Document:

EX-10.23

 

EXHIBIT 10(23)

WAIVER AND CONSENT

     This WAIVER AND CONSENT (this “Agreement”) is made and entered into as of the 28th
day of June, 2006 by and among CanArgo Energy Corporation, a Delaware corporation (the “Company”),
and the individuals and entities who or which are signatories hereto (hereby referred to as a
“Subordinated Noteholder” and collectively as the “Subordinated Noteholders”).

     WHEREAS, the Company and certain individuals propose to enter into a Note and Warrant Purchase
Agreement (the “Note and Warrant Purchase Agreement”) pursuant to which the Company shall issue up
to $10,000,000 in convertible promissory notes (the “12% Subordinated Notes”) on the Closing Date
(as defined in the Note and Warrant Purchase Agreement) and warrants to purchase up to 12.5 million
shares, at an exercise price of $1.00 per share, subject to adjustment, of the Company’s common
stock, par value $.10 per share, on the Closing Date, expiring on the second anniversary of the
Closing Date (the “Warrants,” and together with the 12% Subordinated Notes, the “12% Subordinated
Offering”) thereafter and in accordance with the terms thereof; and

     WHEREAS, the principal amount of each 12% Subordinated Note shall be from time to time in
whole or in part convertible at the option of the holder thereof into shares of the Company’s
common stock at a price per share equal to $1.00 per share, as such price may be adjusted pursuant
to the terms of the Note and Warrant Purchase Agreement; and

     WHEREAS, the Subordinated Noteholders have certain rights (the “Subordinated Noteholder
Rights”) acquired in connection with the purchase of the Company’s Subordinated Notes due September
1, 2009 (“Subordinated Notes”) under that Note and Warrant Purchase Agreement dated March 3, 2006
by and among the Company and the Subordinated Noteholders signatory thereto (the “Subordinated Note
Purchase Agreement”) and the ancillary documents associated therewith, which rights may include,
without limitation, (i) anti-dilution rights and protections, and preemptive and notice rights with
respect to certain issuances of securities by the Company, (ii) rights in connection with negative
covenants provided by the Company in Section 12 of the Subordinated Note Purchase Agreement and
(ii) other rights as described therein; and

     WHEREAS, each of the Subordinated Noteholders desires to waive certain of the Subordinated
Noteholder Rights that it may have in connection with the Note and Warrant Purchase Agreement and
the transactions contemplated thereby and to amend certain provisions of the Subordinated Note
Purchase Agreement;

     NOW, THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency or which is hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:

	 	6.	 	Definitions.
	 
	 	8.	 	As used in this Agreement, the following term shall have the following meaning
ascribed thereto: “Tethys Spin Out” means an offering of Tethys Common Stock with
aggregate gross proceeds to Tethys of not less than $18 million and may include in
connection therewith the sale of shares of Tethys Common Stock by the Company in such
offering in which case the Company at its sole discretion shall be entitled to sell in
such offering up to such number of shares of Tethys Common Stock as would take its
equity interest in Tethys to below 50% of the total issued share capital of Tethys,
provided however, that (a) the offering values Tethys on a pre-money basis at a
minimum of $52 million; and (b) at least 50% of the net proceeds received by the
company following any sale of its shares of Tethys Common Stock are immediately upon
receipt of such proceeds by the Company used to make a prepayment in respect of the
Senior Secured Notes.
	 
	 	9.	 	Capitalized terms used herein but not otherwise defined have the meanings
assigned to them in the Subordinated Note Purchase Agreement.

     7. Consent and Waivers. Notwithstanding the provisions of any Loan Document, in
accordance with Section 19 of the Subordinated Note Purchase Agreement the Subordinated Noteholders
hereby irrevocably and

59

 

unconditionally consent to, and waive any rights they may have under the Subordinated Note
Purchase Agreement or any other Loan Documents in connection with: (i) the 12% Subordinated
Offering, including, without limitation, (w) the terms of the Note and Warrant Purchase Agreement,
(x) the sale and issuance of the 12% Subordinated Notes and the Warrants pursuant to the terms and
provisions of the Note and Warrant Purchase Agreement, (y) the application of any of the negative
covenants set forth in Section 12 of the Subordinated Note Purchase Agreement to the 12%
Subordinated Offering and (z) the Subordinated Subsidiary Guaranty (as defined in the Note and
Warrant Purchase Agreement) to be entered into in connection with the 12% Subordinated Offering,
and (ii) the Tethys Spin Out, including, without limitation (x) the application of the negative
covenants set forth in Section 12 of the Subordinated Note Purchase Agreement; and (y) the release
of Tethys and Tethys Kazakhstan Limited as Subsidiary Guarantors under the Subsidiary Guaranty.
The waivers granted in this Section 2 only apply to the matters described in clause (i) and (ii)
above, and do not constitute any consent to any other action or a waiver of any other provisions of
the Loan Documents, including, without limitation, the provisions of Section 11.7(d) of the
Subordinated Note Purchase Agreement.

     8. Effect on Loan Documents. This Agreement is limited to the specific purpose for
which it is granted and, except as specifically set forth above, (a) shall not be construed as a
consent, waiver or other modification with respect to any term, condition or other provision of any
Loan Document and (b) each of the Loan Documents shall remain in full force and effect and are each
hereby ratified and confirmed.

     9. Miscellaneous.

     (a) Representations and Warranties. Each of the parties hereto hereby represents and
warrants to the other parties hereto that this Waiver Agreement has been duly executed by the party
hereto or by its representatives, thereunto duly authorized and this Waiver Agreement is
enforceable in accordance with its terms except as such enforceability is limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws affecting creditors’ rights generally
or general equitable principles. The undersigned Subordinated Noteholders hereby represent and
warrant to the Company that by virtue of their aggregate holdings of Subordinated Notes they
constitute Required Holders whose consent is required in order to consummate the transactions
contemplated hereby.

     (b) Successors and Assigns. This Agreement shall be binding on and shall inure to the
benefit of the Company and the Subordinated Noteholders and their respective successors and
assigns; provided that the Company may not assign its rights hereunder without the prior written
consent of the Company and the Required Holders. There shall be no third party beneficiaries of
any of the terms and provisions of this Agreement.

     (c) Entire Agreement. This Agreement, including all documents attached hereto,
incorporated by reference herein or delivered in connection herewith, constitutes the entire
agreement of the parties with respect to the subject matter hereof and supersedes all other
understandings, oral or written, with respect to the subject matter
hereof.

     (d) Severability. Whenever possible each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement shall be prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.

     (e) Counterparts.
This Agreement may be executed in any number of counterparts
and by the different parties on separate counterparts, and each such counterpart shall be deemed to
be an original, but all such counterparts shall together constitute but one and the same
instrument. Delivery of an executed counterpart of a signature page to this Agreement by telecopy
shall be effective as delivery of a manually executed counterpart of this Agreement.

60

 

     IN WITNESS WHEREOF, this Waiver Agreement has been duly executed and delivered as of the day
and year first above written.

