CAP(G) - KKM LOAN AGREEMENT
THIS AGREEMENT (this "Agreement") is dated 7 February 2000 BETWEEN
(1) CLOSED TYPE JSC KARAKUDUKMUNAY, a company organised and existing
under the laws of the Republic of Kazakhstan, ("KKM"); and
(2) CENTRAL ASIAN PETROLEUM (GUERNSEY) LIMITED, a company organised
and existing under the laws of Guernsey, (the "Investor").
RECITALS
(A) KazakOil, Korporatsiya Mangistau Terra International and the
Investor entered into a Foundation Agreement on June 12, 1997 (as the same
may be amended from time to time, the "Foundation Agreement") pursuant to
which the Investor has agreed to make certain investments in KKM for the
purpose of funding the exploration, development, production and sale of
hydrocarbons from the Agreement Field (as defined therein) (the "Project").
(B) Pursuant to the terms of the Foundation Agreement and the
Petroleum Agreement dated August 30, 1995 (as the same may be amended from
time to time, the "Petroleum Agreement") between KKM and the Ministry of
Oil and Gas Industries of the Republic of Kazakhstan, it has been agreed
that the Investor will be entitled to receive repayment of all such
investments by means of Investment Recovery as specified in the Petroleum
Agreement.
(C) The Investor has made investments in KKM for the purposes of the
Project pursuant to the terms of the Foundation Agreement and the Petroleum
Agreement amounting in aggregate to $31,238,000 as of 1 January 2000 (each
an "Existing Investment" and collectively the "Existing Investments").
(D) The Investor has made additional investments in KKM for the
purposes of the Project since 1 January, 2000 and intends to continue to
make such investments (each such investment an "Additional Investment" and
collectively the "Additional Investments").
(E) The Investor and KKM have agreed to confirm in this Agreement
the terms and conditions upon which the Existing Investments and the
Additional Investments are made.
IT IS HEREBY AGREED as follows:
1. Definitions
In this Agreement, the following terms have the meanings given to them
in this Clause 1:
"Borrowing Rate" means, at any time, the aggregate of:
(i) the rate of interest per annum for a deposit in United
States dollars for one night offered in the London interbank market to
leading banks by Citibank N.A., London Branch on the fifteenth day of
each month at 11a.m. (London time) and published by the Financial
Times newspaper in London, provided that if such fifteenth day would
otherwise fall on a day which is not a Business Day, the immediately
succeeding Business Day shall be the date for determining such rate of
interest; and
(ii) 1 % per annum.
"Business Day" means a day (other than a Saturday or a Sunday) when
banks and foreign exchange markets are generally open for business in
London.
"CAP(G) Receipts Account" means the account of the Investor with ABN
AMRO Bank N.V., London branch and designated as the "CAP(G) Receipts
Account".
"Existing Interest Amount" has the meaning assigned to it in Clause
2.2(b).
"Gross Revenues" means all revenues, income, receipts or gains from
whatever source received by KKM other than the Principal Investments.
"Investor's Share" has the meaning assigned to it in Clause 2.3(b).
"KKM Proceeds Account" means the account of KKM held with ABN AMRO
Bank N.V., London branch and designated as the "KKM Proceeds Account".
"Principal Investments" means, collectively, the Existing Investments
and the Additional Investments for the time outstanding or, as the context
so requires, an Existing Investment or an Additional Investment for the
time being outstanding.
"Quarterly Date" means 31 March, 30 June, 30 September and 31
December in any year provided that if any such day is not a Business Day,
the Quarterly Date which would otherwise fall on that day shall fall on the
immediately succeeding Business Day.
"Total Interest Amount" has the meaning assigned to it in Clause
2.2(d).
2. Terms
KKM and the Investor confirm and agree as follows:
2.1 Disbursements
Any Additional Investments made on or after the date of this Agreement
by the Investor to KKM shall be deposited into KKM Proceeds Account.
2.2 Interest
(a) Interest shall be deemed to have accrued from day to day on the
principal amount of each Principal Investment from the date made up to but
not including the date of this Agreement at the Borrowing Rate from time to
time.
