Document:

Exhibit 10.1

 

	
  MASTER AGREEMENT

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  THIS AGREEMENT is made on
  August 26, 2008

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  AMONG:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  OOO Geostream Assets Management;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  L-Group;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Key Energy Services, Inc.;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Key Energy Services Cyprus, Ltd.;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  collectively
  hereinafter referred to as “the Parties”;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  RECITALS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  whereas Geostream Group
  (as hereinafter defined) is currently conducting its business in the Russian
  Federation such as field facilities engineering, geological and hydrodynamic
  modelling, field development planning, drilling and workover well services
  and currently desires to extend its business in the Russian Federation; and

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  whereas Key Energy
  Services, Inc. currently provides, among other things, drilling and
  workover services in the U.S. and Argentina and currently wishes to
  participate in the Russian oilfield industry; and

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  whereas OOO Geostream
  Services Group and Key Energy Services, Inc. wish to work together in
  oilfield services on certain terms and conditions provided below

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  the Parties hereto enter
  into this agreement (this “Agreement”).

  	
   

  	
   

  

 

1

 

	
  THE
  PARTIES AGREE AS FOLLOWS:

  	
   

  	
  RUSSIAN VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  1. INTERPRETATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Geostream Group”  means OOO Geostream
  Services Group and all its branches, subsidiaries, affiliates: ZAO (CJSC)
  ENCONCO, OOO (LLC) Geostream Drilling (formerly named OOO Geostream), OOO (LLC)
  Geostream Vostok, OOO (LLC) Geostream Business Support (Formerly Named OOO
  Geostream Drilling Support), OOO (LLC) Katamak-Nafta, OOO (LLC) Geostream
  Assets Evaluation, OOO (LLC) Geostream Consulting (formerly named OOO GTNG/Geostream),
  OOO (LLC) Firm NEFTEGAZPROGRESS and OOO (LLC) COMPUTER TECHNOLOGIES CENTER, all
  of which were formed under Russian Federation Laws, and KATAMAK-NAFTA (IRELAND)
  LIMITED registered under Irish laws (which owns an icelandic company that is
  handling a project to build an oil refinery) and any other entities which Can
  be incorporated by any member of Geostream Group;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “OOO Geostream Services Group” means a
  limited liability company duly incorporated under the laws of the Russian
  Federation, hereinafter
  referred to as the  “Company”;

  	
   

  	
   

  

 

2

 

	
  “L-Group” means Boris
  Germanovich Levin, Mikhail Vladimirovich Siyatskii, Aleksei Rufatovich
  Mustafinov, Yurii Leonidovich Bodnarchuk, John Thomas Wilson and their
  respective successors in title,
  permitted assignees, estates and legal personal representatives, and
  Vemor Trading and Investments Limited, which is registered under Republic of
  Cyprus laws;

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  “Key Energy Services, Inc.” means a company
  duly incorporated under the laws of the United States and all its branches,
  subsidiaries, affiliates, excluding KESC
  (as hereinafter defined);

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Key Energy Services Cyprus, Ltd”., means a subsidiary of Key Energy
  Services, Inc., a company duly incorporated under the laws of Cyprus,
  hereinafter referred to as “KESC”;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “OOO Geostream Assets Management” means a
  company duly incorporated under the laws of the Russian Federation, hereinafter referred to as “GAM”;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Accounting
  Standards” means
  International Financial Reporting Standards (“IFRS”) promulgated by the International Accounting Standards
  Boards (“IASB”) (which includes
  standards and interpretations approved by the IASB and International
  Accounting Standards issued under previous constitutions), together with its
  pronouncements thereon from time to time, and applied on a consistent basis;

  	
   

  	
   

  

 

3

 

	
  “Accounts” means the audited
  report and financial statements of Geostream Group for the financial year up
  to December 31, 2007;

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  “Affiliate” shall mean, with respect
  to any Person, any other Person who, directly or indirectly, controls, is
  controlled by or is under common control with such Person;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Applicable
  Laws” shall mean
  all applicable laws, directives, orders, regulations or rules of any
  Competent Authority to which the Company is subject to and which relate to
  its performance under this Agreement;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Approval
  Permit” means the
  receipt of a prior approval from the Federal Antimonopoly Service of the
  Russian Federation for KESC to proceed with the Initial Closing and the
  Second Closing;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Arbitration
  Notice” is defined
  in clause 23;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Articles” means the charter documents of the Company
  in the agreed form as set out in the Exhibits and duly registered in
  accordance with Russian legislation;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Authority” means any national, supranational,
  regional or local government or governmental, administrative, fiscal,
  judicial, or government-owned body, department, commission, authority,
  tribunal, agency or entity, or central bank (or any Person, whether
  government owned and howsoever constituted 

  	
   

  	
   

  

 

4

 

	
  or called, that exercises
  the functions of a central bank);

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  “Bank
  Valuation” is
  defined in clause 8;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Board”
  means the board of
  directors of the Company at the time in question;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Budget”
  means the annual
  operating and capital budget of the Group;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Business
  Operations” means
  management of the operations and expansion of the Group’s operations related
  to oilfield services and engineering in countries where such business is
  transacted;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Business
  Day” means a day on
  which banks in Russia generally are open for the transaction of normal
  banking business;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Cause” means  termination of the employment from the
  Group of one of the L-Group Executives for the following reasons: alcoholism
  (verified by the special certificate issued by the competent Russian
  authority), drug abuse (verified by the special certificate issued by the
  competent Russian authority) and a material theft fixed by court judgement
  that has come into effect;

  	
   

  	
   

  

 

5

 

	
  “Completion” means completion
  of this Agreement in accordance with its terms, through a three part process,
  part on the Pre-Closing, the Initial Closing and then finally on the Second
  Closing;

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  “Completion Date” means the date on
  which the Second Closing takes place;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Competent Authority” shall mean any court, tribunal or committee
  or any local, national or supra-national agency (including any taxing
  authority), authority, department, inspectorate, minister, ministry, official
  or public or statutory person (whether autonomous or not) of a sovereign
  government;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Dangerous Substance” means any natural
  or artificial substance (whether in the form of a solid, liquid, gas or
  vapour) which is capable of causing harm to human health or safety or harm to
  any other living organism or causing damage to the environment;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Dispute Notice” is defined in
  clause 23;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Employment Agreement” is defined in
  clause 6;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Encumbrance” means any mortgage, charge (whether fixed
  or floating), pledge, lien, security interest, or other third party right or
  interest (legal or equitable) over or in respect of the relevant asset,
  security or right;

  	
   

  	
   

  

 

6

 

	
  “Environmental
  Consent” means any
  material consent, approval, authorisation, permit, exemption, licence or
  registration from time to time required under Environmental Law;

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  “Environmental
  Law” means any law,
  regulation, directive, in force in the relevant jurisdictions in which the
  member of Geostream Group operates relating to the environment, Dangerous
  Substances, or the welfare of any living organism;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “FCPA” means the U.S. Foreign Corrupt Practices
  Act;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Financial Year” means an
  accounting period of 12 months in respect of which the Company prepares its
  Accounts in accordance with the relevant provisions of law;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Initial Closing” means
  the date and events upon which the initial investment consideration is
  delivered to Geostream Group and Shares representing ownership of 26% of the
  Company are delivered to KESC as set forth in the Initial Closing Exhibit;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Initial Closing Exhibit” is
  attached;

  	
   

  	
   

  

 

7

 

	
  “IPO” means initial public offering of Company’s Shares, or derivatives
  thereof, for sale at reputable stock exchange;

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  “Key Liquidity Obligations” is
  defined in clause 8;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “L-Group
  Executives” means
  executives of Geostream Group who are also L-Group members,

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “LIBOR” means

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  The
  rate per annum which appears on Page 3750 or Page 3740 (as
  appropriate) on the Telerate Screen; or

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  if no such rate appears,
  the arithmetic mean (rounded upward to four decimal places) of the relevant
  offered rates which appear on the relevant page (if any) on the Reuters
  Screen; or

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  if no such rate appears on
  the Telerate Screen and the only or no offered rate appears on the relevant
  page of the Reuters Screen or there is no relevant page on the
  Reuters Screen, the arithmetic mean (rounded upward to four decimal places)
  of the rates, as supplied to the provider at its request, quoted by the
  Reference Banks to leading banks in the London interbank market;

  	
   

  	
   

  

 

8

 

	
  At or about
  11:00 a.m. London time on the applicable Rate Fixing Day for the
  offering of EURO deposits for a three months period;

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  “Rate
  Fixing Date” means,
  in relation to any period for which an interest rate is to be determined, the
  Business Day that is one Business Day before the first Business Day of that
  period;`

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Reference
  Banks” means Royal
  Bank of Scotland PLC, HSBC Bank PLC and ABN AMRO Bank N.V., London Branch or
  such other bank or banks as the Parties may agree from time to time;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Managers” means the senior management of Geostream
  Group including without limitation the President, Managing Director (General
  Director), Chief Operating Officer, Financial Director and Legal Director, as
  well as the Chairman of the Management Committee (each as may be appointed by
  the Board);

