Document:

Pledge Agreement

 Exhibit 10.2 
  
 Execution Version 
  
 PLEDGE AGREEMENT 
  
 THIS PLEDGE AGREEMENT (this “Pledge Agreement”), dated as of December 12, 2005, is by and between Transmeridian Exploration
Incorporated, a Delaware corporation (“Pledgor”), The Bank of New York, in its capacity as Collateral Agent for the benefit of the Trustee referred to below and the holders of the Notes referred to below (in such capacity,
the “Collateral Agent”), and The Bank of New York, in its capacity as Trustee under the Indenture referred to below (in such capacity, the “Trustee”). 
  
 RECITALS 
  
 WHEREAS, pursuant to that certain Indenture, dated as of the date hereof, by and among Transmeridian Exploration,
Inc., a company organized under the laws of the British Virgin Islands and a wholly-owned subsidiary of Pledgor (“Issuer”), the Trustee, Pledgor, as a guarantor, and the other guarantors party thereto (the
“Indenture”), Issuer will issue an aggregate $250 million principal amount of its Senior Secured Notes due 2010 (the “Notes”); and 
  
 WHEREAS, pursuant to the terms of the Indenture, the Notes, and the Issuer’s payment obligations under the
Indenture, including obligations to the Trustee, will be secured, in part, by a full and unconditional guarantee by Pledgor (the “Guarantee”) and, in turn, the Guarantee will be secured by a pledge of all of the capital stock
held by Pledgor in Issuer and by a pledge of all of the capital stock directly held by Pledgor in any future subsidiary. 
  
 NOW, THEREFORE, in consideration of these premises and other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows: 
  
 1. Definitions.
Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed to such terms in the Indenture, and the following terms that are defined in the Uniform Commercial Code from time to time in effect in the State of New
York (the “UCC”) are used herein as so defined: Certificated Security, Control, Entitlement Order, Financial Asset, Investment Company Security, Securities Account, Security, Security Entitlement, Securities Intermediary and
Uncertificated Security. 
  
 2. Pledge and Grant of Security Interest.
Subject to the terms and conditions of this Agreement and to secure the performance of the Secured Obligations (as defined in Section 3 hereof), Pledgor hereby pledges and grants to the Collateral Agent, for the benefit of the holders of the
Notes, a continuing security interest in any and all right, title and interest of Pledgor in and to the following, whether now owned or existing or owned, acquired, or arising hereafter (collectively, the “Pledged
Collateral”): 
  
 (a) Pledged Capital Stock.
All of the issued and outstanding Capital Stock directly owned by Pledgor of each Person set forth on Schedule 2(a) attached hereto (collectively, together with the Capital Stock and other interests described in clauses (A) and (B) and in
Section 2(b) below, the “Pledged Capital Stock”), including, but not limited to, the following: 
  
 (A) all shares, securities, membership interests or other equity interests representing a dividend on any of the Pledged Capital Stock, or
representing a 

 
distribution or return of capital upon or in respect of the Pledged Capital Stock, or resulting from a stock split, revision, reclassification or other
exchange therefor, and any subscriptions, warrants, rights or options issued to the holder of, or otherwise in respect of, the Pledged Capital Stock; and 
  
 (B) without affecting the obligations of Pledgor under any provision prohibiting such action hereunder or under the Indenture, in the
event of any consolidation or merger involving the issuer of any Pledged Capital Stock and in which such issuer is not the surviving entity, all shares of each class of the Capital Stock of the successor entity formed by or resulting from such
consolidation or merger. 
  
 (b) Additional Interests. Any
and all other Capital Stock or other equity interests directly owned by Pledgor in any Person now or in the future, whether or not reflected on Schedule 2(a) and whether or not Schedule 2(a) is amended to refer to such additional interests.

  
 (c) Proceeds. All proceeds and products of the
foregoing, however and whenever acquired and in whatever form, subject to Section 10(e). 
  
 Without limiting the generality of the foregoing, it is hereby specifically understood and agreed that Pledgor may from time to time hereafter pledge and deliver additional shares of Capital Stock or other equity
interests to the Collateral Agent as collateral security for the Secured Obligations. Upon such pledge and delivery to the Collateral Agent, such additional shares of Capital Stock or other equity interests shall be deemed to be part of the Pledged
Collateral and shall be subject to the terms of this Pledge Agreement whether or not Schedule 2(a) is amended to refer to such additional shares or interests. 
  

3. Security for Secured Obligations. The security interest created hereby in the Pledged Collateral of Pledgor constitutes continuing collateral security for
all of the following, whether now existing or hereafter incurred (the “Secured Obligations”): (a) the Guarantee and (b) all expenses and charges, legal and otherwise, incurred by the Collateral Agent, the Trustee
and/or the holders of the Notes in enforcing the Guarantee or in realizing on or protecting any security therefor, including without limitation the security granted hereunder. 
  
 4. Delivery of the Pledged Collateral; Perfection of Security Interest. Pledgor hereby agrees that: 
  
 (a) Delivery of Certificates and Instruments. Pledgor shall deliver as
security to the Collateral Agent, (i) simultaneously with or prior to the execution and delivery of this Pledge Agreement, all certificates representing the Pledged Capital Stock owned by Pledgor, together with the delivery of signed, undated
stock transfer forms for the Pledged Capital Stock to the Collateral Agent or its designee; and (ii) promptly upon the receipt thereof by or on behalf of Pledgor, all other certificates and instruments constituting Pledged Collateral owned by
Pledgor; provided, notwithstanding the foregoing, that Pledgor shall deliver all certificates and instruments representing the Capital Stock (as defined in the Indenture) of TMEI (as defined in the Indenture) to the Collateral Agent subsequent to
the consummation of the Bramex Acquisition (as defined in the Indenture) in accordance with Section 4.40(b) of the Purchase Agreement (as defined in the Indenture). Prior to delivery to the Collateral Agent, all such certificates and
instruments constituting Pledged Collateral of Pledgor shall 

  

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be held in trust by Pledgor for the benefit of the Collateral Agent pursuant hereto. All such certificates shall be delivered in suitable form for transfer
by delivery or shall be accompanied by duly executed instruments of transfer or assignment in blank, in forms reasonably acceptable to the Collateral Agent. 
  
 (b) Additional Securities. If Pledgor shall receive by virtue of its being or having been the owner of any Pledged Collateral, any
(i) certificate, including without limitation, any certificate representing a dividend or distribution in connection with any increase or reduction of capital, reclassification, merger, consolidation, sale of assets, combination of shares of
Capital Stock, stock splits, spin-off or split-off, promissory notes or other instruments; (ii) option or right, whether as an addition to, substitution for, or an exchange for, any Pledged Collateral or otherwise; (iii) dividends payable
in Capital Stock; or (iv) distributions of Capital Stock or other equity interests in connection with a partial or total liquidation, dissolution or reduction of capital, capital surplus or paid-in surplus, then Pledgor shall receive such
certificate, instrument, option, right or distribution in trust for the benefit of the Collateral Agent, shall segregate it from Pledgor’s other property and shall deliver it forthwith to the Collateral Agent in the exact form received
accompanied by duly executed instruments of transfer or assignment in blank, in forms reasonably acceptable to the Collateral Agent, to be held by the Collateral Agent as Pledged Collateral and as further collateral security for the Secured
Obligations. 
  
 (c) Financing Statements; Other Perfection
Actions. Pledgor hereby agrees to prepare and file such financing statements (including continuation statements) or amendments thereof or supplements thereto or other instruments as are necessary or appropriate in order to perfect and maintain
the security interests granted hereunder in accordance with the UCC that specifically describes the Pledged Collateral in such manner as is necessary or advisable. Pledgor shall also execute and deliver to the Collateral Agent and/or file such
agreements, assignments or instruments (including affidavits, notices, reaffirmations, amendments and restatements of existing documents and, subject to the terms of the Indenture, any documents as may be necessary if the law of any jurisdiction
other than New York becomes or is applicable to the Pledged Collateral or any portion thereof, in each case, including as the Collateral Agent may reasonably request) and do all such other things as are necessary or appropriate (i) to assure to
the Collateral Agent its security interests hereunder are perfected, including such financing statements (including continuation statements) or amendments thereof or supplements thereto or other instruments, including as the Collateral Agent may
from time to time reasonably request in order to perfect and maintain the security interests granted hereunder in accordance with the UCC and any other personal property security legislation in the appropriate jurisdictions, (ii) to consummate
the transactions contemplated hereby and (iii) to otherwise protect and assure the Collateral Agent of its rights and interests hereunder. 
  
 (d) With respect to the pledged Capital Stock of the Issuer, Pledgor shall request and procure the entry on the share register of the Issuer of (i) a
statement that the Capital Stock is charged; (ii) the name of the Collateral Agent; and (iii) the date on which the aforesaid particulars are entered into the share register. In addition, the Pledgor shall procure the filing of same with
the Registrar of Corporate Affairs in the British Virgin Islands. 
  

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 5. Representations and Warranties. Pledgor hereby represents and warrants to the Collateral Agent for the benefit
of the Trustee and the holders of the Notes that: 
  
 (a)
Authorization of Pledged Capital Stock. The Pledged Capital Stock is duly authorized and validly issued, is fully paid and nonassessable and is not subject to the preemptive rights of any Person. 
  
 (b) Title. Pledgor has good and indefeasible title to the Pledged
Collateral and will at all times be the legal and beneficial owner of such Pledged Collateral free and clear of any Lien, other than Permitted Liens. There exists no “adverse claim” within the meaning of Section 8-102 of the UCC with
respect to the Pledged Capital Stock. 
  
