Exhibit 10.4
Agreement with Transmeridian Exploration Inc., as amended
GOLDEN RIVER INC.
U.S. CORPORATE XXXXXX
0000 XXXX XXXXXXX XXX
XXXXX XXXXXX, XX
00000
October 8, 1999
Xxxxx Xxxxxxxx
00 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx
XXXX0X0
(xxx "Vendor")
RE: PURCHASE BY GOLDEN RIVER INC. ("GOLDEN RIVER") OF ALL THE ISSUED
AND OUTSTANDING SHARES (THE "SHARES") OF TRANSMERIDIAN EXPLORATION
INC., A BRITISH VIRGIN ISLANDS COMPANY ("TRANSMERIDIAN") CARRYING ON
THE BUSINESS OF OIL AND GAS EXPLORATION, DEVELOPMENT AND OPERATION
(THE "BUSINESS")
We are writing to confirm the terms and conditions upon which the
Vendor will sell, transfer and assign to Golden River and Golden River will
purchase the Shares from the Vendor.
The basic terms and conditions of such purchase and sale are as
follows:
1. The Vendor warrants that he is a shareholder of Transmeridian and has
authority to execute this Agreement on behalf of all other shareholders of
Transmeridian. The Vendor will and will cause all other shareholders of
Transmeridian to sell, transfer and assign to Golden River and Golden River
will purchase from the Vendor and the other shareholders of Transmeridian
free and clear of all liens, charges and encumbrances the Shares for the
consideration set out herein; all references herein to the Vendor shall
include all shareholders of Transmeridian;
2. The closing of the purchase and sale of the Shares (the "Closing") will
take place on November 15, 1999 or such other date as may be agreed to by
the parties hereto (the "Closing Date");
-2-
3. The purchase price for the Shares will be the payment on the Closing Date
of such number of common shares in the capital of Golden River (the
"Purchase Shares") that equals the net asset value of oil and gas
properties owned by Transmeridian at the Closing Date (the "Transmeridian
Net Asset Value) divided by $5.00 US for Proven Reserve Value and $10.00 US
for Probable Reserve Value, both as defined below;
4. The Purchase Shares will have such hold periods as are required under
applicable securities laws, which to the knowledge of Golden River is one
year plus applicable affiliate volume restrictions. The Purchase Shares
will be issued from treasury as fully paid and non-assessable shares in the
capital of Golden River and shall be free and clear of all liens, charges
and encumbrances;
5. The Purchase Shares will be paid on Closing either into escrow or directly
to the Vendor. The portion of Transmeridian's Net Asset Value which is
conditional on Transmeridian or the Vendor fulfilling certain obligations
under the applicable purchase or joint venture agreements for oil or gas
properties (the "Earning Conditions") will be paid in Purchase Shares on
the Closing Date into escrow (the "Escrow Shares") with the transfer agent
of Golden River, who will be instructed to release the Escrow Shares from
escrow upon such of the Earning Conditions as is agreed by the parties
prior to Closing being fulfilled; and such amount of the Transmeridian Net
Asset Value of Transmeridian which is not subject to Earning Conditions
shall be issued and delivered to the Vendor on Closing;
6. Upon execution hereof, the parties will at the expense of Transmeridian
retain a firm of Independent and certified oil and gas property valuators
(the "Valuators") approved by all parties who shall value the Transmeridian
assets. The Valuators will be instructed to assess the Transmeridian Net
Asset Value allocating 100% value for Proven Reserves, 50% value for
Probable Reserves, and no value for speculative reserves, all taken at a
15% discount rate (Proven and Probable Reserves as defined by oil industry
standards). The Valuators also will take into account all other risks and
contingencies standard in the oil and gas industries in determining the
Transmeridian Net Asset Value, and will apply such additional discounts as
are reasonable or necessary in their opinion to arrive at a fair value for
the Transmeridian Net Asset Value. Such value as determined by the
Valuators will be the Transmeridian Net Asset Value;
7. Between the execution hereof and the Closing Date, the parties will
co-operate to provide any and all documentation and other material
necessary in order for the other parties to conduct due diligence, seek
approval of any regulatory or other bodies from whom consent is required
and prepare necessary closing documents;
8. As a condition of Closing, all parties must be satisfied with their due
diligence of Transmeridian and Golden River and their principals; the
Transmeridian Net Asset Value; and formal purchase agreements;
9. As a condition of Closing, Golden River and Xxxxx Xxxxxxxx will have agreed
to an employment contract on terms satisfactory to both;
-3-
10. As a condition of Closing, Golden River will require approval of its
shareholders to the transactions contemplated herein; Golden River agrees
to use its reasonable best efforts to obtain such approval upon formal
agreements being approved and executed;
11. Prior to the Closing, the Vendor will not, and will prevent any other party