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Minimum Value” means a
  value for GAM held Shares equal to 23 333 334,00 Euros plus interest from and
  after the Second Closing date at LIBOR plus two hundred (200) basis points,
  compounded annually until the date of acquisition of GAM held Shares by KESC.
  The interest amount for the partial year shall be calculated at the
  aforementioned rate in proportion to the number of days passed from the
  beginning of the year. For the purpose of this definition a year shall be
  comprised of 360 days;

  	
   

  	
   

  

 

9

 

	
  “Minimum Shareholder” is defined in
  clause 6;

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  “Operations” means the
  operations, activities and facilities of Geostream Group

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Shares” means all rights
  and ownership in the Company and having the rights set down in the Articles;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Person” means any natural
  person, corporation, company, partnership, firm, voluntary association, joint
  venture, trust, unincorporated organization, Authority or any other entity
  whether acting in an individual, fiduciary or other capacity;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Parties” are defined in the
  recitals;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Panel” is defined in
  clause 23;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Pre-Closing” means the period of
  time between the date of execution and delivery of this Agreement and the
  Initial Closing;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Pre-Closing Exhibit” is attached;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Proportionate Interest” means a
  percentage equal to, with respect to an L-Group Executive who is the subject
  of that Termination of Employment, that L-Group Executive’s proportionate
  ownership interest in GAM;

  	
   

  	
   

  

 

10

 

	
  “Russian Business Opportunity” means exclusive rights to any and all
  business opportunities in Russia that are related to the provision of
  (a) drilling services for oil, gas, coal and water wells; (b) drilling
  of directional and horizontal wells; (c) drilling of exploration and
  production wells; (d) drilling-project management; (e) repairs and
  well workovers; (f) well completion and abandonment; (g) well drilling supervision;
  (h) sidetracking; (i) the use of secondary and tertiary methods of
  formation stimulation; (j) design, rebuilding, and construction of oil
  refineries (including small ones) and drafting of design estimates
  documentation; (k) construction of surface facilities for oil and gas
  fields; (l) calculation of geological reserves; (m) geological and
  hydrodynamic study and modeling; (n) well-log interpretation;
  (o) development of supplementary- and seismic-exploration programs, p)
  development of field engineering arrangements; (q) monitoring of development;
  (r) preparation of investment feasibility studies and (s) integrated oilfield services;

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  “RCPL” means the  Russian
  Federation anti-corruption laws;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Russian Valuation” is defined in
  clause 8;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Second Closing”, defined in clause
  3.2, is the second investment consideration delivered by KESC to Geostream
  Group in exchange for 

  	
   

  	
   

  

 

11

 

	
  Shares
  of the Company as set forth in Second Closing Exhibit;

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  “Second Closing Exhibit” is
  attached;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Securities Act” means the United
  States Securities Act of 1933;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Shareholders” means KESC and GAM
  and “Shareholder” means either
  of them or their nominee;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Shareholder Majority” means  the holders of more than 50 percent of
  the Shares, at the time in question, held by the Shareholders;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Termination of Employment” means
  the termination of employment of one of the L- Group Executives prior to the
  expiration of that L-Group Executive’s Employment Agreement;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Transfer of Shares” means
  any direct or indirect sale, assignment, gift, devise, pledge, hypothecation
  or other encumbrance, or any other disposition of Shares (or any interest in
  or voting power of Shares) either voluntarily or by operation of law;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Transaction” means  the consummation of the commitments and
  obligations preceding the Initial Closing, the Initial Closing and the Second
  Closing;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Transaction Documents” means this
  Agreement and the Exhibits hereto, which form a part of and are incorporated
  into this Agreement;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “U.S. Valuation” is defined in
  clause 8;

  	
   

  	
   

  

 

12

 

	
  “Voluntary Termination” means a
  Termination of Employment that is voluntary on the part of the L-Group
  Executive; and

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  “Warranties” means the
  representations and warranties set out in this Agreement.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1.1.The following words
  and expressions shall have the following meanings:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1.2. References to the
  Parties are to the Parties to this Agreement and include their respective
  successors in title, permitted assignees, estates and legal personal
  representatives.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1.3. Headings to clauses
  and paragraphs are for information only and shall not form part of the
  operative provisions of, and shall be ignored in construing, this Agreement.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1.4. Unless the context
  otherwise requires, words denoting the singular shall include the plural and
  vice versa, words denoting any gender shall include all genders and words
  denoting persons shall include bodies corporate and unincorporated,
  associations, partnerships and individuals.

  	
   

  	
   

  

 

13

 

	
  2. TRANSACTION OVERVIEW

  	
   

  	
  RUSSIAN VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  2.1 The Transaction is
  divided into three parts. Exhibits are an integral part of implementing the
  Transaction and contain, together with their schedules, details of the
  Transaction. Upon execution and delivery of this Agreement, the Parties
  undertake to carry-out the commitments and obligations provided for in the
  attached Pre-Closing Exhibit.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  2.2.
  Within five business
  days of receipt of the Approval Permit and completion of the commitments and
  obligations provided for in the attached Pre-Closing Exhibit whichever
  occurs last, the Initial Closing will occur.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  2.3.
  Following the Initial
  Closing the Parties undertake to carry-out the commitments and obligations
  provided for in the attached Initial Closing Exhibit.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  2.4.
  Prior to March 31,
  2009, but after completion of the commitments and obligations provided for in
  the attached Initial Closing Exhibit, whichever occurs last, the Second
  Closing will occur.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  3 SHAREHOLDINGS AND
  CAPITALIZATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  3.1.
  At the Initial Closing,
  KESC will perform the actions required for the Initial Closing to
  recapitalize Geostream Group and to obtain 26% of the additionally issued
  Shares of the Company; and GAM will likewise perform the actions required for
  the Initial Closing, all as 

  	
   

  	
   

  

 

14

 

	
  provided in the Initial
  Closing Exhibit.

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  3.2. At the Second
  Closing, KESC will perform the actions required for the Second Closing to
  additionally recapitalize Geostream Group as set forth in the Second Closing
  Exhibit and to obtain additionally issued Shares of the Company
  representing 24% of the outstanding Shares of the Company. Following the
  Second Closing, KESC will then own 50% of the Shares of the Company.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  4. SPECIAL PROVISIONS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  4.1. The Parties agree
  that, upon the Initial Closing and at the discretion of Mr. Boris Levin,
  Geostream Group executive salary increases, not to exceed US$400,000, as
  described in the Pre-Closing Exhibit, may be effected and a special one time
  bonus paid in an amount equal to the difference between the salaries actually
  paid between January 1, 2008, and the Initial Closing and the salaries
  that would have been paid had the salary increases taken effect on
  January 1, 2008.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  4.2. Upon the Initial
  Closing, a transaction success fee equal to US$500,000 will be paid to each
  of Mr. John Thomas Wilson and Syncotrade, Inc. (Copthall,
  P.O. Box 2331, Roseau, St. George, 00152, Commonwealth of 

  	
   

  	
   

  

 

15

 

	
  Dominica) by Geostream
  Group.

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  4.3. Any Share sold or
  purchased under this Agreement shall be sold or purchased with full title
  guarantee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  5. OPERATION OF BUSINESS AND
  PURPOSE OF THE INVESTMENT

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  5.1.
  The investment received
  by Geostream Group from KESC shall be used in and for the development of the
  business of Geostream Group.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  5.2.
  The Board of the
  Company shall appoint the Managers on such terms as it may think fit, the
  initial Managers being identified on the Initial Closing Exhibit. The
  Managing Director shall be responsible for management of the business of
  Geostream Group.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  5.3. The Parties approve
  of all actions contemplated in this Agreement and in the Exhibits. The
  Parties shall exercise their respective powers in relation to the Company so
  that:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (a)

  	
  the Business of Geostream
  Group is carried on and conducted in a proper and efficient manner and for
  the benefit of Geostream Group;

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (b)  each member of Geostream Group transacts its
  business on arm’s length terms;

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (c)  no member of Geostream Group shall enter
  into any agreement or arrangement restricting its competitive freedom to
  provide and take goods and services by such means and from and 

  	
   

  	
   

  
					

 

16

 

	
  to such persons as they
  may respectively think fit;

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  (d)  each member of Geostream Group shall
  maintain any required approval, consent or licence for carrying on its
  business respectively;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (e)  each member of Geostream Group shall keep
  each Shareholder fully and promptly informed of all material matters of which
  it is aware relating to the progress of the business and shall provide the
  Shareholders with access at all reasonable times to all documents and
  information required by them and;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (f)  the Board shall implement, immediately upon
  the Initial Closing and the Second Closing, the steps outlined in the Initial
  Closing Exhibit and in the Second Closing Exhibit.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  5.3.  Recognizing their importance for good
  corporate governance and public stock markets, the Parties will make every
  reasonable effort to have the financial statements, processes and controls of
  Geostream Group consistent with U.S. GAAP without material weaknesses as soon
  as possible, but in any event before the Second Closing.

  	
   

  	
   

  

 

17

 

	
  5.4.  Boris Levin will be the sole and exclusive
  representative for GAM in all matters with KESC and Geostream Group.
  Geostream Group and KESC will rely upon Boris Levin’s representations,
  actions and inactions as those of GAM and his actions and inactions will be
  for, and binding upon, GAM. This will be evidenced by proper powers of
  attorney or relevant corporate resolution by GAM, in the form attached in the
  Pre-Closing Exhibit, and to be delivered to KESC.