	 	 	 	 	 	 	 	 	 
	 	 	CANARGO ENERGY CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Dr David Robson 	 	 
	 

	 	 	 	Name:
	 	Dr David Robson	 	 
	 

	 	 	 	Title:
	 	Chairman and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 

SUBORDINATED NOTEHOLDERS:

PENRITH LTD

	 	 	 	 	 
	By:
	 	/s/ Yvonne Koenig 	 	 
	 

	 		 	 
	Name:

	 	Yvonne Koenig	 	 
	Title:
	 	 	 	 
	 
	 
	/s/ Thomas Gipson 	 	 
	Thomas L. Gipson	 	 
	 
	 
	/s/ Robert Gipson 	 	 
	Robert Gipson	 	 

61EX-10.28

 

EXHIBIT 10(28)

SERVICE AGREEMENT

Between

CANARGO ENERGY CORPORATION

and

JEFFREY WILKINS

Pacific House

70 Wellington Street

GLASGOW

G2 6SB

Tel: +44 (0)141 248 6677

Fax: +44 (0)141 221 1390

E-Mail: enquiries@mcgrigors.com

Web Site: http://www.mcgrigors.com

1043007_1

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	Clause	 	Heading	 	Page No.
	 
	 	 	 	 	 	 
	1

	 	DEFINITIONS AND INTERPRETATION
	 	 	4	 
	1.1

	 	Definitions
	 	 	4	 
	1.2

	 	Interpretation and Construction
	 	 	5	 
	1.3

	 	Headings
	 	 	6	 
	 
	 	 	 	 	 	 
	2

	 	THE EMPLOYMENT
	 	 	6	 
	2.1

	 	Appointment
	 	 	6	 
	2.2

	 	Work Permits and warranty
	 	 	6	 
	 
	 	 	 	 	 	 
	3

	 	DURATION OF THE EMPLOYMENT
	 	 	6	 
	3.1

	 	Continuous Employment
	 	 	6	 
	3.2

	 	Duration
	 	 	6	 
	3.3

	 	Payment in lieu of notice
	 	 	7	 
	3.4

	 	Compulsory retirement
	 	 	7	 
	 
	 	 	 	 	 	 
	4

	 	HOURS AND PLACE OF WORK
	 	 	7	 
	4.1

	 	Hours of work
	 	 	7	 
	4.2

	 	Working Time Regulations
	 	 	7	 
	4.3

	 	Place of work
	 	 	7	 
	 
	 	 	 	 	 	 
	5

	 	SCOPE OF THE EMPLOYMENT
	 	 	8	 
	5.1

	 	Duties of the Executive
	 	 	8	 
	5.2

	 	Right to suspend duties and powers
	 	 	8	 
	5.3

	 	Joint appointments
	 	 	9	 
	5.4

	 	Intra-Group transfer or secondment
	 	 	9	 
	 
	 	 	 	 	 	 
	6

	 	REMUNERATION
	 	 	9	 
	6.1

	 	Basic Salary
	 	 	9	 
	6.2

	 	Salary review
	 	 	9	 
	 
	 	 	 	 	 	 
	7

	 	EXPENSES
	 	 	9	 
	7.1

	 	Out-of-pocket expenses
	 	 	9	 
	7.2

	 	Company credit/charge cards
	 	 	9	 
	 
	 	 	 	 	 	 
	8

	 	DEDUCTIONS
	 	 	9	 
	 
	 	 	 	 	 	 
	9

	 	PENSION SCHEME
	 	 	10	 
	9.1

	 	The Scheme
	 	 	10	 
	 
	 	 	 	 	 	 
	10

	 	OTHER INSURANCE & BENEFITS
	 	 	10	 
	10.1

	 	Life assurance
	 	 	10	 
	10.2

	 	Private medical insurance
	 	 	10	 
	10.3

	 	PHI
	 	 	10	 
	10.4

	 	Payments
	 	 	10	 
	10.5

	 	Right to terminate or amend
	 	 	10	 
	10.6

	 	Medical examinations and health records
	 	 	11	 
	 
	 	 	 	 	 	 
	11

	 	HOLIDAYS
	 	 	11	 
	11.1

	 	The holiday year
	 	 	11	 
	11.2

	 	Annual entitlement
	 	 	11	 

 (i) 

 

 

	 	 	 	 	 	 	 
	Clause	 	Heading	 	Page No.
	 
	 	 	 	 	 	 
	11.3

	 	Holiday entitlement on termination
	 	 	11	 
	 
	 	 	 	 	 	 
	12

	 	ABSENCE
	 	 	11	 
	12.1

	 	Absence due to sickness or injury
	 	 	11	 
	12.2

	 	Payment of salary during absence
	 	 	12	 
	12.3

	 	Absence caused by third party negligence
	 	 	12	 
	 
	 	 	 	 	 	 
	13

	 	OTHER INTERESTS
	 	 	13	 
	13.1

	 	Disclosure of other interests
	 	 	13	 
	13.2

	 	Restrictions on other activities and interests of the Executive
	 	 	13	 
	13.3

	 	Transactions with the Company
	 	 	13	 
	 
	 	 	 	 	 	 
	14

	 	CONFIDENTIALITY AND COMPANY DOCUMENTS
	 	 	13	 
	14.1

	 	Restrictions on disclosure/use of Confidential Information
	 	 	13	 
	14.2

	 	Protection of Company documents and materials
	 	 	14	 
	 
	 	 	 	 	 	 
	15

	 	INVENTIONS AND OTHER WORKS
	 	 	14	 
	15.1

	 	Executive to further interests of the Company
	 	 	14	 
	15.2

	 	Disclosure and ownership of Works
	 	 	14	 
	15.3

	 	Protection, registration and vesting of Works
	 	 	14	 
	15.4

	 	Waiver of rights by the Executive
	 	 	15	 
	15.5

	 	Power of Attorney
	 	 	15	 
	15.6

	 	Statutory rights
	 	 	15	 
	 
	 	 	 	 	 	 
	16

	 	TERMINATION
	 	 	15	 
	16.1

	 	Termination events
	 	 	15	 
	16.2

	 	Company’s right to proceed
	 	 	16	 
	16.3

	 	No damages or payment in lieu of notice
	 	 	16	 
	 
	 	 	 	 	 	 
	17

	 	EVENTS UPON TERMINATION
	 	 	16	 
	17.1

	 	Obligations upon termination
	 	 	16	 
	 
	 	 	 	 	 	 
	18

	 	RESTRICTIONS AFTER TERMINATION
	 	 	16	 
	18.1

	 	Definitions
	 	 	16	 
	18.2

	 	Restrictive covenants
	 	 	17	 
	18.3

	 	Application of restrictive covenants to other Group Companies
	 	 	17	 
	18.4

	 	Effect of suspension on Restricted Period
	 	 	18	 
	18.5

	 	Further undertakings
	 	 	18	 
	18.6

	 	Severance
	 	 	18	 
	 
	 	 	 	 	 	 
	19

	 	RECONSTRUCTION AND AMALGAMATIONS
	 	 	18	 
	 
	 	 	 	 	 	 
	20

	 	DISCIPLINARY, DISMISSAL AND GRIEVANCE PROCEDURE
	 	 	19	 
	20.1

	 	Disciplinary procedures
	 	 	19	 
	20.2

	 	Grievance procedure
	 	 	19	 
	 
	 	 	 	 	 	 
	21

	 	GENERAL
	 	 	19	 
	21.1

	 	Provisions which survive termination
	 	 	19	 
	21.2

	 	No collective agreements
	 	 	19	 
	 
	 	 	 	 	 	 
	22

	 	DATA PROTECTION
	 	 	19	 
	 
	 	 	 	 	 	 
	23

	 	AMENDMENTS, WAIVERS AND REMEDIES
	 	 	19	 
	23.1

	 	Amendments
	 	 	19	 
	23.2

	 	Waivers and remedies cumulative
	 	 	19	 

 (ii) 

 

 

	 	 	 	 	 	 	 
	Clause	 	Heading	 	Page No.
	 
