Exhibit 10.2

 

Kenmont Special Opportunities Master Fund, L.P.    Whitebox Convertible
Arbitrage Partners, LP Man Mac Miesque 10B Ltd.    Whitebox Hedged High Yield
Partners, LP c/o Kenmont Investments Management, L.P.    Pandora Select
Partners, LP 711 Louisiana, Suite 1750    Whitebox Intermarket Partners, LP
Houston, TX 77002    3033 Excelsior Boulevard, Suite 300    Minneapolis, MN
55416-4675    Fursa Master Global Event Driven Fund, LP    Guggenheim Portfolio
Company XXXI, LLC 444 Merrick Road, Suite 104    GPC LIX, LLC Lynbrook, NY 11563
   135 East 57th Street, 11th Floor    New York, NY 10022

CONFIDENTIAL

June 18, 2007

Transmeridian Exploration Incorporated

397 N. Sam Houston Pkwy. E., Suite 300

Houston, Texas 77060

Attention: Earl W. McNiel, Chief Financial Officer

20% Junior Redeemable Convertible Preferred Stock

Additional Return Agreement

Ladies and Gentlemen:

Reference is made to the amended and restated commitment letter dated the date
hereof (including Exhibit A thereto, the “Commitment Letter”) among the various
investors set forth on the signature pages hereto (collectively, the “Initial
Investors”), and you. This Additional Return Agreement is the “Letter Agreement”
referred to therein. Terms used but not defined in this Additional Return
Agreement shall have the meanings assigned thereto in the Commitment Letter.

 

1. Additional Returns.

As consideration for our respective agreements under the Commitment Letter with
respect to the Transaction, you agree to pay to each Initial Investor (i) a
commitment preferred return (collectively, and as the same may be adjusted as
provided for below, “Commitment Return”) equal to 25% of the commitment amount
of such Initial Investor, as set forth under the heading “Commitment Amount” in
the table appearing in Paragraph 1 of the Commitment Letter, which preferred
return is subject to adjustment as described below and (ii) for its own account,
in consideration of its standby pledge with respect to the Transaction, a
transaction preferred return (collectively, “Transaction Return” and together
with the Commitment Return, the “Returns”) equal to 10% of the commitment amount
of such Initial Investor, as set forth under the heading “Commitment Amount” in
the table appearing in Paragraph 1 of the Commitment Letter.

The Transaction Return is fully vested upon your acceptance of the Commitment
Letter, without regard to whether any closing of the purchase and sale of
Securities contemplated by the Commitment Letter shall take place (unless, in
the case of an Initial Investor, such failure to close is the result of such
Initial Investor’s default under the Commitment Letter). The Commitment Return,
as applicable to each of Tranche 1 and Tranche 2 of the Securities, is fully
vested upon consummation of the Transaction as it occurs with respect to each
such tranche; provided, however, all Returns are due and payable at the earlier
of: (i) the occurrence of a Change of Control, as such term is defined in the
Certificate and (ii) June 18, 2008.

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If the Returns are not paid by December 31, 2007, from and after such date the
principal amount of the Company’s obligation to pay such Returns shall
thereafter be increased, without the need for further act or evidence, at the
rate of 10% per annum.

You shall make payment of the Returns when due without the need for any demand
or other action by any of us, in each case by wire transfer to the respective
accounts that each Initial Investor shall have previously designated to you;
provided, however, if the Returns become due other than upon the occurrence of a
Change of Control, you may elect to satisfy your payment obligations with
respect thereto by delivery of duly authorized, fully paid and non-assessable
shares of your Common Stock, valued for such purpose as prescribed by Section
(3A)(b) of the Certificate.

