GUARANTEE AGREEMENT (this "Agreement"), dated as of May 17, 2004, by
XXXXXX RESOURCES LIMITED, a company organized under the laws of Bermuda (the
"Guarantor"), in favor of CENTRAL ASIAN INDUSTRIAL HOLDINGS N.V., a company
organized under the laws of The Netherlands Antilles (the "Guaranteed Party").
WHEREAS, the Guaranteed Party and NRL Acquisition Corp., a corporation
incorporated under the laws of the State of Delaware (the "Purchaser") are
parties to a Share Purchase Agreement (the "Share Purchase Agreement") dated as
of May 17, 2004 pursuant to which, among other things, the Guaranteed Party has
agreed to sell, and the Purchaser has agreed to purchase, 22,925,701 shares of
common stock, par value $0.0001 per share, of Chaparral Resources, Inc., a
corporation incorporated under the laws of the State of Delaware; and
WHEREAS, as an inducement to and a condition of the Guaranteed Party
entering into the Share Purchase Agreement, the Guarantor agrees to enter into
this Agreement.
NOW, THEREFORE, in consideration of the Guaranteed Party entering into
the Share Purchase Agreement and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Guarantor hereby
agrees as follows:
SECTION 1. Definitions. All capitalized terms used but not defined
herein shall have the meanings ascribed to such terms in the Share Purchase
Agreement.
SECTION 2. Guarantee. The Guarantor hereby irrevocably guarantees, as
principal and not as surety, (i) the due and punctual payment of all monetary
obligations now or hereafter due and payable by the Purchaser pursuant to the
Share Purchase Agreement, and (ii) the full and complete performance of all
covenants, agreements, duties and obligations applicable to the Purchaser
pursuant to the Share Purchase Agreement, as if the Guarantor were party thereto
(in the place of the Purchaser), whether such covenants, agreements, duties or
obligations are outstanding on the date hereof or arise or are incurred at any
time or times hereafter (the obligations of the Purchaser under the Share
Purchase Agreement specified in clauses (i) and (ii) being referred to herein
collectively as the "Obligations"). Notwithstanding anything to the contrary
contained in this Agreement, the obligations of the Guarantor under this
Agreement shall not (other than the costs, expenses, fees and interest to be
paid by the Guarantor pursuant to Section 6) be greater than the obligations
that the Guarantor would have if it were a party to the Share Purchase Agreement
in the place of the Purchaser.
SECTION 3. Nature of Guarantee. The Guarantor guarantees that the
Obligations will be duly and punctually paid and fully and completely performed
(in each case, as if the Guarantor were the Purchaser) strictly in accordance
with the terms of the Share Purchase Agreement, as applicable. If for any reason
the Purchaser shall fail or be
unable to duly and punctually pay or to fully and completely perform, or cause
to be duly and punctually paid or fully and completely performed, any Obligation
as and when the same shall become due and payable or otherwise required to be
performed, the Guarantor shall, subject to the terms and conditions of this
Agreement, forthwith duly and punctually pay or fully and completely perform, or
cause to be duly and punctually paid or fully and completely performed, such
Obligation (in each case, as if the Guarantor were the Purchaser). The Guarantor
further agrees that this Agreement, to the extent it requires the payment of
money, constitutes a guarantee of payment when due and not of collection and is
in no way conditioned or contingent upon any attempt to collect from the
Purchaser. It is understood and agreed that any waiver by the Guaranteed Party
of any of the terms, provisions or conditions of the Share Purchase Agreement,
or any amendment to or modification of the Share Purchase Agreement in
accordance with the terms of the Share Purchase Agreement, may all or any of
them be made and done from time to time without notice to the Guarantor, and the
Guarantor's obligations under this Agreement shall continue subject to such
waiver, amendment or modification.
SECTION 4. Continuing Guarantee. (a) The Guarantor's guarantee of the
Obligations shall continue to be effective if (i) at any time any payment of any
Obligation is rescinded or must otherwise be returned by the payee thereof upon
the insolvency, bankruptcy, reorganization or similar event of the Purchaser or
otherwise or (ii) the obligations of the Guarantor under this Agreement are
released in consideration of a payment of money or transfer of property by the
Purchaser or any other Person and such payment, transfer or grant is rescinded
or must otherwise be returned by the recipient thereof upon the insolvency,
bankruptcy, reorganization or similar event of the Purchaser, such other Person
or otherwise, in each case, as though all applicable payments, transfers and
grants had not been made.
