Document:

Investor Rights Agreement dated August 30,2005

 Exhibit 10.2 
  
 INVESTOR RIGHTS AGREEMENT 
  
 This Investor Rights Agreement (this “Agreement”) is made and entered into as of August 30, 2005 among Transmeridian Exploration Incorporated, a Delaware
corporation (the “Company”), and each of the purchasers executing this Agreement and listed on Schedule 1 attached hereto (collectively, the “Purchasers”). 
  
 This Agreement is being entered into pursuant to the Convertible Promissory Note and Warrant Purchase Agreement, dated as of
[the date hereof,] by and among the Company and the Purchasers (the “Purchase Agreement”). 
  
 The Company and the Purchasers hereby agree as follows: 
  

	 	1.	Definitions. 

  
 Capitalized terms used and not otherwise defined herein shall have the meanings given such terms in the Purchase Agreement. As used in this Agreement, the
following terms shall have the following meanings: 
  
 “Advice” shall have the meaning set forth in Section 3(m). 
  
 “Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls or is controlled by or under common control with such Person. For the purposes of this definition,
“control,” when used with respect to any Person, means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by
contract or otherwise; and the terms “affiliated,” “controlling” and “controlled” have meanings correlative to the foregoing. 
  
 “Blackout Period” shall have the meaning set forth in Section 3(n). 
  
 “Board” shall have the meaning set forth in Section 3(n). 
  
 “Business Day” means any day except Saturday, Sunday and any
day which shall be a legal holiday or a day on which banking institutions in the State of Texas generally are authorized or required by law or other government actions to close. 
  
 “Closing Date” means the Closing Date as defined in the Purchase Agreement. 
  
 “Commission” means the Securities and Exchange Commission.

  
 “Common Stock” means the Company’s
Common Stock, par value $0.0006 per share. 
  
 “Demand
Notice” has the meaning set forth in Section 2(a). 
  
 “Effectiveness Period” means the period after a Registration Statement becomes effective until such date as is the earlier of (x) the date when all Registrable Securities 

 
covered by such Registration Statement have been sold or (y) the date on which the Registrable Securities may be sold without any restriction pursuant to
Rule 144(k) as determined by the counsel to the Company pursuant to a written opinion letter, addressed to the Company’s transfer agent to such effect. 
  
 “Event” shall have the meaning set forth in Section 8(e). 
  
 “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
  
 “Filing Date” means the 45th day following the date of
receipt by the Company of a Demand Notice, or in the case of a Registration Statement pursuant to Section 8(d) the 45th day following receipt by the Holder of written notice of the Company’s determination to proceed with such a Registration Statement. 
  
 “Holder” or “Holders” means the holder or holders, as the case may be, from time to time of Registrable Securities,
including without limitation the Purchasers and their assignees. 
  
 “Indemnified Party” shall have the meaning set forth in Section 5(c). 
  
 “Indemnifying Party” shall have the meaning set forth in Section 5(c). 
  
 “Initiating Holders” has the meaning set forth in Section 2(a). 
  
 “Losses” shall have the meaning set forth in Section 5(a).

  
 “Notes” means the Convertible Promissory
Notes issued pursuant to the Purchase Agreement. 
  
 “Person” means an individual or a corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind. 
  
 “Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened. 
  
 “Prospectus” means the prospectus included in any
Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities
Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement, and all other amendments and supplements to the Prospectus,
including post-effective amendments, and all material incorporated by reference in such Prospectus. 
  
 “Registrable Securities” means (a) the Warrant Shares (without regard to any limitations on beneficial ownership contained therein) or
other securities issued or issuable 

  

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to each Purchaser or its transferee or designee (i) upon exercise of the Warrants, or (ii) upon any dividend or distribution with respect to, any exchange
for or any replacement of such Warrants or (iii) upon any conversion, exercise or exchange of any securities issued in connection with any such distribution, exchange or replacement; (b) securities issued or issuable upon any stock split, stock
dividend, recapitalization or similar event with respect to the foregoing; and (c) any other security issued as a dividend or other distribution with respect to, in exchange for, in replacement or redemption of, or in reduction of the liquidation
value of, any of the securities referred to in the preceding clauses; provided, however, that such securities shall cease to be Registrable Securities when such securities have been sold to or through a broker or dealer or underwriter in a public
distribution or a public securities transaction or when such securities may be sold without any restriction pursuant to Rule 144(k) as determined by the counsel to the Company pursuant to a written opinion letter, addressed to the Company’s
transfer agent to such effect as described in Section 2 of this Agreement. 
  