(b) The aggregate amount of interest deemed to have accrued on the
Existing Investments up to and including 1 January 2000 equals $3,450,000
(the "Existing Interest Amount").
(c) On and with effect from the date of this Agreement, interest
shall accrue from day to day on the principal amount of each Principal
Investment at the Borrowing Rate applicable from time to time in respect of
the Principal Investments and from the date made, in respect of any
Additional Investment.
(d) Interest accrued under Clause 2.2(a) and (c) on and with effect
from 2 January 2000 shall be added to the Existing Interest Amount and such
aggregated amount (the "Total Interest Amount") shall be payable in
accordance with Clause 2.3.
2.3 Investment Recovery
(a) Each of the Investor and KKM jointly and severally acknowledges
that as at 1 January, 2000 (i) the Existing Investments amount in aggregate
to $31,238,000 and (ii) the Existing Interest Amount is $3,450,000.
(b) Subject to Clause 2.3(c) and (g), until the Principal Investments
and Total Interest Amount have been irrevocably repaid and discharged in
full and all other amounts owing to the Investor under or pursuant to the
terms of this Agreement have been paid, KKM agrees that on each Quarterly
Date KKM shall pay to the Investor 59.8% of the Gross Revenues received by
KKM during the immediately preceding three month period ending on such
Quarterly Date (the "Investor's Share") which shall be applied by the
Investor, first, towards payment of the Total Interest Amount and second,
towards repayment of the Principal Investments and all other amounts owing
to the Investor under or pursuant to the terms of this Agreement.
(c) The Investor may, at its sole discretion, elect not to recover
from KKM some or all of the Investor's Share to which it is entitled on a
Quarterly Date. For the avoidance of doubt, the Principal Investments and
the Total Interest Amount shall not be reduced by the portion of the
Investor's Share which the Investor elects not to recover on any Quarterly
Date.
(d) All payments to the Investor hereunder shall be made in United
States dollars for value on the due date without set off or counterclaim to
the CAP(G) Receipts Account.
(e) The party making a payment to another party under this Agreement
shall promptly notify the other party that the payment has been made and
the other party shall, on receipt, promptly notify the paying party that
payment has been received.
(f) The Investor shall maintain a record of the amounts from time to
time owing by KKM under this Agreement. Such record shall be prima facie
evidence as to the existence and amounts owing by KKM under this Agreement.
The Investor shall deliver a statement to KKM five Business Days after each
Quarterly Date detailing the amounts owing to the Investor under this
Agreement at that time.
(g) If a notice is served on Chaparral Resources, Inc. pursuant to
clause 18.31 of the Loan Agreement dated 1 November 1999 between, inter
alia, Chaparral Resources, Inc., KKM, the Facility Agent and the Lenders
(as such terms are defined therein), the Principal Investments, the Total
Interest Amount and all other amounts owing to CAP(G) under or pursuant to
the terms of this Agreement shall become immediately due and payable.
3. Withholding of Fiscal Obligations
(a) All sums payable by KKM under this Agreement shall be paid in
full without any restriction or condition and, except to the extent
required by any law, free and clear of any deduction or withholding on
account of any Fiscal Obligation (as defined in the Petroleum Agreement) or
otherwise. If KKM is required by any law to make any such deduction or
withholding, KKM shall, together with the relevant payment, pay such
additional amount as will ensure that the Investor receives and is entitled
to retain, free and clear of any such deduction or withholding, the full
amount which it would have received if no such deduction or withholding had
been required.
(b) Without limiting Clause 3(a), if the Investor is required by law
to make any payment on account of tax (not being, in the case of the
Investor, a tax imposed on and calculated by reference to the overall net
income paid to and received by it in the jurisdiction in which it is
incorporated or in which it is, for the time being, situated) or otherwise
on or in relation to any sum received or receivable under this Agreement by
the Investor (including any sum received or receivable under this Clause 3)
or any liability in respect of any such payment is asserted, imposed,
levied or assessed against the Investor, KKM shall, upon demand by the
Investor, promptly indemnify the Investor against such payment or
liability, together with any interest, penalties, costs and expenses
payable or incurred in connection therewith.
