may terminate the Engagement by notice
with immediate effect for any of the following reasons (each an “Event of Default”):-

	 	(a)	 	the Consultant or the Chairman is guilty of dishonesty or of misconduct,
including, without limitation, a material breach of the restrictive covenant,
guarantee and confidentiality undertaking, or gross incompetence or wilful neglect of
duty, or the Consultant or Chairman commits any material breach of this Agreement,
including, without limitation, a breach of Clause 8 of this Agreement, other than a
breach which is capable of remedy and is remedied forthwith at the Company’s request;
or
	 
	 	(b)	 	the Consultant or Chairman is convicted of a serious criminal offence; or
	 
	 	(c)	 	the Consultant’s affairs are declared to be an état de désastre or the
Consultant becomes bankrupt; or
	 
	 	(d)	 	the Chairman is incapacitated for twenty six (26) consecutive weeks, or for
an aggregate of thirty nine (39) weeks during any period of fifty two (52)
consecutive weeks from performing the duties of the Engagement; or

	12	 	DISCIPLINARY RULES; GRIEVANCE PROCEDURES; HEALTH AND SAFETY
	 
	12.1	 	The Consultant acknowledges by the execution of this Agreement that the Chairman will receive
a copy of the Company’s Disciplinary Rules and Grievance Procedures.
	 
	12.2	 	The Consultant shall at all times during the course of the Engagement procure that the
Chairman conducts himself in the conformity with the laws of Guernsey and shall otherwise
perform his duties hereunder in a professional and responsible manner.
	 
	13	 	POST-TERMINATION PROVISIONS
	 
	 	 	Any provision of this Agreement which contemplates or is capable of operation after the
termination of the Engagement shall apply notwithstanding termination of the Engagement
for whatever reason.
	 
	14	 	CONSULTANT’S REPRESENTATIONS AND WARRANTIES
	 
	 	 	The Consultant represents and warrants to the Company (i) that this Agreement constitutes
a valid and binding obligation, enforceable against the Consultant in accordance with its
terms; (ii) that neither the execution or delivery of this Agreement nor the performance
by the Consultant of any covenants hereunder will constitute a default under any contract,
agreement or obligation to which the Consultant is a party or by which the Consultant or
any of the Consultant’s properties is bound; (iii) that there are no lawsuits, arbitration
actions or other proceedings (equitable, legal, administrative or otherwise) pending or
(to the best of the Consultant’s knowledge) threatened which could adversely affect the
validity or enforceability of this Agreement or the Consultant’s obligation or ability to
perform
his

8

 

		 	obligations hereunder; and (iv) that no consent, approval or authorisation of,
or notification
to, any governmental entity or any person or entity is required in connection with the
execution, delivery or performance of this Agreement by the Consultant.
	 
	15	 	NOTICE
	 
	 	 	Any notices or other communications required or permitted to be given hereunder or
otherwise in connection herewith shall be in writing and shall be sent to the parties at
the following addresses or at such other addresses as shall be specified by the parties by
like notice:

	 	 	 
	To the Company:

	 	CanArgo Energy Corporation
	 

	 	PO Box 291
	 

	 	St. Peter Port
	 

	 	Guernsey
	 

	 	GY1 3RR
	 

	 	Telephone: +44 1481 729 980
	 

	 	Facsimile: +44 1481 729 982
	 
	 	 
	To Consultant:

	 	Vazon Energy Limited
	 

	 	PO Box 144
	 

	 	St Peter Port
	 

	 	Guernsey GY1 3HX
	 

	 	Channel Islands
	 

	 	Telephone: +44 1481 729 981
	 

	 	Facsimile: +44 1481 711 086
	 
	 	 
	With a copy to:
	 	 
	 
	 	 
	 

	 	Dr David Robson
	 

	 	Concordia
	 

	 	Montville Road
	 

	 	St Peter Port
	 

	 	Guernsey GY1 1BQ
	 

	 	Channel Islands
	 

	 	Telephone: +44 1481 720 248

	 	 	Such notices or other communications shall be deemed to have been duly given and received
(i) on the day of sending if sent by personal delivery, cable, telegram; (ii) on the third
calendar day after the day of sending if sent by facsimile transmission or telex, Federal
Express or other express delivery service or (iii) on the fifth calendar day after the day
of sending if sent by registered or certified mail (return receipt requested).
	 
	16	 	AMENDMENTS
	 
	 	 	Any amendment to the provisions of this Agreement shall be in writing and signed by both
of the parties hereto or their duly authorised representatives.
	 
