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EXHIBIT 10(20)
CONFORMED COPY
INVESTMENT NUMBER 8138
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GUARANTEE AGREEMENT
BETWEEN
CANARGO ENERGY CORPORATION
and
INTERNATIONAL FINANCE CORPORATION
DATED DECEMBER 17, 1998
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TABLE OF CONTENTS
Article of
Section Page No.
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ARTICLE I ......................................................................................2
DEFINITIONS AND INTERPRETATION..................................................................2
SECTION 1.01. DEFINED TERMS................................................................2
SECTION 1.02. GUARANTEED OBLIGATIONS.......................................................2
SECTION 1.03. INTERPRETATION..............................................................2
ARTICLE II......................................................................................3
GUARANTEE.......................................................................................3
SECTION 2.01. GUARANTEE....................................................................3
SECTION 2.02. CONTINUING GUARANTEE.........................................................4
SECTION 2.03. NO SET-OFF...................................................................4
SECTION 2.04. TAXES........................................................................4
SECTION 2.05. CERTIFICATE CONCLUSIVE.......................................................5
SECTION 2.06. APPLICATION OF PAYMENTS......................................................5
SECTION 2.07. ALLOCATION...................................................................6
ARTICLE III.....................................................................................6
SAVING PROVISIONS...............................................................................6
SECTION 3.01. INCREASE IN GUARANTEED OBLIGATIONS...........................................6
SECTION 3.02. WAIVER OF DEFENSES...........................................................6
SECTION 3.03. IMMEDIATE RECOURSE...........................................................7
SECTION 3.04. SUBROGATION..................................................................7
SECTION 3.05. BANKRUPTCY OR LIQUIDATION OF COMPANY.........................................8
SECTION 3.06. APPROPRIATION OF MONEYS......................................................8
SECTION 3.07. RESTRUCTURING................................................................9
SECTION 3.08. ADDITIONAL SECURITY..........................................................9
ARTICLE IV......................................................................................9
INDEMNITY.......................................................................................9
SECTION 4.01. INDEMNITY....................................................................9
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ARTICLE OR
SECTION PAGE NO.
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ARTICLE V......................................................................................10
REPRESENTATIONS AND WARRANTIES.................................................................10
SECTION 5.01. REPRESENTATIONS AND WARRANTIES..............................................10
SECTION 5.02. IFC RELIANCE................................................................11
SECTION 5.03. RIGHTS AND REMEDIES NOT LIMITED.............................................11
ARTICLE VI.....................................................................................13
COVENANTS......................................................................................13
SECTION 6.01. GUARANTOR'S COVENANTS.......................................................13
ARTICLE VII....................................................................................14
MISCELLANEOUS..................................................................................14
SECTION 7.01. NOTICES.....................................................................14
SECTION 7.02. ENGLISH LANGUAGE............................................................16
SECTION 7.03. EXPENSES....................................................................16
SECTION 7.04. REMEDIES AND WAIVERS........................................................16
SECTION 7.05. JURISDICTION AND ENFORCEMENT................................................16
SECTION 7.06. CONFIDENTIAL INFORMATION....................................................19
SECTION 7.07. SUCCESSORS AND ASSIGNS......................................................19
SECTION 7.08. AMENDMENT...................................................................19
SECTION 7.09. COUNTERPARTS................................................................20
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GUARANTEE AGREEMENT
GUARANTEE AGREEMENT DATED DECEMBER 17, 1998, BETWEEN CANARGO ENERGY
CORPORATION (THE "GUARANTOR") AND INTERNATIONAL FINANCE CORPORATION ("IFC").
WHEREAS:
(A) BY A CONVERTIBLE LOAN AGREEMENT (THE "CONVERTIBLE
LOAN AGREEMENT") DATED AS OF THE DATE HEREOF, BETWEEN IFC AND
NINOTSMINDA OIL COMPANY (THE "COMPANY"), IFC HAS AGREED TO
EXTEND TO THE COMPANY A CONVERTIBLE LOAN (THE "LOAN") IN THE
PRINCIPAL AMOUNT OF SIX MILLION DOLLARS ($6,000,000), ON THE
TERMS AND SUBJECT TO THE CONDITIONS SET FORTH IN THE
CONVERTIBLE LOAN AGREEMENT.
(B) THE GUARANTOR HAS BEEN PROVIDED WITH, AND HEREBY
ACKNOWLEDGES RECEIPT OF, A CONFORMED COPY OF THE CONVERTIBLE
LOAN AGREEMENT.
(C) BY VIRTUE OF SECTION 6.01(D) OF THE CONVERTIBLE
LOAN AGREEMENT, IT IS A CONDITION OF THE INITIAL DISBURSEMENT
OF THE LOAN THAT THE GUARANTOR HAS GUARANTEED THE OBLIGATIONS
OF THE COMPANY IN RESPECT OF THE LOAN ON TERMS AND CONDITIONS
SATISFACTORY TO IFC.
(D) THE GUARANTOR WILL OBTAIN BENEFITS AS A RESULT OF
THE LOAN MADE TO THE COMPANY UNDER THE CONVERTIBLE LOAN
AGREEMENT AND, ACCORDINGLY, DESIRES TO EXECUTE AND DELIVER
THIS GUARANTEE IN ORDER TO SATISFY THE CONDITION DESCRIBED IN
THE PRECEDING PARAGRAPH.
(E) THE GUARANTOR, TO INDUCE IFC TO MAKE THE LOAN
AND, IN PARTICULAR, THE FIRST DISBURSEMENT OF THE LOAN, HAS
AGREED TO GUARANTEE SUCH OBLIGATIONS OF THE COMPANY.
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
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ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.01. DEFINED TERMS. TERMS DEFINED IN THE CONVERTIBLE
LOAN AGREEMENT HAVE THE SAME MEANINGS WHEN USED IN THIS GUARANTEE,
UNLESS THE CONTEXT OTHERWISE REQUIRES.
SECTION 1.02. GUARANTEED OBLIGATIONS. IN THIS GUARANTEE:
(A) THE TERM "GUARANTEED OBLIGATIONS" MEANS ALL DEBTS AND MONETARY
LIABILITIES OF THE COMPANY TO IFC UNDER OR IN RELATION TO THE CONVERTIBLE LOAN
AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT AND IN ANY CAPACITY IRRESPECTIVE OF
WHETHER THE DEBTS OR LIABILITIES:
(I) ARE PRESENT OR FUTURE;
(II) ARE ACTUAL, PROSPECTIVE, CONTINGENT OR OTHERWISE;
(III) ARE AT ANY TIME ASCERTAINED OR UNASCERTAINED;
(IV) ARE OWED OR INCURRED AS PRINCIPAL, INTEREST, FEES,
CHARGES, TAXES, DUTIES OR OTHER IMPOSTS, DAMAGES (WHETHER FOR BREACH
OF CONTRACT OR TORT OR INCURRED ON ANY OTHER GROUND), LOSSES, COSTS
OR EXPENSES, OR ON ANY OTHER ACCOUNT;
(V) ARE OWED AT STATED MATURITY, UPON PREPAYMENT, FOLLOWING
ACCELERATION, OR OTHERWISE, OR
(VI) COMPRISE ANY COMBINATION OF THE ABOVE; AND
(B) THE TERM "THIS GUARANTEE" INCLUDES THE INDEMNITY SET FORTH IN
ARTICLE IV.