 

2. General.

The assignment of any portion of an Initial Investor’s commitment under the
Commitment Letter shall be deemed to include an assignment of the corresponding
portion of the unvested Commitment Return applicable to the portion of such
commitment so assigned. No Returns, once vested, are assignable without the
prior written consent of the Company, which shall not unreasonably be withheld;
provided, however, notwithstanding the foregoing, an Initial Investor may assign
its vested Returns, or any part thereof, to an affiliate and in such case the
assignor must provide written notice thereof to the Company promptly upon
completion of such assignment. Notwithstanding any provision of this Additional
Return Agreement or the Commitment Letter to the contrary, an Initial Investor
may elect in writing to waive all or any portion of its Returns, whether vested
or unvested.

You agree that, once paid, the Returns or any part thereof payable hereunder
will not be refundable under any circumstances. All Returns payable hereunder
will be paid in immediately available funds and shall not be subject to
reduction by way of setoff or counterclaim.

You agree that (i) you will not disclose this Additional Return Agreement or the
contents hereof other than as permitted by the Commitment Letter and (ii) your
obligations under this Additional Return Agreement shall survive the expiration
or termination of the Commitment Letter and the purchase of the Securities.

It is understood that this Additional Return Agreement shall not constitute or
give rise to any obligation on our part to purchase any Securities; such an
obligation will arise only under the Commitment Letter if accepted in accordance
with its terms. This Additional Return Agreement amends, restates and supersedes
in its entirety that certain letter agreement among the Initial Investors and
the Company, dated June 18, 2007, regarding the matters addressed herein. This
Additional Return Agreement may not be amended or any provision hereof waived or
modified except by an instrument in writing signed by each of the parties
hereto. THIS ADDITIONAL RETURN AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. This Additional Return
Agreement may be executed in any number of counterparts, each of which shall be
an original and all of which, when taken together, shall constitute one
agreement. Delivery of an executed counterpart of a signature page of this
Additional Return Agreement by facsimile transmission shall be effective as
delivery of a manually executed counterpart of this Additional Return Agreement.
Section headings used herein are for convenience of reference only, are not part
of this Additional Return Agreement and are not to affect the construction of,
or to be taken into consideration in interpreting, this Additional Return
Agreement.

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If the foregoing correctly sets forth our understanding, please indicate your
acceptance of the terms hereof by returning to each of us an executed
counterpart hereof, whereupon this Additional Return Agreement shall become a
binding agreement between us.

 

Very truly yours, KENMONT SPECIAL OPPORTUNITIES MASTER FUND, L.P. By   Kenmont
Investments Management, L.P. By  

/s/ John Harkrider

Name:   John Harkrider Title:   Managing Director & CFO MAN MAC MIESQUE 10B LTD.
By   Kenmont Investments Management, L.P. By  

/s/ John Harkrider

Name:   John Harkrider Title:   Managing Director & CFO FURSA MASTER GLOBAL
EVENT DRIVEN FUND, LP By  

/s/ Mickey Harley

Name:   Mickey Harley Title:   President & CIO

Additional Return Agreement Signature Page

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WHITEBOX CONVERTIBLE ARBITRAGE PARTNERS, LP By  

/s/ Jonathan Wood

Name:   Jonathan Wood Title:   Director - COO WHITEBOX HEDGED HIGH YIELD
PARTNERS, LP By  

/s/ Jonathan Wood

Name:   Jonathan Wood Title:   Director - COO PANDORA SELECT PARTNERS, LP By  

/s/ Jonathan Wood

Name:   Jonathan Wood Title:   Director - COO WHITEBOX INTERMARKET PARTNERS, LP
By  

/s/ Jonathan Wood

Name:   Jonathan Wood Title:   Director - COO

Additional Return Agreement Signature Page

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GUGGENHEIM PORTFOLIO COMPANY XXXI, LLC By  

/s/ Jonathan Wood

Name:   Jonathan Wood Title:   Director - COO GPC LIX, LLC By  

/s/ Jonathan Wood

Name:   Jonathan Wood Title:   Director - COO

 

Accepted and agreed to as of

the date first above written:

TRANSMERIDIAN EXPLORATION INCORPORATED

By:  

/s/ Earl W. McNiel

  Earl W. McNiel   Vice President and Chief Financial Officer

Additional Return Agreement Signature Page