	 	 	 	 	 	 
	24

	 	ENTIRE AGREEMENT
	 	 	20	 
	 
	 	 	 	 	 	 
	25

	 	NO OUTSTANDING CLAIMS
	 	 	20	 
	 
	 	 	 	 	 	 
	26

	 	SEVERANCE
	 	 	20	 
	 
	 	 	 	 	 	 
	27

	 	NOTICE
	 	 	20	 
	27.1

	 	Notices and deemed receipt
	 	 	20	 
	27.2

	 	No electronic service
	 	 	21	 
	 
	 	 	 	 	 	 
	28

	 	GOVERNING LAW AND JURISDICTION
	 	 	21	 
	28.1

	 	Governing law
	 	 	21	 
	28.2

	 	Jurisdiction
	 	 	21	 

 (iii) 

 

 

THIS AGREEMENT is made on the 22 day of August 2006
between

	(1)	 	CANARGO ENERGY CORPORATION, a Corporation incorporated under the laws of Delaware, USA and
having an address at 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808 (the
“Company”); and

	(2)	 	JEFFREY WILKINS, residing at The Dell, Nuthurst Street, Horsham, West Sussex, RH13 6LH (the
“Executive”)

WHEREAS the Company wishes to employ the Executive as Chief Financial Officer on the terms and
conditions of this Agreement and the Executive wishes to accept such employment.

IT IS AGREED as follows:-

	1	 	DEFINITIONS AND INTERPRETATION
	 
	1.1	 	Definitions
	 
	 	 	In this Agreement, unless the context otherwise requires:
	 
	 	 	“Basic Salary” means the annual salary, as specified in Clause 6.1 or, as appropriate, the
reviewed annual salary from time to time;
	 
	 	 	“Board” means the Board of directors of the Company from time to time or any duly
authorised committee thereof;
	 
	 	 	“Compensation Committee” means the compensation committee appointed by the Board;
	 
	 	 	“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 (without prejudice to the foregoing generality) any
information about the personal affairs of any of the directors (or their families) of the
Company or any Group Company, 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, trade secrets, 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);
	 
	 	 	“Employment” means the employment of the Executive under this Agreement or, as the context
requires, the duration of that employment;
	 
	 	 	“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;
	 
	 	 	“Intellectual Property Rights” means any and all existing and future intellectual or
industrial property rights in and to any Works (whether registered or unregistered),
including all existing and future patents, copyrights, design rights, database rights,
trade marks, semiconductor topography rights, plant varieties rights, internet
rights/domain names, know-how and any and all applications for any of the foregoing and
any and all rights to apply for any of the foregoing in and to any Works;
	 
	 	 	“Minority Holder” means a person who either solely or jointly holds (directly or through
nominees) any shares or loan capital in any company whose shares are listed or dealt in on
a recognised investment exchange (as that term is defined by Section 285 of the Financial
Services and Markets Act 2000) provided that such holding does not, when aggregated with
any shares or loan capital held by the Executive’s partner and/or his or his partner’s
children under the age of 18, exceed 3% of the shares or loan capital of the class
concerned for the time being issued;
	 
	 	 	“Termination Date” means the date of termination of the Employment; and
	 
	 	 	“Works” means any documents, materials, models, designs, drawings, processes, inventions,
formulae, computer coding, methodologies, know-how, Confidential Information or other
work, performed made, created, devised, developed or discovered by the Executive in the
course of the Employment either alone or with any other person in connection with or in
any way affecting or relating to the business of the Company or any Group Company or
capable of being used or adapted for use therein or in connection therewith.
	 
	1.2	 	Interpretation and Construction
	 
	 	 	Save to the extent that the context or the express provisions of this Agreement require
otherwise, in this Agreement:-

	 	(a)	 	words importing the singular shall include the plural and vice versa;
	 
	 	(b)	 	words importing any gender shall include all other genders;
	 
	 	(c)	 	words importing the whole shall be treated as including reference to any
part of the whole;
	 
	 	(d)	 	any reference to a Clause, the Schedule or part of the Schedule is to the
relevant Clause, Schedule or part of the Schedule of or to this Agreement unless
otherwise specified;
	 
	 	(e)	 	reference to this Agreement or to any other document is a reference to this
Agreement or to that other document as modified, amended, varied, supplemented,
assigned, novated or replaced from time to time;
	 
	 	(f)	 	reference to a provision of law is a reference to that provision as
extended, applied, amended, consolidated or re-enacted or as the application thereof
is modified from time to time and shall be construed as including reference to any
order, instrument, regulation or other subordinate legislation from time to time made
under it [except to the extent that any extension, application, amendment,
consolidation, re-enactment modification or construction takes effect after the date
of this Agreement and has the effect of increasing or extending any obligation or
liability or otherwise adversely affects the rights of, any Party];

 

 

	 	(g)	 	references to a “person” includes any individual, firm, company,
corporation, body corporate, government, state or agency of state, trust or
foundation, or any association, partnership or unincorporated body (whether or not
having separate legal personality) of two or more foregoing;
	 
	 	(h)	 	any phrase introduced by the words “including”, “include”, “in particular”
or any similar expression shall be construed as illustrative only and shall not be
construed as limiting the generality of any preceding words;
	 
	 	(i)	 	the words “other” and “otherwise” shall not be construed eiusdem generis
with any foregoing words where a wider construction is possible.

	1.3	 	Headings
	 
	 	 	The table of contents and the headings in this Agreement are included for convenience only
and shall be ignored in construing this Agreement.
	 
	2	 	THE EMPLOYMENT
	 
	2.1	 	Appointment
	 
	 	 	Subject to the provisions of this Agreement, the Company employs the Executive and the
Executive accepts employment as Chief Financial Officer of the Company with effect from 1
August 2006 notwithstanding the date or dates of this Agreement.
	 
	2.2	 	Work Permits and warranty
	 
	2.2.1	 	The Executive warrants to the Company that by virtue of entering into this Agreement he will
not be in breach of any express or implied obligation to any third party, including any
restrictive covenants.

	2.2.2	 	The Executive warrants that he is legally entitled to work in the United Kingdom and will
throughout the Employment continue to hold a valid UK work permit if appropriate. Should the
Company discover that the Executive does not have permission to live and work in the United
Kingdom or if any such permission is revoked, the Company reserves the right to terminate the
Employment immediately and without notice or pay in lieu of notice and without referring to
the warning stages of the Company’s disciplinary procedure.

	3	 	DURATION OF THE EMPLOYMENT
	 
	3.1	 	Continuous Employment
	 
	 	 	The Executive’s continuous period of employment with the Company commenced on 1 August
2006. No employment with any previous employer shall count as part of the Executive’s
continuous period of employment.
	 
	3.2	 	Duration
	 
	 	 	Subject to the provisions of Clauses 3 and 16.1 the Employment shall continue unless and
until terminated at any time by:-

	 	(a)	 	the Company giving to the Executive not less than six months’ prior written
notice of termination of the Employment; or
	 
	 	(b)	 	the Executive giving to the Company not less than six months’ prior written
notice of termination of the Employment.

 

 

	3.3	 	Payment in lieu of notice
	 
	3.3.1	 	The Company shall be entitled, at its sole discretion, to terminate the Employment
immediately in writing at any time and to make a payment to the Executive, calculated in
accordance with the provisions of Clauses 3.3 (the payment being referred to as a “Notice
Payment”).
	 
	3.3.2	 	For the avoidance of doubt, the Company is not obliged to make a Notice Payment. If the
Company shall decide not to make a Notice Payment, the Executive shall not be entitled to
enforce that payment as a contractual debt nor as liquidated damages.
	 
	3.3.3	 	The Notice Payment will be paid less all deductions that are required or permitted by law to
be made including in respect of income tax, national insurance contributions and any sums due
to the Company or any Group Company.
	 