(C) THE TERM "PRO-RATA SHARE" MEANS A PERCENTAGE OF THE GUARANTEED
OBLIGATIONS BASED ON THE GUARANTOR'S PRO-RATA OWNERSHIP INTEREST IN THE COMPANY.
SECTION 1.03. INTERPRETATION IN THIS AGREEMENT, UNLESS THE CONTEXT
OTHERWISE REQUIRES:
(A) HEADINGS ARE FOR CONVENIENCE ONLY AND DO NOT AFFECT THE
INTERPRETATION OF THIS AGREEMENT;
(B) WORDS IMPORTING THE SINGULAR INCLUDE THE PLURAL AND VICE VERSA;
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(C) AN EXPRESSION IMPORTING A NATURAL PERSON INCLUDES ANY COMPANY,
PARTNERSHIP, TRUST, JOINT VENTURE, ASSOCIATION, CORPORATION OR OTHER BODY
CORPORATE AND ANY GOVERNMENTAL OR SEMI GOVERNMENTAL AUTHORITY OR AGENCY,
(D) A REFERENCE TO A SECTION, ARTICLE, PARAGRAPH, PARTY, ANNEX,
EXHIBIT, OR SCHEDULE IS A REFERENCE TO A SECTION, ARTICLE AND PARAGRAPH OF, AND
A PARTY, ANNEX, EXHIBIT AND SCHEDULE TO, THIS AGREEMENT;
(E) A REFERENCE TO A DOCUMENT INCLUDES AN AMENDMENT OR SUPPLEMENT TO,
OR REPLACEMENT OR NOVATION OF, THAT DOCUMENT BUT DISREGARDING ANY AMENDMENT,
SUPPLEMENT, REPLACEMENT OR NOVATION MADE IN BREACH OF THIS AGREEMENT; AND
(F) A REFERENCE TO A PARTY TO ANY DOCUMENT INCLUDES THAT PARTY'S
SUCCESSORS AND PERMITTED ASSIGNS.
ARTICLE II
GUARANTEE
SECTION 2.01. GUARANTEE. THE GUARANTOR IRREVOCABLY, ABSOLUTELY AND
UNCONDITIONALLY:
(A) AS PRIMARY OBLIGOR AND NOT MERELY AS SURETY, GUARANTEES TO IFC THE
DUE AND PUNCTUAL PAYMENT OF THE GUARANTEED OBLIGATIONS, WHETHER AT STATED
MATURITY, UPON PREPAYMENT, FOLLOWING ACCELERATION OR OTHERWISE, AND AGREES TO
PAY ANY AND ALL EXPENSES (INCLUDING COUNSEL FEES AND EXPENSES) INCURRED BY IFC
IN ENFORCING ANY RIGHTS UNDER THIS GUARANTEE, UP TO AN AMOUNT EQUAL TO ITS
PRO-RATA SHARE; AND
(B) UNDERTAKES WITH IFC THAT WHENEVER THE COMPANY DOES NOT PAY ANY
AMOUNT OF THE GUARANTEED OBLIGATIONS WHEN DUE THE GUARANTOR WILL, IMMEDIATELY,
AND IN ANY EVENT FORTHWITH UPON DEMAND BY IFC, PAY SUCH AMOUNT, UP TO ITS
PRO-RATA SHARE, TO IFC, IN THE CURRENCY PRESCRIBED IN THE CONVERTIBLE LOAN
AGREEMENT OR THE RELEVANT TRANSACTION DOCUMENT, AND OTHERWISE IN THE SAME MANNER
IN ALL RESPECTS AS THE GUARANTEED OBLIGATIONS ARE REQUIRED TO BE PAID BY THE
COMPANY.
SECTION 2.02. CONTINUING GUARANTEE. (A) THE GUARANTEE AND THE
INDEMNITY CONTAINED IN THIS GUARANTEE IS EACH A CONTINUING OBLIGATION OF
THE GUARANTOR, AND SHALL REMAIN IN FULL FORCE AND EFFECT UNTIL THE
EARLIER OF:
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(I) THE GUARANTEED OBLIGATIONS HAVE BEEN FULLY PAID STRICTLY
IN ACCORDANCE WITH THE PROVISIONS OF THE CONVERTIBLE LOAN AGREEMENT
AND THE TRANSACTION DOCUMENTS; OR
(II) THE FINANCIAL COMPLETION DATE.
(B) THE GUARANTEE AND THE INDEMNITY CONTAINED IN THIS GUARANTEE SHALL
BE ADDITIONAL, SEPARATE AND INDEPENDENT OBLIGATIONS OF THE GUARANTOR.
(C) THE GUARANTEE AND THE INDEMNITY CONTAINED IN THIS GUARANTEE SHALL
SURVIVE THE TERMINATION OF ANY TRANSACTION DOCUMENT.
(D) THE GUARANTOR'S OBLIGATIONS UNDER THIS GUARANTEE CAN BE DISCHARGED
ONLY BY PERFORMANCE AND THEN ONLY TO THE EXTENT OF SUCH PERFORMANCE. THE
GUARANTOR'S OBLIGATIONS ARE NOT SUBJECT TO, AND THE GUARANTOR HEREBY WAIVES THE
REQUIREMENT FOR, ANY PRIOR NOTICE TO, PROTEST, DEMAND UPON OR ACTION AGAINST THE
COMPANY, OR ANY PRIOR NOTICE TO THE GUARANTOR WITH REGARD TO ANY DEFAULT BY THE
COMPANY.
(E) THIS GUARANTEE SHALL CONTINUE TO BE EFFECTIVE, OR BE REINSTATED, AS
THE CASE MAY BE, IF AT ANY TIME ANY PAYMENT OF A GUARANTEED OBLIGATION IS
RESCINDED OR MUST OTHERWISE BE RETURNED BY IFC OR ANY OTHER PERSON AS A RESULT
OF A COURT ORDER OR OTHERWISE UPON THE INSOLVENCY, BANKRUPTCY OR REORGANIZATION
OF ANY PERSON, AS THOUGH SUCH PAYMENT HAD NOT BEEN MADE.
SECTION 2.03. NO SET-OFF. ALL PAYMENTS WHICH THE GUARANTOR IS
REQUIRED TO MAKE UNDER THIS GUARANTEE SHALL BE WITHOUT ANY SET-OFF,
COUNTERCLAIM OR CONDITION.