 (c) Exercising of
Rights. The exercise by the Collateral Agent of its rights and remedies hereunder will not violate any law or governmental regulation or any material contractual restriction binding on or affecting Pledgor or any of its property. 
  
 (d) Pledgor’s Authority. No authorization, approval or action by,
and no notice or filing with any Governmental Authority, the issuer of any Pledged Capital Stock or third party is required either (i) for the pledge made by Pledgor or for the granting of the security interest by Pledgor pursuant to this
Pledge Agreement or (ii) for the exercise by the Collateral Agent, the Trustee or the holders of the Notes of their rights and remedies hereunder (except as may be required by laws affecting the offering and sale of securities). 
  
 (e) Security Interest/Priority. This Pledge Agreement creates a valid
security interest in favor of the Collateral Agent, for the benefit of the Trustee and the ratable benefit of the holders of the Notes, in the Pledged Collateral. The taking of possession by the Collateral Agent of the certificates (if any)
representing the Pledged Capital Stock and the relevant stock transfer forms and all other certificates and instruments constituting Pledged Collateral will perfect and establish the first priority of the Collateral Agent’s security interest in
all certificated Pledged Capital Stock and such certificates and instruments. Upon the filing of UCC financing statements by the Pledgor in the location of Pledgor’s state of organization, the Collateral Agent shall have a first priority
perfected security interest in all uncertificated Pledged Capital Stock consisting of partnership or limited liability company interests that do not constitute a Security pursuant to Section 8-103(c) of the UCC. With respect to any Pledged
Collateral consisting of an Uncertificated Security or a Security Entitlement or any Pledged Collateral held in a Securities Account, upon execution and delivery by Pledgor, the Collateral Agent and the applicable Securities Intermediary or the
applicable issuer of the Uncertificated Security of an agreement granting Control to the Collateral Agent over such Pledged Collateral, the Collateral Agent shall have a first priority perfected security interest in such Pledged Collateral. Except
as set forth in this Section 5(e), no action is necessary to perfect the Collateral Agent’s security interest. 
  
 6. Covenants. Pledgor hereby covenants and agrees with the Collateral Agent that Pledgor shall: 
  
 (a) Defense of Title. Warrant and defend title to and ownership of the Pledged Collateral at its own expense against the
claims and demands of all other parties claiming an interest therein; keep the Pledged Collateral free from all Liens, other than Permitted Liens; and not sell, exchange, transfer, assign, lease or otherwise dispose of the Pledged Collateral or any
interest therein, except as permitted under the Indenture. 
  
 (b)
Further Assurances. Subject to the terms of the Indenture, promptly execute and deliver at its expense all further instruments and documents and take all further action that may be necessary and desirable or that the Collateral Agent may request in
order to (i)

  

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perfect and protect the security interest created hereby in the Pledged Collateral (including, without limitation, execution and delivery of one or more
control agreements reasonably acceptable to the Collateral Agent, filing of UCC financing statements and any and all other actions reasonably necessary to satisfy the Collateral Agent that the Collateral Agent has obtained a first priority perfected
security interest in all Pledged Collateral); and (ii) enable the Collateral Agent to exercise and enforce its rights and remedies hereunder in respect of the Pledged Collateral. 
  
 (c) Amendments. Not make or consent to any amendment or other modification or waiver with respect to any of the
Pledged Collateral or enter into any agreement or allow to exist any restriction with respect to any of the Pledged Collateral other than pursuant hereto or as may be permitted under the Indenture. 
  
 (d) Compliance with Securities Laws. File all reports and other
information now or hereafter required to be filed by Pledgor with the United States Securities and Exchange Commission and any other state, federal or foreign agency in connection with the ownership of the Pledged Collateral. 
  
 7. Performance of Obligations; Advances by Collateral Agent. On failure of Pledgor to
perform any of the covenants and agreements contained herein, the Collateral Agent may, at its sole option and in its sole discretion, but shall not be required to, perform or cause to be performed the same and in so doing may expend such sums as
the Collateral Agent may reasonably deem advisable in the performance thereof, including, without limitation, the payment of any insurance premiums, the payment of any taxes, a payment to obtain a release of a Lien or potential Lien (other than in
either case a Permitted Lien), expenditures made in defending against any adverse claim and all other expenditures which the Collateral Agent may make for the protection of the security interest hereof or may be compelled to make by operation of
law. All such sums and amounts so expended shall be repayable by Pledgor promptly upon timely notice thereof and demand therefor and shall constitute additional Secured Obligations. No such performance of any covenant or agreement by the Collateral
Agent on behalf of Pledgor, and no such advance or expenditure therefor, shall relieve Pledgor of any default under the terms of this Pledge Agreement or the Indenture. The Collateral Agent may make any payment hereby authorized in accordance with
any bill, statement or estimate procured from the appropriate public office or holder of the claim to be discharged without inquiry into the accuracy of such bill, statement or estimate or into the validity of any tax assessment, sale, forfeiture,
tax lien, title or claim except to the extent such payment is being contested in good faith by Pledgor in appropriate proceedings and against which adequate reserves are being maintained in accordance with GAAP. 
  
 Pledgor covenants and agrees to indemnify the Collateral Agent to the same extent as the
Trustee is indemnified under the terms of the Indenture by the Issuer of the Notes, for any claims, costs, liabilities or expense of any kind (including the fees and expenses of counsel) arising out of or in connection with performance of its duties
hereunder or with respect to the Escrow Agreement, and such expenses shall, until paid in full, constitute additional secured obligations (as defined in the Indenture). 
  
 8. Events of Default. The occurrence of an event which under the Indenture would constitute an Event of Default shall be an event of
default hereunder (an “Event of Default”). 
  

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 9. Remedies. 
  
 (a) General Remedies. Upon the occurrence of an Event of Default and during the continuation thereof, the Collateral Agent shall have, in respect
of the Pledged Collateral, in addition to the rights and remedies provided herein and in the Indenture, the rights and remedies of a secured party under the UCC or any other applicable law. 
  
 (b) Sale of Pledged Collateral. Upon the occurrence of an Event of
Default and during the continuation thereof, without limiting the generality of this Section 9 and without notice, the Collateral Agent may, in its sole discretion, sell or otherwise dispose of or realize upon the Pledged Collateral, or any
part thereof, in one or more parcels, at public or private sale, at any exchange or broker’s board or elsewhere, at such price or prices and on such other terms as the Collateral Agent may deem commercially reasonable, for cash, credit or for
future delivery or otherwise in accordance with applicable law. To the extent permitted by law, any holder of the Notes may, in such event, bid for the purchase of such securities. Pledgor agrees that, to the extent notice of sale shall be required
by law and has not been waived by Pledgor, any requirement of reasonable notice shall be met if notice, specifying the place of any public sale or the time after which any private sale is to be made, is personally served on or mailed, postage
prepaid, to Pledgor, in accordance with Section 16 at least ten (10) days before the time of such sale. The Collateral Agent shall not be obligated to make any sale of Pledged Collateral regardless of notice of sale having been given. The
Collateral Agent may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned. 
  
 (c) Private Sale. Upon the occurrence of an Event of Default and
during the continuation thereof, Pledgor recognizes that the Collateral Agent may deem it impracticable to effect a public sale of all or any part of the Pledged Collateral and that the Collateral Agent may, therefore, determine to make one or more
private sales of any such Pledged Collateral to a restricted group of purchasers who will be obligated to agree, among other things, to acquire such Pledged Collateral for their own account, for investment and not with a view to the distribution or
resale thereof. Pledgor acknowledges that any such private sale may be at prices and on terms less favorable to the seller than the prices and other terms which might have been obtained at a public sale and, notwithstanding the foregoing, agrees
that such private sale shall be deemed to have been made in a commercially reasonable manner and that the Collateral Agent shall have no obligation to delay sale of any such Pledged Collateral for the period of time necessary to permit the issuer of
such Pledged Collateral to register such Pledged Collateral for public sale under the Securities Act of 1933. Pledgor further acknowledges and agrees that any offer to sell such Pledged Collateral which has been (i) publicly advertised on a
bona fide basis in a newspaper or other publication of general circulation in the financial community of New York, New York (to the extent that such offer may be advertised without prior registration under the Securities Act of 1933), or
(ii) made privately in the manner described above, shall be deemed to involve a “public sale” under the UCC, notwithstanding that such sale may not constitute a “public offering” under the Securities Act of 1933, and the
Collateral Agent or any holder of the Notes may, in such event, bid for the purchase of such Pledged Collateral, in each case except to the extent limited or prohibited by applicable law. 
  
 (d) Retention of Pledged Collateral. In addition to the rights and remedies hereunder, upon the occurrence of an
Event of Default and during the continuation thereof, the Collateral Agent may, after providing the notices required by Sections 9-620 and 9-621 of 

  

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the UCC (or any successor sections of the UCC) or otherwise complying with the notice requirements of applicable law of the relevant jurisdiction, accept or
retain all or any portion of the Pledged Collateral in satisfaction of the Secured Obligations. Unless and until the Collateral Agent shall have provided such notices, however, the Collateral Agent shall not be deemed to have retained any Pledged
Collateral in satisfaction of any Secured Obligations for any reason. 
  
 (e) Deficiency. In the event that the proceeds of any sale, collection or realization are insufficient to pay all amounts to which the Collateral Agent, the Trustee or the holders of the Notes are legally entitled, Pledgor shall be
liable for the deficiency, together with the costs of collection and the reasonable fees of any attorneys employed by the Collateral Agent to collect such deficiency. Any surplus remaining after the full payment and satisfaction of the Secured
Obligations shall be returned to Pledgor or to whomsoever a court of competent jurisdiction shall determine to be entitled thereto. 
  
