TMY » Topics » Item 1.01. Entry into a Material Definitive Agreement

This excerpt taken from the TMY 8-K filed Jan 2, 2008.

Item 1.01. Entry into a Material Definitive Agreement

On December 31, 2007, Transmeridian Exploration Incorporated (the “Company”) entered into an Agreement and Plan of Merger, by and among Trans Meridian International, Inc., a British Virgin Islands company (“Parent”), TME Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Parent (“Merger Sub”), and the Company (the “Merger Agreement”), pursuant to which Merger Sub will commence a tender offer to purchase outstanding shares of the Company’s common stock at a purchase price of $3.00 per share, following completion of which Merger Sub will be merged with and into the Company, with the Company becoming a wholly owned subsidiary of Parent (“Merger”). In the Merger, each outstanding share of common stock of the Company will be converted into the right to receive $3.00, without interest.

The Company’s press release dated December 31, 2007 announcing the entry by the parties thereto into the Merger Agreement and related matters is attached hereto as Exhibit 99.1 and incorporated herein by reference.

The Merger Agreement contains representations and warranties that the parties have made to each other as of specific dates. Except for its status as a contractual document that establishes and governs the legal relations among the parties, the Merger Agreement is not intended to be a source of factual, business or operational information about any of the parties thereto. The representations and warranties contained in the Merger Agreement were made only for purposes of the Merger Agreement and as of specific dates, were solely for the benefit of the parties to the Merger Agreement, and may be subject to limitations agreed between those parties, including being qualified by disclosures between those parties. The representations and warranties in the Merger Agreement may have been made to allocate risks among the parties thereto, including where the parties do not have complete knowledge of all facts, instead of establishing matters as facts. Furthermore, those representations and warranties may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. The assertions embodied in such representations and warranties are qualified by information contained in the Company’s disclosure schedule delivered in connection with the signing of the Merger Agreement. Accordingly, investors and security holders should not rely on such representations and warranties as characterizations of the actual state of facts or circumstances, since they were only made as of the date of the Merger Agreement and are modified in important part by the Company’s disclosure schedule. Moreover, information concerning the subject matter of such representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures.

The Merger Agreement is attached hereto as Exhibit 2.1. The descriptions of the Merger Agreement above and in the Company’s December 31, 2007 press release do not purport to be complete and are qualified in their entirety by reference to the Merger Agreement.

THIS CURRENT REPORT ON FORM 8-K IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT AN OFFER TO BUY OR A SOLICITATION OF AN OFFER TO SELL ANY SHARES OF THE COMPANY’S COMMON STOCK OR OTHER COMPANY SECURITIES. THE SOLICITATION AND THE OFFER TO BUY SHARES OF THE COMPANY’S COMMON STOCK WILL BE MADE ONLY PURSUANT TO AN OFFER TO PURCHASE, LETTER OF TRANSMITTAL


AND RELATED MATERIALS TO BE DISTRIBUTED TO HOLDERS OF THE COMPANY’S COMMON STOCK. AT THE TIME THE EXPECTED TENDER OFFER IS COMMENCED, PARENT’S ACQUISITION COMPANY WILL FILE THESE TENDER OFFER MATERIALS WITH THE SECURITIES AND EXCHANGE COMMISSION AND THE COMPANY WILL FILE A SOLICITATION/ RECOMMENDATION STATEMENT WITH RESPECT TO THE OFFER. ONCE FILED, THE COMPANY’S STOCKHOLDERS SHOULD READ THESE MATERIALS CAREFULLY PRIOR TO MAKING ANY DECISIONS WITH RESPECT TO THE OFFER BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION, INCLUDING THE TERMS AND CONDITIONS OF THE OFFER. INFORMATION CONCERNING MR. OLIVIER AND HIS BENEFICIAL OWNERSHIP OF THE COMPANY’S COMMON STOCK AND HIS OTHER POTENTIAL INTERESTS IN THE TRANSACTION DESCRIBED IN THIS PRESS RELEASE MAY BE FOUND IN THE COMPANY’S PROXY STATEMENT FILED WITH THE SEC UNDER SCHEDULE 14A ON APRIL 17, 2007 AND IN MR. OLIVIER’S SCHEDULE 13D AND AMENDMENTS THERETO FILED OR TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. ALL OF THESE MATERIALS ARE OR WILL BE AVAILABLE FREE OF CHARGE ALSO AT THE SEC’S WEBSITE AT WWW.SEC.GOV, FROM THE INFORMATION AGENT NAMED IN THE TENDER OFFER MATERIALS, OR FROM PARENT.