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  6. CONDUCT OF THE GROUP FOLLOWING CAPITALIZATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  6.1.
  The Parties shall
  exercise their respective powers in relation to the Company that it shall:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (a)  Notice
  and Information  

  

  provide to GAM and
  KESC:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (i)  reasonable advance notice of each meeting of the Board or committee
  of the Board (such notice to be not less than five Business Days unless
  otherwise provided by the Articles) and an agenda of the business to be
  transacted at such meeting (together with all papers circulated or presented
  to the same);

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (ii)  as soon as practicable after each such meeting of the Board or of a
  committee of the Board a copy of the draft minutes thereof;

  	
   

  	
   

  

 

18

 

	
  (iii)  access to the Company’s books, records, accounts and appropriate
  non-trade secret information, to any Minimum Shareholder;

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  (b)  Frequency of Board Meetings

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ensure that Board meetings
  of the Company shall be held quarterly at the Company’s registered office (or
  such other venue as is approved by the Board unless otherwise provided in the
  Articles);

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (c)  Business at Board Meetings

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ensure that the business
  conducted at the Board meeting shall be limited to that which is contained in
  the agenda and documents circulated to GAM and KESC and, unless the Board
  agrees otherwise, no matters shall be resolved at any meeting of the Board
  except those specified in the notice of the meeting;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (d)  Enforcement of Rights

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  at the request of the
  Board enforce all the Company’s rights or ensure that any member of Geostream
  Group enforces all of its rights under any agreement to which the Company or
  any member of Geostream Group is a party;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (e)  Management of Business

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ensure that the businesses
  of Geostream Group shall be properly managed; and

  	
   

  	
   

  

 

19

 

	
  (f)  Consent Matters

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  ensure that the matters
  set out in this Agreement requiring the Shareholder consent shall not take
  place without the requisite the Shareholder consent.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  6.2.
  The relevant member of
  Geostream Group shall ensure that prior to the Initial Closing each of the
  L-Group Executives shall enter into Employment Agreement, or amend their
  existing Employment Agreements to the satisfaction of the relevant parties,
  with the member of Geostream Group as provided in the Initial Closing
  Exhibit.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  6.3.
  Except as expressly
  provided below and in the Articles, the Board will make all of the business
  decisions affecting Geostream Group.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  6.4.
  Notwithstanding any
  other provision of this Agreement, the following actions require the approval
  of all Shareholders owning at least 25% (a «Minimum Shareholder») of the
  Shares of the Company:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (a) amending
  the Articles;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (b) establishing
  the terms of dealings between Geostream Group and the Shareholder Majority
  and Affiliates;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (c) liquidation
  or reorganization of any member of Geostream Group;

  	
   

  	
   

  

 

20

 

	
  (d) initiating
  bankruptcy proceedings by any member of Geostream Group;

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  (e) disposing
  or acquiring assets of, or by, Geostream Group with the regard to business
  other than those described in the definition “Russian Business Opportunity”;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (f) purchasing
  equity interests in the Company or any member of Geostream Group, or diluting
  any Shareholder’s interest in the Company, aside from those equity purchases
  by KESC expressly contemplated in this Agreement; or

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (g) absent a unanimous act of the Board,
  borrowing by Geostream Group of an amount in excess of US$10,000,000 per
  year.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  7.  DIRECTORS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  7.1.
  Upon the Initial
  Closing, KESC and GAM will each have the right to appoint 50% (fifty percent)
  of the members of the Company’s Board and of the governing bodies of all
  members of Geostream Group. Upon the Second Closing, KESC will have the right
  to appoint a majority of the members of the Board and of the governing bodies
  of all members of Geostream Group, and GAM will have the right to appoint the
  balance of the Board.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  7.2.
  The directors of the
  Company and all general directors of all members of Geostream Group at the
  Initial Closing shall be as set out in the Initial Closing Exhibit (for
  the avoidance 

  	
   

  	
   

  

 

21

 

	
  of doubt such directors
  shall be subject to the provisions in relation to the appointment and removal
  of directors as set out under the Articles and this Agreement).

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  7.3.
  A director appointed by KESC is a “KESC
  Director” and a director appointed by  GAM is a “L-Group Director”. KESC may appoint and
  remove from office any person appointed a KESC Director and to appoint
  another person in his place. GAM may appoint and remove from office any
  L-Group Director. KESC shall also be entitled to require that any KESC
  Director, and GAM shall also be entitled to require that any L-Group
  Director, be appointed as a non-executive director of each subsidiary of the
  Company and to be appointed to (a) any committee or sub-committee of or
  established by the Board (or any committee thereof) and (b) any
  committee or sub-committee of or established by the board of directors of any
  member of the Geostream Group.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  7.4. Any appointment or
  removal pursuant to clause 7.3 shall be in writing.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  8. SHARE TRANSFERS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  8.1.
  One goal of GAM is to,
  over time, liquidate, subject to the Bank Valuation, GAM’s position in the Shares,
  either through the sale of Shares to KESC or through an IPO or subsequent
  Share sales following an IPO. A goal of KESC is to acquire up to 100% of the
  Shares, or arrange an IPO for some portion of the Shares as set forth in
  clause 8.2. The Parties agree in this clause 8 to restrict the Transfer of
  Shares, provide for a Share valuation method, 

  	
   

  	
   

  

 

22

 

	
  provide for Share purchase
  options and obligations and provide for an IPO for Shares, all as herein provided,
  all to accommodate the goals of both GAM and KESC.

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  8.2.
  KESC must purchase 49%
  of GAM held Shares (unless otherwise agreed by the Parties in writing), or
  approve an IPO, by the fourth anniversary of the Initial Closing, and KESC
  must purchase all of GAM held Shares, or approve an IPO, by the sixth
  anniversary of the Initial Closing (the “Key
  Liquidity Obligations”). If GAM refuses to sell its Shares in
  connection with an IPO, refuses to sell its Shares relying upon the Minimum
  Value reservation of rights then KESC shall be deemed and stipulated to have
  met and satisfied the Key Liquidity Obligations. In this case GAM shall have
  the right to sell its Shares to a third party, and KESC shall have the
  preferential right of purchase on the same terms as offered by a third party
  and which are acceptable to GAM.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  8.3.
  KESC shall have the
  option to acquire all or part of GAM held Shares in one or two purchases, for
  cash, between the second and sixth anniversaries of the Initial Closing.
  KESC’s first purchase of GAM held Shares shall be either 49% or 100% of GAM
  held 

  	
   

  	
   

  

 

23

 

	
  Shares (unless otherwise
  agreed by the Parties in writing). GAM shall not Transfer any Shares or shares
  in GAM, other than to KESC or into the public market created by the IPO
  provided that L-Group can Transfer shares in GAM to each other.

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  8.4.
  To exercise KESC’s
  Share purchase option, KESC shall give GAM at least 90 days advance written
  notice of its election to purchase and the number of Shares being purchased.
  Following the delivery of this notice, KESC and GAM shall make all reasonable
  efforts to negotiate a mutually agreeable purchase price for the Shares. KESC
  and GAM shall negotiate toward a Share valuation for 90 days prior to
  initiating the following Bank Valuation Process. If this price setting
  negotiation is unsuccessful, then the purchase price for the Shares shall be
  determined by taking the average of (i) a valuation of Geostream Group,
  taking into account the values for oilfield service companies performing
  similar services in Russia, adjusted to similar size, as determined by a
  mutually agreeable bank doing company valuations or other body authorized to
  perform such valuations in Russia (“Russian
  Valuation”)  and
  (ii) a valuation of Geostream Group as if Geostream Group was conducting
  business onshore in the “lower 48” states of the United States, taking into
  account the values of oilfield service companies performing services similar
  to those of Geostream Group, adjusted to similar size, as determined by a
  U.S. bank acceptable to both KESC and GAM, doing service company valuations
  in the U.S. (“U.S. Valuation”).

  	
   

  	
   

  

 

24

 

	
  If
  KESC and GAM cannot agree on the banks, then they shall each choose a Russian
  bank (or other body authorized to perform such valuation) and a U.S. bank.
  The two Russian Valuations shall be averaged as shall the two U.S. Valuations
  to reach Russian and U.S. Valuations, respectively. These Russian and U.S.
  Valuation averages shall be averaged to determine the value of the GAM held
  Shares. The foregoing shall be referred to as the “Bank Valuation Process.” The results of the Bank Valuation
  Process shall be binding on both KESC and GAM.

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  However, if the value of
  GAM held Shares determined pursuant to the Bank Valuation Process is less
  than the Minimum Value, GAM reserves the right to refuse to sell the GAM
  owned Shares to KESC unless, during a one year period beginning on the date
  that GAM gives KESC formal written notice that GAM is exercising its right to
  refuse to sell Shares for less than the Minimum Value, KESC is willing to pay
  the Minimum Value for the Shares. The Bank Valuation Process shall be at cost
  of the Company.

  	
   

  	
   

  

 

25

 

	
  8.5.
  If KESC elects to sell
  KESC’s Shares, GAM shall have the right to “tag along” and sell a
  proportionate amount of its Shares based on the then ownership of GAM. For
  example, if KESC sells Shares at a time when KESC owns approximately 75% of
  the Shares and GAM owns approximately 25% of the Shares, then GAM shall have
  the right to sell one Share for every three Shares being sold by KESC.