	17	 	SEVERABILITY
	 
	 	 	If any provision of this Agreement is held invalid or unenforceable by any court of
competent jurisdiction, the other provisions of this Agreement will remain in full force
and effect. Any provision of this Agreement held invalid or unenforceable only in part or
degree will remain in full force and effect to the extent not held invalid or
unenforceable.

9

 

	18	 	NO WAIVER
	 
	 	 	The failure to enforce at any time any of the provisions of this Agreement or to require
at any time performance by the other party of any of the provisions hereof shall in no way
be construed to be a waiver of such provisions or to affect the validity of this
Agreement, or any part thereof, or the right of either party thereafter to enforce each
and every such provision in accordance with the terms of this Agreement.
	 
	19	 	ENTIRE AGREEMENT
	 
	 	 	This Agreement contains the entire agreement between the parties with respect to the
Engagement of the Consultant by the Company and supersedes any and all prior
understandings, agreement or correspondence between the parties. The Exhibit to this
Agreement form an integral part of this Agreement.
	 
	20	 	GOVERNING LAW
	 
	 	 	This Agreement shall be governed by, and interpreted in accordance with, the laws of
Guernsey.
	 
	21	 	DISPUTE RESOLUTION

	 	(a)	 	The parties agree that if any dispute or claims arises in relation to the
Agreement, representatives of each party shall negotiate promptly and in good faith
in an attempt to resolve the matter between themselves.
	 
	 	(b)	 	If the parties are unable to resolve any dispute pursuant to clause 21 (a)
above, the matter shall be referred to mediation in accordance with procedures laid
down from time to time by the Centre for Dispute Resolution (“CEDR”) within thirty
(30) days of one party giving notice to the other that, in its reasonable opinion, no
agreement will be reached by them.
	 
	 	(c)	 	If having followed the process set out in clause 21 (a) and 21 (b), the
parties have failed to resolve their dispute or settled their claim, then the parties
shall submit to the exclusive jurisdiction of the Guernsey courts.

	22	 	ASSIGNMENT
	 
	 	 	Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or
by reason hereof may be assigned or delegated by either the Consultant or the Company
without the prior written consent of the other.
	 
	23	 	INTERPRETATION
	 
	 	 	All references to Clauses and Exhibits are to sections and exhibits in or to this
Agreement unless otherwise specified. The words “hereof”, “herein” and “hereunder” and
words of similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement. Where the context permits,
the singular includes the plural and vice versa and one gender includes any gender.
	 
	24	 	MONETARY TERMS
	 
	 	 	All amounts expressed in pounds sterling or “pounds sterling” in this Agreement shall mean
pound sterling in the United Kingdom.

10

 

	25	 	COUNTERPARTS
	 
	 	 	This Agreement may be executed in several counterparts, each of which shall be deemed an
original but all of which shall constitute one and the same instrument.

IN WITNESS WHEREOF, this Agreement is executed on June 27th                           2007.

	 	 	 
	CANARGO ENERGY CORPORATION
	 
	 	 
	By:
	 	 
	 

	 	Name: /s/ Nils Trulsvik
	 

	 	Title: Director
	 
	 	 
	VAZON ENERGY LIMITED
	 
	 	 
	By:
	 	 
	 

	 	Name: /s/ Dr David Robson
	 

	 	Title: Managing Director

11

 

EXHIBIT 1

Specific Duties of Consultant

Vazon Energy Limited (“the Consultant”) shall, in accordance with Clause 2 of the Management
Services Agreement entered into between the Consultant and CanArgo Energy Corporation (“the
Company”) provide the services of Dr David Robson to provide the following services as Chairman of
the Company:-

  The Chairman will be responsible for chairing of Board Meetings and Stockholder Meetings and
will be expected to attend a minimum of four Board Meetings per year, at least two (if held) in
person. The Chairman will also have responsibilities, on behalf of the Board, for overseeing the
strategic direction of the business and overall corporate strategy however the actual executive
implementation of such strategies will be the responsibility of the Chief Executive Officer who
will manage, maintain, develop and run the business on a day-to-day basis. The Chairman will
also have a duty to oversee political and governmental relations and other high level oil
industry contacts, and with an overall responsibility with respect to investor relations strategy
and implementation.”

12

 

EXHIBIT 2

Working Percentage

The initial working percentage shall be thirty per cent (30%) and this shall be the proportion of
office costs which the company shall pay for provision of the Chairman’s office, telecoms,
utilities, and office support, and the percentage of holiday entitlement due to the Chairman.

13

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