Document:

Pledge Agreement

 Exhibit 10.5 
 Execution Version 
 PLEDGE AGREEMENT 
 THIS PLEDGE AGREEMENT (this “Pledge Agreement”), dated as of December 22, 2005, is by and between Transmeridian Exploration
Inc., a British Virgin Islands company (“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 Pledgor, the Trustee and the guarantors party thereto (the “Indenture”), Pledgor has issued 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 Pledgor’s payment obligations under the Indenture, including obligations to the Trustee, will be secured by a pledge of all of the capital stock held by Pledgor in Transmeridian (Kazakhstan) Incorporated, a British
Virgin Islands company, and in Bramex Management, Inc., a British Virgin Islands company, 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 Trustee and 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. Prior to delivery to the Collateral Agent, all such certificates
and instruments constituting Pledged Collateral of Pledgor shall 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. 
  

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 (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. 
 Pledgor shall create a register of
mortgages, charges and other encumbrances (the “Register”) pursuant to section 70A of the International Business Companies Act (Cap 291) of the laws of the British Virgin Islands and within 21 days of entering into this
Pledge Agreement shall (i) enter particulars of this Pledge Agreement in the Register in a form and substance satisfactory under applicable law; and (ii) file a copy of the Register with the Registry of Corporate Affairs in the British
Virgin Islands. 
 (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. 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 upon the filing by Pledgor of such
financing statements or other documents and/or taking by Pledgor of such other actions as may be required in Pledgor’s jurisdiction of organization and/or in the jurisdiction of organization of such partnership or limited liability company in
order to perfect such security interest. 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. 
  

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 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) 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 it receives written notice from Pledgor that 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. 
  

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 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. 
 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”). 
 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 

  

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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 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; 
  

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 (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; 
 (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 

  

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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. 
 (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 

  

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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 (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. 
  

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 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 prepared by and 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 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 Finance
		
	To Pledgor:	    	Transmeridian Exploration Inc.
		    	c/o 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

  

 11 

 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 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 INC.,
 a British
Virgin Islands company

		
	By:	 	 /s/ Earl W. McNiel

	Name:	 	Earl W. McNiel
	Title:	 	Duly Authorized Attorney
	
	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 (Kazakhstan) Incorporated
	  	Transmeridian
Exploration Inc.	  	British Virgin Islands	  	100%
	 Bramex Management, Inc.
	  	Transmeridian
Exploration Inc.	  	British Virgin Islands	  	100%Purchase Agreement

 Exhibit 10.7 
 Execution Copy 
 PURCHASE AGREEMENT 
 THIS PURCHASE AGREEMENT (“Agreement”) is made as of the 12 day of December, 2005, by and between TRANSMERIDIAN EXPLORATION, INC., a company
organized in the British Virgin Islands with registered offices at Quastisky Building, 3rd Floor, P.O. Box 905, Road
Town, Tortola (the “Company”), and KORNERSTONE INVESTMENT GROUP LTD., a company organized in the British Virgin Islands with registered offices at Trident Chambers, P.O. Box 146, Wickhams Cay, Road Town, Tortola (“Kornerstone”).