SECTION 2.04. TAXES. (A) THE GUARANTOR SHALL PAY OR CAUSE TO BE PAID
ALL PRESENT AND FUTURE TAXES, DUTIES, FEES AND OTHER CHARGES OF WHATSOEVER
NATURE, IF ANY, NOW OR IN THE FUTURE LEVIED OR IMPOSED BY CANADA OR GEORGIA OR
BY ANY AUTHORITY OF EITHER OF THE FOREGOING, OR BY ANY ORGANIZATION OF WHICH
EITHER OF THE FOREGOING IS A MEMBER OR ANY JURISDICTION THROUGH OR OUT OF WHICH
A PAYMENT IS MADE ON OR IN CONNECTION WITH THE PAYMENT OF ANY AND ALL AMOUNTS
DUE UNDER THIS GUARANTEE.
(B) ALL PAYMENTS DUE UNDER THIS GUARANTEE SHALL BE MADE WITHOUT
DEDUCTION FOR OR ON ACCOUNT OF ANY SUCH TAXES, DUTIES, FEES OR OTHER CHARGES.
(C) IF THE GUARANTOR IS PREVENTED BY OPERATION OF LAW OR OTHERWISE FROM
MAKING OR CAUSING TO BE MADE SUCH PAYMENTS WITHOUT DEDUCTION, THE AMOUNTS DUE
UNDER THIS GUARANTEE SHALL BE INCREASED, AND THE GUARANTOR SHALL PAY, SUCH
AMOUNT AS MAY BE NECESSARY SO THAT IFC RECEIVES THE FULL AMOUNT IT WOULD HAVE
RECEIVED (TAKING INTO ACCOUNT ANY SUCH TAXES, DUTIES, FEES OR OTHER CHARGES
PAYABLE ON AMOUNTS PAYABLE BY THE GUARANTOR UNDER THIS SUBSECTION) HAD SUCH
PAYMENTS BEEN MADE WITHOUT SUCH DEDUCTION.
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(D) IF SUBSECTION (C) ABOVE APPLIES AND IFC SO REQUIRES, THE GUARANTOR
SHALL DELIVER TO IFC OFFICIAL TAX RECEIPTS EVIDENCING PAYMENT (OR CERTIFIED
COPIES OF THEM) WITHIN THIRTY (30) DAYS OF THE DATE OF PAYMENT.
SECTION 2.05. CERTIFICATE CONCLUSIVE. A CERTIFICATE OF IFC STATING:
(A) THE AMOUNT OF THE GUARANTEED OBLIGATIONS DUE AND PAYABLE; OR
(B) ANY AMOUNT DUE AND PAYABLE BY THE GUARANTOR UNDER THIS GUARANTEE;
OR
(C) THE AMOUNT OF THE GUARANTEED OBLIGATIONS, WHETHER CURRENTLY DUE AND
PAYABLE OR NOT,
SHALL BE CONCLUSIVE IN THE ABSENCE OF MANIFEST ERROR.
SECTION 2.06. APPLICATION OF PAYMENTS. IFC MAY APPLY ANY AMOUNTS
RECEIVED BY IT OR RECOVERED UNDER:
(A) ANY IFC SECURITY; AND
(B) ANY OTHER DOCUMENT OR AGREEMENT WHICH IS A SECURITY FOR ANY OF THE
GUARANTEED OBLIGATIONS AND ANY OTHER MONEYS, IN SUCH MANNER AS IT DETERMINES IN
ITS ABSOLUTE DISCRETION.
SECTION 2.07. ALLOCATION. IF THE GUARANTOR AT ANY TIME PAYS TO IFC AN
AMOUNT LESS THAN THE FULL AMOUNT THEN DUE AND PAYABLE TO IFC UNDER THIS
GUARANTEE, IFC MAY ALLOCATE AND APPLY SUCH PAYMENT IN ANY WAY OR MANNER AND FOR
SUCH PURPOSE OR PURPOSES AS IFC IN ITS SOLE DISCRETION DETERMINES,
NOTWITHSTANDING ANY INSTRUCTION THAT THE GUARANTOR MIGHT GIVE TO THE CONTRARY.
ARTICLE III
SAVING PROVISIONS
SECTION 3.01. INCREASE IN GUARANTEED OBLIGATIONS. THE OBLIGATIONS OF
THE GUARANTOR UNDER THIS GUARANTEE SHALL EXTEND TO ANY INCREASE IN THE
GUARANTEED OBLIGATIONS AS A RESULT OF:
(A) ANY AMENDMENT, SUPPLEMENT, RENEWAL OR REPLACEMENT OF ANY
TRANSACTION DOCUMENT; OR
(B) THE OCCURRENCE OF ANY OTHER THING; AND
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(C) REGARDLESS OF WHETHER THE GUARANTOR IS AWARE OF, CONSENTED TO OR IS
GIVEN NOTICE OF ANY ALTERATION, VARIATION, AMENDMENT, SUPPLEMENT, RENEWAL OR
REPLACEMENT OF ANY TRANSACTION DOCUMENT OR THE OCCURRENCE OF SUCH OTHER THING.