with authority for Transmeridian, from holding discussions, entertaining
offers, or conducting any negotiations with any other party respecting the
sale of the Shares or the Business;
12. Until the Closing, the Vendor will cause Transmeridian to enter into
business arrangements stipulating that the Shares will be transferred to
Golden River. Prior to Closing, Transmeridian will not enter into any
agreements without prior consultation with Golden River;
13. Upon Closing, Golden River will use its reasonable best efforts to change
its name to "Transmeridian Exploration, Inc.";
14. Upon Closing, the Vendor will have the right to the appointment of four
directors to the board of Golden River, which directors will hold office
until the next annual general meeting of Golden River at which time
directors will be elected;
15. Upon Closing, the Vendor will use their reasonable best efforts to arrange
a private placement in Golden River for a minimum of USD$2 million dollars
to cover immediate working capital and project costs. In addition, the
Vendor will use their reasonable best efferts to arrange for 100% project
financing for each of the Transmeridian projects;
16. The Vendor will cause Transmeridian to disclose all contracts, engagements
and commitments, whether oral or written to Golden River immediately as
they occur;
17. The parties will diligently work toward the preparation and execution of a
formal purchase agreement which includes the terms set out herein. The
formal purchase agreement will also contain representations and warranties
which are customary in agreements respecting purchases of companies with
very substantial oil and gas assets;
18. Each party will execute all of the documents and do all such other acts and
deeds as an when the same may be necessary in order to carry out the terms
and intent of this Letter Agreement;
19. Each party will pay its costs of the transactions contemplated herein.
20. This agreement will enure to the benefit of and be binding upon the parties
hereto and their respective heirs, executors, administrators, successors
and permitted assigns. This agreement may not be assigned by any paty
without the prior written consent of the others;
21. This agreement may be executed in several counterparts each of which will
be deemed to be an original and all of which together will constitute one
and the same instrument. A facsimile copy of a signed agreement will be
deemed an original.
-4-
If you agree to the above terms kindly sign this letter signifying your
approval and acceptance and return one fully executed copy to us at your
earliest convenience. This offer is open for acceptance until October
_______________, 1999.
Yours truly,
GOLDEN RIVER INC.
Per: /s/ Xxxxx Xxxxxx
The undersigned hereby agree to the foregoing terms of purchase and sale this
13th day of October, 1999.
/S/ XXXXX XXXXXXXX
XXXXX XXXXXXXX
GOLDEN RIVER RESOURCES INC.
0000 XXXXXXX XXXXXX
XXXXXXX, XXXXXXX XXXXXXXX
X0X 0X0 XXXXXX
November 4, 1999
Xxxxx Xxxxxxxx
00 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx
XXXX0X0
(xxx "Vendor")
RE: PURCHASE BY GOLDEN RIVER RESOURCES INC. ("GOLDEN RIVER") OF ALL
THE ISSUED AND OUTSTANDING SHARES (THE "SHARES") OF TRANSMERIDIAN
EXPLORATION INC., A BRITISH VIRGIN ISLANDS COMPANY ("TRANSMERIDIAN")
CARRYING ON THE BUSINESS OF OIL AND GAS EXPLORATION, DEVELOPMENT AND
OPERATION (THE "BUSINESS")
We are writing to amend our earlier letter agreement with you dated
October 8, 1999 and accepted by you October 13, 1999 (the "Agreement").
The terms and conditions set forth in the Agreement are to remain the
same, except to the extent that they conflict with the following:
1. The closing of the purchase and sale of the Shares (the "Closing") will
take place as soon as practicable after all of the conditions to Closing
have been met.
2. As a condition of Closing, all parties must be satisfied with their due
diligence of Transmeridian and Golden River and their principals; the
Transmeridian Net Asset Value; and formal purchase agreement. For the
purpose of the Agreement, due diligence is intended to encompass an
examination of the feasibility of the acquisition of the Transmeridian
Business by Golden River.
3. As an additional condition of Closing, Transmeridian must provide
historical audited financial statements through the end of the latest
complete fiscal year and unaudited financial statement through the end of
the latest completed fiscal quarter which will meet the requirements of the
United States Securities and Exchange Commission.
-2-
In the event that the terms and conditions set forth in the Agreement
conflict with the terms set forth above, the terms set forth above shall be
deemed to be the agreement between the parties.
If you agree to the above terms, kindly sign this letter signifying
your approval and acceptance and return one fully executed copy to us at your
earliest convenience.
Yours truly,
GOLDEN RIVER RESOURCES INC.
Per: /s/ Xxxxx Xxxxxx
The undersigned hereby agrees to the foregoing terms this 4th day of November,
1999.
/S/ XXXXX XXXXXXXX
Xxxxx Xxxxxxxx