This excerpt taken from the TMY 8-K filed Jun 19, 2007.

Item 1.01 Entry Into a Material Definitive Agreement.

On June 18, 2007, Transmeridian Exploration Incorporated (the “Company”) entered into a Commitment Letter, dated as of June 18, 2007 (the “Commitment Letter”), with the several investors party thereto (the “Investors”), pursuant to which the Investors committed to purchase from the Company 400,000 shares of the Company’s 20% Junior Redeemable Convertible Preferred Stock (the “Preferred Stock”) at a purchase price (equal to the liquidation preference of the Preferred Stock) of $100 per share.

Pursuant to the Commitment Letter, 100,000 shares of the Preferred Stock were sold to the Investors effective as of June 18, 2007, and the proceeds with respect to the sale of such shares (net of offering expenses) were paid to the Company. Also pursuant to the Commitment Letter, the Company shall have the right, no earlier than June 25, 2007, to draw down the remaining commitments of the Investors and sell the remaining 300,000 shares of the Preferred Stock to the Investors, provided certain specified conditions are satisfied, including (i) a customary “no material adverse effect” condition with respect to the Company’s business, assets and financial condition, (ii) the filing of preliminary proxy materials with the Securities and Exchange Commission (the “SEC”) with respect to the solicitation of proxies for a meeting of the Company’s stockholders to be held for the purpose of voting on a proposal to approve, pursuant to the rules of the American Stock Exchange, the issuance of shares of common stock in excess of 19.99% of the shares of the Company’s common stock outstanding as of the date of the Commitment Letter upon conversion or redemption of, or in payment of dividends on, the Preferred Stock (such proposal, the “AMEX Stockholder Proposal”), and (iii) the execution and delivery of an escrow agreement between the Company, the Investors and an escrow agent (the “Escrow Agreement”).

As contemplated by the Commitment Letter, 200,000 of the 300,000 shares of the Preferred Stock to be sold pursuant to the drawdown of the Investors’ remaining commitments, and the proceeds in respect of the sale of such shares, will be placed in an escrow account pursuant to the Escrow Agreement. The Escrow Agreement will provide that such shares and proceeds will be released from escrow and delivered by the escrow agent to the Investors and the Company, respectively, upon (i) the Company’s receipt of written consents or proxies from holders of its Common Stock evidencing stockholder approval of the AMEX Stockholder Proposal, (ii) the Company’s filing with the SEC of a preliminary information statement or definitive proxy statement with respect to such stockholder approval and (iii) the Company’s delivery of a written certification that such conditions have been satisfied. If the Company fails to satisfy any of these three conditions within 60 days from the date of the Commitment Letter, the Escrow Agreement will terminate and the escrow agent will be obligated to return the escrowed shares of the Preferred Stock and escrowed sales proceeds to the Company and the Investors, respectively.

The Commitment Letter contains customary representations and warranties on the part of the Company and the Investors and customary indemnification provisions. The Commitment Letter also contains the agreement of the Company to cause the composition of the Company’s Board of Directors to be modified in accordance with the board representation rights granted to the holders of the Preferred Stock pursuant to the Certificate of Designations, dated June 18, 2007, governing the Preferred Stock.

 



In connection with the Commitment Letter, the Company executed a Fee Letter, dated as of June 18, 2007, with the Investors pursuant to which the Company agreed to pay a cash arrangement fee equal to 10% of each Investor’s commitment and a cash commitment fee equal to 25% of each commitment. The arrangement fees were fully earned upon the execution of the Commitment Letter, and the commitment fees are earned at the time the Investor funds its commitment. However, these fees are not due and payable until the earlier of (i) the occurrence of a change of control with respect to the Company and (ii) June 18, 2008; provided, however, that if the fees become due and payable on June 18, 2008 in the absence of a change of control transaction, the Company may elect to satisfy its payment obligations by delivery of shares of its common stock valued at 97% of the stock’s market value at such time. In addition, if a change of control with respect to the Company has not occurred by December 31, 2007, the fee balances are increased, until paid, at the rate of 10% per annum.

This excerpt taken from the TMY 8-K filed Dec 4, 2006.

Item 1.01 Entry into a Material Definitive Agreement.

