Exhibit 10.1
DATED November 9, 2005
(1) OOO ZAURALNEFTEGAZ
and
(2) CASPIAN FINANCE LIMITED
LOAN AGREEMENT
Xxxxxxxxx & Xxxxxxx
Registered Foreign Lawyers and Solicitors - Xxxxxx
000 Xxxxxx
Xxxxxx XX0X 0XX
THIS LOAN AGREEMENT is made on November 9, 2005.
PARTIES:
OOO ZAURALNEFTEGAZ, a limited liability company incorporated under the laws of
-------------------
the Russian Federation under the main state registration number (ORGN)
1024500513950, located at 00 Xxxxx Xxxxxx, Xxxxxx, 000000, Xxxxxx Oblast,
Russian Federation ("ZNG"); and
CASPIAN FINANCE LIMITED, a company incorporated in England and Wales under
-------------------------
company number 05530897 and whose registered office is at Millennium Xxxxxx
Xxxxx, 0 Xxxxxxx Xxxx, Xxxxxx XX0X 0XX Xxxxxx Xxxxxxx (the "LENDER").
WHEREAS:
(A) All rights and obligations of Baltic Petroleum Limited ("BP") pursuant
to a loan agreement dated 28 April 2005 (the "INTERIM LOAN AGREEMENT")
between it as lender and ZNG as borrower have been assigned to the Lender
pursuant to a deed of novation entered into among BP, ZNG and the Lender
immediately prior to the execution of this Agreement.
(B) In addition to assuming the obligation to make the loan under the
Interim Loan Agreement (the "INTERIM LOAN"), the Lender is willing to make
available to ZNG an additional loan facility upon and subject to the terms
and conditions set out in this Agreement.
IT IS THEREFORE AGREED AS FOLLOWS:
1. DEFINITIONS
For the purposes of this Agreement the following definitions will apply:
"ADVANCE" means any amount advanced or to be advanced by the Lender under
the Loan;
"AGREEMENT" means this agreement;
"ASSUMED COMMITMENT" means the amount of US$1,739,658, representing
the principal, accrued interest and costs outstanding under the Interim
Loan, together with pre-trading expenses of ZNG advanced to it by BP;
"AVAILABLE FACILITY" means the Commitment from time to time less the
aggregate of each Advance then drawn down and outstanding;
"BP (E&P)" means Baltic Petroleum (E&P) Limited;
"BUDGET" means the budget for ZNG as agreed between the parties, a
copy of which is annexed at Annex 1;
"COMMITMENT" means the amount of up to US$6,874,325, representing the
Assumed Commitment and the New Commitment;
"DRAWDOWN NOTICE" means a notice complying with clause 5 (Drawdown
Notices) below;
"EVENT OF DEFAULT" has the meaning given in clause 11 (Events of Default)
below;
"JOINT VENTURE AGREEMENT" means the joint venture agreement between
SEG and BP (E&P) dated 14th October 2005;
"JV CO" means Zauralneftegaz Limited;
"LOAN" means the loan made available to ZNG under clause 2 (The Loan);
"NEW COMMITMENT" means the amount of up to US$5,134,667; "OUTSTANDING
ADVANCES" means amounts drawn down under the Loan but not repaid;
"SEG" means Siberian Energy Group Inc; and
"WORK PROGRAMME" means the work programme for ZNG's business as agreed
between the parties, a copy of which is annexed at Annex 2.
2. THE LOAN
2.1 The Lender hereby agrees to lend to ZNG, upon and subject to the terms
of this Agreement, a loan in principal amount equal to the Commitment.
2.2 The Interim Loan shall be subject to the terms of this Agreement, and
the Interim Loan Agreement shall terminate and have no further force and
effect.
3. TERM
Subject to clause 11 (Events of Default), the Loan shall be available
until the date which is the sixth anniversary of the date of this
Agreement, following which all Outstanding Advances shall, together with
accrued interest and costs and expenses due hereunder, forthwith be repaid.
4. DRAWDOWN
4.1 Subject to clauses 3 (Term) and 10 (Conditions Precedent) below, the
Lender shall make an Advance to ZNG subject to:
(a) a Drawdown Notice in respect of such Advance having been received
by the Lender;
(b) the amount of the Advance does not exceed the Available Facility;
(c) the representations and warranties referred to in clause 12
(Representations and Warranties) below would be true if repeated on
the intended Drawdown Date; and
(d) no Event of Default has occurred and is continuing.