 RECITALS 
 WHEREAS, the
Company and Kornerstone entered into that certain Consultancy Agreement dated May 1, 1999 (the “Consultancy Agreement”), whereby the Company retained the services of Kornerstone to support the Company in legal and tax research,
contract drafting and discussions with third parties including the Government of Kazakhstan on various matters as provided for therein; 
 WHEREAS, under the terms of such Consultancy Agreement, as compensation for such services, the Company assigned to Kornerstone a carried working interest equal to ten percent (10%) of the Company’s interest in the South Alibek
License 1557 (as more particularly described in the Consultancy Agreement, the “Working Interest”). 
 WHEREAS, Kornerstone has
entered into a consulting agreement with the Company’s affiliate JSC Caspi Neft TME in Kazakhstan, and the Company and Kornerstone desire to cancel and terminate the Consultancy Agreement effective upon the closing of the Company’s
agreement to purchase Bramex Management, Inc. on or before December 23, 2005 (the “Effective Date”); and 
 WHEREAS, in
consideration of such cancellation of the Consultancy Agreement by the Company, Kornerstone is conveying, assigning, and transferring to the Company all of Kornerstone’s right, title and interest in and to the Working Interest on the Effective
Date, all under and subject to the terms and conditions of this Agreement; 
 NOW THEREFORE, in consideration of the mutual covenants and
agreements contained herein, the parties hereby agree as follows: 
 1. Cancellation and Termination of the Consultancy Agreement;
Conveyance of Working Interest. The Company and Kornerstone hereby terminate and cancel, effective upon the Effective Date, the Consultancy Agreement and any amendments thereto, and all of the obligations of the parties thereunder are
effectively terminated (other than sections 4.1 and 6.1 of the Consultancy Agreement, which shall survive such termination) at such time. In consideration thereof (and for the further consideration set forth herein below), and in reliance on the
representations and warranties, and upon the terms and subject to the conditions of this Agreement, on the Effective Date Kornerstone is hereby selling, assigning, conveying, transferring, and delivering to the Company, and the Company is hereby
purchasing, all of Kornerstone’s right, title and interest in and to the Working Interest, free and clear of all liens, claims, charges, restrictions, equities, or encumbrances of any kind. As further consideration for such sale, assignment,

 
conveyance and transfer of the Working Interest, the Company and Kornerstone hereby agree as follows: 
 a. The Company shall pay to Kornerstone cash consideration in the amount of U.S. Fifteen Million Two Hundred Fifty Thoursand Dollars (US$15,250,000.00),
payable on the Effective Date. Such amount shall be payable by wire transfer or other payment method as mutually agreeable to the parties hereto; 
 b. The Company shall cause Transmeridian Exploration Incorporated, a Delaware corporation and the parent corporation of the Company (“TMI”), to issue to Kornerstone an aggregate amount of One Million (1,000,000) shares of
TMI’s Common Stock, $0.0006 par value, equivalent in value to U.S. Four Million Dollars (US$3,750,000) based upon a price of $3.75 per share (the “TMI Stock”); and 
 c. The TMI Stock is being issued pursuant to applicable exemptions from the registration requirements of the U.S. Securities Act of 1933 (the
“Securities Act”), and thus are subject to the applicable resale restrictions and holding periods under such law. 
 2.
Deliveries by Kornerstone. In exchange for the consideration set out above, Kornerstone is hereby delivering to the Company all of its right, title, and interests in and to the Working Interest, free and clear of all liens, claims, charges,
restrictions, equities or encumbrances of any kind, effective upon the Effective Date. Kornerstone shall execute and deliver any and all documents, instruments, and other agreements (including without limitation, any and all documents and
instruments that may need to be filed in Kazakhstan), and shall take any and all other action as may be necessary to effectively transfer and deliver the Working Interest to the Company and vest all right, title and interest in and to the Working
Interest in the Company. Kornerstone shall cooperate at its expense with the Company, both before and after the date hereof, to the extent Company may reasonably request, in the defense of any proceeding seeking to restrain, prohibit or invalidate
the transactions contemplated by this Agreement. 
 3. Representations and Warranties of Kornerstone. 
 a. Kornerstone has the power and authority to execute, deliver and perform this Agreement and all other instruments and documents required or contemplated
to be executed, delivered and performed by it under this Agreement. Such execution, delivery and performance (i) have been duly authorized by all necessary corporate action by Kornerstone, (ii) do not and will not require the approval of
any person whose approval has not been obtained, (iii) do not and will not contravene the organizational documents of Kornerstone, (iv) do not and will not contravene, conflict with, result in a violation (or any occurrence which by notice
or passage of time or both would constitute a violation) of, or entitle any party to terminate, accelerate or declare a default with respect to, any contract, mortgage, franchise, deed of trust, lease, license or agreement of Kornerstone, or any
rule, regulation, order, writ or decree applicable to Kornerstone, (v) do not and will not result in the creation or imposition of any lien, charge, encumbrance or claim of any nature whatsoever upon Working Interest, and (vi) will not
result in the violation of any laws. This Agreement and each of the documents and instruments to be executed by Kornerstone and delivered 