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  8.6.
  If KESC either (i) files for protection under the bankruptcy laws of the
  United States or (ii) elects to sell Shares before it has met its Key
  Liquidity Obligations, then KESC shall advise GAM of such filing or intended
  sale of Shares and KESC shall extend to GAM the right to purchase, for cash,
  the Shares held by KESC for a price set by the Bank Valuation Process.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  8.7.
  No Shareholder shall:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (a)  without the written consent of the other
  Shareholder grant an Encumbrance or otherwise encumber its legal or
  beneficial interest in its Shares except for any pledging or encumbrance
  required by the senior credit facility of Key Energy Services, Inc.; or

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (b)  otherwise than in accordance with this
  Agreement, Transfer any of such Shares (or any interest therein) except as
  provided under the provisions of this Agreement.

  	
   

  	
   

  

 

26

 

	
  8.8.
  In the case of Termination of Employment, (a) if the Termination of
  Employment is for Cause or a Voluntary Termination, then KESC has the right,
  but not the duty, to purchase from GAM a Proportionate Interest in the GAM
  held Shares still held by GAM; but (b) if the Termination of Employment
  is not for Cause and is not a Voluntary Termination, then if requested by
  L-Group Executive whose employment is terminated KESC has the duty to
  purchase from GAM a Proportionate Interest in the GAM held Shares. Purchases
  and sales under this clause 8.8 will be for cash and with the delivery of
  good and marketable title, free of Encumbrances, to Shares, as soon as
  practicable following the Termination of Employment. Absent agreement on the
  price by KESC and GAM, the price of the Shares purchased and sold pursuant to
  this clause 8.8 will be determined by the process of clause 8.4.

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  8.9.
  With regard to KESC’s option to approve an IPO as provided in clause 8.2
  above, the phrase “approve an IPO” shall mean KESC’s approval of an IPO by
  voting for this IPO at a Shareholders meeting, performing all necessary steps
  which have to be taken by KESC as a Shareholder and assisting the Company in
  executing such IPO.

  	
   

  	
   

  

 

27

 

	
  8.10.  In case KESC fails to meet its Key
  Liquidity Obligations, GAM shall have the right to sell its Shares to third
  parties.

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  8.11.  If either Shareholder sells Shares of
  Company pursuant to the provisions of this Clause 8, and such Party’s
  ownership in Company Shares is reduced to less than 50% of the outstanding
  and issued Shares, then the Shareholders shall
  cause the termination of the Company Board and the transfer of all Board
  rights to be vested with the Company shareholders.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  9. DIRECTION OF BUSINESS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Until such time as KESC
  has met its Key Liquidity Obligations, KESC and GAM, and their Affiliates,
  must offer Geostream Group exclusive rights to any Russian Business
  Opportunity. The Party presenting the Russian Business Opportunity shall give
  written notice with reasonable specificity on opportunities covered by this
  clause 9. However, no Shareholder shall be required to contribute to
  Geostream Group or to assist Geostream Group in pursuing a Russian Business
  Opportunity. If Geostream Group does not pursue a presented Russian Business
  Opportunity within 60 days of presentation, then Geostream Group is deemed to
  have declined the opportunity and the Shareholders or Affiliates are free to
  pursue the Russian Business Opportunity independently of Geostream Group. The
  Parties are free to pursue other opportunities in oilfield services and other
  businesses in Russia that are not Russian Business Opportunities.

  	
   

  	
   

  

 

28

 

	
  10. WARRANTIES

  	
   

  	
  RUSSIAN VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  10.1. GAM warrants
  to KESC from the date of signing hereof, and again on the Initial Closing and
  Second Closing, that:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (a) to the best of
  its knowledge, information and belief no material information in relation to
  Geostream Group has been deliberately and knowingly concealed by it;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (b) Geostream Group
  has all the necessary powers and authorities to complete and consummate this
  Agreement and the documents referred to herein and this Agreement has been
  approved by its directors;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (c) there
  are no options or other legally binding agreements which give any person the
  right to subscribe for or call for the issue of any share capital of the
  Company or any member of Geostream Group. The Company is not under any
  obligation to sell, charge or otherwise dispose of any of the Shares in the
  Company, or in any member of Geostream Group, or any interest therein to any
  Person;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (d) all
  documents which should have been delivered by any member of Geostream Group
  to the Registrar of Companies or any other 

  	
   

  	
   

  

 

29

 

	
  authority
  have been duly delivered;

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  (e) Geostream
  Group has kept and maintained all necessary books of account, minute books,
  records, register of members and other statutory books. All such documents
  contain complete and accurate records of all matters required to be recorded
  therein. Such books, records and registers are in Geostream Group’s or the
  relevant subsidiary’s possession; and

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (f) the Shares as set
  out in Pre-Closing Exhibit represent all of the Shares currently in
  issue by the Company, and no person has any interest or the right to acquire
  any interest in any unissued Shares of the Company or any options or the like
  to acquire such Shares.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  10.2.
  The warranties above shall be supported by Warranty Letters signed by the
  General Directors of the Company, OOO Geostream Vostok, OOO Geostream
  Drilling and ZAO Enconco in the form acceptable by L-Group at the time of
  signing of this Agreement.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  11. PROVISION OF INFORMATION TO THE KESC AND GAM

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  11.1. The Parties shall
  exercise their respective powers in relation to the Company that it shall:

  	
   

  	
   

  

 

30

 

	
  (a) Management Accounts

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  prepare at the cost of the
  Company and deliver to each KESC and GAM within 15 days of the end of each
  month management accounts of Geostream Group in the form reasonably required
  by KESC and GAM, with one a set of financial records in accordance with US
  GAAP, and within 15 days of the end of every six months another set in
  accordance with IFRS GAAP, including a profit and loss account or, where
  relevant, an income statement, a balance sheet, cash flow statement and
  12-month cash flow forecast in each case with a comparison against the Budget
  together with a commentary on the trading and prospects of Geostream Group;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (b) Audited Accounts

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  provide the audited
  accounts of Geostream Group (to be prepared in accordance with US GAAP for
  each Financial Year) to KESC and GAM as soon as they are prepared but in any
  case not later than 45 days after the end of each Financial Year (it being
  understood that 31 December 2008 will be the end of the first Financial
  Year);

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (c)   Budget

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ensure that not later than
  October 1st of each Financial Year there is prepared and delivered to
  the Board for its approval a detailed 

  	
   

  	
   

  

 

31

 

	
  operating budget of
  Geostream Group for next Financial Year (including a schedule of all forecast
  capital expenditure and cash flow forecast for Geostream Group in respect of
  the following Financial Year), such Budget and cash flow forecast to be
  satisfactory (both as to form and content) but in any event to be broken down
  into periods of not longer than one month; and

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  (d)  Other
  Information

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ensure that all material
  developments regarding Geostream Group’s affairs are communicated in writing
  to KESC and GAM and that they are each given such information and such access
  to the officers, employees and premises of Geostream Group as they may
  reasonably require. KESC can request such tax and financial information from
  the Company as is reasonable and necessary for the complete and accurate reporting
  of income and tax credits for US Federal Income Tax purposes.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  12.  CONTINUING
  OBLIGATIONS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  12.1. Each of the Parties
  undertakes to each of the other Parties that it will (so far as it is
  lawfully able) use the powers vested in it from time to time as Shareholder
  of the Company to ensure that the Company complies with the Articles and this
  Agreement.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  12.2. Each of the Parties
  undertakes to each of the other Parties that it will comply with the 

  	
   

  	
   

  

 

32

 

	
  obligations imposed upon
  it by the Articles.

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  13. CONFIDENTIAL INFORMATION AND ANNOUNCEMENTS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  13.1. Each Party
  undertakes that it will not at any time divulge or communicate to any person
  (other than to officers or employees of Geostream Group or of the
  Shareholders or their legal advisers or other advisors who are bound by an
  obligation of confidentiality whose responsibility it is to know such
  information) any confidential information concerning the business, accounts,
  finance or contractual arrangements or other dealings, transactions or
  affairs of Geostream Group which may come to its knowledge as a shareholder
  of a member of Geostream Group and it shall use its reasonable endeavours to
  prevent the publication or disclosure of any confidential information
  concerning such matters.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  13.2. No  announcements  or  other  publicity  shall  be  issued, given  or  made  concerning  this  Agreement  or  the  subject  matter  of  this Agreement
  unless, and in the form, agreed by the Company or as required by law (in
  which case the Company shall be afforded a reasonable opportunity to see and
  comment on the proposed announcement before issue) nor shall the names of the
  directors of the Company appear in any advertising literature or other
  publicity issued by the Company without their consent.

  	
   

  	
   

  

 

33

 

	
  13.3. The
  restrictions set out in clauses 13.1 and 13.2 above shall not apply to any
  information which is required to be disclosed by any applicable law, rules,
  regulation or by order of a court of competent jurisdiction or by a
  recognised stock exchange, governmental department or agency or other
  supervisory or regulatory body to whose rule the relevant Party is
  subject provided that, where practicable and lawful, prior to such disclosure
  by any Shareholder such Shareholder shall consult with the Company as to the
  proposed form, nature and purpose of the disclosure.