 “Registration Statement” means the registration statements and any additional registration statements contemplated by Section 2 and Section 8(d), including (in each case) the Prospectus, amendments
and supplements to such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference in such registration statement. 
  
 “Rule 144” means Rule 144 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. 
  
 “Rule 158” means Rule 158 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. 
  
 “Securities Act” means the Securities Act of 1933, as
amended. 
  
 “Special Counsel” means Wiggin and
Dana LLP. 
  
 “Warrant Shares” means the shares
of Common Stock issuable upon the exercise of the warrants issued or to be issued to the Purchasers or their assignees or designees in connection with the offering consummated under the Purchase Agreement. 
  

	 	2.	Registration. 

  
 (a) At any time on or after the date that is the earlier of (i) three months after the Closing Date or (ii) the date on which the Notes are converted into
New Securities (as defined in the Purchase Agreement), a Holder or Holders holding in the aggregate at least 50% of the Registrable Securities then outstanding (the “Initiating Holders”) may request, in writing (a “Demand
Notice”), that the Company effect the registration on Form S-3 (or if such form is not available to the Company on another form appropriate for such registration in accordance herewith) of any Registrable Securities owned by such Initiating
Holders. 
  

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 (b) Upon receipt of any request for registration pursuant to this Section 2, the Company shall promptly
give written notice of such proposed registration to all other Holders. Such Holders shall have the right, by giving written notice to the Company within ten (10) days after the Company provides its notice, to elect to have included in such
registration such of their Registrable Securities as such Holders may request in such notice of election, subject in the case of an underwritten offering to the terms of Section 2(c). Thereupon, the Company shall, as expeditiously as possible, use
its best efforts to effect the registration of all Registrable Securities which the Company has been requested to so register (including filing with the Commission a request for acceleration of effectiveness in accordance with Rule 461 promulgated
under the Securities Act within five (5) Business Days of the date that the Company is notified (orally or in writing, whichever is earlier) by the Commission that a Registration Statement will not be “reviewed,” or not be subject to
further review) and to keep such Registration Statement continuously effective under the Securities Act during the Effectiveness Period. Such Registration Statement also shall cover, to the extent allowable under the Securities Act and the Rules
promulgated thereunder (including Securities Act Rule 416), such indeterminate number of additional shares of Common Stock resulting from stock splits, stock dividends or similar transactions with respect to the Registrable Securities. 

 
 (c) If the Initiating Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to Section 2(a) and the Company shall include such information in its written notice referred to in Section
2(b). In such event, (i) the right of any other Holder to include its Registrable Securities in such registration pursuant to Section 2(a) shall be conditioned upon such other Holder’s participation in such underwriting on the terms set forth
herein, and (ii) all Holders including Registrable Securities in such registration shall enter into an underwriting agreement upon customary terms with the underwriter or underwriters managing the offering. The Initiating Holders shall have the
right to select the managing underwriter(s) for any underwritten offering requested pursuant to Section 2(a) subject to the approval of the Company, which approval will not be unreasonably withheld, conditioned or delayed. If any Holder who has
requested inclusion of its Registrable Securities in such registration as provided above disapproves of the terms of the underwriting, such person may elect, by written notice to the Company, to withdraw its Registrable Securities from such
Registration Statement and underwriting. If the managing underwriter advises the Company in writing that marketing factors require a limitation on the number of shares to be underwritten, the number of Registrable Securities to be included in the
Registration Statement and underwriting shall be allocated among all Holders requesting registration in proportion, as nearly as practicable, to the respective number of Registrable Securities held by them on the date of the request for registration
made by the Initiating Holders pursuant to Section 2(a). If any Holder would thus be entitled to include more Registrable Securities than such Holder requested to be registered, the excess shall be allocated among other requesting Holders pro rata
in the manner described in the preceding sentence. 
  