  

 -2- 

 
to the Company pursuant to this Agreement when so delivered will constitute their respective legal, valid and binding obligations enforceable in accordance
with each such Agreement’s, document’s, and instrument’s respective terms. 
 b. Kornerstone has good and marketable title to
the Working Interest, has not assigned any right, title or interest in and to the Working Interest, and on the Closing the Working Interest will be free and clear of liens, claims, charges, mortgages, security interests, pledges, and encumbrances.
Upon consummation of the transactions contemplated hereby, the Company shall receive good, valid and marketable title to the Working Interest. 
 c. There is no action, suit, proceeding, investigation or claim pending, or to Kornerstone’s best knowledge, threatened in law, equity or otherwise before any court, administrative agency or arbitrator which either (a) questions
the validity of this Agreement, or (b) might adversely affect the right, title or interest of Kornerstone in the Working Interest. 
 d.
Kornerstone acknowledges its understanding that the issuance of the TMI Stock is intended to be exempt from registration under the Securities Act and, in furtherance thereof, Kornerstone represents and warrants to and agrees with the Company that:
(i) Kornerstone has the financial ability to bear the economic risk of its investment; (ii) Kornerstone certifies that it is not a U.S. person and is not acquiring the TMI Stock for the account or benefit of any U.S. person;
(iii) Kornerstone agrees that it will hold the TMI Stock for investment purposes only and that any resale of such securities will be made strictly in accordance with the provisions of Regulation S promulgated under the Securities Act of 1933,
pursuant to registration under the Securities Act, or pursuant to an available exemption from registration; and agrees not to engage in hedging transactions with regard to such securities unless in compliance with the Securities Act. 
 e. None of the representations and warranties made by Kornerstone, or made in any certificate or memorandum furnished or to be furnished by Kornerstone,
on any of its behalf, contain or will contain any untrue statement of material fact, or omit any material fact, the omission of which would be misleading. All representations and warranties of the Kornerstone contained in this Agreement, or
contained in any instrument, certificate, opinion or other document delivered by any of them, or on its behalf, pursuant to this Agreement, shall survive the execution of this Agreement, and Kornerstone shall indemnify, defend and hold harmless the
Company and each of the Company’s parent, subsidiary, and affiliates from and against any and all claims, costs, and expenses arising out of any breach of any covenant or representation or warranty of Kornerstone under this Agreement.

 4. Representations and Warranties of the Company. 
 a. The Company has the power and authority to execute, deliver and perform this Agreement and all other instruments and documents required or contemplated to be executed, delivered and performed by it under this
Agreement. Such execution, delivery and performance (i) have been duly authorized by all necessary corporate action by the Company, (ii) do not and will not require the approval of any person whose approval has not been obtained,
(iii) do not and will not contravene the organizational documents of the Company, (iv) do not and will not contravene, 

  

