Document:

Exhibit 10.38

 

 

 

 

 

 

 

 

 

 

 

ANTURIE BETEILIGUNGSVERWALTUNGS GmbH

 

KAZAKHMYS POWER B.V.

 

KAZAKHMYS PLC

 

 

 

 

 

 

 

 

AGREEMENT

 

for the sale and purchase of
100% of the issued share 

capital of AES Kazakhstan
Holdings BV, AES 

Ekibastuz Holdings BV and
Emerging Energy 

Investments &
Holdings BV

 

 

 

 

 

5 February 2008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CONTENTS

 

	
  Clause

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  SALE AND PURCHASE

  	
  3

  
	
  2.

  	
   

  	
  PRICE

  	
  4

  
	
  3.

  	
   

  	
  CONDITIONS TO CLOSING

  	
  5

  
	
  4.

  	
   

  	
  CLOSING

  	
  7

  
	
  5.

  	
   

  	
  INDEMNITY IN RESPECT OF
  CONSENTS

  	
  8

  
	
  6.

  	
   

  	
  SELLER GROUP
  REORGANISATION

  	
  8

  
	
  7.

  	
   

  	
  SELLER WARRANTIES

  	
  9

  
	
  8.

  	
   

  	
  PURCHASER WARRANTIES

  	
  13

  
	
  9.

  	
   

  	
  CONDUCT OF PURCHASER
  CLAIMS

  	
  13

  
	
  10.

  	
   

  	
  CHANGES OF NAME

  	
  14

  
	
  11.

  	
   

  	
  INTRA-GROUP SERVICES

  	
  15

  
	
  12.

  	
   

  	
  NO RIGHTS OF RESCISSION OR
  TERMINATION

  	
  15

  
	
  13.

  	
   

  	
  PAYMENTS

  	
  15

  
	
  14.

  	
   

  	
  INTER-COMPANY DEBT

  	
  16

  
	
  15.

  	
   

  	
  ANNOUNCEMENTS

  	
  16

  
	
  16.

  	
   

  	
  CONFIDENTIALITY

  	
  16

  
	
  17.

  	
   

  	
  NON-SOLICITATION

  	
  18

  
	
  18.

  	
   

  	
  ASSIGNMENT

  	
  18

  
	
  19.

  	
   

  	
  FURTHER ASSURANCES

  	
  18

  
	
  20.

  	
   

  	
  COSTS

  	
  19

  
	
  21.

  	
   

  	
  NOTICES

  	
  19

  
	
  22.

  	
   

  	
  CONFLICT WITH OTHER
  AGREEMENTS

  	
  19

  
	
  23.

  	
   

  	
  WHOLE AGREEMENT

  	
  20

  
	
  24.

  	
   

  	
  RIGHT OF SET-OFF

  	
  20

  
	
  25.

  	
   

  	
  GUARANTEE

  	
  21

  
	
  26.

  	
   

  	
  WAIVERS, RIGHTS AND
  REMEDIES

  	
  21

  
	
  27.

  	
   

  	
  COUNTERPARTS

  	
  21

  
	
  28.

  	
   

  	
  VARIATIONS

  	
  22

  
	
  29.

  	
   

  	
  INVALIDITY

  	
  22

  
	
  30.

  	
   

  	
  NO THIRD PARTY ENFORCEMENT
  RIGHTS

  	
  22

  
	
  31.

  	
   

  	
  GOVERNING LAW AND
  JURISDICTION

  	
  22

  
	
  SCHEDULE 1   TARGET COMPANIES

  	
  23

  
	
  SCHEDULE 2   LIMITATIONS ON LIABILITY

  	
  25

  
	
  SCHEDULE 3   PURCHASER WARRANTIES

  	
  29

  
	
  SCHEDULE 4   CLOSING ARRANGEMENTS

  	
  31

  
	
  SCHEDULE 5   GENERAL DISCLOSURES

  	
  34

  
	
  SCHEDULE 6   AES COMPLIANCE TERMS AND
  CONDITIONS

  	
  36

  
	
  SCHEDULE 7   EARNOUT CONSIDERATION

  	
  38

  
	
  SCHEDULE 8   INTER COMPANY DEBT

  	
  49

  
	
  SCHEDULE 9   POST-CLOSING FINANCIAL
  ADJUSTMENTS

  	
  50

  
	
  SCHEDULE 10   PRICE ALLOCATION

  	
  55

  
	
  SCHEDULE 11   AVAILABLE CAPACITY

  	
  56

  
	
  SCHEDULE 12   DEFINITIONS AND INTERPRETATION

  	
  57

  

 

 

 

2

AGREEMENT

 

dated
5 February 2008

 

PARTIES:

 

1.                                       ANTURIE BETEILIGUNGSVERWALTUNGS
GmbH of 1010 Vienna, Dr Karl
Lueger-Ring 12, Austria (the Seller);

 

2.                                       KAZAKHMYS POWER B.V. of Prins Bernhardplein 200,
1097 JB Amsterdam, The Netherlands (the Purchaser); and

 

3.                                       KAZAKHMYS PLC of 6th and 7th
Floor, Cardinal Place, 100 Victoria Street, London SW1E 5JL (the Parent Company)

 

(together the parties).

 

The Parent Company enters into this
Agreement solely in its capacity of a guarantor under clause 25 of this
Agreement and by execution of this Agreement shall not have or be deemed to
have any obligations or liabilities under this Agreement other than expressly
stipulated in clause 25 of this Agreement.

 

Words and expressions used in this
Agreement shall be interpreted in accordance with Schedule 10.

 

WHEREAS:

 

(A)          The Purchaser has agreed to purchase
all the issued share capital of AES Kazakhstan Holdings BV, AES Ekibastuz
Holdings BV and Emerging Energy Investments & Holdings BV, which
together hold (indirectly or directly) certain interests of The AES Corporation
(AES) in the Target Companies (as
defined below and as listed in Schedule 1 of this
Agreement) including AES Ekibastuz LLP, the operator of the AES Ekibastuz power
plant in Kazakhstan and Maikuben West LLP, the owner of the Maikuben West coal
mine in Kazakhstan, from the Seller, which is an indirectly owned subsidiary of
AES, for the consideration and upon the terms and subject to the conditions set
out in this Agreement.

 

(B)           The parties have agreed a total consideration
in respect of the Shares being sold of up to $1,525,000,000. Such total
consideration is subject to (i) certain post-closing financial adjustments
in respect of cash and external debt and certain other line items as is
described further below in Schedule 9; (ii) such performance discounts as may
be applicable in respect of the Earnout Consideration of up to $320,000,000, as
further set out in Schedule
7 and (iii) otherwise as provided herein or in
the Management Agreement.

 

 

IT IS AGREED:

 

 

1.      SALE AND PURCHASE

 

1.1           The Seller shall sell, with full
title guarantee, and the Purchaser shall purchase, the Shares on the terms set
out in this Agreement.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3

 

1.2           The Shares shall be sold free of all
Encumbrances with all rights attaching to them at Closing including the right
to receive all distributions and dividends declared, paid or made in respect of
the Shares after Closing.

 

1.3           The Seller covenants with the
Purchaser that it has the right to sell and transfer to the Purchaser the full
legal and beneficial interest in the Shares on the terms set out in this
Agreement.

 

2.      PRICE

 

2.1           The initial price for the Shares (the
Initial Price)
shall be the amount which results from taking $1,150,000,000 (one billion one
hundred fifty million US dollars) and:

 

(a)                                  subtracting the amount of the
External Debt of the Group Companies as shown in the 30 September 2007
Accounts as set out in Part C of Exhibit 2;

 

(b)                                 adding the amount of Cash of
the Group Companies as shown in the 30 September 2007 Accounts as set out
in Part B of Exhibit 2;

 

(c)                                  subtracting the amount of the
difference between the External Debt as at the Closing Date as agreed between
the Seller and the Purchaser (the Estimated External Debt) and the External
Debt as shown in the 30 September 2007 Accounts if the former is more than
the latter (or adding the amount of such difference if the former is less than
the latter); and

 

(d)                                 adding the amount of the
difference between the Cash as at the Closing Date as agreed between the Seller
and the Purchaser (the Estimated
Cash) and the Cash as shown in the 30 September 2007
Accounts if the former is more than the latter (or subtracting the amount of
such difference if the former is less than the latter).

 

The Seller shall provide the Purchaser with
its calculation in good faith of the amounts of the Estimated External Debt,
the Estimated Cash and the amounts to be paid under Schedule
8
(together with supporting documentation, such documentation to include the most
recent (prior to Closing) monthly management accounts of the relevant Group
Companies) no later than 7 Business Days prior to Closing. The Calculation of
the Initial Price shall be in the form set out in Exhibit 4. The Seller
and the Purchaser shall seek to agree the Calculation of the Initial Price in
good faith prior to Closing. However, if no such agreement has been reached by
no later than 3 Business Days prior to the Closing Date, the amounts shown in
the most recent (prior to Closing) monthly management accounts of the relevant
Group Companies shall be used to determine the Estimated External Debt and the
Estimated Cash for the purposes of clause 2.1(c) and (d) and the amounts to be paid under Schedule
8.

 

2.2           At Closing, the Purchaser shall pay
to the Seller the Initial Price as calculated in accordance with Clause 2.1
above, subject to Clause 2.3 below.

 

2.3           At Closing the Parties shall make the
payments contemplated by paragraph 2 of Schedule 8 in relation to
net Inter-Company Debt. Any payment made by the Purchaser to the Seller
pursuant to paragraph 2 of Schedule 8 will reduce the Initial Price payable at
Closing on a dollar-for-dollar basis (and any payment made by the Seller to the
Purchaser pursuant to paragraph 2 of Schedule 8 will increase the Initial Price
payable at Closing on a dollar-for-dollar basis).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4

 

2.4           The Final Price shall be calculated
after Closing on the basis set out in Schedule 9.  Any payments required to be made under the
Financial Adjustments shall be treated as adjusting the Initial Price, thus
resulting after such adjustment in the Final Price.

 

2.5           Notwithstanding anything to the
contrary in this Agreement, no payments shall be made under the Financial
Adjustments in the event that such payments would not exceed in aggregate the
sum of $2,000,000 (provided that, if such payments would exceed $2,000,000, the
whole amount of such payments shall be made and not merely the excess).

 

2.6           The Purchaser shall pay to the
Seller, by way of fixed deferred consideration (the Fixed
Deferred Consideration), the amount of US$30 million to be paid
as follows:-

 

(a)                                  US$2.5 million on the Closing
Date;

 

(b)                                 US$2.5 million on the later of
1 April 2008 and the Closing Date (in addition to the amount payable under
sub-clause (a));

 

(c)                                  US$2.5 million on each of 1 July 2008
and 1 October 2008;

 

(d)                                 US$2.5 million on each of 1
January, 1 April, 1 July and 1 October 2009; and

 

(e)                                  US$2.5 million on each of 1 January,
1 April, 1 July and 1 October 2010,

 

subject in each case to any provision of
the Management Agreement.

 

2.7           The provisions of Schedule 7 shall apply in respect of the Earnout Consideration (which the
Purchaser shall be obliged to pay in accordance with the provisions of Schedule 7) and the Total Consideration for the Shares shall consist of the
aggregate of the Final Price, the Fixed Deferred Consideration and the total
amount of Earnout Consideration paid by the Purchaser to the Seller.

 

2.8           The Total Consideration shall, to the
extent applicable, be adopted for all tax reporting purposes. The allocation of
the Total Consideration in relation to the Ekibastuz power plant and the
Maikuben mine is attached at Schedule 10.

 

3.      CONDITIONS TO
CLOSING

 

3.1           Closing shall be conditional on each
of the following Conditions having been satisfied:

 

(a)                                  all statutory, regulatory and
other consents, licences or authorisations of any Governmental Entity in
Kazakhstan required in connection with the Proposed Transactions (including the
execution and implementation of the Management Agreement) and the
Reorganisation (other than in relation to the step contemplated at point (i) on
page 7 of Exhibit 5) having been obtained (subject to no condition or
subject only to any such conditions that shall be reasonably acceptable to both
parties), including without limitation:

 

(i)             waivers by the Republic of Kazakhstan of
any pre-emptive rights it may have in relation to the transfer of any direct or
indirect interest in Maikuben West LLP and AES Ekibastuz LLP (or a letter or
letters from the authorised body indicating that no pre-emptive right under
Kazakh law is applicable to such transfers);

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5

 

(ii)          approvals of the Competition Protection
Agency of the Republic of Kazakhstan;

 

(iii)       such consents of the government of
Kazakhstan as are required in respect of the transfer of any direct or indirect
interest in AES Ekibastuz LLP; and

 

(iv)      such natural monopoly approvals as are
required;

 

(b)                                 completion in full of the
Reorganisation in accordance with Exhibit 5 (other than, to the extent the
relevant approval has not been obtained, the step contemplated at point (i) on
page 7 of Exhibit 5); and

 

(c)                                  the Management Agreement
having been entered into and being in full force and effect (subject to Closing
occurring under this Agreement).

 

3.2           The Purchaser shall, at its own cost
and subject to the due performance by the Seller of its obligations under
clause 3.3 below, use its best endeavours to ensure that the Condition in
clause 3.1(a) is fulfilled as soon as reasonably practicable after the
date of this Agreement.  The Purchaser
shall have primary responsibility for the process of obtaining all consents,
approvals or actions of any Governmental Entity in Kazakhstan which are
required in order to satisfy that Condition and confirms that it is taking all
steps necessary for that purpose (including making appropriate submissions,
notifications and filings, in consultation with the Seller and on its
behalf).  The Purchaser shall for this
purpose:

 

(a)                                  promptly notify the Seller
(and provide copies or, in the case of non-written communications, details) of
any communications with any such Governmental Entity relating to any such
consent, approval or action;

 

(b)                                 regularly review with the
Seller the progress of any notifications or filings with a view to obtaining
clearance from any Governmental Entity at the earliest reasonable opportunity;
and

 

(c)                                  provide the Seller with draft
submissions, notifications and filings in English or Russian at least three
Business Days prior to their submission and consider in good faith any
reasonable modifications proposed by the Seller.

 

3.3           The Seller shall:

 

(a)                                  promptly provide the Purchaser
with any necessary information and documents reasonably required for the
purpose of making any submissions, notifications and filings to any
Governmental Entity in Kazakhstan, as well as such necessary assistance as the
Purchaser may reasonably require (subject to the allocation of primary
responsibility set out in clause 3.2 above); and

 

(b)                                 promptly notify the Purchaser
(and provide copies or, in the case of non-written communications, details) of
any communication received from any such Governmental Entity relating to any
such consent, approval or action and shall not take any action in relation to
any Governmental Entity in Kazakhstan without prior consultation with the
Purchaser (to the extent practicable and lawfully permissible and save as is
reasonably required to protect the Seller’s interests).

 

3.4           Subject to the due performance by the
Purchaser of its obligations under clauses 3.2 above and 6.1  below and to all consents or approvals contemplated by such clauses
having been obtained, the Seller shall, at its own cost, use its best
endeavours to ensure that the Condition in clause 3.1(b)
is fulfilled as soon as reasonably practicable after such consents and
approvals have been obtained.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6

 

3.5           The Conditions may only be waived by
the written agreement of the Seller and the Purchaser.

 

3.6           The Seller and the Purchaser
shall each notify the other promptly upon becoming aware that any Condition has
been fulfilled.  The first Business Day
in London on or by which all the Conditions have been fulfilled (or waived in
accordance with clause 3.5) is the Unconditional Date.

 

3.7           If:

 

(a)                                  Closing has not occurred on or
before 11 April 2008; or

 

(b)                                 any Governmental Entity has
rejected, such decision being in full legal force and subject to no further
right of appeal, any application for the granting of any statutory, regulatory
or other consent, licence or authorisation set out in clause 3.1(a)
above or has made, such decision being in full legal force and subject to no
further right of appeal, such grant subject to conditions that the Purchaser or
the Seller in its reasonably held view considers unacceptable,

 

then this Agreement (other than the
Surviving Provisions) shall automatically terminate unless the parties agree
otherwise in writing.  In such event,
neither party (nor any of its Affiliates) shall have any claim under this
Agreement of any nature whatsoever against the other party (or any of its
Affiliates) except in respect of any rights and liabilities which have accrued
before termination or under any of the Surviving Provisions.

 

3.8           The Purchaser acknowledges that AES
Ekibastuz LLP, AES Maikuben LLP and Maikuben West LLP are entering into the
Management Agreement in the context of the Proposed Transactions as a whole and
waives for itself and on their behalf with effect from Closing any right to
challenge the entry into the Management Agreement by such persons, whether on
the basis of alleged non-independence, coercion or otherwise.

 

4.      CLOSING

 

4.1           Closing shall take place at the
Amsterdam offices of the Seller’s lawyers on the tenth Business Day after the
Unconditional Date (or at such other place, at such other time and/or on such
other date as the Seller and the Purchaser may agree in writing) (the Closing Date).

 

4.2           Until Closing the provisions of Part A
of Schedule 4 shall apply.

 

4.3           At Closing each of the Seller and the
Purchaser shall deliver or perform (or ensure that there is delivered or
performed) all those documents, items and actions respectively listed in
relation to that party or any of its Affiliates in Schedule
4.

 

4.4           If for any reason the Unconditional
Date has occurred and the provisions of Part B of Schedule 4 are not fully observed and performed as contemplated by this
Agreement, the Purchaser may elect (in addition and without prejudice to all
other rights or remedies available to it) not to complete the purchase of the
Shares or to fix a new time and date for Closing by, in either case, giving
notice to the Seller.  In particular, the
Purchaser shall not be obliged to complete the purchase of any of the Shares
unless the purchase of all the Shares is completed simultaneously in accordance
with this Agreement. If for any reason the 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7

 

Unconditional
Date has occurred and the provisions of Part
C of Schedule 4 are not fully observed and performed as contemplated by this
Agreement, the Seller may elect (in addition and without prejudice to all other
rights and remedies available to it) not to complete the sale of the Shares or
to fix a new time and date for Closing by, in either case, giving notice to the
Purchaser.  In particular, the Seller
shall not be obliged to complete the sale of any of the Shares unless the sale
of all the Shares is completed simultaneously in accordance with this
Agreement.

 

4.5           If the Purchaser elects or the Seller
elects (the party or parties making such election being the Non-Defaulting Party
for the purposes of this subclause) not to complete the purchase or sale of the
Shares under the preceding subclause:

 

(a)                                  except for the Surviving
Provisions, all the provisions of this Agreement shall lapse and cease to have
effect, provided that neither the lapsing of those provisions nor their ceasing
to have effect shall affect any accrued rights or liabilities of either party
in respect of damages for non-performance of any obligation under this
Agreement falling due for performance prior to such lapse and cessation; and

 

(b)                                 the other party shall
indemnify the Non-Defaulting Party against all reasonable costs, charges and
expenses incurred by it after 20 December 2007 in connection with the
negotiation, preparation and entering into of the Transaction Documents and in
discharging its obligations under any of them.

 

5.      INDEMNITY IN
RESPECT OF CONSENTS

 

5.1           The Purchaser shall indemnify the
Seller against any and all Costs suffered or incurred by the Seller and each of
its Affiliates to the extent that Closing occurs and any such Costs subsequently
arise or result in Kazakhstan as a result of any of the statutory, regulatory
and other consents, licences or authorisations of any Governmental Entity
contemplated by the Condition in clause 3.1(a) as well as by clause 6.1(a) below
not having been obtained (or, if obtained, being in any way insufficient or
defective) (other than in respect of any such Costs which relate to consents,
licences or authorisations required solely in connection with the step
contemplated at point (i) on page 7 of Exhibit 5).

 

5.2           The provisions of clause 5.1
above shall not apply to the extent that such Costs arise as a direct result of
any incorrect or otherwise defective written information or documents provided
by or on behalf of the Seller to the Purchaser for the purpose of obtaining
such consents, licences or authorisations (for the avoidance of doubt, such
information shall include the description of the Reorganisation contained in Exhibit 5).

 

 

6.      SELLER GROUP
REORGANISATION

 

6.1           The Purchaser acknowledges and agrees
that the Seller is restructuring its holding of the Group Companies and certain
other entities within the Seller Group pursuant to the Reorganisation and that:

 

(a)                                  the Purchaser shall use its
best endeavours, subject to the due performance by the Seller of its
obligations under clause clause 6.2 below,  to obtain all statutory, regulatory and other
consents, licences or authorisations of any Governmental Entity in Kazakhstan
required in connection with the Reorganisation (including making appropriate submissions,
notifications and filings) and whether or not such consents, licences or
authorisations, submissions, notifications and filings are the responsibility
of anyone other than the Purchaser including the Seller or any of its
Affiliates, other than in 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8

 

respect of any consents, licences and
authorisations required in connection with the step contemplated by point (i) on
page 7 of Exhibit 5, in relation to which the Purchaser shall use its
reasonable endeavours to achieve the same;

 

(b)                                 the Purchaser shall, to the
extent possible, make a composite application in respect of all steps
contemplated by the Reorganisation (including the step contemplated at point (i) on
page 7 of Exhibit 5);

 

(c)                                  the Purchaser shall not,
subject to the due performance by the Seller of its obligations under clause 6.2
below, object to or otherwise interfere with or delay the Reorganisation; and

 

(d)                                 the Purchaser shall take all
actions reasonably required by the Seller in connection with the
Reorganisation.

 

6.2           The Seller shall:

 

(a)                                  provide the Purchaser with any
necessary information, documents and assistance reasonably required for the
purpose of making any submissions, notifications and filings to any Governmental
Entity required in connection with the Reorganisation;

 

(b)                                 provide the Purchaser with
draft documents relating to implementation of any action under the
Reorganisation to be undertaken by a Group Company (as well as any draft
documents intended to transfer the Shares or assign the Inter-Company Debt) at
least three Business Days prior to taking such action and consider in good
faith any reasonable modifications proposed by the Purchaser which are required
to ensure compliance of such an action with Exhibit 5 and/or consistency
with any relevant  consent, licence or
authorisation or any application to obtain the same filed in accordance with
this Agreement provided that the Purchaser has fulfilled its obligation under clause
3.2(c) in relation to that application; and

 

(c)                                  regularly review with the
Purchaser the progress of the Reorganisation with a view to completing the
Reorganisation in accordance with Exhibit 5 as soon as reasonably
practicable after all necessary consents, licences or authorisations of a
Governmental Entity contemplated under clause 6.1(a) above have been obtained.

 

6.3           The Seller shall indemnify the
Purchaser in respect of any and all amounts of taxation (other than taxation
arising in Kazakhstan) incurred by any Group Company or the Purchaser as a
direct result of the Reorganisation to the extent that such amounts would not
have otherwise been incurred by them.

 

 

7.      SELLER
WARRANTIES

 

7.1           The Seller warrants to the Purchaser
as at the date of this Agreement in the terms of the Seller Warranties set out
in clause 7.2  below. The Seller
Warranties are given subject to the limitations set out in Schedule 2.

 

7.2           The Seller warrants to the Purchaser
in the terms of the Seller Warranties set out in this clause 7.2:

 

(a)                                  the Seller has obtained all
corporate authorisations (including, for the avoidance of doubt, all necessary
board and shareholder approvals) and all other governmental, statutory,
regulatory or other consents, licences or authorisations (except for any and 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9

 

all governmental, statutory, or regulatory
consents, licences or authorisations under Kazakh law and regulation) required
to empower it to enter into and perform its obligations under this Agreement
where failure to obtain them would adversely affect to a material extent its
ability to enter into or perform its obligations under this Agreement;

 

(b)                                 entry into and performance by
the Seller and AES London Holdings BV of this Agreement and/or any Transaction
Document to which it is a party will not (i) breach any provision of its
constitutional documents or (ii) result in a breach of any laws or
regulations in its jurisdiction of incorporation or of any order, decree or
judgment of any court or any governmental or regulatory authority in its
jurisdiction of incorporation, where (in either case) the breach would
adversely affect to a material extent its ability to enter into or perform its
obligations under this Agreement and/or any Transaction Document to which it is
a party;

 

(c)                                  each of the Seller, AES London
Holdings BV and each Group Company is validly incorporated, in existence and
duly registered under the laws of its jurisdiction of incorporation. Each Group
Company has full power under its constitutional documents to conduct its
business as at the date of this Agreement and each of the Non-Kazakh Group
Companies has full power under the relevant laws and regulations (other than
the laws and regulations of Kazakhstan) to conduct its business as conducted at
the date of this Agreement;

 

(d)                                 subject to any required
statutory, regulatory or other consents, licences or authorisations of any
Governmental Entity which are described in clause 3.1(a)
and clause 6.1(a) having been obtained, the
Seller is or will at Closing be entitled to transfer the Shares;

 

(e)                                  the Shares constitute the
whole of the issued and allotted share capital of the Companies, all the Shares
are free of any Encumbrances, fully paid or properly credited as fully paid and
the Seller is or will at Closing be the sole legal and beneficial owner of the
Shares;

 

(f)                                    so far as the Seller is aware,
in the 12 months prior to the date of this Agreement, each Target Company has
conducted its business (if any) and corporate affairs in all material respects
in accordance with its constitutional documents;

 

(g)                                 the Seller or another Group
Company is or will at Closing be the direct or indirect legal and beneficial
owner (solely or together with another Group Company) of the whole of the
issued and allotted share or charter capital of each Group Company, such shares
and charter capital being free from any Encumbrance (other than the pledge in
respect of the shares in Maikuben West LLP in favour of Bank Turan Alem), and
fully paid or properly credited as fully paid (other than the charter capital
of Argamak 2007 LLP, Maikuben Mine LLP, Maikuben Electric LLP and Maikuben Coal
LLP which is unpaid);

 

(h)                                 so far as the Seller is aware,
no person is entitled or has claimed to be entitled to require any Group Company
to issue any share or loan capital either now or at any future date whether
contingently or not;

 

(i)                                     no member of the Seller Group
or any Group Company has received any written notice that an order has been
made, petition presented or meeting convened for the winding up of the Seller
or any Group Company or for the appointment of any provisional liquidator;

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10

 

(j)                                     no member of the Seller Group
or any Group Company has received any written notice concerning the appointment
of a receiver (including any administrative receiver or the equivalent to a
receiver or administrative receiver in the relevant jurisdiction) in respect of
the whole or any material part of the property, assets and/or undertaking of
the Group Companies;

 

(k)                                  neither the Seller nor any
Group Company has made any voluntary arrangement with any of its creditors in
the 2 years prior to the date of this Agreement;

 

(l)                                     the Available Capacity of the
GRES-1 power plan operated by AES Ekibastuz LLP will be demonstrated, prior to
Closing, as being not less than 2250MW as demonstrated by the procedures set
forth in Schedule 11;

 

(m)                               so far as the Seller is aware,
the 30 September 2007 Accounts were properly prepared in all material
respects in accordance with the accounting policies and procedures of AES as at
30 September 2007. Such policies and procedures were consistent with US
GAAP applied for the purposes of producing consolidated financial statements
for AES and its subsidiaries at such date;

 

(n)                                 so far as the Seller is aware,
no Group Company has at any time in the last five (5) years deliberately
engaged in tax evasion in any material respect, in circumstances where it knew
that such evasion was unlawful (based upon its honestly held interpretation of
applicable tax law at such time);

 

(o)                                 no Group Company has any
outstanding liability to make any payment in respect of a tax liability imposed
by a Governmental Entity in the Netherlands, Ireland, United Kingdom or Cyprus;

 

(p)                                 no Group Company has or shall
become liable to make any payment in respect of a tax liability imposed by a
Governmental Entity in the Netherlands which is properly attributable to
another member of the Seller Group, as a result of being treated as part of a
fiscal unity with that other member for Dutch tax purposes;

 

(q)                                 no Group Company has or shall
have in the future any taxation liability 
in relation to the transfer prior to the Closing Date of the tax
residency of AES Suntree Power Limited from Ireland to the UK;

 

(r)                                    none of the Non-Kazakh Group
Companies has any material outstanding or potential liabilities or obligations
and AES Kazelectro NV, Electric Power Holdings VOF, AES Suntree Power Limited
and Kilcormac Trading Limited are dormant companies;

 

(s)                                  since 30 September 2007
each of the Target Companies has been operated in the ordinary course in all
material respects (to the extent permitted by applicable law and save in
respect of the voluntary tariff freeze agreed between the parties) and no dividend
or other distribution of profits or assets has been or agreed to be declared,
made or paid by any Group Company (other than to another Group Company);

 

(t)                                    so far as the Seller is aware,
there are no current or pending regulatory proceedings or claims in which a
Group Company is involved in respect of the termination of the lease of the ORU
sub-station to ORU Ekibastuz LLP;

 

(u)                                 so far as the Seller is aware,
no document to which a Group Company is a party that is material in the context
of the consolidated position of the Group Companies taken as a whole has been
deliberately and intentionally omitted from the Data Room with a 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11

 

view to concealing information (not
otherwise known or available to the Purchaser or any other member of the
Purchaser Group) from the Purchaser which if known would have a significant and
adverse impact on the value of the Group Companies (taken as a whole); and

 

(v)                                 the Seller has provided the
Purchaser with all of the relevant and material information of which the Seller
is aware as at the date of this Agreement in relation to:

 

(i)                             all current litigation,
arbitration or administrative proceedings which (if successful) are likely to
result in a cost, benefit or value to the Kazakh Business of $2,000,000 or more
in which the Group Companies are involved as parties and all such proceedings
which have been threatened in writing by or against a Group Company;

 

(ii)                          all licences of Intellectual
Property Rights granted to, and by any Group Company and which are material to
the Kazakh Business;

 

(iii)                       all the land, property and
equipment owned, leased, controlled, occupied or used by any Group Company or
in relation to which any Group Company has any right, interest or liability;

 

(iv)                      all current claims or
proceedings which (if successful) are likely to result in a cost, benefit or
value to the Kazakh Business of $2,000,000 or more pending against any Group
Company with respect to any breach of or liability under Environmental Laws
relating to the Kazakh Business and all written statutory complaints or
statutory notices received by a Group Company alleging or specifying any such
breach;

 

(v)                         all termination, retirement,
superannuation, provident, death or disability schemes for directors or
Employees provided by the Group Companies and the Kazakh Business; and

 

(vi)                      all constitutional documents
of each Group Company;

 

which, in the Seller’s opinion, are
material to the Kazakh Business, and to the Seller’s knowledge, such
information is accurate in all material respects.

 

7.3           In the event of a breach of the
warranty contained in clause 7.2(1) above, the Purchaser shall
only be entitled to compensation, damages or any other form of relief or remedy
if it gives the Seller written notice of an alleged breach and any actual
breach is not remedied or found to be unfounded within 30 days after the
date on which such notice is served on the Seller (which notice must be served
within 60 days of the Closing Date). If the breach is not remedied or found to
be unfounded within such 30-day period, the Seller shall be required to
increase the Available Capacity of the Business to not less than 2250MW within
180 days from the expiry of such 30-day period at its own cost (subject to the
limit on the Seller’s aggregate liability under this Agreement contained in
paragraph paragraph 3 of Schedule
2). If the
Seller fails to comply with this obligation, it shall indemnify the Purchaser
in full for all costs incurred by the Purchaser and the Group Companies as a
result of such breach and once paid, no adjustment shall be made to the EBITDA
for the purposes of calculating the Earnout Consideration in respect of any
such Costs incurred by any Group Company. Except as expressly provided, no other
remedy shall be available to the Purchaser in respect of the warranty contained
in clause 7.2(1) above.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12

8.      PURCHASER
WARRANTIES

 

The Purchaser warrants to the Seller as at
the date of this Agreement in the terms of the Purchaser Warranties set out in Schedule 3.

 

9.      CONDUCT OF
PURCHASER CLAIMS

 

9.1           If the Purchaser becomes aware after
the Closing Date of any claim or potential claim by a third party (a Third Party Claim),
or of any other matter or circumstance which might result in a Claim being
made, the Purchaser shall:

 

(a)                                  promptly (and in any event
within 20 Business Days of it becoming aware of it) give notice of the Third
Party Claim or other such matter or circumstance to the Seller;

 

(b)                                 provide (and shall ensure that
the members of the Purchaser Group provide) all reasonable information,
facilities and assistance that the Seller may reasonably require to investigate
the Third Party Claim;

 

(c)                                  not (and ensure that each
member of the Purchaser Group shall not) admit liability or make any agreement
or compromise in relation to the Third Party Claim without prior written
approval of the Seller (which shall not be unreasonably withheld or delayed);

 

(d)                                 (subject to the Purchaser or
the relevant member of the Purchaser Group being indemnified by the Seller
against all damages incurred as a result of, and reasonable out of pocket costs
and expenses incurred in respect of, the things set out in paragraphs (i) to
(iii) in relation to that Third Party Claim) ensure that it and each
member of the Purchaser Group shall:

 

(i)                     take such action as the Seller may
reasonably request to avoid, resist, dispute, appeal, compromise or defend the
Third Party Claim;

 

(ii)                  allow the Seller (if it elects to do so) to
take over the conduct of all proceedings and/or negotiations arising in
connection with the Third Party Claim; and

 

(iii)               provide such information and assistance as
the Seller may reasonably require in connection with the preparation for and
conduct of any proceedings and/or negotiations relating to the Third Party
Claim.

 

9.2           If the Seller takes over the conduct
of the Third Party Claim in accordance with clause 9.1(d)(ii):

 

(a)                                  the Seller shall consult with
the Purchaser on any matter which is or is likely to be material in relation to
that Third Party Claim and shall consider in good faith any reasonable
requirements of the Purchaser;

 

(b)                                 the Seller shall keep the
Purchaser promptly informed of the progress of that Third Party Claim and,
without prejudice to the generality of the foregoing, shall inform the
Purchaser in advance of any hearings in any proceedings in connection with that
Third Party Claim;

 

(c)                                  the Seller shall provide the
Purchaser with copies of all relevant documents, including all written
communications, correspondence and notes or other written records of telephone
conversations or meetings, which relate to that Third Party Claim; and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13

 

d)                                     the Seller shall provide the
Purchaser with draft submissions, notifications and filings in English and
Russian at least three Business Days prior to their submission and consider in
good faith any reasonable modifications proposed by the Purchaser.

 

9.3           Nothing in subclause 9.1 shall:

 

(a)                                  (subject to clause 9.1(c)
above) require the Purchaser or any member of the Purchaser Group to do
anything or omit to do anything where such action or omission would, in the
reasonable opinion of the Purchaser, be prejudicial in any material respect to
the relationship of the Purchaser or of any member of the Purchaser Group with
any Governmental Entity in Kazakhstan; or

 

(b)                                 entitle the Seller to make, or
to request the Purchaser that it shall, or to procure that a member of the
Purchaser Group shall, make any admission of liability, agreement or compromise
in relation to that Third Party Claim without the prior written approval of the
Purchaser (which shall not be unreasonably withheld or delayed) unless such
admission, agreement or compromise provides for settlement or relief solely in
the form of monetary payment.

 

9.4           If the Seller takes over the conduct
of the Third Party Claim in accordance with subclause 9.1(d)(ii),
the Purchaser may give notice to the Seller that the Purchaser or the relevant
member of the Purchaser Group is taking over the conduct of all proceedings
and/or negotiations arising in connection with the Third Party Claim if in the
Purchaser’s reasonable opinion the conduct of the dispute, defence, compromise
or appeal of the Third Party Claim by the Seller has prejudiced or is likely to
prejudice in any material respect the relationship of the Purchaser or of any
member of the Purchaser Group with any Governmental Entity in Kazakhstan. If
the Purchaser takes over conduct in such manner, then (i) for the
avoidance of doubt, the provisions set out in clause 9.1(c)
shall continue to apply and (ii) the Purchaser shall conduct the defence
of the Third Party Claim diligently and without undue delay.

 

9.5           The Seller shall not be liable under
any Claim to the extent its liability has increased (or has not been reduced)
as a result of the operation of the provisions of subclause 9.3(a)
or 9.4. The provisions of paragraph 10 and 11 of Schedule 2 shall not be affected by the provisions of subclause 9.3(a)
or 9.4.

 

9.6           If the exercise by the Purchaser of
its rights under clause 9.3(a) or 9.4
would, in the reasonable opinion of the Seller, be prejudicial in any material
respect to the commercial interests of the Seller or any member of the Seller
Group, the Purchaser may only exercise such rights to the extent that it
delivers to the Seller an opinion (setting out the facts on which such opinion
is based) by an English Queen’s Counsel of more than 10 years call addressed to
the Purchaser and the Seller, to the effect that the course of action which the
Purchaser proposes to undertake is reasonable in all the circumstances. The
Purchaser may only exercise its rights under clause 9.3(a) and 9.4
in a manner consistent with the course of action described in any opinion which
it has so procured.