SECTION 3.02. WAIVER OF DEFENSES. THE GUARANTOR'S OBLIGATIONS UNDER
THIS GUARANTEE SHALL BE IRREVOCABLE, ABSOLUTE AND UNCONDITIONAL, IRRESPECTIVE
OF, AND SHALL NOT BE AFFECTED OR IMPAIRED BY, ANY ACT, OMISSION, CIRCUMSTANCE
(OTHER THAN COMPLETE PAYMENT OF THE GUARANTEED OBLIGATIONS), MATTER OR THING
WHICH, BUT FOR THIS PROVISION, WOULD REDUCE, RELEASE OR PREJUDICE ANY OF ITS
OBLIGATIONS UNDER THIS GUARANTEE OR WHICH MIGHT OTHERWISE CONSTITUTE A LEGAL OR
EQUITABLE DISCHARGE OR DEFENSE OF A SURETY OR A GUARANTOR, INCLUDING (WHETHER OR
NOT KNOWN TO THE GUARANTOR OR TO IFC):
(A) ANY TIME, WAIVER, COMPOSITION, FORBEARANCE OR CONCESSION GIVEN TO
THE COMPANY OR ANY OTHER PERSON;
(B) ANY ASSERTION OF, OR FAILURE TO ASSERT, OR DELAY IN ASSERTING, ANY
RIGHT, POWER OR REMEDY AGAINST THE COMPANY OR ANY OTHER PERSON, OR IN RESPECT OF
ANY SECURITY FOR THE LOAN;
(C) ANY TAKING, EXCHANGE, RELEASE OR NON-PERFECTION OF THE IFC
SECURITY, OR ANY TAKING, RELEASE OR AMENDMENT OR WAIVER OF OR CONSENT TO
DEPARTURE FROM ANY OTHER GUARANTY, FOR ALL OR ANY OF THE GUARANTEED OBLIGATIONS;
(D) ANY MANNER OF APPLICATION OF THE IFC SECURITY, OR PROCEEDS THEREOF,
TO ALL OR ANY OF THE GUARANTEED OBLIGATIONS, OR ANY MANNER OF SALE OR OTHER
DISPOSITION OF ANY COLLATERAL FOR ALL OR ANY OF THE GUARANTEED OBLIGATIONS UNDER
THE TRANSACTION DOCUMENTS;
(E) ANY AMPLIFICATION, AMENDMENT (HOWEVER FUNDAMENTAL), VARIATION OR
REPLACEMENT OF THE PROVISIONS OF ANY TRANSACTION DOCUMENT OR OF ANY OTHER
AGREEMENT OR SECURITY BETWEEN IFC AND THE COMPANY;
(F) ANY FAILURE OF THE COMPANY OR THE GUARANTOR TO COMPLY WITH ANY
REQUIREMENT OF ANY LAW, REGULATION OR ORDER;
(G) ANY CHANGE, RESTRUCTURING, REORGANIZATION OR TERMINATION OF THE
LEGAL STATUS OR STRUCTURE OF THE COMPANY OR THE GUARANTOR;
(H) THE OCCURRENCE AND/OR CONTINUANCE OF ANY BANKRUPTCY,
REORGANIZATION, ARRANGEMENT, ADJUSTMENT OF DEBT, RELIEF OF DEBTORS, DISSOLUTION,
INSOLVENCY, LIQUIDATION OR SIMILAR PROCEEDINGS WITH RESPECT TO THE COMPANY OR
THE GUARANTOR;
(I) ANY PURPORTED OR ACTUAL ASSIGNMENT OF THE LOAN BY IFC TO ANY OTHER
PARTY; OR
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(J) THE CONVERTIBLE LOAN AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT
BEING IN WHOLE OR IN PART ILLEGAL, VOID, VOIDABLE, AVOIDED, INVALID,
UNENFORCEABLE OR OTHERWISE OF LIMITED FORCE AND EFFECT.
SECTION 3.03. IMMEDIATE RECOURSE. THE GUARANTOR WAIVES ANY RIGHT IT MAY
HAVE OF FIRST REQUIRING IFC (OR ANY TRUSTEE, AGENT OR OTHER PERSON ACTING ON ITS
BEHALF) TO PROCEED AGAINST OR ENFORCE ANY OTHER RIGHTS OR SECURITY OR CLAIM
PAYMENT FROM ANY PERSON BEFORE CLAIMING FROM THE GUARANTOR UNDER THIS GUARANTEE.
SECTION 3.04. SUBROGATION. IF ANY AMOUNTS HAVE BECOME PAYABLE OR HAVE
BEEN PAID BY THE GUARANTOR UNDER THIS GUARANTEE, THE GUARANTOR SHALL NOT, IN
RESPECT OF SUCH MONIES, SEEK TO ENFORCE REPAYMENT, OBTAIN THE BENEFIT OF ANY
SECURITY OR EXERCISE ANY OTHER RIGHTS OR LEGAL REMEDIES OF ANY KIND WHICH MAY
ACCRUE TO THE GUARANTOR AGAINST THE COMPANY, WHETHER BY WAY OF SUBROGATION,
OFFSET, COUNTERCLAIM OR OTHERWISE, WHETHER OR NOT SUCH RIGHTS OR LEGAL REMEDY
ARISE IN EQUITY OR UNDER CONTRACT, STATUTE OR COMMON LAW, IN RESPECT OF THE
AMOUNT SO PAYABLE OR SO PAID (OR IN RESPECT OF ANY OTHER MONIES FOR THE TIME
BEING DUE TO THE GUARANTOR FROM THE COMPANY) IF AND FOR SO LONG AS (I) ANY
MONIES WHICH HAVE BECOME PAYABLE TO IFC UNDER THE CONVERTIBLE LOAN AGREEMENT OR
ANY OTHER TRANSACTION DOCUMENT REMAIN UNPAID, OR (II) ANY OTHER EVENT OF DEFAULT
(OR EVENT WHICH WITH NOTICE, LAPSE OF TIME OR BOTH WOULD BECOME AN EVENT OF
DEFAULT) IS IN EXISTENCE. THE GUARANTOR SHALL HOLD IN TRUST FOR, AND FORTHWITH
PAY OR TRANSFER TO, IFC ANY PAYMENT OR DISTRIBUTION OR BENEFIT OF SECURITY
RECEIVED BY IT CONTRARY TO THIS SECTION 3.04.
SECTION 3.05. BANKRUPTCY OR LIQUIDATION OF COMPANY. IF THE COMPANY
BECOMES BANKRUPT, ENTERS INTO A COMPOSITION OR MAKES ANY ARRANGEMENT WITH ITS
CREDITORS, OR IS DISSOLVED, LIQUIDATED OR WOUND UP, THE GUARANTOR SHALL NOT
CLAIM, RANK, PROVE OR VOTE AS A CREDITOR OF THE COMPANY OR ITS ESTATE IN
COMPETITION WITH IFC IN RESPECT OF ANY AMOUNTS OWING TO THE GUARANTOR BY THE
COMPANY ON ANY ACCOUNT WHATSOEVER, BUT INSTEAD SHALL GIVE IFC THE BENEFIT OF ANY
SUCH PROOF AND OF ALL AMOUNTS TO BE RECEIVED IN RESPECT OF THAT PROOF UNTIL ALL
GUARANTEED OBLIGATIONS HAVE BEEN FULLY PAID. THE GUARANTOR SHALL HOLD IN TRUST
FOR, AND FORTHWITH PAY OR TRANSFER TO, IFC ANY PAYMENT OR DISTRIBUTION OR
BENEFIT OF SECURITY RECEIVED BY IT CONTRARY TO THIS SECTION 3.05.
SECTION 3.06. APPROPRIATION OF MONEYS. UNTIL ALL OF THE GUARANTEED
OBLIGATIONS HAVE BEEN IRREVOCABLY PAID IN FULL, IFC (OR ANY TRUSTEE, AGENT OR
OTHER PERSON ACTING ON ITS BEHALF) MAY:
(A) REFRAIN FROM APPLYING OR ENFORCING ANY OTHER MONEYS, SECURITY OR
RIGHTS HELD OR RECEIVED BY IFC (OR SUCH TRUSTEE, AGENT OR OTHER PERSON) IN
RESPECT OF THE GUARANTEED OBLIGATIONS, OR APPLY AND ENFORCE THE SAME IN SUCH
MANNER AND ORDER AS IT SEES FIT (WHETHER AGAINST THE GUARANTEED OBLIGATIONS OR
OTHERWISE) AND THE GUARANTOR SHALL NOT BE ENTITLED TO THE BENEFIT OF THE SAME;
AND
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(B) HOLD AND KEEP FOR SUCH TIME AS IT THINKS PRUDENT ANY MONIES
RECEIVED, RECOVERED OR REALIZED UNDER THIS GUARANTEE, TO THE CREDIT EITHER OF
THE GUARANTOR OR SUCH OTHER PERSON OR PERSONS AS IT THINKS FIT.
