JPMorgan - KASE

in HKM or HOP respectively, from that existing on the Issue Date. The Indenture will provide that
the proceeds of any issuance, sale or disposition permitted under clauses (ii), (iv), (v) and (vi) of
the preceding sentence must be applied in accordance with the covenant described under “—
Asset Sales”.
Transactions with Affiliates
The Indenture will provide that the Company will not, and will not permit any of its Restricted
Subsidiaries to, sell, lease, transfer or otherwise dispose of any of its properties or assets to, or
purchase any property or assets from, or enter into or make any contract, agreement,
understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate (each of the
foregoing, an “Affiliate Transaction”), unless (i) such Affiliate Transaction is in the ordinary
course of business, (ii) the terms of such Affiliate Transaction are fair and reasonable to the
Company or such Restricted Subsidiary, as the case may be, and are at least as favorable as the
terms which could be obtained by the Company or such Restricted Subsidiary, as the case may be,
in a comparable transaction made on an arm’s-length basis between unaffiliated parties and (iii)
the Company delivers to the Trustee (a) with respect to any Affiliate Transaction entered into
after the date of the Indenture involving aggregate consideration in excess of $2.5 million, a
resolution of the Board of Directors set forth in an Officers’ Certificate certifying that such
Affiliate Transaction complies with clauses (i) and (ii) above and that such Affiliate Transaction
has been approved by a majority of the disinterested members of the Board of Directors and (b)
with respect to any Affiliate Transaction involving aggregate consideration in excess of $10.0
million, an opinion as to the fairness to the Company or such Restricted Subsidiary of such
Affiliate Transaction from a financial point of view issued by an investment banking firm or other
appraisal firm of national standing (in the United States, Canada or a member state of the
European Union as of the date of the Indenture) or a branch of such institution in Kazakhstan,
provided that the following will not be deemed to be Affiliate Transactions: (u) reasonable fees
and compensation paid to, and indemnity provided on behalf of, officers and directors of the
Company or any Restricted Subsidiary as determined in good faith by the appropriate Board of
Directors or senior management; (v) transactions with customers, clients, suppliers, joint venture
partners or purchaser or sellers of goods or services, in each case in the ordinary course of
business (including, without limitation, pursuant to joint venture agreements) and otherwise in
compliance with the terms of the Indenture and which comply with the terms of clause (ii) above;
(w) any employment agreement entered into by the Company or any of its Restricted Subsidiaries
in the ordinary course of business and consistent with the past practice of the Company or such
Restricted Subsidiary (including, without limitation, any such employment agreements entered
into prior to the date of the Indenture); (x) transactions between or among the Company and/or
its Restricted Subsidiaries; and (y) transactions with joint ventures engaged in the Oil and Gas
Business, provided that all equity interests which are not owned by the Company or its Restricted
Subsidiaries in such joint venture are owned by a Person which is not an Affiliate of the Company
otherwise than by reason of such Person’s ownership of equity interests in such joint venture.
Limitation as to Unrestricted Subsidiaries
The Indenture will provide that the Company may designate a Subsidiary (including a newly
formed or newly acquired Subsidiary) of the Company or any of its Subsidiaries (other than the
Issuer, HKM, HOP and Valsera) as an Unrestricted Subsidiary; provided that (i) immediately after
giving effect to the transaction, the Company could incur $1.00 of additional Indebtedness
pursuant to the first paragraph of “Description of the Notes — Certain Covenants — Incurrence
of Indebtedness and Issuance of Preferred Stock” and (ii) such designation is at the time
permitted under “Description of the Notes — Certain Covenants — Restricted Payments”.
Notwithstanding any provisions of this covenant all Subsidiaries of an Unrestricted Subsidiary will
be Unrestricted Subsidiaries.
The Indenture will provide that the Company will not permit any Unrestricted Subsidiary to
create, assume, incur, guarantee or otherwise become liable in respect of any Indebtedness
except Non-Recourse Debt. The Company and its Restricted Subsidiaries will not designate, create
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