 

10.    CHANGES OF NAME

 

10.1         The Purchaser shall procure that:

 

(a)                                  as soon as reasonably
practicable after the Closing Date and in any event within ninety (90) days
afterwards, the name of any Group Company which consists of or incorporates the
word “AES” is changed to a name which does not include that word or any word
which, in the reasonable opinion of the Seller, is substantially or confusingly
similar;

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14

 

(b)                                 as soon as reasonably
practicable after the Closing Date and in any event within ninety (90) days
afterwards, the Group Companies shall cease to use or display any trade or
service name or mark, business name, logo or domain name used or held by any
member of the Seller Group or any mark, name or logo which, in the reasonable
opinion of the Seller, is substantially or confusingly similar to any of them.

 

10.2         The Seller shall, at the cost of the
Purchaser, provide the Purchaser with such necessary information, documents or
assistance as is reasonably required and requested for the purposes of this
clause 10.

 

11.    INTRA-GROUP
SERVICES

 

The Seller confirms and the Purchaser
acknowledges that all services currently provided by a member of the Seller
Group to a Group Company (including any group insurance coverage, the provision
of guarantees, audit and tax services and others currently provided) shall cease
to be so provided with effect from the Closing Date (save where the Seller uses
its powers of sub-contracting under the Management Agreement to continue the
provision of such services) and that the Purchaser shall (subject to the
express terms of the Management Agreement) be responsible for the provision of
such services from the Closing Date.

 

12.    NO RIGHTS OF
RESCISSION OR TERMINATION

 

Subject to clause 3.7
of this Agreement, the Purchaser shall not be entitled to rescind or terminate
this Agreement in any circumstances whatsoever (whether before or after
Closing).  This shall not exclude any
liability for (or remedy in respect of) any fraud or fraudulent
misrepresentation of a director, officer or senior manager of any member of the
Seller Group or any fraud, or fraudulent misrepresentation by the Seller in
connection with the disclosure of written documents or written information to
the Purchaser and its Representatives at any time prior to the execution of
this Agreement.

 

 

13.    PAYMENTS

 

13.1         Any payment to be made pursuant to this
Agreement by the Purchaser (or any member of the Purchaser Group) shall be made
to the Seller’s Bank Account.

 

13.2         Any payment to be made pursuant to this
Agreement by the Seller shall be made to the Purchaser’s Bank Account.

 

13.3         Payment under clause 13.1
and 13.2 shall be in immediately available funds by
electronic transfer on the due date for payment and shall (save where expressly
provided otherwise) be made in U.S. dollars. 
Receipt of the amount due shall be an effective discharge of the
relevant payment obligation.

 

13.4         If any sum due for payment in
accordance with this Agreement is not paid on the due date for payment, the
person in default shall pay Default Interest on that sum from but excluding the
due date to and including the date of actual payment calculated on a daily
basis.

 

13.5         Unless expressly stipulated in this
Agreement otherwise, any payments of Total Consideration made pursuant to this
Agreement (including any payment in respect of Earnout 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15

 

Consideration)
shall be made in full without set-off or counterclaim and not subject to any
condition and free and clear of and without deduction or withholding for or on
account of any tax, duties, charges, fees, deductions, or restrictions
whatsoever.

 

14.    INTER-COMPANY
DEBT

 

The provisions of Schedule 8 shall apply in respect of net Inter-Company Debt and the Parties will
comply with the obligations set out therein.

 

15.    ANNOUNCEMENTS

 

15.1         From the date of this Agreement until
12 months after the Closing Date, neither the Seller nor the Purchaser
(nor any of their respective Affiliates) shall make any announcement or issue
any circular (including the Class 2 circular to be issued by the Parent Company)
in connection with the existence or subject matter of this Agreement (or any
other Transaction Document) without the prior written approval of the other
(such approval not to be unreasonably withheld or delayed), except where the
content of the announcement or circular has previously been included in an
announcement made or circular issued in accordance with this clause 15.

 

15.2         The restriction in clause 15.1
shall not apply to the extent that the announcement or circular is required by
law, by any stock exchange or any regulatory or supervisory body or authority
of competent jurisdiction, whether or not the requirement has the force of
law.  If this exception applies, the
party making the announcement or issuing the circular shall use its reasonable
efforts to consult with the other party in advance as to its form, content and
timing.

 

16.    CONFIDENTIALITY

 

16.1         For the purposes of this clause 16:

 

(a)                                  Confidential Information means:

 

(i)             (in relation to the obligations of the
Purchaser) any information received or held by the Purchaser (or any of its
Representatives) relating to the Seller Group or, prior to Closing, any of the
Group Companies; or

 

(ii)          (in relation to the obligations of the
Seller) any information received or held by the Seller (or any of its
Representatives) relating to the Purchaser Group or, following Closing, any of
the Group Companies; and

 

(iii)       information relating to the provisions of,
and negotiations leading to, this Agreement and the other Transaction
Documents;

 

and includes written information and
information transferred or obtained orally, visually, electronically or by any
other means and any and all documents prepared by the Purchaser (or its
Representatives) which contain, reflect or are based upon, in whole or in part,
the Confidential Information; and

 

(b)                                 Representatives means, in relation to a party, its respective
Affiliates and the directors, officers, partners, employees, agents, advisers,
accountants, bankers and financing institutions, contractors, sub-contractors
and consultants of that party and/or of its respective Affiliates.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

16

 

16.2         Each of the Seller and the Purchaser
shall (and shall ensure that each of its Representatives shall) maintain Confidential
Information in confidence and not disclose Confidential Information to any
person except (i) as this clause 16 permits or (ii) as the
other party approves in writing.

 

16.3         Clause 16.2 and 16.4
shall not prevent disclosure by a party or its Representatives to the extent it
can demonstrate that:

 

(a)                                  disclosure is required by law
or by any stock exchange or any regulatory, governmental or antitrust body
(including any tax authority) having applicable jurisdiction (provided that the
disclosing party shall first inform the other party of its intention to
disclose such information and take into account the reasonable comments of the
other party);

 

(b)                                 disclosure is of Confidential
Information which was lawfully in the possession of that party or any of its
Representatives (in either case as evidenced by written records) without any
obligation of secrecy prior to its being received or held;

 

(c)                                  disclosure is of Confidential
Information which has previously become publicly available other than through
that party’s fault (or that of its Representatives); and

 

(d)                                 disclosure is required for the
purpose of any arbitral or judicial proceedings arising out of this Agreement
(or any other Transaction Document).

 

16.4         The Purchaser and the Sellers shall not
(and shall procure that their respective Representatives shall not) disclose to
any person the fact that the Confidential Information has been made available
to it or any terms, conditions or other facts with respect to the Proposed
Transactions including their status.

 

16.5         Each of the Seller and the Purchaser
undertakes that it (and its Affiliates) shall only disclose Confidential
Information to its Representatives if it is reasonably required for purposes
connected with this Agreement and only if the Representatives are informed of
the confidential nature of the Confidential Information.

 

16.6         If this Agreement terminates, the
Purchaser shall as soon as practicable on request by the Seller:

 

(a)                                  return to the Seller all
written documents and other materials relating to the Seller or to any Group
Company including any Confidential Information which the Seller (or its
Representatives) have provided to the Purchaser (or its Representatives)
without keeping any copies of them;

 

(b)                                 destroy all information or other
documents derived from such Confidential Information; and

 

(c)                                  expunge such Confidential
Information from any computer, word processor or other device,

 

provided that no such obligation shall
apply to the extent that any Representative may be required to retain any such
information or documents by any law, regulation or code of practice relating to
their professional conduct.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

17

 

17.    NON-SOLICITATION

 

Each of the Seller and the Purchaser shall
not (and shall ensure that each of its Affiliates shall not) prior to the
expiry of the term or, if earlier, termination of the Management Agreement:

 

(a)                                  solicit or cause to be
solicited the employment or service of any of the employees or directors of any
member of the Seller Group or any of the Group Companies (in the case of the
Purchaser) or any member of the Purchaser Group (in the case of the Seller) of
senior management level or above (provided that this shall not prevent the
Seller or an Affiliate from offering employment to the current general
directors of AES Ekibastuz LLP, AES Maikuben LLP or Maikuben West LLP during
the six-month period preceding the termination of the Management Agreement,
subject to (i) the Seller not procuring such employment through the offer
of enhanced terms and (ii) such persons not being relocated from the
Kazakh Business prior to the date one month after the termination of the
Management Agreement); or

 

(b)                                 solicit or cause to be
solicited the employment or service of any of the employees of any member of
the Seller Group or any of the Group Companies (in the case of the Purchaser)
or any member of the Purchaser Group (in the case of the Seller) below senior
management level unless they do so pursuant to a generalised advertisement not
specifically directed at such employees or at the instigation of the employee
without encouragement by the respective party.

 

18.    ASSIGNMENT

 

18.1         Except as provided in this clause 18
or unless the Seller and the Purchaser specifically agree in writing, no person
shall assign, transfer, charge or otherwise deal with all or any of its rights
under this Agreement nor grant, declare, create or dispose of any right or
interest in it.  Any purported assignment
in contravention of this clause 18 shall be void.

 

18.2         The benefit of the Seller Warranties
may be assigned (in whole or in part) by the Purchaser to any wholly owned and
controlled subsidiary of Kazakhmys plc for the time being which is the legal
and beneficial owner from time to time of any or all of the Shares as if it
were the Purchaser under this Agreement provided that before any such assignee
subsequently ceases to be a wholly owned subsidiary of Kazakhmys plc, the
Purchaser shall ensure that it shall re-assign that benefit to the Purchaser or
to another wholly owned subsidiary of Kazakhmys plc.

 

18.3         The benefit of the Earnout
Consideration may be assigned (in whole or in part) by the Seller to any member
of the Seller Group provided that before any such assignee subsequently ceases
to be a member of the Seller Group, the Seller shall ensure that it shall
re-assign that benefit to the Seller or to another member of the Seller Group.

 

18.4         If an assignment is made in accordance
with this clause 18, the assignor shall promptly
notify the other party and the liabilities of the members of one party’s Group
to the other party’s Group under this Agreement shall be no greater than such
liabilities would have been if the assignment had not occurred.

 

19.    FURTHER
ASSURANCES

 

Each of the Seller and the Purchaser shall
procure that its Affiliates comply with all obligations under this Agreement
which are expressed to apply to any such Affiliates.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

18

 

20.    COSTS

 

20.1         Subject to clause 20.2
and except as otherwise provided in this Agreement (or any other Transaction
Document), each of the Seller and the Purchaser shall be responsible for its
own costs, charges and other expenses (including those of its Affiliates)
incurred in connection with the Proposed Transactions.

 

20.2         The Purchaser or its Affiliates shall
bear all stamp duty, notarisation fees or other documentary transfer or
transaction duties, and all stamp duty reserve tax, stamp duty land tax and any
other transfer taxes (but excluding expressly any tax on actual profit or gains
payable by the Seller or any of its Affiliates under the laws of any
jurisdiction and any related interest or penalties) including in each case any
related interest or penalties arising as a result of this Agreement or of any
of the other Transaction Documents.

 

21.    NOTICES

 

21.1         Any notice in connection with this
Agreement shall be in writing in English and delivered by hand, fax, registered
post or courier using an internationally recognised courier company.  A notice shall be effective upon receipt and
shall be deemed to have been received (i) at the time of delivery, if
delivered by hand, registered post or courier or (ii) at the time of
transmission if delivered by fax provided that in either case, where delivery
occurs outside Working Hours, notice shall be deemed to have been received at
the start of Working Hours on the next following Business Day.

 

21.2         The addresses and fax numbers of the
parties for the purpose of clause 21.1 are:

 

	
  Seller

  	
  Address:

  	
  Fax:

  
	
  For the attention of: 

  

  The Directors

  	
  c/o AES Electric Ltd. 

  37-39 Kew Foot Road 

  Richmond, Surrey 

  TW9 2SS, United Kingdom

  	
  +44 (0) 20 8332 9078

  
	
   

  	
   

  	
   

  
	
  Purchaser

  	
  Address:

  	
  Fax:

  
	
  For the attention of: 

  

  Company Secretary 

  Kazakhmys PLC, 

  Mr. Robert Welch

  	
  Cardinal Place, 100 Victoria 

  Street, London SW1E 5JL

  	
  +44 (0) 207 901 7861

  

 

22.    CONFLICT WITH
OTHER AGREEMENTS

 

If there is any conflict between the terms
of this Agreement and any other agreement (including the agreement of
understanding between AES and the Parent Company dated 20 December 2007
which the parties agree is terminated with the execution and delivery of this
Agreement), this Agreement shall prevail (as between the parties to this
Agreement and as between any members of the Seller Group and any members of the
Purchaser Group) unless (i) such other agreement expressly states that it
overrides this Agreement in the relevant respect and (ii) the Seller and
the Purchaser are either also parties to that other agreement or otherwise
expressly agree in writing that such other agreement shall override this
Agreement in that respect.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

19

 

 

23.    WHOLE AGREEMENT

 

23.1         In this clause 23
the Relevant Parties
shall mean the Seller and the Purchaser, and each of them shall be a Relevant Party.

 

23.2         This Agreement and the other
Transaction Documents together set out the whole agreement between the Relevant
Parties in respect of the sale and purchase of the Shares and supersede any
prior agreement (whether oral or written) relating to the Proposed
Transactions.  It is agreed that:

 

(a)                                  no Relevant Party shall have
any claim or remedy in respect of any statement, representation, warranty or
undertaking made by or on behalf of the other Relevant Party (or any of its
Connected Persons) in relation to the Proposed Transactions which is not
expressly set out in this Agreement or any other Transaction Document;

 

(b)                                 any terms or conditions
implied by law in any jurisdiction in relation to the Proposed Transactions are
excluded to the fullest extent permitted by law or, if incapable of exclusion,
any right or remedies in relation to them are irrevocably waived;

 

(c)                                  the only right or remedy of a
Relevant Party in relation to any provision of this Agreement or any other
Transaction Document shall be for breach of this Agreement or the relevant
Transaction Document; and

 

(d)                                 except for any liability in
respect of a breach of this Agreement or any other Transaction Document, no
Relevant Party (or any of its Connected Persons) shall owe any duty of care or
have any liability in tort or otherwise to the other Relevant Party (or its
respective Connected Persons) in relation to the Proposed Transactions,

 

provided that this clause shall not exclude
any liability for (or remedy in respect of) fraudulent misrepresentation.  Each Relevant Party agrees to the terms of
this clause 23 on its own behalf and as
agent for each of its Connected Persons. 
For the purpose of this clause, Connected Persons means (in relation to a
Relevant Party) the officers, employees, agents and advisers of that Relevant
Party or any of its Affiliates.

 

24.    RIGHT OF SET-OFF

 

24.1         The Purchaser shall have the right to
set off any amounts due to it from the Seller in respect of a Claim against an
equal amount of Earnout Consideration which it would otherwise be obliged to
pay to the Seller, provided that the Purchaser has first delivered (or shall
deliver within 10 Business Days of such amount of Earnout Consideration
falling due) to the Seller an opinion by an English Queen’s Counsel of more
than 10 years call addressed to the Purchaser and the Seller to the effect that
in his or her opinion the Claim is more likely than not to be upheld by an
arbitral tribunal constituted under the rules of the LCIA and that the
quantum of such Claim is reasonable (an External Counsel Opinion).
Such an opinion shall set out the facts on which such an opinion is based. If
the Seller does not agree with the facts stated in such opinion, it may make
written representations to the issuer of the opinion, who shall consider such
representations and revise the opinion as necessary. For the avoidance of
doubt, the amount that the Purchaser may set off in such manner shall not
exceed 20% of the Final Price.

 

24.2         In the event that the Seller exercises
its right of termination pursuant to clause 8.1 of the Management Agreement or
the Parent Company exercises its right of termination pursuant to clause 8.2 of
the Management 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

20

 

Agreement
prior to 31 January 2009, the Seller shall procure that a person
satisfying the criteria set out in clause 14.1 of the Management Agreement
provides a guarantee of the Seller’s financial obligations under this
Agreement. Such guarantee shall be limited to the amount paid to the Seller
pursuant to clause 8.1 of the Management Agreement (if the Seller exercises its
right of termination) or the amount that would have been paid to the Seller if
it had exercised its right of termination (if the Purchaser exercises its right
of termination) (but in any event shall not exceed 20% of the Final Price) and
shall expire on 31 January 2009 (or, if later, upon the settlement in full
by the Seller of the Claim) provided that the Claim is notified to the Seller
prior to 31 January 2009 and provided that the Purchaser has first
delivered (or shall deliver no later than 10 Business Days after such
termination of the Management Agreement) to the Seller an External Counsel
Opinion).

 

25.    GUARANTEE

 

25.1         In consideration of the Seller entering
into this Agreement, the Parent Company unconditionally and irrevocably
guarantees to the Seller and AES London Holdings BV as a continuing obligation
that the Purchaser will comply properly and punctually with its financial
obligations under this Agreement and its obligations (together, the Guaranteed Obligations) under
clauses 3.2, 6.1, 15, 16, 17 and 18 and each Transaction
Document.

 

25.2         The Parent Company’s liability under
clause 25.1 shall not be discharged or impaired by:

 

(a)                                  any amendment, variation or
assignment of this Agreement or any Transaction Document or any waiver of its
or their terms;

 

(b)                                 any release of, or granting of
time or other indulgence to, the Purchaser or any third party;

 

(c)                                  any winding up, dissolution,
reconstruction, legal limitation, incapacity or lack of corporate power or
authority or other circumstances affecting the Purchaser (or any act taken by
the Seller in relation to any such event); or

 

(d)                                 any other act, event, neglect
or omission (whether or not known to the Purchaser, the Seller or the Parent
Company) which would or might (but for this clause) operate to impair or
discharge the Parent Company’s liability or afford the Parent Company or the
Purchaser any legal or equitable defence;

 

25.3         In consideration of the Seller entering
into this Agreement, , the Parent Company, undertakes to perform as a primary
obligation the Guaranteed Obligations.

 

26.    WAIVERS, RIGHTS
AND REMEDIES

 

Except as expressly provided in this Agreement,
no failure or delay by either party in exercising any right or remedy relating
to this Agreement or any of the Transaction Documents shall affect or operate
as a waiver or variation of that right or remedy or preclude its exercise at
any subsequent time.  No single or
partial exercise of any such right or remedy shall preclude any further
exercise of it or the exercise of any other remedy.

 

27.    COUNTERPARTS

 

This Agreement may be executed in any
number of separate counterparts, each of which is an original but all of which
taken together shall constitute one and the same instrument.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

21

 

28.    VARIATIONS

 

No amendment of this Agreement (or of any
other Transaction Document) shall be valid unless it is in writing and duly
executed by or on behalf of all of the parties to it.

 

29.    INVALIDITY

 

Each of the provisions of this Agreement
and the other Transaction Documents is severable.  If any such provision is held to be or
becomes invalid or unenforceable in any respect under the law of any
jurisdiction, it shall have no effect in that respect and the parties shall use
all reasonable efforts to replace it in that respect with a valid and
enforceable substitute provision the effect of which is as close to its
intended effect as possible.

 

30.    NO THIRD PARTY
ENFORCEMENT RIGHTS

 

A person who is not a party to this
Agreement shall have no right under any statutory provision to enforce any of
its terms.

 

 

31.    GOVERNING LAW
AND JURISDICTION

 

31.1         This Agreement shall be governed by,
and interpreted in accordance with, English law.

 

31.2         In the event of any dispute,
controversy or claim arising out of or in connection with this Agreement,
including the breach, termination or invalidity of it (Dispute), either
party may serve formal written notice on the other party that a Dispute has
arisen (Notice of
Dispute).  The parties
shall use all reasonable efforts for a period of 30 calendar days from the date
on which the Notice of Dispute is served by one party on the other party (or
such longer period as may be agreed in writing between the parties) to resolve
the Dispute on an amicable basis.  If the
parties agree that a matter is capable of resolution by an independent expert,
such matter shall be referred to such independent expert (on such terms as the
parties may agree in writing) for resolution and, save in respect of any
manifest error, the decision of such expert shall be final and binding on the
parties.

 

31.3         If the parties are unable to resolve
the Dispute by amicable negotiation within the time period referred to in
clause 31.2, the Dispute shall be immediately referred to the Chief
Operating Officer of AES on behalf of the Seller and Andrei Tretyakov on behalf
of the Purchaser (or, in either case, such other executive officer of a similar
level as the Seller or, as the case may be, the Purchaser nominates in writing
to the other party) who shall attempt, for a period of seven days from the date
of such referral, to resolve the Dispute. 
In the event that such persons are unable to resolve the Dispute within
the stated time period (or such longer agreed period), the Dispute shall be
referred to arbitration in accordance with the remaining provisions of this
clause 31.

 

31.4         Subject to clauses 31.2
and 31.3, the Dispute shall be referred to and
finally resolved by arbitration at the London Court of International
Arbitration under the UNCITRAL Arbitration Rules by three arbitrators
appointed in accordance with those Rules.  The seat of arbitration shall be London,
England.  The language to be used in the
arbitral proceedings shall be English.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

22

SCHEDULE 1

 

TARGET COMPANIES

 

The following entities shall be considered the Target
Companies (as shown in the chart on the following page)

 

 

 

 

 

 

 

	
   

  	
  Target
  Company

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AES Maikuben
  LLP, Kazakhstan

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Maikuben
  West LLP, Kazakhstan

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AES
  Ekibastuz LLP, Kazakhstan

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AES Suntree
  Power Ltd., Ireland

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Kilcormac
  Trading Ltd., Cyprus

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Electric
  Power Holding VOF,

  Netherlands

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AES Coal
  LLP, Kazakhstan

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Argamak 2007
  LLP, Kazakhstan

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Maikuben
  Mine LLP, Kazakhstan

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Maikuben
  Electric LLP, Kazakhstan

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Maikuben
  Coal LLP, Kazakhstan

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AES
  Kazelectro NV, Netherlands

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

23

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

24

 

SCHEDULE 2

 

LIMITATIONS ON LIABILITY

 

1.             Time
Limits.  The Seller shall not be
liable for any Claim unless the Seller receives from the Purchaser written
notice (within 60 days of the Purchaser becoming aware of such Claim)
containing reasonably specific details of the Claim including, where reasonably
possible, the Purchaser’s estimate (on a without prejudice basis) of the amount
of the Claim no later than 31 January 2009.

 

	
  2.

  	
   

  	
  Thresholds
  for Claims.  The Seller shall not be
  liable for any single Claim:

   

  
	
   

  	
   

  	
   

  
	
  (a)

  	
   

  	
  unless the amount of the liability
  pursuant to that single Claim exceeds $2,000,000 (in which case the Purchaser
  shall be able to claim only for the excess over $2,000,000); and

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  unless the aggregate amount of the
  liability of the Seller for all Claims not excluded by sub-paragraph (a)
  exceeds $10,000,000 (in which case the Purchaser shall be entitled to claim
  the whole amount and not merely the excess).

  

 

If more than one Claim arises from, or is
caused by, the same or substantially the same matter, matters, circumstance or
circumstances and the aggregate amount of damages to which the Purchaser would
be entitled as a result of those Claims is equal to or exceeds the sum
specified in subparagraph (a) of this paragraph 2, sub-paragraph 2(a) shall
not apply to any of those Claims.

 

3.             Maximum
limit for all Claims.  The aggregate
amount of the liability of the Seller shall not exceed:

 

(i)          20%
of the Final Price in respect of all Claims (including any amounts of
expenditure incurred by the Seller pursuant to clause 7.3  above) other than any Claims in respect of a
breach of any Title Warranty; and

 

(ii)         100%
of the Final Price in respect of any Claims in respect of a breach of any Title
Warranty less all other Claims made up to the 20% limit in (i) above.

 

4.             Claim
to be withdrawn unless litigation commenced.  Any Claim shall (if it has not been
previously satisfied, settled or withdrawn) be deemed to have been withdrawn
6 months after the notice is given pursuant to paragraph 1 of this
Schedule or, in the case of a contingent liability, 6 months after that
liability becomes an actual liability, unless legal proceedings in respect of
it have been commenced by being both issued and served (unless the Claim arises
as a result of, or in connection with, a Third Party Claim and the Seller shall
have assumed the conduct of the Third Party Claim in accordance with Clause 7
of this Agreement).  No new Claim may be
made in respect of the facts, matters, events or circumstances giving rise to
any such withdrawn Claim.

 

5.             No
other Seller Warranties.  The
Purchaser acknowledges and agrees that no Seller Warranties are given in
relation to any matters except those set out in clause 7 of this
Agreement.

 

6.             Matters
disclosed.  The Seller shall not be
liable for any Claim for breach of the Warranties if and to the extent that the
fact, matter, event or circumstance giving rise to such Claim is disclosed by
this Agreement, any other Transaction Document, the General Disclosures as per Schedule
5, the Disclosure Letter, any document disclosed in the Data Room or any
disclosure through any discussions with the Seller or its Representatives.

 

 

25

 

 

7.             Matters
taken into account in adjustments. 
The Seller shall not be liable for any Claim if and to the extent that
the fact, matter, event or circumstance giving rise to the Claim is provided
for or otherwise taken into account in the Closing Statement or any consequent
adjustment to the Initial Price.

 

8.             Seller
Awareness.  The Seller shall not be
liable for any Claim for breach of the Seller Warranties under this Agreement
if and to the extent that the Seller is not aware at the date of this Agreement
(i) of the fact, matter, event or circumstance which is the subject matter
of the Claim or (ii) that the fact, matter, event or circumstance could
reasonably be expected to amount to a Claim.

 

9.             Contingent
liabilities.  If any Claim is based
upon a liability which is contingent only, the Seller shall not be liable to
make any payment unless and until such contingent liability gives rise to an
obligation to make a payment (but the Purchaser has the right under
paragraph 1 of this Schedule 2 to give notice of that Claim before such
time and shall be entitled to exercise a right of set off in respect of such
Claim in accordance with the terms of clause 24).

 

10.           No
liability for Claims arising from acts or omissions of Purchaser.  The Seller shall not be liable for any Claim
to the extent that it would not have arisen but for, or has been increased or
not reduced as a result of, any voluntary act, omission or transaction carried
out:

 

	
  (a)

  	
   

  	
  after Closing by the Purchaser or any
  member of the Purchaser Group (or its respective directors, employees or
  agents or successors in title) outside the ordinary and usual course of
  business of a Group Company as at Closing; or

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  before Closing by any member of the
  Seller Group or any Group Company at the direction or request of the
  Purchaser or any member of the Purchaser Group.

  

 

11.           Purchaser’s
duty to mitigate.  The Purchaser
shall procure that all reasonable steps are taken to avoid or mitigate any loss
or damage which it may suffer in consequence of any breach by the Seller of the
terms of this Agreement or any fact, matter, event or circumstance likely to
give rise to a Claim.

 

12.           Insured
Claims.  The Seller shall not be
liable in respect of any Claim to the extent that the amount of such Claim is
covered by a policy of insurance or would have been so covered if the policies
of insurance effected by or for the benefit of the Group Companies had been
maintained after Closing on no less favourable terms than those existing at the
date of this Agreement.

 

13.           Recovery
from third party after payment from Seller. 
Where the Seller has made a payment to the Purchaser in relation to any
Claim (to the extent such payment does not comprise interest on late payment)
and the Purchaser or any member of the Purchaser Group is entitled to recover
(whether by insurance, payment, discount, credit, relief or otherwise) from a
third party a sum which indemnifies or compensates the Purchaser or any member
of the Purchaser Group (in whole or in part) in respect of the liability or
loss which is the subject of a Claim, the Purchaser or relevant member of the
Purchaser Group shall (i) promptly notify the Seller of the fact and
provide such information as the Seller may reasonably require (ii) take
all reasonable steps or proceedings as the Seller may require to enforce such
right and (iii) pay to the Seller as soon as practicable after receipt an
amount equal to any amount by which the total of (i) any such sum received
by the Purchaser from that third party and (ii) any 

 

 

26

 

such payment
received by the Purchaser from the Seller exceeds the amount required to
compensate the Purchaser in full under this Agreement for the matter or
circumstance which gave rise to the relevant Claim (net of taxation and less
any reasonable costs of recovery).

 

14.           Net financial benefit.  The Seller shall not be liable to satisfy any
Claim to the extent of any corresponding saving by or net quantifiable
financial benefit to the Purchaser or any member of the Purchaser Group arising
from the matter(s) giving rise to such Claim, including the amount (if
any) by which any tax for which the Purchaser or any member of the Purchaser
Group would otherwise have been accountable or liable to be assessed is
actually reduced or extinguished as a result of the matter(s) giving rise
to the Claim.

 

15.           No liability for legislation or
changes in rates of tax.  The Seller
shall not be liable for any Claim if and to the extent it is attributable to or
the amount of such Claim is increased as a result of any (i) legislation
not in force at the date of this Agreement (ii) change of law (including
any enactment or introduction of any new law or any change in the
interpretation of, or any extension of or designations under, any existing law
or the repeal of any existing law or the alteration or termination (unless
replaced or no longer required under applicable law) of any relevant consent
from a Governmental Entity, regulation, directive, requirement or
administrative practice or (iii) change in the rates of taxation in force
at the date of this Agreement.

 

16.           No double recovery.  The Purchaser shall not be entitled to
recover damages or obtain payment, reimbursement, restitution or indemnity more
than once in respect of any one liability, loss, cost, shortfall, damage,
deficiency, breach or other set of circumstances which gives rise to more than
one Claim.

 

17.           Consequential loss.  Neither the Purchaser nor any member of the
Purchaser Group shall be entitled to claim for any punitive, special, indirect
or consequential loss or loss of profit or for any loss of goodwill or possible
business after Closing, whether actual or prospective.

 

18.           Purchaser’s knowledge.  The Seller shall not be liable for any Claim
for breach of the Seller Warranties if and to the extent that the Purchaser or
any of its Affiliates or Representatives is aware at the date of this Agreement
(i) of the fact, matter, event or circumstance which is the subject matter
of the Claim and (ii) that the fact, matter, event or circumstance could
reasonably be expected to likely amount to a Claim.

 

19.           Waiver of right of set-off.  Save as expressly provided in clause 24
of this Agreement, the Purchaser waives and relinquishes any right of set-off
or counterclaim, deduction or retention which the Purchaser might otherwise
have in respect of any Claim against or out of any payments which the Purchaser
may be obliged to make (or procure to be made) to the Seller pursuant to this
Agreement or otherwise.

 

20.           Seller to have opportunity to
remedy breaches.  Without prejudice
to the Purchaser’s right to make any set off under clause 24.1,
if a breach of the Seller Warranties is capable of remedy, the Purchaser shall
only be entitled to compensation if it gives the Seller written notice of the
breach and the breach is not remedied within 180 days after the date on
which such notice is served on the Seller. 
Without prejudice to its duty to mitigate any loss, the Purchaser shall
(or shall procure that any relevant member of the Purchaser Group shall)
provide all reasonable assistance to the Seller and/ or any of its Affiliates,
at their cost, to remedy any such breach.

 

21.           Application.  Nothing in this Schedule
2 shall
operate to limit the Seller’s liability in respect of any Claim which arises
(or to the extent it is increased) as a result of fraud or

 

 

27

 

fraudulent
misrepresentation by a director, officer or senior manager of any member of the
Seller Group or any fraud or fraudulent misrepresentation by the Seller in
connection with the disclosure of written documents or written information to
the Purchaser and its Representatives at any time prior to the execution of
this Agreement).

 

22.           Disapplication of Limitations.   The limitations set out in paragraphs 6, 8 and 18 above shall not apply to any Claim in respect of a breach of Title
Warranty or to any Claim under clause 7.2(1).

 

 

 

 

 

 

 

 

 

 

 

 

 

28

 

SCHEDULE 3

 

PURCHASER WARRANTIES

 

1.             The Purchaser is validly
incorporated, in existence and duly registered under the laws of its
jurisdiction and has full power to conduct its business as conducted at the
date of this Agreement.

 

2.             The Purchaser has obtained all
corporate authorisations (including, for the avoidance of doubt, all necessary
board and shareholder approvals) and has obtained or will have obtained at
Closing all other governmental, statutory, regulatory or other consents,
licences and authorisations required to empower it to enter into and perform
its obligations under this Agreement where failure to obtain them would
adversely affect to a material extent its ability to enter into and perform its
obligations under this Agreement.

 

3.             Entry into and performance by the
Purchaser and the Parent Company of this Agreement and/or any Transaction
Document to which it is a party will not (i) breach any provision of its
memorandum and articles of association, by-laws or equivalent constitutional
documents or (ii) result in a breach of any laws or regulations in its
jurisdiction of incorporation or of any order, decree or judgment of any court
or any governmental or regulatory authority, where (in either case) the breach
would adversely affect to a material extent its ability to enter into or
perform its obligations under this Agreement and/or any Transaction Document to
which it is a party.

 

4.             No member of the Purchaser Group
(other than an Affiliate which is not material in the context of the Purchaser
Group as a whole, does not hold a direct or indirect stake in the Purchaser and
is not a Subsidiary Undertaking of the Purchaser) is insolvent or bankrupt
under the laws of its jurisdiction of incorporation, unable to pay its debts as
they fall due or has proposed or is liable to any arrangement (whether by court
process or otherwise) under which its creditors (or any group of them) would
receive less than the amounts due to them. 
No member of the Purchaser Group has received or made any written
communication concerning any proceedings in relation to any compromise or arrangement
with creditors or any winding up, bankruptcy or insolvency proceedings
concerning and no member of the Purchaser Group is aware of any events that
have occurred which would justify such proceedings.  no member of the Purchaser Group has received
any written communication in respect of any steps taken to enforce any security
over any assets of any member of the Purchaser Group and no member of the
Purchaser Group is aware of any event that has occurred to give the right to
enforce such security.

 

5.             So far as the Purchaser or any
member of the Purchaser Group is aware, neither the Purchaser nor any of its
Affiliates is subject to any order, judgment, direction, investigation or other
proceedings by any Governmental Entity which will, or are likely to, prevent or
delay the Closing.

 

6.             The Purchaser has available cash or
available loan facilities which will at Closing provide in immediately
available funds the necessary cash resources to pay the Initial Price as
calculated under clause 2.1 of this Agreement and meet
its other obligations under this Agreement and, in the case of loan facilities,
they involve no material pre-conditions that would prevent the Purchaser from
satisfying all conditions of drawdown to such loan facilities at or prior to
Closing.

 

7.             Without prejudice to the Purchaser’s
rights under the Seller Warranties, the Purchaser acknowledges that it has such
knowledge and experience in financial and business matters and in the Kazakh
power and mining sectors that it is capable of evaluating the Proposed
Transactions and the merits and risks of an investment in the Shares.  The Purchaser further acknowledges that it
has received the Disclosure Letter.

 

29

 

8.             Without prejudice to the
Purchaser’s rights under the Seller Warranties, the Purchaser acknowledges and
affirms that it has completed its own independent investigation, analysis and
evaluation of the Group Companies, that it has made all such reviews and
inspections of the business, assets, results of operations and condition (financial
or otherwise) of the Group Companies as it has deemed necessary or appropriate,
and that in making its decision to enter into this agreement and to consummate
the transactions contemplated hereby it has relied on its own independent
investigation, analysis, and evaluation of the Group Companies.

 

9.             The Purchaser is not aware of any
facts or circumstances which could reasonably be expected to result in a Claim
being made against the Seller or any misrepresentation by or on behalf of the
Seller in connection with the Proposed Transactions.

 

10.           The Purchaser shall, in entering into
and performing its obligations under this Agreement and/ or any Transaction
Document, comply with the AES Compliance Terms and Conditions (as set out in Schedule 6).

 

11.           For the avoidance of doubt and at the
request of the Seller, the Purchaser and the Parent Company confirm that they
do not benefit from sovereign immunity.

 

 

 

 

 

 

 

 

 

 

 

30

 

SCHEDULE 4

 

CLOSING ARRANGEMENTS

 

Part A : Pre-Closing

 

1.             Access

 

Until Closing the Seller shall:

 

	
  (a)

  	
   

  	
  procure that the Purchaser and its
  Representatives are given reasonable access to the properties, assets and to
  the books and records of the Group Companies during normal business hours on
  any Business Day and on reasonable notice to the Seller; and

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  provide such information regarding the
  businesses and affairs of the Group Companies as the Purchaser may reasonably
  require,

  

 

provided that:

 

	
  (a)

  	
   

  	
  the provision of such information is not
  unduly disruptive to the operation of the Kazakh Business;

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  the provision of such access or
  information does not breach any applicable law or regulation; and

  
	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  the Purchaser and its Representatives
  comply in full with AES security and safety procedures when accessing the
  properties of the Group Company.