4.2 Each Advance shall be paid by the Lender direct to the following US$
denominated account (or to any other account nominated by the Lender in
writing):
Corresponding bank: XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Beneficiary bank: XXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXX
Payee: XXXXXXXXXXXXXXXXXXXXXXXXXXX
Account name: OOO "Zauralneftegaz"
Account number: XXXXXXXXXXXXXXXXXXXXXXX
4.3 ZNG shall be responsible for satisfying all requirements of Russian
Federation law and regulation in respect of the Loan, each Advance and any
matter contemplated by this Agreement and shall indemnify the Lender for
any loss or damage (including legal fees) it may suffer as a result of the
Loan, any Advance or this Agreement being in contravention of such law or
regulation. ZNG shall provide to the Lender such information or
documentation that it may from time to time request in writing to
demonstrate that all requirements of Russian Federation law and regulation
in respect of the Loan, each Advance and any other matter contemplated by
this Agreement have been satisfied and that ZNG is in compliance with its
obligations under this Agreement.
4.4 ZNG shall procure that in respect of each Advance a sum of 2% (or such
other amount as may from time to time be stipulated by applicable Russian
banking and currency control regulations) in respect thereof is placed in a
special deposit account to satisfy Russian banking and currency control
regulations (the "RETENTION REQUIREMENT"). Such amounts shall be repaid to
the Lender immediately upon release to ZNG from such special deposit
account.
4.5 An Advance equal to the Assumed Commitment shall be treated as having
been drawn down as at the date hereof.
5. DRAWDOWN NOTICES
5.1 Each Drawdown Notice must be in the form set out in Schedule 1 to this
Agreement or in such other form as may be acceptable to the Lender and
shall relate to only one of the purposes set forth in clause 8.1 for which
the Advance will be utilized. The Drawdown Notice shall specify the date
upon which such Advance is to be made (the "DRAWDOWN DATE") and the amount
of the Advance.
5.2 Unless otherwise agreed by the Lender, a Drawdown Notice must be
received by the Lender not less than 10 days prior to the proposed Drawdown
Date.
6. INTEREST AND DEFAULT INTEREST
6.1 Interest will be charged on the Outstanding Advances at the following
rates:
(a) during the first two years of the term, 14% per annum;
(b) during the third year of the term, 13% per annum; and
(c) thereafter, 12% per annum.
6.2 Interest will be calculated and accrue on a daily basis (calculated on
a year of 365 days and the actual number of days elapsed) and will be
payable as follows:
(a) until the earlier of (i) the date on which ZNG's monthly turnover
as shown by its monthly management accounts exceeds US$100,000 and
(ii) the third anniversary of this Agreement, interest shall be rolled
up and, at the end of such period, be added to the principal amount of
the Loan; and
(b) thereafter, on a monthly basis on the final day of each calendar
month.
6.3 In the event that any monies from time to time payable to the Lender
hereunder are not paid on the due date, interest shall be payable on the
amount due, from the date payment was due to the date payment is made, at a
rate equivalent to 6% per annum. Any such interest will be calculated and
accrue on a daily basis.
7. REPAYMENT
7.1 All Outstanding Advances, together with accrued interest and costs and
expenses due hereunder shall be repaid on the sixth anniversary of the date
of this Agreement.
7.2 ZNG may with the prior written consent of the Lender repay in US$ all
or any part (provided, in the case of part only, it is of an amount of not
less than US$50,000) of the Outstanding Advances, together with accrued
interest thereon. Any amounts repaid may not be reborrowed.
8. PURPOSE
8.1 The New Commitment shall be available for, and shall be applied
strictly by ZNG in the amounts set out in the Budget and for the
corresponding purpose stated in the Work Programme. Of the amounts to be
advanced under the Loan which are detailed in the Budget and Work
Programme:
(a) the following amounts shall be available to be drawn down
following execution of this Agreement, subject to compliance with all
applicable terms of the Agreement in respect of each Advance to be
made:
PURPOSE AMOUNT (US$)
------- ------------
Payment to OOO Business Standard in respect
of the gathering and co-ordination of data in
respect of the new licences detailed in Schedule 2 100,000
Payment of 50% of amounts owed to Messrs. Repin and
Potapov 170,000
Payment to Mylarshikov for overdue rent (subject to
clause 8.3) 44,000
Payment of mineral tax (for second quarter of 2005) 3,864.52
Payment of accrued salaries of ZNG employees for
August and September 2005 32,000
TOTAL 348,864.52
(b) the following amounts shall be available to be drawn down subject to
the prior satisfaction of the additional condition set out at clause 10.2
and compliance with all other applicable terms of the Agreement in respect
of each Advance to be made:
PURPOSE AMOUNT (US$)
------- ------------
Further payment to OOO Business Standard in Up to 340,000
respect of the gathering and co-ordination
of data in respect of the new licences detailed
in Schedule 2
Payment of amounts owed to Basneftegeofizika 204,482.91
Payment of outstanding invoice of Basneftegeofizika
(amount must be agreed in writing with the Lender) Up to 100,000
Payment of amounts owed to Bazhenov Expedition 20,351.17
Payment of remaining amounts owed to Messrs.