	3.3.4	 	The Notice Payment will consist of a sum equivalent to the Basic Salary which the Executive
would have received during any notice period during which the Executive would otherwise have
been entitled to work in terms of Clause 3.2 together with any other benefits which he would
have received during that period.
	 
	3.4	 	Compulsory retirement
	 
	 	 	Notwithstanding Clause 3.2, the Employment shall terminate without notice on the
Executive’s 65th birthday.
	 
	4	 	HOURS AND PLACE OF WORK
	 
	4.1	 	Hours of work
	 
	 	 	The Executive agrees that he shall work such hours as are necessary for the proper
performance of his duties. The Executive shall work a minimum of 140 hours per month
based upon an 8 hour day Monday to Friday between the hours of 8.00 am and 6.00 pm, with a
break of one hour for lunch each day.
	 
	4.2	 	Working Time Regulations
	 
	 	 	The Executive agrees to work hours that exceed the maximum average weekly working time
limit of 48 hours imposed by the Working Time Regulations 1998. The Executive may
withdraw his agreement on giving to the Company six months’ prior written notice.
	 
	4.3	 	Place of work
	 
	4.3.1	 	The Executive’s place of work will initially be at the Company’s offices in Guernsey but the
Company will require the Executive to travel to and work at any of the premises of the Company
or the Group as may be required for the proper performance of his duties, including in
particular the Company’s London office, within Guernsey, the United States and countries of
the former Soviet Union. The Executive will be given reasonable notice of any change in his
permanent place of work.

 

 

	5	 	SCOPE OF THE EMPLOYMENT
	 
	5.1	 	Duties of the Executive
	 
	 	 	During the Employment the Executive shall:-

	 	  (a)	 	undertake and carry out to the best of his ability such duties and exercise
such powers in relation to the Company’s business as may from time to time be
assigned to or vested in him by the Board, including without limitation the duties
listed in the Schedule attached hereto;
	 
	 	  (b)	 	in the discharge of those duties and the exercise of those powers observe
and comply with all lawful resolutions, regulations and directions from time to time
made by, or under the authority of, the Board and promptly upon request, give a full
account to the Board or a person duly authorised by the Board of all matters with
which he is entrusted;
	 
	 	  (c)	 	unless prevented by ill-health, holidays or other unavoidable cause, devote
the whole of his working time, attention and skill to the discharge of his duties
hereunder; and
	 
	 	  (d)	 	faithfully and diligently perform his duties and at all times use his best
endeavours to promote and protect the interests of the Company/Group.

	5.2	 	Right to suspend duties and powers

	5.2.1	 	The Company reserves the right in its absolute discretion to suspend all or any of the
Executive’s duties and powers on terms it considers expedient or to require him to perform
only such duties, specific projects or tasks as are assigned to him expressly by the Company
(including the duties of another position) in any case for such period or periods and at such
place or places (including, without limitation, the Executive’s home) as the Company in its
absolute discretion deems necessary (the “Garden Leave”).

	5.2.2	 	The Company may, at its sole discretion, require that during the Garden Leave the Executive
shall not:

	 	(a)	 	enter or attend the premises of the Company or any Group Company;
	 
	 	(b)	 	contact or have any communication with any client or prospective client or
supplier of the Company or any Group Company in relation to the business of the
Company or any Group Company;
	 
	 	(c)	 	contact or have any communication with any employee, officer, director,
agent or consultant of the Company or any Group Company in relation to the business
of the Company or any Group Company;
	 
	 	(d)	 	remain or become involved in any aspect of the business of the Company or
any Group Company except as required by such companies; or
	 
	 	(e)	 	work either on his own account or on behalf of any other person.

	5.2.3	 	During Garden Leave, the Executive will continue to receive his Basic Salary and benefits.

 

 

	5.2.4	 	For the avoidance of doubt, the Company may exercise its powers under this Clause 5.2 at any
time during the Employment including after notice of termination has been given by either
party.
	 
	5.3	 	Joint appointments
	 
	 	 	The Company shall be at liberty to appoint any other person or persons to act jointly with
the Executive in any position to which he may be assigned from time to time.
	 
	5.4	 	Intra-Group transfer or secondment
	 
	 	 	The Company may at its sole discretion transfer this Agreement or second the Executive to
any Group Company at any time.
	 
	6	 	REMUNERATION
	 
	6.1	 	Basic Salary
	 
	 	 	During the Employment the Company shall pay the Executive a Basic Salary of not less than
£120,000 per annum. The Basic Salary shall accrue from day to day and be payable by
credit transfer in equal monthly instalments in arrears on or around the 15th
day of each calendar month or otherwise as arranged from time to time.
	 
	6.2	 	Salary review
	 
	 	 	The Basic Salary shall be reviewed annually at the discretion of the Compensation
Committee. The Company is not obliged to increase the Basic Salary at any review.
	 
	7	 	EXPENSES
	 
	7.1	 	Out-of-pocket expenses
	 
	 	 	The Company shall reimburse to the Executive (against receipts or other appropriate
evidence as the Board may require) the amount of all out-of-pocket expenses reasonably and
properly incurred by him in the proper discharge of his duties hereunder.
	 
	7.2	 	Company credit/charge cards
	 
	 	 	In the event that the Company issues a Company sponsored credit or charge card to the
Executive he shall use such card only for expenses reimbursable under Clause 7.1 and shall
return it to the Company when so requested and in any event immediately on termination of
the Employment howsoever arising.
	 
	8	 	DEDUCTIONS
	 
	 	 	The Executive agrees that the Company may deduct from any sums due to him under this
Agreement any sums due by him to the Company including, without limitation, any debits to
his Company credit or charge card not authorised by the Company, the Executive’s pension
contributions (if any), any overpayments, loans or advances made to him by the Company,
the cost of repairing any damage or loss to the Company’s property caused by him and any
losses suffered by the Company as a result of any negligence or breach of duty by the
Executive.

 

 

	9	 	PENSION SCHEME
	 
	9.1	 	The Scheme
	 
	 	 	There is no pension scheme and there is no contracting-out certificate in terms of the
Pension Schemes Act 1993. However, the Company will pay a monthly contribution of 9% of
the Executive’s Basic Salary into a personal pension scheme held by the Executive provided
the Company is satisfied that the personal pension scheme is a properly authorised scheme
for tax and regulatory purposes.
	 
	10	 	OTHER INSURANCE & BENEFITS
	 
	10.1	 	Life assurance
	 
	 	 	The Company will provide the Executive with the benefit of death in service life assurance
which, in the event of death itself will pay a maximum amount of 4 times the Executive’s
Basic Salary, subject to the terms and conditions of the assurance policy.
	 
	10.2	 	Private medical insurance
	 
	 	 	The Company shall provide the Executive with PPP Healthcare cover at the expense of the
Company, always subject to the terms and conditions of the PPP Healthcare scheme from time
to time.
	 
	10.3	 	Travel Insurance
	 
	 	 	The Company shall provide the Executive with travel insurance to cover the Executive when
travelling on Company business at the expense of the Company, always subject to terms and
conditions of the travel insurance policy from time to time.
	 
	10.4	 	PHI
	 
	 	 	The Executive shall be entitled to participate in a Permanent Health Insurance (“PHI”)
scheme always subject to the following terms and conditions:-

	 	(a)	 	the terms and conditions of the PHI scheme from time to time;
	 
	 	(b)	 	the insurer or provider of the Health Care Scheme honouring the claim in
respect of the Executive; and
	 
	 	(c)	 	the Executive’s acceptance of such variations to his terms and conditions
of employment as may from time to time be required by the Company.