On December 1, 2006, Transmeridian Exploration Incorporated (the “Company”) completed its previously disclosed (i) private offering of $37.0 million of its 15% Senior Redeemable Convertible Preferred Stock (the “Preferred Stock”) pursuant to the terms of a Purchase Agreement, dated as of November 28, 2006 (the “Purchase Agreement”), by and between the Company and the initial purchaser party thereto (the “Initial Purchaser”), with respect to 370,000 shares of the Preferred Stock, and (ii) concurrent private placement of $7.0 million of the Preferred Stock pursuant to Subscription Agreements and Investment Representations, each dated as of November 28, 2006 (the “Subscription Agreements”), by and between the Company and each of the purchasers party thereto (including the Company’s Chairman of the Board, President and Chief Executive Officer and the Company’s Vice President and Chief Financial Officer) with respect to an aggregate 70,000 additional shares of the Preferred Stock.

The Purchase Agreement contains customary representations and warranties on the part of the Company and customary indemnification and contribution provisions whereby the Company and the Initial Purchaser have agreed to indemnify each other against certain liabilities or to contribute to payments which they may be required to make in that respect. The Subscription Agreements contain customary representations and warranties on the part of each of the purchasers party thereto.

The Preferred Stock is governed by the terms of a Certificate of Designations, dated as of, and filed with the Delaware Secretary of State on, December 1, 2006 (the “Certificate of Designations”). The Certificate of Designations amends the Company’s Amended and Restated Certificate of Incorporation (as amended), effective as of December 1, 2006, and provides that the Preferred Stock ranks senior to the Company’s common stock and Series A Cumulative Convertible Preferred Stock with respect to dividend rights and rights upon the Company’s liquidation, winding-up or dissolution. The Certificate of Designations also contains restrictive covenants related to the Company’s ability to incur indebtedness, make certain payments or investments and create restrictions on its and its subsidiaries’ ability to pay dividends, and further provides for preemptive rights in favor of the holders of the Preferred Stock with respect to certain securities offerings that the Company may make in the future.

The Preferred Stock, which has a liquidation preference of $100 per share, will pay cumulative quarterly dividends at an initial rate of 15% per annum (equal to $15.00 per share per annum), payable at the option of the Company in additional shares of the Preferred Stock, shares of the Company’s common stock (subject to the satisfaction of certain conditions set forth in the Certificate of Designations) or cash (if allowed by the terms of the Company’s then-existing debt instruments) on January 1, April 1, July 1 and October 1 of each year, commencing April 1, 2007.

Each share of the Preferred Stock is convertible at the holder’s option at any time into approximately 22.2222 shares of the Company’s common stock, based on an initial conversion price of $4.50 per share of the Company’s common stock. The conversion price and the dividend rate of the Preferred Stock will be adjusted to $3.90 per share and 3% per annum above the then-effective dividend rate, respectively, effective as of July 1, 2007, unless the Company achieves a specified average production threshold for the three months ended June 30, 2007 or a


specified volume weighted average price threshold with respect to its common stock for the 15 trading days immediately following June 30, 2007. If the Company meets or exceeds either of these thresholds, there will be no adjustment in the conversion price or the dividend rate of the Preferred Stock.

In addition, the conversion price of the Preferred Stock will be subject to adjustment pursuant to customary anti-dilution provisions set forth in the Certificate of Designations and may also be adjusted upon the occurrence of a change of control of the Company that constitutes a “fundamental change” (as defined in the Certificate of Designations). However, pursuant to the Certificate of Designations, in no event will the conversion price of the Preferred Stock be reduced to less than $3.23 per share (subject to adjustment), which was the closing price of the Company’s common stock on the American Stock Exchange on November 28, 2006 (the pricing date of the private offering and the concurrent private placement and the date of the Purchase Agreement and the Subscription Agreements).

On or after July 1, 2007, if the closing price of the Company’s common stock exceeds 150% of the then-effective conversion price of the Preferred Stock for 20 trading days during any consecutive 30 trading day period, one-third of the total shares of the Preferred Stock outstanding upon the consummation of the private offering and the concurrent private placement will automatically convert into shares of the Company’s common stock at the then-effective conversion price of the Preferred Stock, and an additional one-third of the total shares of the Preferred Stock will automatically convert into shares of the Company’s common stock at the then-effective conversion price of the Preferred Stock following each subsequent and distinct 30 trading day period during which the closing price condition is satisfied.

The Preferred Stock is redeemable at the option of the holder on December 1, 2011 or upon a change of control of the Company, at the liquidation preference of the Preferred Stock plus all accumulated and unpaid dividends on the Preferred Stock.

