CRI - CAP(G) LOAN AGREEMENT
THIS AGREEMENT (this "Agreement") is dated 7 February 2000 BETWEEN
(1) CHAPARRAL RESOURCES, INC., a company organised and existing under
the laws of Delaware ("CRI"); and
(2) CENTRAL ASIAN PETROLEUM (GUERNSEY) LIMITED, a company organised
and existing under the laws of Guernsey, ("CAP(G)").
RECITALS
(A) KazakOil, Korporatsiya Mangistau Terra International and CAP(G)
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
CAP(G) has agreed to make certain investments in Closed Type JSC
Karakadukmunay, a company organised and existing under the laws of the
Republic of Kazakhstan ("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 CAP(G) will be entitled to receive repayment of all such investments
by means of Investment Recovery as specified in the Petroleum Agreement.
(C) CAP(G) 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 at 1 January 2000 (the
"Existing Investments") and has made additional investments in KKM for the
purposes of the Project since 1 January, 2000 and intends to continue to
make such investments (such investment being the "Additional Investments").
(D) In order for CAP(G) to fund its Existing Investments in KKM, CRI
has made loans to CAP(G) amounting in aggregate to $31,025,000 as at 1
January 2000 (each an "Existing Loan" and collectively the "Existing
Loans").
(E) In order for CAP(G) to fund its Additional Investments in KKM,
CRI has made additional loans to CAP(G) for the purposes of the Project
since 1 January 2000 and intends to continue to make additional loans
available to CAP(G) subject to and in accordance with the terms of this
Agreement (each an "Additional Loan" and collectively the "Additional
Loans").
(F) CRI has made arrangements for financing certain of the Additional
Loans to CAP(G) under this Agreement by entering into a loan agreement
dated 1 November 1999 (the "Commercial Loan Agreement") with, inter alia,
Shell Capital Services Limited, as Arranger and the Lenders (as such term
is defined in the Commercial Loan Agreement), pursuant to which the Lenders
have agreed to make available loans to CRI in an aggregate principal amount
not exceeding $24,000,000 subject to the terms and conditions contained in
the Commercial Loan Agreement.
(G) CRI and CAP(G) have agreed to confirm in this Agreement the terms
and conditions upon which the Existing Loans and the Additional Loans 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) Disbursement Account" means the account of CAP(G) with ABN
AMRO Bank N.V., London branch and designated as the "CAP(G) Disbursement
Account".
"CRI Receipts Account" means the account of CRI held with ABN AMRO
Bank N.V., London branch and designated as the "CRI Receipts Account".
"Existing Interest Amount" has the meaning assigned to it in Clause
2.2(b).
"Principal Loans" means, collectively, the Existing Loans and the
Additional Loans for the time being outstanding or, as the context so
requires, an Existing Loan or an Additional Loan 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
CRI and CAP(G) confirm and agree as follows:
2.1 Disbursements
Any Additional Loans made by CRI to CAP(G) on or after the date of
this Agreement shall be deposited into CAP(G) Disbursement Account.
2.2 Interest
(a) Interest shall be deemed to have accrued from day to day on the
principal amount of each Principal Loan 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 Loans up to and including 1 January 2000 equals $3,430,000 (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 Loan
at the Borrowing Rate applicable from time to time in respect of the
Principal Loans and from the date made, in respect of any Additional Loan.
(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 Repayment of the Principal Loans
(a) CRI and CAP(G) jointly and severally acknowledges that as at 1
January 2000 (i) the Existing Loans amount in aggregate to $31,025,000 and
(ii) the Existing Interest Amount is $3,430,000.
(b) CRI shall be entitled to repayment of all or, at its sole
discretion, part of the Principal Loans, the Total Interest Amount and all
other amounts owing to CRI under or pursuant to the terms of this Agreement
on first demand of CRI from time to time whereupon the same shall
immediately become due and payable.
(c) All payments to CRI hereunder shall be made in United States
dollars for value on the due date without set off or counterclaim to the
CRI Receipts Account.
(d) 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.
(e) CRI shall maintain a record of the amounts from time to time
owing by CAP(G) under this Agreement. Such record shall be prima facie
evidence as to the existence and amounts owing by CAP(G) under this
Agreement. CRI shall deliver a statement to CAP(G) five Business Days
after each Reduction Date detailing the amounts owing to CRI under this
Agreement at that time.
3. Cross Acceleration
If a notice is served on CRI pursuant to clause 18.31 of the
Commercial Loan Agreement, the Principal Loans, the Total Interest Amount
and all other amounts owing to CRI under or pursuant to the terms of this
Agreement shall become immediately due and payable.
4. Tax Gross-up
(a) All sums payable by CAP(G) 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 tax or otherwise. If CAP(G) is required by any law to make any
such deduction or withholding, CAP(G) shall, together with the relevant
payment, pay such additional amount as will ensure that CRI 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 4(a), if CRI is required by law to make
any payment on account of tax (not being, in the case of CRI, 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 CRI (including any sum
received or receivable under this Clause 4) or any liability in respect of
any such payment is asserted, imposed, levied or assessed against CRI,
CAP(G) shall, upon demand by CRI, promptly indemnify CRI against such
payment or liability, together with any interest, penalties, costs and
expenses payable or incurred in connection therewith.
(c) If, at any time, CAP(G) 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 CRI
details of such requirement or change.
(d) If CAP(G) 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 CRI, 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 CRI's payment.
5. 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) CAP(G) may not assign, transfer, novate or dispose of any of, or
any interest in, its rights or obligations under this Agreement.
(c) CRI may, at its own cost, transfer all or part of its rights or
obligations under this Agreement.
6. 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.
7. 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 CAP(G) 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 CAP(G) may notify to CRI by not less than five Business
Days' notice.
(ii) The address and facsimile number of CRI is:
Chapparal Resources, Inc.
00000 Xxxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000, XXX
Attention: President
Facsimile: (000) 000 0000
or such other as CRI may notify to the CAP(G) by not less than five
Business Days' notice.
8. Amendment
No amendment, modification or waiver to this Agreement shall be valid
unless it is in writing and signed by CAP(G) and CRI.
9. Law and Jurisdiction
9.1 English Law
This Agreement shall be governed by English law.
9.2 Jurisdiction
(a) CAP(G) 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 9 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 9.6.
(b) CAP(G) 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 9.2 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 9.2 shall limit the right of CRI
to take proceedings against CAP(G) 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.
9.3 Process Agent
CAP(G) hereby irrevocably and unconditionally (a) appoints Law
Debenture Corporate Services Limited, whose address is at Xxxxxxx Xxxxx, 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 CRI to serve process in any other
manner permitted by law.
9.4 Waiver of Immunity
To the extent that CAP(G) 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 CAP(G), any such immunity (whether or not claimed), CAP(G) 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.
9.5 Consent to Enforcement
CAP(G) 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.
9.6 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 CRI, 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 9.6. Such arbitration shall take
place in London, England and shall be conducted by three arbitrators, one
of whom shall be nominated by CAP(G), one by CRI 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.
CHAPARRAL RESOURCES, INC.,
By: /S/ XXXXXXX X. XXXXX
-----------------------------
Name: Xxxxxxx X. Xxxxx
Title: Treasurer
In the presence of:
/S/ XXXX X. XXXXX
-----------------------------
Witness
Name: Xxxx X. Xxxxx
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