	10.5	 	Payments
	 
	10.5.1	 	All payments under a PHI scheme or the like will be subject to the deductions required by
law.
	 
	10.5.2	 	Where payments are made under a PHI scheme all other benefits provided to or in respect of
the Executive will cease from the start of those payments (if they have not done so already),
unless the Company is fully reimbursed by the PHI scheme for the cost of providing the
benefit.
	 
	10.6	 	Right to terminate or amend
	 
	 	 	The Company reserves the right at its absolute discretion to terminate or amend at any
time any Health Care Scheme or the Executive’s membership of any scheme. The Company will

 

 

	 	 	provide an equivalent benefit unless, in the reasonable opinion of the Board, it is unable
to secure insurance at reasonable premiums due to the medical condition of the Executive.

	10.7	 	Medical examinations and health records
	 
	 	 	The Executive shall submit to such medical examinations by a doctor selected by the Board
as may reasonably be required by the Board from time to time. The Executive authorises
the Company to make applications on his behalf for access to any health records relating
to him for the purposes of Section 3 of the Access to Health Records Act 1990, provided
that the Executive is given prior notice of any application being made. Copies of any
health records provided to the Board as a result of any application shall be made
available to the Executive. The fees and expenses incurred in the provision of any
medical examination and of obtaining access to the health records shall be borne by the
Company.
	 
	11	 	HOLIDAYS
	 
	11.1	 	The holiday year
	 
	 	 	The Company’s holiday year runs from 1st January to 31st December. Holidays can only be
taken with the prior permission of the Chief Executive Officer.
	 
	11.2	 	Annual entitlement
	 
	11.2.1	 	The Executive’s annual entitlement to paid holidays is to those public or customary holidays
recognised by the Company in any holiday year and in addition, 25 contractual days’ holiday.
	 
	11.2.2	 	Entitlement to contractual holidays is accrued pro rata throughout the holiday year. The
Executive will be entitled to take public and customary holidays on the days that they are
recognised by the Company during the holiday year.
	 
	11.2.3	 	The Executive is not entitled to carry any unused holiday entitlement forward to the next
holiday year without the permission of the Company.
	 
	11.3	 	Holiday entitlement on termination
	 
	 	 	Upon notice of termination of the Employment being served by either party, the Company may
require the Executive to take any unused holidays accrued at that time during any notice
period. Alternatively, the Company may, at its discretion, on termination of the
Employment, make a payment in lieu of accrued contractual holiday entitlement. The
Executive 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 Date. Any sums so
due may be deducted from any money owing to the Executive by the Company.
	 
	12	 	ABSENCE
	 
	12.1	 	Absence due to sickness or injury
	 
	 	 	If the Executive is absent from work due to sickness or injury he shall:

	 	(a)	 	immediately inform the Company of his sickness or injury;
	 
	 	(b)	 	in respect of a consecutive period of absence lasting less than 8 days
(including weekends), send to the Company a self-certification form in a format
stipulated by the Company; and

 

 

	 	(c)	 	in respect of any absence exceeding 7 consecutive days (including
weekends), send to the Company a medical certificate signed by a doctor covering the
further consecutive period of absence.

	12.2	 	Payment of salary during absence
	 
	12.2.1	 	Subject to the Executive complying with the terms of Clause 12.1, the Company shall
continue to pay Basic Salary and other benefits during any period of absence due to sickness
or injury for up to a maximum period of 10 weeks in any period of 12 consecutive months (the
12 month period referred to as the “Entitlement Period”) and thereafter a sum equivalent to
50% of Basic Salary during any further period of absence due to sickness or injury in the same
Entitlement Period for up to a maximum period of 10 weeks unless the Employment is terminated
in terms of Clauses 3 or 16. The first Entitlement Period will begin on the first day of
absence and any subsequent Entitlement Period will start on the first day of any absence
occurring outside an enduring Entitlement Period.
	 
	12.2.2	 	Payment of the Basic Salary in terms of Clause 12.2.1 shall be made less:

	 	(a)	 	an amount equivalent to any Statutory Sick Pay payable to the Executive;
	 
	 	(b)	 	any sums which may be received by the Executive under any insurance policy
effected by the Company; and
	 
	 	(c)	 	any other benefits or sums which the Executive receives in terms of the
Employment or under any relevant legislation.

	12.2.3	 	Once entitlement to Basic Salary under Clause 12.2.1 lapses, the Executive shall have no
right to any benefit or emolument from the Company except any permanent health insurance
benefit in accordance with Clause 10 and/or any remaining entitlement to Statutory Sick Pay.
	 
	12.3	 	Absence caused by third party negligence
	 
	 	 	If the Executive’s absence is caused by the negligence of a third party in respect of
which damages are recoverable, then all sums paid by the Company during the period of
absence in terms of Clause 12.2 shall constitute loans to the Executive who shall:-

	 	(a)	 	immediately notify the Company of all the relevant circumstances and of any
claim, compromise, settlement or Judgment made or awarded; and
	 
	 	(b)	 	if the Company so requires, refund to it an amount determined by the
Company , not exceeding the lesser of:

	 	(i)	 	the amount of damages recovered by him in respect of loss
of earnings during the period of absence under any compromise, settlement or
Judgment; and
	 
	 	(ii)	 	the sums advanced to him by the Company in respect of the
period of incapacity.

 

 

	13	 	OTHER INTERESTS
	 
	13.1	 	Disclosure of other interests
	 
	 	 	The Executive shall disclose to the Board any interest of his own (or that of his partner
or of any child of his or of his partner under eighteen years of age):-

	 	(a)	 	in any trade, business or occupation whatsoever which is in any way similar
to any of those in which the Company or any Group Company is involved; and
	 
	 	(b)	 	in any trade, business or occupation carried on by any supplier or customer
of the Company or any Group Company whether or not such trade, business or occupation
is conducted for profit or gain.

	13.2	 	Restrictions on other activities and interests of the Executive

	13.2.1	 	During the Employment the Executive shall not at any time, without the prior written consent
of the Board, either alone or jointly with any other person, carry on or be directly or
indirectly employed, engaged, concerned or interested in any business, prospective business or
undertaking other than a Group Company. Nothing contained in this Clause shall preclude the
Executive from being a Minority Holder unless the holding is in a company that is a direct
business competitor of the Company or any Group Company in which case, the Executive shall
obtain the prior consent of the Board to the acquisition or variation of such holding.

	13.2.2	 	If the Executive, with the consent of the Board, accepts any other appointment he must keep
the Company accurately informed of the amount of time he spends working under that
appointment.

	13.3	 	Transactions with the Company
	 
	 	 	Subject to any regulations issued by the Company, the Executive shall not be entitled to
receive or obtain directly or indirectly any discount, rebate or commission as a result of
any sale or purchase of goods or services effected or other business transacted (whether
or not by him) by or on behalf of the Company or any Group Company and if he (or any
person in which he is interested) obtains any discount, rebate or commission he shall
account to the Company for the amount received by him (or a due proportion of the amount
received by the person having regard to the extent of his interest therein).
	 
	14	 	CONFIDENTIALITY AND COMPANY DOCUMENTS
	 
	14.1	 	Restrictions on disclosure/use of Confidential Information
	 
	 	 	The Executive must not either during the Employment (except in the proper performance of
his duties) or at any time (without limit) after the Termination Date:

	 	(a)	 	divulge or communicate to any person;
	 
	 	(b)	 	use for his own purposes or for any purposes other than those of the
Company or any Group Company; or
	 
	 	(c)	 	through any failure to exercise due care and diligence, cause any
unauthorised disclosure of;

 

 

	 	 	 	any Confidential Information. The Executive must at all times use his best endeavours to
prevent publication or disclosure of any Confidential Information. These restrictions
shall cease to apply to any information which shall become available to the public
generally otherwise than through the default of the Executive.