At any time on or after October 1, 2007, the Company may redeem all or a portion of the then-outstanding shares of the Preferred Stock for cash at the optional redemption prices set forth in the Certificate of Designations. From October 1, 2007 through December 31, 2007, the Company may exercise this right only if the closing price of its common stock equals or exceeds 125% of the conversion price of the Preferred Stock for at least 20 trading days in any consecutive 30 trading day period. After December 31, 2007, the Company may exercise this redemption right without regard to the market price of its common stock. However, at any time, the Company’s exercise of this redemption right is subject to the effectiveness of a shelf registration statement covering resales of the Preferred Stock and the shares of the Company’s common stock into which the Preferred Stock is convertible.

Prior to the conversion of their shares of the Preferred Stock into shares of the Company’s common stock, holders of the Preferred Stock have voting rights only with respect to matters pertaining to their securities as a class. The affirmative consent of holders of at least 66-2/3% of the then-outstanding shares of the Preferred Stock is required for (i) the issuance of any class of the Company’s stock ranking senior to or equal with the Preferred Stock as to dividend rights or rights upon the Company’s liquidation, winding-up or dissolution and (ii) amendments to the Company’s Amended and Restated Certificate of Incorporation (as amended) that would adversely affect the rights of the holders of the Preferred Stock. In addition, the consent of holders of at least 66-2/3% of the then-outstanding shares of the Preferred Stock is required to waive the Company’s compliance with any of the restrictive covenants set forth in the Certificate of Designations.


If (i) the dividends on the Preferred Stock or any other stock ranking equally with the Preferred Stock with respect to dividend rights or rights upon the Company’s liquidation, winding-up or dissolution and having similar voting rights are in arrears and unpaid for two or more years or (ii) the Company fails to redeem the shares of the Preferred Stock “put” to it for redemption pursuant to either of the holders’ redemption options described above, the holders of the Preferred Stock, voting as a single class with the holders of any such other stock ranking equally with the Preferred Stock with respect to dividend rights or rights upon the Company’s liquidation, winding-up or dissolution and having similar voting rights, will be entitled at the Company’s next regular or special meeting of stockholders to elect two additional directors to the Company’s board of directors. Such voting rights and the terms of the directors so elected will continue until such time as the dividend arrearage on the Preferred Stock or any such other stock has been paid in full or the Company has paid the redemption price payable with respect to the shares of the Preferred Stock “put” to it for redemption pursuant to either of the holders’ redemption options.

The private offering and the concurrent private placement generated total net proceeds to the Company of approximately $41.2 million (net of commissions of approximately $2.4 million and other offering expenses totaling approximately $0.4 million).

The shares of the Preferred Stock offered and sold by the Company to the Initial Purchaser in the private offering, pursuant to the exemption from the registration requirements of the Securities Act of 1933 (as amended, the “Securities Act”) provided by Section 4(2) of the Securities Act, will be offered by the Initial Purchaser within the United States only to “qualified institutional buyers” pursuant to Rule 144A under the Securities Act. The shares of the Preferred Stock sold in the concurrent private placement, which were also offered and sold pursuant to the exemption from the registration requirements of the Securities Act provided by Section 4(2) of the Securities Act, were offered and sold at the same per-share price as the shares of the Preferred Stock offered and sold in the private offering. The Preferred Stock and the shares of the Company’s common stock issuable upon conversion of the Preferred Stock have not been registered under the Securities Act or the securities laws of any other jurisdiction and, unless they are so registered, may be offered and sold only in transactions that are exempt from registration under the Securities Act or the securities laws of such other jurisdictions.

 


In connection with the completion of the private offering and the concurrent private placement, the Company entered into a Registration Rights Agreement, dated as of December 1, 2006, with the Initial Purchaser (the “Registration Rights Agreement”) pursuant to which the Company is obligated to (i) file with the Securities and Exchange Commission (the “SEC”) a shelf registration statement covering resales of the Preferred Stock (including both the shares of the Preferred Stock issued in the private offering and the shares of the Preferred Stock issued in the concurrent private placement), the shares of the Company’s common stock issuable upon conversion of the Preferred Stock and the shares of the Preferred Stock and shares of the Company’s common stock issued as a dividend on the Preferred Stock, within 60 days of the closing date of the private offering and the concurrent private placement and (ii) cause such registration statement to be declared effective by the SEC within 150 days of the closing


date of the private offering and the concurrent private placement. The Company’s failure to fulfill either of these obligations will result in the payment of additional dividends on the Preferred Stock equivalent to 1.00% per annum until such obligations are fulfilled.