(c) If, at any time, KKM is required by any law to make any deduction
or withholding from any sum payable by it under this Agreement (or there is
any change in the rates at which or the manner in which such deductions or
withholdings are calculated), it shall promptly supply to the Investor
details of such requirement or change.
(d) If KKM makes any payment under this Agreement in respect of which
it is required to make any deduction or withholding, it shall pay the full
amount required to be deducted or withheld to the relevant taxation or
other authority within the time allowed for such payment under applicable
law and shall deliver to the Investor, within ten days of receiving a
receipt for such payment from the applicable authority, an original receipt
(or a certified copy thereof) issued by such authority evidencing the
payment to such authority of all amounts so required to be deducted or
withheld in respect of the Investor's payment.
4. Binding Agreement
(a) This Agreement shall be binding upon and inure to the benefit of
each party to this Agreement and its successors and assigns.
(b) KKM may not assign, transfer, novate or dispose of any of, or any
interest in, its rights or obligations under this Agreement.
(c) The Investor may, at its own cost, transfer all or part of its
rights or obligations under this Agreement.
5. Remedies and Waivers
(a) Time is of the essence of each party's obligations under this
Agreement but no failure to exercise, nor any delay in exercising, on the
part of one party to this Agreement, any right or remedy under this
Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right or remedy prevent any further or other
exercise thereof or the exercise of any other right or remedy. The rights
and remedies contained in this Agreement are cumulative and not exclusive
of any rights or remedies provided by law. Either party may agree to any
waiver of any of its rights or remedies under this Agreement on such terms
as it sees fit.
(b) If, at any time, any provision of this Agreement is or becomes
illegal, invalid or unenforceable in any respect under the law of any
jurisdiction, neither the legality, validity or enforceability of the
remaining provisions of this Agreement under the law of that jurisdiction
nor the legality, validity or enforceability of that or any other provision
of this Agreement under the law of any other jurisdiction shall in any way
be affected or impaired thereby unless the effect of the foregoing would be
substantially to alter the rights and obligations of the parties originally
agreed.
6. Notices
(a) All notices or other communications shall be given in writing or
by facsimile. Any such notice shall be deemed to be given, if in writing,
when delivered and if by facsimile, when received. However, a notice given
in accordance with the above but received on a non-working day or after
business hours in the place of receipt shall only be deemed to be given on
the next working day in that place.
(b) The address and facsimile number of KKM is:
Closed Type JSC Xxxxxxxxxxxxxx,
Xxxxxxxxxxxxx 0, Xxxxxxxx 00 Xxxxx,
Xxxxxxxx of Kazakhstan
Attention: Financial Diretor
Facsimile: (7-3292) 518 336
or such other as KKM may notify to the Investor by not less than five
Business Days' notice.
(ii) The address and facsimile number of the Investor is:
Central Asian Petroleum (Guernsey) Limited
c/o Chapparal Resources, Inc.
00000 Xxxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000, XXX
Attention: Director
Facsimile: (000) 000 0000
or such other as the Investor may notify to the KKM by not less than five
Business Days' notice.
(b) Any notice or other communication given by or to KKM or the
Investor shall be copied to Chaparral Resources, Inc..
7. Amendment
No amendment, modification or waiver to this Agreement shall be valid
unless it is in writing and signed by KKM and the Investor.
8. Law and Jurisdiction
8.1 English Law
This Agreement shall be governed by English law.
8.2 Jurisdiction
(a) KKM irrevocably agrees that the courts of England are to have
jurisdiction to settle any disputes which may arise out of or in connection
with this Agreement and that accordingly any suit, action or proceedings
(together in this Clause 8 referred to as "proceedings") arising out of or
in connection with this Agreement may be brought in such courts, subject to
the option referred to in Clause 8.6.