	14.2	 	Protection of Company documents and materials
	 
	 	 	All notes, records, lists of customers, suppliers and employees, correspondence, computer
and other discs or tapes, data listings, codes, keys and passwords, designs, drawings and
other documents or material whatsoever (whether made or created by the Executive or
otherwise and in whatever medium or format) relating to the business of the Company or any
Group Company or any of its or their clients (and any copies of the same):

	 	(a)	 	shall be and remain the property of the Company or the relevant Group
Company or client; and
	 
	 	(b)	 	shall be handed over by the Executive to the Company or the relevant Group
Company or client on demand by the Company and in any event on the termination of the
Employment.

	15	 	INVENTIONS AND OTHER WORKS
	 
	15.1	 	Executive to further interests of the Company
	 
	 	 	The Company and the Executive agree that the Executive may make or create Works during the
Employment and agree that in this respect the Executive is obliged to further the
interests of the Company and any Group Company.
	 
	15.2	 	Disclosure and ownership of Works
	 
	 	 	The Executive must immediately disclose to the Company all Works and all Intellectual
Property Rights. Both the Works and all Intellectual Property Rights will (subject to
sections 39 to 43 of the Patents Act 1977) belong to and be the absolute property of the
Company or any other person the Company may nominate.
	 
	15.3	 	Protection, registration and vesting of Works
	 
	 	 	The Executive shall immediately on request by the Company (whether during or after the
Termination Date) and at the expense of the Company:

	 	(a)	 	apply or join with the Company or any Group Company in applying for any
Intellectual Property Rights or other protection or registration (“Protection”) in
the United Kingdom and in any other part of the world for, or in relation to, any
Works;
	 
	 	(b)	 	execute all instruments and do all things necessary for vesting all
Intellectual Property Rights or Protection when obtained and all right, title and
interest to and in the same absolutely and as sole beneficial owner in the Company or
such Group Company or other person as the Company may nominate; and
	 
	 	(c)	 	sign and execute any documents and do any acts reasonably required by the
Company in connection with any proceedings in respect of any applications and any
publication or application for revocation of any Intellectual Property Rights or
Protection.

 

 

	15.4	 	Waiver of rights by the Executive
	 
	 	 	The Executive hereby irrevocably and unconditionally waives all rights under Chapter IV
Copyright, Designs and Patents Act 1988 and any other moral rights which he may have in
the Works, in whatever part of the world such rights may be enforceable including:

	 	(a)	 	the right conferred by section 77 of that Act to be identified as the
author of any such Works; and
	 
	 	(b)	 	the right conferred by section 80 of that Act not to have any such Works
subjected to derogatory treatment.

	15.5	 	Power of Attorney
	 
	 	 	The Executive hereby irrevocably appoints the Company to be his attorney and in his name
and on his behalf to execute any such act and to sign all deeds and documents and
generally to use his name for the purpose of giving to the Company the full benefit of
this Clause. The Executive agrees that, with respect to any third parties, a certificate
signed by any duly authorised officer of the Company that any act or deed or document
falls within the authority hereby conferred shall be conclusive evidence that this is the
case.
	 
	15.6	 	Statutory rights
	 
	 	 	Nothing in this Clause 15 shall be construed as restricting the rights of the Executive or
the Company under sections 39 to 43 of the Patents Act 1977.
	 
	16	 	TERMINATION
	 
	16.1	 	Termination events
	 
	 	 	Notwithstanding the provisions of Clauses 3 and 10, the Company shall be entitled, but not
bound, to terminate the Employment:

	 	(a)	 	with immediate effect by giving to the Executive notice in writing at any
time after the occurrence of any one or more of the following events:-

	 	(i)	 	if the Executive is guilty of any gross misconduct or
behaviour which tends to bring himself or the Company or any Group Company
into disrepute; or
	 
	 	(ii)	 	if the Executive commits any material or persistent
breach of this Agreement, or fails to comply with any reasonable order or
direction of the Board, or fails to perform his duties to the standard
required by the Board; or
	 
	 	(iii)	 	if he becomes insolvent or bankrupt or compounds with or
grants a trust deed for the benefit of his creditors; or
	 
	 	(iv)	 	if his behaviour (whether or not in breach of this
Agreement) can reasonably be regarded as materially prejudicial to the
interests of the Company or any Group Company, including if he is found
guilty of any criminal offence punishable by imprisonment (whether or not
such sentence is actually imposed); or

 

 

	 	(v)	 	has an order made against him disqualifying him from
acting as a company director; or
	 
	 	(vi)	 	if he becomes of unsound mind; or

	 	(b)	 	by giving not less than six months’ notice in writing if the Executive has
been prevented by reason of ill health, injury or some other reason beyond his
control, from performing his duties under this Agreement for a period or periods
aggregating at least ninety days in the preceding period of twelve consecutive months
provided that if at any time during the period of such notice and before the
termination of the Employment the Executive shall provide a medical certificate
satisfactory to the Board to the effect that he has fully recovered his physical
and/or mental health and that no recurrence of illness or incapacity can reasonably
be anticipated, the Company shall withdraw the notice.

	16.2	 	Company’s right to proceed
	 
	 	 	While the Company will endeavour to deal fairly with allegations against the Executive, it
reserves the right to proceed under Clause 16.1 without prior notice and without holding a
hearing or inviting any representations from the Executive.
	 
	16.3	 	No damages or payment in lieu of notice
	 
	 	 	In the event of the Employment being terminated in accordance with Clause 16.1(a), the
Executive shall not be entitled to receive any payment in lieu of notice nor make any
claim against the Company or any Group Company for damages for loss of office or
termination of the Employment. Regardless of this, the termination shall be without
prejudice to the continuing obligations of the Executive under this Agreement.
	 
	17	 	EVENTS UPON TERMINATION
	 
	17.1	 	Obligations upon termination
	 
	 	 	Immediately upon the termination of the Employment howsoever arising or immediately at the
request of the Board at any time after either the Company or the Executive has served
notice of termination of the Employment, the Executive shall deliver to the Company all
Works, materials within the scope of Clause 14.2 and all other materials and property
including credit or charge cards, mobile telephone, computer equipment, disks and
software, passwords, encryption keys or the like, keys, security pass, letters,
stationery, documents, files, films, records, reports, plans and papers (in whatever
format including electronic) and all copies thereof used in or relating to the business of
the Company or the Group which are in the possession of or under the control of the
Executive.
	 
	18	 	RESTRICTIONS AFTER TERMINATION
	 
	18.1	 	Definitions
	 
	 	 	Since the Executive is likely to obtain Confidential Information in the course of the
Employment and personal knowledge of and influence over suppliers, customers, clients and
employees of the Company and Group Companies, the Executive hereby agrees with the Company
that in addition to the other terms of this Agreement and without prejudice to the other
restrictions imposed upon him by law, he will be bound by the covenants and undertakings
contained in Clauses 18.2 to 18.5. In this Clause 18, unless the context otherwise
requires:

 

 

	 	 	“Critical Employee” means any person who was a director, employee or consultant of the
Company at any time within the Relevant Period who by reason of that position and in
particular his seniority and expertise or knowledge of Confidential Information or
knowledge of or influence over the clients, customers or contacts of the Company is likely
to cause damage to the Company if he were to leave the employment of the Company and
become employed by a competitor of the Company;
	 	 	“Relevant Period” means the period of twelve months immediately preceding the Termination
Date;
	 
	 	 	“Restricted Area” means any country in the world where, on the Termination Date, the
Company or any Group Company has a valid licence for the exploration and/or production of
oil and/or gas; and
	 
	 	 	“Restricted Period” means the period commencing on the Termination Date and, subject to
the terms of Clause 18.4, continuing for twelve months.