 (f) Other Security. To the extent that any of the Secured Obligations are now or hereafter secured by property other than the Pledged Collateral
(including, without limitation, real and other personal property owned by Pledgor), or by a guarantee, endorsement or property of any other Person, then the Collateral Agent shall have the right to proceed against such other property, guarantee or
endorsement upon the occurrence and during the continuation of any Event of Default, and the Collateral Agent shall have the right, in its sole discretion, to determine which rights, security, Liens, security interests or remedies the Collateral
Agent shall at any time pursue, relinquish, subordinate, modify or take with respect thereto, without in any way modifying or affecting any of them, any of the Collateral Agent’s rights or the Secured Obligations under this Pledge Agreement or
under the Indenture. 
  
 10. Rights of the Collateral Agent. 
  
 (a) Power of Attorney. Pledgor hereby designates and appoints the
Collateral Agent, on behalf of the Trustee and the holders of the Notes, and each of its designees or agents as attorney-in-fact of Pledgor, irrevocably and with power of substitution, with authority to take any or all of the following actions upon
the occurrence and during the continuation of an Event of Default: 
  
 (i) to demand, collect, settle, compromise, adjust and give discharges and releases concerning the Pledged Collateral of Pledgor, all as the Collateral Agent may reasonably determine in respect of the Pledged
Collateral; 
  
 (ii) to commence and prosecute
any actions at any court for the purposes of collecting any of the Pledged Collateral and enforcing any other right in respect thereof; 
  
 (iii) to defend, settle, adjust or compromise any action, suit or proceeding brought with respect to the Pledged Collateral and, in
connection therewith, give such discharge or release as the Collateral Agent may deem reasonably appropriate; 
  
 (iv) to pay or discharge taxes, Liens, security interests, or other encumbrances levied or placed on or threatened against the Pledged
Collateral; 
  

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 (v) to direct any parties liable for any payment under any of the Pledged Collateral to
make payment of any and all monies due and to become due thereunder directly to the Collateral Agent or as the Collateral Agent shall direct; 
  
 (vi) to receive payment of and receipt for any and all monies, claims, and other amounts due and to become due at any time in respect of
or arising out of any of the Pledged Collateral; 
  
 (vii) to sign and endorse any drafts, assignments, proxies, stock powers, verifications, notices and other documents relating to the Pledged Collateral; 
  
 (viii) to execute and deliver and/or file all assignments, conveyances, statements, financing statements,
continuation statements, pledge agreements, affidavits, notices and other agreements, instruments and documents that the Collateral Agent may determine necessary in order to perfect and maintain the security interests and Liens granted in this
Pledge Agreement and in order to fully consummate all of the transactions contemplated herein; 
  
 (ix) to exchange any of the Pledged Collateral or other property upon any merger, consolidation, reorganization, recapitalization or other
readjustment of the issuer thereof and, in connection therewith, deposit any of the Pledged Collateral with any committee, depository, transfer agent, registrar or other designated agency upon such terms as the Collateral Agent may determine;

  
 (x) to vote for a shareholder, partner or
member resolution, or to sign an instrument in writing, sanctioning the transfer of any or all of the Pledged Collateral into the name of the Collateral Agent or into the name of any transferee to whom the Pledged Collateral or any part thereof may
be sold pursuant to Section 9 hereof; and 
  
 (xi) to do and perform all such other acts and things as the Collateral Agent may reasonably deem to be necessary, proper or convenient in connection with the Pledged Collateral. 
  
 This power of attorney is a power coupled with an interest and shall be irrevocable for so long as any of the Secured Obligations (other
than contingent indemnity obligations that survive termination of the Indenture pursuant to the stated terms thereof) remain outstanding. The Collateral Agent shall be under no duty to exercise or withhold the exercise of any of the rights, powers,
privileges and options expressly or implicitly granted to the Collateral Agent in this Pledge Agreement, and shall not be liable for any failure to do so or any delay in doing so. The Collateral Agent shall not be liable for any act or omission or
for any error of judgment or any mistake of fact or law in its individual capacity or its capacity as attorney-in-fact except acts or omissions resulting from its gross negligence or willful misconduct. This power of attorney is conferred on the
Collateral Agent solely to perfect, protect, preserve and realize upon its security interest in the Pledged Collateral. 
  
 (b) Assignment by the Collateral Agent. The Collateral Agent may from time to time assign the Secured Obligations or any portion thereof and/or the
Pledged Collateral or any portion thereof to a successor Collateral Agent, and the assignee shall be entitled to all of the rights and remedies of the Collateral Agent under this Pledge Agreement in relation thereto. 
  

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 (c) The Collateral Agent’s Duty of Care. Other than the exercise of reasonable care to assure
the safe custody of the Pledged Collateral while being held by the Collateral Agent hereunder, the Collateral Agent shall have no duty or liability to preserve rights pertaining thereto, it being understood and agreed that Pledgor shall be
responsible for preservation of all rights in the Pledged Collateral, and the Collateral Agent shall be relieved of all responsibility for the Pledged Collateral upon surrendering it or tendering the surrender of it to Pledgor. The Collateral Agent
shall be deemed to have exercised reasonable care in the custody and preservation of the Pledged Collateral in its possession if such Pledged Collateral is accorded treatment substantially equal to that which the Collateral Agent accords its own
property, which shall be no less than the treatment employed by a reasonable agent in the industry, it being understood that the Collateral Agent shall not have responsibility for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relating to any Pledged Collateral, whether or not the Collateral Agent has or is deemed to have knowledge of such matters; or (ii) taking any necessary steps to preserve rights
against any parties with respect to any Pledged Collateral. 
  
 (d) Voting Rights in Respect of the Pledged Collateral. 
  
 (i) So long as no Event of Default shall have occurred and be continuing, to the extent permitted by law, Pledgor may exercise any and all voting and other consensual rights pertaining to the Pledged Collateral or any
part thereof for any purpose not inconsistent with the terms of this Pledge Agreement or the Indenture. 
  
 (ii) Subject to subsection (e) of this Section 10, upon the occurrence and during the continuance of an Event of Default, all
rights of Pledgor to exercise the voting and other consensual rights which it would otherwise be entitled to exercise pursuant to paragraph (i) of this subsection (d) shall cease and all such rights shall thereupon become vested in the
Collateral Agent, which shall then have the sole right to exercise such voting and other consensual rights. 
  
 (e) Dividend and Distribution Rights in Respect of the Pledged Collateral. 
  
 (i) So long as no Event of Default shall have occurred and be continuing, Pledgor may receive and retain any
and all dividends (other than dividends payable in the form of Capital Stock and other dividends constituting Pledged Collateral which are required to be delivered to the Collateral Agent pursuant to Section 4 above), distributions or interest
paid in respect of the Pledged Collateral to the extent they are allowed under the Indenture. 
  
 (ii) Upon the occurrence and during the continuation of an Event of Default: 
  
 (A) all rights of Pledgor to receive the dividends,
distributions and interest payments which it would otherwise be authorized to receive and retain pursuant to paragraph (i) of this subsection (e) shall cease and all such rights shall thereupon be vested in the Collateral Agent which shall
then have the sole right to receive and hold as Pledged Collateral such dividends, distributions and interest payments; and 
  
 (B) all dividends, distributions and interest payments which are received by Pledgor contrary to the provisions of clause (A) of this
subsection 

  

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(ii) shall be received in trust for the benefit of the Collateral Agent, shall be segregated from other property or funds of Pledgor, and shall be forthwith
paid over to the Collateral Agent as Pledged Collateral in the exact form received, to be held by the Collateral Agent as Pledged Collateral and as further collateral security for the Secured Obligations. 
  
 (f) Release of Pledged Collateral. The Collateral Agent may release
any of the Pledged Collateral from this Pledge Agreement or may substitute any of the Pledged Collateral for other Pledged Collateral without altering, varying or diminishing in any way the force, effect, Lien, pledge or security interest of this
Pledge Agreement as to any Pledged Collateral not expressly released or substituted, and this Pledge Agreement shall continue as a first priority Lien on all Pledged Collateral not expressly released or substituted. 
  
 11. Application of Proceeds. After the exercise of remedies by the Collateral Agent,
the Trustee or the holders of the Notes under Section 6.5 of the Indenture, any proceeds of the Pledged Collateral, when received by the Collateral Agent or the holders of the Notes in cash or its equivalent, will be applied in reduction of the
Secured Obligations, and Pledgor irrevocably waives the right to direct the application of such payments and proceeds and acknowledges and agrees that the Collateral Agent shall have the continuing and exclusive right to apply and reapply any and
all such proceeds in the Collateral Agent’s sole discretion, notwithstanding any entry to the contrary upon any of its books and records. 
  
 12. Costs of Counsel. If at any time hereafter, whether upon the occurrence of an Event of Default or not, the Collateral Agent employs counsel to prepare or
consider amendments, waivers or consents with respect to this Pledge Agreement, or to take action or make a response in or with respect to any legal or arbitral proceeding relating to this Pledge Agreement or relating to the Pledged Collateral, or
to protect the Pledged Collateral or exercise any rights or remedies under this Pledge Agreement or with respect to the Pledged Collateral, then Pledgor agrees to promptly pay the costs and expenses of the Collateral Agent in accordance with the
terms of the Indenture, all of which costs and expenses shall constitute Secured Obligations hereunder. 
  