(b) If a claim is made upon the Guaranteed Party at any time for
disgorgement, repayment or recovery of any amount or amounts or other
consideration or value received from any source whatsoever in payment,
performance, satisfaction or discharge of, or otherwise on account of, any of
the Obligations, and if the Guaranteed Party repays any such amounts, value or
consideration or otherwise becomes liable for all or any part of such claim by
reason of (i) any order, writ, injunction, decree, or judgment by or legally
binding agreement or stipulation with any Governmental Authority ("Order"), (ii)
any settlement or compromise of any Order or (iii) the bankruptcy, insolvency or
reorganization of the Purchaser or any successor endorser, guarantor, surety or
obligor in respect of any of the Obligations, the Guarantor shall be and remain
liable hereunder for the amount, value or consideration so repaid, or for which
the Guaranteed Party otherwise is liable, to the same extent as if such amount,
value or consideration never had been received by the Guaranteed Party, all
notwithstanding any termination hereof or the cancellation of any agreement,
instrument or document evidencing any of the Obligations. By virtue of this
Agreement, the Guarantor hereby expressly assumes any and all risks of a
bankruptcy, insolvency or reorganization with respect to the Purchaser or any
successor endorser, guarantor, surety or obligor in respect of any of the
Obligations. Notwithstanding any other provision of this Agreement or anything
to the contrary contained in the Share Purchase Agreement, the Guarantor's
obligations under
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this Agreement shall be continuing obligations and shall survive the termination
of any of the Obligations.
SECTION 5. Release/Waiver/Rights. (a) The Guarantor hereby agrees that
it shall not be released from any of its obligations under this Agreement by any
act, thing or circumstance whatsoever which might, but for this provision, be
deemed a legal or equitable discharge, release or defense of a guarantor or
surety. Notwithstanding anything to the contrary contained in this Agreement,
the Guarantor shall have the benefit of all defenses, causes of action, remedies
and rights which would inure to, or could be brought by, the Guarantor if it
were a party to the Share Purchase Agreement in the place of the Purchaser.
(b) Without limiting the generality of paragraph (a) above, the
Guarantor hereby unconditionally waives any and all notices that may be required
by Law or otherwise, now or hereafter in effect, including promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Obligations and this Agreement and any requirement that the Guaranteed Party
first presents to, proceeds against or makes a demand against the Purchaser or
otherwise exhausts any right, power or remedy under the Share Purchase
Agreement, before requesting payment or performance by the Guarantor hereunder
or that the Guaranteed Party protects, secures, perfects or insures any security
interest or lien or any property subject thereto or exhausts any other right to
take any action against the Purchaser or any collateral.
SECTION 6. Fees and Expenses. The Guarantor agrees to pay any and all
costs, expenses and fees, including reasonable attorneys' fees and
disbursements, incurred by the Guaranteed Party in enforcing any rights under
this Agreement, whether or not litigation or arbitration is commenced and during
all phases of litigation and arbitration.
SECTION 7. Representations and Warranties of Guarantor. The Guarantor
hereby represents and warrants, as of the date of this Agreement, to the
Guaranteed Party as follows:
(a) Organization. The Guarantor is a company duly organized and
validly existing under the laws of Bermuda, with the requisite corporate power
and authority to enter into and to perform, and has taken all necessary
corporate action to authorize the execution and performance of its obligations
under, this Agreement.
(b) Enforceability. This Agreement constitutes a legal, valid and
binding obligation of the Guarantor, enforceable against the Guarantor in
accordance with its terms, except to the extent that such enforceability may be
limited by applicable bankruptcy, insolvency, or other similar laws affecting
creditors' rights generally and be general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
(c) No violation. The execution and delivery by the Guarantor of this
Agreement and the payment obligations of the Guarantor contemplated hereunder do
not
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and will not (i) violate any provision of the certificate of incorporation or
by-laws or other constitutional documents of the Guarantor; (ii) violate any Law
or order of any Governmental Authority applicable to the Guarantor; or (iii)
result in a violation or breach of, conflict with, constitute (with or without
due notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation, payment or acceleration) under, or result in the
creation of any encumbrance upon any of the properties or assets of the
Guarantor under, any of the terms, conditions or provisions of any agreement or
other instrument or obligation to which the Guarantor is a party or by which the
Guarantor or its properties or assets are bound.