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  14. NOTICES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Notice, instruction,
  consent or other document to be given under this Agreement shall be in
  writing and delivered personally or by express mail services to the recipient
  Party at the address shown following their name on the signature
  page and at its registered office for the time being (for the Company)
  or to such other address as is notified in writing from time to time by such
  Party to each of the other Parties. Any notice delivered personally shall be
  deemed to be received when delivered and any notice sent by prepaid recorded
  signed for post shall be deemed received fifteen business days after posting.

  	
   

  	
   

  

 

34

 

	
  15.
  COUNTERPARTS

  	
   

  	
  RUSSIAN VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  This
  Agreement may be executed in any number of counterparts with the same effect
  as if the signatures to each such counterpart were upon the same instrument.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  16. NO
  PARTNERSHIP FOR NON-TAX PURPOSES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Nothing contained in this
  Agreement shall be deemed to constitute a partnership among the Parties, or
  any of them, for legal and liability purposes, as distinguished from purely
  tax purposes.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  17. INTERACTION
  AND LANGUAGE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  In the event of any
  conflict or inconsistency between the Articles and the provisions of this
  Agreement the provisions of this Agreement shall prevail and the Parties
  shall ensure that the terms of the Articles are amended so as to accord with
  the provisions of this Agreement. This Agreement is prepared in English and
  Russian counterparts. In the event of any conflict or ambiguity the English
  version shall control.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  18. WHOLE
  AGREEMENT

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  This Agreement, together
  with any documents referred to in it, or expressed to be entered into in
  connection with it, constitutes the entire agreement of the Parties concerning
  the subject matter of this Agreement.

  	
   

  	
   

  

 

35

 

	
  19. WAIVER/AMENDMENT

  	
   

  	
  RUSSIAN VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  19.1. There shall be no
  waiver of any term, provision or condition of this Agreement unless such
  waiver is evidenced in writing and signed by the waiving party.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  19.2. No omission or delay
  on the part of any Party hereto in exercising any right, power or privilege
  hereunder shall operate as a waiver thereof, nor shall any single or partial
  exercise of any such right, power or privilege preclude any other or further
  exercise thereof or the exercise of any other right, power or privilege. The
  rights and remedies herein provided are cumulative with and not exclusive of
  any rights or remedies provided by law.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  19.3. No variation to this
  Agreement shall be effective unless made in writing and signed by all the
  Parties.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  20. TERMINATION
  OF AGREEMENT

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  This
  Agreement shall cease and determine with respect to the rights and
  obligations of any

  	
   

  	
   

  

 

36

 

	
  Shareholder, upon that
  Shareholder ceasing to be the holder or beneficial owner of Shares or upon an
  IPO or a sale of all Shares. This Agreenent may be terminated by either
  Shareholder if KESC fails to obtain a prior approval of FAS before 1
  March 2009.

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  21. ASSIGNMENT

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  The rights of this
  Agreement are personal to each Party and in each case they may not be
  assigned at law or in equity without the prior written consent of the other
  Parties.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  22. COSTS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Each
  Party shall bear its own legal, accountancy, expert, technical and other
  costs, charges and expenses incurred by the Parties in connection with the
  negotiation, preparation and implementation of this Agreement and any other
  agreement incidental to or referred to in this Agreement. KESC agrees to
  reimburse, following the Initial Closing, the bona fide, documented and
  reasonable tax and legal advisory expenses of L-Group that have been incurred
  directly, related to the negotiation and preparation of this Agreement, in an
  amount not to exceed US $100,000.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  23. GOVERNING
  LAW AND DISPUTE RESOLUTION

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  23.1. This Agreement shall
  be governed by and construed in all respects in accordance with laws of
  England regardless of the law that 

  	
   

  	
   

  

 

37

 

	
  might be applied under
  applicable principles of conflicts of laws.

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  23.2. If any one or more
  of the provisions or parts thereof contained in this Agreement is for any
  reason held to be invalid, illegal, or unenforceable in any respect, then
  such invalidity, illegality, or unenforceability shall not affect any other
  provision hereof, and this Agreement shall be construed as if such invalid,
  illegal, or unenforceable provision or part thereof had never been contained
  herein.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  23.3. All disputes,
  controversy or claim arising out of or in connection with the present
  Agreement shall be finally settled by arbitration in accordance with the
  Rules of Arbitration Institute of the Stockholm Chamber of Commerce
  (hereinafter referred to as the “Arbitration”). The place of arbitration
  shall be Stockholm, Sweden. The language of the Arbitration shall be English.
  The Arbitration board shall consist of 3 (three) arbitrators (the “Panel”). Each Shareholder shall nominate
  one arbitrator, the chairman being nominated by the Arbitration Institute of
  Stockholm Chamber of commerce. The Arbitration awards shall be final and
  binding upon the Shareholders.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  23.4.
  The Shareholders shall attempt to resolve 

  	
   

  	
   

  

 

38

 

	
  any
  dispute arising out of, or in connection with, this Agreement amicably and
  promptly by negotiations between designated senior executives of the
  Shareholders who have authority to settle the controversy.

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  Notwithstanding
  the foregoing, with respect to any dispute not resolved in the normal course
  of business, either Shareholder may
  give any other Shareholder a
  written notice of such dispute (the “Dispute
  Notice”) that it seeks, subject to the conditions herein, to refer
  such dispute to such senior executives for resolution.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Upon
  receipt of the Dispute Notice, the designated senior executives of the Shareholders shall meet at a
  mutually acceptable time and place, and thereafter as often as they
  reasonably deem necessary, to exchange relevant information and to attempt to
  resolve the dispute; provided, however, that if the matter has not been
  resolved within thirty days of the date of the Dispute Notice (the “30-Day
  Period”), any Shareholder may
  give written notice (the “Arbitration
  Notice”) to the other Shareholder that it
  intends to resolve the dispute by arbitration.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  23.5.
  Upon expiration of the 30-Day Period and issuance of an Arbitration Notice,
  the dispute arising out of or in connection with this Agreement not otherwise
  resolved in 

  	
   

  	
   

  

 

39

 

	
  accordance
  with clause 23.4 to the full satisfaction of all Shareholders, shall be referred
  to and finally resolved under the Rules of Arbitration Institute of the
  Stockholm Chamber of Commerce as set forth in clause 23.3.

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  None
  of the Arbitrators may be Russian or U.S. citizens. The Shareholders will submit to
  each other and to the Panel all
  essential documents on which the parties intend to rely no later than 90 days
  after the commencement of the arbitration.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  23.6.
  If the Panel finds that any issue at dispute shall be subject to exclusive
  mandatory jurisdiction of Russian courts, then a) such a finding and its
  consequences shall not negatively affect or void any award or part of award,
  b) the Shareholders will
  move the resolution of such specific issue to the competent Russian courts
  (Russian proceedings) without prejudice to the Stockholm Arbitral
  proceedings, and c) the Shareholders will
  move to enforce each award independently without waiting for the result of
  such court action, and d) the Shareholders will
  apply all efforts so that the Russian court proceedings will not cause any
  interruption or delay of the Stockholm Arbitral Proceedings and the
  enforcement of the award.

  	
   

  	
   

  

 

40

 

	
  23.7.
  Each Shareholder agrees
  not to file any court action that may result in usurpation of Panel’s
  majority arbitrators’ jurisdiction by Russian courts.

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  Each
  Shareholder agrees
  not to move to the courts to seek injunctive relief before any courts against
  the Panel of arbitrators and Stockholm Arbitral Proceedings that may halt or
  delay, or otherwise interfere with, the Stockholm Arbitral Proceedings and
  the issuance and enforcement of the arbitral awards.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Should
  such an usurpation or injunction take place, each Shareholder shall immediately
  act to have it retracted, while continuing acting in the Stockholm
  Arbitration Proceedings.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  23.8.
  Partial awards or interim awards issued by the Panel during the proceedings
  are subject to stand-alone enforcement at the discretion of the Shareholder in whose favour
  the partial award or the interim award is issued. Dissenting opinions of the
  Panel’s individual arbitrators shall not be used as evidence in or outside
  the Stockholm Arbitral Proceedings.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  23.9.
  Each one of the final awards, the partial awards, and the interim awards
  shall be final; the Shareholders hereby
  agree not to resist or contest recognition, confirmation and 

  	
   

  	
   

  

 

41

 

	
  enforcement
  of such awards, and not to dispute or challenge such awards, in any
  jurisdictions or courts of law or equity.

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  The Shareholders  agree  that  any  arbitral  award  under  this  Agreement  may  be  recognized  or  enforced  in  the  courts  of  any  nation  then  a Contracting State
  to the United Nations Convention on the Recognition and Enforcement of
  Foreign Arbitral Awards, and thereby consent to the jurisdiction of all such
  courts.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  The
  Shareholders waive
  any objections to the exercise of the jurisdiction of any of such courts,
  including, without limitation, any objection or defense based upon lack of
  personal jurisdiction or the absence of property of the award debtor in the
  jurisdiction where recognition or enforcement of the award is sought;

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  and
  the Shareholders agree
  that they shall not seek forum non conveniens dismissal or any action so
  brought to recognize or enforce the arbitral award. The Shareholders further agree
  that they will not challenge recognition or enforcement of the award on the
  basis of manifest disregard of the law or of the evidence. The monetary
  amount of any award shall be stated in US dollars.