 -3- 

 
conflict with, result in a violation (or any occurrence which by notice or passage of time or both would constitute a violation) of, or entitle any party to
terminate, accelerate or declare a default with respect to, any contract, mortgage, franchise, deed of trust, lease, license or agreement of the Company, or any rule, regulation, order, writ or decree applicable to Kornerstone, and (vi) will
not result in the violation of any laws. This Agreement and each of the documents and instruments to be executed by the Company and delivered to Kornerstone pursuant to this Agreement when so delivered will constitute their respective legal, valid
and binding obligations enforceable in accordance with each such Agreement’s, document’s, and instrument’s respective terms. 
 b. None of the representations and warranties made by Company, or made in any certificate or memorandum furnished or to be furnished by Company, on any of its behalf, contain or will contain any untrue statement of material fact, or omit
any material fact, the omission of which would be misleading. All representations and warranties of the Company contained in this Agreement, or contained in any instrument, certificate, opinion or other document delivered by any of them, or on its
behalf, pursuant to this Agreement, shall survive the execution of this Agreement, and the Company shall indemnify, defend and hold harmless Kornerstone from and against any and all claims, costs, and expenses arising out of any breach of any
covenant or representation or warranty of the Company under this Agreement. 
 5. Restrictive Legends. Each certificate for the TMI
Stock, and each certificate issued to any subsequent transferee of any such certificate, unless, in each case, such TMI Stock is eligible for resale without registration pursuant to Rule 144(k) under the Securities Act or such TMI Stock is being
sold pursuant to an effective registration statement under the Securities Act, shall be stamped or otherwise imprinted with legends in substantially the following form: 
 “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED, AND MAY NOT BE OFFERED, SOLD, ASSIGNED OR TRANSFERRED, IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT REGISTRATION UNDER SAID ACT IS NOT REQUIRED.” 
 6. Registration Rights. The resale of the TMI Stock shall be registered in accordance with the terms and conditions contained in that
certain Registration Rights Agreement executed by TMI and attached hereto as Exhibit A (the “Registration Rights Agreement”). Kornerstone acknowledges that pursuant to the Registration Rights Agreement, TMI has the right to request that
Kornerstone furnish information regarding Kornerstone and the distribution of the TMI Stock as is required by law or the U.S. Securities Exchange Commission to be disclosed in the Registration Statement (as such term is defined in the Registration
Rights Agreement), and TMI may exclude from such registration the shares of TMI Stock if Kornerstone fails to furnish such information within a reasonable time prior to the filing of each Registration Statement, supplemented prospectus included
therein and/or amended Registration Statement. 
 7. Expenses. Each party hereto shall bear all of its own expenses in connection with
the transactions contemplated herewith. 
  

 -4- 

 8. Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH ENGLISH LAW. 
 9. Entire Agreement. This Agreement embodies the entire agreement and understanding of the parties hereto and
supersedes any prior agreement or understanding between the parties. 
 10. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same document. 
 11.
Binding Effect; Benefits. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, administrators, executors, successors and assigns; provided, however, that nothing in this Agreement,
expressed or implied, is intended to confer on any person other than the parties hereto or their respective heirs, successors and assigns, any rights and remedies, obligations or liabilities under or by reason of this Agreement. 
 12. Arbitration of Disputes. The parties agree that any future dispute, claim or controversy arising between them relating to or arising under
this Agreement, whether based upon contract or tort, at law or in equity, shall be determined by arbitration in accordance with the arbitration rules established by the London Court of International Arbitration, with the arbitration taking place in
London, England. The award of the arbitrator will be final and binding between the parties. The losing party will pay for the reasonable costs and legal fees of the other side incurred in reference to the arbitration. All proceedings will be
conducted in the English language, and English law shall apply. 
 13. Confidentiality. Each of the parties agrees that he will
maintain the confidentiality of this Agreement (except to the extent that disclosure is necessary to employees, agents, representatives, consultants or subcontractors of the Company in connection with the performance of the terms of this Agreement),
and, in that connection, each agrees that he will not take any action intended to cause public disclosure of the terms of this Agreement, unless, in the good faith judgment of such party, such disclosure of this Agreement is required by law or is
necessary in connection with endeavoring to enforce or require performance or observance of any of the terms or provisions of this Agreement or in connection with defending against any claim or any person against such party or in connection with
endeavoring to protect or preserve the interests of such party or any right, title, property or interest herein provided to be granted or afforded to such party. 
 [Intentionally left blank] 
  

 -5- 

 IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement as of the date first above
written. 
  

			
	“COMPANY”
	
	TRANSMERIDIAN EXPLORATION, INC.
		