(b) KKM irrevocably waives and agrees not to raise any objection
which it may have now or hereafter to the laying of the venue of any
proceedings in any such court as is referred to in this Clause 8.2 and any
claim that any such proceedings have been brought in an inconvenient or
inappropriate forum and further irrevocably agrees that a judgment in any
proceedings brought in the English courts shall be conclusive and binding
upon each of the parties and may be enforced in the courts of any other
jurisdiction.
(c) Nothing contained in this Clause 8.2 shall limit the right of the
Investor to take proceedings against KKM in any other court of competent
jurisdiction, nor shall the taking of proceedings in one or more
jurisdictions preclude the taking of proceedings in any other jurisdiction,
whether concurrently or not.
8.3 Process Agent
KKM hereby irrevocably and unconditionally (a) appoints Law Debenture
Corporate Services Limited, whose address is at Princes House, 00 Xxxxxxx
Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxxx as its process agent to receive, for and
on its behalf, service of process in England in any proceedings with
respect to this Agreement, (b) agrees that failure by any such process
agent to give notice of such process to it shall not impair the validity of
such service or of any judgment based thereon and agrees that nothing in
this Agreement shall affect the right of the Investor to serve process in
any other manner permitted by law.
8.4 Waiver of Immunity
To the extent that KKM may now or hereafter be entitled, in any
jurisdiction in which proceedings may at any time be commenced with respect
to this Agreement, to claim for itself or any of its undertaking,
properties, assets or revenues present or future any immunity (sovereign or
otherwise) from suit, jurisdiction of any court, attachment prior to
judgment, attachment in aid of execution of a judgment, execution of a
judgment or from set-off, banker's lien, counterclaim or any other legal
process or remedy with respect to its obligations under this Agreement
and/or to the extent that in any such jurisdiction there may be attributed
to KKM, any such immunity (whether or not claimed), KKM hereby to the
fullest extent permitted by applicable law irrevocably agrees not to claim,
and hereby to the fullest extent permitted by applicable law waives, any
such immunity.
8.5 Consent to Enforcement
KKM consents generally in respect of any proceedings to the giving of
any relief or the issue of any process in connection with such proceedings
including the making, enforcement or execution against any property
whatsoever (irrespective of its use or intended use) of any order or
judgment which may be made or given in such proceedings.
8.6 Arbitration
If any dispute arises in relation to this Agreement, including any
question as to existence, validity or termination, such dispute shall, at
the option only of the Investor, be referred to and finally resolved by
arbitration under the rules of the London Court of International
Arbitration which are applicable at the time of reference to the
arbitration and are deemed to be incorporated by reference into this Clause
8.6. Such arbitration shall take place in London, England and shall be
conducted by three arbitrators, one of whom shall be nominated by KKM, one
by the Investor and the third to be agreed between the two arbitrators so
nominated and in default he shall be nominated by the President of the
London Court of International Arbitration. The language in which such
arbitration shall be conducted shall be English. Any award rendered shall
be final and binding on the parties thereto and may be entered into any
court having jurisdiction or application may be made to such court for an
order of enforcement as the case may require. No party may appeal to any
court from any award or decision of the arbitral tribunal and, in
particular, but without limitation, no applications may be made under
section 45 of the Arbitration Xxx 0000 and no appeal may be made under
section 69 of the said Act.
IN WITNESS WHEREOF this Agreement has been executed by the parties
hereto on the date stated at the beginning of this Agreement.
CLOSED TYPE JSC KARAKADUKMUNAY,
By: /S/ XXXXXXX X. KLINCHEV
-----------------------------
Name: Xxxxxxx X. Klinchev
Title: General Director
By: /S/ XXXXXXX X. XXXXX
-----------------------------
Name: Xxxxxxx X. Xxxxx
Title: Finance Director
CENTRAL ASIAN PETROLEUM (GUERNSEY)
LIMITED,
By: /S/ XXXXX X. XXXXX
-----------------------------
Name: Xxxxx X. Xxxxx
Title: Director
In the presence of:
/S/ XXXX X. XXXXX
-----------------------------
Witness
Name: Xxxx X. Xxxxx
