Exhibit 10.1
TRANSMERIDIAN EXPLORATION,
INC.
SUBSCRIPTION AGREEMENT AND
INVESTMENT REPRESENTATION
Effective July
, 2005
THE COMMON STOCK OF TRANSMERIDIAN
EXPLORATION, INC. ISSUED PURSUANT TO THIS SUBSCRIPTION AGREEMENT
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS
OF ANY STATE. THERE ARE RESTRICTIONS ON THE TRANSFERABILITY
OF THE COMMON STOCK WHICH ARE DESCRIBED IN SECTION 3 OF THIS
SUBSCRIPTION AGREEMENT.
THE INVESTOR CERTIFIES THAT IT IS
NOT A U.S. PERSON AND IS NOT ACQUIRING THE COMMON STOCK FOR THE
ACCOUNT OR BENEFIT OF ANY U.S. PERSON. THE INVESTOR AGREES
THAT IT WILL HOLD THE COMMON STOCK FOR INVESTMENT PURPOSES ONLY AND
THAT ANY RESALE OF SUCH COMMON STOCK WILL BE MADE STRICTLY IN
ACCORDANCE WITH THE PROVISIONS OF REGULATION S PROMULGATED UNDER
THE SECURITIES ACT, PURSUANT TO REGISTRATION UNDER THE SECURITIES
ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION.
THE INVESTOR FURTHER AGREES NOT TO ENGAGE IN ANY SHORT SALES,
HEDGING TRANSACTIONS OR OTHER TRANSACTIONS WITH REGARD TO THE
COMPANY’S COMMON STOCK UNLESS IN STRICT COMPLIANCE WITH THE
SECURITIES ACT. THE INVESTOR UNDERSTANDS THAT THE COMPANY IS
RELYING UPON THE REPRESENTATIONS, COVENANTS AND AGREEMENTS
CONTAINED IN THIS SUBSCRIPTION AGREEMENT (AND ANY SUPPLEMENTAL
INFORMATION) FOR THE PURPOSE OF DETERMINING WHETHER THIS
TRANSACTION MEETS THE REQUIREMENTS FOR SUCH EXEMPTION.
IT IS IMPOSSIBLE TO FORECAST THE
RESULTS TO A PURCHASER FROM AN INVESTMENT IN THE SECURITIES.
NO ONE CAN PREDICT WHETHER, TO WHAT EXTENT, OR OVER WHAT TIME FRAME
THE BUSINESS OF TRANSMERIDIAN EXPLORATION, INC. MAY BE
SUCCESSFUL. THE PURCHASE OF COMMON STOCK INVOLVES A HIGH
DEGREE OF RISK AND SHOULD BE CONSIDERED ONLY BY PERSONS WHO CAN
BEAR THE RISK OF AN ENTIRE LOSS OF THEIR INVESTMENT.
SECTION 1
1.1
Subscription
. This Subscription Agreement
(the “Agreement”) is made by and between Transmeridian
Exploration Incorporated, a corporation organized under the laws of
the State of Delaware (the “Company”), and the
“Investor”, as designated on
Exhibit ”A” to this Agreement. The Investor,
intending to be legally bound, hereby irrevocably subscribes for
and agrees to purchase the number of shares of common stock, par
value $0.0006 per share, of the
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Company (the “Subscribed
Stock”) designated on Exhibit ”A” for the
consideration specified on such Exhibit ”A,” under
the terms specified below. The Investor hereby agrees that
this Agreement shall be irrevocable and binding on the Investor and
any successors in interest, representatives or assigns of the
Investor. (The Subscribed Stock is sometimes herein referred
to as the “Common Stock.”)
1.2
Closing . On or prior to July 29, 2005, the
Investor will transfer by wire to the Company in same day funds the
total consideration specified on Exhibit ”A,”
according to the wire transfer instructions provided by the
Company, as payment in full for the Common Stock to be purchased
hereunder (such transfer of funds by the Investor and receipt
thereof by the Company hereinafter referred to as the
“Closing”). This Agreement shall be null and void
if funds are not received by the Company as of July 29, 2004
(the “Final Closing Date”).
1.3
Multiple Closing and
Funding . The
Investor understands and acknowledges that at any time on or prior
to the Final Closing Date, multiple closings and fundings may occur
upon execution of substantially identical subscription agreements
by other investors.
1.4
Acceptance or
Rejection . The
Investor understands and acknowledges that this Agreement shall be
deemed to be accepted by the Company only when the Agreement,
together with Exhibit ”A” hereto, is signed by an
authorized officer of the Company on behalf of the Company.