 13. Continuing Agreement. 
  
 (a) This Pledge Agreement shall be a continuing agreement in every respect and shall remain in full force and effect so long as any of the Secured Obligations (other than contingent indemnity obligations that survive termination of the
Indenture pursuant to the stated terms thereof) remain outstanding. Upon such payment and termination, this Pledge Agreement shall be automatically terminated and the Collateral Agent shall, upon the request and at the expense of Pledgor, forthwith
release all of the Liens and security interests granted hereunder and shall deliver all UCC termination statements and/or other documents reasonably requested by Pledgor evidencing such termination. Notwithstanding the foregoing, all releases and
indemnities provided hereunder shall survive termination of this Pledge Agreement. 
  
 (b) This Pledge Agreement shall continue to be effective or be automatically reinstated, as the case may be, if at any time payment, in whole or in part, of any of the Secured Obligations is rescinded or must
otherwise be restored or returned by the Collateral Agent, the Trustee or any holder of the Notes as a preference, fraudulent conveyance or otherwise under any bankruptcy, insolvency or similar law, all as though such payment had not been made;
provided that in the event payment of all or any part of the Secured 

  

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Obligations is rescinded or must be restored or returned, all reasonable costs and expenses (including without limitation any reasonable legal fees and
disbursements) incurred by the Collateral Agent, the Trustee or any holder of the Notes in defending and enforcing such reinstatement shall be deemed to be included as a part of the Secured Obligations. 
  
 14. Amendments; Waivers; Modifications. This Pledge Agreement and the provisions
hereof may be amended, waived, modified, changed, discharged or terminated only by a written instrument signed by the parties hereto. 
  
 15. Successors in Interest. This Pledge Agreement shall create a continuing security interest in the Pledged Collateral and shall be binding upon Pledgor and its
successors and assigns and shall inure, together with the rights and remedies of the Collateral Agent hereunder, to the benefit of the Collateral Agent and the holders of the Notes and their respective successors and permitted assigns; provided,
however, that Pledgor may not assign its rights or delegate its duties hereunder without the prior written consent of the Collateral Agent. 
  
 16. Notices. Any notice, consent, or other communication required or permitted to be given under this Pledge Agreement to the Collateral Agent or Pledgor must be
in writing in the English language and delivered in person, by facsimile or by registered or certified mail, return receipt requested, postage prepaid, as follows: 
  

			
	 To Collateral Agent:
	  	The Bank of New York
	 	  	101 Barclay Street – 21 West
	 	  	New York, NY 10286
	 	  	Fax No.: 212-815-5802 (or 5803)
	 	  	Attention: Global Structured Finance
		
	 To Pledgor:
	  	Transmeridian Exploration Incorporated
	 	  	397 N. Sam Houston Parkway E., Suite 300
	 	  	Houston, Texas 77060
	 	  	Telephone: 281-999-9091
	 	  	Fax No.: 281-999-9094
	 	  	Attention: Chief Financial Officer
		
	 with a copy to:
	  	Akin Gump Strauss Hauer & Feld LLP
	 	  	1111 Louisiana Street, 44th Floor
	 	  	Houston, Texas 77002-5200
	 	  	Telephone: 713-220-5800
	 	  	Fax No.: 713-236-0822
	 	  	Attention: James L. Rice III

  
 Any such notice, consent, or other
communication shall be deemed given when delivered in person, sent by confirmed fax or, if given by mail, five (5) days after such communication is deposited in the mail, certified or registered with return receipt requested. 
  
 17. Counterparts. This Pledge Agreement may be executed in counterparts, each of which
where so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. It shall not be necessary in making proof of this Pledge Agreement to produce or account for more than one such counterpart.
Delivery of executed counterparts of this Pledge Agreement by telecopy shall be effective as an original and shall 

  

 11 

 
constitute a representation that an original shall be delivered upon the request of the Collateral Agent. 
  
 18. Headings. The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning, construction or interpretation of any provision of this Pledge Agreement. 
  
 19. Governing Law. THIS PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW). 
  
 20. Severability. If any provision of this Pledge Agreement is determined to be illegal, invalid or unenforceable, such provision
shall be fully severable and the remaining provisions shall remain in full force and effect and shall be construed without giving effect to the illegal, invalid or unenforceable provisions. 
  
 21. Entirety. This Pledge Agreement and the Indenture represent the entire agreement
of the parties hereto and thereto, and supersede all prior agreements and understandings, oral or written, if any, including any correspondence relating to this Pledge Agreement or the Indenture or the transactions contemplated herein and therein.

  
 22. Rights of Note Holders. All rights of the Collateral Agent
hereunder, if not exercised by the Collateral Agent, may be exercised by the Trustee or (subject to the terms of Section 6.5 of the Indenture) the holders of the Notes. 
  

 12 

 Each of the parties hereto has caused a counterpart of this Pledge Agreement to be duly executed and
delivered as of the date first above written. 
  

			
	PLEDGOR:
	
	 TRANSMERIDIAN EXPLORATION
 INCORPORATED,
 a Delaware corporation

		
	 By:
	 	/s/    BRUCE A.
FALKENSTEIN        
	 Name:
	 	Bruce A. Falkenstein
	 Title:
	 	Vice President Exploration and Geology
	
	Accepted and agreed to as of the date first above
written.
	
	 THE BANK OF NEW YORK,
 as Collateral Agent

		
	 By:
	 	/s/    LUIS PEREZ        
	 Name:
	 	Luis Perez
	 Title:
	 	Assistant Vice President
	
	 THE BANK OF NEW YORK,
 as Trustee

		
	 By:
	 	/s/    LUIS PEREZ        
	 Name:
	 	Luis Perez
	 Title:
	 	Assistant Vice President

  

 S-1 

 Schedule 2(a) 
  

							
	 ISSUER

	 	 OWNER

	 	 ISSUER’S
JURISDICTION
OF FORMATION

	 	% OF
OWNERSHIP
INTEREST

	 Transmeridian Exploration Inc.
	 	Transmeridian Exploration Incorporated	 	British Virgin Islands	 	100%
	 TMEI Operating, Inc.
	 	Transmeridian Exploration Incorporated	 	Texas	 	100%Escrow Agreement

 Exhibit 10.3 
  
 Execution Version 
  
 ESCROW AGREEMENT 
  
 This ESCROW AGREEMENT (this “Agreement”), dated as of December 12, 2005, is by and among The Bank of New York, as escrow
agent (in such capacity, the “Escrow Agent”), The Bank of New York, as Trustee (in such capacity, the “Trustee”) under the Indenture (as defined herein), and Transmeridian Exploration, Inc., a British
Virgin Islands company (the “Company”). 
  
 RECITALS: 
  
 A. Pursuant to the Indenture, dated
as of December 12, 2005 (as amended or supplemented from time to time, the “Indenture”), among the Company, each of the Guarantors party thereto and the Trustee, the Company is issuing $250,000,000 aggregate principal
amount of its Senior Secured Notes Due 2010 (the “Securities”). 
  
 B. As security for its obligations under the Securities and the Indenture, the Company hereby grants to the Trustee, for the benefit of the Trustee, any successor Trustee under the Indenture and the Holders (the
Trustee, any successor Trustee and the Holders being collectively, the “Beneficiaries”), a security interest in and lien upon the Collateral (as defined herein). 
  
 C. The parties have entered into this Agreement in order to set forth the conditions upon which, and the manner in which,
funds will be disbursed from the Escrow Account and released from the security interest and lien described above. 
  
 AGREEMENT: 
  
 NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
  

1. Defined Terms. All capitalized terms used but not defined herein shall have the meanings ascribed to them in the Indenture. In
addition to any other defined terms used herein, the following terms shall constitute defined terms for purposes of this Agreement and shall have the meanings set forth below: 
  
 “Applied” means that disbursed funds have been applied (i) to the payment of interest on the
Securities, (ii) pursuant to Section 3(c) or (iii) pursuant to Section 6(b)(iii). 
  
 “Available Funds” means (i) the sum of (A) the Initial Interest Escrow Amount, (B) the Initial Bramex Escrow Amount
and (C) interest earned or dividends paid on the funds in the Escrow Account (including holdings of U.S. Government Securities), less (ii) the aggregate disbursements previously made pursuant to this Agreement, which shall constitute at
any time of determination all monies on deposit and/or securities credited to the Escrow Account. 
  
 “Beneficiaries” shall have the meaning given in the recitals hereto. 
  
 “Collateral” shall have the meaning given in Section 6(a) hereof. 
  

 1 

 “Escrow Account” means the escrow account established pursuant to Section 2.

  
 “Escrow Account Statement” shall have
the meaning given in Section 2(f). 
  
 “Escrow
Deposit Account” shall have the meaning given in Section 6(f)(i) 
  
 “Escrow Securities Account” shall have the meaning given in Section 6(f)(i). 
  
 “Existing Beneficiaries” shall have the meaning given in the recitals hereto. 
  
 “Initial Bramex Escrow Amount” means $161,683,985.35.

  
 “Initial Interest Escrow Amount” means
$30,000,000.00. 
  
 “Initial Instructions”
shall have the meaning given in Section 2(d) hereof. 
  
 “Interest Payment Date” means March 15, June 15, September 15 and December 15 of each year, commencing March 15, 2006 until the Securities are paid in full. 
  
 “Payment Notice and Disbursement Instruction” means a
notice sent by the Trustee to the Escrow Agent requesting a disbursement of funds from the Escrow Account, in substantially the form of Exhibit A hereto. Each Payment Notice and Disbursement Instruction shall be signed by Trust Officer of the
Trustee. 
  
 “TIA” shall have the meaning
given in Section 2(d) hereof. 
  
 “UCC” means the Uniform Commercial Code as in effect in the State of New York. 
  
 “U.S. Government Securities” means securities that are direct obligations of the United States of America for the payment of which
its full faith and credit is pledged. 
  
