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 risks of purchase of the Common Stock to the
extent the Company possesses such information or can acquire it without
unreasonable effort or expense; and has not been furnished any other offering
literature or prospectus except as mentioned herein or in the Information;


 


(iii)                               Has not been furnished
with any oral representation or warranty in connection with the offering of the
Common Stock by the Company or any officer, employee, agent, affiliate or
subsidiary, which is not contained in the Information, and is relying solely on
the information contained in the Information and the answers to questions with
respect thereto furnished to the Investor by the Company;


 


(iv)                              Understands that the
purchase of the Common Stock involves various risks including, but not limited
to, those outlined in the Information and in this Agreement, and has determined
that the Common Stock is a suitable investment and that it could bear a
complete loss of its investment;


 


(v)                                 Is not relying on the
Company with respect to the economic considerations of the Investor related to
this investment.  The Investor has relied
on


 


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the advice of, or has consulted with, regarding the economic
considerations related to this investment, only its own personnel and Advisors;


 


(vi)                              The Investor is
authorized and qualified to become a stockholder in, and authorized to make its
capital contributions to, the Company, and the person signing this Agreement
and Investment Representation on behalf of such entity has been duly authorized
by such entity to do so;


 


(vii)                           Any information which the
Investor has heretofore represented or furnished to the Company with respect to
its financial position and business experience is correct and complete as of
the date of this Agreement and if there should be any material change in such
information it will immediately furnish such revised or corrected information
to the Company; and


 


(viii)                        The Investor understands that,
unless the Investor notifies the Company in writing to the contrary before the
Closing, all the representations and warranties contained in this Agreement will
be deemed to have been reaffirmed and confirmed as of the Closing, taking into
account all information received by the Investor.


 


(c)                                  Investor Awareness.  The Investor acknowledges, represents, agrees
and is aware that:


 


(i)                                     Substantially all
of the Company’s current operations are located in the Republic of Kazakhstan,
and the Company is subject to the political and economic risks of operating in
this country and region of the world.


 


(iii)                               No federal or state
agency has passed upon the Common Stock or made any finding or determination as
to the fairness of this investment;


 


(iv)                              The Company is subject to
substantial risks, including those described in Item 1 of its annual report on Form 10-K
for the year ended December 31, 2004, and the Investor acknowledges that
these risks, as well as others incident to the investment in the Common Stock
of the Company, could result in the loss of part or all of the purchase price
paid hereunder for the Subscribed Stock;


 


(v)                                 Any projections or
forward looking information provided to the Investor are based on various
estimates and forecasts by the Company and/or its consultants and are subject
to the caveats set forth in the Information. 
The Investor specifically acknowledges that actual results may differ
materially from these estimates and forecasts;


 


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(vi)                              Until the Registration Statement
is declared effective by the SEC, the investment in the Company is an illiquid
investment, and the Investor must bear the economic risk of investment in the
Common Stock during such period of time; and


 


(d)                                 Accredited Investor
Status.  The Investor represents that
the Investor qualifies as an Accredited Investor under U.S. securities laws and
the regulations of the SEC and any similar laws and regulations which may be
applicable to this transaction in any other jurisdiction which may govern the
Investor or this transaction.


 


(e)                                  Restrictions on
Transfer or Sale of the Common Stock:


 


(i)                                     The Investor is
acquiring the Common Stock subscribed for solely for the Investor’s own
beneficial account, for investment purposes, and not with a view to, or for
resale in connection with, any distribution of the Common Stock.  The Investor understands that the offer and
sale of the Common Stock is intended to be exempt from registration under U.S.
and state securities laws and has not been registered under the Securities Act
or the securities laws of any state of the United States in reliance on
specific exemptions under the provisions thereof.  These exemptions depend in part upon the
investment intent of the Investor and of the other representations made by the
Investor in this Agreement.  In
particular, 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, nor
is the Investor a U.S. person who purchased securities in a transaction that
did not require registration under the Securities Act.  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 (i) the provisions of
Regulation S promulgated under the Securities Act, (ii) an effective
registration statement under the Securities Act, or (iii) pursuant to an
available exemption from registration. 
The Investor further agrees not to engage in any short sales, hedging
transactions or other similar 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 Agreement
(and any supplemental information) for the purpose of determining whether this
transaction meets the requirements for such exemptions.