  	
   

  	
   

  

 

42

 

	
  24. SPECIAL WARRANTIES FOR COMPLIANCE WITH
  ANTI-CORRUPT PRACTICES LAWS

  	
   

  	
  RUSSIAN VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  24.1.
  GAM acknowledges receipt of a copy of the FCPA, confirm understanding of the
  provisions of the FCPA, and agree to comply with those provisions and not to
  take or fail to take any action that might in any way cause or the Company to
  be in violation of the FCPA. GAM represents and warrants to KESC that GAM has
  provided, or caused Geostream Group to provide, to KESC (or its counsel), all
  documents, certificates, materials, financial or similar accounting books,
  records, ledgers and materials requested by KESC, together with the
  information obtained through interviews of Geostream Group’s directors,
  officers, agents, employees or other representatives conducted by KESC or its
  counsel (collectively, the “FCPA Information”) and that the FCPA Information
  is accurate and complete to the best of its knowledge and belief.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  24.2.
  KESC acknowledge the RCPL, confirm understanding of the provisions of the
  RCPL, and agree to comply with those provisions and not to take or fail to
  take any action that might in any way cause GAM or the Company to be in
  violation of the RCPL. KESC represents and warrants to GAM that the
  information concerning KESC filed with the Securities and 

  	
   

  	
   

  

 

43

 

	
  Exchange
  Commission of the United States by the ultimate parent, Key Energy
  Services, Inc., is accurate in all material respects.

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  24.3.
  Notwithstanding any provision of this Agreement or the Exhibits, GAM shall
  not take any action that would result in the Shareholders or Affiliates being
  in violation of, or penalized under, Applicable Laws of the United States or
  the Russian Federation.

  	
   

  	
   

  

 

44

 

	
  25. TAX
  MATTERS

  	
   

  	
  RUSSIAN VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  The Parties acknowledge that the Company and
  Geostream Group will be organized, administered and conduct operations in a
  tax compliant and tax efficient manner. Further, the Parties agree that, for
  U.S. federal income tax purposes, the Company will be taxed as a partnership,
  each member of Geostream Group will be taxed as a disregarded entity, and
  that the Parties will take all steps necessary to ensure and maintain these
  U.S. federal income tax characterizations.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  26. REGULATORY MATTERS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  The
  Parties shall respectively co-operate with each other to ensure that all
  information required by law or regulation for the making of (or responding
  to) any requests for further information consequent upon any notifications or
  filings made in respect of this Agreement or any of the transactions hereby
  contemplated or the business of any of the Parties is supplied to the Persons
  dealing with such notifications and filings and that they are properly,
  accurately and promptly made.

  	
   

  	
   

  

 

45

 

	
  27. REPRESENTATIONS AND WARRANTIES OF GAM

  	
   

  	
  RUSSIAN VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  GAM makes the following
  representations and warranties to KESC:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  27.1 Organization. GAM and
  each member of the GAM or of Geostream Group that is a company, is duly
  organized, validly existing and in good-standing under the laws of the
  Russian Federation or of Ireland, respectively.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  27.2. Authority and
  Authorization. GAM has, or shall have, full corporate power and authority to
  enter into and perform its obligations under this Agreement as and in the
  secuence these are desrcibed in the Pre-Closing, Initial Closing and Second
  Closing Exhibits. The execution and delivery of this Agreement by GAM have
  been, and the performance by GAM of this Agreement and the transactions contemplated
  in this Agreement will be, duly and validly authorized by all requisite
  corporate action on the part of GAM.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  27.3. Enforceability. This
  Agreement has been duly executed and delivered by GAM and constitutes the
  valid and binding obligation of GAM enforceable against GAM in accordance
  with its terms, except as enforceability may be limited by bankruptcy,
  receivership, insolvency, moratorium and other laws affecting creditor’s
  rights generally and limitations on the availability of equitable remedies
  (the “Enforcement Limitations”). At the Initial Closing and Second Closing,
  all documents and instruments required under this 

  	
   

  	
   

  

 

46

 

	
  Agreement to be executed
  and delivered by GAM will be duly executed and delivered and shall constitute
  valid and binding obligations of GAM enforceable in accordance with their
  terms, except as enforceability may be limited by Enforcement Limitations.

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  27.4. Conflicts. The
  execution and delivery of this Agreement by GAM do not, and the consummation
  of the Transaction contemplated by this Agreement will not, (i) violate
  or be in conflict with, or require the consent of any person or entity under
  any provision of the governing documents of GAM, (ii) conflict with,
  result in a breach of, or constitute a default (or an event that with the
  lapse of time or notice, or both, would constitute a default) under, any
  material agreement or instrument to which GAM is a party or is bound, or
  (iii) violate any provision of or require any consent, authorization or
  approval under any judgement, decree, judicial or administrative order,
  award, writ, injunction, statute, rule or regulation applicable to GAM.

  	
   

  	
   

  

 

47

 

	
  27.5. Ownership of Shares.
  GAM shall own the Shares, free and clear of any claim by third parties or any
  lien or other Encumbrance.

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  27.6. Tax Liabilities.
  There are no outstanding liabilities, claims, disputes, suits, proceedings,
  filing misrepresentations or other matters which may result in Geostream
  Group incurring any material tax liability, except as reflected otherwise in
  the audited financial statements of Geostream Group. In case any claims arise
  before signing the Agreement, Geostream Group shall provide KESC with
  respective Disclosure Letters.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  27.7. Accounting. Except
  as noted in Geostream Group’s audited financial statements for the years
  ended 2006 and 2007, to GAM’s knowledge, the books and records of the Company
  have been kept in accordance with generally accepted accounting practices
  applied in the Russian Federation and all audited financial statements of the
  Company have been prepared in accordance with generally accepted accounting
  practices applied in the Russian Federation.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  27.8. The warranties and
  representations above shall be supported by Warranty Letter signed by General
  Director of GAM.

  	
   

  	
   

  

 

48

 

	
  28. REPRESENTATIONS AND WARRANTIES OF KESC

  	
   

  	
  RUSSIAN VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  KESC makes the following
  representations and warranties to GAM:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  28.1 Organization. KESC is
  company duly organized, validly existing and in good standing under the laws
  of Cyprus.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  28.2 Authority and
  Authorization. KESC has full corporate power and authority to enter into and
  perform its obligations under this Agreement. The execution and delivery of
  this Agreement have been, and the performance by KESC of this Agreement and
  the transactions contemplated in this Agreement will be, duly and validly
  authorized by all requisite corporate action on the part of KESC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  28.3 Enforceability. This
  Agreement has been duly executed and delivered by KESC and constitutes the
  valid and binding obligation of KESC enforceable against KESC in accordance
  with its terms, except as enforceability may be limited by Enforcement
  Limitations. At the Initial Closing and Second Closing, all documents and
  instruments required under this Agreement to be executed and delivered by KESC
  will be duly executed and delivered and shall constitute valid and binding
  obligations of KESC enforceable in accordance with their terms, except as
  enforceability may be limited 

  	
   

  	
   

  

 

49

 

	
  by Enforcement Limitations.

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  28.4 Conflicts. The
  execution and delivery of this Agreement by KESC do not, and the consummation
  of the transaction contemplated by this Agreement will not, (i) violate
  or be in conflict with, or require the consent of any person or entity under
  any provision of the governing documents of KESC, (ii) conflict with,
  result in a breach of, or constitute a default (or an event that with the
  lapse of time or notice, or both, would constitute a default) under, any
  agreement or instrument to which KESC is a party or is bound, or
  (iii) violate any provision of or require any consent, authorization or
  approval under any judgment, decree, judicial or administrative order, award,
  writ, injunction, statute, rule or regulation applicable to KESC.

  	
   

  	
   

  

 

50

 

	
  28.5. KESC Qualification.
  KESC is capable of evaluating the merits and risks of an investment in the
  Shares. KESC has a financial condition such that it is under no present need
  to dispose of any portion of the Shares to satisfy any existing or
  contemplated undertaking or indebtedness and is able to bear the economic
  risk of a purchase of the Shares, including, without limitation, the risk of
  losing part or all of its investment. KESC understands and acknowledges that
  there exists no ready market for the Shares, and that no such market may in
  the future arise, and that its investment in the Shares involves a high
  degree of risk and is suitable only for persons of substantial financial
  means who have not need for liquidity with respect to their investment in the
  Shares, and who can afford to lose their entire investment.

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  29. LEGAL IMPEDIMENT

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  29.1  Notwithstanding anything in this Agreement
  to the contrary, KESC shall not take any action and shall be excused from
  performing any obligation under this Agreement that would result in Key
  Energy Services, Inc., any of its affiliates or KESC being in violation
  of, or penalized under, any applicable law of the United States of America (a
  “U.S. Legal Impediment”).

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  29.2  Notwithstanding anything in this 

  	
   

  	
   

  

 

51

 

	
  Agreement to the contrary,
  GAM shall not take any action and shall be excused from performing any
  obligation under this Agreement that would result in GAM or any of its
  affiliates being in violation of, or penalized under, any applicable law of
  the Russian Federation (a “Russian Legal Impediment”).