  
	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Conduct of business

  

 

Until Closing the Seller shall procure
that, except with the written consent of the Purchaser, each Group Company
shall be operated in the ordinary course in all material respects (to the
extent permitted by applicable law and save in respect of any Tariff Freeze
agreed between the parties), that no Group Company acts in a manner
inconsistent with the framework implied by the Management Agreement in any material
respect without the Seller consulting with the Purchaser (assuming the
Purchaser responds in an appropriate and timely manner) in respect of such
action (to the extent that it is lawful and practicable to do so) and that no
Group Company shall:

 

	
  (a)

  	
   

  	
  declare, make or pay any dividend or
  other distribution; or

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  create, issue, purchase or redeem any
  class of share or loan capital; or

  
	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  form, other than as a part of the
  Reorganisation, any subsidiary or acquire shares in any company or participate
  in, or terminate any participation in, any partnership or joint venture; or

  
	
   

  	
   

  	
   

  
	
  (d)

  	
   

  	
  pass any resolution of its shareholders
  or any class of shareholders, whether in general meeting or otherwise (except
  (i) as required in connection with or for the purposes of the
  Reorganisation or (ii) with the prior consent of the Purchaser which
  shall not be unreasonably withheld or delayed);

  

 

 

31

 

 

	
  (e)

  	
   

  	
  agree, conditionally or otherwise, to do
  any of the foregoing.

  

 

Part B  : Seller Obligations

 

At Closing, the Seller shall deliver or
ensure that there is delivered to the Purchaser (or made available to the
Purchaser’s reasonable satisfaction):

 

	
  (a)

  	
   

  	
  the share registers of the Companies
  showing the Seller’s ownership of the Shares;

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  an apostilled certificate of tax
  residence of the Seller; and

  
	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  a duly executed notarial deed of transfer
  in respect of the Shares.

  

 

Part C : Purchaser
Obligations

 

At Closing, the Purchaser shall:

 

	
  (a)

  	
   

  	
  deliver (or ensure that there is
  delivered to the Seller) (to the extent not previously delivered) a copy of a
  resolution (certified by a duly appointed officer as true and correct) of the
  board or, as applicable, supervisory board of directors of the Purchaser and
  the Parent Company as appropriate (or, if required by the law of its
  jurisdiction or its articles of association, by-laws or equivalent
  constitutional documents, of its shareholders) authorising the execution of
  and the performance by the Purchaser and the Parent Company of its
  obligations under this Agreement and each of the Transaction Documents to be
  executed by it;

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  deliver duly executed copies of the power
  of attorney of the Parent and Owners required to be delivered pursuant to
  Clauses 3.15 and 3.16 of the Management Agreement;

  
	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  pay to the Seller the Initial Price in
  accordance with clause 2.1; and

  
	
   

  	
   

  	
   

  
	
  (d)

  	
   

  	
  deliver a duly executed notarial deed of
  transfer in respect of the Shares.

  

 

Part D : Inter
Company Debt

 

At Closing,

 

	
  (a)

  	
   

  	
  the Seller shall procure the execution by
  AES London Holdings BV and the Purchaser shall execute any Transaction
  Documents as may be required in order to assign the Inter-Company Debt to the
  Purchaser, free of any Encumbrances;

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  the Seller and the Purchaser shall carry
  out their respective obligations under Schedule 8 (Inter-Company Debt)
  required to be performed at Closing.

  

 

 

 

 

32

 

Part E : General

 

	
  1.

  	
   

  	
  The Seller and the Purchaser shall
  negotiate in good faith with a view to agreeing before the Closing Date the
  final form of any Transaction Document reasonably acceptable to all parties
  thereof which is not in Agreed Form at the date of this Agreement.

  
	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  All documents and items delivered at
  Closing pursuant to this Schedule 4 shall be held by the recipient to the
  order of the person delivering the same until such time as Closing shall be
  deemed to have taken place. Simultaneously with:

  
	
   

  	
   

  	
   

  
	
  (a)

  	
   

  	
  delivery of all documents and all items
  required to be delivered at Closing (or waiver of its delivery by the person
  entitled to receive the relevant document or item); and

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  receipt of an electronic funds transfer
  to the Seller’s Bank Account in immediately available funds of the Initial
  Price,

  

 

the documents and items delivered in
accordance with this Schedule shall cease to be held to the order of the person
delivering them and Closing shall be deemed to have taken place.

 

 

 

 

 

 

 

 

 

 

33

 

SCHEDULE 5

 

GENERAL DISCLOSURES

 

	
  1.

  	
   

  	
  The Purchaser shall be deemed to have
  full knowledge of:

  
	
   

  	
   

  	
   

  
	
  (a)

  	
   

  	
  to the extent Fairly Disclosed, all
  matters contained in written correspondence, documents and other information
  delivered, sent or given to (or made available for inspection by) the
  Purchaser or any member of the Purchaser Group or any of its advisers by the
  Seller or any of its advisers, and any matter referred to in any of them;

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  all information contained on the files or
  any document, register or record maintained by the Registrar of Companies in
  Ireland, Cyprus, the Netherlands and Kazakhstan in relation to any Group
  Company and which the public may inspect as at 31 January 2008;

  
	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  all information in relation to any Group
  Company which would be revealed by a search made on 31 January 2008
  at any court registry or registry of winding up searches in Ireland or the
  Netherlands;

  
	
   

  	
   

  	
   

  
	
  (d)

  	
   

  	
  all information in relation to any Group
  Company which would be revealed by an inspection or search as at 31
  January 2008 of any document, register or record which the public may
  inspect in Ireland, Cyprus, the Netherlands or Kazakhstan;

  
	
   

  	
   

  	
   

  
	
  (e)

  	
   

  	
  to the extent Fairly Disclosed, all
  information contained or referred to in the information memorandum sent to
  the Purchaser or any member of the Purchaser Group on
  4 December 2007;

  
	
   

  	
   

  	
   

  
	
  (f)

  	
   

  	
  all matters of which the Purchaser or any
  member of the Purchaser Group ought reasonably to be aware as affecting the
  business sectors within which the Group Companies operate and/or which are
  known generally by those operating within such business sectors;

  
	
   

  	
   

  	
   

  
	
  (g)

  	
   

  	
  any information which would be revealed
  by an inspection or search on 31 January 2008 of any document, register
  or record which the public may inspect and which is maintained by any
  registry of trade marks, patents, designs, domain
  names (where that information relates to any domain name that incorporates
  any trade mark that would be revealed upon an inspection or search of a trade
  marks registry in accordance with this paragraph 1(g) followed by one of
  the general top-level domains .com,
  .net, .info or .biz, or followed by a country code top-level domain) or other intellectual
  property in any jurisdiction, or information which is available to the public
  from any such registry;

  
	
   

  	
   

  	
   

  
	
  (h)

  	
   

  	
  without prejudice to the generality of
  any of the foregoing paragraphs, in relation to any and all of the
  Properties:

  

 

(i)          any
information which would be revealed by an inspection or search on 31 January 2008
of any document, register or record which the public may inspect and which are
maintained by, or information which is available to the public from, any land
registry and any register of local land charges in any jurisdiction; and

 

(ii)         all
matters which would be revealed by searches or enquiries carried out on
31 January 2008 at the relevant local authorities or any other body
or authority which a prudent purchaser of the Properties would make having
regard to the nature and use of the Properties; and

 

(iii)        any
matter which would be revealed by an inspection and/or survey by suitably
qualified technical consultants.

 

34

 

SCHEDULE 6

 

AES COMPLIANCE TERMS
AND CONDITIONS

 

In connection
with the sale and purchase agreement to which this Schedule forms a part (the Main Agreement), the Purchaser
hereby represents and warrants to and agrees with the Seller that, in respect
of the Proposed Transactions, the Purchaser shall be legally bound as follows:

 

1.             The Purchaser shall comply fully
with all applicable laws of the countries in which the Proposed Transactions
are conducted as well as the applicable anti-corruption, anti-money laundering,
anti-terrorism and economic sanction and anti-boycott laws of the United States
including without limitation, the United States Foreign Corrupt Practices Act
(the Applicable  Laws and
Regulations).

 

2.             The Purchaser represents and
warrants that it has not, and that it has no evidence of any kind that any of
its owners, controlling shareholders, directors, officers, employees or any
other person acting on its behalf (including, without limitation, any of its
Affiliates, contractors, subcontractors, consultants, representatives or
agents) has, either directly or indirectly:

 

(a)                                  Made a Prohibited
Payment, with respect to the Proposed Transactions, which is
defined to include any offer, gift, payment, promise to pay, or authorization
of the payment of any money or anything of value, directly or indirectly, to (i) any
officer or employee of a government (other than the U.S. government),
department (whether executive, legislative, judicial or administrative), agency
or instrumentality of such government, including a regional governmental body
or a government-owned business, or of a public international organization; (ii) any
person acting in an official capacity for or on behalf of such government,
department, agency, instrumentality, or public international organization; (iii) any
candidate for a political or government office or appointee to such office; or (iv) any
(other than U.S.) political party outside of the United States (each a Government
Official), including for the use or benefit of any other person
or entity, to the extent that one knows or has reasonable grounds for believing
that all or a portion of the money or thing of value which was given or is to
be given to such other person or entity, will be paid, offered, promised, given
or authorised to be paid by such other person or entity, directly or
indirectly, to a Government Official, for the purpose of either (i) influencing
any act or decision of the Government Official in his official capacity; (ii) inducing
the Government Official to do or omit to do any act in violation of his lawful
duty; (iii) securing any improper advantage; or (iv) inducing the
Government Official to use his influence with a non-U.S. government or
instrumentality thereof to affect or influence any act or decision of such
government or instrumentality, in order to assist in obtaining or retaining
business or in directing business to any party.

 

(b)                                 Engaged in a Prohibited Transaction with respect
to the Proposed Transactions which is defined to include:

 

	
  (i)

  	
   

  	
  receiving,
  transferring, transporting, retaining, using, structuring, diverting, or
  hiding the proceeds of any criminal activity whatsoever, including drug
  trafficking, fraud, and bribery of a Government Official;

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  engaging or
  becoming involved in, financing, or supporting financially or otherwise,
  sponsoring, facilitating, or giving aid to any terrorist person, activity or
  organization; or

  

 

 

 

 

35

 

	
  (iii)

  	
   

  	
  participating
  in any transaction or otherwise conducting business with a “designated
  person,” namely a person or entity that appears on any list issued by the
  United States or the United Nations with respect to money laundering,
  terrorism financing, drug trafficking, or economic or arms embargoes (a Designated Person).

  

 

3.             The Purchaser will not and shall
take all reasonable steps to ensure that none of its owners, controlling
shareholders, officers, employees and other persons working for it on the
Proposed Transactions (including, without limitation, its Affiliates,
contractors, subcontractors, consultants, representatives and agents), directly
or indirectly, make, promise or authorize the making, of a Prohibited Payment
or engage in a Prohibited Transaction with respect to the Proposed
Transactions.

 

4.             The Purchaser shall promptly report
to the Seller any Prohibited Payment or Prohibited Transaction of which it
obtains knowledge, or has reasonable grounds to believe occurred in respect of
the Proposed Transactions.

 

5.             The Purchaser agrees that, if the Seller
has any reasonable grounds to believe that a Prohibited Payment has been made,
promised or authorised, directly or indirectly, to a Government Official in
connection with the Proposed Transactions, or that a Prohibited Transaction has
taken place in connection with the Proposed Transactions, it shall cooperate in
good faith with the Seller in determining whether such a violation occurred by
engaging an independent third party to investigate the matter and to provide a
written report of its findings to the Seller and the Purchaser.

 

6.             The Purchaser has not and will not,
either directly or indirectly, share or promise to share its fees or any other
funds it receives from the Seller or in respect of the Proposed Transactions
with any Government Official.

 

7.             The Purchaser agrees that a
material breach of one or more of the covenants or representations of the
Purchaser in this Schedule shall be sufficient cause for the Seller, acting in
good faith, and not without reasonable prior written notice, to terminate the
Main Agreement and the Proposed Transactions, in whole or in part, and to
declare them null and void, in which case the Purchaser agrees that it shall be
liable for any damages or remedies available to the Seller under applicable
law.

 

8.             This Schedule shall be considered
to be an integral part of the Main Agreement (and shall be effective on the
same date as the Main Agreement).  In the
event of a conflict between this Schedule and the Main Agreement, this Schedule
shall prevail.

 

9.             All the provisions in this Schedule
are material and shall survive the termination of Main Agreement.

 

10.           The Purchaser shall not assign its
rights and responsibilities contained in this Schedule to a third party without
the prior written approval of the Seller.

 

 

 

36

 

SCHEDULE 7

EARNOUT CONSIDERATION

 

 

Part A : Definitions relating to this
Schedule

 

1.1           For the purposes of this Agreement,
the following expressions shall have the following meanings:

 

Capex means the amount of capital expenditure
incurred in a given financial period, as determined in accordance with IFRS;

 

Change in Law has the meaning given to it in the
Management Agreement;

 

Earnout Consideration means
any of the First Earnout Consideration, the Second Earnout Consideration or the
Third Earnout Consideration;

 

Earnout Income Statements means the income statements
for the relevant Earnout Period prepared in Kazakh tenge and converted into US
dollars at the exchange rates set out in Part B below for the purposes of
calculating OP1, OP2 and OP3;

 

Earnout Period means any of the First Earnout Period, the
Second Earnout Period and the Third Earnout Period;

 

EBITDA means the consolidated profit before
interest (both receivable and payable), taxation, depreciation and amortisation
of the Group Companies, determined in accordance with IFRS and applying
accounting policies as set out in Part
E of this
Schedule, and as adjusted in accordance with Part
D of this
Schedule and in accordance with Clauses 3.3, 3.26B, 4.6, 4.14 and 13.5(b)(ii) of
the Management Agreement;

 

Expert has the meaning given to it in the
Management Agreement;

 

First Earnout Consideration means a maximum amount of
$105 million calculated in accordance with paragraph 2 of
Part B of this Schedule;

 

First Earnout Period means the twelve month period
from 1 January 2008 to 31 December 2008;

 

High Target means the minimum EBITDA required for the
maximum Earnout Consideration to be payable with respect to any Earnout Period;

 

OP1 means the EBITDA in US dollars for the
First Earnout Period (converted from Kazakh Tenge at the exchange rate set out
below);

 

OP2 means the EBITDA in US dollars for the
Second Earnout Period (converted from Kazakh Tenge at the exchange rate set out
below);

 

OP3 means the EBITDA in US dollars for the
Third Earnout Period (converted from Kazakh Tenge at the exchange rate set out
below);

 

Payment Date means in respect of each Earnout Period,
7 days after the date on which the Earnout Consideration for the relevant
Earnout Period shall be deemed to have been determined in accordance with Part C
of this Schedule (or, if earlier, the date on which payment in respect of such
Earnout Period is required in accordance with paragraphs 3 or 5 of Part F
below);

 

 

 

37

 

Permitted
Tariffs has the meaning given to it in paragraph 4 of Part D;

 

Relevant Amount  means each of OP1, OP2 and OP3;

 

Relevant Period means the period commencing on the Closing
Date and ending on the final day of the Third Earnout Period or, if earlier,
the date on which the Management Agreement terminates;

 

Second Earnout Consideration means a maximum amount of
$105 million calculated in accordance with paragraph 3 of
Part B of this Schedule;

 

Second Earnout Period means the twelve month period
from 1 January 2009 to 31 December 2009;

 

Termination Payment has the meaning given to it in the
Management Agreement;

 

Three Year Period means the three year period from 1 January 2008
to 31 December 2010;

 

Third Earnout Consideration means a maximum amount of
$110 million calculated in accordance with paragraph 4 of
Part B of this Schedule (subject to the
adjustment set out in Part G of this Schedule);

 

Third Earnout Period means the twelve month period
from 1 January 2010 to 31 December 2010; and

 

Unit 8 means Unit 8 of the Ekibastuz power plant.

 

 

 

38

 

Part B
: Calculation of Earnout Consideration

 

 

1.       GENERAL

 

1.1           OP1, OP2 and OP3 shall each be
determined in accordance with Part
C of this
Schedule.

 

1.2           The Earnout Consideration shall be
paid in U.S. dollars by transfer to the Seller’s Bank Account on the relevant
Payment Date subject to the terms of the Management Agreement.

 

2.       FIRST
EARNOUT CONSIDERATION

 

The First
Earnout Consideration shall be calculated on the following basis:

 

	
  OP1 (US$ million, converted from
  Kazakh

  tenge at the rate of 117.67 KZT: 1 USD)

  	
   

  	
  First
  Earnout Consideration (US$ million)

  
	
  100-120

  	
   

  	
  60+
  (23/20* (OP1-100))

  
	
  120-150

  	
   

  	
  83+
  (22/30* (OP1-120))

  
	
  150
  or more

  	
   

  	
  105

  

 

3.       SECOND
EARNOUT CONSIDERATION

 

The Second
Earnout Consideration shall be calculated on the following basis:

 

	
  OP2 (US$ million, converted from
  Kazakh

  tenge at the rate of 114.00 KZT: 1 USD)

  	
   

  	
  Second
  Earnout Consideration (US$ million)

  
	
  160-185

  	
   

  	
  60+
  (23/25* (OP2-160))

  
	
  185-220

  	
   

  	
  83+
  (22/35* (OP2-185))

  
	
  220
  or more

  	
   

  	
  105

  

 

 

 

39

 

4.       THIRD
EARNOUT CONSIDERATION

 

The Third
Earnout Consideration shall be calculated on the following basis:

 

	
  OP3 (US$ million, converted from
  Kazakh

  tenge at the rate of 117.89 KZT: 1 USD)

  	
   

  	
  Third
  Earnout Consideration (US$ million)

  
	
  250-295

  	
   

  	
  60+
  (23/45* (OP3-250))

  
	
  295-355

  	
   

  	
  83+
  (27/60* (OP3-295))

  
	
  355
  or more

  	
   

  	
  110

  

 

5.       FUTURE
CONDUCT OF THE BUSINESS

 

The Seller and
the Purchaser agree that the business of the Company shall be conducted at all
times during the Relevant Period in accordance with the principles set out in Part F
of this Schedule.

 

6.       INTEREST

 

If any part of
the Earnout Consideration is not paid to the Seller on or by the respective
Payment Date, Default Interest shall accrue on a daily basis in accordance with
clause 12.4 of the Agreement.

 

 

 

40

 

Part C : Determination of Earnout
Consideration

 

1.             The Relevant Amounts and the
consequent Earnout Consideration shall be calculated by the Group Companies (at
the direction and subject to the review of the parties) in accordance with Part C  and Part D
of this Schedule as soon as reasonably practicable following the end of the
relevant Earnout Period to which the Relevant Amount relates and in any event
within thirty (30) days thereof. 
The Earnout Income Statement and the calculation of the Relevant Amount
shall be prepared in accordance with Part
C, Part D
and Part E  of this Schedule, in the form and
including the items shown in Exhibit 6 to this Agreement.

 

2.             A written statement of the amount
of the Relevant Amount, together with details of its calculation, shall be
delivered to the parties upon completion of the calculation pursuant to paragraph 1  above, in the form of a certificate prepared by the Group Companies.
In the event that either party disputes the certified Relevant Amount, it shall
notify the other party in writing of the amount, nature and basis of such
dispute within thirty (30) days after delivery of the certificate to it.

 

3.             In the event that either party
provides written notice of a dispute in accordance with paragraph 2
above, the Purchaser and the Seller agree to negotiate in good faith to resolve
such dispute among themselves.  If the
Purchaser and the Seller are unable to resolve such dispute within twenty one
(21) days after delivery of the certificate to the parties, the dispute
shall immediately be submitted by either the Purchaser or the Seller to an
independent UK accounting firm (the Expert)
who shall either be agreed upon by the Purchaser and the Seller or, if no such
agreement is reached within five (5) days of the end of such twenty one
(21) day period, on the request of either the Purchaser or the Seller,
such Expert shall be appointed by the President of the Institute of Chartered
Accountants in England and Wales.  The
Expert shall not be a national of or reside in either Kazakhstan or the United
States.  The Expert shall determine and
deliver written notice of such determination to the Seller and Purchaser the
amount of the Relevant Amount within thirty (30) days from the date of his
appointment and, in doing so, shall act as an expert and not as an arbitrator.

 

4.             The Seller and the Purchaser shall
each have and the parties shall procure that the Expert has full access to the
books and records of the Group Companies as is reasonably necessary for each to
be able to review in detail the calculation of the Relevant Amount (together
with all supporting information relied on in making such calculation).

 

5.             The determination of the Relevant
Amount by the Expert shall (save in the case of manifest error) be final and
binding on the parties.  All
determinations by the Expert shall be in writing, shall be delivered to the
Seller and the Purchaser.  The fees and
expenses of the Expert shall be borne equally by the Seller and the Purchaser
or as the Expert shall otherwise determine.

 

6.             The Relevant Amount shall be deemed
to have been determined:

 

(a)                                  if the parties agree with the
calculation prepared by the Group Companies, on the day that they confirm such
agreement in writing;

 

(b)                                 if neither party provides
written notice of a dispute in accordance with paragraph 2
above, on the day thirty (30) days after the delivery of the certificate
prepared by the Group Companies;

 

 

 

41

 

(c)                                  if the Seller and the
Purchaser disagree as to any matters, but resolve in writing their difference
or dispute prior to (or at any time during) the period of the appointment of
the Expert, on the day that they so agree in writing; or

 

(d)                                 on the date that the Expert
notifies the Seller and Purchaser of his determination.

 

 

 

42

 

Part D : Adjustment to EBITDA

 

1.             In preparing a draft of the Earnout
Income Statement in accordance with Part C of this Schedule and the
calculation of the Relevant Amount the Group Companies shall make the following
adjustments.

 

2.             No account shall be taken of any
items that are exceptional or out of the ordinary course based on those items
actually incurred in the usual operation of the Group Companies in the 12
months preceding the date of this Agreement, and in particular (but without
prejudice to the generality of the foregoing) no account will be taken of the
following:

 

(a)                                  any management charges or
other payments (excluding the Manager Expenses) paid or payable to the Manager
(or any other member of the Seller Group) pursuant to the Management Agreement;

 

(b)                                 any costs incurred on behalf
of the Owners by the Parent without the approval of the Manager and any other
amounts excluded by the operation of clause 3.20(d)(iii) of the Management
Agreement;

 

(c)                                  any costs incurred in the
provision of training services and development activities pursuant to clause
3.12 of the Management Agreement;

 

(d)                                 the costs and expenses
contemplated by clause 3.20(d)(vi) of the Management Agreement;

 

(e)                                  the costs and expenses
contemplated by clause 9.3 and clause 3.20(g) of the Management Agreement;

 

(f)                                    any exceptional or
non-recurring items in accordance with IFRS (including but not limited to
redundancy or restructuring costs) and any amounts payable in respect of
litigation (or a settlement in respect thereof) other than as enforcement action
in relation to a money debt;

 

(g)                                 any one-time write-offs
(including in respect of inventory obsolescence);

 

(h)                                 any costs in respect of
insurance in excess of $2 million per annum and any other costs contemplated by
clause 3.29 of the Management Agreement;

 

(i)                                     any amounts resulting from
mark-to-market accounting of contracts held by the Group Companies; and

 

(j)                                     any fines, penalties, levies,
special taxes or other amounts payable to a Governmental Entity other than as a
direct result of any material breach of the Management Agreement by the Seller
or another member of the Seller Group.

 

3.             In the event that the revenues of
the Group Companies in an Earnout Period are lower than would otherwise have
been the case as a result of any voluntary Tariff Freeze adopted by any of the
Group Companies, the EBITDA for the Earnout Period shall be increased to the
amount which would have been obtained were it not for such Tariff Freeze. If
the parties cannot agree on the amount of such increase in respect of a particular
quarter within 30 days of the end of that quarter, this shall be referred to
the Expert for binding determination in accordance with the procedures set out
in clause 15.3 of the Management Agreement.

 

 

 

43

 

4.             In calculating the amount by which
the revenues of the Group Companies in an Earnout Period were reduced as the
result of a voluntary Tariff Freeze, it shall be assumed that the following
tariffs (the Permitted Tariffs) would have
applied had it not been for such voluntary Tariff Freeze:

 

	
  2008

  	
  2.69 KZT / KWH

  
	
   

  	
   

  
	
  2009

  	
  3.45 KZT / KWH

  
	
   

  	
   

  
	
  2010

  	
  4.13 KZT / KWH

  

 

 

 

44

 

 

Part E :
Accounting Policies

 

1.                                       General Policies

 

The Earnout
Income Statements shall be prepared in accordance with IFRS.

 

 

 

 

 

 

 

45

 

 

 

Part F :
Operation of the business during the Relevant Period

 

1.                                       The Purchaser agrees that through the
Relevant Period it will not (and shall procure that its Affiliates and the
Owners will not) take any action inconsistent with the terms of the Management
Agreement and will (and shall procure that its Affiliates and the Owners will)
act in accordance with the terms of the Management Agreement.

 

2.                                       In the event of termination of the
Management Agreement prior to 31 December 2010, the provisions of
clause 8 of the Management Agreement shall apply.

 

 

 

 

46

 

Part G :
Capex Provisions

 

1.                                       The Third Earnout Consideration shall be
subject to the following adjustment in respect of Capex.

 

2.                                       In the event that the actual Capex in
respect of the Kazakh Business in respect of those items of capital expenditure
contemplated by the Capex Plan during the Three Year Period exceeds
$650 million, the Third Earnout Consideration shall be reduced by 50% of
the amount of such excess, provided that such reduction shall not exceed US$25 million.

 

3.                                       In the event that the actual Capex in
respect of the Kazakh Business in respect of those items of capital expenditure
contemplated by the Capex Plan during the Three Year Period is less than
$650 million, the Third Earnout Consideration shall be increased by 50% of
the amount of such shortfall, provided that such increase shall not exceed
US$25 million.

 

4.                                       Without prejudice to paragraph 3 above,
in the event that Unit 8 is not available for generation by
31 December 2010, the Third Earnout Consideration shall be reduced by
$25 million, provided that the aggregate reduction to the Third Earnout
Consideration resulting from the application of paragraph 2 above
and this paragraph 4 shall not in any event exceed US$25 million.

 

5.                                       For the purposes of this Part G,
capitalised interest shall not be treated as Capex.

 

 

47

 

 

SCHEDULE 8

INTER COMPANY DEBT

 

New Inter-Company Trading Debt

 

1.                                       Save as stipulated otherwise in the
respective agreement, any Inter-Company Trading Debt which arises after Closing
during the term of the Management Agreement shall be paid within 30 days of it
so arising.

 

Payment at Closing in respect of
Inter-Company Debt

 

2.                                       In relation to Inter-Company Debt existing
at the Closing Date:

 

(a)                                  the Purchaser shall at Closing
pay to the Seller (for itself or, as the case may be, as agent for the members
of the Seller Group to which the relevant Inter-Company Payables are owed) an
amount in the applicable currency equal to each of the Inter-Company Payables
(if any) which are owed to any member of the Seller Group, in consideration of
the assignment to the Purchaser of the benefit of such Inter-Company Payables;
and

 

(b)                                 the Seller shall at Closing
(for itself or, as the case may be, as agent for each relevant member of the
Seller Group) pay to the Purchaser an amount in the applicable currency equal
to each of the Inter-Company Receivables (if any) of each Group Company which
are owed by any member of the Seller Group, in consideration of the assignment
to the Purchaser of the burden of such Inter-Company Receivables.

 

Withholding Tax in respect of Inter-Company
Debt

 

3.                                       The Purchaser shall not make any deduction
from the payment at Closing in respect of Inter-Company Payables referred to in
paragraph 2 above. However, if and when any applicable Kazakh withholding tax
falls due and is paid in respect of the interest which has accrued on such
Inter-Company Payables up to the Closing Date, the Purchaser may (subject to it
providing the Seller with proof of payment) deduct the amount of such
withholding tax from any payments which subsequently fall due to the Seller
under this Agreement, provided that the amount of any such deduction may not
exceed in aggregate 15% of the interest accrued up to the Closing Date in
respect of the Inter-Company Payable owed by AES Ekibastuz LLP to Global Energy
Holding CV and 10% of the interest accrued up to the Closing Date in respect of
all other Inter-Company Payables provided however that to the extent no further
Earnout Consideration remains payable under this Agreement, the Seller shall
pay any amounts payable to the Purchaser under this clause within 10 Business
Days of having been requested to make such a payment by the Purchaser.

 

 

48

 

 

SCHEDULE 9

POST-CLOSING FINANCIAL ADJUSTMENTS

 

 

Part A :
Preliminary

 

1.                                       In preparing the Closing Statement:

 

(a)                                  the items and amounts to be
included in the calculation of External Debt and Cash for the purposes of the
Closing Statement shall be identified by applying the relevant definition in Schedule 12 (subject, where applicable, to the provisions of Part A of this
Schedule);

 

(b)                                 the amounts to be included in
the calculation of Reviewed Line Items Amount for the purposes of the Closing
Statement shall be the Total Reviewed Line Items Amounts and no others;

 

(c)                                  in applying each such
definition and the provisions of Part A of this Schedule and determining which
items and amounts are to be included in the Closing Statement, if and to the
extent that the treatment or characterisation of the relevant item or amount or
type or category of item or amount:

 

(i)                     is dealt with in the specific accounting
treatments set out in Part B of this Schedule (the Specific Accounting Treatments),
the relevant Specific Accounting Treatment(s) shall apply;

 

(ii)                  is not dealt with in the Specific
Accounting Treatments but is dealt with in the accounting principles, policies,
treatments, practices and categorisations used in the preparation of the
30 September 2007 Accounts (to the extent that such accounting
principles, policies, treatments, practices and categorisations are consistent
with US GAAP for the purposes of producing consolidated financial statements
for AES and its subsidiaries) (the Accounting Principles), the applicable
Accounting Principle(s), shall apply (including in relation to the exercise of
accounting discretion and judgement); and

 

(iii)               is not dealt with in either the Specific
Accounting Treatments or the Accounting Principles, US GAAP shall apply.

 

2.                                       For the purposes of calculating External
Debt or Cash for any Group Company any amounts which are to be included in any
such calculation which are expressed in a currency other than U.S. dollars
shall be converted into U.S. dollars at the Exchange Rate as at the Closing
Date.

 

 

49

 

 

Part B :
Specific Accounting Treatments

 

1.                                       Information available for Closing Statement.  Information available up until the date on
which the Closing Statement is finally agreed or determined shall be taken into
account insofar as it provides evidence of the state of affairs of the Group
Companies at Closing.  The Closing
Statement will reflect the position of the Group Companies as at Closing and
will not take into account the effects of any post Closing reorganisations or,
in any way, the post Closing intentions or obligations of the Purchaser.

 

2.                                       No re-appraisal of asset values.  The Closing Statement shall not re appraise
the value of any of the assets of the Group Companies as a result of the change
in their ownership (or any changes in the business of the Group Companies since
Closing following such change in ownership) except only as specifically set out
in this Schedule.

 

3.                                       Consolidated treatment.   The Group Companies shall be treated as
members of a combined consolidated group so that any intragroup balances are
eliminated.

 

4.                                       Intercompany Debt.  Inter-Company Debt shall be recorded at its
face value plus interest accrued to Closing.

 

Part C :
Closing Statement

 

1.                                       The Seller shall (or shall procure that the
Seller’s accountants (or such other independent firm of chartered accountants
of international standing as the Seller shall determine) shall), after Closing
prepare a draft statement (the Closing Statement) showing the consolidated External
Debt, Cash, and Total Reviewed Line Items Amount.  The Closing Statement shall be in the form
set out in Part A of Exhibit 3 and incorporate separate statements in
the form set out in that Exhibit showing the calculation of the
consolidated Total Reviewed Line Items Amount. 
The Seller shall deliver the draft Closing Statement to the Purchaser
within 90 days after Closing.

 

2.                                       The Purchaser shall notify the Seller in
writing (an Objection
Notice) within 60 days after receipt whether or not it
accepts the draft Closing Statement for the purposes of this Agreement.  An Objection Notice shall set out in detail
the Purchaser’s reasons for such non acceptance and specify the adjustments
which, in the Purchaser’s opinion, should be made to the draft Closing
Statement in order for it to comply with the requirements of this
Agreement.  Except for the matters
specifically set out in the Objection Notice, the Purchaser shall be deemed to
have agreed the draft Closing Statement in full.

 

3.                                       If the Purchaser serves an Objection Notice
in accordance with paragraph 2, the Seller and the Purchaser shall use all
reasonable efforts to meet and discuss the objections of the Purchaser and to
agree the adjustments (if any) required to be made to the draft Closing
Statement, in each case within 15 days after receipt by the Seller of the
Objection Notice.

 

4.                                       If the Purchaser is satisfied with the
draft Closing Statement (either as originally submitted or after adjustments
agreed between the Seller and the Purchaser pursuant to paragraph 3 above)
or if the Purchaser fails to give a valid Objection Notice within the
15 day period referred to in paragraph 2 above, then the draft Closing
Statement (incorporating any agreed adjustments) shall constitute the Closing
Statement for the purposes of this Agreement.

 

 

50

 

 

 

5.                                       If the Seller and the Purchaser do not
reach agreement within 15 days of receipt by the Seller of the Objection
Notice, then the matters in dispute may be referred (on the application of
either the Seller or the Purchaser) for determination by KPMG or, if that firm
is unable or unwilling to act, by such other independent firm of chartered
accountants of international standing as the Seller and the Purchaser shall
agree or, failing agreement, appointed by the President for the time being of
the Institute of Chartered Accountants in England and Wales (the Firm).  The Firm shall be requested to make its
decision within thirty (30) days (or such later date as the Seller, the
Purchaser and the Firm agree in writing) of confirmation and acknowledgement by
the Firm of its appointment.  The
following provisions shall apply once the Firm has been appointed:

 

(a)                                  the Seller and Purchaser shall
each prepare a written statement within 15 days of the Firm’s appointment
on the matters in dispute which (together with the relevant supporting
documents) shall be submitted to the Firm for determination and copied at the
same time to the other;

 

(b)                                 following delivery of their
respective submissions, the Purchaser and the Seller shall each have the
opportunity to comment once only on the other’s submission by written comment
delivered to the Firm not later than 10 days after receipt of the other’s
submission and, thereafter, neither the Seller nor the Purchaser shall be
entitled to make further statements or submissions except insofar as the Firm
so requests (in which case it shall, on each occasion, give the other party
(unless otherwise directed) 10 days to respond to any statements or
submission so made);

 

(c)                                  in giving its determination,
the Firm shall state what adjustments (if any) are necessary, solely for the
purposes of this Agreement, to the draft Closing Statement in respect of the
matters in dispute in order to comply with the requirements of this Agreement
and to determine finally the Closing Statement;

 

(d)                                 the Firm shall act as an
expert (and not as an arbitrator) in making its determination which shall, in
the absence of manifest error, be final and binding on the parties and, without
prejudice to any other rights which they may respectively have under this
Agreement, the parties expressly waive, to the extent permitted by law, any
rights of recourse they may otherwise have to challenge it.

 

6.                                       The Seller and the Purchaser shall each be
responsible for their own costs in connection with the preparation, review and
agreement or determination of the Closing Statement.  The fees and expenses of the Firm shall be
borne equally between the Seller and the Purchaser or in such other proportions
as the Firm shall determine.

 

7.                                       To enable the Seller to meet its
obligations under this Schedule 9, the Purchaser shall provide to the Seller
and the Seller’s accountants full access to the books and records, employees
and premises of the Group Companies and, where relevant, such access as the
Seller may reasonably require of the Purchaser for the period from the Closing
Date to the date that the draft Closing Statement is agreed or determined.  If the Purchaser serves an Objection Notice,
it shall ensure that the Seller and the Seller’s accountants shall be given
reasonable access to the Purchaser’s and the Purchaser’s accountants’ working
papers relating to the adjustments proposed in the Objection Notice and any other
submissions by or on behalf of the Purchaser in relation to the Closing
Statement.  The Purchaser shall
co-operate fully with the Seller and shall permit the Seller and/or the
Seller’s accountants to take copies (including electronic copies) of the relevant
books and records and shall provide all assistance reasonably requested by the
Seller to facilitate the preparation of the Closing Statement.

 

 

51

 

 

8.                                       When the Closing Statement has been agreed
or determined in accordance with the preceding paragraphs, then the amounts
shown in the Closing Statement as the consolidated External Debt, Cash and
Total Reviewed Line Items Amount for the Group Companies shall be final and
binding for the purposes of this Agreement.

 

Part D :
Financial Adjustments

 

1.                                       When the Closing Statement has been finally
agreed or determined in accordance with this Schedule 9, the following
adjustments shall be made to the Initial Price.

 

Total Reviewed Line Items Amount

 

2.                                       In relation to the Total Reviewed Line
Items Amount:

 

(a)                                  if the consolidated Total
Reviewed Line Items Amount of all Group Companies is greater than the Total
Estimated Reviewed Line Items Amount, then the Purchaser shall pay an amount
equal to the difference to the Seller; or

 

(b)                                 if the consolidated Total
Reviewed Line Items Amount of all Group Companies is less than the Total
Estimated Reviewed Line Items Amount, then the Seller shall pay an amount equal
to the difference to the Purchaser.

 

For these
purposes all line items relating to asset accounts shall be taken as positive
amounts and all line items relating to liabilities accounts shall be taken as
negative amounts.