 (d) The
Company shall not be required to effect more than one registration pursuant to Section 2(a). For purposes of this Section 2(d), a Registration Statement shall not be counted until such time as such Registration Statement has been declared effective
by 

  

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the Commission. For purposes of this Section 2(d), a Registration Statement shall not be counted if, as a result of an exercise of the underwriters’
cut-back provisions as set forth in Section 2(c), less than 50% of the total number of Registrable Securities that Holders have requested to be included in such Registration Statement are so included. 
  

	 	3.	Registration Procedures. 

  
 In connection with the Company’s registration obligations hereunder, the Company shall: 
  
 (a) Prepare and file with the Commission on or prior to the Filing Date, a Registration Statement on Form S-3 (or if such
form is not available to the Company on another form appropriate for such registration in accordance herewith) (which shall include a Plan of Distribution substantially in the form of Exhibit A attached hereto), and cause the Registration
Statement to become effective and remain effective as provided herein; provided, however, that not less than three (3) Business Days prior to the filing of the Registration Statement or any related Prospectus or any amendment or supplement thereto,
the Company shall (i) furnish to the Special Counsel, copies of all such documents proposed to be filed, which documents (other than those incorporated by reference) will be subject to the review of such Special Counsel, and (ii) at the request of
any Holder cause its officers and directors, counsel or independent certified public accountants, as applicable, to respond to such inquiries as shall be necessary, in the reasonable opinion of counsel to such Holders, to conduct a reasonable
investigation within the meaning of the Securities Act. The Company shall not file the Registration Statement or any such Prospectus or any amendments or supplements thereto to which the Holders of a majority of the Registrable Securities or the
Special Counsel shall reasonably object within three (3) Business Days after the Special Counsel’s receipt thereof. 
  
 (b) (i) Prepare and file with the Commission such amendments, including post-effective amendments, to the Registration Statement as may be necessary to
keep the Registration Statement continuously effective as to the applicable Registrable Securities for the Effectiveness Period and to the extent any Registrable Securities are not included in such Registration Statement for reasons other than the
failure of the Holder to comply with Section 3(m) hereof, shall prepare and file with the Commission such additional Registration Statements in order to register for resale under the Securities Act all Registrable Securities; (ii) cause the related
Prospectus to be amended or supplemented by any required Prospectus supplement, and as so supplemented or amended to be filed pursuant to Rule 424 (or any similar provisions then in force) promulgated under the Securities Act; (iii) respond as
promptly as possible, and in no event later than ten (10) Business Days, to any comments received from the Commission with respect to the Registration Statement or any amendment thereto and as promptly as possible provide the Holders true and
complete copies of all correspondence from and to the Commission relating to the Registration Statement; and (iv) comply in all material respects with the provisions of the Securities Act and the Exchange Act with respect to the disposition of all
Registrable Securities covered by the Registration Statement during the Effectiveness Period in accordance with the intended methods of disposition by the Holders thereof set forth in the Registration Statement as so amended or in such Prospectus as
so supplemented. 
  

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 (c) Notify the Holders of Registrable Securities to be sold and the Special Counsel as promptly as
possible (A) when a Prospectus or any Prospectus supplement or post-effective amendment to the Registration Statement is proposed to be filed (but in no event in the case of this subparagraph (A), less than three (3) Business Days prior to date of
such filing); (B) when the Commission notifies the Company whether there will be a “review” of such Registration Statement and whenever the Commission comments in writing on such Registration Statement; and (C) with respect to the
Registration Statement or any post-effective amendment, when the same has become effective, and after the effectiveness thereof: (i) of any request by the Commission or any other Federal or state governmental authority for amendments or supplements
to the Registration Statement or Prospectus or for additional information; (ii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement covering any or all of the Registrable Securities or the
initiation of any Proceedings for that purpose; (iii) if at any time any of the representations and warranties of the Company contained in any agreement contemplated hereby ceases to be true and correct in all material respects; (iv) of the receipt
by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (v) if the financial statements included in the Registration Statement become ineligible for inclusion therein or of the occurrence of any event that makes any statement made in the Registration Statement or Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to the Registration Statement, Prospectus or other documents so that, in the case of the Registration Statement or the
Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading. 
  
 (d) Use its best efforts to
avoid the issuance of, or, if issued, use best efforts to obtain the withdrawal of, (i) any order suspending the effectiveness of the Registration Statement or (ii) any suspension of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction, at the earliest practicable moment. 
  