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  29.3  In the event a U.S. Legal Impediment or a
  Russian Legal Impediment shall continue for a period of nine
  (9) calendar months, the Shareholders during such period shall in good
  faith take action to preserve the value of the Company with the goal of
  identifying a third party purchaser for their Shares and negotiating a sale
  within the end of such nine (9) months period.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  AS WITNESS the hands of the
  Parties or their duly authorised representatives the day and year first above
  written.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Addresses
  and Contact Details of the Parties

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  OOO
  Geostream Assets Management

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  8/3 General Karbyshev
  Blvd., 

  Moscow, Russian Federation, 123154 

  www.geostream.ru 

  Attention: General Director

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  L-Group

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  OOO Geostream Assets
  Management

  8/3 General Karbyshev Blvd., 

  Moscow, Russian Federation, 123154 

  	
   

  	
   

  

Attention: Boris Germanovich
Levin

 

52

 

	
   

  	
   

  	
  RUSSIAN
  VERSION OF AGREEMENT

  
	
   

  	
   

  	
   

  
	
  Key
  Energy Services Cyprus, Ltd.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Iris House, 3’d Floor 

  8 John Kennedy Street 

  3106 Limasol 

  Cyprus 

  Attention: Director

  	
   

  	
   

  
	
   

  With copy to: 

  Key Energy
  Services, Inc. 

  1301 McKinney Street, 

  Suite 1800, 

  Houston, Texas, 77010, U.S.A. 

  Attention: Newton W. “Trey” Wilson III

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Key
  Energy Services, Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1301 McKinney Street,

  	
   

  	
   

  
	
  Suite 1800,

  	
   

  	
   

  
	
  Houston, Texas, 77010,
  U.S.A.

  	
   

  	
   

  
	
  www.keyenergy.com

  	
   

  	
   

  
	
  Attention: General Counsel

  	
   

  	
   

  

 

53

 

	
  SIGNATURES:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  OOO Geostream Assets 

  Management

  	
   

  	
   

  	
   

  	
   

  
	
  By:
  

  Boris Germanovich Levin 

  General Director

  	
   

  	
  /s/
  Boris Germanovich Levin

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  L-Group

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Boris
  Germanovich Levin

  	
   

  	
  /s/
  Boris Germanovich Levin

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Yurii
  Leonidovich Bodnarchuk

  	
   

  	
  /s/
  Yurii Leonidovich Bodnarchuk

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Aleksei
  Rufatovich Mustafinov

  	
   

  	
  /s/Aleksei
  Rufatovich Mustafinov

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mikhail
  Vladimirovich Siyatskii

  	
   

  	
  /s/
  Mikhail Vladimirovich Siyatskii

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  John
  Thomas Wilson

  	
   

  	
  /s/
  John Thomas Wilson

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Vemor
  Trading and Investments 

  Limited 

  Represented by: Taratula I.P.

  	
   

  	
  /s/
  Taratula I.P.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Key Energy Services  

  Cyprus, Ltd.

  	
   

  	
   

  	
   

  	
   

  
	
  By:
  

  Newton W. “Trey” Wilson III 

  Attorney-in-fact

  	
   

  	
  /s/
  Newton W. Wilson III

  	
   

  	
   

  

 

54

 

	
  Key Energy Services, Inc.

  	
   

  	
   

  	
   

  	
   

  
	
  By:
  

  Newton W. “Trey” Wilson III, 

  Executive Vice President and 

  Chief Operating Officer

  	
   

  	
  /s/
  Newton W. Wilson III

  	
   

  	
   

  

 

55Exhibit 10.2

 

EAGLE BANCORP, INC.

 

SUBORDINATED NOTE

 

	
  Certificate No.

  	
   

  	
   

  
	
  $         

  	
   

  	
  August 28, 2008

  
	
  Initial Principal
  Amount

  	
   

  	
   

  

 

THIS SECURITY IS NOT A SAVINGS ACCOUNT OR DEPOSIT OF
ANY BANK OR OTHER INSURED DEPOSITARY INSTITUTION, AND IT IS NOT INSURED BY THE
UNITED STATES OR ANY AGENCY OR FUND OF THE UNITED STATES, INCLUDING THE FEDERAL
DEPOSIT INSURANCE CORPORATION.

 

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), ANY STATE SECURITIES
LAWS OR ANY OTHER APPLICABLE SECURITIES LAW. 
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND ANY APPLICABLE STATE SECURITIES LAWS. 
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER THIS SECURITY ONLY (A) TO THE COMPANY, (B) PURSUANT
TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, OR (C) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY’S RIGHT
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT.

 

IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL
DELIVER TO THE COMPANY SUCH CERTIFICATES AND OTHER INFORMATION AS MAY BE
REASONABLY REQUIRED TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS.

 

THIS NOTE IS INELIGIBLE AS COLLATERAL FOR ANY LOAN OR
OTHER EXTENSION OF CREDIT BY THE COMPANY OR ANY OF ITS SUBSIDIARIES.

 

THE HOLDER OF THIS SECURITY AGREES THAT IT WILL COMPLY
WITH THE FOREGOING RESTRICTIONS.

 

FOR VALUE RECEIVED, Eagle Bancorp, Inc., a
Maryland corporation (the “Company” which term includes any successor to the
Company), for value received promises to pay to                                         
or registered assigns, the initial principal sum of                                    
dollars and no cents ($                          .00),
or such lesser amount as shall result from the cancellation of all or a portion
of this Note at the Closing (as hereinafter defined), or partial redemption of
this Note, as shall be set forth on a duly executed Schedule A hereto, on September 30,
2014, and to pay interest on said outstanding principal sum from August 28,
2008, or from the most recent Interest Payment Date (as defined below) to which
interest has been paid or duly provided for, monthly in arrears on the 1st  day of each month, or if such day is not a
Business Day (as hereinafter defined), then the next succeeding Business Day
(each such date, an “Interest Payment Date”) (it being understood that interest
accrues for any such non-Business Day), commencing on the Interest Payment Date
in October 2008, at a fixed annual rate equal to 10.0% (the “Interest Rate”)
applied to the principal amount hereof, until the principal hereof is paid or
duly provided for or made available for payment, and on any overdue principal
and (without duplication and to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest at the
Interest Rate, compounded quarterly, from the dates such amounts are due until
they are paid or made available for payment. 
The amount of interest payable for any period will be computed on the
basis of the actual number of days 

 

1

 

in the Interest Payment Period concerned divided by
360.  The interest installment so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will be paid to the person in whose name this Note is registered at the close
of business on the regular record date for such interest installment (the “Holder”),
which shall be fifteen days prior to the day on which the relevant Interest
Payment Date occurs.  Any such interest
installment not so punctually paid or duly provided for shall forthwith cease
to be payable to the Holder on such regular record date and may be paid to the
person in whose name this Note is registered at the close of business on a
special record date. “Business Day” means any day other than a Saturday, Sunday
or any other day on which banking institutions in New York City or Bethesda,
Maryland  are permitted or required by
any applicable law or executive order to close.

 

The principal of and interest on this Note shall be payable
in any coin or currency of the United States of America that at the time of
payment is legal tender for payment of public and private debts, by check
mailed to the registered holder at such address as shall appear in the Note
register maintained by the Company, or by wire transfer to an account
appropriately designated by the holder hereof.

 

The indebtedness evidenced by this Note is subordinate
and junior in right of payment to the prior payment in full of all claims of (i) general
creditors of the Company, (ii) holders of all secured indebtedness of the
Company, and (iii) holders of other claims which do not by their terms
expressly state that they are pari passu or
junior in right of payment to this Note, whether now existing or hereafter
incurred, except that this Note shall rank senior in right of payment to any
qualifying trust preferred securities and related subordinated debt and
guarantees hereafter issued by the Company or any subsidiary trust, and this
Note is issued subject to the foregoing. Each holder of this Note, by accepting
the same, (a) agrees to and shall be bound by such provisions, (b) authorizes
and directs the Company on his or her behalf to take such action as may be
necessary or appropriate to acknowledge or effectuate the subordination so
provided and (c) appoints the Company his or her attorney-in-fact for any
and all such purposes. Each holder hereof, by his or her acceptance hereof,
hereby waives all notice of the acceptance of the subordination provisions
contained herein by each holder of claims or indebtedness to which this Note is
subordinate, whether now outstanding or hereafter incurred, and waives reliance
by each such holder upon said provisions. 
Payments of interest and principal on the Notes is senior to the payment
of dividends or amounts paid in liquidation on any class of capital stock of
the Company.

 

This Note is part of, and ranks pari passu
and equal in right of payment with other Notes constituting a part of, the
issuance of up to $12.15 million of Subordinated Notes authorized by the Board
of Directors of the Company on August 18, 2008 (collectively, the “Notes”).

 

The Company shall
have the right to redeem the Notes, in whole or in part, but in all cases in a
principal amount with integral multiples of $1,000.00, on any Interest Payment
Date at a redemption price of 100% of the principal amount of the Note to be
redeemed on such date, plus interest accrued and unpaid to the date of
redemption. Any such redemption shall be subject to receipt of the prior approval
of the Federal Reserve Bank of Richmond, or other appropriate regulatory
authority, to the extent required.