 

Inter-Company Debt

 

3.                                       In relation to Inter-Company Payables:

 

(a)                                  if the aggregate amount of
Inter-Company Payables as at the Closing Date is less than the amount paid by
the Purchaser at Closing in accordance with Schedule 8, paragraph 1(a), then
the amount equal to the difference shall be deemed to increase the Final Price
and deemed to decrease the amount paid by the Purchaser in relation to the
Inter-Company Payables; or

 

(b)                                 if the aggregate amount of
Inter-Company Payables as at the Closing Date is greater than the amount paid
by the Purchaser at Closing in accordance with Schedule 8, paragraph 1(a), then
the amount equal to the difference shall be deemed to decrease the Final Price
and deemed to increase the amount paid by the Purchaser in relation to the
Inter-Company Payables.

 

4.                                       In relation to Inter-Company Receivables:

 

(a)                                  if the aggregate amount of
Inter-Company Receivables as at the Closing Date is less than the amount paid
by the Seller at Closing in accordance with Schedule 8, paragraph 1(b), then
the amount equal to the difference shall be deemed to decrease the Final Price
and deemed to decrease the amount paid to the Purchaser in relation to the
Inter-Company Receivables

 

(b)                                 if the aggregate amount of
Inter-Company Receivables as at the Closing Date is greater than the amount
paid by the Seller at Closing in accordance with Schedule 8, paragraph 1(b),
then the amount equal to the difference shall be deemed to increase the Final
Price and deemed to increase the amount paid to the Purchaser in relation to
the Inter-Company Receivables.

 

 

52

 

 

5.                                       For the avoidance of doubt, no actual cash
payments shall be made by either party in respect of any deemed adjustments
made pursuant to clause 3 and 4 of this Part D.

 

External Debt

 

6.                                       In relation to External Debt:

 

(a)                                  if the consolidated External
Debt of all Group Companies as at the Closing Date is less than the Estimated
External Debt, then the Purchaser shall pay an amount equal to the difference
to the Seller; or

 

(b)                                 if the consolidated External
Debt of all Group Companies as at the Closing Date is greater than the
Estimated External Debt, then the Seller shall pay an amount equal to the
difference to the Purchaser.

 

Cash

 

7.                                       In relation to Cash:

 

(a)                                  if the consolidated Cash of
all Group Companies as at the Closing Date is greater than the Estimated Cash,
then the Purchaser shall pay an amount equal to the difference to the Seller;
or

 

(b)                                 if the consolidated Cash of
all Group Companies as at the Closing Date is less than the Estimated Cash,
then the Seller shall pay an amount equal to the difference to the Purchaser.

 

8.                                       For the purposes of clause 2.4 and this Schedule
9, the consolidated Cash of all Group Companies as at the Closing Date shall be
deemed to be increased by the amount expended by the Group Companies on
maintenance Capex between the date of this Agreement and the Closing Date,
provided that the amount of such deemed increase shall not exceed
US$2 million.  The amount of such
maintenance Capex (up to such $2 million limit) shall be taken into account in
determining the Capex in respect of the Kazakh Business for the purposes of Part
G of Schedule 7.

 

General

 

9.                                       Any payment required to be made pursuant to
any of paragraphs 2 to 7 inclusive of this Part D shall be paid by
the Seller or the Purchaser (as the case may be) together with an amount equal
to interest on such payment at the Default Rate for the period from (but
excluding) the Closing Date to (and including) the due date for payment
pursuant to the relevant clause, calculated on a daily basis.

 

10.                                 The Seller and Purchaser agree that, once
the Closing Statement has been agreed or determined in accordance with the
provisions of Part C of this Schedule 9, the sums which each is respectively
obliged to pay pursuant to this Part D shall be aggregated and set off against
each other.  Whichever of the Seller or
Purchaser is then left with any payment obligation under this Part D shall
make the applicable payment(s) within 5 Business Days of the date on which
the Closing Statement is agreed or so determined.  Any such payment shall be made in accordance
with the provisions of clause 13.1 or 13.2 of this Agreement, as the case
may be.

 

 

 

53

 

SCHEDULE 10

PRICE ALLOCATION

 

1.                                       The Initial Price payable for the Shares
under this Agreement shall be deemed to be allocated between the Ekibastuz
GRES-1 assets and the Maikuben mine assets as follows:

 

(a)                                  USD 1,040,000,000 shall
be deemed payable in relation to the purchase of the Ekibastuz GRES-1 assets;
and

 

(b)                                 USD 110,000,000 shall be
deemed payable in relation to the purchase of the Maikuben mine assets.

 

2.                                       Any adjustments made under clause 2.1 of
this Agreement or under Schedule 9 and any payments of Earnout Consideration to
be paid under Schedule 7 shall be deemed to be allocated between the Ekibastuz
GRES-1 assets and the Maikuben mine assets in the same proportion as set out in
paragraph 1 of this Schedule 10 above.

 

 

 

 

54

SCHEDULE 11

 

AVAILABLE CAPACITY

 

The Available Capacity of the GRES 1 power plant operated by AES
Ekibastuz LLP (the Power Station) will be demonstrated as being not
less than 2250 MW in the following manner:

 

1.                                      In the period between the signing of this Agreement
and Closing each of the five operating units of the Power Station will be
separately run under test conditions typically used by the Power Station for a
period of at least one hour so as to determine and record that unit’s available
capacity at the time. The results of the power generated during that test
period will be recorded in the Power Station’s generation report (the generation report) and certified
extract of such reports will be made available to the Purchaser.

 

2.                                      Once the generation tests have been run on
all of the five operating units in 1 above the Seller shall provide the
Purchaser with a complete report showing the available capacity of each unit
demonstrated by the Generation Report and the aggregate available capacity of
each unit demonstrated by the Generation Report; and

 

3.                                      If the aggregate available capacity shown
in 2 above is less than 2250 MW the Seller will provide the Purchaser with the
reasons for such shortfall and the procedures being undertaken to remedy such a
shortfall prior to closing. If the aggregate available capacity in
paragraph 2 above is 2250 MW or more the warranty in clause 7.2(1) will be
considered satisfied.

 

 

 

 

55

 

SCHEDULE 12

DEFINITIONS AND INTERPRETATION

 

1.                                       Definitions.  In
this Agreement (including the Schedules), the following words and expressions
shall have the following meanings:

 

30 September 2007 Accounts means the unaudited combined
balance sheet of the Group Companies and the unaudited combined profit and loss
account of the Group Companies, in each case as at 30 September 2007 and
prepared in accordance with US GAAP for the purposes of producing consolidated
financial statements for AES and its subsidiaries, together with any notes,
reports, statements or documents included in or annexed or attached to them, as
contained in Part A of Exhibit 2;

 

AES Business Plan means the business plan contained in Exhibit 1
to this Agreement, as revised from time to time in accordance with the terms of
the Management Agreement;

 

AES
Compliance Terms and Conditions means the AES compliance terms and
conditions set out in Schedule 6;

 

Affiliate means, in relation to any party, any
Subsidiary Undertaking or Parent Undertaking of that party and any Subsidiary
Undertaking of any such Parent Undertaking, in each case from time to time;

 

Agreed Form means, in relation to a document, the form
of that document as initialled on the date of this Agreement for the purpose of
identification by or on behalf of the Seller and the Purchaser (in each case
with such amendments as may be agreed in writing by or on behalf of the Seller
and the Purchaser);

 

Available Capacity means capacity that is available from a
unit as determined by the procedures set forth in Schedule 11;

 

Base
Case Payout means US$83 million in respect of each Earnout
Period;

 

Business Day means a day other than a Saturday or Sunday
or public holiday in England and Wales and the Republic of Kazakhstan on which
banks are open in London and Almaty for general commercial business;

 

Calculation
of the Initial Price has the meaning given in clause 2.1;

 

Cash  means, in relation to each Group Company, the
aggregate of its cash (whether in hand or credited to any account with any
banking, financial, acceptance credit, lending or other similar institution or
organisation) and its cash equivalents (including short-term investments such
as certificates of deposit, as illustrated in Part B of Exhibit 2),
including all interest accrued thereon, as at Closing;

 

Claim means any claim under or for breach of this Agreement
(other than a claim for non-payment of any payment required to be made under
the Financial Adjustments), Schedule 8, or clause 9.1(d), including any claim
for breach of the Seller Warranties or in respect of an indemnity given by the
Seller;

 

Closing means completion of the sale and purchase of the
Shares in accordance with the provisions of this Agreement;

 

 

56

 

Closing Date has the meaning given in clause 4.1;

 

Closing Statement has the meaning given in Schedule 9;

 

Companies means AES Kazakhstan Holdings BV, AES
Ekibastuz Holdings BV and Emerging Energy Investments & Holdings BV;

 

Conditions mean the conditions to Closing set out in
clause 3.1;

 

Confidential Information has the meaning given in
clause 16.1;

 

Connected
Persons has the meaning given in clause 23;

 

Costs means losses, damages, costs (including
reasonable legal costs) and expenses (including taxation), in each case of any
nature whatsoever;

 

Data Room means the data room comprising the
documents and other information relating to the Kazakh Business made available
by the Seller via the Project Harp datasite hosted by Merrill Corporation that
are recorded on the CDs and/or DVDs initialled by or on behalf of the Sellers
and the Purchaser and certified as accurate by Merrill Corporation;

 

Default Interest means interest at LIBOR plus three (3) per
cent;

 

Disclosure Letter means the letter from the Seller to the
Purchaser executed and delivered immediately before the signing of this
Agreement;

 

Dispute has the meaning given to it
in clause 31.2;

 

Earnout Consideration has the meaning given to it
in Schedule 7;

 

Employees
means
the employees of the Group Companies immediately prior to Closing, excluding
any employees of AES or any Affiliate of AES who are seconded to any Group
Companies;

 

Encumbrance means any encumbrances
including any mortgage, pledge, charge, lien, deposit or assignment by way of
security, bill of sale, option or right of pre-emption, entitlement to
beneficial ownership (including usufruct and similar entitlements), any
provisional or executional attachment and any interest or right held, or claim
that could be raised, by a third party;

 

Environment means all or any of the
following media, namely air (including the air within buildings or other
natural or man-made structures above or below ground), water (including surface
waters, underground waters, groundwater, and water within any natural or
man-made structure), land (including land under water, surface land and
sub-surface land), flora, fauna and ecosystems;

 

Environmental Consents means any material permit, licence,
authorisation, approval or consent required under Environmental Laws for or in
connection with the carrying on of the Kazakh Business or the use of, or any
activities or operations carried out at, any Property;

 

Environmental Laws means all international, European Union,
national, state, federal, regional or local laws (including common law, statute
law, civil and criminal law) which are in force and binding at the date of this
Agreement, to the extent that they relate to Environmental Matters;

 

 

57

 

Environmental Matters means all matters relating to
the pollution or protection of the Environment;

 

Estimated Cash has the meaning given to it in Clause 2.1;

 

Estimated External Debt has the meaning given to it
in Clause 2.1;

 

Estimated Reviewed Line Item Amount means the amount of any line
item set out in Part B of Exhibit 3 (and no others) in relation to
each Target Company as shown in 30 September 2007 Accounts;

 

Exchange Rate means, with respect to a particular
currency for a particular day, the spot rate of exchange (the closing
mid-point) for that currency into dollars on such date as published in the
London edition of the Financial Times first published thereafter or, where no
such rate is published in respect of that currency for such date, the rate
quoted by Barclays Bank plc as at the close of business in London on such date;

 

External
Counsel Opinion  has
the meaning given to it in clause 24.1 of the Agreement;

 

External Debt means, in relation to each Group Company,
the aggregate of the Financial Debt owed by that Group Company as at Closing
(together with any accrued interest) to any banking, financial, acceptance
credit, lending or other similar institution or organisation which, in each
case, is not a member of the Seller Group; for the avoidance of doubt, neither
Inter-Company Payables (and any interest thereon) nor any items to be treated
as creditors in the Total Reviewed Line Items Amount constitute External Debt;

 

Fairly
Disclosed means in relation to any matter disclosure which is fair in the context
of the other disclosures in respect of that matter taken as a whole;

 

Final Price means the Initial Price adjusted in
accordance with the Financial Adjustments;

 

Financial Adjustments means any adjustment(s) required in
accordance with Part D of Schedule 9;

 

Financial Debt means borrowings and indebtedness in the
nature of borrowing (including but not limited to by way of acceptance credits,
third party borrowings, non-recourse finance, liabilities under finance leases,
hire purchase arrangements, factored debts, discounting or similar facilities,
loan stocks, bonds, debentures, notes, overdrafts or any other similar
arrangements the purpose of which is to raise money) owed to any banking,
financial, acceptance credit, lending or other similar institution or
organisation;

 

Force Majeure has the meaning ascribed to it in the Management
Agreement;

 

Governmental Entity means any supra-national, national, state,
municipal or local government (including any subdivision, court, administrative
agency or commission or other authority thereof) or any quasi-governmental or
private body exercising any regulatory, taxing, importing or other governmental
or quasi-governmental authority, including the European Union;

 

Group
Companies means the Companies and the Target Companies and a Group Company mean
any of them;

 

Guaranteed Obligations has the meaning given to it in
clause 25.1;

 

 

58

 

IFRS means the body of pronouncements issued by
the International Accounting Standards Board (IASB), including International Financial
Reporting Standards and interpretations approved by IASB, International
Accounting Standards and Standing Interpretations Committee interpretations
approved by the predecessor International Accounting Standards Committee;

 

Initial Price means the cash price payable
on Closing under clause 2.1;

 

Intellectual
Property Rights means patents, trade marks, service marks, logos,
trade names, internet domain names, copyright (including rights in computer
software) and moral rights, database rights, semi-conductor topography rights,
utility models, rights in designs, rights in get-up, rights in inventions,
rights in know-how and other intellectual property rights, in each case whether
registered or unregistered, and all rights or forms of protection having
equivalent or similar effect anywhere in the world and registered includes
registrations and applications for registration;

 

Inter-Company Debt means any Inter-Company Payables and any
Inter-Company Receivables (including but not limited to those items and amounts
set out in Part D of Exhibit 2);

 

Inter-Company Payables means, in relation to each Group Company,
any amounts owed as at Closing by that Group Company to any member of the
Seller Group (including in respect of inter-company charges), together with
accrued interest, if any, up to the date of Closing on the terms of the
applicable debt;

 

Inter-Company Receivables means, in relation to each Group Company,
any amounts owed as at Closing to that Group Company by any member of the
Seller Group (including in respect of inter-company charges) together with
accrued interest, if any, up to the date of Closing on the terms of the
applicable debt;

 

Inter-Company Trading Debt means all amounts owed,
outstanding or accrued in the ordinary course of trading, including any VAT
arising on such amounts, as between any member of the Seller Group and any
Group Company in respect of inter-company trading activity and the provision of
services, facilities and benefits between them;

 

Kazakh Business means the business carried on by the Group
Companies in Kazakhstan;

 

Liabilities means all liabilities, duties and
obligations of every description, whether deriving from contract, common law,
statute or otherwise, whether present or future, actual or contingent or
ascertained or unascertained and whether owed or incurred severally or jointly
or as principal or surety;

 

LIBOR means the display rate per annum of the offered
quotation for deposits in dollars for a period of one month which appears on
the appropriate page of the Reuters Screen (or such other page as the
parties may agree) at or about 11.00 a.m. London time on the date on which
payment of the sum under this Agreement was due but not paid;

 

Low
Case Payout  means US$60
million in respect of each Earnout Period;

 

Management Agreement means a management agreement between AES
Ekibastuz LLP, AES Maikuben LLP, Maikuben West LLP, the Manager and the
Purchaser of even date herewith in the agreed form;

 

Manager has the meaning given to it in the
Management Agreement;

 

 

59

 

Management Expenses has the meaning given to it in the
Management Agreement;

 

Non-Kazakh
Group Companies means the Companies, AES Suntree Power Ltd., Kilcormac
Trading Ltd and Electric Power Holding VOF;

 

Notice
of Dispute has the meaning given in clause 31.2;

 

Owners has the meaning given to it in the
Management Agreement;

 

Parent has the meaning given to it in the
Management Agreement;

 

Parent Undertaking has the meaning ascribed to it in the
definition of Subsidiary Undertaking below;

 

Properties
means
the freehold and leasehold interests of the Group Companies;

 

Proposed Transactions means the transactions contemplated by the
Transaction Documents;

 

Purchaser’s Bank Account means the Purchaser’s bank account details
of which are advised by the Purchaser to the Seller in writing no later than 10
Business Days before Closing;

 

Purchaser Group means the Purchaser and its Affiliates
from time to time;

 

Purchaser’s Warranties means the
warranties given by the Purchaser pursuant to Schedule 3;

 

Reorganisation means the reorganisation of the Seller’s holding of the Group
Companies, as such reorganisation is specified in Exhibit 5;

 

Representatives has the meaning given in clause 16.1;

 

Reviewed Line Item Amount means the amount of any line item set out
in Part B of Exhibit 3 (and no others) in relation to each Target
Company as shown in the reviewed accounts for 30 September 2007;

 

Seller Group means the Seller and its Affiliates from
time to time but excluding the Group Companies;

 

Seller’s Bank Account means the Seller’s bank account details of
which are advised by the Seller to the Purchaser in writing no later than 10
Business Days before Closing;

 

Seller Warranties means the warranties given by the Seller
pursuant to clause 7;

 

Shares means all the issued share capital of each of the
Companies;

 

Subsidiary Undertaking means, in relation to an
undertaking (the Parent Undertaking), any
other undertaking in which the Parent Undertaking (or persons acting on its or
their behalf) for the time being directly or indirectly holds or controls
either:

 

(a)                                  a majority of the voting rights exercisable
at general meetings of the members of that undertaking on all, or substantially
all, matters; or

 

(b)                                 the right to appoint or remove directors
having a majority of the voting rights exercisable at meetings of the board of
directors of that undertaking on all, or substantially all, matters,

 

 

 

60

 

and any undertaking which is a Subsidiary
Undertaking of another undertaking shall also be a Subsidiary Undertaking of
any further undertaking of which that other is a Subsidiary Undertaking;

 

Surviving Provisions means clauses 15 (Announcements), 16
(Confidentiality), 17 (Non-Solicitation), 18
(Assignment), 20 (Costs), 21
(Notices), 22 (Conflict with other Agreements), 23
(Whole Agreement), 24 (Waivers, Rights and
Remedies), 28 (Variations), 29 (Invalidity), 30
(No Third Party Enforcement Rights), 31 (Governing law and
Jurisdiction) and Schedule 10 (Definitions and
Interpretation);

 

Target Companies means the companies which are listed in Schedule
1 and Target Company
means any of them;

 

Tariff
Freeze means (i) a reduction in tariffs for the sale of electricity
and/or the sale price of coal (either of general or specific application)
and/or (ii) the imposition of a levy, or surcharge or other cost or the
increase of existing costs in each case following a non-binding request from
any Government Entity which the Parent requires or requests the Manager to
implement pursuant to clause 3.26B of the Management Agreement.

 

tax  or taxation  includes, without limitation, (a) taxes
on gross or net income, profits and gains, and (b) all other taxes,
levies, duties, imposts, charges and withholdings of any nature, including any
excise, property, value added, sales, use, occupation, transfer, franchise and
payroll taxes and any national insurance or social security contributions, and
any payment whatsoever which the relevant person may be or become bound to make
to any person as a result of the discharge by that person of any tax which the
relevant person has failed to discharge, together with all penalties, charges
and interest relating to any of the foregoing or to any late or incorrect
return in respect of any of them, and regardless of whether such taxes, levies,
duties, imposts, charges, withholdings, penalties and interest are chargeable
directly or primarily against or attributable directly or primarily to the
relevant person or any other person and of whether any amount in respect of
them is recoverable from any other person;

 

Title Warranties means the warranties set out in clauses 7.2(a),
(insofar as it relates to corporate authorisations), 7.2(b)(i), 7.2(e) and 7.2(g)
above and Title Warranty
means any of them;

 

Total Consideration has the meaning given to it in clause 2.7;

 

Total
Estimated Reviewed Line Items Amount means the aggregate amount of each of the
line items set out in Part B of Exhibit 3 (and no others) in relation
to each Target Company as shown in the reviewed accounts for 30 September 2007;

 

Total
Estimated Reviewed Line Items Amount means $24,625,386;

 

Transaction Documents means this Agreement, the Disclosure
Letter, the Management Agreement and any other documents in Agreed Form;

 

Unconditional Date  has the meaning given in clause 3.6;

 

undertaking  means a body corporate,
corporation or partnership or an unincorporated association carrying on trade
or a business with or without a view to profit. 
In relation to an undertaking which is not a company, expressions in
this Agreement appropriate to companies are to be construed as references to
the corresponding persons, officers, documents or organs (as the case may be)
appropriate to undertakings of that description;

 

 

61

 

US
GAAP
means the generally accepted accounting principles and practices applicable in
the United States of America; and

 

Working Hours means 9.30 a.m. to 5.30 p.m. in
the relevant location on a Business Day.

 

2.                                       Interpretation.  In this Agreement, unless the context
otherwise requires:

 

(a)                                  references to a person include any individual, firm, body
corporate (wherever incorporated), government, state or agency of a state or
any joint venture, association, partnership, works council or employee
representative body (whether or not having separate legal personality);

 

(b)                                 headings do not affect the interpretation
of this Agreement; the singular shall include the plural and vice versa; and
references to one gender include all genders;

 

(c)                                  references to any English legal term or
concept shall, in respect of any jurisdiction other than England, be construed
as references to the term or concept which most nearly corresponds to it in
that jurisdiction;

 

(d)                                 references to U.S. dollars or dollars or $
are references to the lawful currency from time to time of the United States of
America;

 

(e)                                  for the purposes of applying a reference to
a monetary sum expressed in dollars, an amount in a different currency shall,
unless otherwise expressly provided in this Agreement, be deemed to be an
amount in dollars translated at the Exchange Rate at the relevant date (which
in relation to a Claim, shall be the date of the receipt of notice of that
Claim under Schedule 2);

 

(f)                                    any statement in this Agreement qualified
by the expression so far
as the Seller is aware or to the best of the Seller’s knowledge or any
similar expression shall be deemed only to be made on the basis of the actual
knowledge, at the date of this Agreement, of the following persons and in each
case in respect only of the clauses identified below against their respective
names and shall carry no requirement to make enquiries of any other person:

 

	
  Name

  	
   

  	
  Clauses

  
	
  Igor Sergeev

  	
   

  	
  7.2 (f)

  
	
   

  	
   

  	
   

  
	
  Igor Sergeev

  	
   

  	
  7.2 (h)

  
	
   

  	
   

  	
   

  
	
  Fernando Gonzalez

  	
   

  	
  7.2 (m)

  
	
   

  	
   

  	
   

  
	
  Fernando Gonzalez / Igor Sergeev

  	
   

  	
  7.2 (n)

  
	
   

  	
   

  	
   

  
	
  Igor Sergeev / Mike
  Jonagan

  	
   

  	
  7.2 (t)

  
	
   

  	
   

  	
   

  
	
  Igor Sergeev

  	
   

  	
  7.2 (u)

  
	
   

  	
   

  	
   

  
	
  Igor Sergeev

  	
   

  	
  7.2 (v)

  
	
   

  	
   

  	
   

  
	
  Igor Sergeev/Mike Jonagan

  	
   

  	
  Schedule 2 paragraph 8

  

 

 

62

 

(g)                                 any phrase introduced by the terms including, include, in particular or any
similar expression shall be construed as illustrative and shall not limit the
sense of the words preceding those terms; and

 

(h)                                 any reference in this Agreement to a time
of day shall refer to London time unless stated otherwise.

 

3.                                       Enactments. 
Except as otherwise expressly provided in this Agreement, any express
reference to an enactment (which includes any legislation in any jurisdiction)
includes references to (i) that enactment as amended, consolidated or re-enacted
by or under any other enactment before or after the date of this Agreement; (ii) any
enactment which that enactment re-enacts (with or without modification); and (iii) any
subordinate legislation (including regulations) made (before or after the date
of this Agreement) under that enactment, as amended, consolidated or re-enacted
as described in (i) or (ii) above, except to the extent that any of
the matters referred to in (i) to (iii) occurs after the date of this
Agreement and increases or alters the liability of the Seller or the Purchaser
(or any person on whose behalf it is acting as agent pursuant to this
Agreement) under this Agreement.

 

4.                                       Schedules. 
The Schedules comprise schedules to this Agreement and form part of this
Agreement.

 

5.                                       Inconsistencies.  Where there is any inconsistency between the
definitions set out in this Schedule and the definitions set out in any clause
or any other Schedule, then, for the purposes of construing such clause or
Schedule, the definitions set out in such clause or Schedule shall prevail.

 

 

 

63

 

SIGNATURE

 

This Agreement is signed by duly authorised representatives of the
parties:

 

	
  SIGNED

  	
  )

  	
  SIGNATURE:

  	
   

  
	
  for and on behalf of

  	
  )

  	
   

  	
   

  
	
  ANTURIE
  BETEILIGUNGSVERWALTUNGS

  	
  )

  	
  NAME:

  	
  FERNANDO O.

  
	
  GmbH

  	
  )

  	
   

  	
  GONZALEZ

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED

  	
  )

  	
  SIGNATURE:

  	
   

  
	
  for and on behalf of

  	
  )

  	
   

  	
   

  
	
  KAZAKHMYS POWER B.V.

  	
  )

  	
  NAME:

  	
  OLEG NOVACHUK

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SIGNED

  	
  )

  	
  SIGNATURE:

  	
   

  
	
  for and on behalf of

  	
  )

  	
   

  	
   

  
	
  KAZAKHMYS PLC

  	
  )

  	
  NAME:

  	
  OLEG NOVACHUK

  

 

 

 

64Exhibit
10.39

 

THIS
AGREEMENT is made the 5th day of February 2008

 

BETWEEN:

 

(1)                                  KAZAKHMYS PLC, a public company
registered in England (the Parent) of
6th & 7th Floor, Cardinal Place; 100 Victoria
Street, London, SW1E 5JL;

 

(2)                                  AES EKIBASTUZ LLP, a Kazakhstan limited
liability partnership (Ekibastuz LLP);

 

(3)                                  AES MAIKUBEN LLP, a Kazakhstan limited
liability partnership (Maikuben LLP);

 

(4)                                  MAIKUBEN WEST LLP, a Kazakhstan limited
liability partnership (Maikuben West LLP and,
together with Ekibastuz LLP and Maikuben LLP, the
Owners); and

 

(5)                                  ALBERICH
BETEILIGUNGSVERWALTUNGS GmbH, (the Manager),
of 1010
Vienna, Dr Karl Lueger-Ring 12, Vienna Austria and registered with the
Companies’ Register of the Commercial Court of Vienna under registration number
FN 301829 t, acting through its Kazakhstan branch.

 

WHEREAS

 

(A)          Anturie
Beteiligungsverwaltungs GmbH (the Seller),
an indirect subsidiary of AES has agreed to sell and Kazakhmys Power B.V. (the Purchaser)
an affiliate of the Parent, has agreed to buy certain entities which directly
or indirectly own, among other entities, Ekibastuz LLP, Maikuben LLP and
Maikuben West LLP pursuant to the Sale and Purchase Agreement between the
Seller and the Purchaser dated on or about the date of this Agreement (the Sale and Purchase Agreement).  As part of the arrangements for the sale, the Manager, an
Affiliate of AES, has agreed with the Parent to provide or procure the
provision of certain management services to Ekibastuz LLP, Maikuben LLP and
Maikuben West LLP and the Parent and the Owners have agreed to use the Manager
to exclusively manage certain commercial, administrative, operation,
maintenance and capital expenditure activities of the Facilities until 31 December 2010
with a view to inter alia maximising EBITDA.

 

(B)           Ekibastuz LLP owns and operates the
Ekibastuz coal-fired thermal power station (the Power
Station) and the substation adjacent to the Power Station (the Substation), each located in
Pavlodar Oblast in northeastern Kazakhstan and Maikuben West LLP owns and operates
the Maikuben coal mine located in Pavlodar Oblast (the Coal
Mine and, together with the Power Station and the Substation,
the Facilities).  Maikuben LLP carries out certain trading
activities in respect of the coal and coal products produced by the Coal Mine.

 

(C)           The Manager has available and/or
access to the organisation, resources, knowledge and experience for the
provision (or procurement) of management services in respect of the Facilities
upon and subject to the terms hereinafter set out.  The terms of this Agreement contemplate early
termination of this Agreement at the option of either the Manager or the
Parent.

 

 

 

1

 

NOW
IT IS HEREBY AGREED as follows:

 

1.             DEFINITIONS
AND INTERPRETATION

 

1.1           In this Agreement, unless the context
otherwise requires, the following expressions have the following meanings:

 

Advance
Period has the meaning given to such term in clause 8.4;

 

AES means The AES Corporation;

 

AES Credit Support means the guarantee issued by
the AES Credit Support Provider(s) in accordance with clause 14;

 

AES Credit Support Provider means the person or persons
providing the AES Credit Support in accordance with clause 14
or any renewal or replacement thereof from time to time;

 

Affected Party has the meaning given to such
term in clause 10.2;

 

Affiliate means, in relation to a
Party, a subsidiary or a holding company of the Party or a subsidiary of the
holding company of the Party and the expressions holding
company and subsidiary
shall have the meanings respectively given to them pursuant to Section 736
of the Companies Act 1985 (as modified, amended or replaced from time to time);

 

Annual
Average Tariff means, for any Operating Year and at any time the
average tariff charged to consumers in Kazakhstan in Kazakh Tenge under all
Power Purchase Agreements entered into for that Operating Year and taking into
account in respect of future sales in the Operating Year the tariff assumed in
the Business Plan

 

Annual Budget  has the meaning given to such
term in clause 6.3;

 

Applicable
Law
means any applicable national, regional, municipal, local, civil, criminal or
administrative law, common law, statute, statutory instrument, regulation,
directive, order, direction, ordinance, tariff regime or any rule, code,
standards and guidance, decree or judgement or measure of similar effect to any
of the foregoing of Kazakhstan or any part thereof or of any Competent
Authority which has appropriate jurisdiction;

 

Appointor has the meaning given to such
term in clause 15.3(iv);

 

Base
Case Payout means has the meaning given to such term in the Sale and
Purchase Agreement;

 

Budget
Limit
means, in respect of any Operating Year, an amount equal to 10% of the
aggregate expenditure set out in the Annual Budget for that Operating Year;

 

Business Plan means the business plan
attached to this Agreement at Schedule
2 as revised and approved from time
to time pursuant to and in accordance with clause 6;

 

 

 

2

 

Business Day means, unless otherwise
specified, any day (excluding Saturday, Sunday and any public holiday in
England, New York or Kazakhstan) when banks are open for business in New York;

 

Change in Law  means, in each
case after the date of this Agreement, the enactment or introduction of any new
Applicable Law in Kazakhstan or any change in, or any change in the interpretation of, or any
extension of or designations under any existing Applicable Law in Kazakhstan
or the
repeal of any existing Applicable Law in Kazakhstan or the alteration
or termination (unless no longer required under Applicable Law in Kazakhstan) of any Relevant
Consent in Kazakhstan;

 

Change of Control
means a person other than the Parent or an Affiliate of the Parent gaining
Control of any Owner or the ownership or operation of all or substantially all
of either Facility or the Parent ceasing to be the sole party having Control of
any Owner or the operation of either Facility, in each case, other than as
contemplated by this Agreement, provided that, for the purposes of this
definition and clause 8.7(d), the exception for an Affiliate of the Parent shall
not apply where such Affiliate is a Competent Authority or an Affiliate of a
Competent Authority;

 

Coal Mine has the meaning given to such
term in the recitals to this Agreement;

 

Coal Sales Contract means any contract or other
arrangements providing for coal sales entered into by the Manager as agent of
Maikuben LLP and/or Maikuben West LLP (or by Maikuben LLP and/or Maikuben West
LLP pursuant to the power of attorney as referred to in clause 3.15)
pursuant to which any party agrees to purchase coal or coal products from
Maikuben LLP and/or Maikuben West LLP;

 

Commodity Contract has the meaning given to such
term in clause 3.21(e);

 

Competent  Authority
means:

 

(a)                                  any person, body or other
authority of any kind (whether of a national, regional, municipal, local, civil
or administrative nature) having jurisdiction over a Party or any part of the
Facilities; and

 

(b)                                 any court of competent
jurisdiction and any local, national, regional, municipal or supranational,
body or agency, authority, department, inspectorate, minister, ministry (or any
subdivision of any of them), official or public or statutory person (whether
autonomous or not) of any governmental or other regulatory department, body,
instrumentality, agency or authority having jurisdiction over a Party to this
Agreement or any part of the Facilities (including any tax authority and
environmental authority or agency in Kazakhstan or other jurisdiction relevant
to any Party and/or any part of the Facilities);

 

Compliance
Program means the
Compliance Program designated as such by the Manager and notified to the Parent
and the Owners from time to time which will be developed on the same basis as
the Standards of Conduct and to ensure compliance with the Compliance
Requirements and clause 3.31;

 

 

 

3

 

Compliance
Requirements means the standards and requirements for ethical
conduct set out in Schedule 5;

 

Control means, in relation to a company or partnership,
either:

 

(a)                                  the beneficial ownership of the majority of
the issued voting shares (or other ownership or participation interests) of the
company or
partnership or the ability (whether by direct or indirect ownership of
shares, participation or ownership interests or contract) to direct the voting
of the majority of the votes; or

 

(b)                                 “actual control” over the company or partnership where actual control
means having the ability to direct on an ongoing basis the major strategic and
major management decisions of the relevant company or partnership,
whether through the ability to exercise voting power (directly or indirectly), by
contract or otherwise;

 

Default Interest has the meaning given to such term in the Sale
and Purchase Agreement;

 

Dispute has the meaning given to such
term in clause 15.1;

 

Dollars or US$ means United
States dollars, the legal currency of the United States of America;

 

Earnout Consideration has the meaning given to such term in Schedule 7
to the Sale and Purchase Agreement;

 

Earnout Income Statement has the meaning given to such term in
Schedule 7 to the Sale and Purchase Agreement;

 

Earnout Period has the meaning given to such term in
Schedule 7 to the Sale and Purchase Agreement;

 

EBITDA has the meaning given to such
term in the Sale and Purchase Agreement;

 

Effective  Date
means the Closing Date as defined in the Sale and Purchase Agreement;

 

Expert means a person appointed in
accordance with clause 15.1 to decide a Dispute
hereunder;

 

Facilities has the meaning given to such
term in the recitals to this Agreement;

 

Fixed Deferred Consideration has the meaning given to such
term in the Sale and Purchase Agreement;

 

Force  Majeure
means an act of a public enemy, war (declared or undeclared), threat of war,
terrorist act, blockade, revolution or insurrection, to the extent such event
results in failure by the Affected Party to perform, or delay in the
performance by the 

 

 

4

 

Affected Party, of any of its obligations
under this Agreement, provided that no Party shall be relieved by Force Majeure
from any obligation to pay money due hereunder;

 

Force  Majeure
Termination  Payment
means the aggregate of:

 

(a)                                  the Base Case Payout for each
of the Earnout Period in which the termination occurred and any subsequent
Earnout Periods;

 

(b)                                 the entire amount of the Fixed
Deferred Consideration payable under the Sale and Purchase Agreement in respect
of the remainder of the Term; and

 

(c)                                  any
amount in respect of Management Expenses due but unpaid under clause 7.1 and a pro rata
amount of Management Expenses for the quarter in which the Termination Date
occurs;

 

Government Official means any of the following or
any person employed by or acting for such person:

 

(a)                                  any officer or employee of a
government (other than the U.S. government) department (whether executive,
legislative, judicial or administrative), agency or instrumentality of such
government, including a regional governmental or municipal body or a government-owned
business, or of a public international organization;

 

(b)                                 any person acting in an
official capacity for or on behalf of such government, department, agency,
instrumentality, or public international organization;

 

(c)                                  any candidate for a political
or government office or appointee to such office; or

 

(d)                                 any (other than U.S.)
political party outside of the United States,

 

Gross Negligence means any act or failure to act which seriously
and substantially deviates from the Standard of a Reasonable and Prudent
Operator and which is in reckless disregard of the harmful consequences of such
act or omission and shall not include any error of judgment or mistake by such
person in the exercise of any function, authority or discretion;

 

Growth Capex Plan means the plan for capital expenditure in connection with
the Facilities over the Term attached to this Agreement at Schedule 3;

 

High Target has the meaning given to such term in
Schedule 7 to the Sale and Purchase Agreement;

 

IFRS has the meaning given to such
term in the Sale and Purchase Agreement;

 

Kazakhmys Group means the Parent, the Owners
and their respective Affiliates;

 

Kazakhstan Competition Agency means the Agency of the
Republic of Kazakhstan for the Protection of Competition or any successor
agency or other regulatory body;

 

 

 

5

 

LIBOR has the meaning given to such
term in the Sale and Purchase Agreement;

 

Low Case Payout has the meaning given to such term in the Sale
and Purchase Agreement;

 

Maintenance Capex means capital expenditure
beyond that in the Growth Capex Plan relating to the performance of maintenance
activities in respect of the Power Station as a result of load factors above
those identified in the Business Plan;

 

Management  Expenses
has the meaning given to such term in clause 7.1;

 

Manager Costs means all costs and expenses
incurred by or on behalf of the Manager in providing or procuring the provision
of the Services, including overhead, offices costs and costs associated with
hardware and software, drivers and related expenses and costs of the Manager’s
employees (including salary, tax and social security payments, compensation,
tax equalisation, benefits, travel expenses and allowances, language training
and translation facilities, visa costs, club membership and housing costs);

 

Manager  Failure
has the meaning given to such term in clause 8.3;

 

Manager Proprietary Systems means proprietary
products, components, subsystems and other items designated as such by the
Manager and owned by the Manager or its Affiliates or sub-contractors or
suppliers, including those maintained as trade secrets by their respective
owners;

 

Manager
Voluntary Termination Payment means the aggregate of:

 

(a)           the present value (as at the relevant
calculation date), discounted at 10.5% per annum, of the Low Case Payout for
each of the Earnout Period in which the Manager’s election under clause 8.2
is made and any subsequent Earnout Periods. For purposes of calculation of this
amount, it will be assumed that the payment date of each of the payout amounts
occurs on 15 February of the subsequent year of the respective Earnout
Period;

 

(b)           the entire amount of the Fixed
Deferred Consideration payable under the Sale and Purchase Agreement in respect
of the year in which the Manager’s election is made;

 

(c)           any amount of
Management Expenses due but unpaid under clause 7.1 and a pro rata
amount of Management Expenses for the quarter in which the Termination Date
occurs; and

 

(d)           if the actual Capex incurred prior to
the date on which the Manager’s election under clause 8.2
is made, in respect of the items of capital expenditure contemplated by the
Growth Capex Plan, is less than the aggregate amount of expenditures budgeted
in the Growth Capex Plan in respect of those items on which that actual Capex
had been incurred prior to such date, 50% of the amount of such shortfall or if
more, a deduction shall be made equal to 50% of the amount of such excess
(provided that the amount payable or deductible under this sub-paragraph (d) shall
not exceed US$25,000,000)

 

 

6

 

For the avoidance of doubt, the Parent
shall not be relieved of any due obligation to pay an Earnout Payment in
respect of any Earnout Periods which have expired prior to the date on which
the Manager’s election is made, any amount of Fixed Deferred Consideration or Management
Expenses
in respect of any period which has expired prior to such date or any other
amounts which have already fallen due prior to such election.