 


Also in connection with the completion of the private offering and the concurrent private placement, the Company issued to the Initial Purchaser, as part of its compensation for its services as Initial Purchaser and for its services rendered in connection with the concurrent private placement, warrants to purchase an aggregate 110,000 shares of the Company’s common stock at an exercise price per share of $3.08. The warrants will be evidenced by a Common Stock Purchase Warrant, to be dated as of December 1, 2006, granted by the Company in favor of the Initial Purchaser, the terms of which will include customary anti-dilution adjustments. The warrants will be exercisable by the Initial Purchaser (or its assignees or transferees), in whole or in part, at any time prior to or on December 1, 2013 and, under certain circumstances, by way of a “cashless exercise.”

Pursuant to an Investor Rights Agreement, to be dated as of or about December 1, 2006, by and between the Company and the Initial Purchaser, the Initial Purchaser (and its assignees and transferees) will be entitled to certain registration rights with respect to the shares of the Company’s common stock issuable upon exercise of the warrants.

 


Copies of (i) a form of the Subscription Agreements, (ii) the Certificate of Designations and (iii) the Registration Rights Agreement are attached hereto as Exhibits 10.1, 3.1 and 4.1, respectively, and are incorporated herein by reference.

 


On November 29, 2006, the Company issued a press release announcing the pricing of the private offering and concurrent private placement of the Preferred Stock (see Exhibit 99.1). On December 1, 2006, the Company issued a press release announcing the completion of the private offering and concurrent private placement of the Preferred Stock (see Exhibit 99.2).

This excerpt taken from the TMY 8-K filed Jan 12, 2006.

Item 1.01 Entry into a Material Definitive Agreement.

 

On January 9, 2006, Transmeridian Exploration Inc. (“TMEI”), a wholly-owned subsidiary of Transmeridian Exploration Incorporated (the “Company”), completed the acquisition of the 10% carried working interest in the South Alibek Field held by Kornerstone Investment Group, Ltd. (“Kornerstone”). The acquisition was made pursuant to a purchase agreement dated as of December 12, 2005 between TMEI and Kornerstone. The total purchase price under the agreement was $19 million, consisting of $15.25 million in cash paid by TMEI and one million shares of the Company’s common stock valued at $3.75 per share. The shares of the Company’s common stock were issued to Kornerstone pursuant to the exemption from registration provided by Section 4(2) of the Securities Act of 1933.

 

This excerpt taken from the TMY 8-K filed Oct 20, 2005.

Item 1.01 Entry into a Material Definitive Agreement.

 

On October 14, 2005, Transmeridian Exploration, Inc. (“TEI”), a wholly-owned subsidiary of Transmeridian Exploration Incorporated (the “Company”), entered into a share sale and purchase agreement with Seeria Alliance Ltd. pursuant to which TEI will purchase 100% of the authorized and issued shares of Bramex Management, Inc. (“Bramex”). Bramex owns the 50% of JSC CaspiNeft TME (“CaspiNeft”) not currently owned by TEI. The Company operates the South Alibek Field in Kazakhstan through TEI’s present interest in CaspiNeft under a joint operating agreement with Bramex. Upon the closing of the transaction, which is expected to occur on or about December 23, 2005, TEI will own 100% of the authorized and issued shares of CaspiNeft.

 

The terms of the agreement require TEI to pay a total of $168 million at the closing, of which approximately $42 million is to repay bank indebtedness owed by CaspiNeft and the remainder represents the purchase price for the shares of Bramex.

 

The agreement, which is governed by English law, contains representations and warranties, pre- and post-closing covenants and indemnification provisions that are customary for transactions of this nature. Closing of the transaction is subject to several conditions, including release of liens on the shares and assets of CaspiNeft, receipt of necessary government approvals and other customary conditions.

 

On October 20, 2005, the Company issued a press release announcing the share sale and purchase agreement (see Exhibit 99.1 hereto).

 

This excerpt taken from the TMY 8-K filed Sep 12, 2005.

ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

 

Transmeridian Exploration Incorporated (the “Company”), through its 50%-owned subsidiary JSC Caspi Neft TME, has received notice from its bank in Kazakhstan that the due dates for payments of principal and interest under its primary credit facility have been extended until the regularly scheduled payment dates falling on or after October 18, 2005. Approximately $8.0 million of principal and interest that had become due through August 31, 2005 had not been paid. Payments of additional interest and principal of approximately $2.7 million were scheduled to become due in September 2005. The Company has received a proposal to refinance the existing bank debt in its entirety and expects to complete the refinancing by mid-October 2005.


SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

   

Transmeridian Exploration Incorporated

(Registrant)

Date: September 9, 2005   By:  

/s/ EARL W. MCNIEL


        Earl W. McNiel
        Vice President, Chief Financial Officer
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