 


(ii)                                  The Investor
understands that the shares of Common Stock are restricted securities under
applicable U.S. securities laws and that the Securities Act, and that the rules of
the SEC provide in substance that the Investor may dispose of the Common Stock
only pursuant to an effective registration statement under the Securities Act
or an exemption therefrom.  The Investor
understands that, other than as expressly provided for in this Agreement, the
Company has no obligation or intention to register any of the Common Stock
purchased by the Investor hereunder, or to take any affirmative action so as to
permit sales pursuant to the Securities Act.


 


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As a consequence, the Investor understands that it must bear the
economic risks of the investment in the Common Stock until such time as the
Registration Statement becomes effective. 
The Investor understands that the Investor may not at any time demand
the purchase by the Company of the Investor’s Common Stock.


 


(iii)                               The Investor agrees: (A) that
the Investor will not sell, assign, pledge, give, transfer or otherwise dispose
of the Common Stock or any interest therein, or make any offer or attempt to do
any of the foregoing, except pursuant to a registration of the Common Stock
under the Securities Act and all applicable state securities laws or in a
transaction which is exempt from the registration provisions of the Securities
Act and all applicable state securities laws; (B) that the Company and any
transfer agent for the Common Stock shall not be required to give effect to any
purported transfer of any of the Common Stock except upon compliance with the
foregoing restrictions; and (C) that a legend in substantially the
following form will be placed on the certificates representing the Common
Stock:


 


THE SHARES OF COMMON STOCK REPRESENTED BY
THIS CERTIFICATE HAVE BEEN TAKEN WITHOUT A VIEW TO THE DISTRIBUTION THEREOF
WITHIN THE MEANING OF THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”) AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OR ANY STATE
SECURITIES LAWS AND NEITHER THE COMMON STOCK NOR ANY INTEREST THEREIN MAY BE
OFFERED, SOLD, PLEDGED, HYPOTHECATED, ASSIGNED, TRANSFERRED OR OTHERWISE
DISPOSED OF IN THE UNITED STATES OR TO U.S. PERSONS EXCEPT PURSUANT TO
REGULATION S PROMULGATED UNDER THE SECURITIES ACT, AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH SECURITIES ACT, OR AN EXEMPTION FROM REGISTRATION UNDER
SUCH SECURITIES ACT WHICH, IN THE OPINION OF COUNSEL FOR THE COMPANY, IS
AVAILABLE.   THE HOLDER AGREES NOT TO
ENGAGE IN ANY SHORT SALES, HEDGING TRANSACTIONS OR OTHER SIMILAR TRANSACTIONS
WITH REGARD TO THE COMMON STOCK OF THE COMPANY UNLESS IN STRICT COMPLIANCE WITH
THE SECURITIES ACT.


 


(iv)                              The Investor has not
offered or sold any portion of the Subscribed Stock and has no present
intention of dividing such Common Stock with others or of reselling or
otherwise disposing of any portion of such Common Stock either currently or
after the passage of a fixed or determinable period of time or upon the
occurrence or nonoccurrence of any predetermined event or circumstance.


 


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SECTION 4


 


4.1                                 Survival;
Indemnification.  All
representations, warranties and covenants contained in this Agreement and the
indemnification contained in this Section 4.1 shall survive (i) the
acceptance of the Agreement by the Company and the Closing, (ii) changes
in the transactions, documents and instruments described in the Information
which are not material or which are to the benefit of the Investor, and (iii) the
merger, sale, bankruptcy, insolvency or other change in the legal status of the
Investor.  The Investor acknowledges the
meaning and legal consequences of the representations, warranties and covenants
in Section 3 hereof and that the Company has relied upon such
representations, warranties and covenants in determining the Investor’s
qualification and suitability to purchase the Common Stock.  The Investor hereby agrees to indemnify,
defend and hold harmless the Company, its officers, directors, employees,
agents and controlling persons, from and against any and all losses, claims,
damages, liabilities, expenses (including attorneys’ fees and disbursements),
judgments or amounts paid in settlement of actions arising out of or resulting
from the failure of any representation herein or the breach of any warranty or
covenant herein.  Notwithstanding the
foregoing, however, no representation, warranty, covenant or acknowledgment
made herein by the Investor shall in any manner be deemed to constitute a
waiver of any rights granted to it under the Securities Act or the securities
laws of any state of the United States.