 (e) If reasonably requested by the Holders of a majority in interest of the Registrable Securities, (i) promptly incorporate in a Prospectus supplement or post-effective amendment to the Registration Statement such
information as the Company reasonably agrees should be included therein and (ii) make all required filings of such Prospectus supplement or such post-effective amendment as soon as practicable after the Company has received notification of the
matters to be incorporated in such Prospectus supplement or post-effective amendment; provided, however, that the Company shall not be required to take any action pursuant to this Section 3(e) that would, in the written opinion of counsel for the
Company (addressed to the Special Counsel), violate applicable law. 
  
 (f) Furnish to each Holder and the Special Counsel, without charge, at least one conformed copy of each Registration Statement and each amendment thereto, including financial statements and schedules, and all exhibits to the extent
requested by such Person (including those previously furnished or incorporated by reference) promptly after the filing of such documents with the Commission. 
  

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 (g) Promptly deliver to each Holder and the Special Counsel, without charge, as many copies of the
Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement thereto as such Persons may reasonably request; and the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by
each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto. 
  
 (h) Prior to any public offering of Registrable Securities, use its reasonable commercial efforts to register or qualify or
cooperate with the selling Holders and the Special Counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities or Blue Sky
laws of such jurisdictions within the United States as any Holder requests in writing, to keep each such registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of the Registrable Securities covered by a Registration Statement; provided, however, 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 that would subject it to general service of process in any jurisdiction where it is not then so subject or subject the Company to any material tax in any such jurisdiction where it
is not then so subject. 
  
 (i) Cooperate with the Holders to
facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold pursuant to a Registration Statement, which certificates shall be free, to the extent permitted by applicable law and the Purchase
Agreement, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any Holder may request at least two (2) Business Days prior to any sale of Registrable Securities. In
connection therewith, the Company shall promptly after the effectiveness of the Registration Statement cause an opinion of counsel to be delivered to and maintained with its transfer agent, together with any other authorizations, certificates and
directions required by the transfer agent, which authorize and direct the transfer agent to issue such Registrable Securities without legend upon sale by the Holder of such shares of Registrable Securities under the Registration Statement.

  
 (j) Upon the occurrence of any event contemplated by Section
3(c)(C)(v), as promptly as possible, prepare a supplement or amendment, including a post-effective amendment, to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein
by reference, and file any other required document so that, as thereafter delivered, neither the Registration Statement nor such Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. 
  

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 (k) Cause all Registrable Securities relating to such Registration Statement to be listed on any United
States securities exchange, quotation system, market or over-the-counter bulletin board, if any, on which similar securities issued by the Company are then listed as and when required pursuant to the Purchase Agreement. 
  
 (l) Comply in all material respects with all applicable rules and regulations
of the Commission and make generally available to its security holders earning statements satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 not later than 45 days after the end of any 3-month period (or 90 days after the
end of any 12-month period if such period is a fiscal year) commencing on the first day of the first fiscal quarter of the Company after the effective date of the Registration Statement, which statement shall conform to the requirements of Rule 158.

  
 (m) Request each selling Holder to furnish to the Company
information regarding such Holder and the distribution of such Registrable Securities as is required by law or the Commission to be disclosed in the Registration Statement, and the Company may exclude from such registration the Registrable
Securities of any such Holder who fails to furnish such information within a reasonable time prior to the filing of each Registration Statement, supplemented Prospectus and/or amended Registration Statement. 
  
 If the Registration Statement refers to any Holder by name or otherwise as
the holder of any securities of the Company, then such Holder shall have the right to require (if such reference to such Holder by name or otherwise is not required by the Securities Act or any similar federal statute then in force) the deletion of
the reference to such Holder in any amendment or supplement to the Registration Statement filed or prepared subsequent to the time that such reference ceases to be required. 
  
 Each Holder agrees by its acquisition of such Registrable Securities that, upon receipt of a notice from the Company of the
occurrence of any event of the kind described in Section 3(c)(C)(i), 3(c)(C)(ii), 3(c)(C)(iii), 3(c)(C)(iv), 3(c)(C)(v) or 3(n), such Holder will forthwith discontinue disposition of such Registrable Securities under the Registration Statement until
such Holder’s receipt of the copies of the supplemented Prospectus and/or amended Registration Statement contemplated by Section 3(j), or until it is advised in writing (the “Advice”) by the Company that the use of the applicable
Prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement. 
  