 

Manager’s Representative means the representative
appointed by the Manager in accordance with clause 5.2;

 

month and year
means a calendar month and calendar year;

 

Notice
of Dispute has the meaning given to such term in clause 15.1;

 

Operating  Year
means in the case of the first operating year, the period commencing on the
Effective Date and ending on the next 31 December, and in the case of each
succeeding operating year the 12 month period between 1 January and
31 December until the last operating year which shall commence on 1 January 2010
and end on the Termination Date;

 

Owner Accounts has the meaning given to such
term in clause 3.33;

 

Owners has the meaning given to such
term in the first section of this Agreement;

 

Parent
Voluntary Termination Payment means the
aggregate of:

 

(a)           the present value, (as at the
relevant calculation date), discounted at 10.5% per annum, of the Base Case
Payout for each of the Earnout Period in which the Parent’s election under
clause 8.1 is made and any subsequent
Earnout Periods. For purposes of calculation of this amount, it will be assumed
that the payment date of each of the payout amounts occurs on 15 February of
the subsequent year of the respective Earnout Period;

 

(b)           the entire amount of the Fixed Deferred
Consideration payable under the Sale and Purchase Agreement in respect of the
remainder of the Term;

 

(c)           any amount of
Management Expenses due but unpaid under
clause 7.1 and
a pro rata amount of Management Expenses for the quarter in which the Termination
Date occurs;
and

 

(d)           if the actual Capex incurred prior to
the date on which the Parent’s election under clause 8.1 is made, in respect of
the items of capital expenditure contemplated by the Growth Capex Plan, is less
than the aggregate amount of expenditures budgeted in the Growth Capex Plan in
respect of those items on which that actual Capex had been incurred prior to
such date, 50% of the amount of such shortfall or if more, a deduction shall be
made equal to 50% of the amount of such excess (provided that the amount
payable or deductible under this sub-paragraph (d) shall not exceed
US$25,000,000).

 

 

7

 

For the avoidance of doubt, the Parent
shall not be relieved of any due obligation to pay an Earnout Payment in
respect of any Earnout Periods which have expired prior to the date on which
the Parent’s election is made, any amount of Fixed Deferred Consideration or Management
Expenses
in respect of any period which has expired prior to such date or any other
amounts which have already fallen due prior to such election.

 

Parent’s Appointed Officer has the meaning given to such
term in clause 3.9;

 

Parent’s  Representative
means the representatives appointed by the Parent in accordance with
clause 5.1;

 

Participant means the holders from time
to time of the participation interests in each of the Owners;

 

Party means any of Maikuben LLP,
Maikuben West LLP, Ekibastuz LLP, the Parent or the Manager as the case
requires and Parties means all of them;

 

Permitted Tariff  has the
meaning given to such term in the Sale and Purchase Agreement;

 

Power Purchase  Agreement
means any contract or other arrangements providing for energy sales (including
sales into the pool) entered into by the Manager as agent of Ekibastuz LLP (or
by Ekibastuz LLP pursuant to a power of attorney as referred to in
clauses 3.15 and 3.16)
pursuant to which any party agrees to purchase electricity from Ekibastuz LLP;

 

Power  Station
has the meaning given to such term in the recitals to this Agreement;

 

Procurement
Procedure means the
procurement procedure attached to this Agreement at Schedule
6 and as developed between
the Manager and the Parent from time to time;

 

Prohibited Payment means any offer, gift,
payment, promise to pay, or authorization of the payment of any money or
anything of value (in any form) or contract, permit or any other concession,
directly or indirectly, which is contrary to Applicable Law or the laws of any
jurisdiction to which any Party or any of its Affiliates is subject (including
the Foreign Corrupt Practices Act of the United States), and includes any
offer, gift, payment, promise to pay, or authorization of the payment of any
money or anything of value (in any form) to any Government Official including
for the use or benefit of any other person or entity, to the extent that the
payor knows or has reasonable grounds for believing that all or a portion of
the money or thing of value which was given or is to be given to such other
person or entity, will be paid, offered, promised, given or authorised to be
paid by such other person or entity, directly or indirectly, to a Government
Official, for the purpose of either (A) influencing any act or decision of
the Government Official in his official capacity; (B) inducing the
Government Official to do or omit to do any act in violation of his lawful
duty; 

 

 

8

 

(C) securing any improper advantage;
or (D) inducing the Government Official to use his influence with a
non-U.S. government or instrumentality thereof to affect or influence any act
or decision of such government or instrumentality, in order to assist in
obtaining or retaining business or in directing business to any party;

 

Prohibited Transaction means:

 

(a)                                  receiving, transferring,
transporting, retaining, using, structuring, diverting, or hiding the proceeds
of any criminal activity whatsoever, including drug trafficking, fraud, and
bribery of a Government Official;

 

(b)                                 engaging or becoming involved
in, financing, or supporting financially or otherwise, sponsoring,
facilitating, or giving aid to any terrorist person, activity or organization;
or

 

(c)                                  participating in any
transaction or otherwise conducting business with a “designated person,” namely
a person or entity that appears on any list issued by the European Union, the
United States or the United Nations with respect to money laundering, terrorism
financing, drug trafficking, or economic or arms embargoes;

 

Reasonable
and Prudent Operator means a person seeking to perform its contractual
obligations and in so doing and in the general conduct of its business
exercising that degree of skill, diligence, prudence and foresight which would
reasonably and ordinarily be expected from a skilled and experienced operator engaging
in the same type of business in the same or similar circumstances and
conditions, taking into account, without limitation:

 

(a)                                  the funding available in the
Business Plan and the Growth Capex Plan;

 

(b)                                 the age, nature, location and
condition of the Facilities (and the assets comprising the Facilities);

 

(c)                                  availability and reliability
of fuel supply and ancillary facilities;

 

(d)                                 the interchange of parts
between operational and non-operational sections of the Facilities;

 

(e)                                  the legal, regulatory and
operating environment (both formal and informal) for the business in Kazakhstan
and to the extent relevant in Russia;

 

(f)                                    applicable practices
previously adopted and as updated from time to time; and

 

(g)                                 the most economically
efficient methods of undertaking the business,

 

and any references to the “Standard of a Reasonable and Prudent
Operator” shall be construed accordingly, provided that the
Manager shall be deemed to be acting according to the Standard of a Reasonable
and Prudent Operator if it follows the instructions of any Competent Authority;

 

Relevant Claims has the meaning given to such
term in clause 4.8;

 

 

 

9

 

Relevant Consents means all permits, licences,
permissions and approvals, consents, certificates, notices, filings,
lodgements, agreements, exemptions, registrations, declarations and any other
forms of authorisations required from any Competent Authority or under any
Applicable Law (which shall include all Relevant Consents of an environmental
nature or relating to environmental matters);

 

Sale and Purchase Agreement has the meaning given to such
term in the recitals to this Agreement;

 

Services has the meaning given to such
term in clause 3.1;

 

Service Contracts has the meaning given to such
term in clause 3.21;

 

Service Contract Counterparty means any counterparty to a
Service Contract;

 

Service
Costs
has the meaning given to such term in clause 7.6;

 

Standards means has the meaning given
to such term in clause 3.1;

 

Standards
of Conduct means
the values statement attached to this Agreement at Annex 1 to Schedule 5;

 

State Procurement Rules means the regulations, rules,
guidance directions or measures having similar effect to any of the foregoing
of any Competent Authority for the procurement of goods and/or services
applicable to any person in which the government of Kazakhstan (or any
subdivision, ministry, department, body or agency thereof) has an ownership
interest or which it Controls;

 

Substation has the meaning given to such
term in the recitals to this Agreement;

 

Successor  Manager
means the person nominated and appointed by the Parent and/or the Owners to
succeed the Manager on the Termination Date as manager of the Facilities, if
any;

 

Suspension Event has the meaning given to such
term in clause 8.10;

 

Tariff
Freeze has the meaning given to such term in the Sale and Purchase Agreement;

 

Term has the meaning given to such
term in clause 2.2;

 

Termination  Date
means 31 December 2010, unless terminated earlier in accordance with
the terms of this Agreement;

 

Termination  Payment
means the aggregate of:

 

(a)                                  the Earnout Consideration that
would be payable in respect of the Earnout Period in which the relevant event
occurs and any subsequent Earnout Periods on the assumption that the EBITDA in
the respective Earnout Period was at least equal to the High Target;

 

 

 

10

(b)                                 the entire amount of the Fixed
Deferred Consideration payable under the Sale and Purchase Agreement in respect
of the remainder of the Term; and

 

(c)                                  any
amount in respect of Management Expenses due but unpaid under clause 7.1 and a pro rata
amount of Management Expenses for the quarter in which the Termination Date
occurs;
and

 

(d)                                 US$25,000,000;

 

Total Consideration has the meaning given to such term in the Sale and
Purchase Agreement;

 

Transition Plan means the plan prepared by
the Manager in respect of the last Operating Year relating to preparations for
the Owners to continue operation of the Facilities following the end of the
Term; and

 

Wilful Misconduct means the intentional breach
by a senior officer of a Party acting by himself or herself or in conjunction
with one or more senior officers or through an employee, agent or contractor of
that Party, of any obligation of that Party under this Agreement which a
Reasonable and Prudent Operator would reasonably consider to be material and
excluding any error of judgment or mistake or omission made by any person in
the exercise in good faith of any function, authority or discretion.

 

1.2                                 Save to the extent that the
context or the express provisions of this Agreement otherwise require:

 

(a)                                  words importing the singular
shall include the plural and vice versa;

 

(b)                                 references to persons  includes individuals, bodies
corporate (wherever incorporated), unincorporated associations and
partnerships;

 

(c)                                  references to the words include and including are to be
construed without limitation;

 

(d)                                 any reference to the ordinary course of business shall be
construed to take account of applicable practices previously adopted and such
changes to business practices as would be implemented by a Reasonable and
Prudent Operator in similar circumstances;

 

(e)                                  references to one gender
includes all genders;

 

(f)                                    any reference to an enactment
or statutory provision is a reference to it as it may have been, or may from
time to time be amended, modified, consolidated or re-enacted;

 

(g)                                 references to any English
legal term for any action, remedy, method of judicial proceeding, legal
document, legal status, court official or any other legal concept is, in
respect of any jurisdiction other than England, deemed to include the legal concept
or term which most nearly approximates in that jurisdiction to the English
legal term

 

 

11

 

(h)                                 the headings to the clauses
are for convenience only and do not affect the interpretation of this Agreement;

 

(i)                                     references in this Agreement
to clauses, sub-clauses, paragraphs and Schedules are unless the context
otherwise requires to clauses, sub-clauses, paragraphs of and Schedules to this
Agreement;

 

(j)                                     all references to documents or
other instruments include all amendments and replacements thereof and
supplements thereto provided that the Party affected thereby has been given
notice thereof;

 

(k)                                  references to Parties or any
other person include their successors and permitted assigns and permitted transferees;

 

(l)                                     all references to any statute
or statutory provision shall include references to any statute or statutory
provision which amends, extends, consolidates or replaces the same or which has
been amended, extended, consolidated or replaced by the same and shall include
any orders, regulations, instruments or other subordinate legislation made
under the relevant statute;

 

(m)                               references to any amount in US
dollars in this Agreement (including the Schedules) which is to be converted
into Kazakh Tenge shall be converted for the purposes of any determination or
calculation under this Agreement in respect of, or affecting, the calculation
of the Earnout Consideration at the same rate of exchange as applies for the
calculation of the Earnout Consideration under the Sale and Purchase Agreement.

 

2.             TERM

 

2.1           This Agreement, and the rights and
obligations of the Parties hereunder, are conditional upon the occurrence of,
and shall come into full force and effect upon, the Effective Date.

 

2.2           The provision of the Services by the
Manager shall commence on the Effective Date and, unless
terminated earlier in accordance with the provisions of this Agreement,
terminate
automatically without notice on 31 December 2010 (the Term), provided that the Manager
shall continue to arrange the preparation of the Owner Accounts in respect of
the period ending 31 December 2010 and, for up to 90 days after
the end of the Term, the Manager shall have all access to the books and
records, accounts and other financial, tax and accounting information,
employees and other resources of the Owners necessary for such purpose.

 

3.             THE
SERVICES

 

Services

 

3.1           The Manager agrees to manage the
commercial, administrative, operation, maintenance and capital expenditure
activities of the Owners in respect of the Facilities and as part thereof to
provide or procure the provision of the services set out in Schedule 1 (collectively, the Services)
in each case in accordance with:

 

12

 

(a)                                  the Business Plan and the
Growth Capex Plan;

 

(b)                                 the Standard of a Reasonable
and Prudent Operator;

 

(c)                                  subject to clause 3.35,
all Applicable Laws, including without limitation all relevant health and
safety legislation and environmental requirements and all Relevant Consents
from time to time in force;

 

(d)                                 the sustainability of the
operation of the Facilities following the Term; and

 

(e)                                  its express obligations under
this Agreement,

 

(together the Standards).

 

3.2                               The Parent and Owners agree
that the Manager shall have absolute and exclusive discretion throughout the
Term to decide the manner in which the Facilities are managed and operated and
the Services are performed or procured including, without prejudice to the
generality of the foregoing:

 

(a)                                  to make all decisions related
to the commercial, administrative (save for the activities outside the
responsibilities of the Manager), operation, maintenance and capital
expenditure activities at the Facilities including the prices at which supplies
are purchased and power and coal is sold) and directing and managing the
commercial, administrative, operation, maintenance and expenditure activities
of the Owners as legal entities (and their employees, agents and
sub-contractors); and

 

(b)                                 to appoint, direct and
instruct such consultants and advisers (including technical, legal or financial
consultants or advisers) as the Managers consider appropriate in connection
with the provision of the Services,

 

with a view, as a primary goal, to the High
Targets described in Schedule 7 to the Sale and Purchase Agreement being
achieved or exceeded.  The Manager’s
provision or procurement of the Services shall be effected through its
instructions and directions to the management, operational, commercial and
administrative staff of the Parent and the Owners and the entry into of Service
Contracts.

 

3.3          The Parent and the Owners agree that
the Manager shall have exclusive authority to instruct and direct the Owners
and their respective employees and officers with respect to the commercial,
administrative, operation, maintenance and capital expenditure activities of
the Facilities in accordance with this Agreement and the performance of the
Services and, for those matters set out in the Participants’ powers of attorney
granted under clause 3.16, the Participants. 
The Owners shall comply with, and shall cause their employees and
officers to comply with, any instruction of the Manager, with respect to
instructions relating to the operation of the Facilities, immediately and, with
respect to any other instruction of the Manager, within five Business
Days of such instruction being issued or less as the context requires.  Any instruction of the Manager shall be final
and binding on the Owners, the Participants and their employees, officers, consultants
and subcontractors.  If any such
instruction of the Manager is not complied with by the Owners, the Participants

 

13

 

and their
respective employees and officers within such period, the calculation of EBITDA
and the Earnout Income Statements under the Sale and Purchase Agreement shall
be adjusted to reflect such non-compliance by assuming the amount of EBITDA
which would have been generated if the Manager’s instruction had been complied
with.

 

Acknowledgement of Manager’s Absolute Authority

 

3.4          Each of the Parent and the Owners
acknowledges and agrees that it will not, and will ensure that its Affiliates
and the Participants will not, seek to direct or manage or influence any
decisions relating to the commercial, administrative (save for activities
outside the responsibilities of the Manager), operation, maintenance and
capital expenditure activities of the Facilities or any aspect of the
performance of the Services and will not take any action delegated to the
Manager under this Agreement, including in particular the award of or entry
into any Service Contract relating to the Facilities as shareholder or
otherwise.

 

3.5          The Manager shall exclusively
determine the administrative (save for activities outside the responsibilities
of the Manager) and corporate policies and procedures of the Owners and all
other policies and procedures relating to the commercial, administrative,
operation, maintenance and capital expenditure activities of the Facilities, other
than the activities outside the responsibility of the Manager or which are to
be undertaken by the Parent, in each case as set out in this Agreement.

 

3.6          The Parent and the Owners acknowledge
and agree that the Manager shall have the complete and absolute right to be
provided by the Owners and the Participants with any information in relation to
the commercial, administrative (save for activities outside the
responsibilities of the Manager), operation, maintenance and capital
expenditure activities of the Owners and to review the accounting books,
financial reports and all other documents of the Owners and the Participants to
the extent relating to the Owner and the Facilities.

 

3.7          Each of the Parent and the Owners
acknowledges and agrees that the Manager shall not be in breach of this
Agreement nor have any liability to the Parent or the Owners for the
performance of the Services nor be responsible for its failure to perform or
procure the Services where such performance or failure results from the events
set out at clauses 8.3(i) to (ix).

 

Appointment of Senior Management

 

3.8          The Manager shall be exclusively
responsible for the selection, hiring, assigning, removing and supervision of
staff at each of the Owners (including all present and future employees of the
Owners, including in particular the General Director of each Owner but
excluding the appointment of the Parent’s Appointed Officers).  Without prejudice to clause 7.6,
the Manager shall be entitled to select and hire such persons as it, in its sole
discretion, determines are needed for the functions of the Manager and to
facilitate the Manager’s performance of the Services.

 

3.9          The senior management structure of the
Owners and the related reporting lines will be implemented in accordance with
the structure chart attached as Schedule
7 

 

14

 

(Senior Management Structure) to this Agreement.  The Parent shall appoint the chief financial
officer and the chief legal officer of each of the Owners (each a Parent’s Appointed Officer), provided that the Manager (acting reasonably and upon
reasonable notice) shall be entitled to require on reasonable grounds the
Parent to remove and replace any Parent’s Appointed Officer of any Owner
within 25 Business Days of the Manager’s written notice requesting his
removal.  The General Director and the
Parent’s Appointed Officers shall constitute all of and the only senior
management of the Owners.  The Parent’s
Appointed Officers shall report to the General Director of the relevant Owner
and his or her responsibilities shall include the operation of the bank
accounts of the Owners, the provision of timely instructions to effect all
payments required to be made by the Owners and assisting the Manager in the
preparation and updating of, and the reporting requirements for, each Annual
Budget.  Any act or omission by a
Parent’s Appointed Officer shall constitute an act or omission by the Parent
under this Agreement.

 

Staff

 

3.10        The Manager shall exclusively determine
the employment and compensation policies and procedures applicable to all staff
(including all present and future employees of the Owners, including the
General Director of each Owner but not the Parent’s Appointed Officers) of each
of the Owners provided any changes in such policies and procedures effected
during the six month period ending 31 December 2010 shall be subject to
the approval of the Owners, such consent not to be unreasonably withheld or
delayed.

 

3.11        The Parties agree that each person
employed by any of the Owners as at the date of this Agreement shall, subject
to resignation by any employee, remain employed by such Owner after the
Effective Date provided that the Manager shall be entitled to exercise its
rights under clause 3.9 and 3.10
and the Manager shall be entitled to select and hire its own staff in its sole
discretion to perform or procure the performance of the Services. The Parent
and the Owners agree that the Owners shall continue for the Term to employ the
levels and categories of staff employed by such Owner as at the date of this
Agreement, unless otherwise directed by the Manager and that employment levels
shall increase in line with the needs of the Business Plan and the operation of
the Facility in accordance with and as envisaged by this Agreement.

 

Training

 

3.12        At the request of the Parent the Manager
agrees to provide, or procure the provision of, in 2010, training services for
the benefit of personnel reasonably designated by the Parent’s Representatives
in the safe and efficient operation of the Facilities and for such other
activities as are reasonably requested by the Parent and the Owners, including
developing training procedures and protocols, a training plan for training in
all relevant disciplines and activities for personnel involved in the operation
and maintenance of the Facilities, a qualification book for all operational and
maintenance personnel.  All costs
incurred by the Manager in the provision of these training services and development
activities (including the salaries and employment costs (of the persons
carrying out such training) shall be included in Service Costs and paid by the
Owners and excluded from (or be included as an 

increase in)
the calculation of the EBITDA and the Earnout Income Statements under the Sale
and Purchase Agreement.

 

15

 

Appointment of Manager as Agent

 

3.13        Each of the Owners hereby irrevocably
appoints the Manager to act as its sole and lawful disclosed agent, in their
name and on its behalf, to facilitate the Manager’s management and operation of
the Facilities and the performance or procurement of the provision of the
Services in accordance with this Agreement. 
The Manager accepts its appointment as agent subject to and in
accordance with the provisions of this Agreement.  Each of the Owners will take all action
reasonably necessary under Kazakhstan law to confirm the appointment of the
Manager as its agent with effect from the Effective Date.

 

Powers of Attorney and evidence of authority

 

3.14        Each of the
Owners agrees to grant and provide to the Manager and keep updated
from time to time such documentation (including powers of attorney) as the
Manager may reasonably request the Owners to provide in order to evidence the
Manager’s absolute and exclusive authority to provide or procure the provision
of the Services and to act on behalf of that Owner in each case in accordance
with this Agreement.

 

3.15        In particular,
the Owners, on the Effective Date, shall provide and grant to the Manager (and
keep updated) a power of attorney in the form attached to this Agreement at Part B
of Schedule 4.

 

3.16        The Parent shall
cause each Participant, on the Effective Date, to provide and grant to the
Manager (and keep updated) a power of attorney in the form attached to this Agreement at Part A
of Schedule 4 and which shall be valid throughout the
Term.

 

3.17        The Manager may take any action or make
any decision on behalf of the Participant required to evidence the approval of
that Participant to enable the Manager to ensure or facilitate the compliance
by the Owners of the Manager’s instructions or to those matters where the
approval of the Participant is required in respect of any action or commitment
on the part of the Owners.

 

3.18        [NOT USED].

 

3.19        The Manager agrees that it may only use
the authority granted to it under the powers of attorney provided by the Owners
and the Participants under clauses 3.15 and 3.16
in a manner consistent with the provision of the Services and other obligations
under this Agreement.  Any denial,
cancellation, withdrawal or revocation by the Owners or the Participants of the
appointment under clause 3.13 of the Manager as its agent
or the power of attorney granted by it to the Manager under clauses 3.14, 3.15 or 3.16 shall entitle the Manager to
terminate this Agreement subject to and in accordance with clause 8.7.  If the Manager takes any action in the name
of, or on behalf of, any Owner or Participant which breaches in any material
respect any limit on the Manager’s powers so to act and as set out in this
Agreement, the Manager agrees, upon notice from the Parent, to take such steps,
as its own expense, as are reasonably required to remedy such breach and its
consequences.

 

16

 

Undertaking of the Parent and Owners

 

3.20                        Each of the Parent and the
Owners undertakes:

 

(a)                               without prejudice to the
rights of the Parent under this Agreement, to co-operate with, support and not
to interfere in any way with the Manager in respect of the Manager’s
performance or procurement of the Services in accordance with this Agreement;

 

(b)                              to fund or procure the
financing of all of the capital expenditure contemplated by the Business Plan,
the Growth Capex Plan and all Service Costs and working capital requirements
provided that the Parent and the Owners shall not be obliged to fund or procure
the financing of capital expenditure (i) for the items set out in the
Growth Capex Plan to the extent such capital expenditure exceeds US$700,000,000
or (ii) for Maintenance Capex exceeding in aggregate US$50,000,000 or (iii) in
the case of the Parent to fund or provide financing for Service Costs or
working capital requirements in an aggregate amount in any Operating Year in
excess of the Budget Limit for that Operating Year, provided that in the case
of capital expenditure under (ii) above, the obligation of the Parent to
fund such capital expenditure shall be subject to the Manager providing
evidence reasonably satisfactory to the Parent that such expenditure cannot be
met from the financial resources of the Owners, including the availability of
credit facilities;

 

(c)                               to take all steps necessary
(taking into account the Business Plan) to cause their employees, agents,
consultants and subcontractors who, in each case, are involved in the
operation, maintenance and other activities relating to the Facilities to
comply with, and in the case of the Owners only to effect and comply with, the
directions and recommendations of the Manager with respect to the operation of
the Facilities and its performance or procurement of the Services (including in
respect of the Parent, to take and to cause the Participants to take such
action as shareholder, participant or member (as applicable) in any Owner (as
directed by the Manager) in respect of such matters);

 

(d)                              without prejudice to the
rights of the Parent under this Agreement not to take any action or fail to
take any action, and to cause the Participants not to take any action or fail
to take any action on behalf of the Owners, which will or could disrupt the
operation of the Facilities or the Manager’s performance or procurement of the
Services or the Manager in accordance with this Agreement, including:

 

(i)                  not to transfer or otherwise
dispose of the assets of the Facilities (including between the Owners) or the
Facilities themselves;

 

(ii)               (other than by the Manager
acting as agent or the Manager exercising its rights under any power of
attorney in each case as provided for in this Agreement) not to enter into any
Service Contract in respect of the Facilities;

 

17

 

(iii)            not to incur or agree to
incur any payment obligation on behalf of the Owners or in respect of the
Facilities and (other than by the Manager acting as agent or the Manager
exercising as its rights under any power of attorney) not to effect any payment
from any Owner from the funds available to the Owner (other than dividends in
accordance with clause 7.16, Service Costs in accordance with clause 7.6 and other than
on the express instructions of the Manager) unless such amounts are excluded
from (or be included as an increase in) the calculation of EBITDA and the
Earnout Income Statements under the Sale and Purchase Agreement;

 

(iv)           (except in accordance with
clause Error! Reference source not found.) not to grant or agree to grant
any security interest in respect of the assets of the Facilities as part of any
financing arrangements;

 

(v)              not to commence insolvency
or liquidation proceedings (or equivalent) in respect of the Participants or
the Owners;

 

(vi)           except as permitted under
clause 13.5 not to reorganise or restructure in any way the Owners or the
Participants or amend, change or replace the constitutional documents of the
Owners; and

 

(vii)        not to transfer or permit the Owners to
acquire new assets or liabilities (other than on the instructions and with the
consent of the Manager);

 

(e)                                  to comply with the terms of
any Service Contract and with Applicable Law in all material respects (and with
the directions of the Manager regarding compliance with Applicable Law in
accordance with clause 3.35);

 

(f)                                    to disclose to the Manager
upon request whether any party to a Service Contract or proposed Service
Contract is an Affiliate of the Parent;

 

(g)                                 in the case of the Parent, not
to charge or recharge to the Owners any costs or expenses (other than the
reasonable remuneration of the Parent’s Appointed Officers or pursuant to a
Service Contract entered into in accordance with clause 3.20(d)(ii)) in respect of the exercise of the rights or performance of its
obligations under this Agreement, or if charged or recharged, such costs and
expenses, other than such remuneration or pursuant to a Service Contract and
taking into account any tax benefits, will be excluded from (or be included as
an increase in) the calculation of EBITDA and the Earnout Income Statements
under the Sale and Purchase Agreement; and

 

(h)                                 to comply with and be bound by
the instructions and directions of the Manager with respect to the commercial,
administrative, operation, maintenance and capital expenditure activities of
the Facilities other than for activities outside the responsibilities of the
Manager or which are to be undertaken by the Parent, in each case as set out in
this Agreement.

 

18

 

Subcontracts; Sales; Procurement

 

3.21                      Without prejudice to the generality of the other
provisions of this clause Error!
Reference source not found., but subject to the application of the Standards,
each of the Parent and the Owners acknowledge that the Manager has the
exclusive right (unless provided otherwise) on behalf of the Owners to
negotiate, enter into, vary, terminate or replace:

 

(a)                                  contracts for the performance
or procurement of any part of the Services (including contracts with
consultants and all aspects of maintenance and refurbishment);

 

(b)                                 contracts (including
maintenance contracts) providing for capital expenditure in connection with the
Facilities;

 

(c)                                  agreements for the sale,
disposal or purchase of equipment and other assets used in or forming part of
the Facilities (including for the disposal of scrap metal but excluding any
Commodity Contract);

 

(d)                                 subject to clause 4.3,
leasing arrangements and financing arrangements relating to the procurement of
assets and equipment (including the granting of charges in connection
therewith); and

 

(e)                                  Power Purchase Agreements,
Coal Sales Contracts and other arrangements relating to the trading and sales
of energy, coal and coal products including related and/or embedded derivative
arrangements relating to any of the foregoing (each being a Commodity Contract),

 

(collectively, Service Contracts).

 

3.22                           In respect of any Service Contract for
capital expenditure, the Manager shall apply the following procedures:

 

(a)                                  in the case of a
Service Contract which is for capital expenditure in accordance with the Growth
Capex Plan and for an amount of less than or equal to US$5,000,000, the Manager
shall not be required to submit the proposed Service Contract to the Parent in
accordance with the Procurement Procedure nor otherwise require the Parent’s
approval for the execution of that Service Contract or for the making of any
payments thereunder;

 

(b)                                 in the case of a
Service Contract which is for capital expenditure in accordance with the Growth
Capex Plan and for an amount of more than US$5,000,000, the Manager shall be
required to submit the proposed Service Contract to the Parent along with
evidence that the proposed contract has been procured by or on behalf of the
Manager in accordance with the Procurement Procedure, but subject to compliance
therewith, shall not otherwise be required to obtain the Parent’s approval for
the execution of that Service Contract or for the making of any payments
thereunder; and

 

(c)                                  in the case of a
Service Contract which is for capital expenditure not contemplated in the
Growth Capex Plan, the Manager shall obtain the prior 

 

19

 

approval of the Parent (not to be unreasonably withheld or delayed) for
the entry into of that Service Contract in accordance with clause 4.1.

 

3.23                           Subject to clause 3.24,
the Manager shall ensure that Service Contracts:

 

(i)                  shall be on arm’s length
terms and in the ordinary course of the relevant Owner’s business and/or
trading, and subject thereto on such terms as the Manager may (acting as a
Reasonable and Prudent Operator in accordance with the Business Plan) determine
(including as to price and duration) and/or on the best terms which are readily
available; and

 

(ii)               shall bind the Parent and the
Owners as principal.

 

3.24                           Subject to the Service Contract approval
process set out in clause 4.1, the Manager shall obtain the
prior approval of the Parent (not to be unreasonably withheld or delayed) for
the entry into of any Service Contract:

 

(i)                  which has a duration beyond
the Term other than:

 

(A)                              any Commodity Contracts which
are entered into in the ordinary course of business during the last Operating
Year and which expire within two months after the Termination Date or in the
case of any annual Coal Sales Contract within six months after the Termination
Date; and

 

(B)                                any Service Contract entered
into for the purchase of ash precipitators for which delivery will be during
and after the Term; and

 

(ii)               which is not within the
revenue or expenditure items in the relevant Annual Budget and (save for
Commodity Contracts and any Service Contract which is for capital expenditure)
under which the amounts payable by the Owners or due to the Owners exceed in
aggregate US$1,000,000;

 

(iii)            which is with an Affiliate of
the Manager or AES, other than:

 

(aa)                            a Commodity Contract subject
to such Commodity Contract being on arms’ length terms and entered into in
accordance with the Standard of a Reasonable and Prudent Operator (and if
requested in writing, provide details thereof); or

 

(bb)                          a Service Contract entered
into for the provision of advisory or audit services by the relevant Affiliate
and which provides for the payment of amounts to that Affiliate which when aggregated
with other amounts paid or payable under any other such Service Contracts
entered into with an Affiliate of the Manager or AES would not exceed
US$500,000 in any Operating Year;

 

20

 

(iv)           which is a Commodity Contract
for a duration of at least twelve (12) months and for an amount of electrical
capacity exceeding 300 MW or is a Commodity Contract for an amount of coal
exceeding 500,000 tonnes, in either case, aggregating for the purposes of
this clause 3.24 deliveries of electricity or
coal, as the case may be, to parties which are known to the Manager to be
affiliates;

 

(v)              for the making by the Owners
of any political donation or, except in accordance with the relevant Annual
Budget, any charitable donation;

 

(vi)           for disposal of any material
part of the Facilities or assets of the Owners other than under a Commodity
Contract entered into in the ordinary course of business or in respect of
obsolete or surplus equipment or scrap;

 

(vii)        being a Power Purchase
Agreement, if the tariff under that Power Purchase Agreement would, taking into
account the tariff under other existing Power Purchase Agreements, cause the
Annual Average Tariff for the then-current Operating Year to exceed 110% of the
Permitted Tariff for that Operating Year.

 

and this
clause 3.24
shall apply equally in the case of any variation to a Service Contract which
effects any of the foregoing matters.

 

Consultants

 

3.25         The Manager may, as agent for and on
behalf of the Parent and the Owners, engage and instruct such consultants and
advisers (including technical, legal or financial consultants or advisors) as
the Manager considers appropriate in connection with the provision of the
Services, having regard to the Standard of a Reasonable and Prudent
Operator.  The costs of such consultants
shall be borne solely by the Owners as part of the Service Costs.

 

Parent Consents

 

3.26         The Manager shall obtain the prior
approval of the Parent (not to be unreasonably withheld) in relation to the
following matters:

 

(a)                                  the sale or creation of any
mortgage, pledge, lien, charge, assignment, hypothecation, priority notice or
other security interest in any part of the Facilities (without prejudice to the
Manager’s rights under clauses 3.21(c) and (d))
or any part of the interest of the Parent or the Owners in the Facilities
(other than retention of title terms in the ordinary course of business); and

 

(b)                                 the entry into of any Service
Contract which is outside of the ordinary course of business.

 

3.26A      Sales
and purchases by the Parent from the Owners will all be on arms length market
price terms and consistent with current business practices and contracting
terms of the Owners.  The Manager agrees
that to the extent surplus power capacity is 

 

 

21

 

available for sale by the relevant Owner
the Manager will sell, if requested by the Parent, up to 12.5% of available
capacity at any point (up to a maximum limit of 300 MW) for a period consistent
with current contracting practices at market price and provided such sale does
not disrupt the market at that time and provided further such sale does not
require the Manager or the Owner to breach any contract, Applicable Laws or
Relevant Consent.  The Parent agrees to
indemnify the Manager and the Owner for any Costs (as defined in the Sale and
Purchase Agreement) as a result of actions by a Competent Authority with
respect to such sales.

 

3.26B      The
Parent may require the Manager to implement a Tariff Freeze and following such
instruction, the calculation of EBITDA and the Earnout Income Statements under
the Sale and Purchase Agreement shall be adjusted to reflect such Tariff Freeze
by assuming the amount of EBITDA which would have been generated if such Tariff
Freeze had not occurred.

 

Bank Accounts and cash management

 

3.27         All amounts received or due to the
Owners under the Service Contracts (including relating to sales under any Power
Purchase Agreement or Coal Sales Contract) or otherwise shall be held in the
bank accounts of the Owners and be available for payment of Management
Expenses
and Service Costs in accordance with clause 7.

 

3.28         The chief financial officer as the
Parent’s Appointed Officer of each Owner shall have control over the bank accounts
of the Owners and their subsidiaries and over the management and movement of
money in such accounts (including the currency in which funds are held and/or
converted), provided that he or she shall do so in a manner that is consistent
with the payment of the Management Expenses and the Manager’s
instructions relating to the payment of Service Costs in accordance with
clause 7.