(d) Litigation. There is no claim, action, suit, investigation of
which the Guarantor has knowledge, arbitration or legal, administrative or other
proceeding pending and, to the knowledge of the Guarantor, none is presently
threatened in writing against the Guarantor before or by any court, governmental
authority or arbitrator, which, if adversely determined, individually or in the
aggregate, is reasonably likely to materially impair the Guarantor's ability to
perform its obligations under this Agreement or to have a material adverse
effect on the financial condition of the Guarantor. The Guarantor has not
received any currently effective notices of default and is not in default under
any Orders, in each case, which individually or in the aggregate, are reasonably
likely to materially impair the Guarantor's ability to perform its obligations
under this Agreement.
SECTION 8. Survival of Representations. All of the representations and
warranties made by the Guarantor in this Agreement shall be deemed to have been
relied upon by the Guaranteed Party and shall survive the execution and delivery
of this Agreement.
SECTION 9. Place and Mode of Payment, etc. Each payment payable by the
Guarantor hereunder shall be made on the due date of such payment to the
Guaranteed Party in United States Dollars by electronic transfer in immediately
available funds and to the account designated by the Guaranteed Party in writing
five (5) Business Days in advance.
SECTION 10. Payments To Be Free of Deductions. Each payment payable by
the Guarantor to the Guaranteed Party under this Agreement shall be made without
any set-off or counterclaim whatsoever and shall be free and clear of and
without deduction for any Taxes, levies, imports, duties, charges, fees,
deductions, withholdings, compulsory loans, restrictions or conditions of any
nature now or hereafter imposed or levied by any governmental authority unless
the Guarantor is compelled by Law to make such deduction or withholding. If any
such obligation is imposed upon the Guarantor with respect to any payment
payable by the Guarantor to the Guaranteed Party hereunder, the Guarantor shall
pay to the Guaranteed Party, on the date on which the said payment shall become
due and payable hereunder, such additional amount as shall be necessary to
enable the Guaranteed Party to receive the same net amount which the Guaranteed
Party would have received on such due date had no such obligation been imposed
upon the Guarantor. If any additional amount is paid by the Guarantor to any
Guaranteed Party for or on account of any Taxes, levies, imports, duties,
charges, fees, deductions, withholdings, compulsory loans, restrictions or
conditions pursuant to this Section 10,
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then, if the Guaranteed Party at its sole discretion determines that it has
received or been granted a refund of, credit against or remission for such
Taxes, levies, imports, duties, charges, fees, deductions, withholdings,
compulsory loans, restrictions or conditions, the Guaranteed Party shall, to the
extent that it can do so without prejudice to the retention of the amount of
such refund, credit or remission, reimburse to the Guarantor such amount as the
Guaranteed Party shall, in its sole discretion, determine to be attributable to
the relevant Taxes, levies, imports, duties, charges, fees, deductions,
withholdings, compulsory loans, restrictions or conditions.
SECTION 11. Further Assurances, etc. The Guarantor will, at any time
and from time to time upon the written request of the Guaranteed Party, and at
the expense of the Guarantor, execute and deliver, or cause to be executed and
delivered, any and all such further assurances and other agreements and
instruments and take or cause to be taken such other action as may be reasonably
requested by the Guaranteed Party in order to give full effect to this Agreement
and to maintain and reserve all of the rights, remedies, powers and privileges
of the Guaranteed Party hereunder.