 


4.2                                 Modification.  Neither this Agreement nor any provisions
hereof shall be modified, discharged or terminated except by an instrument in
writing signed by the party against whom any waiver, change, discharge or
termination is sought.


 


4.3                                 Notices.  Any and all notices or other communications
or deliveries required or permitted to be provided hereunder shall be in
writing and shall be deemed given and effective on the earliest of (a) the
date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number specified in this Section 4.3 prior to
5:00 p.m. (Houston time) on a business day, (b) the next business day
after the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number specified in this Section on a day
that is not a business day or later than 5:00 p.m. (Houston time) on any
business day, or (c) upon delivery, if sent by an internationally
recognized courier service.  The addresses
for such notices and communications shall be as follows:


 


if to the Investor, addressed as specified in Exhibit ”A”; and


 


if to the Company, addressed to:


 


Transmeridian Exploration, Inc.


397 N. Sam Houston Pkwy E, Suite 300


Houston, Texas 77060


Attention:  Chief Financial
Officer


Facsimile No.:  281-999-9094


 


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or to such other address or addresses or facsimile number or numbers as
any such party may most recently have designated in writing to the other
parties hereto by such notice.


 


4.4                                 Counterparts.  This Agreement may be executed through the
use of separate signature pages or in any number of counterparts, and each
of such counterparts shall, for all purposes, constitute one agreement binding
on all the parties, notwithstanding that all parties are not signatories to the
same counterpart.


 


4.5                                 Binding
Effect.  Except as otherwise provided
herein, this Agreement shall be binding upon and inure to the benefit of the
parties and their heirs, executors, administrators, successors, legal
representatives and assigns.  If the
Investor is more than one person, the obligation of the Investor shall be joint
and several and the agreements, representations, warranties and acknowledgments
herein contained shall be deemed to be made by and be binding upon each such
person and its heirs, executors, administrators and successors.


 


4.6                                 Entire
Agreement.  This instrument contains
the entire agreement of the parties, and there are no representations,
covenants or other agreements except as stated or referred to herein.


 


4.7                                 Assignability.  This Agreement is not transferable or
assignable by the Investor except as may be provided herein.


 


4.8                                 Applicable
Law.  This Agreement shall be
governed by and construed in accordance with the laws of the State of Texas.


 


IN WITNESS WHEREOF, the undersigned have executed this Agreement
effective as of the date first written above.


 


 


	
  TRANSMERIDIAN EXPLORATION INCORPORATED

  
	
   

  
	
   

  
	
  By: 

  	
   

  	
   

  
	
  Lorrie T. Olivier

  
	
  President and Chief Executive Officer

  
	
   

  
	
   

  
	
  INVESTOR:

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  
	
  Title:

  



 


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Exhibit ”A”


 


Subscription Details, Investor Information
and Signature Page


 


Subscription Agreement and Investment
Representation


 


Dated July    , 2005


 


	
  Name of Investor:

  	
   

  	
   

  
	
   

  
	
  Number of Shares:

  	
   

  	
   

  
	
   

  
	
  Price per Share:

  	
   

  	
   

  
	
   

  
	
  Total Consideration:

  	
   

  	
   

  
	
   

  
	
   

  
	
  Signature:

  	
   

  	
   

  
	
   

  
	
  Title or Capacity:

  	
   

  	
   

  
	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  
	
  Telephone #:

  	
   

  	
   

  
	
   

  
	
  Fax #:

  	
   

  	
   

  
	
   

  
	
  Citizenship:

  	
   

  	
   

  
	
   

  
	
  Primary Residence:

  	
   

  	
   

  
	
   

  
	
  Agreed and Accepted:

  	
   

  	
   

  
	
   

  
	
   

  
	
  TRANSMERIDIAN EXPLORATION INCORPORATED

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Lorrie T. Olivier

  
	
  President and Chief Executive Officer

  
					



 


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