Repin and Potapov 170,000
Payment to Mylarshikov for overdue rent
(subject to clause 8.3) 44,000
Payment of mineral tax (for third quarter of 2005) 3,864.52
TOTAL UP TO 882,698.60
8.2 No Advance under the New Commitment may be utilised for any purpose
other than those stated in clause 8.1 without the prior written consent of
Lender. The Budget and the Work Programme may only be revised, updated or
amended with the prior written consent of the Lender.
8.3 ZNG shall only make the payments to Mylarshikov in respect of overdue
rent that are referred to in clauses 8.1(a) and 8.1(b) above in exchange
for a duly notarised written undertaking in English from Mylarshikov that
such amounts are in full and final settlement of all overdue rent owed to
it by ZNG and confirming a one year extension of the lease for the premises
currently occupied by ZNG in Kurgan City, Kurgan from October 2005 for the
same services as currently received, together with an option for ZNG to
extend such lease for a further period of one year from the expiration of
such extension, both leases to be at a monthly rent of US$2,800.
9. SECURITY
The Loan shall initially be unsecured by ZNG, but the Lender reserves
the right (at its sole discretion) to request security (in the form of
fixed or floating charges (or the equivalent under the law of any
applicable jurisdiction)) over all or some of the assets and/or undertaking
of ZNG (subject to such assets and undertaking being capable of being
charged) at any time prior to any drawdown or whilst any monies remain
outstanding under the Loan. The Lender agrees and acknowledges that any
such security will or may rank after any security interests existing at
such time and that the ability of ZNG to give such security may be subject
to appropriate inter-creditor agreements or priority agreements being
entered into with other lenders and/creditors of ZNG. If security is
required by the Lender, ZNG shall grant the same as soon as shall
reasonably be practicable thereafter. ZNG will pay the Lender's reasonable
costs of putting such security in place, including the cost of negotiating
and documenting such security.
10. CONDITIONS PRECEDENT
10.1 No drawdown may be made until each of the following conditions shall
have been satisfied (or waived by the Lender) or, if a drawdown shall
previously have been made, no further drawdown may be made until (if
applicable) the conditions in sub-clauses (f), (h) and (i) below shall have
been satisfied (or waived by the Lender):
(a) the Lender has received a copy, duly notarised as being a true
copy by the General Director of ZNG, of a resolution of the authorised
body of ZNG (in terms satisfactory to the Lender) authorising ZNG to
enter into and perform its obligations under this Agreement and
authorising a person to execute this Agreement;
(b) there shall have been received by the Lender this Agreement duly
executed by a duly authorised person for and on behalf of ZNG;
(c) there shall have been received by Lender a copy, duly notarised
as being a true copy, of the current Charter of ZNG together with a
copy, notarised as aforesaid, of the Certificate of Registration (OGRN
Certificate) of ZNG;
(d) JV Co shall have entered into the guarantee, the pledge and the
debenture with the Lender in the form annexed hereto at Annex 3
(together the "SECURITY DOCUMENTS" and each a "SECURITY DOCUMENT");
(e) there shall have been received by the Lender a certified copy of
a resolution of the board of JV Co (in terms satisfactory to the
Lender) authorizing JV Co to enter into and perform its obligations
under the Security Documents, and authorizing a person to execute the
Security Documents;
(f) the Lender shall have received written evidence in a form
satisfactory to it that any previous Advance or Advances has or have
been applied by ZNG strictly in accordance with clause 8 (Purpose);
(g) all outstanding liabilities of ZNG to its creditors (other than
those amounts detailed in clauses 8.1(a)and 8.1(b)) as at the date
hereof have been satisfied in full or SEG has provided to ZNG an
indemnity, in a form satisfactory to the Lender, in respect of any
such outstanding liabilities;
(h) if security shall have been requested under clause 9 (Security)
above, such security shall have been granted to the satisfaction of
the Lender; and
(i) an Event of Default has not occurred and is not continuing.