 (n) If (i) there is material non-public information regarding the Company
which the Company’s Board of Directors (the “Board”) reasonably determines not to be in the Company’s best interest to disclose and which the Company is not otherwise required to disclose, or (ii) there is a significant business
opportunity (including, but not limited to, the acquisition or disposition of assets (other than in the ordinary course of business) or any merger, consolidation, tender offer or other similar transaction) available to the Company which the Board
reasonably determines not to be in the Company’s best interest to disclose and which the Company would be required to disclose under the Registration Statement, then the Company may postpone or suspend filing or effectiveness of a registration
statement for a period not to exceed 30 consecutive days, provided that the Company may 

  

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not postpone or suspend its obligation under this Section 3(n) for more than 45 days in the aggregate during any 12 month period (each, a “Blackout
Period”). The payment requirements set forth in Sections 8(e) and (f) shall be tolled during and shall not be applicable with respect to any Blackout Period. 
  

	 	4.	Registration Expenses. 

  
 All fees and expenses incident to the performance of or compliance with this Agreement by the Company shall be borne by the Company whether or not the
Registration Statement is filed or becomes effective and whether or not any Registrable Securities are sold pursuant to the Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i)
all registration and filing fees (including, without limitation, fees and expenses (A) with respect to filings required to be made with each securities exchange, quotation system, market or over-the-counter bulletin board on which Registrable
Securities are required hereunder to be listed, (B) with respect to filings required to be made with the Commission, and (C) in compliance with state or provincial securities or Blue Sky laws (including, without limitation, fees and disbursements of
Special Counsel in connection with Blue Sky qualifications of the Registrable Securities and determination of the eligibility of the Registrable Securities for investment under the laws of such jurisdictions as the Holders of a majority of
Registrable Securities may designate)), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities and of printing or photocopying prospectuses), (iii) messenger, telephone and delivery
expenses, (iv) Securities Act liability insurance, if the Company desires such insurance, (v) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement,
including, without limitation, the Company’s independent public accountants (including, in the case of an underwritten offering, the expenses of any comfort letters or costs associated with the delivery by independent public accountants of a
comfort letter or comfort letters) and legal counsel, and (vi) fees and expenses of the Special Counsel in connection with any Registration Statement hereunder. In addition, the Company shall be responsible for all of its internal expenses incurred
in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit
and the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder. Notwithstanding the foregoing, the Holders shall pay all underwriting discounts or commissions, selling
commissions and stock transfer taxes attributable to any sale of Registrable Securities. 
  

	 	5.	Indemnification. 

  
 (a) Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder,
the officers, directors, partners, agents, brokers (including brokers who offer and sell Registrable Securities as principal as a result of a pledge or any failure to perform under a margin call of Common Stock), investment advisors and employees of
each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 

  

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20 of the Exchange Act) and the officers, directors, agents and employees of each such controlling Person, to the fullest extent permitted by applicable law,
from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, costs of preparation and reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out of or
relating to any untrue or alleged untrue statement of a material fact contained or incorporated by reference in the Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or form of prospectus or amendment or
supplement thereto, in the light of the circumstances under which they were made) not misleading, except to the extent, but only to the extent, that (i) such untrue statements or omissions are based solely upon information regarding such Holder
furnished in writing to the Company by such Holder expressly for use therein, which information was reasonably relied on by the Company for use therein or to the extent that such information relates to (x) such Holder and was reviewed and expressly
approved in writing by such Holder expressly for use in the Registration Statement, such Prospectus or such form of prospectus or in any amendment or supplement thereto or (y) such Holder’s proposed method of distribution of Registrable
Securities as set forth in Exhibit A (or as such Holder otherwise informs the Company in writing); or (ii) in the case of an occurrence of an event of the type described in Section 3(c)(C)(ii), 3(c)(C)(iii), 3(c)(C)(iv), 3(c)(C)(v) or 3(n), the use
by a Holder of an outdated or defective Prospectus after the delivery to the Holder of written notice from the Company that the Prospectus is outdated or defective and prior to the receipt by such Holder of the Advice contemplated in Section 3(m).
The Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding of which the Company is aware in connection with the transactions contemplated by this Agreement. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of an Indemnified Party (as defined in Section 5(c) to this Agreement) and shall survive the transfer of the Registrable Securities by the Holders. 
  