	By:	 	 /s/ Lorrie T. Olivier

	Name:	 	Lorrie T. Olivier
	Title:	 	President
	
	“KORNERSTONE”
	
	KORNERSTONE INVESTMENT GROUP LTD.
		
	By:	 	 /s/ Nurzhan S. Kurmanov

	Name:	 	Nurzhan S. Kurmanov
	Title:	 	President

  

 -6- 

 Exhibit “A” 
 Registration Rights Agreement 
 This Registration Rights Agreement (“Agreement”) is entered
into as of December __, 2005 by and between Transmeridian Exploration Incorporated, a Delaware corporation (the “Company”) and Kornerstone Investment Group Ltd. (the “Investor”). In order to induce the Investor to enter into that
certain Purchase Agreement (herein so called) by and between Transmeridian Exploration, Inc., a wholly-owned subsidiary of the Company, and the Investor dated of even date herewith, the Company has agreed to provide the registration rights set forth
in this Agreement. The effectiveness of this Agreement is conditioned upon the consummation of the closing of such Purchase Agreement. 
 NOW
THEREFORE, for and in consideration of the mutual covenants and conditions as set forth in the Purchase Agreement and in this Agreement, the parties hereto hereby agree as follows: 
 1) Registration Rights 
 (a) Piggyback Registration Rights. In the event the Company intends to file a
Registration Statement under the Securities Act (other than on Form S-4 or Form S-8 or any successor form for the registration of securities issued or to be issued in connection with a merger or acquisition or employee benefit plan) covering the
offer and sale of Common Stock by the Company or by other selling shareholders, the Company shall give written notice thereof to the Investor, and the Company shall include in such registration such number of Registrable Securities for which it has
received written requests from the Investor to include within such Registration Statement within fifteen (15) days after the Company has sent written notice to such Investor. 
 (b) Underwritten Offerings. If for any reason the Form S-3 Registration Statement under Subsection (a) above is to cover an Underwritten Offering,
such Registrable Securities shall be included in the underwriting on the same terms and conditions as the securities otherwise being sold through the underwriters. If in the good faith judgment of the managing underwriter in any Underwritten
Offering, the inclusion of all of the shares of Registrable Securities and any other Common Stock requested to be registered in such Underwritten Offering would interfere with the successful marketing of a smaller number of such shares, then the
number of shares of Registrable Securities and other Common Stock to be included in the offering (except for shares to be issued by the Company in an offering initiated by the Company) shall be reduced to such smaller number as the managing
underwriter shall in its sole discretion determine. In this event, the reduction in participation by holders of Registrable Securities shall occur on a pro rata basis with all other participating holders of securities to be registered under such
Form S-3 Registration Statement or other Registration Statement (as applicable), except to the extent that certain holders of other securities may have a contractual preference to participate. In such case, the Company and the managing underwriter
shall use their reasonable best efforts to accommodate the selling desires of the holders of Registrable Securities and the holders of other shares of Common Stock of the Company who possess such registration rights. Any shares for which the Company
has received written request to register such shares and which are excluded from an underwritten public offering as discussed above, shall be withheld from the market by the holders thereof for a period of time, not to exceed 30 days prior to the
effective date and 180 days thereafter, that the managing underwriter reasonably determines is necessary in order to effect the underwritten public offering. 
  

 A-1 

 2) Termination 
 If the Investor participates in an offering but ultimately decides not to sell upon the effectiveness of the Registration Statement including such shares, the obligations of the Company under this Registration Rights
Agreement shall cease. In any event, this Registration Rights Agreement shall immediately terminate without further action on the part of the Company at such time as the securities that have registration rights under this Agreement shall no longer
be Transfer Restricted Securities. 
 3) Registration Procedures 
 If and whenever the Company is required to register Registrable Securities, the Company will use its reasonable best efforts to effect such registration to permit the sale of such Registrable Securities in accordance
with the intended plan of distribution thereof, and pursuant thereto the Company will as expeditiously as possible: 
 (a) prepare and file
with the SEC as soon as practicable a Form S-3 Registration Statement with respect to such Registrable Securities and use its best efforts to cause such Registration Statement to become effective and remain effective until the Registrable Securities
covered by such Registration Statement have been sold, provided, however, in no event shall the Company be required to maintain the effectiveness of the Form S-3 Registration Statement for longer than one hundred eighty (180) days; 