SECTION 12. Notices. All notices, demands, requests, statements,
certificates, waivers and other communications required or permitted to be given
under this Agreement shall be in writing and shall be deemed to have been duly
given if delivered in person or mailed, certified or registered mail with
postage prepaid, or sent by facsimile (upon confirmation of receipt), as
follows:
(a) if to the Guaranteed Party, to it at:
Central Asian Industrial Holdings N.V.
c/o 3rd Floor, Xxxxxxxxx Xxxxx
0-0 Xxxxxxxxx Xxxxxx
Xxxxxx X0
Xxxxxx Xxxxxxx
Attention: Xxx Xxxxxx
Fax: +44-20-7494 6070
with a copy (which shall not constitute notice) to:
White & Case
0-00 Xxxxxxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
Attention: Xxxxxx Xxxxxx
Fax: +44-20-7600 7030
(b) if to the Guarantor, to it at:
Xxxxxx Resources Limited
0xx Xxxxx
00 Xxxxxxxx Xxxxxx
Xxxxxx X0X 0XX
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United Kingdom
Attention: R. Xxxxxxxxx Xxxxxx
Fax: +44-20-7495 8909
with a copy (which shall not constitute notice) to:
Coudert Brothers LLP
00 Xxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
Attention: Xxxxx X'Xxxxxxxx
Fax: x00 00 0000 0000
or to such other person or address as either the Guarantor or the
Guaranteed Party shall specify by notice in writing to the other. All
such notices, demands, requests, statements, certificates, waivers and
communications shall be deemed to have been received upon receipt
thereof.
SECTION 13. Amendments. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto by their
duly authorized representatives.
SECTION 14. No Waiver; Remedies. No failure on the part of the
Guaranteed Party to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. This Agreement may be enforced by the Guaranteed
Party from time to time as often as the occasion therefor may arise and without
any requirement on the part of the Guaranteed Party first to exercise any rights
against the Purchaser or against any other person or to exhaust any remedies
available to the Guaranteed Party against the Purchaser or against any other
person or to resort to any other source or means of obtaining payment or
enforcing performance of the Obligations or any of them. The remedies herein
provided are cumulative and not exclusive of any remedies provided by Law or in
equity.
SECTION 15. Effective Date; Termination. The Guarantor's obligations
hereunder shall arise irrevocably as of the date first above written and
terminate on the latest date that the Obligations terminate in accordance with
the provisions of the Share Purchase Agreement.
SECTION 16. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, United States
of America, without giving effect to any conflicts of laws principles thereof
which would result in the application of the laws of another jurisdiction. The
provisions of Clause 14.12(b) through (d) (inclusive) of the Share Purchase
Agreement shall be incorporated by reference in this Agreement as if set forth
in full herein, provided that references in such Clauses to "this Agreement"
(and correlative references such as "hereof" and "hereunder") shall be deemed to
be references to this Agreement and references in such
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Clauses to the "Parties" and a "Party" shall be deemed to be references to the
Guarantor and the Guaranteed Party, as the context may require.
SECTION 17. Enforcement. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached.
SECTION 18. Entire Agreement; Assignment. This Agreement constitutes
the entire agreement and understanding of the parties hereto and supersedes all
prior agreements and understandings, both written and oral, between the parties
hereto with respect to the subject matter hereof. Neither the Guarantor nor the
Guaranteed Party may assign its rights hereunder or delegate any of its
covenants, agreements, duties or obligations hereunder without the prior written
consent of the other party, and any such purported assignment or purported
delegation shall be null and void; provided, however, that in the event the
Guaranteed Party wishes to make such an assignment or delegation to an
Affiliate, the Guarantor cannot unreasonably withhold or delay such consent. All
covenants, agreements, duties, obligations, rights, remedies, powers, privileges
and preferences of each party to this Agreement shall be binding upon and inure
to the benefit of its permitted successors and assigns.
SECTION 19. Severability. If at any time any provision of this
Agreement is or becomes invalid, illegal or unenforceable under the laws of the
State of New York, the validity, legality and enforceability of the remainder of
this Agreement shall not be affected.
SECTION 20. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
SECTION 21. Headings. The headings of this Agreement are for
convenience only and shall not be construed to affect the meaning or
construction of any of the provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
XXXXXX RESOURCES LIMITED
by /s/ Xxxx Xxxx
--------------------------------------------
Name: Xxxx Xxxx
Title: Chairman and Chief Executive Officer
CENTRAL ASIAN INDUSTRIAL HOLDINGS N.V.
by /s/ Askar Alshinbayev
--------------------------------------------
Name: Askar Alshinbayev
Title: Managing Director
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