	18.2	 	Restrictive covenants
	 
	 	 	The Executive confirms that, neither during the Employment nor during the Restricted
Period, without the prior written consent of the Company, whether by himself, through his
employees or agents or otherwise and whether on his own behalf or on behalf of any person,
directly or indirectly, he will not:

	 	(a)	 	so as to compete with the Company within the Restricted Area, be employed
or engaged or at all interested in (except as a Minority Holder) a business or person
which is involved in the business of exploration or production of oil and/or gas, if
the business is or seeks to be in competition with the Company;
	 
	 	(b)	 	solicit or induce or endeavour to solicit or induce any person who, on the
Termination Date, was a Critical Employee (and with whom the Executive had dealings
during the Relevant Period) to cease working for or providing services to the
Company, whether or not any such person would thereby commit a breach of contract;
	 
	 	(c)	 	employ or otherwise engage any Critical Employee in the business of
exploration or production of oil and/or gas, if that business is, or seeks to be, in
competition with the Company; or
	 
	 	(d)	 	solicit or induce or endeavour to solicit or induce any Government body or
agency or any other third party in the Restricted Area to cease to deal with the
Company and shall not interfere in any way with any relationship between any such
Government body or agency or other third party and the Company.

	18.3	 	Application of restrictive covenants to other Group Companies
	 
	 	 	Clause 18.2 shall also apply as though references to the “Company” in Clauses 18.1 and
18.2 include references to each Group Company in relation to which the Executive has in
the course of the Employment or by reason of rendering services to or holding office in
such Group Company:

	 	(a)	 	acquired knowledge of its trade secrets or Confidential Information; or
	 
	 	(b)	 	had personal dealings with its Customers or Prospective Customers; or

 

 

	 	(c)	 	supervised directly or indirectly employees having personal dealings with
its Customers or Prospective Customers;
	 
	 	 	 	but so that references to the “Company” shall for this purpose be deemed to be references
to the relevant Group Company. The obligations undertaken by the Executive pursuant to
this Clause 18.3 shall, with respect to each Group Company, constitute a separate and
distinct covenant and the invalidity or unenforceability of any such covenant shall not
affect the validity or enforceability of the covenants in favour of any other Group
Company.

	18.4	 	Effect of suspension on Restricted Period
	 
	 	 	If the Company exercises its right to suspend the Executive’s duties and powers under
Clause 5.2 after notice of termination of the Employment has been given, the aggregate of
the period of the suspension and the Restricted Period shall not exceed twelve months and
if the aggregate of the two periods would exceed twelve months, the Restricted Period
shall be reduced accordingly.
	 
	18.5	 	Further undertakings
	 
	 	 	The Executive hereby undertakes to the Company that he will not at any time:

	 	(a)	 	during the Employment or after the Termination Date engage in any trade or
business or be associated with any person engaged in any trade or business using any
trading names used by the Company or any Group Company including the names or
incorporating the words “CanArgo” or “CanArgo Energy Corporation”; or
	 
	 	(b)	 	after the Termination Date represent or otherwise indicate any association
or connection with the Company or any Group Company or for the purpose of carrying on
or retaining any business represent or otherwise indicate any past association with
the Company or any Group Company.

	18.6	 	Severance
	 
	 	 	The restrictions in this Clause 18 (on which the Executive has had the opportunity to take
independent advice, as the Executive hereby acknowledges) are separate and severable
restrictions and are considered by the parties to be reasonable in all the circumstances.
It is agreed that if any such restrictions, by themselves, or taken together, shall be
adjudged to go beyond what is reasonable in all the circumstances for the protection of
the legitimate interests of the Company or a Group Company but would be adjudged
reasonable if some part of it were deleted, the relevant restriction or restrictions shall
apply with such deletion(s) as may be necessary to make it or them valid and enforceable.
	 
	19	 	RECONSTRUCTION AND AMALGAMATIONS
	 
	 	 	If the Company undergoes any process of reconstruction or amalgamation (whether or not
involving the liquidation of the Company) and the Executive is offered employment by the
successor or proposed successor to the Company or any Group Companies on terms not
materially less favourable overall to those under this Agreement whether as to duties,
responsibilities, remuneration or otherwise and the Executive does not accept the offer
within one month of it being made, then the Executive shall have no claim against the
Company or the successor to the Company in respect of termination of this Agreement and
the Employment.

 

 

	20	 	DISCIPLINARY, DISMISSAL AND GRIEVANCE PROCEDURE
	 
	20.1	 	Disciplinary procedures
	 
	 	 	Any disciplinary or dismissal action taken in connection with the Employment will usually
be taken in accordance with the Company’s normal disciplinary and dismissal procedures
(which are workplace rules and not contractually binding) a copy of which is available
from the Secretary of the Company. If the Executive is dissatisfied with any disciplinary
or dismissal decision taken in relation to the Executive, the Executive should refer to
the disciplinary and dismissal procedure.
	 
	20.2	 	Grievance procedure
	 
	 	 	If the Executive wishes to obtain redress of any grievance relating to the Employment, he
shall apply in writing to the Chief Executive Officer, setting out the nature and details
of any such grievance or dissatisfaction. Subsequent steps in the Company’s grievance
procedures are set out in the Company’s normal grievance procedures (which are workplace
rules and not contractually binding) a copy of which is available from the Secretary of
the Company.
	 
	21	 	GENERAL
	 
	21.1	 	Provisions which survive termination
	 
	 	 	Any provision of this Agreement which is expressed or intended to have effect on, or to
continue in force after, the termination of this Agreement shall have such effect, or, as
the case may be, continue in force, after such termination.
	 
	21.2	 	No collective agreements
	 
	 	 	There are no collective agreements that directly affect the terms and conditions of the
Employment.
	 
	22	 	DATA PROTECTION
	 
	 	 	The Executive acknowledges and agrees that the Company is permitted to hold personal
information about the Executive as part of its personnel and other business records and
may use such information in the course of the Company‘s or the Group‘s business. The
Executive agrees that the Company may disclose such information to third parties in the
event that such disclosure is in the Company‘s view required for the proper conduct of the
Company‘s business or that of any Group Company. This Clause applies to information held,
used or disclosed in any medium.
	 
	23	 	AMENDMENTS, WAIVERS AND REMEDIES
	 
	23.1	 	Amendments
	 
	 	 	No amendment or variation of this Agreement or any of the documents referred to in it
(other than an alteration in the Basic Salary) shall be effective unless it is in writing
and signed by or on behalf of each of the parties.
	 
	23.2	 	Waivers and remedies cumulative
	 
	23.2.1	 	The rights of each party under this Agreement:

	 	(a)	 	may be exercised as often as necessary;

 

 

	 	(b)	 	are cumulative and not exclusive of its rights under the general law; and
	 
	 	(c)	 	may be waived only in writing and specifically.

Delay in exercising or non-exercise of any right is not a waiver of that right.

	23.2.2	 	Any right of rescission conferred upon the Company by this Agreement shall be in addition to
and without prejudice to all other rights and remedies available to it.
	 
	24	 	ENTIRE AGREEMENT
	 
	 	 	This Agreement and the documents referred to in it, constitute the entire agreement and
understanding of the parties and supersede any previous agreement between the parties
relating to the subject matter of this Agreement.
	 