(b) prepare and file with the SEC such amendments and post-effective amendments to the Registration Statement, and such supplements to the Prospectus,
as may be reasonably requested by the Investor or any underwriter of Registrable Securities or as may be required by the rules, regulations or instructions applicable to the registration form used by the Company or by the Securities Act or rules and
regulations thereunder to keep the Registration Statement effective until all Registrable Securities covered by such Registration Statement are sold in accordance with the intended plan of distribution set forth in such Registration Statement or
supplement to the Prospectus; 
 (c) deliver to the Investor and the underwriters, if any, without charge, as many copies of each Prospectus
(and each preliminary prospectus) as such Persons may reasonably request (the Company hereby consenting to the use of each such Prospectus (or preliminary prospectus) by the Investor and the underwriters, if any, in connection with the offering and
sale of the Registrable Securities covered by such Prospectus (or preliminary prospectus); and 
 (d) register or qualify or cooperate with
the Investor, the underwriters, if any, and their respective counsel in connection with the registration or qualification of such Registrable Securities for offer and sale under the securities or blue sky laws of such jurisdictions as the Investor
or underwriters may designate in writing and do anything else necessary or advisable to enable the 

  

 A-2 

 
disposition in such jurisdictions of the Registrable Securities covered by the Registration Statement; provided that the Company shall not be required to
qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action which would subject it to general service of process in any such jurisdiction where it is not then so subject. 
 Notwithstanding the undertakings in this Section 3, the Company may decline to file a Registration Statement after giving notice to any holder of
Registrable Securities as discussed in Section 1, or withdraw a Registration Statement after filing and after such notice, but prior to the effectiveness thereof, provided, that the Company shall promptly notify each holder in writing of any
such action and provided, further, that the Company shall bear all expenses which would otherwise have been charged to the holder in connection with such withdrawn Registration Statement. In taking such action, the Company shall have no liability to
the holders of Registrable Securities to the extent it did not have a contractual requirement to file such Registration Statement or obtain its effectiveness. 
 4) Registration Expenses 
 The Registration Expenses of all Registrations shall be borne by the Company, except that
(i) the fees and disbursements of any counsel to the selling security holders shall be paid by such holders if such security holders are unwilling to be represented by counsel to the Company, and (ii) the selling security holders shall pay
all underwriting discounts or commissions, any selling commissions and stock transfer taxes attributable to sales of Registrable Securities. 
 5)
Requirements for Participation in Underwritten Offerings 
 No person may participate in any Underwritten Offering pursuant to a
Registration initiated by the Company hereunder unless such Person (a) agrees to sell such Person’s securities on the basis provided in any underwriting arrangements approved by the Company and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements; provided, that the term of such underwriting arrangement in connection with the sale of
Registrable Securities shall be no less favorable than the terms afforded to any other holder of securities participating in the Underwritten Offering. 
 6)
Suspension of Sales 
 Upon receipt of written notice from the Company that a Registration Statement or Prospectus contains a
Misstatement, each Holder of Registrable Securities shall forthwith discontinue disposition of Registrable Securities until such Holder has received copies of a supplemented or amended Prospectus, or until such Holder is advised in writing by the
Company that the use of the Prospectus may be resumed, and, if so directed by the Company, such Holder shall deliver to the Company (at the Company’s expense) all copies, other than permanent file copies then in such Holder’s possession,
of the Prospectus covering such Registrable Securities current at the time of receipt of such notice. 
  