 2. Escrow Account;
Escrow Agent. 
  
 (a) Appointment of
Escrow Agent. The Company and the Trustee hereby appoint the Escrow Agent, and the Escrow Agent hereby accepts appointment, as escrow agent, under the terms and conditions of this Agreement. 
  
 (b) Establishment of Escrow Account. On the Issue
Date, the Escrow Agent shall establish an escrow account entitled the “Escrow Account pledged by Transmeridian Exploration Inc. to The Bank of New York, as Trustee with respect to the Senior Secured Notes Due 2010” (the “Escrow
Account”) at its office located at The Bank of New York, 101 Barclay Street, 21 West, New York, New York 10286, Attention: Corporate Finance Americas. The Escrow Account shall be established in the name of the Trustee. All funds and
assets accepted by the Escrow Agent pursuant to this Agreement shall be held for the exclusive benefit of the Beneficiaries. All such funds shall be held in the Escrow Account until disbursed or paid in accordance with the terms hereof. The Escrow
Account, the funds held therein and any U.S. Government Securities held by the Escrow Agent shall be credited by the Escrow Agent to the Escrow Account for the benefit of the Beneficiaries. On the Issue Date, the Company shall 

  

 2 

 
deliver the Initial Interest Escrow Amount and the Initial Bramex Escrow Amount to the Escrow Agent for deposit into the Escrow Account against the Escrow
Agent’s written acknowledgment and receipt of the Initial Interest Escrow Amount and the Initial Bramex Escrow Amount. 
  
 (c) Escrow Agent Compensation. The Company shall pay to the Escrow Agent such compensation for services to be performed by it under
this Agreement as the Company and the Escrow Agent may agree in writing from time to time. The Escrow Agent shall be paid any compensation owed to it directly by the Company and shall not disburse from the Escrow Account any such amounts.

  
 The Company shall reimburse the Escrow Agent upon request for
all reasonable expenses, disbursements, and advances incurred or made by the Escrow Agent in implementing any of the provisions of this Agreement, including compensation and the reasonable expenses and disbursements of its counsel. The Escrow Agent
shall be paid any such expenses owed to it directly by the Company and shall not disburse from the Escrow Account any such amounts. 
  
 (d) Investment of Funds in Escrow Account. Funds deposited in the Escrow Account shall be invested and reinvested only upon the
following terms and conditions: 
  
 (i)
Acceptable Investments. All funds deposited or held in the Escrow Account at any time shall be invested by the Escrow Agent in U.S. Government Securities in accordance with the instructions annexed hereto as Schedule A (the
“Initial Instructions”) and thereafter, if necessary, the Company’s written instructions from time to time to the Escrow Agent (unless and until the Escrow Agent shall have received written notice to the contrary from
the Trustee, in which case the Escrow Agent shall follow the Trustee’s instructions); provided, however, that the Company shall only designate investment of funds in U.S. Government Securities maturing in an amount sufficient to and/or
generating interest income sufficient to, when added to the balance of funds held in the Escrow Account, provide for the payment of interest on the outstanding Securities on each Interest Payment Date beginning on and including March 15, 2006
and through and including the Interest Payment Date on December 15, 2006; provided, further, however, that any such written instruction shall specify the particular investment to be made, shall state that such investment is
authorized to be made hereby and in particular satisfies the requirements of the preceding proviso and Section 2(d)(v), shall contain the certification referred to in Section 2(d)(ii), if required, and shall be executed by an Officer of
the Company. All U.S. Government Securities shall be assigned to and held in the possession of, or, in the case of U.S. Government Securities maintained in book entry form with the Federal Reserve Bank i.e., TRADES, transferred to a book
entry account in the name of, the Escrow Agent, for the benefit of the Beneficiaries, with such guarantees as are customary, except that U.S. Government Securities maintained in book entry form with the Federal Reserve Bank shall be transferred to a
book entry account in the name of the Escrow Agent at the Federal Reserve Bank that includes only U.S. Government Securities held by the Escrow Agent for its customers and segregated by separate recordation in the books and records of the Escrow
Agent. The Escrow Agent shall not be liable for losses on any investments made by it pursuant to and in compliance with such instructions. In the absence of qualifying instructions from the Company that 

  

 3 

 
meet the requirements of this Section 2(d)(i), the Escrow Agent shall have no obligation to invest funds held in the Escrow Account. 
  
 (ii) Security Interest in Investments. If the Company
is providing instructions with respect to investments pursuant to Section 2(d)(i) above, no investment of funds in the Escrow Account shall be made unless the Company has certified to the Escrow Agent and the Trustee that, upon such investment,
the Trustee will have a first priority perfected security interest in the applicable investment. If a certificate as to a class of investments has been provided to the Escrow Agent, a certificate need not be issued with respect to individual
investments in securities in that class if the certificate applicable to the class remains accurate with respect to such individual investments, which continued accuracy the Escrow Agent may conclusively assume. Promptly after the Issue Date, each
of the Trustee and the Escrow Agent shall receive an Opinion of Counsel to the Company, dated such date, which opinion shall meet the requirements of Section 314(b) of the Trust Indenture Act of 1939, as amended (the
“TIA”) and shall comply with Sections 12.4 and 12.5 of the Indenture. 
  
 (iii) Interest and Dividends. All interest earned and dividends paid on funds invested in U.S. Government Securities shall be
deposited in the Escrow Account as additional Collateral for the exclusive benefit of the Beneficiaries and, if not required to be disbursed in accordance with the terms hereof, shall be reinvested in accordance with the terms hereof at the
Company’s written instruction. 
  
 (iv)
Limitation on Escrow Agent’s Responsibilities. The Escrow Agent’s sole responsibilities under this Section 2 shall be (A) to retain possession of certificated U.S. Government Securities (except, however, that the Escrow
Agent may surrender possession to the issuer of any such U.S. Government Security for the purposes of effecting assignment, crediting interest, or reinvesting such security or reducing such security to cash) and to be the registered or designated
owner of U.S. Government Securities which are not certificated; (B) to follow the Company’s written instructions given in accordance with Section 2(d)(i) (or the Trustee’s written instructions, if the Trustee shall have notified
the Escrow Agent that the Company’s authority to give such instructions is revoked); (C) to invest and reinvest funds pursuant to this Section 2(d); and (D) to use reasonable efforts to reduce to cash such U.S. Government
Securities as may be required to fund any disbursement or payment in accordance with Section 3. In connection with clause (A) above, the Escrow Agent will maintain continuous possession in the State of New York of certificated U.S.
Government Securities and cash included in the Collateral and will cause uncertificated U.S. Government Securities to be registered in the book-entry system of, and transferred to an account of the Escrow Agent or a sub-agent of the Escrow Agent at,
the Federal Reserve Bank of New York. Except as provided in Section 6, the Escrow Agent shall have no other responsibilities with respect to perfecting or maintaining the perfection of the Trustee’s security interest in the Collateral and
shall not be required to file any instrument, document or notice in any public office at any time or times. In connection with clause (D) above and subject to the following sentence, the Escrow Agent shall not be required to reduce to cash any
U.S. Government Securities to fund any disbursement or payment in accordance with Section 3 in the absence of written instructions signed by an Officer of the Company (or the 

  

 4 

 
Trustee’s written instructions, if the Trustee shall have notified the Escrow Agent that the Company’s authority to give such instructions is
revoked) specifying the particular investment to liquidate. If no such written instructions are received, the Escrow Agent may liquidate those U.S. Government Securities having the lowest interest rate per annum or, if none such exist, those having
the nearest maturity. 
  
 (v) Manner of
Investment. Funds deposited in the Escrow Account shall initially be invested in accordance with the Initial Instructions, which is in a manner such that there will be sufficient funds available, without any further investment by the Company, to
cover any disbursements pursuant to Section 3(d) hereof during the time such disbursements may be made and to cover all interest due on the outstanding Securities, as such interest becomes due, for each Interest Payment Date occurring from the
Issue Date and ending on (and including) December 15, 2006, provided that such investments shall have such maturities and/or interest payment dates such that funds will be available with respect to each such Interest Payment Date no later than
the time the Escrow Agent is required to disburse such funds to the Trustee pursuant to Section 3(a). The Escrow Agent shall have no responsibility for determining whether funds held in the Escrow Account shall have been invested in such a
manner so as to comply with the requirements of this clause (v). 
  
 (vi) Authority. The Trustee hereby authorizes the Escrow Agent to rely upon the instructions of the Company under Section 2(d) and, to the extent applicable, Section 6(b) unless and until the Escrow
Agent receives a written notice from the Trustee that such authorization is revoked, following which the Escrow Agent shall act solely as directed by the Trustee with respect to the matters addressed therein. The Trustee agrees with the Company that
such authorization shall not be revoked unless and until a default under the Indenture shall have occurred and be continuing; provided, however, the Escrow Agent shall have no duty or obligation to ascertain whether any such default
exists if the Escrow Agent shall receive a revocation notice from the Trustee under this clause (vi). 
  
 (e) Substitution of Escrow Agent. The Escrow Agent may resign by giving no less than 20 Business Days prior written notice to the
Company and the Trustee. Such resignation shall take effect upon the later to occur of (i) delivery of all funds and U.S. Government Securities maintained by the Escrow Agent hereunder and copies of all books, records, plans and other documents
in the Escrow Agent’s possession relating to such funds or U.S. Government Securities or this Agreement to a successor escrow agent (which shall have the capability of acting as a “securities intermediary” under Article 8 of the UCC)
mutually approved by the Company and the Trustee (which approvals shall not be unreasonably withheld or delayed) and (ii) the Company and the Trustee and such successor escrow agent entering into this Agreement or any written successor
agreement no less favorable to the interests of the Beneficiaries than this Agreement; and the Escrow Agent shall thereupon be discharged of all obligations under this Agreement and shall have no further duties, obligations or responsibilities in
connection herewith, except as set forth in Section 4. If a successor escrow agent has not been appointed or has not accepted such appointment within 20 Business Days after notice of resignation is given to the Company, the Escrow Agent may
apply to a court of competent jurisdiction for the appointment of a successor escrow agent. 
  