10.2 In addition to satisfaction of the conditions contained in clause
10.1, drawdown of any amounts referred to in clause 8.1(b) shall be
conditional on receipt by the Lender of a duly notarised copy of a letter
in English to ZNG from the relevant licence authority(ies) of the Ministry
of Natural Resources of the Russian Federation confirming that the licences
detailed in Schedule 2 have been awarded to ZNG in a form acceptable to the
Lender.
11. EVENTS OF DEFAULT
11.1 Each of the events set out in clause 11.2 below is an "EVENT OF
DEFAULT". On or at any time after the occurrence of an Event of Default,
the Lender may by notice to ZNG (i) cancel the Loan (in which case a
Drawdown Notice may not be issued) and/or (ii) declare that all or part of
the Outstanding Advances, together with accrued interest and all other
amounts accrued, be immediately due and payable (whereupon they shall be
paid within 5 days) or declare that all or part of the Outstanding Advances
be payable on demand (whereupon they shall be paid within 5 days of
demand).
11.2 The events referred to in clause 11.1 above are:
(a) any liquidator, trustee in bankruptcy, judicial custodian,
compulsory manager, receiver, administrative receiver, administrator
or the like is appointed in respect of ZNG or JV Co or any part of
their respective assets;
(b) an order is made or an effective resolution passed for the
winding up of ZNG or JV Co;
(c) either ZNG or JV Co stops payment of all or any class of its
debts or announces an intention to do so, or a moratorium is declared
in respect of any of its indebtedness or ceases to carry on its
business or substantially the whole of its business or threatens to
cease to carry on the same or substantially changes the nature of its
business;
(d) an encumbrancer takes possession or a receiver or administrator
(or an equivalent person in any jurisdiction) is appointed in respect
of any property of ZNG or JV Co;
(e) ZNG makes default in the payment on the due date of any money
which may have become due hereunder;
(f) any distress, execution, sequestration or other processes are
levied or enforced upon or sued out against the property of ZNG or JV
Co and is not discharged within seven days of being levied;
(g) either ZNG or JV Co becomes insolvent or is unable to pay its
debts (in the case of ZNG, within the meaning ascribed to it by the
Federal Russian Law on Insolvency (Bankruptcy) or any statutory
modification or re-enactment thereof for the time being in force), or
either ZNG or JV Co certifies that it is unable to pay its debts as
and when they fall due;
(h) ZNG fails to comply with any of the covenants, conditions,
undertakings or provisions contained in this Agreement or any
agreements or documents supplemental hereto in each case which ZNG has
failed to remedy within 7 days of receipt of written notice from the
Lender requiring it to do the same, or if any representation or
warranty given herein by ZNG to the Lender proves to be materially
untrue;
(i) ZNG applies any Advance (or part thereof) other than for the
applicable purpose set out in clause 8 (Purpose);
(j) any event or series of events occurs which, in the opinion of the
Lender acting reasonably, might have a material and adverse effect on
the financial condition of ZNG or the ability of ZNG to comply with
its obligations under this Agreement;
(k) if there is an event of default under the Joint Venture Agreement
(except to the extent suffered by BP(EP));
(l) if at any time it is or becomes unlawful for JV Co to perform or
comply with any or all of its obligations under any Security Document
or any obligation under a Security Document ceases to be legal, valid,
binding and enforceable or any Security Document or any obligation
thereof is required by applicable law or regulation to be waived,
amended, modified or abandoned;
(m) any Security Document does not create the security interest it
purports to create, is not effective or is challenged by JV Co or ZNG;
and
(n) there shall not have occurred any material adverse change in the
business, operations, assets, position (financial, trading or
otherwise), profits or prospects of ZNG or any event or circumstance
that may result in such a material adverse change.