 A-3 

 7) Miscellaneous 
 Any notice, demand or other communication which any party hereto may be required, or may elect, to give to anyone interested hereunder shall be sufficiently given if (a) deposited, postage prepaid, in a United
States mail letter box, registered or certified mail, return receipt requested, addressed to such address as may be given herein, or (b) delivered personally at such address. This Agreement may be executed through the use of separate signature
pages or in any number of counterparts, and each of such counterparts shall, for all purposes, constitute one agreement binding on all the parties, notwithstanding that all parties are not signatories to the same counterpart. Except as otherwise
provided herein, this Agreement shall be binding upon and inure to the benefit of the parties and their heirs, executors, administrators, successors, legal representatives and assigns. If the Investor is more than one person, the obligation of the
Investor shall be joint and several and the agreements, representations, warranties and acknowledgments herein contained shall be deemed to be made by and be binding upon each such person and its heirs, executors, administrators and successors. This
instrument contains the entire agreement of the parties, and there are no representations, covenants or other agreements except as stated or referred to herein. This Agreement is not transferable or assignable by the Investor. This Agreement shall
be governed by and construed in accordance with the laws of the State of Texas. 
 8) Definitions 
 Registration Expenses: Registration Expenses shall mean: 
 (1) all registration and filing fees (including fees with respect to filings required to be made with the Securities and Exchange Commission and the National Association of Securities Dealers, Inc.); 
 (2) fees and expenses of compliance with securities or blue sky laws (including fees and disbursements of counsel for the underwriters in connection with
blue sky qualifications of the Registrable Securities); 
 (3) printing, messenger, telephone and delivery expenses; 
 (4) fees and disbursements of counsel for the Company; and 
 (5) fees and disbursements of all independent certified public accountants of the Company incurred specifically in connection with such Registration. 
 Registration Expenses shall not include: (i) the fees and disbursements of any counsel to the selling security holders, which shall be paid by such
holders if such security holders are unwilling to be represented by counsel to the Company, and (ii) any underwriting discounts or commissions, any selling commissions and stock transfer taxes attributable to sales of Registrable Securities.

 Registrable Securities: (a) One Million (1,000,000) shares of Common Stock, $0.0006 par 

  

 A-4 

 
value, of the Company (the “TMI Stock”) issued to the Investor under the Purchase Agreement, and (b) any securities issued or issuable with
respect to such TMI Stock by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or reorganization; provided, however, that any such shares or securities shall be
deemed to be Registrable Securities only if and so long as it is a Transfer Restricted Security. 
 Registration Statement: Any other
form of registration statement that the Company determines, in its sole discretion to file, and in each case including the Prospectus included in such registration statement, amendments (including post-effective amendments) and supplements to such
registration statement, and all exhibits to and all material incorporated by reference in such registration statement. 
 Securities
Act: The Securities Act of 1933, as from time to time amended. 
 SEC: The Securities and Exchange Commission. 
 Transfer Restricted Security: A security that has not been sold to or through a broker, dealer or underwriter in a public distribution or other
public securities transaction or sold in a transaction exempt from the registration and prospectus delivery requirements of the Securities Act under Rule 144(k) promulgated thereunder (or any successor rule other than proposed Rule 144A). The
foregoing notwithstanding, a security shall remain a Transfer Restricted Security until (i) all stop transfer instructions or notations and restrictive legends with respect to such security are eligible to be removed and (ii) the Holder of
such security has received an opinion of counsel to the Company, to the effect that such shares in such Holder’s hands are freely transferable in any public or private transaction without registration under the Securities Act (or such Holder
has waived receipt of such opinion). 
 Underwritten Registration or Underwritten Offering: A registration in which securities
of the Company are sold to an underwriter for distribution to the public. 
  

 A-5 

 IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement as of the date first above
written. 
  

			
	TRANSMERIDIAN EXPLORATION INCORPORATED
		
	By:	 	  

		 	Lorrie T. Olivier
		 	President and CEO
	
	KORNERSTONE INVESTMENT GROUP LTD.
		
	By:	 	  

		 	Nurzhan S. Kurmanov
		 	President

  

 A-6

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