 5 

 (f) Escrow Account Statement. At least 30 days prior to each Interest Payment
Date, the Escrow Agent shall deliver to the Company and the Trustee a statement setting forth with reasonable particularity the balance of funds then in the Escrow Account and the manner in which such funds are invested (“Escrow Account
Statement”). The parties hereto irrevocably instruct the Escrow Agent that on the first date upon which the balance in the Escrow Account (including the holdings of all U.S. Government Securities) is reduced to zero, the Escrow Agent
shall deliver to the Company and the Trustee a notice that the balance in the Escrow Account has been reduced to zero. 
  
 3. Disbursements. 
  
 (a) Payment Notice and Disbursement Instruction; Disbursements. The Trustee shall, at least five Business Days prior to an Interest
Payment Date, or at least one Business Day prior to the Special Mandatory Redemption Date in the case of a Special Mandatory Redemption of the Securities pursuant to Section 3.8 of the Indenture, submit to the Escrow Agent a completed Payment
Notice and Disbursement Instruction substantially in the form of Exhibit A hereto. 
  
 The Escrow Agent’s disbursement pursuant to any Payment Notice and Disbursement Instruction shall be subject to the satisfaction of the applicable conditions set forth in Section 3(b). Provided such Payment
Notice and Disbursement Instruction is not rejected by it, as soon as reasonably practicable on (i) the Business Day prior to the Interest Payment Date, or (ii) on the Special Mandatory Redemption Date, if applicable, but in no event later
than (x) 11:00 a.m. (New York City time) on the Business Day prior to the Interest Payment Date and (y) 5:00 p.m. (New York City time) on the Special Mandatory Redemption Date, as the case may be, the Escrow Agent shall disburse the funds
requested in such Payment Notice and Disbursement Instruction by wire or book-entry transfer of immediately available funds to the account of the Trustee for the benefit of the Beneficiaries. The Escrow Agent shall notify the Trustee as soon as
reasonably possible (but not later than two (2) business days from the date of receipt of the Payment Notice and Disbursement Instruction) if any Payment Notice and Disbursement Instruction does not meet the applicable conditions set forth in
Section 3(b). If the Payment Notice and Disbursement Instruction does not meet the applicable conditions set forth in Section 3(b) below, the Trustee shall thereupon resubmit the Payment Notice and Disbursement Instruction with appropriate
changes. 
  
 (b) Conditions Precedent to
Disbursement. The Escrow Agent’s payment of any disbursement pursuant to Section 3(a) shall be made only if the Trustee shall have submitted, in accordance with the provisions of Section 3(a) herein, a completed Payment Notice and
Disbursement Instruction to the Escrow Agent substantially in the form of Exhibit A with blanks appropriately filled in. 
  
 (c) Retired Securities. In the event a portion of the Securities has been retired by the Company and submitted to the Trustee for
cancellation and there is no continuing Default or Event of Default under the Indenture, funds representing the lesser of (i) any funds remaining in the Escrow Account that are in excess of the amount sufficient to pay interest through and
including December 15, 2006 on the Securities not so retired and (ii) the interest payments which have not previously been made on such retired Securities for each Interest Payment Date through 

  

 6 

 
the Interest Payment Date to occur on December 15, 2006 shall upon the written request of the Company to the Escrow Agent and the Trustee, and upon
payment by the Company of any amounts due and owing to the Trustee and the Escrow Agent, be paid to the Company upon compliance with the release of collateral provisions of the Indenture and upon receipt by the Escrow Agent of a Payment Notice and
Disbursement Instruction from the Trustee to that effect. 
  
 (d) Bramex Acquisition. At any time on or before 5:00 p.m. on December 23, 2005, the Company may provide written instructions executed by an Officer of the Company to the Escrow Agent and the Trustee for a
one-time payment to Seeria Alliance Ltd. of an amount not greater than $128,000,000 in connection with the acquisition by the Company of Bramex Management, Inc. Upon the receipt of such instructions from the Company (unless and until the Escrow
Agent shall have received written notice to the contrary from the Trustee, in which case the Escrow Agent shall follow the Trustee’s instructions), the Escrow Agent shall (i) disburse funds for the account of the Company to Seeria Alliance
Ltd. in the amount specified in such instructions by wire transfer of immediately available funds in accordance with the wire transfer instructions set forth on Exhibit B and (ii) disburse funds to the Company in the amount of the
Initial Bramex Escrow Amount plus all interest earned or dividends paid on such funds less the amount of funds disbursed to Seeria Alliance Ltd. pursuant to the preceding clause (i), by wire transfer of immediately available funds in
accordance with the wire transfer instructions set forth on Exhibit C. 
  
 4. Escrow Agent. 
  
 (a) Limitation of the Escrow Agent’s Liability: Responsibilities of the Escrow Agent. The Escrow Agent’s responsibility and liability under this Agreement shall be limited as follows: (i) the
Escrow Agent does not represent, warrant or guaranty to the Holders from time to time the performance of the Company; (ii) the Escrow Agent shall have no responsibility to the Company or the Beneficiaries from time to time as a consequence of
performance or non-performance by the Escrow Agent hereunder, except for any gross negligence or willful misconduct of the Escrow Agent; (iii) the Company shall remain solely responsible for all aspects of the Company’s business and
conduct; and (iv) the Escrow Agent is not obligated to supervise, inspect or inform the Company or any third party of any matter referred to above. 
  
 No implied covenants or obligations shall be inferred from this Agreement against the Escrow Agent, nor shall the Escrow Agent be bound by the provisions
of any agreement beyond the specific terms hereof. Specifically and without limiting the foregoing, the Escrow Agent shall in no event have any liability in connection with its investment, reinvestment or liquidation, in good faith and in accordance
with the terms hereof, of any funds or U.S. Government Securities held by it hereunder, including without limitation any liability for any delay not resulting from gross negligence or willful misconduct in such investment, reinvestment or
liquidation, or for any loss of principal or income incident to any such delay. 
  
 The Escrow Agent shall be entitled to rely upon any judicial order or judgment, upon any written opinion of counsel or upon any certification, instruction, notice, or other writing delivered to it by the Company or
the Trustee in compliance with the provisions of this Agreement without being required to determine the authenticity or the correctness of any fact stated therein or the propriety or validity of service thereof. The Escrow Agent may act in 

  

 7 

 
reliance upon any instrument comporting with the provisions of this Agreement or signature believed by it to be genuine and may assume that any person
purporting to give notice or receipt or advice or make any statement or execute any document in connection with the provisions hereof has been duly authorized to do so. 
  
 The Escrow Agent may act pursuant to the written advice of counsel chosen by it with respect to any matter relating to this
Agreement and (subject to clause (ii) of the first paragraph of this Section 4(a)) shall not be liable for any action taken or omitted in accordance with such advice. 
  
 The Escrow Agent shall not be called upon to advise any party as to selling or retaining, or taking or refraining from
taking any action with respect to, any securities or other property deposited hereunder. 
  
 In the event of any ambiguity in the provisions of this Agreement with respect to any funds or property deposited hereunder, the Escrow Agent shall be entitled to refuse to comply with any and all claims, demands or
instructions with respect to such funds or property, and the Escrow Agent shall not be or become liable for its failure or refusal to comply with conflicting claims, demands or instructions. The Escrow Agent shall be entitled to refuse to act until
either any conflicting or adverse claims or demands shall have been finally determined by a court of competent jurisdiction or settled by agreement between the conflicting claimants as evidenced in a writing, satisfactory to the Escrow Agent, or the
Escrow Agent shall have received security or an indemnity satisfactory to the Escrow Agent sufficient to save the Escrow Agent harmless from and against any and all loss, liability or expense which the Escrow Agent may incur by reason of its acting.
The Escrow Agent may in addition elect at its sole option to commence an interpleader action or seek other judicial relief or orders as the Escrow Agent may deem necessary. 
  
 No provision of this Agreement shall require the Escrow Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder. 
  
 5. Indemnity. The Company shall indemnify, hold harmless and defend the Escrow Agent and its directors, officers, agents, employees and controlling persons, from and against any and all claims, actions, obligations,
liabilities and expenses, including defense costs, investigative fees and costs, legal fees and expenses, and claims for damages, arising from the Escrow Agent’s performance or non-performance, or in connection with its acceptance or
appointment as Escrow Agent, under this Agreement, except to the extent that such liability, expense or claim is solely and directly attributable to the gross negligence or willful misconduct of any of the foregoing persons. The provisions of this
Section 5 shall survive any termination, satisfaction or discharge of this Agreement as well as the resignation or removal of the Escrow Agent. 
  