 

Insurance

 

3.29         The Parent may at any time, if it
determines that insurance cover for the Facilities becomes available on commercially
reasonable terms, obtain or procure insurance cover for the Facilities or
related risks (including the employees, directors and officers of the Owners
and the Manager) and the cost of such insurance cover shall be borne solely by
the Owners as a Services Cost.  Any
proposals for insurance cover for the Facilities shall be provided in advance
to the Manager and the Manager may request further information regarding the
terms of cover and any requirements of the insurers for providing such
cover.  The premium for such insurances
(to the extent that such premium exceeds US$2,000,000 in any Operating Year)
and any additional costs to be incurred in implementing any such insurances,
including any requirements for additional equipment to be installed at the
Facilities or changes to operating procedures, shall be borne by the Owners and
excluded from (or be included as an increase in) the calculation of EBITDA and
the Earnout Income Statements under the Sale and Purchase Agreement.

 

 

 

22

 

Business
Conduct

 

3.30         Each of the Parties in performing their
obligations in this Agreement, agrees to comply with the Compliance
Requirements and acknowledges that the Manager will operate and manage the
Facilities in accordance with the Standards of Conduct and the Compliance
Program.  The Parent and the Owners agree
that, in providing or procuring the provision of the Services, the Manager
shall not be under any obligation to act, or omit to act, in any manner which
might cause the Manager or the Owners or any of its officers, employees,
representatives or agents to be in breach of any of the provisions of the
Standards of Conduct and the Compliance Program.

 

3.31         Each of the Parties agrees that it
will, and will ensure that its participants, owners, controlling shareholders,
directors, officers, employees or any other person (including any of its
Affiliates, contractors, subcontractors, consultants, representatives or
agents) shall:

 

(a)                                  not make a Prohibited Payment
to any person or organization either directly or indirectly (through an agent,
representative, sub-contractor or other third party) in connection with this
Agreement or for the purpose of providing the Service or otherwise;

 

(b)                                 not engage in a Prohibited
Transaction with respect to this Agreement or for the purpose of providing the
Service or otherwise; and

 

(c)                                  comply fully with all
applicable laws relating to anti-corruption, anti-money laundering,
anti-terrorism and economic sanction and anti-boycott (including the United
States Foreign Corrupt Practices Act and other such laws of the United States).

 

3.32         Each of the Parties agrees that it will
not instruct any of its directors, officers, employees or any other person
(including any of its Affiliates, contractors, subcontractors, consultants,
representatives or agents) to take any action which would be in breach of the
obligations in clauses 3.30 and 3.31.

 

Audit

 

3.33         Without prejudice to the responsibility
of the Parent and the Owners under clause 4.10, the Manager shall arrange
for the books and records, accounts and other financial information of the
Owners or otherwise relating to the operation of the Facilities (the Owner Accounts) to be prepared from
time to time in respect of each Operating Year for annual accounts and
semi-annual accounts to be audited by a firm of international accountants as
appointed by the Parent pursuant to clause 4.10, provided that
notwithstanding the Owner Accounts may be used to calculate EBITDA and the
Earnout Income Statements under the Sale and Purchase Agreement the Manager or
the Seller shall be entitled to object to any items in the Owner Accounts in
case of any dispute relating to such calculations.  The Owner Accounts shall be prepared in
accordance with IFRS (to the extent reasonably practicable in the first
Operating Year).  The Manager shall have
the right at its own cost to audit and/or procure that any third party on its
behalf audit the Owner Accounts.

 

 

 

23

 

3.34         The Manager and the auditor preparing
the Owner Accounts shall have all access to the books and records, accounts and
other financial, tax and accounting information, employees and other resources
of the Manager, the Owners and the Facilities necessary for the preparation of
the Owner Accounts.

 

Compliance with Applicable Law

 

3.35         For the period of three months
commencing on the Effective Date, the Parties shall consult with each other
regarding all potential breaches of Applicable Law or Relevant Consents that may
arise or have arisen prior to the Effective Date, in respect of the operation
and maintenance of the Facilities and the other activities of the Manager
within the Services.  Thereafter the
Manager shall direct the Owners to, and otherwise in performance of the
Services the Manager shall, comply with all Applicable Laws and Relevant
Consents in all material respects, other than in accordance with any approval
by the Parent that an act or omission by the Manager or the Owners, as the case
may be, shall for the purposes of this Agreement not be regarded as a breach of
an Applicable Law or Relevant Consent.

 

Limits on Authority

 

3.36         The Parties agree that notwithstanding
any other provision of this Agreement which may purport to confer upon the
Manager freedom to take certain actions in connection with its rights and
obligations under this Agreement, such freedom shall not entitle the Manager to
exceed any limits imposed in this Agreement on the Manager’s freedom in
performing the Services, operating and maintaining the Facilities and
fulfilling its other obligations including without limitation:

 

(a)                                  the obligation in clause 3.1
to comply with the Standards;

 

(b)                                 the requirement to obtain the
Parent’s consent as provided for in clauses 3.24 and 3.26;

 

(c)                                  the Manager’s obligation not
to exceed the agreed Annual Budget beyond the limits allowed in clause 7.10
without the Parent’s consent.

 

4.             OBLIGATIONS
OF OWNERS AND PARENT

 

Approval process

 

4.1           The Parent agrees and acknowledges
that its timely approval of any Service Contract or other matter submitted to
it by the Manager in accordance with this Agreement is essential for the
performance of the Services and agrees to maintain sufficient personnel with
appropriate qualifications, experience and availability to consider such
matters under this Agreement.  If in
respect of any Service Contract or other matter submitted to it by the Manager
in accordance with this Agreement, the Parent does not notify the Manager
whether or not such Service Contract or matter is approved within
10 Business Days after delivery of such details of that Service Contract
or matter as are required to be delivered in accordance with this Agreement (or
otherwise such details as the Manager reasonably determines or the Parent reasonably
requires are necessary for such approval), the Parent agrees that such 

 

 

24

 

Service
Contract or matter shall for all purposes under this Agreement be deemed to be
approved by the Parent for and on behalf of itself and the Owners and the
Manager shall be entitled conclusively to rely upon such deemed approval in its
performance of the Services.

 

Access to Facilities and Records

 

4.2           The Parent and the Owners agree that
the Manager, its agents, consultants, employees and sub-contractors shall have
full and unrestricted access to (i) the Facilities in order to perform or
procure the performance of the Services and (ii) the bank accounts and the
books and records, accounts and other financial, tax and accounting information
of the Owners and the Participants to the extent necessary for the Manager to
arrange the preparation of the Owner Accounts.

 

Financial and Tax Matters

 

4.3           The Parent and the Owners acknowledge
and agree that the Services and the obligations to be performed by the Manager
shall not include any tax and treasury matters, activities and functions
relating to the Owners, the Facilities and any amount payable under or in
connection with this Agreement (including Service Costs payable to any party) or
activities associated with defining all tax positions in respect of the
foregoing, including the preparation and completion of all tax filings, dealing
with tax authorities and resolving any tax related litigation or proceedings
and such matters shall be the responsibility of and be carried out by the
Owners. Any proposals or agreements relating to (a) the grant of any
security interests in respect of the assets of the Facilities as part of any
financing arrangement or (b) leasing arrangements and financing
arrangements relating to the procurement of the assets and equipment for the
Owners shall require the approval of the Manager’s Representative and the chief
financial officer as the Parent’s Appointed Officer.

 

Consents; Dealings with Regulatory Matters; Visas

 

4.4           The Parent and the Owners acknowledge
and agree that the Services and the obligations of the Manager shall include
preparing timely submissions, applications and other documentation necessary
for obtaining and maintaining all Relevant Consents required from time to time
for the commercial, administrative, operation, maintenance and capital
expenditure activities of the Facilities in accordance with the Business Plan
and capital expenditure in accordance with the Growth Capex Plan.  The Manager shall maintain or procure the
maintenance of a register of all such Relevant Consents and shall inform the
Owners of actions required to obtain and to maintain such Relevant Consents in
full force and effect.  The Manager shall
provide all reasonable assistance to the Owners in procuring, obtaining and
maintaining Relevant Consents, including, where appropriate, by preparing
applications reasonably necessary for the obtaining of such Relevant Consents
and providing completed applications to the Parent’s Representative for
submission to the relevant Competent Authority.

 

4.5           The Parent and the Owners acknowledge
and agree that the Services and the obligations of the Manager shall not
include negotiating and liaising with all Competent Authorities in Kazakhstan
(unless the Manager notifies the Owners in 

 

 

25

 

writing
otherwise and subject to the performance by the Manager of the matters within
its responsibility under clause 4.4) with respect to all aspects
of the commercial, administrative, operation, maintenance and capital
expenditure activities of the Facilities, including:

 

(a)                                  dealing with any tax authority
with respect to the accounts, books and records and other financial information
of the Owners and relating to the Facilities;

 

(b)                                 all environmental permits and
enforcement actions and litigation;

 

(c)                                  all compliance requirements of
the Kazakhstan stock exchange;

 

(d)                                 the proper consideration and
issue of all Relevant Consents in Kazakhstan; and

 

(e)                                  obtaining and maintaining all
work permits, visas and other residency and employment requirements from any
Competent Authority in Kazakhstan as required from time to time for the
employees of the Owners and the Manager.

 

4.6           If there is any delay or interruption
to the performance of the Services or the operation and maintenance of the
Facilities as a result of (i) any Relevant Consent, works permit, visa or
other residency or employment requirement not being obtained from any Competent
Authority as required from time to time for the employees of the Owners and the
Manager or (ii) any action or inaction by any Competent Authority, in each
case not solely attributable to any failure by the Manager to discharge its
responsibilities under clause 4.4 to the extent it is
reasonably able to do so acting as a Reasonable and Prudent Operator, the
calculation of EBITDA and the Earnout Income Statements in accordance with the
Sale and Purchase Agreement shall be adjusted to reflect the consequences of
such delay or interruption by assuming the amount of EBITDA which would have
been generated if such delay or interruption had not occurred.

 

4.7           If the Manager is unable to perform
or prevented from performing its obligations under this Agreement in all
material respects for a period of 30 days for any reason or the Facilities
cannot be operated in all material respects for any reason for a period of
30 days due to (i) the failure of the Parent and the Owners to
procure, obtain and maintain Relevant Consents and work permits, visas and
other residency and employment requirements from any Competent Authority in
Kazakhstan as required from time to time for the employees of the Owners and
the Manager or (ii) any action or inaction by any Competent Authority in
each case not solely attributable to any failure by the Manager to discharge
its applicable responsibilities under this Agreement to the extent it is
reasonably able to do so acting as a Reasonable and Prudent Operator, a
Suspension Event shall be deemed to have occurred under clause 8.10.

 

Litigation

 

4.8           The Parent and the Owners acknowledge
and agree that the Manager’s responsibilities shall not include, and the Owners
shall be responsible for, the conduct of all and any claims (whether existing
or arising prior to, on or after the date of this Agreement) made against the
Manager, the Owners or the Parent in connection with 

 

 

26

 

the Facilities
or against the Facilities themselves or in any way impacting the Facilities and
heard in the courts of Kazakhstan (Relevant Claims).

 

4.9           To the extent any Relevant Claim
includes the Manager as a party to such claim, the Parent shall consult with
the Manager with respect to the conduct of such Relevant Claim and any
proceedings relating thereto, provided that (i) the Parent shall not admit
liability on the part of the Manager or settle any Relevant Claim affecting the
Manager, in either case, without indemnifying the Manager in respect of such
Relevant Claim and, in any event, without the written consent of the Manager
and (ii) the Manager shall have the right at any time to elect to retain
or take control of the conduct of any Relevant Claim involving the Manager and
any related proceedings (and including to appoint its own counsel) and the
costs of the Manager retaining or taking control of such Relevant Claim
shall  (without prejudice to clause 11)
constitute Service Costs.

 

Audit required by Applicable Law

 

4.10         The Parent and the Owners acknowledge
and agree that the Services do not include any responsibility for, and the
Owners shall be responsible for, ensuring that the books and records, accounts
and other financial information of the Owners or relating to the Facilities are
prepared and audited in compliance with IFRS in force from time to time in
Kazakhstan, all Applicable Law and requirements of any Competent
Authority.  The external auditors of the
Owners shall be appointed by the Parents.

 

Co-operation of the Manager

 

4.11         Without the Manager having any
liability for the performance of the matters excluded from the Services as set
out in this clause 4, the Manager shall provide reasonable
assistance and co-operation to support the performance by the Parent and the
Owners (as the case may be) of their obligations as set out in this clause 4.

 

Liability of Parent and Owners

 

4.12         Each of the Owners agree that they
shall be joint and severally liable for the obligations of the Owners as set
out in this Agreement.  The performance
by the Manager of any obligation in respect of any of the Owners shall
constitute due performance of that obligation of the Manager to the Owners.

 

4.13         Subject to clause 3.20(b),
the Parent agrees and undertakes to provide to the Owners, or procure the
provision of, all necessary financial and other resources so as to enable the
Owners perform and discharge in full and on a timely basis all of their
obligations under this Agreement to the extent such obligations relate to
matters which are not the responsibility of the Manager under the terms of this
Agreement or are obligations of the Parent.

 

4.14         If
any of the Owners does not comply with any of its obligations under this
Agreement, the calculation of EBITDA and the Earnout Income Statements shall be
adjusted in accordance with the Sale and Purchase Agreement to reflect such
non-compliance by assuming the amount of EBITDA which would have been generated
if the Owners had complied with such obligation.

 

 

27

 

5.             REPRESENTATIVES

 

Parent’s Representative

 

5.1           Without prejudice to the Manager’s
absolute discretion to direct the operation of the Facilities, the Parent shall
appoint as its representatives up to two persons (which shall not include the
Parent’s Appointed Officers) who shall be the sole points of contact for the
Manager and shall have full power and authority:

 

(a)                                  to receive instructions from
the Manager in respect of the operation of the Facilities and to act on behalf
of the Parent and the Owners in connection with all matters concerning this
Agreement and the performance or procurement of the Services; and

 

(b)                                 to give and receive, on behalf
of the Parent and the Owners, any communication or decision on behalf of the
Parent or the Owners under this Agreement (but not to amend the terms of this
Agreement).  Any such communication or
notice so given or notified shall be deemed to be that of the Parent and the
Owners and shall bind the Parent and the Owners accordingly.

 

Manager’s Representative

 

5.2           The Manager shall appoint as its
representative for the Services a person (the Manager’s
Representative) who shall be the sole point of contact for the
Parent and shall have full power and authority to act and receive any approvals
or instructions from the Owners on behalf of the Manager in connection with the
operation, maintenance and management of the Facilities and the provision of
the Services.

 

5.3           All day to day communications
(whether in writing or by telephone) from the Parent or the Owners to the
Manager shall be directed only to the designated Manager’s Representative and
any communication from the Parent or the Owners to the Manager not directed to
the designated Manager’s Representative shall not constitute delivery to or
notification of the Manager unless notified pursuant to clause 20.

 

Deputies

 

5.4           Each of the Parent’s Representative
and the Manager’s Representative shall appoint a deputy to act in his place
during any period of absence. Each such deputy shall be appointed in writing
and his appointment copied to the other Parties and during the period of his
appointment shall have all the powers of the Parent’s Representative or the
Manager’s Representative (as the case may be) save to the extent of any
limitation on such powers made known in writing by his appointor to the other
Parties. No such limitation shall be such that it is impractical for the
relevant deputy to fulfil the functions of the Parent’s Representative or
Manager’s Representative, as the case may be. Any revocation of such
appointment of a deputy shall be in writing and copied to the other Party.

 

 

 

28

 

Changes of Representatives

 

5.5           Each of the Parent and the Manager
shall inform the other in writing of any change in the identity of the Parent’s
Representative or, as the case may be, the Manager’s Representative or their
respective deputies.

 

6.             BUSINESS
PLAN; GROWTH CAPEX PLAN; ANNUAL BUDGET

 

Business Plan and Growth Capex Plan

 

6.1           The Parent, the
Owners and the Manager have agreed the Business Plan and the Growth Capex
Plan to take effect from the Effective Date which covers the period from the
Effective Date to 31 December 2010. 
The Business Plan is set out in Schedule 2 to this
Agreement and the Growth Capex Plan is set out in Schedule 3 to this
Agreement.  Within 30 days after the
Effective Date, the Manager will provide the Parent with, and will update as
part of each Annual Budget, the work milestones within the parameters of the
Growth Capex Plan, subject to the provisos therein.

 

6.2           The Business Plan and the Growth
Capex Plan may not be changed without the consent of the Parent.  The Manager may from time to time prepare and
submit to the Parent proposed amendments to the Business Plan and the Growth
Capex Plan.  The Parent may also propose
to the Manager amendments to the Business Plan and the Growth Capex Plan.  Each proposed revised Business Plan and/or
the Growth Capex Plan will be in substantially the same form and contain the
same level of detail as set out in the Business Plan attached at Schedule 2 or the Growth Capex Plan attached as Schedule
3 (as the
case may be).  If the Manager and the
Parent do not agree any proposed amendment to the Business Plan and/or the
Growth Capex Plan, the Business Plan set out in Schedule 2  and the Growth Capex Plan set out in Schedule 3 (in either case, with such amendments as previously agreed) shall
continue to apply.

 

Annual Budget

 

6.3           For a
thirty day period after the Effective Date, the Manager and the Parent
shall consult and use commercially reasonable endeavours to agree the form of
Annual Budget.  Subject thereto, the
Manager shall prepare each Annual Budget having regard to the Standard of a
Reasonable and Prudent Operator and consistent with applicable practices previously adopted
and the proposals of the Parent as to the form of the Annual Budget.  On or before 30 September of
each Operating Year (and, in respect of the first Operating Year,
within 30 days after the Effective Date), the Manager shall submit
for information to the Parent a budget for the following Operating Year (Annual Budget) which shall inter alia:

 

(a)                                  provide
for the financial
projections of the Owners’ operating income and expenditure, balance sheets and
cashflow (all relating to the Facilities) prepared in accordance with IFRS (to
the extent reasonably practicable in the first Operating Year);

 

(b)                                 provide
for
planned operating and maintenance activities in respect of the Facilities;

 

 

 

29

 

(c)                                  identify
the
Service Contracts which may be entered into by the Manager as agent of the
Owners in respect of that Operating Year; and

 

(d)                                 identify any variations to the
Business Plan.

 

6.4           Within 15 Business
Days of the Manager’s submission of an Annual Budget to the Parent and the
Owners pursuant to clause 6.3, the Parent, the Owners and
the Manager shall discuss the Annual Budget and shall use commercially
reasonable endeavours to agree revisions to the Annual Budget to take account
of the comments of the Parent and the Owners.

 

6.5           The Manager shall
not be required to adopt any comment of the Parent or the Owners with respect
to the Annual Budget received after the 25th Business Day
following the Manager’s submission of an Annual Budget to the Parent and the
Owners pursuant to clause 6.3.  If the Parent and the Manager cannot agree
the amendments to the Annual Budget, the Annual Budget shall be revised (if
necessary) in line with the Business Plan and the Growth Capex Plan and shall
apply as amended.  If the Parent and the
Owners do not submit comments on the Annual Budget to the Manager within such
25 Business Day period, the Annual Budget shall be deemed approved.

 

6.6           The amounts set out
in the Annual Budget shall be forecast and estimated amounts, according to the
projections and estimates of the Manager acting as a Reasonable and Prudent
Operator.

 

7.             PAYMENTS
TO MANAGER

 

Management Expenses

 

7.1           Throughout the Term of this
Agreement, the Owners shall pay the Manager a lump sum amount in reimbursement
of the Manager’s costs and expenses (Management Expenses) equal to US$2,000,000 for
each Operating Year during the Term, to be paid in arrears by the Owners in
four equal instalments of US$500,000 on or before each 31 December,
31 March , 30 June and  30 September of each
Operating Year, commencing on 31 March 2008 and the final payment
shall be made on 31 December 2010.

 

7.2           The Manager shall provide evidence of
its registration as a branch with the relevant Competent Authority in
Kazakhstan and any payment of Management Expenses shall be deferred until such
evidence is provided.

 

7.3           The Manager shall not be required to
provide any details of Management Expenses in connection with the
amounts due and payable under clause 7.1.

 

7.4           The Management
Expenses
shall be paid by the Owners (or the Parent as the case may be) by electronic
transfer in cleared funds in Dollars to the account within Kazakhstan
designated by the Manager for such purpose without set-off, demand or
counterclaim by the Manager and free and clear of all taxes, provided that the
Owners or the Parent, as the case may be, may set off against the Management
Expenses
any amount which is determined in accordance with clause 15.6
to be due and payable by the Manager to any Owner or the Parent.

 

30

 

7.5           Save where the Agreement is
terminated before 31 January 2010 and without prejudice to clause 7.2,
the Parent and the Owners agree and acknowledge that the Manager shall be
entitled to payment of the Management Expenses irrespective of the operation
of the Facilities or the Manager’s performance or procurement of the Services
and regardless of the occurrence of the events set out at clauses 8.3(i) to
(ix).

 

Service Costs

 

7.6           All amounts of capital expenditure,
operational expenditure, financing costs, staff costs (other than the Manager
Costs), overheads or internal costs, expenses and other costs
incurred or forecast to be incurred or to become due in respect of the
commercial, administrative, operation, maintenance and capital expenditure
activities (including insurance) of the Facilities, in each case, incurred in
accordance with this Agreement (Service Costs) are
the sole responsibility of the Owners. 
Without prejudice to the Manager’s right to be paid the Management
Expenses
pursuant to clause 7.1, the Manager shall be
responsible for the Manager Costs.

 

7.7           The Manager shall be entitled to
incur any and all Service Costs as agent for and on behalf of the Owners
(including under Service Contracts) or to direct the Owners to incur or become
responsible for and pay all Service Costs.

 

7.8           Notwithstanding any other provision
of this Agreement, the Manager shall have no obligation to pay from its own
funds or to otherwise fund Service Costs.

 

7.9           The Manager shall include a summary
of the Service Costs (other than Manager Costs or Management
Expenses)
incurred in the previous month and estimated to be incurred in the next month
in each monthly report provided by the Manager under paragraph 12.1
of Schedule 1.

 

Compliance with Annual Budget

 

7.10         The Manager agrees that it will obtain
the prior approval of the Parent in accordance with clause 4.1
prior to incurring any Service Costs in any Operating Year which would, taking
into account remaining expenditure in that Annual Budget, cause the aggregate
Service Costs incurred in that Operating Year to exceed the Budget Limit for
that Operating Year.

 

Currency of Payments

 

7.11         The Management
Expenses
and amounts due under clause 7.1 shall be paid in Dollars in
accordance with clause 7.4.

 

7.12         All amounts of Service Costs shall be
paid by the Owners in the currency in which such Service Costs are incurred by
the Owners or by the Manager as agent of the Owners.

 

 

 

31

 

Withholding tax and grossing up

 

7.13         The Parent and the Owners, as the case
may be, shall pay all sums payable by it under this Agreement free and clear of
all deductions or withholdings unless the law requires a deduction or
withholding.  If a deduction or
withholding is so required, the Parent or the Owners, as the case may be, shall
increase the amount paid by it so that after deducting and withholding any
amounts required by Applicable Laws, the net amount the Manager receives shall
equal the full amount which it would have received had no deduction or
withholding from the original amount been required.

 

7.14         If any Competent Authority in Kazakhstan
brings any
sum paid by the Parent or the Owners to the Manager under or pursuant to this
Agreement into charge to tax, including value added or goods and services tax
and withholding tax but excluding income tax, then the Parent or the Owners, as
applicable, shall bear the costs of such tax and shall pay such additional
amount as will ensure that the total amount paid under this Agreement, less the
tax chargeable on such amount, is equal to the amount that would otherwise be
payable under this Agreement  if no tax was due and payable
in Kazakhstan on the payments pursuant to this Agreement.  The Manager will cooperate with the Parent
and Owners to mitigate any tax liability.

 

Late Payment

 

7.15         If any payment which becomes due under
this Agreement remains unpaid after the due date thereof, such payment shall
accrue interest daily at the Default Interest rate specified in the Sale and
Purchase Agreement from the date on which payment was due until the date
payment is actually received.  The right
of any Party to receive interest in respect of the late payment of any sum due
shall be without prejudice to such other rights which such Party may have in
respect of such late payment.

 

Dividends

 

7.16         The Parent and the Owners may declare
dividends and make distributions in respect of the shares in the Owners or
other instruments providing capital amounts from the Parent or any of its
Affiliates to the Owners, in an amount not exceeding the amount available for
dividends or other distributions in accordance with Applicable Law less an
amount sufficient for the Owners to meet the working capital requirements
determined in accordance with the Annual Budget for that Operating Year
provided that none of the Parent or the Owners are in default of their
respective obligations hereunder at the time of declaring dividends or making
distributions and, in any event, the Owners shall notify the Manager at least
5 Business Days before declaring any dividends or making any
distributions.

 

8.             DEFAULT
AND TERMINATION

 

Voluntary Termination by the Parent

 

8.1           Without prejudice to any claim that
the Parent, the Owners or the Manager may have against the other Parties
arising out of this Agreement prior to such termination, the Parent may elect
to terminate this Agreement on 30 days’ notice to the Manager without
cause, provided that the Parent shall (within 30 days of such 

 

 

32

 

notice) pay to
the Manager an amount equal to the Parent Voluntary Termination Payment which
amount shall be treated as part of the Total Consideration payable under the
Sale and Purchase Agreement and shall immediately become due and payable by the
Parent to the Manager within 30 days of the Parent’s notice of election
under this clause 8.1.  Such termination shall take effect and such
payment shall become due and payable, notwithstanding any Party may be or
become entitled to terminate this Agreement pursuant to any other provision of
this Agreement.

 

Voluntary Termination by the Manager

 

8.2           Without prejudice to any claim that
the Parent, the Owners or the Manager may have against the other Parties
arising out of this Agreement prior to such termination, the Manager may elect
to terminate this Agreement on 30 days’ notice to the Parent without cause
and the Parent shall (within 30 days of such notice) pay to the Manager an
amount equal to the Manager Voluntary Termination Payment which amount shall be
treated as part of the Total Consideration payable under the Sale and Purchase
Agreement and shall immediately become due and payable by the Parent to the
Manager within 30 days of the Manager’s notice of election under this
clause 8.2.  Such termination shall take effect and such
payment shall become due and payable, notwithstanding any Party may be or
become entitled to terminate this Agreement pursuant to any other provision of
this Agreement.

 

Termination by the Parent

 

8.3           If :

 

(a)                                  the Manager wilfully and
intentionally ceases all operation of the Facilities for a continuous period of
30 days or more; or

 

(b)                                 the Manager fails to provide
the Services or performs the Services in a manner which has resulted in material
damage to all or a material part of the Facilities for a continuous period
of 30 days, or

 

(c)                                  the AES Credit Support
Provider files for bankruptcy under the laws of its jurisdiction of
incorporation or makes any composition or arrangement with its creditors and
such filing, composition or arrangement has not been discharged
within 30 days thereof;

 

other than, in any case, where such
cessation, failure, performance or bankruptcy event is due to or results from:

 

(i)                  any breach by the Parent or
the Owners of any of their respective obligations under this Agreement;

 

(ii)              circumstances which would result in the
Manager or its Affiliates incurring liability for which it is not indemnified
by the Parent and the Owners or would constitute breach of the Compliance
Programme or would require the Manager to act contrary to the Standard of a
Reasonable and Prudent Operator;

 

 

 

33

 

(iii)            circumstances beyond the
Manager’s control;

 

(iv)           Force Majeure;

 

(v)              any Change in Law;

 

(vi)           the failure for any Relevant
Consent or work permit, visa or other residency and employment requirement
required for the employees of the Owners and the Manager to be obtained,
renewed or maintained, in each case not solely attributable to any failure by
the Manager to discharge its responsibilities under clause 4.4;

 

(vii)        any action or inaction by any
Competent Authority in Kazakhstan not solely attributable to any failure by the
Manager to discharge its applicable responsibilities under this Agreement;

 

(viii)     any Relevant Claim or
litigation or other proceedings in connection with a Relevant Claim in respect
of which a Reasonable and Prudent Operator would act in a similar way;

 

(ix)             any of the following events:

 

(A)                              strike, lockout, go-slow, work
to rule or other industrial disturbance (other than of the Manager’s own
employees);

 

(B)                                sabotage, act of vandalism;

 

(C)                                explosions, chemical nuclear
or radioactive contamination;

 

(D)                               mechanical breakdown of
equipment at the Facilities and/or maintenance stoppages, whether planned or
unplanned;

 

(E)                                 pressure waves caused by
aircraft or other aerial devices travelling at sonic or supersonic speeds;

 

(F)                                 lightning, fire, storm, flood,
extreme weather, earthquake, accumulation of snow or ice or other natural
disasters or phenomena; or

 

(G)                                significant archaeological
discoveries at or near the Facilities,

 

then the Parent may give written notice to
the Manager stating that a Manager Failure
has occurred and specifying the nature of the Manager Failure and any actions
the Parent believes are necessary to remedy such Manager Failure.

 

8.4           For a period of up to 120 days
following a notice given by the Parent and the Owners under clause 8.3
(the Advance Period), the Manager and the
Parent and the Owners shall discuss and co-operate to pursue a remedy to the
Manager Failure specified in such notice and to identify such changes to the
Services as necessary to ensure the continued operation of the Facilities,
provided that at any time if the Manager does not agree that a Manager Failure
has occurred, the Manager may refer the matter for resolution in accordance
with clause 15 and the Advance Period shall
not commence until such matter is resolved or determined by an Expert.

 

 

34

 

8.5           If the Manager Failure subsists for
the duration of the Advance Period, then at the end of the Advance Period, the
Parent may deliver a further notice to the Manager.  Following receipt by the Manager of such
notice given in respect of a Manager Failure identified in clauses 8.3(a) or (b),
the Manager shall have 60 days within which to remedy the Manager
Failure.  If at the end of such
60 day period, the Manager Failure is subsisting, the Parent shall be
entitled to terminate this Agreement forthwith on 10 days’ written notice
from the Parent to the Manager.  In the
event of a Manager Failure identified in clauses 8.3(c) the
Parent and the Owners may terminate this Agreement forthwith.

 

8.6           If this Agreement is terminated by
the Parent under clause 8.5, the Parent shall (within
30 days of the Termination Date) pay to the Manager any due but unpaid
amount of the Management Expenses and a pro rata amount of
Management Expenses for the quarter in which the Termination Date occurs.

 

Termination by the Manager

 

8.7           The Manager shall be entitled (but
not obliged) to terminate this Agreement upon seven days notice:

 

(a)                                  if the Parent fails to pay any
amount specified in this Agreement (including the Management
Expenses)
or fund the Service Costs or any other amount required to be paid on account of
the Owners on or before the 30th day following the Manager’s demand
for payment to be made in accordance with this Agreement;

 

(b)                                 if any of the Owners or the
Participants denies, cancels, withdraws or revokes the appointment under
clause 3.13 of the Manager as its agent
or the power of attorney granted by it to the Manager under clauses 3.14, 3.15, or 3.16 and has not reappointed the
Manager as its attorney under clause 3.13 within 30 days of such
denial, cancellation, withdrawal or revocation or, irrespective of the
reappointment of the Manager as attorney under clause 3.13,
such event occurs three or more times;

 

(c)                                  if the Parent fails to comply
with the provisions of clauses 3.20 or 4.13 (other than in respect of
payments) after receipt by the Parent of written notice from the Manager
requiring the Parent to remedy such failure and such failure (if capable of
remedy) has not been remedied within 30 days of such notice; or

 

(d)                                 any Change of Control of any
of the Owners or in respect of the Facilities or the completion of any
disposition of an interest in the Owners or the Facilities which would result
in the State Procurement Rules applying to the Manager, the Facilities or
the Manager’s provision of the Services.

 

 

 

35

 

Continuation

 

8.8           Notwithstanding any breach, default
or omission by any Party, the other Parties may elect unanimously to continue
to treat this Agreement as in full force and effect and to enforce their
respective rights hereunder and failure of any Party to exercise any right
hereunder including the right to termination shall not be deemed a waiver of
such right for any continuing or subsequent default.

 

Termination Payment; Suspension Event

 

8.9           If (i) the Manager becomes
entitled to terminate this Agreement pursuant to clause 8.7, 8.10 or 9.2 or (ii) the Sale and
Purchase Agreement is terminated by the Seller thereunder following breach by
the Purchaser thereunder then, the Parent shall (within 30 days of such
event) pay to the Manager an amount equal to the Termination Payment which
amount shall be treated as part of the Total Consideration payable under the
Sale and Purchase Agreement and shall immediately become due and payable by the
Parent to the Manager within 30 days of the Manager’s demand.

 

8.10         If the Manager is unable to perform or
prevented from performing its obligations under this Agreement in all material
respects for a period of 30 days for any reason or the Facilities cannot
be operated in all material respects for any reason (other than due to the
occurrence of Force Majeure) for a period of 30 days (including where the
Manager’s inability to perform its obligations is due to the occurrence of any
one of the events set out in clauses 8.3(i) through (ix)
(inclusive other than subclause (iv))), then a Suspension Event shall be deemed to
have occurred and the Manager shall notify the Parent and Owners of its belief
that a Suspension Event shall have occurred and:

 

(a)                                  if the Parent notifies the
Manager within 15 Business Days of the Manager notifying the Parent and
the Owners of its belief that a Suspension Event has occurred that it wishes
the Manager to continue to provide the Services notwithstanding the occurrence
of such Suspension Event, in addition to all other amounts payable under this
Agreement by the Parent and the Owners to the Manager (including the Management
Expenses
and Service Costs), the Parent shall pay (at the end of each relevant Earnout
Period during which the Facilities or the Manager were affected by such
Suspension Event but without prejudice to the Manager’s entitlement to the
Earnout Consideration in respect of any other Earnout Period) to the Manager
the Earnout Consideration that would be payable (on the assumption that the
EBITDA in the relevant Earnout Period was at least equal to the High Target) in
respect of the Earnout Period in which the Suspension Event occurs and each
subsequent Earnout Period during any part of which the relevant Suspension Event
is subsisting; and

 

(b)                                 if the Parent does not notify
the Manager that it wishes the Manager to continue to provide the Services
within 15 Business Days following the Manager notifying the Parent and the
Owners of its belief that a Suspension Event has occurred, then this Agreement
shall terminate and the Manager may demand the Termination Payment in
accordance with clause 8.9.

 

 

 

36

 

Non prejudice to claims

 

8.11         Termination on the grounds referred to
in this clause 8 shall be without prejudice to any claim
that the Parent, the Owners or the Manager may have against the other Parties
arising out of this Agreement prior to such termination (other than any such
prior claim in respect of the calculation of Earnout Consideration where such
amounts have been included in full in the Termination Payment payable under
clause 8.9).

 

Disengagement

 

8.12         Promptly following the Termination
Date, the Manager shall hand or deliver to, or relinquish custody in favour of,
the Owners or, if applicable, a Successor Manager all amounts to the credit of
any bank account managed by the Manager in the name of or as agent or trustee
for the Owners in relation to its role as Manager and all books, records and
inventories and all property held as agent or trustee for the Owners relating
to the commercial, administrative, operation, maintenance and capital
expenditure activities of the Facilities. The Manager shall use reasonable
endeavours to transfer to the Owners or, if applicable, a Successor Manager,
effective as of the Termination Date, any rights it may have as Manager under
the Service Contracts.

 

8.13         If the Owners or the Parent enter into
an agreement with a Successor Manager for provision of Services equivalent to
the Services following termination of this Agreement, the Manager shall
(without prejudice to its rights hereunder) during the last six months of the
Term (or any shorter period following execution of such agreement with the
Successor Manager), provide reasonable access for such Successor Manager and
its representatives to the Facilities and (subject to the Manager’s rights
under clause 3.6 and subject to the Successor
Manager executing and complying with the terms of a confidentiality agreement
in such form as the Manager reasonably requires) documents and information in
the Manager’s possession relating to the Facilities.

 

8.14         The Manager shall, at least
12 months prior to the expiry of the Term, prepare and submit to the
Parent and the Owners a Transition Plan.  The Transition Plan shall cover the six months
prior to the expiry of the Term and shall be taken account of in the
preparation of the Annual Budget for the Operating Year ending 31 December 2010.  The Transition Plan shall provide for the
management of the transfer of the commercial, administrative, operation,
maintenance and capital expenditure activities of the Facilities from the
Manager to a Successor Manager or to the Owners and the migration from that
Termination Date of the commercial, administrative, operation, maintenance and
capital expenditure activities of the Facilities from the Manager Proprietary
Systems to replacement systems and procedures designated by the Parent and the
Owners

 

8.15         In accordance with the Transition Plan,
the Parent, the Owners and the Manager shall co-operate within the period
prescribed in the Transition Plan prior to the Termination Date (if such date
occurs at the expiry of the Term) to complete the Transition Plan.