12. REPRESENTATIONS AND WARRANTIES
12.1 As a condition of the Loan being available, ZNG hereby undertakes with
and represent and warrants to the Lender as follows:
(a) ZNG is a limited liability company duly incorporated and validly
existing under the laws of the Russian Federation and has the power
and authority to own its properties and assets and to carry on its
business as it is now being conducted and to enter into this Agreement
and any other documents contemplated hereby and to borrow money and
perform its obligations hereunder and has ZNG taken all necessary
action to authorise the execution, delivery and performance of this
Agreement and each such other document;
(b) this Agreement and each other document contemplated hereby
(including any documents which may be required in connection with any
security requested under clause 9 above) constitutes or will, when
executed, constitute a legally binding obligation of ZNG and is or
will be, when executed, enforceable in accordance with its terms;
(c) the execution, delivery and performance by ZNG of this Agreement
does not and will not exceed any power granted to ZNG by or violate
any provision of:
(i) any law or regulation or any order or decree of any
governmental authority, agency or court, to which ZNG is subject;
and/or
(ii) the Charter of ZNG, as amended;
(d) ZNG is not in default in respect of any material obligation under
any agreement to which it is a party or by which it may be bound and
no litigation, arbitration or administrative proceedings are pending
or threatened which are material in the context of the Loan and the
Advances made or to be made hereunder;
(e) there is no provision of any instrument or agreement and no other
obligation by which ZNG or any of its assets is bound and no judgment,
injunction or other order or award of any judicial, administrative,
governmental or other authority or of any arbitrator which is
contravened by the execution and delivery of this Agreement or which
would be contravened by the performance or observance of any of the
obligations of ZNG in or pursuant to this Agreement;
(f) ZNG has not taken any corporate action nor have any other steps
been taken or legal proceedings started or (to the best of ZNG's
belief) threatened against ZNG for its winding up, dissolution or
reorganisation or for the appointment of a receiver, trustee or
similar officer of it or of any of its assets or revenues;
(g) no Events of Default exist or might result from the making of any
Advance;
(h) there does not exist any event or circumstance which has, or
could have, a material adverse effect on the business of ZNG or on its
ability to perform its obligations under this Agreement;
(i) repayment of the Loan and payment of other amounts due hereunder
by ZNG to the Lender will be an unconditional obligation of ZNG which
shall rank at least pari passu with all of the other liabilities of
ZNG; and
(j) all information as provided by ZNG to the Lender in connection
with this Agreement is true, complete and accurate in all respects and
ZNG has not concealed any facts which, if disclosed, may adversely
affect the Lender's decision regarding the provision of the Loan to
ZNG.
12.2 ZNG shall cause all the above representations and warranties to remain
valid throughout the term of this Agreement. ZNG shall promptly notify the
Lender of facts which would change any of its representations and
warranties or render any of them inaccurate, untrue or misleading.
12.3 The representation and warranties set out above shall survive the
execution of this Agreement and the making of Advance hereunder and shall
be deemed to be repeated by ZNG on each day so long as any amount is or may
be outstanding hereunder with reference to the facts and circumstances then
subsisting, as if made at each such time.
13. NOTIFICATION OF EVENTS OF DEFAULT
Immediately upon becoming aware of the same, ZNG undertakes to notify
the Lender by fax (and by notice in writing sent by first class post) of
the occurrence of any event or matter which constitutes or might constitute
an Event of Default pursuant to clause 11 (Events of Default) and ZNG shall
at the same time inform the Lender of any action taken or proposed to be
taken in connection therewith.
14. COSTS AND CHARGES
14.1 ZNG will reimburse the Lender on demand for all costs or expenses
incurred by the Lender in the enforcement (or in seeking to enforce) of
this Agreement and the Security Documents or in protecting or preserving
(or attempting to protect or preserve) any of its rights hereunder.
14.2 ZNG will reimburse the Lender on repayment of the Loan hereunder for
all costs or expenses (including but not limited to legal fees and subject
to a maximum of $150,000) incurred by the Lender in the preparation of this
Agreement and the Security Documents.
15. GROSS UP
ZNG shall not withhold Russian profits tax from any amount payable by
ZNG under this Agreement provided that the Lender has, prior to the date of
payment of such amount, provided to ZNG a document confirming that the
Lender is a resident of the United Kingdom for the purposes of the income
tax treaty between the United Kingdom and the Russian Federation and that
is certified by the tax authority of the United Kingdom (the "NON-RESIDENT
CERTIFICATE"). The Lender shall use its reasonable endeavours to obtain the
Non-Resident Certificate from the tax authority of the United Kingdom
following the date hereof and shall as soon as reasonably practicable
following receipt thereof from the tax authority in the United Kingdom
forward the same to ZNG; PROVIDED THAT if the Lender should fail to obtain
the Non-Resident Certificate for any reason and therefore provide it to
ZNG, ZNG shall make such withholding or deduction on account of any taxes
it is required to make in respect of any payment made hereunder and the
amount payable by ZNG shall be increased to such extent that the net amount
received by the Lender after such withholding or deduction shall equal the
gross amount received to be paid under this Agreement. ZNG shall account to
the appropriate authority for any taxes withheld or deducted and shall
provide the Lender with such evidence that it has done so if required by
the Lender.