 6. Grant of Security Interest; Instructions to Escrow Agent. 
  
 (a) The Company hereby irrevocably grants a first priority security interest in and lien on, and pledges,
assigns and sets over to the Trustee, for the ratable benefit of the Beneficiaries, all of the Company’s right, title and interest in the Escrow Account (including the 

  

 8 

 
Escrow Securities Account and the Escrow Deposit Account), and all property now or hereafter carried in or credited to, placed or deposited in, or delivered
to the Escrow Agent for placement or deposit in, the Escrow Account, including, without limitation, all security entitlements (as defined in Article 8 of the UCC), all funds held therein, all financial assets (as defined in Article 8 of the UCC),
all U.S. Government Securities held by (or otherwise maintained in the name of) the Escrow Agent pursuant to Section 2, and all proceeds as well as all rights of the Company under this Agreement, and all proceeds of the foregoing (collectively,
the “Collateral”), in order to secure all obligations and indebtedness of the Company under the Indenture, the Securities and any other obligation, now or hereafter arising, of every kind and nature, owed by the Company under
the Indenture to the Beneficiaries. The Escrow Agent hereby acknowledges the Trustee’s security interest and lien as set forth above. The Company shall take all actions necessary on its part to insure the continuance of, and perfection by
“control” (within the meaning of Article 8 of the UCC with respect to the Escrow Securities Account, and within the meaning of Section 9-104 of the UCC with respect to the Escrow Deposit Account) of, a first priority security interest
in the Collateral in favor of the Beneficiaries in order to secure all such obligations and indebtedness. 
  
 (b) The Company and the Trustee hereby irrevocably instruct the Escrow Agent to, and the Escrow Agent shall: (i) (A) hold the
properties, funds, securities entitlement and U.S. Government Securities in the Escrow Account for the benefit of the Trustee as required herein, (B) maintain possession of all certificated U.S. Government Securities purchased hereunder that
are physically possessed by the Escrow Agent in order for the Trustee to enjoy a continuous perfected first priority security interest therein under the law of the State of New York (the Company hereby agreeing that in the event any certificated
U.S. Government Securities are in the possession of the Company or a third party, the Company shall use its best efforts to deliver all such certificates to the Escrow Agent), (C) take all steps specified by the Company pursuant to paragraph
(a) of this Section 6 to cause the Trustee to enjoy a continuous perfected first priority security interest under any applicable Federal and State of New York law in all U.S. Government Securities purchased hereunder that are not
certificated and (D) maintain the Collateral free and clear of all liens, security interests, safekeeping or other charges, demands and claims against the Escrow Agent of any nature now or hereafter existing in favor of anyone other than the
Trustee; (ii) promptly notify the Trustee if the Escrow Agent receives written notice that any Person other than the Trustee has a lien or claim or security interest upon any portion of the Collateral; and (iii) in addition to disbursing
amounts held in escrow pursuant to any Payment Notice and Disbursement Instruction given to it by the Trustee pursuant to Section 3, upon receipt of written notice from the Trustee of the acceleration of the maturity of the Securities, and
direction from the Trustee to disburse all Available Funds to the Trustee, as promptly as practicable, disburse all funds held in the Escrow Account to the Trustee and transfer title to all U.S. Government Securities held by the Escrow Agent
hereunder to the Trustee. The lien and security interest provided for by this Section 6 shall automatically terminate and cease as to, and shall not extend or apply to, and the Trustee shall have no security interest in, any funds disbursed by
the Escrow Agent to the Company pursuant to this Agreement to the extent not inconsistent with the terms hereof. Notwithstanding any other provision contained in this Agreement, the Escrow Agent shall act solely as the Trustee’s agent for the
equal and ratable benefit of the Beneficiaries in connection with its duties under this Section 6 or any other duties herein relating to the Escrow Account or any funds or U.S. Government Securities held thereunder. The Escrow Agent shall not
have any right to receive compensation 

  

 9 

 
from the Trustee and shall have no authority to obligate the Trustee or to compromise or pledge their respective security interests hereunder. Accordingly,
the Escrow Agent is hereby directed to cooperate with the Trustee in the exercise of its respective rights in the Collateral provided for herein. 
  
 (c) Any money and U.S. Government Securities collected by the Trustee pursuant to Section 6(b)(iii) shall be applied as provided in
Sections 6.2 and 6.10 of the Indenture. Any surplus of such cash or cash proceeds held by the Trustee, and remaining after indefeasible payment in full of all the obligations under the Indenture, shall be paid over to the Company or to whomsoever
may be lawfully entitled to receive such surplus or as a court of competent jurisdiction may direct. 
  
 (d) Upon demand by the Trustee, the Company will execute and deliver to the Trustee such instruments and documents as the Trustee may deem
necessary or advisable to confirm or perfect its rights under this Agreement and its interests in the Collateral. The Trustee shall be entitled (but shall not be required) to take all necessary action to preserve and protect the security interest
created hereby as a lien and encumbrance upon the Collateral. 
  
 (e) The Company hereby appoints the Trustee as its attorney-in-fact with full power of substitution to do any act which the Company is obligated hereto to do, and the Trustee may exercise such rights as the Company
might exercise with respect to the Collateral and take any action in the Company’s name to protect the Trustee’s security interest hereunder. In addition to the rights provided under Section 6(b)(iii) hereof, upon an Event of Default
and for so long as such Event of Default continues, the Trustee may exercise in respect of the Collateral, in addition to other rights and remedies provided for herein or otherwise available to it, all the rights and remedies of a secured party
under the UCC or other applicable law, and the Trustee may also upon obtaining possession of the Collateral as set forth herein, without notice to the Company except as specified below, sell the Collateral or any part thereof in one or more parcels
at public or private sale, at any exchange, broker’s board or at any of the Trustee’s offices or elsewhere, for cash, on credit or for future delivery, and upon such other terms as the Trustee may deem commercially reasonable. The Company
acknowledges and agrees that any such private sale may result in prices and other terms less favorable to the seller than if such sale were a public sale. The Company agrees that, to the extent notice of sale shall be required by law, at least ten
(10) days’ notice to the Company of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification. The Trustee shall not be obligated to make any sale regardless of
notice of sale having been given. The Trustee may adjourn any public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so
adjourned. 
  
 (f) The provisions of this
Section 6(f) shall apply notwithstanding any provision hereof to the contrary. The Escrow Agent, the Company and the Trustee agree as follows: 
  
 (i) The Escrow Agent shall establish and maintain within the Escrow Account (A) a “securities account” (within the meaning
of Article 8 of the UCC) (the “Escrow Securities Account”) in the name of the Trustee, and (B) a “deposit 

  

 10 

 
account” (as defined in Section 9-102(a)(2) of the UCC (the “Escrow Deposit Account”) in the name of the Trustee.

  
 (ii) The provisions of this
Section 6(f)(ii) shall apply to the Escrow Securities Account. The parties agree that (A) the Escrow Agent, in maintaining the Escrow Securities Account, shall act in the capacity of a “securities intermediary” within the meaning
of Article 8 of the UCC; (B) the Escrow Agent shall treat all assets (other than cash (except for cash, if any, that the Escrow Agent in its sole discretion determines to maintain in the Escrow Securities Account as a financial asset)) now or
hereafter comprising the Collateral held in the Escrow Securities Account as “financial assets” within the meaning of Article 8 of the UCC; and (C) any instructions given by the Trustee under this Agreement with respect to the Escrow
Securities Account will be deemed to be an “entitlement order” within the meaning of Article 8 of the UCC. The Escrow Agent agrees that (x) it will comply with all entitlement orders originated by the Trustee regarding the disposition
of any Collateral carried in or credited to the Escrow Securities Account, without further consent by the Company, and (y) it will not comply with any entitlement orders within the meaning of Article 8 of the UCC, except as expressly permitted
or required by this Agreement. The parties agree that the Trustee shall be the “entitlement holder” (as defined in Article 8 of the UCC) with respect to the Escrow Securities Account and the security entitlements carried thereon or
credited thereto, and the Trustee shall have “control” (as defined in Article 8 of the UCC) of the Escrow Account and such security entitlements. 
  
 (iii) The provisions of this Section 6(f)(iii) shall apply to the Escrow Deposit Account. The parties agree that (A) the Escrow
Agent, in maintaining the Escrow Deposit Account, shall act as a “bank” as defined in Section 9-102(a)(8) of the UCC; and (B) the Trustee will be the bank’s “customer” (as defined in Section 4-406 of the UCC).
The Escrow Agent agrees that (x) it will comply with all instructions originated by the Trustee regarding the disposition of funds in the Escrow Deposit Account, without further consent by the Company, and (y) it will not comply with any
instructions, except as expressly permitted or required by this Agreement. The parties agree that the Trustee shall have “control” (as defined in Section 9-104 of the UCC) of the Escrow Deposit Account. 
  
 (iv) Upon receipt of a Payment Notice and Disbursement
Instruction, or notice delivered under Section 2(d)(vi) from the Trustee with respect to the Escrow Securities Account or the Escrow Deposit Account, the Escrow Agent shall have no obligation or right to determine whether the facts stated
therein by the Trustee are in fact correct or exist, and the Escrow Agent shall follow such instruction without further consent of the Company. The Escrow Agent shall have no liability to the Company or any other Person for following a Payment
Notice and Disbursement Instruction, or other notice pursuant to Section 2(d)(vi), delivered by the Trustee. 
  

 11 

 (v) Cash shall be deposited in the Escrow Deposit Account, except for any cash that the
Escrow Agent, in its sole discretion, determines to hold in the Escrow Securities Account as a financial asset. All investments (including investments made from cash in the Escrow Deposit Account) shall be carried in and credited to the Escrow
Securities Account. 
  
 7. Termination. Unless there
is a continuing Default or Event of Default under the Indenture, this Agreement shall terminate 10 days after the interest payment with respect to the Securities due on December 15, 2006 is made by the Company and any funds remaining in the
Escrow Account are paid to the Company pursuant to an appropriate Payment Notice and Disbursement Instruction from the Trustee. 
  