 

 

 

37

 

8.16         In the event of early termination
of this Agreement by the Manager or the Parent, the Manager shall if required
by the Owners continue to operate the Power Station for a period specified by
the Owners but not exceeding 90 days whilst the Successor Manager is installed,
including taking the actions contemplated in clause 8.13
for the Successor Manager to understand management of the Owners. During any
such period the Manager shall continue to act in all respects in accordance
with this Agreement as if the same had not been terminated and the Manager’s
obligations hereunder continued during such period. The Owners shall afford the
Manager every assistance in redeploying staff or making use of temporary staff
to carry out its obligations.

 

8.17         All costs and expenses of any of the
Parties associated with the transfer of the Services and the Manager’s
obligations under the Agreement and the Service Contracts to the Owners or, if
applicable, a Successor Manager before or after the Termination Date, shall be
for the account of the Parent and the Owners and the Parent and the Owners
shall reimburse such costs to the Manager on demand, including after the
Termination Date.  Any costs and expenses
of the Manager associated with the transfer of the Services and the Manager’s
obligations under the Agreement and the Service Contracts to the Owners or, if
applicable, a Successor Manager before the Termination Date shall be excluded
from (or be included as an increase in) the calculation of EBITDA and the
Earnout Income Statements under the Sale and Purchase Agreement for the
relevant Earnout Period.

 

9.             CHANGE
IN LAW

 

9.1           The Manager shall not be liable in
any way or have any additional responsibility under this Agreement resulting
from a Change in Law and the Manager shall be relieved from its obligations
under this Agreement to the extent that such obligations are affected by any
Change in Law.

 

9.2           If a Change in Law results in the
Manager becoming unable to perform or is prevented from performing its
obligations under this Agreement (including procuring the performance of the
Services or the Facilities ceasing operations) and the necessary steps have not
been taken to amend or disapply such Change in Law so as to remove the relevant
restriction within 30 days of that Change in Law coming into effect, then
subject to clause 8.10, the Manager shall be
entitled to terminate this Agreement and to demand immediate payment by the
Parent of the Termination Payment in accordance with clause 8.9.

 

9.3           If a Change in Law results in the
Manager incurring additional costs and expenses either itself or on behalf of
the Owners, such costs and expenses shall be excluded from (or lead to an
increase in) the calculation of EBITDA and the Earnout Income Statements under
the Sale and Purchase Agreement for the relevant Earnout Period.

 

10.          FORCE MAJEURE

 

10.1         The Parent, the Owners or the Manager
shall be relieved from their obligations under this Agreement to the extent
that they are prevented from complying therewith by Force Majeure and for a
maximum period no longer than the duration of the event of Force Majeure.

 

 

38

 

10.2         In the event that any of the Parent,
the Owners or the Manager are prevented from performing any part of this Agreement
by Force Majeure (the Affected Party)
they shall give notice of suspension as soon as reasonably practicable to the
other stating the date and extent of such suspension, the relevant events or
circumstances and the delay or default caused thereby or resulting therefrom
(or expected so to be caused or to result). 
The Affected Party shall use reasonable endeavours to resume the
performance of this Agreement as soon as reasonably practicable after the
removal of the cause and pending such resumption shall keep the other (non-Affected Party) fully informed
of any developments and shall take such action as may be necessary to prevent,
limit or mitigate any damage to the Facilities or any loss of output
capability, power output or ancillary services from the Facilities.  The non-Affected Party shall use reasonable
endeavours to assist the Affected Party in such action as aforementioned.

 

10.3         Without prejudice to the Manager’s
rights under clauses 8.9 and 8.10,
in respect of any period during which the obligations of the Parent, the Owners
or the Manager, as the case may be, are suspended in accordance with
clause 10.1, the Parent shall continue to
pay the Manager the Management Expenses and the Owners shall continue
to pay the Manager the Service Costs, provided that the Manager shall use its
reasonable endeavours and take reasonably practicable means (without
prejudicing the delivery of the Services) to reduce the Service Costs during
the period that the obligations of the Affected Party are suspended in accordance
with clause 10.1.

 

10.4         Without prejudice to the Manager’s
rights under clauses 8.9 and 8.10,
if the Manager is unable to perform or prevented from performing its
obligations under this Agreement in all material respects for a period of
30 days due to the occurrence of Force Majeure then the Manager may
terminate this Agreement by notice and 
the Parent shall (within 30 days of such event) pay to the Manager
an amount equal to the Force Majeure Termination Payment which amount shall be
treated as part of the Total Consideration payable under the Sale and Purchase
Agreement and shall immediately become due and payable by the Parent to the
Manager within 30 days of the Manager’s demand.

 

11.          INDEMNITY

 

Third party indemnity — by Parent and Owners

 

11.1         The Parent and the Owners shall jointly
and severally indemnify and hold the Manager harmless from and against any and
all claims, liabilities, costs, damages and expenses of every kind and nature
in respect of the sickness, injury or death of any third party and the damage
to or destruction of any property of any third party arising directly or
indirectly as a result of any act, omission or default of the Owners and their
respective agents, consultants, employees or subcontractors (other than the
Manager).

 

 

 

39

 

Third party indemnity — by Manager

 

11.2         The Manager shall indemnify and hold
the Owners and the Parent harmless from and against any and all claims,
liabilities, costs, damages and expenses of every kind and nature in respect of
the sickness, injury or death of any third party and the damage to or
destruction of any property of any third party arising directly or indirectly
during or as a result of any negligence, Gross Negligence or Wilful Misconduct
on the part of the Manager or its agents, consultants, employees or
sub-contractors.

 

Hold harmless indemnity by Parent and Owners

 

11.3         The Parent and the Owners shall jointly
and severally indemnify and hold the Manager harmless from and against any and
all claims, liabilities, costs, damages and expenses of every kind and nature
(including fines, penalties and similar charges) in respect of (i) the
sickness, injury or death of any person employed directly or indirectly by the
Parent, the Owners, the Service Contract Counterparties and their respective
Affiliates and any of its or their sub-contractors and (ii) damage to or
destruction of any property or equipment of the Parent, the Owners, the Service
Contract Counterparties and their respective Affiliates and sub-contractors and
their respective employees and (iii) any actions, proceedings, claims,
liabilities, costs, damages and expenses of every kind and nature (either
actual or contingent) (including taxes, duties, fines, penalties and similar
charges) brought by a third party  and
arising out of any action or inaction of the Manager in its capacity as Manager
under this Agreement and the provision of the Services pursuant to this
Agreement by the Manager, provided that this clause 11.3 shall not apply to sickness,
injury or death or damage to or destruction of property or claim to the extent
caused by the Gross Negligence or Wilful Misconduct of the Manager or its
employees.

 

Hold harmless indemnity by the Manager

 

11.4         The Manager shall indemnify and hold
the Owners and the Parent harmless from any and all claims liabilities costs
damages and expenses of every kind and nature in respect of (i) the
sickness, injury or death of any person employed directly or indirectly by the
Manager and its Affiliates or any of their sub-contractors and (ii) damage
to or destruction of any property or equipment of the Manager and its
Affiliates and their respective employees, arising during or as a result of the
performance of this Agreement from any act or omission of the Manager, its
sub-contractors or their respective employees including but not limited to the
negligence of the Manager its sub-contractors or their respective employees
provided that this clause 11.4 shall not apply to sickness,
injury, death or damage to or destruction of property to the extent caused by
the Gross Negligence or Wilful Misconduct of the Parent or the Owners, the
Service Contract Counterparties, their respective servants, agents or
sub-contractors (other than the Manager).

 

Indemnity — directors and officers

 

11.5         Save in those circumstances where
exclusions from the indemnities by the Parent and the Owners under clauses 11.1
and 11.3 apply, the Parent and the Owners shall jointly and severally indemnify
and hold harmless (to the fullest extent permitted 

 

 

40

 

by law) each
director, officer,
employee, agent and representative of the Manager from and against any
and all actions, proceedings, claims, liabilities, costs, damages and expenses
of every kind and nature (either actual or contingent) (including taxes,
duties, fines, penalties and similar charges) incurred or suffered by him in
any way, directly or indirectly, arising out of, related to, or connected with
this Agreement or the Facilities or any third party claim for damages arising
out of any action or inaction of the Parent or the Owners.

 

12.          LIMITATION OF LIABILITY

 

12.1         Except as specifically provided for
elsewhere in this Agreement and regardless of whether any remedy, indemnity or
warranty (if any) provided in this Agreement fails its essential purpose, the
Manager shall not have any liability with respect to its obligations under this
Agreement or otherwise howsoever arising including under contract, indemnity,
breach of statutory duty or in tort for consequential losses (including the
generality of the foregoing, loss of savings or profits, loss of use, loss of
data, loss of production, loss of goodwill, loss of contracts or business
opportunities, special, indirect, punitive, exemplary or incidental damages)
even if it has been advised of the possibility of such damages.

 

12.2         The Parent and the Owners agree that
the Manager’s cumulative liability hereunder arising out of contract,
indemnity, tort (including negligence), strict liability, or warranty shall not
exceed the aggregate amount of US$10,000,000 in any Operating Year (which
amount shall reduce by any claim paid by the Manager to the Parent or the
Owners during that Operating Year) or, in respect of any claim or liability as
a result of Gross Negligence on the part of the Manager, US$50,000,000 in
aggregate and provided that such limitations shall not apply in respect of any
claim or liability as a result of Wilful Misconduct on the part of the Manager.

 

13.          ASSIGNMENT AND TRANSFER
OF OWNERSHIP

 

13.1         No Party shall assign or transfer the
benefit or burden of this Agreement without prior written consent of the other
Parties, other than pursuant to clause 13.2 (in the case of the Manager)
and clause 13.3 (in the case of the Parent
and the Owners).

 

13.2         This Agreement may be assigned or
transferred by the Manager to and vested in any Affiliate of AES without the
prior written consent of the Parent or the Owners, provided that (a) such
assignment or transfer does not result in additional amounts of income tax or
withholding tax being payable by the Parent or the Owners including with
respect to the payment of the Management Expenses and the Manager has not
agreed with the Parent to be responsible for the payment of such additional
amount of income tax and withholding tax and (b) any AES Credit Support
shall continue in effect in respect of the transferee.

 

13.3         This Agreement may be assigned by the
Parent to an Affiliate of the Parent provided that notwithstanding any such
assignment, the Parent shall continue to be liable for all of the obligations
of the Parent under this Agreement.

 

 

 

41

13.4         The Parent and the Manager agree that,
following any assignment by any of them of this Agreement to an Affiliate
pursuant to clause 13.2 (in the case of the Manager)
and clause 13.3 (in the case of the Parent),
if the relevant assignee ceases to be an Affiliate of the Parent or the
Manager, as applicable, the Parent, the Owners or the Manager, as the case may
be, shall procure that the Assignment is re-assigned to the original party to
this Agreement or another of its Affiliates.

 

13.5         The Parent shall be entitled to
transfer or otherwise dispose of any equity interest in the Participants or the
Owners and in connection therewith to reorganise or restructure the Owners or
the Participants or amend, change or replace the constitutional documents of
the Owners, provided that:

 

(a)                                  following such actions, the
Parent notifies the Manager of the actions taken in respect of the Owners and
Participants and complies with its obligations under clause 3.16 in respect of
any new Participant;

 

(b)                                 if the Manager notifies the
Parent that the actions conflict with, or the implementation will conflict
with, the performance by the Owners of their obligations under this Agreement
or compliance by or on behalf of the Participants with the applicable
requirements of this Agreement, then:

 

(i)                  the Parent shall take such steps as are
required to remove such conflict; or

 

(ii)               the calculation of EBITDA and the Earnout
Income Statements under the Sale and Purchase Agreement shall be adjusted to
reflect such reorganisation, structuring, amendment, change or replacement by
assuming the amount of EBITDA which would have been generated if such conflicts
had not been created.

 

14.          AES CREDIT SUPPORT

 

14.1         The Manager shall, on or prior to the
Effective Date and thereafter during the Term, obtain and maintain in favour of
the Parent the AES Credit Support.  The
AES Credit Support Provider shall, at the sole election of the Manager, be any
of:

 

(a)                                  AES;

 

(b)                                 an Affiliate or Affiliates of
AES which has or have in aggregate a net asset value of at least US$50,000,000
(determined in accordance with the latest financial statements of that
Affiliate at the date of issue of the AES Credit Support); or

 

(c)                                  a financial institution with a
long-term credit rating of not less than “A” by Standard & Poor’s
Rating Services, “A2” by Moody’s Investors Service, Inc. (or equivalent).

 

14.2         The Parent and the Owners acknowledge
and agree that the AES Credit Support Provider may be replaced by any
substitute AES Credit Support Provider satisfying the criteria set out in
clause 14.1(a), (b) or (c) on 10 Business Days’
notice to the Parent.

 

42

 

14.3         The terms and conditions of the AES
Credit Support shall in the case of an AES Credit Support Provider which meets
the requirements of clause 14.1(a) or (b)
as set out in Schedule 8 and in the case of an AES
Credit Support Provider which meets the requirements of clause 14.1(c)
be in the form of ISP 98 and otherwise on customary terms for an
irrevocable standby letter of credit or such other form as is reasonably
acceptable to the Parent.

 

14.4         The Parent agrees that the AES Credit
Support shall be for a face amount or otherwise subject to an aggregate limit
of liability of US$50,000,000.

 

15.          DISPUTE RESOLUTION

 

15.1         In the event of any dispute,
controversy or claim arising out of or in connection with this Agreement,
including the breach, termination or invalidity of it (Dispute), either the
Parent and the Owners on the one hand or the Manager on the other hand may
serve formal written notice on the other that a Dispute has arisen (Notice of Dispute).  In respect of any Dispute between the Parent
or the Owners and the Manager, representatives of the Parent shall manage the
resolution of such Dispute on behalf of the Owners and represent the Owners in
respect of such Dispute.

 

15.2         The Parties shall use all reasonable
efforts for a period of 90 days from the date on which the Notice of
Dispute is served by one Party on the other (or such longer period as may be
agreed in writing between the Parties) to resolve the Dispute on an amicable
basis.

 

15.3         If the parties are unable to resolve
the Dispute by amicable negotiation within the time period referred to in
clause 15.2, then the Dispute may be
immediately referred by any Party to an Expert (acting as an expert and not as
an arbitrator) in accordance with the following provisions:

 

(i)                  the Party wishing to refer a
Dispute to an Expert shall give notice to the other Parties in writing giving
details of the Dispute to be referred to the Expert;

 

(ii)               the Expert shall in no event
be a national of or reside in either Kazakhstan or the United States of
America;

 

(iii)            the Parent, the Owners and
Manager shall endeavour to agree upon the appointment of the Expert;

 

(iv)           if within 21 days from
the date of the written notice referred to in (i) above the Parent, the
Owners and Manager fail to reach agreement on the appointment of the Expert the
matter shall be referred to the President of The London Court of International
Arbitration (the Appointor) who shall be
requested to make the appointment of the Expert within 21 days;

 

43

 

(v)              in making the appointment the
Appointor shall have regard to the nature of the Dispute which is referred for
determination by the Expert;

 

(vi)           such appointment of the Expert
by the Appointor shall be binding on the Parent, the Owners and the Manager;

 

(vii)        if for any reason the Expert
appointed by the Appointor shall be or shall become unable or unwilling to act,
then the Parent, the Owners and the Manager shall agree a replacement or in
default of agreement within seven days of a notice from one to the other
inviting agreement on a replacement Expert, the Appointor shall be requested to
appoint a replacement Expert whose appointment shall be binding on the Parent,
the Owners and the Manager;

 

(viii)     the Parent or the Owners on
the one hand or the Manager on the other hand shall submit a written statement
of not more than 20 pages long on the matters in Dispute (including the
nature and a brief description of the Dispute and the nature of relief sought)
together with copies of all documents on which it wishes to rely, to the Expert
and to the other Parties within 21 days of the appointment of the Expert;

 

(ix)             the Parent or the Owners on
the one hand or the Manager on the other hand shall have the right to submit a
written response of not more than 20 pages long to the written
statement of the other Party, together with copies of any further documents on
which it wishes to rely, to the Expert and to the other Party within
14 days of receipt of the other Party’s written statement;

 

(x)                if the Parent or the Owners on
the one hand or the Manager on the other hand shall fail to submit such written
statement to the Expert within the time specified in paragraphs (viii) or (ix) above, or fail to attend any meeting convened by the
Expert, the Expert shall proceed with his determination on the basis of the
information provided to him by the other Party;

 

(xi)             the Expert shall act
impartially in the conduct of the Expert determination and in reaching his
decision;

 

(xii)          all communications between the
Expert and one of the Parties shall be copied simultaneously to the other
Parties;

 

(xiii)       the Expert shall make such enquiries
and investigation into the Dispute as he shall think fit in order to decide the
Dispute fairly and expeditiously and shall have power to request the parties to
provide him with such oral or written statements documents or information as he
may determine;

 

(xiv)      the Expert shall give his
decision in writing to the Parent, the Owners and the Manager within 60 days of
his appointment (or such longer period as they may agree in writing). The
Expert shall have power to 

 

44

 

order his costs to be paid wholly or partly by the
Parent, the Owners or the Manager and in the absence of any order as to costs
by the Expert his costs shall be borne equally between the Parent and the
Owners on one hand and the Manager on the other;

 

(xv)         the Expert’s decision shall be
in writing and shall be final and binding upon the Parent, the Owners and the
Manager and given effect to by them unless and until the Dispute has been
referred to arbitration in accordance with clause 15.4,
and an award made or settlement reached; and

 

(xvi)      the time limits in this
clause 15.1 may be extended only by
agreement in writing between the Parties or, failing such agreement, by the
Expert.

 

15.4         If:

 

(a)                                  the Expert has made his
decision on a Dispute and the Parent, the Owners or the Manager are
dissatisfied with it; or

 

(b)                                 for whatever reason and
notwithstanding the foregoing provisions no Expert willing and able to act has
been appointed in accordance with the foregoing within 90 days of the initial
request by the Parent, the Owners or the Manager to refer a Dispute to an
Expert; or

 

(c)                                  an Expert has been appointed
but has failed to give his decision on the Dispute within 60 days of his
appointment (or such longer period as the Parent, the Owners and the Manager
shall agree in writing),

 

then within 45
days from the date of receiving the Expert’s determination or from the
happening of (b) or (c) above any of the Parent or the Owners on the
one hand or the Manager on the other hand may give notice to the other that
they require the Dispute to be and thereupon it shall be referred to
arbitration at the London Court of International Arbitration under the UNCITRAL
Arbitration Rules by three arbitrators appointed in accordance with those Rules (as
modified, amended or replaced from time to time). The arbitrator shall have
full power to open up revise and review any determination of the Expert.

 

The seat of
arbitration shall be London, England. 
The language to be used in the arbitral proceedings shall be English.

 

15.5         If Disputes arise in accordance with
the terms of this Agreement on a matter relating to this Agreement in
accordance with clauses 15.1 and 15.4
above on a common matter in relation to the Sale and Purchase Agreement then
(and provided that the expert determination or arbitration procedures and the
relevant time periods allow) such Disputes shall be determined by reference to
the London Court of International Arbitration under the UNCITRAL Arbitration Rules by
three arbitrators appointed in accordance with those Rules.

 

45

 

15.6         Following any determination of a
Dispute by an Expert pursuant to this clause 15 by which either the Parent
and the Owners owe an amount to the Manager or the Manager owes an amount to
the Parent and the Owner, the party in whose favour the determination has been
made by the Expert shall be entitled to demand payment of the relevant amount
within 5 Business Days of such determination.  If the relevant Dispute is subsequently
referred to arbitration and the arbitral award determines that a different
amount is due as between the parties to the dispute, the party from whom the
balance is due shall pay such balance within 5 Business Days of the
arbitral award.

 

16.          CONFIDENTIALITY

 

16.1         For
the purposes of this clause 16:

 

(a)                                  Confidential Information means:

 

(i)                  (in relation to the obligations of the Parent and the
Owners) any information received or held by the Parent and the Owners (or any
of its Representatives) relating to the Manager or its Affiliates; or

 

(ii)               (in relation to the obligations of the Manager) any
information received or held by the Manager (or any of its Representatives)
relating to the Parent or the Owners;

 

(iii)            information relating to the performance of the Services and
the respective rights and obligations of the Parties under this Agreement; and

 

(iv)           (in relation to the confidentiality obligations of the
Manager) information relating to the Facilities which is not otherwise
information within paragraphs (i), (ii) or (iii) above,

 

and includes written information and information
transferred or obtained orally, visually, electronically or by any other means
and any and all documents prepared by the Manager (or its Representatives)
which contain, reflect or are based upon, in whole or in part, the Confidential
Information; and

 

(b)                                 Representatives means, in relation to a Party, its respective Affiliates
and the directors, officers, partners, employees, agents, advisers,
accountants, bankers and financing institutions, contractors, sub-contractors
and consultants of that Party and/or of its respective Affiliates.

 

16.2         Each
of the Parties shall (and shall ensure that each of its respective
Representatives shall) maintain Confidential Information in confidence and not
disclose Confidential Information to any person except (i) as this
clause 16 permits or (ii) as the Manager (with respect to Confidential
Information held by the Parent and the Owners) or the Parent (with respect to
Confidential Information held by the Manager) approves in writing.

 

46

 

16.3         Clause 16.2 and
16.4 shall not prevent
disclosure by a Party or its Representatives to the extent it can demonstrate
that:

 

(a)                                  disclosure is required by law or by any stock exchange or
any regulatory, governmental or antitrust body (including any tax authority)
having applicable jurisdiction (provided that the disclosing party shall first
inform the other Party of its intention to disclose such information and take
into account the reasonable comments of the other Party);

 

(b)                                 save in relation to information relating to the Facilities,
disclosure is of Confidential Information which was lawfully in the possession
of that party or any of its Representatives (in either case as evidenced by
written records) without any obligation of secrecy prior to its being received
or held;

 

(c)                                  disclosure is of Confidential Information which has
previously become publicly available other than through that party’s fault (or
that of its Representatives); and

 

(d)                                 disclosure is required for the purpose of any arbitral or
judicial proceedings arising out of this Agreement.

 

16.4         The
Parties shall not (and shall procure that their respective Representatives
shall not) disclose to any person the fact that the Confidential Information
has been made available to it or any terms, conditions or other facts in
connection with this Agreement including their status.

 

16.5         Each
of the Parties undertakes that it (and its Affiliates) shall only disclose
Confidential Information to its Representatives if it is reasonably required
for purposes connected with this Agreement and the provision of the Services
and only if the Representatives are informed of the confidential nature of the
Confidential Information.  The Parent
undertakes not to disclose any Confidential Information to any Affiliate which
has entered into, or intending to enter into, a Service Contract with any Owner
and the Parent shall disclose to the Manager details of any such Affiliate from
time to time and otherwise promptly upon request by the Manager.

 

17.          INCORPORATION OF SPA
PROVISIONS

 

Clauses 15 (Announcements),
17 (Non-Solicitation), 20 (Costs), 22 (Conflict with other
Agreements), 23 (Whole Agreement),
26 (Waivers, Rights and Remedies) and
29 (Invalidity) of the Sale and Purchase
Agreement apply to this Agreement as if they were incorporated into and formed
part of this Agreement (and references to “Seller” in such provisions shall be
deemed to be references to the Manager and references to “Purchaser” in such
provisions shall be deemed to be references to the Parent and the Owners).

 

18.          FURTHER ASSURANCE

 

Each of the Parties agrees to perform (or
procure the performance of) all further acts and things, and execute and
deliver (or procure the execution and delivery of) such further documents, as
may be reasonably required by law or as may be necessary or 

 

47

 

reasonably desirable for the purpose of
vesting in the Manager the full benefit of the assets, rights and benefits to
be transferred to Manager under this Agreement.

 

19.          GOVERNING LAW

 

Laws of England and Wales

 

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

 

English language

 

19.2         All correspondence, notices,
communications, instructions, manuals, plant nomenclature and all other matters
in relation to this Agreement (other than communications or instructions
between the Manager and the Service Contract Counterparties) and any
arbitration proceedings arising hereunder shall be in the English language. In
the event of any conflict between the English text and the text in any other
language, the English text shall prevail.

 

20.          MISCELLANEOUS

 

Notices

 

20.1         Any notice to be given under this
Agreement shall be in writing.  It shall
be served by sending it by fax to the number set out in clause 20.2,
or delivering it by hand, or sending it by pre-paid recorded delivery, courier
special delivery or registered post, to the address set out in clause 20.2
and in each case marked for the attention of the relevant Party (or as
otherwise notified from time to time in accordance with the provisions of this
clause 20).  Any notice so served by hand, fax or post
shall be deemed to have been duly given:

 

(a)                                  in the case of delivery by
hand, when delivered;

 

(b)                                 in the case of fax, at the
time of transmission;

 

(c)                                  in the case of prepaid
recorded delivery, special delivery or registered post, at 10 a.m. on the
second Business Day following the date of posting

 

provided that in each case where delivery
by hand or by fax occurs after 6 p.m. on a Business Day or on a day which
is not a Business Day, service shall be deemed to occur at 9 a.m. on the
next following Business Day.

 

References to time in this clause are to
local time in the country of the addressee.

 

20.2         The addresses and fax numbers of the
Parties for the purpose of clause 20.1
are as
follows:

 

48

 

	
  Parent

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
   

  	
  Parent’s Representative

  
	
  Address:

  	
   

  	
  6th & 7th Floor, Cardinal Place

  
	
   

  	
   

  	
  100 Victoria Street, London, SW1E 5JL

  
	
   

  	
   

  	
   

  
	
  Facsimile:

  	
   

  	
  +44 (0) 207 901 7861

  
	
   

  	
   

  	
   

  
	
  Ekibastuz LLP

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
   

  	
  Parent’s Representative

  
	
  Address:

  	
   

  	
  c/o Kazakhmys plc

  
	
   

  	
   

  	
  6th & 7th Floor, Cardinal Place

  
	
   

  	
   

  	
  100 Victoria Street, London, SW1E 5JL

  
	
   

  	
   

  	
   

  
	
  Facsimile:

  	
   

  	
  +44 (0) 207 901 7861

  
	
   

  	
   

  	
   

  
	
  Maikuben LLP

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
   

  	
  Parent’s Representative

  
	
  Address:

  	
   

  	
  c/o Kazakhmys plc

  
	
   

  	
   

  	
  6th & 7th Floor, Cardinal Place

  
	
   

  	
   

  	
  100 Victoria Street, London, SW1E 5JL

  
	
   

  	
   

  	
   

  
	
  Facsimile:

  	
   

  	
  +44 (0) 207 901 7861

  
	
   

  	
   

  	
   

  
	
  Maikuben West
  LLP

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
   

  	
  Parent’s Representative

  
	
  Address:

  	
   

  	
  c/o Kazakhmys plc

  
	
   

  	
   

  	
  6th & 7th Floor, Cardinal Place

  
	
   

  	
   

  	
  100 Victoria Street, London, SW1E 5JL

  
	
   

  	
   

  	
   

  
	
  Facsimile:

  	
   

  	
  +44 (0) 207 901 7861

  
	
   

  	
   

  	
   

  
	
  Manager

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
   

  	
  The Directors

  
	
  Address:

  	
   

  	
  c/o AES Electric Ltd.

  
	
   

  	
   

  	
  37-39 Kew Foot Road

  
	
   

  	
   

  	
  Richmond, Surrey

  
	
   

  	
   

  	
  TW9 2SS, United Kingdom

  
	
   

  	
   

  	
   

  
	
  Facsimile:

  	
   

  	
  +44 20 8332 9078

  
	
   

  	
   

  	
   

  
	
  No Partnership

  
							

 

20.3         Nothing in this Agreement or any of the
arrangements contemplated by it shall create or be deemed to constitute a
partnership or any other similar type of association between the Parent and the
Owners on the one hand and the Manager on the other.

 

Intellectual Property Rights

 

20.4         The
Manager shall at all times retain sole ownership of the Manager Proprietary
Systems.  Following the Effective Date,
the possession of the Manager 

 

49

 

Proprietary Systems will cease to be with the Owners or any
Affiliates of the Owners and will from that date be vested exclusively in the
Manager.  Following the Termination Date,
the Manager shall be entitled to take possession of the Manager Proprietary
Systems and shall assist, in accordance with the Transition Plan, the Parent’s
procurement of appropriate systems and procedures to replace the Manager
Proprietary Systems.  The Manager shall
make available to and hereby licenses the Owners to use free of charge for the
duration of the Term the Manager Proprietary Systems and all other Intellectual
Property in each case owned by the Manager or its Affiliates which is required
in connection with the performance of the Manager’s obligations under this
Agreement (the Manager Intellectual Property).  This licence is for the purposes of the
operation and maintenance of the Facilities but no other purpose.

 

20.5         The Manager shall own intellectual
property rights and the copyright registered designs and design right in all
drawings, reports, specifications photographs and other documents prepared by
the Manager and used in connection with the Services but not prepared
specifically for or in relation to the Facilities and the Manager grants a
royalty free licence therein to the Owners to use and copy such documents for
all purposes connected with the operation and maintenance of the Facilities.

 

Remedies cumulative

 

20.6         The rights and remedies of each of the
Parties under or pursuant to this Agreement are cumulative, may be exercised as
often as such Party considers appropriate and are in addition to its rights and
remedies under general law.

 

Amendment

 

20.7         This Agreement may not be altered,
modified, revoked or cancelled in any way unless such alteration, modification,
revocation or cancellation is in writing signed by or on behalf of the Parties.
This Agreement supersedes any and all other agreements between the Parties,
whether written or oral, with respect to the subject matter hereof.

 

Counterparts

 

20.8         This Agreement may be executed in any
number of counterparts and by the parties to it on separate counterparts, each
of which is an original but all of which together constitute one and the same
instrument.

 

Contracts (Rights of Third Parties) Act

 

20.9         A person who is not a party to this
Agreement shall have no right under the Contracts (Rights of Third Parties) Act
1999 to enforce any of its terms.

 

50

 

IN
WITNESS whereof this Agreement was executed the day and
year first above written.

 

	
  SIGNED for and

  	
  )

  	
  Oleg Novachuk

  
	
  on behalf of

  	
  )

  	
   

  
	
  KAZAKHMYS PLC

  	
  )

  	
   

  

 

 

	
  SIGNED by

  	
  )

  	
  Nikolay Razumov

  
	
  Nikolay Razumov

  	
  )

  	
   

  
	
  on behalf of

  	
  )

  	
  Company Seal

  
	
  AES EKIBASTUZ LLP

  	
  )

  	
   

  

 

	
  SIGNED by

  	
  )

  	
  Alfiya Jumayeva)

  
	
  Alfiya Jumayeva

  	
  )

  	
   

  
	
  on behalf of

  	
  )

  	
  Company Seal

  
	
  AES MAIKUBEN LLP

  	
  )

  	
   

  

 

	
  SIGNED by

  	
  )

  	
  Alfiya Jumayeva)

  
	
  Alfiya Jumayeva

  	
  )

  	
   

  
	
  on behalf of

  	
  )

  	
  Company Seal

  
	
  MAIKUBEN WEST LLP

  	
  )

  	
   

  

 

	
  SIGNED for and

  	
  )

  	
  Fernando O. Gonzalez

  
	
  on behalf of

  	
  )

  	
   

  
	
  ALBERICH

  	
  )

  	
   

  
	
  BETEILIGUNGSVERWALTUNGS

  	
  )

  	
   

  
	
  GmbH

  	
  )

  	
   

  

 

SCHEDULE 1

 

THE SERVICES

 

1.             GENERAL

 

The Manager shall manage the commercial,
administrative, operation, maintenance and capital expenditure activities of
the Facilities in accordance with the Business Plan and with a view to
achieving or exceeding the High Targets described in Part F of
Schedule 7 to the Sale and Purchase Agreement.

 

The Manager’s provision or procurement of
the Services shall be effected through its instructions and directions to the
management and operational staff of the Parent and the Owners.

 

2.             SERVICE
CONTRACTS

 

The Manager will enter into Service
Contracts as agent on behalf of the Owners and the Parent for the commercial,
administrative, operation, maintenance and capital expenditure activities of
the Facilities.

 

The Manager will monitor and direct the
ordering, delivery, scheduling, quality control and payments in relation to
assets or services procured as part of the commercial, administrative,
operation, maintenance and capital expenditure activities of the Facilities.

 

3.             TRADING
AND ENERGY SALES

 

The Manager shall manage and enter into
arrangements on behalf of the Owners relating to the trading and sales of
energy, coal and coal products (including related derivative arrangements
relating to any of the foregoing).

 

4.             ADMINISTRATION

 

The Manager shall be responsible for and
have absolute control over the administrative, operational and commercial
activities of the Owners and the Facilities and the manner in which the
Services are carried out.

 

5.             AUDITING

 

5.1           Without prejudice to the
responsibility of the Parent and the Owners to prepare and arrange the auditing
of the books and records, accounts and other financial information of the
Owners and relating to the Facilities under clause 4.10,
the Manager shall procure that the Owner Accounts are prepared in accordance
with clause 3.33 for each Operating Year.

 

5.2           The Manager will keep the operational
books and records for the Facilities and manage the development of operating
guidelines and directives for implementation based on the results of the
audits.

 

 

 

1

 

6.             OPERATIONS
AND MAINTENANCE

 

The Manager shall:

 

6.1           select, hire, assign, remove and
supervise staff operating and maintaining the Facilities, notwithstanding that
such staff are employed by the Owners;

 

6.2           create and update an inventory of all
equipment and other assets (including spare parts) used or located at the
Facilities;

 

6.3           provide or procure the provision of
appropriate technical information and advice relating to the operation and
maintenance of the Facilities;

 

6.4           ensure that adequate training is
established in all relevant activities (including emergency measures) for all
personnel in accordance with clause 3.12;

 

6.5           maintain the operation and maintenance
manuals and procedures in place as at the Effective Date;

 

6.6           plan and make decisions relating to
outages of operations including outages for planned and unplanned maintenance;

 

6.7           maintain health and safety manuals
and emergency response procedures in place as at the Effective Date;

 

6.8           conduct periodic safety audits of the
Facilities to ensure safety of the operating personnel;

 

6.9           periodically review the training,
operation and maintenance and safety procedures and plans of the Facilities and
update as necessary;

 

6.10         maintain operation and maintenance
records;

 

6.11

 

(a)           arrange
the management and organisation of all maintenance necessary including
contracted and subcontracted maintenance, repair and testing services required
to carry out preventative maintenance programmes, scheduled inspections,
periodic overhauls, unscheduled maintenance and any major breakdown repairs;
and

 

(b)           supervise
or procure the supervision of all such maintenance;

 

6.12         provide or procure the provision of
technical engineering support for solving operational and maintenance problems;

 

6.13         prepare and organise scheduled
maintenance programmes including liaising with all relevant third parties;

 

6.14         procure the performance of and/or
attendance at periodic performance tests of the Facilities and recommend any
remedial action which the Manager considers 

 

 

2

 

necessary to
correct any operational deficiencies arising from the analysis of the test
results or otherwise revealed during operation of the Facilities;

 

6.15         procure the identification,
preparation, negotiation and management of any warranty claims under the
Service Contracts;

 

6.16         monitor all operation and maintenance
programmes taking into account the Business Plan;

 

6.17         procure the carrying out of any
generation and other tests as reasonably necessary for the operation of the
Facilities;

 

6.18         exercise the rights of the Owners and
procure the performance of the obligations of the Owners on their behalf under
the Service Contracts;

 

6.19         prepare operating information as may be
required including performance reports and recordings and facsimile
confirmations of notices given under the Service Contracts; and

 

6.20         maintain a system for staff
consultation and liaison including safety matters in-keeping with all statutory
requirements.

 

7.             IMPROVEMENTS

 

The Manager shall, where reasonably
practicable:

 

7.1           make arrangements to make
modifications, capital repairs, replacements and improvements to the Facilities
and components thereof which would enhance the performance of the Facilities
and cause the same to be implemented;

 

7.2           identify known defects in the
Facilities and liaise with all relevant parties and monitoring the correction
(as the case may be) of all such defects which are the subject of a warranty
claim.

 

8.             ANNUAL
BUDGET

 

The Manager shall prepare and submit the
Annual Budget to the Parent and the Owners in accordance with clauses 6.3
to 6.6.

 

9.             INSURANCE

 

The Manager shall obtain or procure such
insurance cover as is required under Applicable Law including insurance for
workman’s compensation and motor vehicle liability insurance.

 

10.          MANAGEMENT
INFORMATION SYSTEMS

 

The Manager shall maintain or procure the
maintenance of information systems which fall within the Manager’s
responsibilities to facilitate office administration, including purchasing,
accounting, and inventory, and in this regard, the Manager shall maintain or
procure the maintenance of appropriate software systems and implement or
procure the implementation of new software.