Notwithstanding anything in this Agreement to the contrary, the
Company shall have no obligation to consummate the Closing and
issue the Common Stock to any person to whom the issuance of the
Common Stock would constitute a violation of the Securities Act or
the securities laws of any state of the United States or any
foreign country.
1.5
Delivery of Shares
. Upon receipt by the Company
of the requisite payment for the Common Stock to be purchased by
the Investor in the Closing, the Company will transmit certificates
representing the Common Stock subscribed for no later than 10 days
after the Final Closing Date. Such Common Stock will contain
one or more restrictive legends as specified in Section 3,
below. The Common Stock subscribed for herein shall not be
deemed issued to, or owned by, the Investor until the Investor
delivers the funds and the agreed upon number of shares of Common
Stock are issued to the Investor in accordance with the terms of
each Closing.
1.6
Expenses of
Transaction . In
the absence of an agreement in writing, each party shall bear its
own direct expenses of the transaction. The Company shall
bear all costs of issuing the Common Stock to the
Investor.
1.7
No Brokerage Fees
. The Company shall not be
liable for any brokerage or other financial advisory fees payable
to any third party out of the proceeds of the investment.
This provision shall not restrict the use by either party of any
business, financial, legal, engineering, accounting, tax or other
professional services to evaluate and consummate the
transaction.
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SECTION 2
2.1
Registration
. The Company shall use all
reasonable efforts to (a) submit a Form S-3 registration
statement (the “Registration Statement”) to the U.S.
Securities and Exchange Commission (the “SEC”) within
ten (10) days following the Final Closing Date covering the
shares of Subscribed Stock purchased by the Investor pursuant to
this Agreement and (b) have such Registration Statement
declared effective within thirty (30) days following the Final
Closing Date.
2.2
Purchase Price
. The price to be paid per
share of Common Stock purchased by the Investor hereunder shall be
the be the volume weighted daily average of the last sale price of
the Common Stock on the American Stock Exchange for each of the
five (5) trading days immediately preceding (but not
including) the date of the Closing.
SECTION 3
3.1
Investor Representations and
Warranties . The
Investor hereby acknowledges, represents and warrants to, and
agrees with, the Company, as follows:
(a)
General :
(i)
The Investor is acquiring the Common
Stock for its own account as principal, for investment purposes
only, and not with a view to, or for, resale, distribution or
fractionalization thereof, in whole or in part and no other person
has a direct or indirect beneficial interest in such Common Stock
(excluding the current shareholders and management of the
Investor).
(ii)
The Investor acknowledges its
understanding that the offering and sale of the Common Stock is
intended to be exempt from registration under the Securities Act
and, in furtherance thereof, the Investor represents and warrants
to and agrees with the Company as follows:
(A)
The Investor has the financial
ability to bear the economic risk of its investment, has adequate
means for providing for its current financial needs and
contingencies and has no need for liquidity with respect to its
investment in the Company;
(B)
The Investor has such knowledge and
experience in financial and business matters, including the risks
associated with operating in the Republic of Kazakhstan, as to be
fully capable of evaluating the merits and risks of the prospective
investment; and
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(b)
Information Concerning the
Company : The
Investor and such of its business, financial, legal, engineering
and tax advisors as it, in its sole discretion, may choose to
engage (collectively, the “Advisors”), acknowledge that
it:
(i)
Has been furnished with a copy of
the Company’s most recent Form 10-K (and amendments
thereto), Form 10-Q and proxy statement for the
Company’s 2005 annual meeting. In addition, the Company
will provide such other materials and documents as the Investor or
its Advisors may reasonably request. All of these materials
are collectively referred to as the
“Information.” As a condition to consummating the
Closing, the Investor represents that it and/or its Advisors have
carefully read the Information and understand and have evaluated
the risks of the purchase of Common Stock and the considerations
described in the Information; and have relied solely (except as
indicated in subsections (ii) and (iii) below) on the
Information;
(ii)
Is familiar with the business and
financial condition, properties, operations, and prospects of the
Company, all as generally described in the Information; has been
given the opportunity to ask questions of, and receive answers
from, the appropriate officers of the Company concerning the terms
and conditions of the offering and other matters pertaining to this
investment and has asked such questions as it desires to ask and
all such questions have been answered to the full satisfaction of
the Investor; has been given the opportunity to obtain such
additional information necessary to verify the accuracy of the
information contained in the Information or that which was
otherwise provided in order for him to evaluate the merits
and