SECTION 3.07. RESTRUCTURING. (A) IFC SHALL, WITHOUT THE CONSENT OF THE
GUARANTOR, BE ENTITLED TO RESCHEDULE OR RESTRUCTURE PRINCIPAL, INTEREST AND
OTHER AMOUNTS PAYABLE UNDER THE CONVERTIBLE LOAN AGREEMENT, TO RELEASE THE
COMPANY FROM ITS OBLIGATIONS THEREUNDER AND/OR TO ACCEPT A NEW DEBTOR. THE
GUARANTOR'S LIABILITY UNDER THIS GUARANTY SHALL NOT BE AFFECTED BY SUCH
MEASURES, AND THE GUARANTOR UNDERTAKES TO PAY IFC IN ACCORDANCE WITH THE TERMS
HEREOF, ALL SUCH AMOUNTS IN FULL WHEN DUE.
(B) IFC (OR ANY TRUSTEE, AGENT OR OTHER PERSON ACTING ON ITS BEHALF)
MAY CONCEDE OR COMPROMISE ANY CLAIM THAT ANY PAYMENT, SECURITY OR OTHER
DISPOSITION IS LIABLE TO AVOIDANCE OR RESTORATION.
SECTION 3.08. ADDITIONAL SECURITY. THIS GUARANTEE IS IN ADDITION TO AND
IS NOT IN ANY WAY PREJUDICED BY ANY OTHER COMPONENT OF THE IFC SECURITY, OR ANY
COLLATERAL OR OTHER SECURITY NOW OR HEREAFTER HELD BY IFC, NOR SHALL SUCH
COLLATERAL OR OTHER SECURITY HELD BY IFC OR THE LIABILITY OF ANY PERSON FOR ALL
OR ANY PART OF THE GUARANTEED OBLIGATIONS BE IN ANY MANNER PREJUDICED OR
AFFECTED BY THIS GUARANTEE.
ARTICLE IV
INDEMNITY
SECTION 4.01. INDEMNITY. (A) IF ANY OF THE GUARANTEED OBLIGATIONS
ARE IRRECOVERABLE FROM THE COMPANY, OR NOT RECOVERABLE BY IFC FROM
THE GUARANTOR ON THE BASIS OF A GUARANTEE, THEN THE GUARANTOR:
(I) SHALL PAY TO IFC AN AMOUNT EQUAL TO THE GUARANTEED
OBLIGATIONS UP TO ITS PRO-RATA SHARE; AND
(II) SHALL INDEMNIFY IFC AGAINST ANY CLAIM, ACTION, DAMAGE,
LOSS, LIABILITY, COST, CHARGE AND EXPENSE, OUTGOING OR PAYMENT
SUFFERED, PAID OR INCURRED BY IFC IN RELATION TO THE NON-PAYMENT OF
THE GUARANTEED OBLIGATIONS UP TO ITS PRO-RATA SHARE.
(B) PARAGRAPH (A) ABOVE APPLIES TO ANY GUARANTEED OBLIGATIONS WHICH ARE
OR MAY BE IRRECOVERABLE IRRESPECTIVE OF WHETHER:
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(I) THEY ARE OR MAY BE IRRECOVERABLE BY REASON OF ANY EVENT
DESCRIBED IN SECTION 4.01; OR
(II) THE TRANSACTIONS OR ANY OF THEM RELATING TO THOSE MONEYS
ARE VOID OR ILLEGAL OR AVOIDED OR OTHERWISE UNENFORCEABLE; OR
(III) THEY ARE OR MAY BE IRRECOVERABLE BY REASON OF ANY OTHER
FACT OR CIRCUMSTANCE WHATSOEVER; OR
(IV) ANY OTHER MATTERS RELATING TO THE GUARANTEED OBLIGATIONS
ARE OR SHOULD HAVE BEEN WITHIN THE KNOWLEDGE OF IFC.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.01. REPRESENTATIONS AND WARRANTIES. THE GUARANTOR REPRESENTS
AND WARRANTS THAT AS OF THE DATE OF THIS GUARANTEE:
(A) IT IS A COMPANY DULY ORGANIZED, VALIDLY EXISTING, AND IN GOOD
STANDING UNDER THE LAWS OF ITS JURISDICTION OF INCORPORATION, AND HAS THE
CORPORATE POWER TO ENTER INTO AND DELIVER AND TO PERFORM ITS OBLIGATIONS UNDER
THIS GUARANTEE;
(B) THE EXECUTION AND DELIVERY BY IT OF THIS GUARANTEE AND THE
PERFORMANCE BY IT OF ITS OBLIGATIONS HEREUNDER HAVE BEEN DULY AUTHORIZED;
(C) THIS GUARANTEE HAS BEEN DULY EXECUTED BY IT AND CONSTITUTES ITS
VALID AND LEGALLY BINDING OBLIGATIONS ENFORCEABLE IN ACCORDANCE WITH ITS TERMS
AND WOULD BE SO TREATED IN THE COURTS OF ITS PLACE OF INCORPORATION AND ANY
OTHER JURISDICTION TO WHICH THE GUARANTOR HAS AGREED TO SUBMIT IN THIS
GUARANTEE;
(D) NEITHER THE EXECUTION AND DELIVERY BY IT OF THIS GUARANTEE NOR THE
PERFORMANCE BY IT OF ITS OBLIGATIONS UNDER THIS GUARANTEE CONFLICTS OR WILL
CONFLICT WITH OR RESULT IN ANY BREACH OF ANY OF THE TERMS, CONDITIONS OR
PROVISIONS OF, OR VIOLATE OR CONSTITUTE A DEFAULT OR REQUIRE ANY CONSENT UNDER:
(I) ANY INDENTURE, MORTGAGE, CONTRACT, AGREEMENT OR OTHER
INSTRUMENT OR ARRANGEMENT TO WHICH IT IS A PARTY OR WHICH PURPORTS
TO BE BINDING UPON IT OR ANY OF ITS PROPERTY OR ASSETS, AND WILL NOT
RESULT IN THE IMPOSITION OR CREATION OF ANY LIEN, CHARGE, OR
ENCUMBRANCE ON, OR SECURITY
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INTEREST IN, ANY PART THEREOF PURSUANT TO THE PROVISIONS OF ANY SUCH
AGREEMENT, INSTRUMENT OR ARRANGEMENT; OR
(II) ANY OF THE TERMS OR PROVISIONS OF ITS MEMORANDUM AND
ARTICLES OF ASSOCIATION; OR
(III) ANY STATUTE, RULE OR REGULATION OR ANY JUDGEMENT, DECREE
OR ORDER OF ANY COURT, GOVERNMENTAL AUTHORITY, BUREAU OR AGENCY
BINDING ON OR APPLICABLE TO IT; AND
(E) ALL AUTHORIZATIONS REQUIRED FOR THE EXECUTION AND DELIVERY OF THIS
GUARANTEE BY IT AND THE PERFORMANCE BY IT OF ITS OBLIGATIONS HEREUNDER, HAVE
BEEN DULY OBTAINED OR GRANTED AND ARE IN FULL FORCE AND EFFECT.