 (b) Indemnification by Holders. Each Holder shall, severally and not
jointly, indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors,
officers, agents and employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, arising solely out of or based solely upon any untrue statement of a material fact contained in
the Registration Statement, any Prospectus, or any form of prospectus, or in any amendment or supplement thereto, or arising solely out of or based solely upon any omission of a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of prospectus or supplement thereto, in the light of the circumstances under which they were made) not misleading, to the extent, but only to the extent, that (i) such untrue statement or
omission is contained in or omitted from any information so furnished in writing by such Holder to the Company specifically for inclusion in the Registration Statement or such Prospectus and that such information was reasonably relied upon by the
Company for use in the Registration Statement, such Prospectus, or in any amendment or supplement thereto, or to the extent that such information relates to (x) such Holder and was reviewed and expressly approved in 

  

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writing by such Holder expressly for use in the Registration Statement, such Prospectus, or such form of prospectus or in any amendment or supplement thereto
or (y) such Holder’s proposed method of distribution of Registrable Securities as set forth in Exhibit A (or as such Holder otherwise informs the Company in writing) or (ii) in the case of an occurrence of an event of the type described in
Section 3(c)(C)(ii), 3(c)(C)(iii), 3(c)(C)(iv), 3(c)(C)(v) or 3(n), the use by a Holder of an outdated or defective Prospectus after the delivery to the Holder of written notice from the Company that the Prospectus is outdated or defective and prior
to the receipt by such Holder of the Advice contemplated in Section 3(m); provided, however, that the indemnity agreement contained in this Section 5(b) shall not apply to amounts paid in settlement of any Losses if such settlement is effected
without the prior written consent of the Holder, which consent shall not be unreasonably withheld. Notwithstanding anything to the contrary contained herein, the Holder shall be liable under this Section 5(b) for only that amount as does not exceed
the net proceeds to such Holder as a result of the sale of Registrable Securities pursuant to such Registration Statement. 
  
 (c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an
“Indemnified Party”), such Indemnified Party promptly shall notify the Person from whom indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all reasonable fees and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give such notice shall not
relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or
further review) that such failure shall have proximately and materially adversely prejudiced the Indemnifying Party. 
  
 An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses; or (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the
Indemnifying Party, and such Indemnified Party shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such
Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and such counsel shall be
at the reasonable expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld. No Indemnifying Party
shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified
Party from all liability on claims that are the subject matter of such Proceeding and does not impose any monetary or other obligation or restriction on the Indemnified Party. 
  

 11 

 The Indemnifying Party shall pay all reasonable fees and expenses of the Indemnified Party (including
reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section), as incurred, within ten (10) Business Days of written notice thereof to the
Indemnifying Party, which notice shall be delivered no more frequently than on a monthly basis (regardless of whether it is ultimately determined that an Indemnified Party is not entitled to indemnification hereunder; provided, that the Indemnifying
Party may require such Indemnified Party to undertake to reimburse all such fees and expenses to the extent it is finally judicially determined that such Indemnified Party is not entitled to indemnification hereunder). 
  
 (d) Contribution. If a claim for indemnification under Section 5(a) or
5(b) is unavailable to an Indemnified Party because of a failure or refusal of a governmental authority to enforce such indemnification in accordance with its terms (by reason of public policy or otherwise), then each Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified
Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference
to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any
Losses shall be deemed to include, subject to the limitations set forth in Section 5(c), any reasonable attorneys’ or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have
been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms. Notwithstanding anything to the contrary contained herein, the Holder shall be required to
contribute under this Section 5(d) for only that amount as does not exceed the net proceeds to such Holder as a result of the sale of Registrable Securities pursuant to such Registration Statement. 
  
 The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. No Person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. 
  
 The indemnity and contribution agreements contained in this Section are in
addition to any liability that the Indemnifying Parties may have to the Indemnified Parties. The indemnity and contribution agreements herein are in addition to and not in diminution or limitation of any indemnification provisions under the Purchase
Agreement. 
  