16. SET OFF
The Lender may set off any indebtedness of ZNG hereunder against any
indebtedness of the Lender to ZNG. ZNG shall not withhold, set off, deduct
or counterclaim any payments due to the Lender hereunder against any
amounts owed to it by the Lender.
17. WAIVER
No failure to exercise nor any delay in exercising on the part of the
Lender 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 of
the Lender prevent any further or other exercise thereof or the exercise of
any other right or remedy. The rights and remedies of the Lender hereunder
are cumulative and are not exhaustive of any rights or remedies provided by
law.
18. NOTICES
Any notice to be given pursuant to the terms of this Agreement shall
be given in writing to the party due to receive such notice at the address
stated below or such other address as may have been notified to the other
parties in accordance with this clause. Notice shall be delivered
personally or sent by first class pre-paid recorded delivery or registered
post (air mail if overseas) or by facsimile transmission to the numbers and
parties detailed below and shall be deemed to be given in the case of
delivery personally on delivery and in the case of posting (in the absence
of evidence of earlier receipt) 48 hours after posting (six days if sent by
air mail) and in the case of facsimile transmission on completion of the
transmission provided that the sender shall have received printed
confirmation of transmission.
ZNG: Attn: Fax:
--- ---- ---
c/o Zauralneftegaz Limited Company Secretary x00 00 0000 0000
00x Xxxxxxx Xxxxxx
Xxxxxx X0X 0XX
Xxxxxx Xxxxxxx
With a copy to:
-----------------
Siberian Energy Group Inc.
000 Xxxxxxx Xxxxxx Attn: Fax:
0xx xxxxx
Xxx Xxxx, XX 00000 Xxxxx Xxxxxx x0 (000) 000-0000
USA
The Lender: Attn.: Fax:
----------
Caspian Finance Limited Xxxx XxXxxxxx 020 7429 6001
c/o Salans
Millennium Xxxxxx Xxxxx
0 Xxxxxxx Xxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
19. ASSIGNMENT
ZNG may not assign or transfer all or any part of its rights or
obligations hereunder, save with the prior written consent of the Lender.
The Lender may at any time assign or otherwise transfer all or any part of
its rights and obligations hereunder.
20. LAW AND DISPUTES
This Agreement shall be governed by and construed in accordance with
the laws of England. Any dispute arising out of or in connection with this
Agreement, including any question regarding its existence, validity or
termination, or the legal relationships established by this Agreement,
shall be referred to and finally resolved by arbitration under the Rules of
the London Court of International Arbitration, which Rules are deemed to be
incorporated by reference into this clause. All arbitration proceedings
shall be conducted in English before a single arbitrator in London.
Judgment on any resulting award may be entered in any court having
jurisdiction over the affected party, and may be executed against the
assets of the affected party in any jurisdiction. The arbitrator shall have
jurisdiction to award, and shall award, the prevailing party its reasonable
attorneys fees, costs and expenses.
21. THIRD PARTIES
No term of this Agreement shall be enforceable under the Contracts
(Rights of Third Parties) Xxx 0000 by a third party.
22. LANGUAGE
This Agreement will be executed in English and in Russian. In case of
any conflict between the English and Russian versions, the terms of the
English version should prevail.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
SCHEDULE 1
FORM OF REQUEST FOR AN ADVANCE
To: Caspian Finance Limited (the "LENDER")
From: OOO Zauralneftegaz ("ZNG")
Date [ ] 20
REQUEST FOR AN ADVANCE
We refer to the facility agreement dated [ ] 2005 between ZNG and the
Lender (the "AGREEMENT"). Terms defined in the Agreement have the same meaning
in this letter and references to clauses in this letter are references to
clauses of the Agreement.
We wish to borrow an Advance subject to the terms and conditions of the
Agreement as follows:
(a) Amount:
(b) Purpose:
(c) Drawdown Date:
(d) Payment instructions:
We confirm that the conditions set out in clause 4 will be satisfied on the
Drawdown Date for the proposed Advance.