SECTION 5.02. IFC RELIANCE. (A) THE GUARANTOR ACKNOWLEDGES THAT IT
MAKES THE REPRESENTATIONS IN SECTION 5.01 WITH THE INTENTION OF INDUCING IFC TO
ENTER INTO THIS AGREEMENT AND THE CONVERTIBLE LOAN AGREEMENT AND THAT IFC ENTERS
INTO THIS AGREEMENT AND THE CONVERTIBLE LOAN AGREEMENT ON THE BASIS OF, AND IN
FULL RELIANCE ON, EACH OF SUCH REPRESENTATIONS.
(B) THE GUARANTOR WARRANTS TO IFC THAT EACH OF SUCH REPRESENTATIONS IS
TRUE AND CORRECT IN ALL MATERIAL RESPECTS AS OF THE DATE OF THIS AGREEMENT AND
THAT NONE OF THEM OMITS OR MISSTATES ANY MATTER THE OMISSION OR MISSTATEMENT OF
WHICH MAKES ANY OF SUCH REPRESENTATIONS MISLEADING.
SECTION 5.03. RIGHTS AND REMEDIES NOT LIMITED. IFC'S RIGHTS AND
REMEDIES IN RELATION TO ANY MISREPRESENTATION OR BREACH OF WARRANTY ON
THE PART OF THE GUARANTOR ARE NOT PREJUDICED:
(A) BY ANY INVESTIGATION BY OR ON BEHALF OF IFC INTO THE AFFAIRS OF THE
GUARANTOR;
(B) BY THE EXECUTION OR THE PERFORMANCE OF THIS AGREEMENT; OR
(C) BY ANY OTHER ACT OR THING WHICH MAY BE DONE BY OR ON BEHALF OF IFC
IN CONNECTION WITH THIS AGREEMENT AND WHICH MIGHT, APART FROM THIS SECTION,
PREJUDICE SUCH RIGHTS OR REMEDIES.
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ARTICLE VI
COVENANTS
SECTION 6.01. GUARANTOR'S COVENANTS. THE GUARANTOR SHALL:
(A) WHEN REQUESTED BY IFC, DO OR CAUSE TO BE DONE ANYTHING WHICH AIDS
THE EXERCISE OF ANY POWER, RIGHT OR REMEDY OF IFC UNDER THIS GUARANTEE
INCLUDING, BUT NOT LIMITED TO, THE EXECUTION OF ANY DOCUMENT OR AGREEMENT;
(B) OBTAIN, MAINTAIN AND RENEW WHEN NECESSARY ALL AUTHORIZATIONS
REQUIRED UNDER ANY LAW OR DOCUMENT OR AGREEMENT:
(I) TO ENABLE IT TO PERFORM ITS OBLIGATIONS UNDER THIS
GUARANTEE; OR
(II) FOR THE VALIDITY OR ENFORCEABILITY OF THE GUARANTEE;
(C) COMPLY IN ALL RESPECTS WITH THE TERMS OF THE AUTHORIZATIONS
REFERRED TO IN PARAGRAPH (B) ABOVE;
(D) AS SOON AS AVAILABLE, BUT, IN ANY EVENT, WITHIN FORTY FIVE (45)
DAYS AFTER THE END OF EACH QUARTER OF EACH FISCAL YEAR, FURNISH TO IFC:
(I) TWO (2) COPIES OF ITS FINANCIAL STATEMENTS FOR SUCH PERIOD
PREPARED IN ACCORDANCE WITH UNITED STATES GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES AND CONSISTENTLY APPLIED; AND
(II) A REPORT ON ANY FACTORS MATERIALLY AND ADVERSELY
AFFECTING OR WHICH ARE LIKELY TO MATERIALLY AND ADVERSELY AFFECT ITS
BUSINESS AND OPERATIONS OR FINANCIAL CONDITION; AND
(E) AS SOON AS AVAILABLE, BUT, IN ANY EVENT, WITHIN ONE HUNDRED AND
TWENTY (120) DAYS AFTER THE END OF EACH FISCAL YEAR, FURNISH TO IFC:
(I) TWO (2) COPIES OF THE ITS FINANCIAL STATEMENTS FOR SUCH
FISCAL YEAR (WHICH ARE IN AGREEMENT WITH ITS BOOKS OF ACCOUNT AND
PREPARED IN ACCORDANCE WITH UNITED STATES GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES CONSISTENTLY APPLIED), TOGETHER WITH AN AUDIT
REPORT ON THEM, ALL IN FORM SATISFACTORY TO IFC; AND
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(II) A REPORT ON ANY FACTORS MATERIALLY AND ADVERSELY
AFFECTING OR WHICH ARE LIKELY TO MATERIALLY AND ADVERSELY AFFECT ITS
BUSINESS AND OPERATIONS OR FINANCIAL CONDITION.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. NOTICES. ANY NOTICE, REQUEST OR OTHER COMMUNICATION TO BE
GIVEN OR MADE UNDER THIS GUARANTEE SHALL BE IN WRITING. THE NOTICE, REQUEST OR
OTHER COMMUNICATION MAY BE DELIVERED BY HAND, AIRMAIL, FACSIMILE, OR TELEX TO
THE PARTY'S ADDRESS SPECIFIED BELOW OR AT SUCH OTHER ADDRESS AS SUCH PARTY
NOTIFIES TO THE OTHER PARTY FROM TIME TO TIME AND WILL BE EFFECTIVE UPON
RECEIPT.
FOR THE GUARANTOR:
CANARGO ENERGY CORPORATION
X.X. XXX 000
COMMERCE HOUSE, LES BANQUES
XX. XXXXX XXXX, XXXXXXXX, XX0 0XX
BRITISH ISLES
ATTENTION: CHAIRMAN
FACSIMILE: 44-1481-729-982
WITH A COPY SENT TO:
CANARGO ENERGY CORPORATION
XXXXX 0000, 000 - 0XX XXXXXX X.X.