 

 

3

 

11.          ADMINISTRATION
SERVICES

 

11.1         The Manager shall perform or procure
the performance of the following activities, as required in the Manager’s
discretion:

 

(a)                                  provision and maintenance of
all office services and supplies, temporary building hire and software;

 

(b)                                 operating an invoicing and
payment system;

 

(c)                                  identifying the need for and
appointing external consultancy, legal services or support services; and

 

(d)                                 acting as the Owners’
representative in meetings and committees.

 

12.          REPORTS

 

All reports shall be prepared in accordance
with IFRS standards (to the extent reasonably practicable in the first
Operating Year) and have accompanying management commentary.

 

Monthly Report

 

12.1         The Manager shall provide the Parent
and the Owners with a monthly report by the 7th Business Day of the next month.
This monthly report shall be in such form as the Parent reasonably requires and
incorporate operational, commercial and technical information only and shall
include:

 

(a)                                  a summary of Service Costs
incurred in the past month and estimated to be incurred in the next month, with
details of any variance in those Service Costs against the applicable Annual
Budget;

 

(b)                                 a summary of capital
expenditure within the Growth Capex Plan and capital expenditure not included
in the Growth Capex Plan but necessary in connection with ensuring the
continued provision of the Services or to achieve the overriding goal of
achieving or exceeding the High Targets described in Schedule 7 to the
Sale and Purchase Agreement;

 

(c)                                  all major repairs or
maintenance performed on the Facilities or any portion thereof within the
previous month and all major repairs or maintenance work projected during the
next month, together with the projected time schedule for such intended major
repairs or maintenance;

 

(d)                                 areas of major interest
including efficiency performance and areas of shortfall, output performance and
areas of shortfall;

 

(e)                                  information relating to staff
and industrial relations;

 

 

 

4

 

(f)                                    safety and accident statistics
for the Facilities;

 

(g)                                 details of any Commodity
Contract entered into for the sale of electricity with a capacity exceeding
100 MW; and

 

(h)                                 a summary of any Service
Contracts entered into in that month.

 

The Manager shall also provide a
preliminary monthly report within two Business Days after the end of the
month with regard to production and sales data, financial summary and health
and safety data.

 

Annual Report

 

12.2         The Manager shall supply the Parent and
the Owners with an annual report for the previous Operating Year by 28 February of
each Operating Year and 2011.

 

This annual
report shall incorporate operational, commercial and technical information only
and shall include:

 

(a)                                  a summary of that year’s
Service Costs;

 

(b)                                 a summary of that year’s
repairs and maintenance;

 

(c)                                  a summary of capital
expenditure within the Growth Capex Plan and capital expenditure not included
in the Growth Capex Plan but necessary in connection with ensuring the
continued provision of the Services or to achieve the overriding goal of
achieving or exceeding the High Targets described in Schedule 7 to the
Sale and Purchase Agreement;

 

(d)                                 a summary of the Facilities’
performance and operation including monthly efficiency, availability, load
factor, reliability, mine productivity and recovery rates;

 

(e)                                  an annual financial report and
management accounts including performance against the Business Plan; and

 

(f)                                    a summary of the use of
auxiliary services including power and water.

 

Quarterly Report

 

12.3         The Manager shall supply the Parent and
the Owners with a quarterly report for the quarterly period within 30 days
following the end of the relevant quarter which shall include:

 

(a)                                  update to financial and
operational data previously provided;

 

(b)                                 an explanation of material
variations in such data; and

 

(c)                                  a detailed financial report on
income statement, balance sheet and cashflow movements for the quarter and
against the Annual Budget.

 

 

 

5

 

Claims information

 

12.4         The Manager shall notify the Parent,
promptly upon becoming aware thereof, of any Relevant Claims and in any event
within five Business Days of receiving notice of any Relevant Claim.

 

Quarterly meetings

 

12.5         The Manager shall ensure that
appropriate senior management of the Owners (including the General Directors of
the Owners) and the Manager’s Representative shall attend meetings with the
Parent’s Representatives upon reasonable prior written notice and at reasonable
intervals.

 

12.6         The Manager shall attend meetings with
the Parent and Owners on a quarterly basis in each Operating Year at such
location as the Parent may reasonably request, to discuss the contents of the
prior monthly reports for the relevant quarter and any variations of revenues
and expenditures during that quarter compared to the relevant Annual Budget and
to provide such further information as is reasonably available to the Manager’s
Representative regarding the Facilities.

 

General Information

 

The Manager shall provide the Parent and
Owners with such information held by the Manager in relation to Services and
Facilities as the Owners may reasonably request, including full support as
required for any statutory or regulatory reporting.  This obligation shall survive the expiry of
the Term.

 

The Manager shall notify the Parent
promptly upon receiving any instruction from a Competent Authority to act in a
manner which the Manager believes is contrary to the Standard of a Reasonable
and Prudent Operator.

 

 

 

6

 

SCHEDULE 2

BUSINESS PLAN

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

SCHEDULE 3

GROWTH CAPEX PLAN

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2

 

SCHEDULE 4

 

FORMS OF POWER OF ATTORNEY

 

Part A

 

FORM OF POWER OF ATTORNEY
(PARTICIPANT)

 

This power of attorney is made on [DATE] by
[NAME OF PRINCIPAL] [a company duly registered in **                    , with
the registration number **                    , whose registered office is at]
[ADDRESS] (Principal),

 

1.             APPOINTMENT
AND POWERS

 

The Principal appoints [ALBERICH
BETEILIGUNGSVERWALTUNGS GmbH] [a company duly registered in **                   
, with the registration number **                    , whose registered
office is at] [ADDRESS] (Attorney) and
in the Principal’s name or otherwise and on its behalf:

 

1.1           To consider, settle, approve, sign,
execute, deliver and/or issue all agreements, documents, certificates and
instruments (all whether as a deed or not) which the Attorney in its absolute
discretion considers desirable in connection with the management of the
commercial, administrative, operation, maintenance and capital expenditure
activities (Services) of [AES
Ekibastuz LLP][AES Maikuben LLP][Maikuben West LLP] in which the Principal
holds the participation interest (Company) in
respect of the [Ekibastuz coal-fired thermal power station and the substation
adjacent to the power station, each located in Pavlodar Oblast in northeastern
Kazakhstan][the Maikuben coal mine located in Pavlodar Oblast] (the Facility), including without limitation any:

 

(a)                                  contracts for the performance
or procurement of any part of the Services (including contracts with
consultants and all aspects of maintenance and refurbishment);

 

(b)                                 contracts (including
maintenance contracts) providing for capital expenditure in connection with the
Facility;

 

(c)                                  agreements for the sale,
disposal or purchase of equipment and other assets used in or forming part of
the Facilities;

 

(d)                                 leasing arrangements and
financing arrangements relating to the procurement of assets and equipment
(including the granting of charges in connection therewith); and

 

(e)                                  power purchase agreements,
coal sales contracts and other arrangements relating to the trading and sales
of energy, coal and coal products (including related and/or embedded derivative
arrangements relating to any of the foregoing), (collectively, Contracts).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3

 

1.2           To take any steps or do any thing
which the Attorney in its absolute discretion considers desirable in connection
with the implementation of the Services or the implementation and/or execution
of the Contracts.

 

1.3           To appoint one or more persons to act
as a substitute attorney for the Principal and to exercise one or more of the
powers conferred on the Attorney by this power of attorney and revoke any such
appointment.

 

1.4           To appoint the General Director of
the Company and such other persons as the Attorney, in its sole discretion,
determines are needed for the functions of the Attorney and to facilitate the
Attorney’s performance of the Services which persons shall have ability to act
on behalf of and bind the Company without further action.

 

1.5           To the extent necessary or desirable
to exercise the Attorney’s rights and perform or procure the performance of the
Attorney’s obligations under the Agreement and the Services:

 

(a)                                  to act on the Principal’s
behalf at general meetings of the participants in the Company or take decisions
as the sole participant of the Company, if applicable;

 

(b)                                 to approve on behalf of the
Principal any action of the Company requiring the Principal’s approval or
ratification, including the entry into of any of the Contracts; and

 

(c)                                  to take all decisions reserved
for the Principal under Applicable Law and the foundation documents of the
Company, including:

 

(i)                    to approve the entry into of agreements by
the Company;

 

(ii)                   to establish, change and/or terminate the
authority of the Company’s executive body, the supervisory council or any other
body of the Company;

 

(iii)                to dispose of the assets of the Facility;

 

(iv)               to approve or change the policies, staffing
and structure of the Company; and/or

 

(v)                  to direct the employees of the Company;

 

1.6           To take any action or make any
decision on behalf of the Principal required to enable the Attorney to exercise
its rights or perform its obligations under the Agreement or to facilitate the
Company’s compliance with its obligations under the Agreement.

 

1.7           To take any action, including actions
which require notary’s certification, execute and deliver any agreement,
contract, letter, application or other document, or make any decision on behalf
of the Principal required to enable the Attorney to exercise its rights or
perform its obligations under the Agreement or to facilitate the Owner’s
compliance with its obligations under the Agreement.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4

 

2.             VALIDITY

 

The Principal declares that a person who
deals with the Attorney in good faith may accept a written statement signed by
that Attorney to the effect that this power of attorney has not been revoked as
conclusive evidence of that fact.  Any
party may rely on this power of attorney as complete evidence of the Attorney’s
right to approve actions of the Company on behalf of the Principal.

 

3.             JURISDICTION

 

This power of attorney (and any dispute,
controversy, proceedings or claim of whatever nature arising out of or in any way
relating to this power of attorney or its formation or any act performed or
claimed to be performed under it) shall be governed by and construed in
accordance with the legislation of the Republic of Kazakhstan.

 

4.             TERM

 

The present power of attorney shall be
valid until [31 December 2010].

 

This document has been executed as a deed
and is delivered and takes effect on the date stated at the beginning of it.

 

Signed by [NAME OF PRINCIPAL] acting by
[NAME OF THE PERSON AUTHORISED TO SIGN THIS DOCUMENT ACCORDING TO THE CHARTER
OF THE PRINCIPAL]

 

..........................................

 

[SIGNATURE OF THE AUTHORISED PERSON]

 

	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  

 

 

 

[COMPANY STAMP OF THE PRINCIPAL]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5

 

Part B

 

FORM OF POWER OF ATTORNEY
(OWNERS)

 

This power of attorney is made on [DATE] by
[NAME OF OWNER] [a company duly registered in **                    , with the
registration number **                    , whose registered
office is at] [ADDRESS] (Principal),

 

1.             APPOINTMENT
AND POWERS

 

The Principal appoints [ALBERICH
BETEILIGUNGSVERWALTUNGS GmbH] [a company duly registered in **                   
, with the registration number **                    , whose registered
office is at] [ADDRESS] (Attorney) and
in the Principal’s name or otherwise and on its behalf:

 

1.1           To consider, settle, approve, sign,
execute, deliver and/or issue all agreements, documents, certificates and
instruments (all whether as a deed or not) which the Attorney in its absolute
discretion considers desirable in connection with the management of the
commercial, administrative, operation, maintenance and capital expenditure
activities (Services) of the
Principal in respect of the [Ekibastuz coal-fired thermal power station and the
substation adjacent to the power station, each located in Pavlodar Oblast in
northeastern Kazakhstan][the Maikuben coal mine located in Pavlodar Oblast]
(the Facility), including without limitation
any:

 

(a)                                  contracts for the performance
or procurement of any part of the Services (including contracts with
consultants and all aspects of maintenance and refurbishment);

 

(b)                                 contracts (including
maintenance contracts) providing for capital expenditure in connection with the
Facility;

 

(c)                                  agreements for the sale,
disposal or purchase of equipment and other assets used in or forming part of
the Facilities;

 

(d)                                 leasing arrangements and
financing arrangements relating to the procurement of assets and equipment
(including the granting of charges in connection therewith); and

 

(e)                                  power purchase agreements,
coal sales contracts and other arrangements relating to the trading and sales
of energy, coal and coal products (including related and/or embedded derivative
arrangements relating to any of the foregoing),

 

(collectively, Contracts).

 

1.2           To take any action or take any
decision on behalf of the Principal 
required (in the Manager’s sole discretion) to enable the Manager to
exercise its rights or perform its obligations under this Agreement or to facilitate
the Owner’s compliance with its 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6

 

obligations
under this Agreement and do any thing which the Attorney in its absolute
discretion considers desirable in connection with the implementation of the
Services or the implementation and/or execution of the Contracts.

 

1.3           To appoint one or more persons to act
as a substitute attorney for the Principal and to exercise one or more of the
powers conferred on the Attorney by this power of attorney and revoke any such
appointment.

 

1.4           To appoint the General Director of
the Principal and such other persons as the Attorney, in its sole discretion,
determines are needed for the functions of the Attorney and to facilitate the
Attorney’s performance of the Services which persons shall have ability to act
on behalf of and bind the Principal without further action.

 

1.5           To act on behalf of the Principal and
consider, settle, approve, sign, enter into, execute, deliver and/or issue all
Contracts, agreements, documents, certificates and instruments (all whether as
a deed or not) which the Attorney in its absolute discretion considers
desirable in connection with the provision of the Services including without
limitation any Contracts on behalf of the Principal without any approval or ratification
by the board of directors or officers of the Principal.

 

1.6           To make all decisions relating to the
commercial, administrative, operation, maintenance and capital expenditure
activities of the Principal, including:

 

(a)                                  to approve the entry into of
any Contract;

 

(b)                                 to dispose of or grant charges
in respect of the assets of the Facility;

 

(c)                                  to approve or change the
policies, staffing and structure of the Principal; and/or

 

(d)                                 to direct the employees of the
Principal.

 

2.             VALIDITY

 

The Principal declares that a person who
deals with the Attorney in good faith may accept a written statement signed by
that Attorney to the effect that this power of attorney has not been revoked as
conclusive evidence of that fact.  Any
party may rely on this power of attorney as complete evidence of the Attorney’s
right to approve actions of the Principal.

 

3.             JURISDICTION

 

This power of attorney (and any dispute,
controversy, proceedings or claim of whatever nature arising out of or in any
way relating to this power of attorney or its formation or any act performed or
claimed to be performed under it) shall be governed by and construed in
accordance with the legislation of the Republic of Kazakhstan.

 

4.             TERM

 

The present power of attorney shall be
valid until [31 December 2010].

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7

 

This document has been executed as a deed
and is delivered and takes effect on the date stated at the beginning of it.

 

Signed by [NAME OF PRINCIPAL] acting by
[NAME OF THE PERSON AUTHORISED TO SIGN THIS DOCUMENT ACCORDING TO THE CHARTER
OF THE PRINCIPAL]

 

 

 

..........................................

 

[SIGNATURE OF THE AUTHORISED PERSON]

 

	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  

 

 

 

[COMPANY STAMP OF THE PRINCIPAL]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8

 

SCHEDULE 5

 

STANDARDS OF CONDUCT

 

Compliance with the Law

 

Each Party will
follow all laws, and regulations that govern their obligations.

 

Public Disclosures

 

Each Party will
provide full and accurate information about financial and operational issues to
government agencies. All reports and documents submitted to regulatory
authorities or other government agencies, and all public communications, will
include full, fair, accurate, timely, and understandable disclosures.

 

Insider Trading

 

Each Party will
not use non-public information about other companies (including the Owners) for
personal benefit, will not trade securities base on such information, and will
not provide such information to others.

 

Anti-Corruption

 

Each Party is
committed to compliance with international anti-corruption laws and standards,
including the United States Foreign Corrupt Practices Act, the United Nations
Convention against Corruption and the Organisation for Economic Co-operation
and Development Convention on Combating Bribery of Foreign Public Officials in
International Business. Each Party will not offer money or any other benefit
directly or through another party to any government official in order to
influence decisions, obtain or retain business, or secure any improper
advantage.

 

Each Party will
not provide financial support or assistance to anyone engaged in criminal
activity.

 

International Trade Activities

 

Each Party will
follow all applicable laws, regulations, and restrictions when importing or exporting
goods, information, software, or technology. Each Party will also abide by
applicable anti-boycott laws.

 

Fair Competition

 

Each Party will
not make formal of informal agreements with its competitors regarding prices,
production or inventory levels, bids, or allocation of markets, customers, or
suppliers.

 

Gifts and Entertainment

 

Each Party will
avoid offering, soliciting or accepting gifts, entertainment, favours or other
benefits or advantages that may be misinterpreted as improperly compromising
its judgment or obligating the Party in any way.

 

 

 

 

 

 

 

 

 

 

9

 

Political Activities

 

When a Party’s
businesses participate in political activities and advocacy efforts aimed at
influencing legislative, regulatory, or other government policy matters, they
will follow all applicable laws and regulations regarding interaction with
government officials. All arrangements with outside parties engaged to
undertake such activities on behalf of that Party must also comply with the
law.

 

Corporate Records

 

Each Party will
create truthful and complete business records and supporting detail. This duty
includes financial and accounting data and information regarding transactions,
as well as documentation of business travel and entertainment expenses or other
payments made on behalf of the Party.

 

Each Party will
properly label and handle confidential, sensitive, and proprietary information
and will maintain documents, including electronic records.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10

 

ANNEX
1 TO SCHEDULE 5

 

VALUES
STATEMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11

 

SCHEDULE 6

 

PROCUREMENT PROCEDURE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12

 

PROCUREMENT PROCEDURE

 

	
   No

   	
   Process flow

   	
   Control

   
	
  1

  	
  Initiating requests for materials, equipment,
  supplies and services

  
	
   

  	
  Define material needs and complete a standard
  material requisition form. The form includes the specification of the
  requested  material, quantity, expense
  code and the terms of the requisition. The completed form gets signed off the
  by the initiator of the request and is approved as follows:

  1.     Workshop
  supervisor

  2.     Budget accountant to ensure that the purchase is within the
  budget and the correct cost code was used for coding

  	
  Purchase
  limits (e.g., budgets, not-to-exceed limits, ceilings) are established for
  each requisition

   

  
	
   

  	
  3.       Head of the procurement department

  	
  Purchase
  requisitions are reviewed and approved

  
	
   

  	
  4.      Final approval: either General
  Director or Production Director. No approval limits exist; more material
  requisitions get approved by the General Director but if the general director
  is not available, production director can approve as well.

  	
  Standard
  purchase requisition forms are used

   

  
	
   

  	
   

  	
   

  
	
   

  	
  Cost codes have the following 4 required
  fields:

  ·     Cost center

  ·     Object

  ·     Sub-object

  ·     Project

  	
  Purchase
  requisitions are reviewed and approved

  
	
   

  	
   

  
	
  2

  	
  Registration of requisition forms

  
	
   

  	
  All
  approved requisition forms are sent to the Procurement Department where they
  get numbered and registered in the 

  Requisitions Registration Journal. 
  The journal is a book which has the following fields:

  1.     Requisition
  number

  2.     Date of
  registration in the journal

  3.     Production workshop which initiated the requisition

  	
  All
  required requisition information is complete prior to review and approval

  
	
   

  	
  4.       
  Brief
  description and specifications of the requisitioned materials

  5.     Terms of
  delivery

  6.     Name of
  the final approver

  7.     Name of
  a procurement economist who is assigned with a purchasing responsibility.

  	
  After review and approval, the requestor
  cannot change the requisition unless such changes are explicitly instructed
  by the reviewer/approver

   

  
	
   

  	
   

  
	
   

  	
  The journal exists only for recording
  requisitions. It is not used for tracking the status of the
  requisitions.  

  Approved, numbered and registered requisition forms are filed in a binder by
  production workshop.

  
	
   

  	
   

  
	
  3

  	
  Supplier selection / monitoring approved suppliers. Maintenance of
  the supplier list

  
	
   

   

   

   

  	
  Each procurement economist handles purchases
  of certain materials and inventory. 
  Based on the received requisition forms 

  procurement economists prepare a Request
  for Price Quotation in which they include any special information about
  the purchase (required delivery terms, etc.).

   

  The Request for Price Quotation is
  either faxed or emailed (scanned document) to suppliers who supply needed

  

 

13

 

	
   No

   	
   Process flow

   	
   Control

   
	
   

  	
  materials.  All requests are registered in the Requests
  Registration Journal.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Price quotations from
  suppliers also arrive either via fax or email.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Based on received price
  quotations, the procurement economist prepares a Price Analysis. This
  analysis lists all received price offers, prices for requested materials,
  delivery distance, time of delivery and indicates the most optimal supplier
  for the purchase. 

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  A package of the Price Analysis along with the attached price
  quotations from suppliers is signed by the procurement economist (the
  preparer) and is approved by the head of the procurement department.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  The supplier selection process is not limited to existing suppliers.
  For each purchase, the procurement does the price analyses and does not limit
  itself to already approved suppliers.

  	
  Management has
  established competitive selection objectives (e.g., price, quality,
  timeliness, etc.)

  
	
   

  	
   

  	
   

  
	
   

  	
  New
  suppliers are found via Internet, newspaper advertisements, magazines,
  etc.  Before starting to work with a
  new supplier,  the procurement
  economist requests legal documents of the supplier which include the
  following:

  	Tax registration
       document
	Statistics card (a
       registration in the government agency responsible for statistics)
	Charter

  	
  Competitive supplier
  selection decisions are documented, reviewed and approved

  
	
   

  	
  	Registration for
       collection of VAT
	Registration with the
       State

  	
  Routine purchases that
  require competitive supplier selection are periodically re-bid

  
	
   

  	
   

  	
   

  
	
   

  	
  In addition to checking the legal documents,
  the procurement economist searches Internet for information about the
  supplier (www.compromat.ru, www.yandex.ru and other websites). 

  	
  Management has established a
  qualified/approved and current Supplier List, which should include company
  name, address, contract numbers, etc.

  
	
   

  	
   

  	
   

  
	
   

  	
  New suppliers are approved
  every time the business selects a supplier they have not worked with before
  and enters into an agreement with them. 

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Supplier Addition Form is prepared based on the
  documentation received from the supplier and is a basis for entering supplier
  information into 1C database where the supplier list is maintained.  The form is prepared by Procurement
  economist and approved by Production Director. 

  	
  Supplier qualification is
  reviewed and approved in accordance with management's criteria

  
	
   

  	
   

  
	
   

  	
  Fixed Assets / Inventory accountant adds a supplier in 1C accounting
  system and signs a Supplier Addition Form. Their signature indicates
  that the supplier was added in 1C list of counterparties. All supplier
  addition forms are filed in the binder maintained by Fixed Assets / Inventory
  accountant.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Per
  procurement economist, there were no instances of the removal of suppliers
  from the supplier list 1C.  The list is
  not reviewed. Once the suppliers are added, they are not removed from the
  list.

  	
   

  
				

 

14

 

SCHEDULE 7

 

SENIOR MANAGEMENT STRUCTURE

 

 

 

 

 

 

 

 

 

 

 

 

15

 

SCHEDULE 8

FORM OF AES CREDIT SUPPORT (CORPORATE)

 

THIS GUARANTEE is made on 
[             ]

 

BY:

 

(1)           [                     ]
(the Guarantor); and

 

IN FAVOUR OF:

 

(2)           KAZAKHMYS
PLC of 6th and 7th Floor, Cardinal Place, 100
Victoria Street, London SW1E 5JL (the Beneficiary)

 

(each a Party
and together the Parties).

 

WHEREAS:

 

(A)          Anturie Beteiligungsverwaltungs GmbH,
has agreed to sell and Kazakhmys Power B.V. an affiliate of the Beneficiary,
has agreed to buy certain entities (including AES Ekibastuz LLP, AES Maikuben
LLP and Maikuben West LLP (the Owners))
pursuant to the Sale and Purchase Agreement between Anturie
Beteiligungsverwaltungs GmbH and Kazakhmys Power B.V. dated [·] February 2008 (the Sale and Purchase Agreement).

 

(B)           At the same time as
the sale and purchase of the Owners, Alberich
Beteiligungsverwaltungs GmbH (the Manager),
the Owners and the Beneficiary have agreed to enter into a management agreement
(the Management Agreement)
dated on or about the date of the
Sale and Purchase Agreement pursuant to which the Manager has agreed to provide
or procure the provision of certain management services to the Owners and the
Parent and the Owners have agreed to use the Manager to exclusively manage the
commercial, administrative, operation, maintenance and capital expenditure
activities of the Facilities until 31 December 2010 with a view inter alia
to maximising EBITDA.

 

(C)           In connection with
the Manager’s entry into of the Management Agreement, the Guarantor is
entering into this Guarantee
to guarantee certain of the Manager’s obligations under the Management
Agreement to the Parent on the terms set out in this Guarantee.

 

IT IS HEREBY AGREED AS FOLLOWS:

 

Interpretation

 

1.             The terms defined in
clause 1 of the Management Agreement shall bear the same meanings when
used in this Guarantee.  Clause 1.2 (Interpretation)  of the
Management Agreement shall apply to this Guarantee as if set out in full
herein.

 

Guarantee

 

2.             In consideration of
the Beneficiary entering into the
Management Agreement, the Guarantor unconditionally and irrevocably guarantees
to the Beneficiary the due and punctual
payment by the 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

16

 

Manager of any and all amounts owing by it to the Beneficiary and the
Owners under and pursuant to clause 11 (Indemnity)
of the Management Agreement (the Guaranteed Indemnity
Obligations).

 

3.             In consideration of
the Beneficiary entering into the
Management Agreement, as a separate, additional continuing and primary
obligation, the Guarantor, undertakes to indemnify the Beneficiary
against any costs or losses suffered or incurred by the Parent or the Owners
(the Recoverable Costs) within
10 Business Days of a demand from the Beneficiary as a result of the
Manager’s failure to comply properly and punctually with the Guaranteed
Indemnity Obligations.

 

Guarantor’s Liability

 

4.             The Guarantor’s
liability under this Guarantee shall not be discharged or impaired by:

 

(a)                                  any
amendment, variation or assignment of the Management Agreement or any waiver of
its or their terms;

 

(b)                                 any
release of, or granting of time or other indulgence to, the Manager or any
third party;

 

(c)                                  any
winding up, dissolution, reconstruction, legal limitation, incapacity or lack
of corporate power or authority or other circumstances affecting the Manager
(or any act taken by the Beneficiary in
relation to any such event); or

 

(d)                                 any
other act, event, neglect or omission (whether or not known to the Manager, the
Beneficiary or the Guarantor) which would or might (but
for this clause) operate to impair or discharge the Guarantor’s liability or
afford the Guarantor or the Manager any legal or equitable defence.

 

5.             The Guarantor shall
have no greater liability under this Guarantee than that of the Manager for the
Guaranteed Indemnity Obligations pursuant to the terms of the Management
Agreement and any addendum or variation thereto.

 

6.             The Guarantor’s
maximum aggregate liability under this Guarantee shall not exceed
US$50,000,000.

 

Demand

 

7.             This Guarantee may
be enforced only if, after having received a written notice to do so from the Beneficiary,
the Manager has not discharged its obligations under the Management Agreement
within ten (10) Business Days of receipt of such notification. This
Guarantee is in addition to and not in substitution for any present and future
guarantee, lien or other security held by the Beneficiary.  The Beneficiary ‘s
rights hereunder are in addition to and not exclusive of those provided by law.

 

8.             The Guarantor
agrees to pay interest on each amount due from the Guarantor under this
Guarantee from the first Business Day after the due date until payment at the Default Interest rate specified in the Sale and Purchase Agreement,
provided that the Guarantor shall have no greater liability under this
Guarantee in respect of interest on late payments to the Beneficiary
than the Manager has to the Beneficiary
under the Management Agreement.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

17

 

Payments

 

9.             Payment of
any amount under this Guarantee by the Guarantor shall be made to the
Beneficiary.

 

10.           All payments by the
Guarantor under this Guarantee shall be made in full, without set-off or
counterclaim and free and clear of any deductions or withholdings in
immediately available, freely transferable, cleared funds in US Dollars on the
date specified in the Beneficiary’s
demand to the account specified by the Beneficiary.

 

11.           If at any time the
Guarantor is required by law to make any deduction or withholding in respect of
any taxes, duties or other charges or withholdings from any payment due
hereunder, the sum due from the Guarantor in respect of such payment shall be
increased to the extent necessary to ensure that, after the making of such
deduction or withholding, the Beneficiary
receives on the payment date and retains (free of any liability in respect of
such deduction or withholding) a net sum equal to the sum which it would have
received had no such deduction or withholding been required to be made.

 

Continuing
Guarantee

 

12.           This Guarantee is a
continuing guarantee and accordingly shall cover all of the Guaranteed
Indemnity Obligations and Recoverable Costs and shall not be discharged
by any partial payment of the Guaranteed Indemnity Obligations
and Recoverable Costs, shall not be affected by any
bankruptcy or insolvency (and any similar proceedings in any jurisdiction) of
the Guarantor or the Manager.

 

13.           If any monies paid to
the Beneficiary under the Management
Agreement by the Manager have to be repaid to the Manager by virtue of any
provision or enactment relating to bankruptcy, insolvency or liquidation for
the time being in force or on any other ground, the liability of the Guarantor
under this Guarantee shall be computed as if such monies had never been paid to
the Beneficiary at all.

 

Subrogation

 

14.           Until the
termination or expiry of the Management Agreement, the Guarantor shall not by
virtue of this Guarantee be subrogated to any rights of the Beneficiary against
the Manager and, to the extent the Manager has become bankrupt or otherwise
suffered an insolvency event, shall not claim in competition with the
Beneficiary against the Manager with respect to any payment of any amount by the
Manager to the Beneficiary under the Management Agreement.

 

Notices; Demand

 

15.           Any demand, notice,
consent or the like to be given by either party to the other in connection with
this Guarantee shall be in writing and signed by or on behalf of the party
giving it and may be served by leaving it or sending it by hand, fax,
registered airmail, or courier. A notice shall be effective upon receipt at the
address indicated below and shall be deemed to have been received:

 

(a)                                  in
the case of delivery by hand, registered airmail or courier, when delivered; or

 

(b)                                 in
the case of fax, when received with a full transmission report confirming
complete transmission;

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

18

 

provided that
where, in the case of delivery by hand, by fax, by registered airmail, or by
courier, such delivery or transmission occurs after 5 p.m. on a Business
Day or on a day which is not a Business Day, service shall be deemed to occur
at 9 a.m. on the next Business Day.

 

16.           The initial addresses
and fax numbers for the Parties for the purpose of Clause 15 are:

 

	
   

  	
   

  	
  Guarantor

  	
   

  	
  Beneficiary

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
  [·]

  	
   

  	
  6th &
  7th Floor, Cardinal Place

  
	
   

  	
   

  	
   

  	
   

  	
  100 Victoria
  Street,

  
	
   

  	
   

  	
   

  	
   

  	
  London, SW1E
  5JL

  
	
  Fax no:

  	
   

  	
  [·]

  	
   

  	
  +44 (0) 207 901 7861

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  For the
  attention of:

  	
   

  	
  [·]

  	
   

  	
  [·]

  
	
  For the
  attention of:

  	
   

  	
   

  	
   

  	
   

  
	
  With a copy
  to:

  	
   

  	
  [·]

  	
   

  	
  [·]

  

 

17.           The Beneficiary
and the Guarantor may change their respective nominated addressees and/or
addresses and/or fax numbers for service of documents to another addressee
and/or address and/or fax number, but only with prior written notice to the
other Party giving not less than 20 Business Days’ notice in advance to the
other Party.  All demands and notices
must be in writing.

 

18.           Any notice given by
the Parent or the Owners under the Management Agreement pursuant to which the
Parent or Owners claim any amount payable to either of them by the Manager
shall be copied to the Guarantor at the above address and fax number.

 

Assignment

 

19.           This
Guarantee shall be for the sole benefit of the Beneficiary.  The Beneficiary may not assign or transfer
any of its rights or transfer any of its obligations under this Guarantee
without the prior written consent of the Guarantor.

 

Amendments

 

20.           The Parties agree
that this Guarantee shall not be amended without the prior written consent of
the Guarantor.

 

Law and Jurisdiction

 

21.           This Guarantee shall
be governed by and construed in accordance with the laws of England.  The Guarantor and the Beneficiary
hereby irrevocably agree that any dispute under this Guarantee shall be
resolved in accordance with clause 15 (Dispute
Resolution) of the Management Agreement as if incorporated herein
with necessary changes and further consent to becoming party to any arbitral
proceedings commenced under clause 15 (Dispute
Resolution) of the Management Agreement in respect of any matter
relating to the Guaranteed Indemnity Obligations.

 

Third Party Beneficiaries

 

22.           It is agreed that for
the purposes of the Contracts (Rights of Third Parties) Act 1999 it is not the
intention of the Parties that any term of this Guarantee shall be enforceable
by anyone other than the Parties and their respective permitted assignees.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

19

 

This document has been executed as a deed and delivered on the date
stated at the beginning of it.

 

	
  Guarantor

  
	
   

  
	
  SIGNED by

  	
  )

  
	
  acting by [two
  directors]

  	
  )

  
	
  on behalf of

  	
  )

  
	
  [·]

  	
  )

  
	
   

  
	
  Beneficiary

  
	
   

  
	
  EXECUTED as a DEED

  	
  )

  
	
  acting by [two
  directors]

  	
  )

  
	
  on behalf of

  	
  )

  
	
  KAZAKHMYS PLC

  	
  )

  
	
   

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

20

 

 

CONFORMED
COPY

 

5 FEBRUARY 2008

 

 

 

 

 

 

 

 

 

KAZAKHMYS
PLC

 

 

 

AES
EKIBASTUZ LLP

 

 

 

AES
MAIKUBEN LLP

 

 

 

MAIKUBEN
WEST LLP

 

 

 

ALBERICH
BETEILIGUNGSVERWALTUNGS GMBH

 

 

 

 

MANAGEMENT
AGREEMENT

 

 

 

 

 

 

CONTENTS

 

	
  CLAUSE

  	
   

  	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  DEFINITIONS AND INTERPRETATION

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  TERM

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  THE SERVICES

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  OBLIGATIONS OF OWNERS AND PARENT

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  REPRESENTATIVES

  	
  28

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  BUSINESS PLAN; GROWTH CAPEX PLAN; ANNUAL BUDGET

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  PAYMENTS TO MANAGER

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  DEFAULT AND TERMINATION

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  CHANGE IN LAW

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  FORCE MAJEURE

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  INDEMNITY

  	
  39

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
  LIMITATION OF LIABILITY

  	
  41

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
  ASSIGNMENT AND TRANSFER OF OWNERSHIP

  	
  41

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
  AES CREDIT SUPPORT

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
  DISPUTE RESOLUTION

  	
  43

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
  CONFIDENTIALITY

  	
  46

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
  INCORPORATION OF SPA PROVISIONS

  	
  47

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
  FURTHER ASSURANCE

  	
  47

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  19.

  	
  GOVERNING LAW

  	
  48

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  20.

  	
  MISCELLANEOUS

  	
  48

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 1 THE SERVICES

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  GENERAL

  	
  1

  
	
   

  	
  2.

  	
  SERVICE CONTRACTS

  	
  1

  
	
   

  	
  3.

  	
  TRADING AND ENERGY SALES

  	
   

  	
  1

  
	
   

  	
  4.

  	
  ADMINISTRATION

  	
  1

  
	
   

  	
  5.

  	
  AUDITING

  	
  1

  
	
   

  	
  6.

  	
  OPERATIONS AND MAINTENANCE

  	
  2

  
	
   

  	
  7.

  	
  IMPROVEMENTS

  	
  3

  
	
   

  	
  8.

  	
  ANNUAL BUDGET

  	
  3

  
	
   

  	
  9.

  	
  INSURANCE

  	
  3

  
	
   

  	
  10.

  	
  MANAGEMENT INFORMATION SYSTEMS

  	
  3

  
	
   

  	
  11.

  	
  ADMINISTRATION SERVICES

  	
  4

  
	
   

  	
  12.

  	
  REPORTS

  	
  4

  
	
   

  	
   

  
	
  SCHEDULE 2 BUSINESS PLAN

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 3 GROWTH CAPEX PLAN

  	
  2

  
								

 

 

 

 

	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 4 FORMS OF POWER OF ATTORNEY

  	
  3

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PART A

  	
  3

  
	
   

  	
   

  	
  1.

  	
  APPOINTMENT AND POWERS

  	
  3

  
	
   

  	
   

  	
  2.

  	
  VALIDITY

  	
  5

  
	
   

  	
   

  	
  3.

  	
  JURISDICTION

  	
  5

  
	
   

  	
   

  	
  4.

  	
  TERM

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PART B

  	
  6

  
	
   

  	
   

  	
  1.

  	
  APPOINTMENT AND POWERS

  	
  6

  
	
   

  	
   

  	
  2.

  	
  VALIDITY

  	
  7

  
	
   

  	
   

  	
  3.

  	
  JURISDICTION

  	
  7

  
	
   

  	
   

  	
  4.

  	
  TERM

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 5 STANDARDS OF CONDUCT

  	
  9

  
	
   

  	
   

  
	
  SCHEDULE 6

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PROCUREMENT PROCEDURE

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 7 SENIOR MANAGEMENT STRUCTURE

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 8 FORM OF AES CREDIT SUPPORT
  (CORPORATE)

  	
  16

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00138-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00138-of-00352.parquet"}]]