DEBT PURCHASE AGREEMENT
THIS DEBT PURCHASE AGREEMENT
(“Agreement”), dated as June 26, 2009, between BMB
Munai, Inc., a Nevada corporation, (“BMB Munai”) and
Simage Limited, a British Virgin Islands international business
corporation (“Simage”). Both Simage and BMB Munai are
referred to collectively as the “Parties”.
WHEREAS, Emir Oil, LLP, a Limited
Liability Partnership organized under the laws of the Republic of
Kazakhstan (“Emir”) and is in the business of
exploration drilling for oil and gas in Kazakhstan. Simage has
acquired the rights to collect certain account receivables owed by
Emir to third-party creditors of Emir, as of the date of this
Agreement in the sum of: $5,973,190, (“Obligations”), a
complete list of the individual creditors and the amount of each
account comprising the Obligations is attached hereto as Exhibit 1
and is incorporated herein by this reference;
WHEREAS, as a result of the
Obligations and Emir’s other outstanding indebtedness, Emir
is highly leveraged;
WHEREAS, the foregoing has continued
to negatively impact Emir’s operations, including its ability
to continue its business development plans;
WHEREAS, Emir has requested that
Simage convert their respective Obligations into common stock
(“Common Stock”), of BMB Munai as set forth
herein;
NOW THEREFORE, in consideration of
the promises and the mutual covenants and agreements of the Parties
hereinafter set forth, the Parties hereby agree as
follows:
(a) Simage hereby agrees to assign
to BMB Munai all right, title and interest in the Obligations
(“Debt Assignment”) and BMB Munai agrees to issue
2,986,595 shares of common stock of BMB Munai at the price of USD
2.00 per share to Simage (“Assignment Shares”) as
payment in full of the Debt Assignment. As a result of the Debt
Assignment under this Agreement, BMB Munai shall hold the sole and
exclusive right to collect the Obligations.
(b) BMB Munai shall cause a meeting
of its board of directors (“Directors Meeting”) to be
duly called and held as soon as reasonably practicable for the
purposes of voting on the this Agreement and such other matters as
may be mutually agreed upon by the Parties.
(c) BMB Munai shall comply with all
legal requirements applicable to the Directors Meeting and take
such other actions as may be necessary to effectuate this
Agreement, including, but not limited to, listing the Assignment
Shares with the NYSE Amex Equities and providing notices to, and
responding to queries from, all applicable regulatory authorities
and obtaining all necessary third party Consents.
(d) Subject to the terms and
conditions of this Agreement, the consummation of the transactions
contemplated by this Agreement shall take place at a closing
(“Closing”) to be held at 10:00 a.m., Kazakhstani local
time, on the fourth business day after the date on which the last
of the conditions set forth in Section 4 below is fulfilled, at the
offices of BMB Munai at 202 Dostyk Ave, 4 th Floor,
Almaty, Kazakhstan, or at such other time, date or place as the
Parties may agree upon in writing. BMB Munai shall send to Simage
at least two business days prior to the Closing a notice indicating
the amount of interest accrued through the date of the Closing and
the number of shares of Common Stock Simage will be issued upon the
Closing. At the Closing, Simage shall deliver the documents
necessary to demonstrate their exclusive ownership of the
Obligations and for the assignment and transfer of all right, title
and interest in the Obligations to BMB Munai and BMB Munai shall
deliver to Simage certificates representing the Assignment Shares
to which such Simage is entitled as a result of such Debt
Assignment. In the event that as a result of the Debt Assignment,
fractions of shares would be required to be issued, such fractional
shares shall be rounded up or down to the nearest whole share. BMB
Munai shall pay any documentary, stamp or similar issue or transfer
tax due on such Assignment Shares, except that Simage shall pay any
such tax due because the Assignment Shares are issued in a name
other than Simage.
2. REPRESENTATIONS AND WARRANTIES OF
BMB MUNAI. BMB Munai hereby represents and warrants to Simage as
follows:
(a) As of the date hereof, BMB Munai
has 500,000,000 shares of Common Stock authorized, of which
47,378,420 shares of Common Stock are issued and outstanding, and
20,000,000 shares of preferred stock authorized, of which no shares
are issued and outstanding. As of the date hereof, BMB Munai has
reserved for issuance 1,170,583 shares of Common Stock upon
exercise of all outstanding options and warrants. All of the issued
and outstanding shares of
BMB Munai's Common Stock are, and
all shares reserved for issuance will be, upon issuance in
accordance with the terms specified in the instruments or
agreements pursuant to which they are issuable, duly authorized,
validly issued, fully paid and non-assessable. The Assignment
Shares to be issued and delivered to Simage upon purchase of the
Obligations have been duly authorized and when issued upon such
purchase, will be validly issued, fully-paid and non-assessable.
The issuance of the Assignment Shares will be exempt from
registration under the Securities Act of 1933, as amended
(“Securities Act”) pursuant to Regulation S and such
Assignment Shares will be “restricted securities” as
defined under Rule 144 promulgated under the Securities
Act.
(b) BMB Munai has full legal power
to execute and deliver this Agreement and to perform its
obligations hereunder. All acts required to be taken by BMB Munai
to enter into this Agreement and to carry out the transactions
contemplated hereby have been properly taken, and this Agreement
constitutes a legal, valid and binding obligation of BMB Munai,
enforceable in accordance with its terms and does not conflict
with, result in a breach or violation of or constitute (or with
notice of lapse of time or both constitute) a default under any
instrument, contract or other agreement to which BMB Munai is a
party.
(c) BMB Munai has delivered or made
available to Simage prior to the execution of this Agreement, true
and complete copies of all periodic reports, registration
statements and proxy statements filed by it with the Commission
since March 31, 2007. Each of such filings with the Commission
(collectively, the “SEC Filings”), as of its filing
date, complied in all material respects with the requirements of
the rules and regulations promulgated by the Commission with
respect thereto and did not contain any untrue statement of a
material fact or omit a material fact necessary in order to make
the statements contained therein not misleading in light of the
circumstances in which such statements were made.
(d) Since March 31, 2007 and except
as disclosed in the SEC Filings, BMB Munai has conducted its
business in compliance in all material respects with all applicable
laws, rules, regulations, court or administrative orders and
processes and rules, directives and orders of regulatory and
self-regulatory agencies and bodies, except as would not reasonably
be expected, singly, or in the aggregate, to be materially adverse
to the business, assets or financial condition of BMB
Munai.
3. REPRESENTATIONS AND WARRANTIES OF
SIMAGE. Simage represents and warrants to BMB Munai as
follows:
(a) Simage has full legal power to
execute and deliver this Agreement and to perform its obligations
hereunder and Simage is the sole and exclusive owner of the
Obligations. All acts required to be taken by such Simage to enter
into this Agreement and to carry out the transactions contemplated
hereby have been properly taken; and this Agreement constitutes a
legal, valid and binding obligation of such Simage enforceable in
accordance with its terms.
(b) Simage has reviewed the filings
of BMB Munai referred to in Section 2(c) above.
(c) Simage has been given an
opportunity to ask questions and receive answers from the officers
and directors of BMB Munai and to obtain additional information
from BMB Munai.
(d) Simage has such knowledge and
experience in financial and business matters as to be capable of
evaluating the merits and risks of an investment in BMB Munai's
securities and has obtained, in its judgment, sufficient
information about BMB Munai to evaluate the merits and risks of an
investment in BMB Munai.
(e) Simage is relying solely on the
representations and warranties contained in Section 2 hereof and in
certificates delivered hereunder in making their decision to enter
into this Agreement and consummate the transactions contemplated
hereby and no oral representations or warrantie