XXXXXXX, XXXXXXX, XXXXXX
X0X 0X0
ATTENTION: PRESIDENT
FACSIMILE: (000) 000-0000
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FOR IFC:
INTERNATIONAL FINANCE CORPORATION
0000 XXXXXXXXXXXX XXXXXX, X.X.
XXXXXXXXXX, X.X. 00000
XXXXXX XXXXXX OF AMERICA
ATTENTION: DIRECTOR, OIL, GAS AND MINING DEPARTMENT
FACSIMILE: (000) 000-0000
WITH A COPY (IN THE CASE OF NOTICES RELATING TO PAYMENTS) TO:
MANAGER, ACCOUNTING DIVISION
FACSIMILE: (000) 000-0000
SECTION 7.02. ENGLISH LANGUAGE. ALL DOCUMENTS TO BE FURNISHED OR
COMMUNICATIONS TO BE GIVEN OR MADE UNDER THIS GUARANTEE SHALL BE IN THE ENGLISH
LANGUAGE OR, IF IN ANOTHER LANGUAGE, SHALL BE ACCOMPANIED BY A TRANSLATION INTO
ENGLISH SATISFACTORY TO IFC CERTIFIED BY A REPRESENTATIVE OF THE GUARANTOR,
WHICH TRANSLATION SHALL BE THE GOVERNING VERSION BETWEEN THE GUARANTOR AND IFC.
SECTION 7.03. EXPENSES. THE GUARANTOR SHALL PAY TO IFC OR AS IFC MAY
DIRECT THE COSTS AND EXPENSES INCURRED BY IFC IN RELATION TO THE ENFORCEMENT OR
PROTECTION OR ATTEMPTED ENFORCEMENT OR PROTECTION OF ITS RIGHTS UNDER THIS
GUARANTEE, INCLUDING LEGAL AND OTHER PROFESSIONAL CONSULTANTS' FEES AND EXPENSES
ON A FULL INDEMNITY BASIS.
SECTION 7.04. REMEDIES AND WAIVERS. NO FAILURE OR DELAY BY IFC IN
EXERCISING ANY POWER, REMEDY, DISCRETION, AUTHORITY OR OTHER RIGHTS UNDER THIS
GUARANTEE SHALL WAIVE OR IMPAIR THAT OR ANY OTHER RIGHT OF IFC. NO SINGLE OR
PARTIAL EXERCISE OF SUCH A RIGHT SHALL PRECLUDE ITS ADDITIONAL OR FUTURE
EXERCISE. NO SUCH WAIVER SHALL WAIVE ANY OTHER RIGHT UNDER THIS GUARANTEE. ALL
WAIVERS OR CONSENTS GIVEN UNDER THIS GUARANTEE SHALL BE IN WRITING.
SECTION 7.05. JURISDICTION AND ENFORCEMENT. (A) THIS AGREEMENT IS
GOVERNED BY, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, UNITED STATES OF AMERICA.
(B) THE GUARANTOR IRREVOCABLY AGREES THAT ANY LEGAL ACTION, SUIT OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER TRANSACTION
DOCUMENT TO WHICH IT IS A PARTY MAY BE BROUGHT BY IFC IN THE COURTS OF THE STATE
OF NEW YORK OR OF THE UNITED STATES OF AMERICA LOCATED IN THE SOUTHERN DISTRICT
OF NEW YORK. FINAL JUDGMENT AGAINST THE GUARANTOR IN ANY SUCH
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ACTION, SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER
JURISDICTION, BY SUIT ON THE JUDGMENT, A CERTIFIED OR EXEMPLIFIED COPY OF WHICH
SHALL BE CONCLUSIVE EVIDENCE OF THE JUDGMENT, OR IN ANY OTHER MANNER PROVIDED BY
LAW.
(C) BY THE EXECUTION AND DELIVERY OF THIS AGREEMENT, THE GUARANTOR
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY SUCH COURT IN ANY
SUCH ACTION, SUIT OR PROCEEDING AND DESIGNATES, APPOINTS AND EMPOWERS AS ITS
AUTHORIZED AGENT TO RECEIVE FOR AND ON ITS BEHALF SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH ACTION, SUIT OR PROCEEDING IN THE
STATE OF NEW YORK.
(D) NOTHING IN THIS AGREEMENT SHALL AFFECT THE RIGHT OF IFC TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE XXX THE GUARANTOR IN ANY JURISDICTION, OR
CONCURRENTLY IN MORE THAN ONE JURISDICTION, OR TO SERVE PROCESS, PLEADINGS AND
OTHER LEGAL PAPERS UPON THE GUARANTOR IN ANY MANNER AUTHORIZED BY THE LAWS OF
ANY SUCH JURISDICTION.
(E) AS LONG AS THIS AGREEMENT REMAINS IN FORCE, THE GUARANTOR SHALL
MAINTAIN A DULY APPOINTED AGENT FOR THE SERVICE OF SUMMONS, COMPLAINT AND OTHER
LEGAL PROCESS IN NEW YORK, NEW YORK, UNITED STATES OF AMERICA, FOR PURPOSES OF
ANY LEGAL ACTION, SUIT OR PROCEEDING IFC MAY BRING IN RESPECT OF THIS AGREEMENT
OR ANY OTHER TRANSACTION DOCUMENT TO WHICH THE GUARANTOR IS A PARTY. THE
GUARANTOR SHALL KEEP IFC ADVISED OF THE IDENTITY AND LOCATION OF SUCH AGENT.
(F) THE GUARANTOR ALSO IRREVOCABLY CONSENTS, IF FOR ANY REASON THE
GUARANTOR'S AUTHORIZED AGENT FOR SERVICE OF PROCESS OF SUMMONS, COMPLAINT AND
OTHER LEGAL PROCESS IN ANY SUCH ACTION, SUIT OR PROCEEDING IS NOT PRESENT IN NEW
YORK, NEW YORK, TO SERVICE OF SUCH PAPERS BEING MADE OUT OF THOSE COURTS BY
MAILING COPIES OF THE PAPERS BY REGISTERED UNITED STATES AIR MAIL, POSTAGE
PREPAID, TO THE GUARANTOR AT ITS ADDRESS SPECIFIED IN SECTION 7.01. IN SUCH A
CASE, IFC SHALL ALSO SEND BY TELEX OR FACSIMILE, OR HAVE SENT BY TELEX OR
FACSIMILE, A COPY OF THE PAPERS TO THE GUARANTOR.
(G) SERVICE IN THE MANNER PROVIDED IN SUBSECTION (F) ABOVE IN ANY SUCH
ACTION, SUIT OR PROCEEDING WILL BE DEEMED PERSONAL SERVICE, WILL BE ACCEPTED BY
THE GUARANTOR AS SUCH AND WILL BE VALID AND BINDING UPON THE GUARANTOR FOR ALL
PURPOSES OF ANY SUCH ACTION, SUIT OR PROCEEDING.