 8. Miscellaneous. 
  
 (a) Waiver. Any party hereto may specifically waive any breach of this Agreement by any other party, but no such waiver shall be
deemed to have been given unless such waiver is in writing, signed by the waiving party and specifically designating the breach waived, nor shall any such waiver constitute a continuing waiver of similar or other breaches. 
  
 (b) Invalidity. If for any reason whatsoever any one
or more of the provisions of this Agreement shall be held or deemed to be inoperative, unenforceable or invalid in a particular case or in all cases, such circumstances shall not have the effect of rendering any of the other provisions of this
Agreement inoperative, unenforceable or invalid, and the inoperative, unenforceable or invalid provision shall be construed as if it were written so as to effectuate, to the maximum extent possible, the parties’ intent. 
  
 (c) Assignment. This Agreement is personal to the
parties hereto, and the rights and duties of any party hereunder shall not be assignable except as set forth in Section 2(e) hereof or except as permitted by Section 5.1 of the Indenture, or, with respect to the Trustee, as allowed by the
terms of the Indenture, or except with the prior written consent of the other parties. Notwithstanding the foregoing, this Agreement shall inure to and be binding upon the parties and their successors and permitted assigns. 
  
 (d) Benefit. The parties hereto and their successors
and permitted assigns, but no others, shall be bound hereby and entitled to the benefits hereof; provided, however, that the Beneficiaries (including Holders) and their assigns shall be entitled to the benefits hereof and to enforce
this Agreement. 
  
 (e) Time. Time is of
the essence with respect to each provision of this Agreement. 
  
 (f) Entire Agreement; Amendments. This Agreement and the Indenture contain the entire agreement among the parties with respect to the subject matter hereof and supersede any and all prior agreements,
understandings and commitments, whether oral or written. This Agreement may be amended only by a writing signed by a duly authorized representative of each party hereto. 
  

 12 

 (g) Notices. All notices and other communications required or permitted to be
given or made under this Agreement shall be in writing in the English language and shall be deemed to have been duly given and received when actually received. 
  

To Escrow Agent: 
  
 The Bank of New York 
 101 Barclay Street, 21 West 
 New York, New York 10286 
  
 Attention: Global Finance Americas 
  
 Telecopy: (212) 815-5802/3 
  
 Wire Instructions: 
  
 [Redacted] 
  
 To the Trustee: 
  
 The Bank of New York 
 101 Barclay Street, 21 West 
 New York, New York 10286 
  
 Attention: Global Finance Americas 
  
 Telecopy: (212) 815-5802/3 
  
 To the Company: 
  
 c/o Transmeridian Exploration Incorporated 
 397 N. Sam Houston Parkway East, Suite 300 
 Houston, Texas 77060 
  
 Attention: Earl W. McNiel 
  
 Telecopy: (281) 999-9094 
  
 or at such other address as the specified entity most recently may have designated in writing in accordance with this Section. 
  

 13 

 (h) Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original but all of which together shall constitute one and the same instrument. 
  
 (i) Captions. Captions in this Agreement are for convenience only and shall not be considered or referred to in resolving questions
of interpretation of this Agreement. 
  
 (j)
Choice of Law. The existence, validity, construction, operation and effect of any and all terms and provisions of this Agreement shall be determined in accordance with and governed by the laws of the State of New York, without regard to
principles of conflicts of laws, except to the extent United States federal law is applicable to the perfection and priority of security interests in U.S. Government Securities. The Escrow Agent agrees that its jurisdiction for purpose of this
Agreement and Article 8 of the UCC in the State of New York. The parties to this Agreement hereby agree that jurisdiction over such parties and over the subject matter of any action or proceeding arising under this Agreement may be exercised by a
competent Court of the State of New York, or by a United States Court, sitting in each case in the Borough of Manhattan New York City. The Company hereby submits to the personal jurisdiction of such courts, hereby waives personal service of process
upon it and consents that any such service of process may be made by certified or registered mail, return-receipt requested, directed to the Company at its address last specified for notices hereunder, and service so made shall be deemed completed
five (5) days after the same shall have been so mailed, and hereby waives the right to a trial by jury in any action or proceeding with the Escrow Agent. All actions and proceedings brought by the Company against the Escrow Agent relating to or
arising from, directly or indirectly, this Agreement shall be litigated only in courts within the State of New York. 
  
 (k) Representations and Warranties. 
  
 (i) The Company hereby represents and warrants that this Agreement has been duly authorized, executed and delivered on its behalf and
constitutes the legal, valid and binding obligation of the Company. The execution, delivery and performance of this Agreement by the Company does not violate any applicable law or regulation to which the Company is subject and does not require the
consent of any governmental or other regulatory body to which the Company is subject, except for such consents and approvals as have been obtained and are in full force and effect. 
  
 (ii) Each of the Escrow Agent and the Trustee hereby represents and warrants that this Agreement has been
duly authorized, executed and delivered on its behalf and constitutes its legal, valid and binding obligation. 
  

 14 

 IN WITNESS WHEREOF, the parties have executed and delivered this Escrow Agreement as of the day
first above written. 
  

									
	COMPANY:	 	 	 	TRANSMERIDIAN EXPLORATION INC.
					
	 	 	 	 	 	 	 By:
	 	/s/    BRUCE A.
FALKENSTEIN        
	 	 	 	 	 	 	 Name:
	 	Bruce A. Falkenstein
	 	 	 	 	 	 	 Title:
	 	Vice President
				
	ESCROW AGENT:	 	 	 	 	 	THE BANK OF NEW YORK, as Escrow Agent
					
	 	 	 	 	 	 	 By:
	 	/s/    LUIS PEREZ        
	 	 	 	 	 	 	 Name:
	 	Luis Perez
	 	 	 	 	 	 	 Title:
	 	Assistant Vice President
				
	TRUSTEE:	 	 	 	 	 	THE BANK OF NEW YORK, as Trustee
					
	 	 	 	 	 	 	 By:
	 	/s/    LUIS PEREZ        
	 	 	 	 	 	 	 Name:
	 	Luis Perez
	 	 	 	 	 	 	 Title:
	 	Assistant Vice President

  

 15 

  
 SCHEDULE A 

 
 Initial Investment Instructions 
  
 All Available Funds shall be invested initially in the Fidelity Government
(AAA) Money Market Fund (Symbol – FCGXX). 
  

 16 

  
 EXHIBIT A 

 
 Form of Payment Notice and Disbursement Instruction 
 [Letterhead of the Trustee] 
 [Date] 

 

	________________	

	________________	

	________________	

  

			
	Attention:	  	Global Structured Finance Americas
	Re:	  	Disbursement Instruction No. [indicate whether revised]

  
 Ladies and Gentlemen: 
  
 We refer to the Escrow Agreement, dated as of December 12, 2005 (the
“Escrow Agreement”) among you (the “Escrow Agent”), the undersigned as Trustee, and TRANSMERIDIAN EXPLORATION INC., a British Virgin Islands company (the “Company”) relating to
the Senior Secured Notes Due 2010 of the Company (the “Securities”). Capitalized terms used herein shall have the meaning given in the Escrow Agreement. 
  
 This letter constitutes a Payment Notice and Disbursement Instruction under the Escrow Agreement. 
  
 [choose one of the following, as applicable] 
  
 [The undersigned hereby notifies you that the Company has delivered to the
undersigned the Company’s notice of Special Mandatory Redemption pursuant to Section 3.8 of the Indenture, and requests a disbursement of all Available Funds contained in the Escrow Account, to be made on _________, 2005, the Special
Mandatory Redemption Date.] 
  
 [The undersigned hereby
notifies you that a scheduled interest payment in the amount of $                     is due and payable on
                     ,                      and
requests a disbursement of funds contained in the Escrow Account in such amount to the Trustee.] 
  
 [The undersigned hereby notifies you that Securities equaling $
                     in aggregate principal amount have been retired and authorizes you to release $
                     of funds in the Escrow Account to the Company (to an account designated by the Company in writing), which amount represents the
amount permitted to be released in accordance with Section 3(c) of the Escrow Agreement.] 
  
 [The undersigned hereby notifies you that there has been an acceleration of the maturity of the Securities. Accordingly, you are hereby requested to
disburse all Available Funds contained in the Escrow Account to the Trustee and in accordance with the Escrow Agreement such that the balance in the Escrow Account is reduced to zero.] 
  

 17 

 [The undersigned hereby notifies you that the Company has made the scheduled interest payment on the
Securities due December 15, 2006, and requests a disbursement of all Available Funds to the Trustee, for remittance to the Company, such that the balance in the Escrow Account is reduced to zero.] 
  
 In connection with the requested disbursement, the undersigned hereby
notifies you that: 
  
 1. [The Securities have not, as a
result of an Event of Default (as defined in the Indenture), been accelerated and become due and payable.] 
  
 2. All prior disbursements from the Escrow Account have been Applied. 
  
 3. [add wire instructions] 
  
 The Escrow Agent is entitled to rely on the foregoing in disbursing funds relating to this Payment Notice and Disbursement
Instruction. 
  

			
	 THE BANK OF NEW YORK, as Trustee

		
	 By:
	 	 
	 Name:
	 	 
	 Title:
	 	 

  

 18 

  
 EXHIBIT B 

 
 Wire Transfer Instructions for Seeria Alliance Ltd. 
  
 Seeria Alliance Ltd., banking requisites: 
  

			
	[Redacted]	  	 
	 	  	 
	 	  	 
		
	 	  	 
	 	  	 
	 	  	 
	 	  	 
		
	 	  	 
	 	  	 
	 	  	 
	 	  	 

  

 19 

  
 EXHIBIT C 

 
 Wire Transfer Instructions for the Company 
  
 [Redacted] 
  

 20

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