 

If all, or less than all,
of the Notes are to be redeemed, the Company will give the Holders notice not
less than 30 nor more than 45 days prior to the redemption date as to the
aggregate principal amount of Notes to be redeemed.  The Company shall select, in such manner as
in its sole discretion it shall deem appropriate and fair, the Notes or
portions thereof (in integral multiples of $1,000.00) to be redeemed.

 

The Notes shall be
eligible to be used, in whole or in part, in payment of all or any part of the
subscription price of shares of any class of capital stock which may be offered
by the Company on the basis of one dollar of principal amount of Notes for one
dollar of subscription price.  To the
extent that the subscription of a Holder using Notes as payment of all or a
portion of the subscription price of such Holder’s subscription is accepted by
the Company, then that portion of the principal amount of the Note used in
payment of the accepted portion of the subscription shall be deemed to be
redeemed and cancelled as of the closing date on such subscription (the “Closing”).  Any portion of the Note which is not used in
payment of the subscription price, and any portion of the Notes which is used
to pay the subscription price for shares for which the subscription shall have
been rejected, shall continue to be outstanding Notes.  Interest through the Closing on the portion
of the principal amount of the Notes which is deemed to be redeemed and
cancelled as of the Closing shall be paid on the next Interest Payment Date
following such Closing. Not in limitation of anything to the contrary contained
herein, no Holder shall have any right to participate in any offering by the
Company solely as a result of being a Holder of this Note.

 

2

 

In case an Acceleration
Event of Default, as hereafter defined, shall have occurred and be continuing,
upon demand of the holders of a majority of the aggregate principal amount of
the outstanding Notes, the principal of all of the Notes shall become due and
payable, subject to the receipt of any and all required regulatory approvals.  For purposes hereof, an “Acceleration Event
of Default” means:

 

(a)                                  a
court of competent jurisdiction shall enter a decree or order for relief in
respect of the Company in an involuntary case under any applicable bankruptcy,
insolvency, reorganization or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of the Company or for any substantial part of its
property, or ordering the winding-up or liquidation of its affairs and such
decree or order shall remain unstayed and in effect for a period of
90 consecutive days; or

 

(b)                                 the Company shall commence a voluntary
case under any applicable bankruptcy, insolvency, reorganization or other
similar law now or hereafter in effect, shall consent to the entry of an order
for relief in an involuntary case under any such law, or shall consent to the
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) of the Company or
of any substantial part of its property, or shall make any general assignment
for the benefit of creditors, or shall fail generally to pay its debts as they
become due; or

 

(c)                                  a court or administrative or governmental
agency or body shall enter a decree or order for the appointment of a receiver
of a Major Bank Subsidiary (as hereafter defined) or all or substantially all
of its property in any liquidation, insolvency or similar proceeding with
respect to such Major Bank Subsidiary or all or substantially all of its
property; or

 

(d)                                 a Major Bank Subsidiary shall consent to
the appointment of a receiver for it or all or substantially all of its
property in any liquidation, insolvency or similar proceeding with respect to
it or all or substantially all of its property.

 

For purposes hereof, “Major
Bank Subsidiary” means any subsidiary of the Company that is a “major bank
subsidiary” as that term is used in SR 92-37 (FIS) promulgated by the Division
of Banking Supervision and Regulation of the Federal Reserve, and as such term
may subsequently be defined or interpreted in any rule, regulation, written
interpretation or other public issuance of the Federal Reserve.

 

For purposes hereof “Event
of Default” means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):

 

(a)                                  an
Acceleration Event of Default;

 

(b)                                 the
Company defaults in the payment of any interest upon any Notes, and the
continuation of such default for a period of thirty days; or

 

(c)                                  the
Company defaults in the payment of all or any part of the principal of (or
premium, if any, on) any Notes as and when the same shall become due and
payable either at maturity, upon redemption, by declaration of acceleration or
otherwise; or

 

(d)                                 the
Company defaults in the performance of, or breaches, any of its covenants or
agreements in the Notes (other than a covenant or agreement a default in whose
performance or whose breach is elsewhere in this Note specifically dealt with),
and continuance of such default or breach for a period of 60 days after there
has been given, by registered or certified mail, to the Company by the holders
of at least 25% in aggregate principal amount of the outstanding Notes, a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a “Notice of Default” hereunder.

 

If there shall have
occurred and be continuing any Event of Default, then the Company shall not,
and shall not allow any subsidiary of the Company to, (x) declare or pay
any dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Company’s capital stock or its 

 

3

 

subsidiaries’ capital
stock (other than payments of dividends or distributions to the Company) or
make any guarantee payments with respect to the foregoing or (y) make any
payment of principal of or interest or premium, if any, on or repay, repurchase
or redeem any debt securities of the Company or any subsidiary that rank pari passu in all respects with or junior
in interest to the Notes (other than, with respect to clauses (x) and (y) above:
(1) repurchases, redemptions or other acquisitions of shares of capital
stock of the Company in connection with any employment contract, benefit plan
or other similar arrangement with or for the benefit of one or more employees,
officers, directors or consultants, in connection with a dividend reinvestment
or stockholder stock purchase plan or in connection with the issuance of
capital stock of the Company (or securities convertible into or exercisable for
such capital stock) as consideration in an acquisition transaction entered into
prior to the applicable Event of Default, if any, (2) as a result of any
exchange or conversion of any class or series of the Company’s capital stock
(or any capital stock of a subsidiary of the Company) for any class or series
of the Company’s capital stock or of any class or series of the Company’s
indebtedness for any class or series of the Company’s capital stock, (3) the
purchase of fractional interests in shares of the Company’s capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, (4) any declaration of a dividend
in connection with any stockholders’ rights plan, or the issuance of rights,
stock or other property under any stockholders’ rights plan, or the redemption
or repurchase of rights pursuant thereto, or (5) any dividend in the form
of stock, warrants, options or other rights where the dividend stock or the
stock issuable upon exercise of such warrants, options or other rights is the
same stock as that on which the dividend is being paid or ranks pari passu with or junior to such stock
and any cash payments in lieu of fractional shares issued in connection
therewith.

 

The Notes are issuable
only in registered, certificated form without coupons and in minimum
denominations of $50,000.00 and any multiple of $1,000.00 in excess
thereof.  Subject to the provisions
hereof, upon due presentment for registration of transfer of any Note to the
Company, the Company shall execute and register and make available for delivery
in the name of the transferee or transferees a new Note for a like aggregate
principal amount.  All Notes presented
for registration of transfer or for exchange or payment shall (if so required
by the Company) be duly endorsed by, or be accompanied by a written instrument
or instruments of transfer in form satisfactory to, the Company duly executed
by the holder or his attorney duly authorized in writing.  No service charge shall be made for any
exchange or registration of transfer of Notes, but the Company may require
payment of a sum sufficient to cover any tax, fee or other governmental charge
that may be imposed in connection therewith, provided that nothing shall
preclude the Company from requiring the posting of a bond in connection with
the replacement of a Note certificate which has been lost, destroyed or stolen.

 

Prior to due presentment
for registration of transfer of any Note, the Company, any paying agent, any
transfer agent and any Note registrar may deem the person in whose name such
Note shall be registered upon the Note register to be, and may treat him as,
the absolute owner of such Note (whether or not such Note shall be overdue) for
the purpose of receiving payment of or on account of the principal of, premium,
if any, and interest on such Note and for all other purposes; and neither the
Company nor any paying agent nor any transfer agent nor any Note registrar
shall be affected by any notice to the contrary.  All such payments so made to any holder for
the time being or upon his order shall be valid, and, to the extent of the sum
or sums so paid, effectual to satisfy and discharge the liability for moneys
payable upon any such Note.

 

No recourse for the
payment of the principal of or premium, if any, or interest on any Note, or for
any claim based thereon or otherwise in respect thereof, and no recourse under
or upon any obligation, covenant or agreement of the Company in any such Note,
or because of the creation of any indebtedness represented thereby, shall be
had against any incorporator, stockholder, employee, officer or director, as
such, past, present or future, of the Company or of any successor of the
Company, either directly or through the Company or any successor of the
Company, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise, it being
expressly understood that all such liability is hereby expressly waived and released
as a condition of, and as a consideration for, the issue of the Notes.

 

This Note is
intended to meet the criteria for qualification of outstanding principal as
Tier 2 capital under the regulatory guidelines of the Federal Reserve. The
terms of this Note shall be interpreted in a manner to satisfy such criteria.

 

THE NOTES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MARYLAND
WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES THEREOF.

 

4

 

IN WITNESS WHEREOF, the Company has duly executed this
certificate.

 

	
   

  	
  EAGLE BANCORP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

5

 

Schedule A

 

The initial
principal amount of the obligation evidenced by the Note to which this Schedule
is attached is                           
Dollars ($                ,000).  The notations in the following table evidence
decreases in the principal amount of the obligation evidenced by the Note.

 

	
  Decrease in Principal

  	
   

  	
  Principal after such

  Decrease

  	
   

  	
  Date

  	
   

  	
  Signatures of Authorized Officer

  of Company and Holder

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

6

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