	25	 	NO OUTSTANDING CLAIMS
	 
	 	 	The Executive hereby acknowledges that he has no outstanding claims of any kind against
the Company or any Group Company.
	 
	26	 	SEVERANCE
	 
	 	 	If any provision of this Agreement is or becomes illegal, invalid or unenforceable in any
jurisdiction, that shall not affect:

	 	(a)	 	the legality, validity or enforceability in that jurisdiction of any other
provisions of this Agreement; or
	 
	 	(b)	 	the legality, validity or enforceability in any other jurisdiction of that
or any other provision of this Agreement.

	27	 	NOTICE
	 
	27.1	 	Notices and deemed receipt
	 
	 	 	Any notice hereunder shall be given by either party to the other either personally to the
Executive or the Company Secretary (as appropriate) or sent in the case of the Company, to
its registered office for the time being and, in the case of the Executive, to his address
last known to the Company. Any such notice shall be in writing and shall be given by
letter delivered by hand or sent by first class prepaid recorded delivery or registered
post or by facsimile transmission. Any such notice shall be deemed to have been
received:-

	 	(a)	 	if delivered personally, at the time of delivery;
	 
	 	(b)	 	in the case of pre-paid recorded delivery or registered post, 48 hours from
the date of posting; and
	 
	 	(c)	 	in the case of registered airmail, five days from the date of posting; and
	 
	 	(d)	 	in the case of fax, at the time of transmission;

provided that if deemed receipt occurs before 9am on a business day the notice shall be
deemed to have been received at 9am on that day and if deemed receipt occurs after 5pm on
a business day, or on a day which is not a business day, the notice shall be deemed to
have been received at 9am on the next business day. For the purpose of this Clause,
“business

 

 

day” means any day which is not a Saturday, a Sunday or a public holiday in the place at
or to which the notice is left or sent.

	27.2	 	No electronic service
	 
	 	 	For the avoidance of doubt, notice given under this Agreement shall not be validly served
if sent by e-mail.

	28	 	GOVERNING LAW AND JURISDICTION
	 
	28.1	 	Governing law
	 
	 	 	This Agreement shall be governed and construed in accordance with the law of England &
Wales.
	 
	28.2	 	Jurisdiction
	 
	 	 	Each party hereby submits to the exclusive jurisdiction of the English courts as regards
any claim, dispute or matter arising out of or in connection with this Agreement and its
implementation and effect.

EXECUTED and DELIVERED as a Deed on the date first above written.

By CanArgo Energy Corporation acting by

	 	 	 
	/s/ Vincent McDonnell

	 	Director
	 

V McDonnell

	 	 Full
Name
	 
	 	 
	/s/ Elizabeth Anne Landles

	 	Director/Secretary
	 

Elizabeth Anne Landles

	 	 Full
Name
	 
	 	 
	EXECUTED and DELIVERED as a Deed by
	 
	 	 
	Jeffrey Wilkins
	 	 
	 
	 	 
	/s/ Jeffrey Wilkins
	 	 
	 

in the presence of

	 	 
	 
	 	 
	/s/ Barry Moroney

	 	Witness
	 

Barry Moroney

	 	 Full
Name
	2 CRANBROOK, SS, GUERNSEY

	 	Address
	ACCOUNTANT

	 	Occupation

 

 

SCHEDULE

	 	 	 
	Job Description:

	 	Chief Financial Officer (CFO)
	 
	 	 
	Employed by:

	 	CanArgo Energy Corporation (the “Company”), as an Officer
of the Company.
	 
	 	 
	Location:

	 	initially Guernsey, with travel to London, the United
States and the countries of the former Soviet Union
	 
	 	 
	Reporting to:

	 	Chief Executive Officer of CanArgo

Specific Responsibilities:

Overall management of the Finance function of the Company. Specific responsibilities in the area
of financial and project accounting, management and control include:-

Accounting:

	1	 	Assess overall accounting needs of the organisation;
	 
	2	 	Provide technical accounting services to the CanArgo group;
	 
	3	 	Monitor and ensure corporate compliance with new accounting standards;
	 
	4	 	Manage monthly payroll (all companies) and directors compensation.

Finance:

	1	 	Ensure that the Company’s financial records are accurately maintained;
	 
	2	 	Take responsibility for all financial functions including: A/P; A/R; Cash Management; G/L;
Reconciliations.
	 
	3	 	Supervise and review consolidated financial statement preparation process;
	 
	4	 	Take responsibility for quarterly and annual financial statements including management
discussion and analysis and notes thereto for inclusion in 10-Q and 10-K and filing of same;
	 
	5	 	Chief liaison with auditors during review of 10-Q, 10-K and SOX 404;
	 
	6	 	Co-ordinate prospectus and other filing documents including liaison with legal counsel,
auditors, etc.
	 
	7	 	Ensure compliance with SEC and OSE regulations including filing of S-8’s, 8-K’s;
	 
	8	 	Proposals on corporate funding and assistance with fund raising;
	 
	9	 	Monitor and ensure compliance with initial and subsequent disbursement conditions of debt or
other loans;

 

 

	10	 	Liaise with legal counsel, corporate secretary to ensure that corporate investments are
adequately protected/registered;
	 
	11	 	Prepare and maintain consolidated budget and present to Board of Directors;
	 
	12	 	Review quarterly cost recovery submissions under each Production Sharing Contract.

Treasury:

	1	 	Monitor cash balances;
	 
	2	 	Monitor and advice on term deposit investment;
	 
	3	 	Liaise with bank(s);
	 
	4	 	Prepare and monitor letter of credit applications/status, escrow accounts, etc.;
	 
	5	 	Prepare vendor credit applications;
	 
	6	 	Review and sign cheques/wires for all outgoing payments.

Taxation:

	1	 	Ensure compliance with applicable federal tax codes in US, Canada, UK, Cyprus, Georgia and
Kasakhstan;
	 
	2	 	Prepare or review annual corporate tax filings in above jurisdictions;
	 
	3	 	Prepare annual franchise tax or other corporate tax filings; questionnaires;
	 
	4	 	Defend, if necessary, the corporation against unfair or frivolous tax claims or positions;
	 
	5	 	Develop appropriate corporate tax planning strategies.

Internal Controls:

	1	 	Implement adequate internal controls and procedures to optimise resources, safeguard assets,
prevent and detect fraud and maintain reliable control systems;
	 
	2	 	Update and maintain Accounting Policy and Procedures Manual;
	 
	3	 	Ensure compliance with Sarbanes Oxley and other relevant legislation.

Insurance:

	1	 	Ensure the Company maintains adequate insurance coverage for existing group assets;
	 
	2	 	Assess or add coverage for new activities, assets;
	 
	3	 	Review annual insurance and other corporate practice applications;
	 
	4	 	Supervise preparation and follow-up of insurance claims.

 

 

Job Description:

This position is responsible for the overall financial management of the Company with the
objectives of ensuring finance is available for agreed programmes, maintaining tight financial
control of the business and ensuring financial reporting to the Company’s regulatory bodies is
complied with in full. The position is based in Guernsey, but will require travel to the Company’s
operating areas and more generally. The main finance function is based in Guernsey but as most
expenditure and all income is currently received from Georgia, this position will be responsible
for the overall finance function in Georgia, either directly or indirectly through the Company’s
Georgian operating companies. As a senior officer of the Company this position will work closely
with the CEO, COO and Corporate Secretary and will be involved in discussions on overall corporate
strategy, financing, etc. The position will be expected to present to the Board of Directors of
the Company and to the Company’s Audit Committee.

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