Yours faithfully
By:
Authorised Signatory
for and on behalf of
OOO Zauralneftegaz
ANNEX 2
WORK PROGRAMME
WORK PROGRAMME
Reg. No WPZL4
-----
11/10/2005
WORK PROGRAM FOR ZNG LTD IN KURGAN REGION FOR 2005 AND SECOND QUARTER 2006
1. ACQUISITION OF UP TO FIVE NEW LICENSES HELD BY ZNG
KURGAN
2. CREATION OF THE JOINT VENTURE BY THE SIGNING OF THE
JOINT VENTURE AGREEMENT
3. NOTE THAT ACTIVITIES ARE CONTINGENT UPON ACCEPTABLE
RESULTS AND REPORTS FROM PREVIOUS ACTIVITIES. FAILURE TO
ACHIEVE ACCEPTABLE RESULTS WILL RESULT IN A RE-PLANNING AND
A REVISED WORK PROGRAM.
2005 2006 2006
TYPE OF WORKS 0XX XXXXXXX 0XX XXXXXXX 0XX XXXXXXX LOCATION
Geochemical analysis of
Palaeozoic rocks
(using data from previously
drilled xxxxx) Report Eastern part of
Kurgan Region
Geochemical modelling of
Palaeozoic basin in the eastern
part of Kurgan Region Report Eastern part of
Kurgan Region
August - October
Interpretation of 2D seismic Report
(OAO Bashneftegeofizika)
Zapadno-Suerskiy block Reinterpret
existing seismic data Report Mokrousovskiy,
Privolniy and Orlovo-
Pashkovskiy licenses
Scan/copy of all well logs and reports Report X. Xxxx - ZNG XXXXXX
Locate further samples for geochemical
biostratigraphical analysis Report &
Samples A. Belonosov
Duplication of the Oceangrove analyse
by Dr. Belonosov/Xxxx. Xxxxxx Report Novosibirsk, Moscow
Bazhenov Expedition (Moscow) to
prepare quotation for semi-regional
and block specific gravity and magnetic
survey Quote
(September)
Collation of the seismic and gravimetric Oct - Nov
data (Bazhenovskaya expedition) Report Zapadno-Suerskiy block
Planning of exploration well Nov - Dec
(Institute of Geology Ministry 1 well project
of NaturalResources, Local
Authorities and ZNG)including
the obtaining of all permits. Zapadno-Suerskiy block
Technical and ecological analysisof Beginning of
the project (Institute of Geology oil&gas,ZNG) November 2005 Zapadno-Suerskiy block
Mobilisation of the drilling equipment On receipt Zapadno-Suerskiy block
(contractor will be chosen after a competitive of the positive
bidding procedure, procedures for which will be conclusion of the
written by BalticPetroleum) geological analysis
Gravimetric + Magnetic mapping at 1:100,000
scale (Bazhenovskaya expedition) Min 957 sq km March (Proposed) Mokrousovskiy block
Gravimetric + Magnetic mapping at 1:100,000
scale (Bazhenovskaya expedition) Min 500 sq km Privolniy block
Gravimetric + Magnetic mapping at 1:100,000
scale (Bazhenovskaya expedition) Min 200 sq km Orlovo-Pashkovskiy
block
2D Seismic (contractor will be chosen after Surveysize dependent Mokrousovskiy block
a competitive bidding procedure,procedures for which on gravimetric/
will be written by Baltic Petroleum) magnetic results
2D Seismic (contractor will be chosen after Surveysize dependent
a competitive bidding procedure, procedures for which on gravimetric/
will be written by Baltic Petroleum) magnetic results Privolniy block
2D Seismic (contractor will be chosen after a Surveysize dependent
competitive bidding procedure,procedures for which on gravimetric/
will be written by Baltic Petroleum) magnetic results Orlovo-Pashkovskiy
block
ANNEX 3
Security Documents
1.Guarantee
2.Pledge
3.Debenture
OOO ZAURALNEFTEGAZ
Signed: /s/ Xxxx Xxxxxxxxx
--------------------------
Name (print): Xxxx Xxxxxxxxx
--------------------
Position: President/CEO
------------------------
CASPIAN FINANCE LIMITED
Signed: /s/ Xxxxx Xxxxxx
-------------------------
Name (print): Xxxxx Xxxxxx
-------------------
Position: Director
-----------------------
