RE: SN etc v ZM - SN Declaration30 Apr 2021 02:10
Pt. 2
Specifically,Mr.Mamulaishvili has stolen the Company Opportunities and is competing in violation of his Employment Agreement, even though he was removed by the Board of Directors of the Company on August 28, 2020 and terminated for cause onJanuary 15, 2021. Paragraph 22 of the Employment Agreement contains the obligation of Mr. Mamulaishvili not to "“compete with Frontera......for three (3) years after the Term of Employment.”" See, Paragraph 22(a)(i), (ii), and (iii) (the "“Covenant Not to Compete”"). Thus, Mr. Mamulaishvili cannot compete with Frontera or its subsidiaries until January 15, 2024. Paragraph 22(e) contains Mr. Mamulaishvillii’'s agreement that a breach or violation of this Covenant Not to Compete by him "“shall entitle this Company as a matter of right, to an injunction issued by any court of competent jurisdiction, restraining any further or continued breach or violation of this covenant.”" Frontera seeks such an injunction here.
5. On June 28, 1997, Frontera through its wholly owned subsidiary, Frontera Resources Georgia Corporation (“"FRGC”") entered into a Production Sharing Contract and refinery Study (the "“PSC”") with the Ministry of Fuel and Energy of Georgia and the State Company Georgian Oil.
6. On April 13, 2019, Frontera’'s wholly owned subsidiary, FRGC, assigned 100% of its rights and obligations under the PSC to Frontera Resources U.S. LLC ("“FRUS”"), which was confirmed in a letter signed by Mr. Mamulaishvili, a true and correct copy of which is attached hereto as Exhibit B. FRGC also assigned to FRUS 50% ownership of the Operating Company for the PSC, Frontera Eastern Georgia LLC ("“FEG”"), and the Government of Georgia owns the other 50% interest in FEG.
7. On April 24, 2020, FRGC and FRUS reconfirmed that FRUS now owned 100% of FRGC’'s interest in the PSC, but for reasons unbeknownst to Frontera the assignment of shares to FRUS was never properly reflected in the Public Registry of theGovernment of Georgia, so FRGC incorrectly remained as the registered shareholder instead of FRUS, and Mr. Mamulaishvili has taken advantage of this administrative error. 8. On August 28, 2020, Mr. Mamulaishvili was removed from Frontera’'s Board
of Directors and from his corporate management authority and responsibility (see, a true and correct copy of a letter from the Board of Directors signed by us and attached as Exhibit C).
9. On January 15, 2021, Mr. Mamulaishvili was terminated for cause under the Employment Agreement (see, a true and correct copy of the termination letter attached as Exhibit D).
10. On March 4, 2021, a company owned by Mr. Mamulaishvilii’'s cousin and controlled by Mr. Mamulaishvili and his family, Green Capital LLC ("“Green Capital”"), filed a lawsuit against FRGC in Tbilisi City Court, Georgia, with no notice to the parties to the PSC, FRUS and the Government of Georgia.