(H) THE GUARANTOR IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW:
(I) ANY OBJECTION WHICH IT MAY HAVE NOW OR IN THE FUTURE TO
THE LAYING OF THE VENUE OF ANY SUCH ACTION, SUIT OR PROCEEDING IN
ANY COURT REFERRED TO IN THIS SECTION;
(II) ANY CLAIM THAT ANY SUCH ACTION, SUIT OR PROCEEDING HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM; AND
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(III) ITS RIGHT OF REMOVAL OF ANY MATTER COMMENCED BY IFC IN
THE COURTS OF THE STATE OF NEW YORK TO ANY COURT OF THE UNITED
STATES OF AMERICA.
(I) TO THE EXTENT THAT THE GUARANTOR MAY BE ENTITLED IN ANY
JURISDICTION TO CLAIM FOR ITSELF OR ITS ASSETS IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT TO WHICH THE
GUARANTOR IS A PARTY FROM ANY SUIT, EXECUTION, ATTACHMENT (WHETHER PROVISIONAL
OR FINAL, IN AID OF EXECUTION, BEFORE JUDGMENT OR OTHERWISE) OR OTHER LEGAL
PROCESS OR TO THE EXTENT THAT IN ANY JURISDICTION SUCH IMMUNITY (WHETHER OR NOT
CLAIMED) MAY BE ATTRIBUTED TO IT OR ITS ASSETS, THE GUARANTOR IRREVOCABLY AGREES
NOT TO CLAIM AND IRREVOCABLY WAIVES SUCH IMMUNITY TO THE FULLEST EXTENT
PERMITTED BY THE LAWS OF SUCH JURISDICTION.
(J) THE GUARANTOR HEREBY ACKNOWLEDGES THAT IFC SHALL BE ENTITLED UNDER
APPLICABLE LAW, INCLUDING THE PROVISIONS OF THE INTERNATIONAL ORGANIZATIONS
IMMUNITIES ACT, TO IMMUNITY FROM A TRIAL BY JURY IN ANY ACTION, SUIT OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR ANY OTHER TRANSACTION DOCUMENT TO WHICH THE GUARANTOR IS
A PARTY, BROUGHT AGAINST IFC IN ANY COURT OF THE UNITED STATES OF AMERICA. THE
COMPANY HEREBY WAIVES ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY IN ANY
ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OTHER TRANSACTION DOCUMENT TO WHICH THE GUARANTOR IS A PARTY OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT OR SUCH TRANSACTION DOCUMENTS, BROUGHT AGAINST
IFC IN ANY FORUM IN WHICH IFC IS NOT ENTITLED TO IMMUNITY FROM A TRIAL BY JURY.
(K) TO THE EXTENT THAT THE GUARANTOR MAY, IN ANY SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY OF THE COURTS REFERRED TO IN PARAGRAPH (B) ABOVE OR
ELSEWHERE ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
TRANSACTION DOCUMENT TO WHICH THE GUARANTOR IS A PARTY, BE ENTITLED TO THE
BENEFIT OF ANY PROVISION OF LAW REQUIRING IFC IN SUCH SUIT, ACTION OR PROCEEDING
TO POST SECURITY FOR THE COSTS OF THE GUARANTOR (CAUTIO JUDICATUM SOLVI), OR TO
POST A BOND OR TO TAKE SIMILAR ACTION, THE GUARANTOR HEREBY IRREVOCABLY WAIVES
SUCH BENEFIT, IN EACH CASE TO THE FULLEST EXTENT NOW OR IN THE FUTURE PERMITTED
UNDER THE LAWS OF THE JURISDICTION IN WHICH SUCH COURT IS LOCATED.
SECTION 7.06. CONFIDENTIAL INFORMATION. (A) IFC MAY DISCLOSE TO ANY
PERSON FOR THE PURPOSE OF EXERCISING ANY POWER, REMEDY, RIGHT, AUTHORITY, OR
DISCRETION UNDER THIS GUARANTEE OR ANY OTHER TRANSACTION DOCUMENT IN CONNECTION
WITH AN EVENT OF DEFAULT, ANY DOCUMENTS OR RECORDS OF, OR INFORMATION ABOUT,
THIS GUARANTEE OR THE ASSETS, BUSINESS OR AFFAIRS OF THE GUARANTOR.
(B) THE GUARANTOR ACKNOWLEDGES AND AGREES THAT, NOTWITHSTANDING THE
TERMS OF ANY OTHER AGREEMENT BETWEEN THE GUARANTOR AND IFC, A DISCLOSURE OF
INFORMATION BY IFC IN THE CIRCUMSTANCES CONTEMPLATED BY THIS SECTION DOES NOT
VIOLATE ANY DUTY OWED TO THE GUARANTOR OR AGREEMENT BETWEEN IFC AND THE
GUARANTOR.
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SECTION 7.07. SUCCESSORS AND ASSIGNS. THIS GUARANTEE BINDS AND INURES
TO THE BENEFIT OF THE RESPECTIVE SUCCESSORS AND ASSIGNS OF THE PARTIES, EXCEPT
THAT THE GUARANTOR MAY NOT ASSIGN OR OTHERWISE TRANSFER ALL OR ANY PART OF ITS
RIGHTS OR OBLIGATIONS UNDER THIS GUARANTEE WITHOUT THE PRIOR WRITTEN CONSENT OF
IFC. THE BENEFIT OF THIS GUARANTEE MAY BE FREELY AND UNCONDITIONALLY ASSIGNED,
TRANSFERRED OR OTHERWISE DISPOSED OF, IN WHOLE OR IN PART, BY IFC TO ANY OTHER
PERSON, CORPORATE OR OTHERWISE.
SECTION 7.08. AMENDMENT. ANY AMENDMENT OF ANY PROVISION OF THIS
GUARANTEE SHALL BE IN WRITING AND SIGNED BY THE PARTIES.
SECTION 7.09. COUNTERPARTS. THIS GUARANTEE MAY BE EXECUTED IN
SEVERAL COUNTERPARTS, EACH OF WHICH IS AN ORIGINAL, BUT ALL OF WHICH
TOGETHER CONSTITUTE ONE AND THE SAME AGREEMENT.
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IN WITNESS WHEREOF, THE PARTIES HAVE EXECUTED THIS GUARANTEE AS OF THE
DATE FIRST ABOVE WRITTEN.
CANARGO ENERGY CORPORATION
BY: /S/ XXXXXXX XXXXXXX
NAME:
TITLE: AUTHORIZED REPRESENTATIVE
INTERNATIONAL FINANCE CORPORATION
BY: /S/ XXXXX XX XXXXX XXXXXXXXX
NAME:
TITLE: AUTHORIZED REPRESENTATIVE