 12 

	 	6.	Rule 144. 

  
 As long as any Holder owns Warrants or Warrant Shares, the Company covenants to timely file (or obtain extensions in respect thereof and file within the
applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to Section 13(a) or 15(d) of the Exchange Act. As long as any Holder owns Warrants or Warrant Shares, if the Company is not required to file
reports pursuant to Section 13(a) or 15(d) of the Exchange Act, it will prepare and furnish to the Holders and make publicly available in accordance with Rule 144(c) promulgated under the Securities Act annual and quarterly financial statements,
together with a discussion and analysis of such financial statements in form and substance substantially similar to those that would otherwise be required to be included in reports required by Section 13(a) or 15(d) of the Exchange Act, as well as
any other information required thereby, in the time period that such filings would have been required to have been made under the Exchange Act. The Company further covenants that it will take such further action as any Holder may reasonably request
in writing, all to the extent required from time to time to enable such Person to sell Warrant Shares without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act,
including compliance with the provisions of the Purchase Agreement relating to the transfer of the Conversion Shares and Warrant Shares. Upon the request of any Holder, in writing, the Company shall deliver to such Holder a written certification of
a duly authorized officer as to whether it has complied with such requirements. 
  

	 	7.	Approval of Certain Transactions. 

  
 (a) As long as at least 20% of the aggregate principal amount of Notes are outstanding, the consent of the holders of at least 75% of the aggregate
principal amount of such Notes, at the time outstanding, given in accordance with the Certificate of Incorporation and Bylaws of the Company, as amended, shall be necessary for effecting or validating (whether by merger, consolidation or otherwise)
any restructuring, incurrence, creation or assumption by the Company of, or the Company otherwise becoming or remaining liable with respect to, any Indebtedness, including guarantees of Indebtedness of others and reimbursement obligations, whether
contingent or matured, under letters of credit or other financial guarantees by third parties (or becoming contractually committed to doing so) in excess of $1,000,000 in the aggregate. For purposes of this Section 7, “Indebtedness” means
all funding obligations, contingent or otherwise. 
  
 (b) The
approval of the holders of Notes required by Section 7(a), to the extent required thereby, of any financing and /or restructuring of debt of any joint venture or subsidiary in which the Company is a shareholder or partner as of the date hereof which
debt is jointly and severally guaranteed or secured by the Company up to a maximum exposure of the Company of $50 million (or $120 million in the event the excess proceeds of such financing or restructuring are to be used to fund a potential
transaction involving the purchase of equity securities of the entity that, as of the date of the Purchase Agreement, owns a 50% interest in the Seller’s principal operating subsidiary in Kazakhstan) shall not be unreasonably withheld or
delayed. 
  

 13 

 (c) The holders of Notes shall, in connection with the approvals required by Sections 7(a) and 7(b),
review the terms and conditions of any other asset-based bank financing proposed by the Company in good faith and with the objective of maximizing the Company’s value. 
  

	 	8.	Miscellaneous. 

  
 (a) Remedies. In the event of a breach by the Company or by a Holder, of any of their obligations under this Agreement, each Holder or the Company,
as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be entitled to seek specific performance of its rights under this Agreement. The Company and each
Holder agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific
performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate. 
  
 (b) No Inconsistent Agreements. Except as otherwise disclosed in the Purchase Agreement, neither the Company nor any of its subsidiaries is a party
to an agreement currently in effect, nor shall the Company or any of its subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Holders in
this Agreement or otherwise conflicts with the provisions hereof. Without limiting the generality of the foregoing, without the written consent of the Holders of a majority of the then outstanding Registrable Securities, the Company shall not grant
to any Person the right to request the Company to register any securities of the Company under the Securities Act unless the rights so granted are subject in all respects to the prior rights in full of the Holders set forth herein, and are not
otherwise in conflict with the provisions of this Agreement. 
  
 (c) Notice of Effectiveness. Within two (2) Business Days after the Registration Statement which includes the Registrable Securities is ordered effective by the Commission, the Company shall deliver, and shall cause legal counsel for
the Company to deliver, to the transfer agent for such Registrable Securities (with copies to the Holders whose Registrable Securities are included in such Registration Statement) confirmation that the Registration Statement has been declared
effective by the Commission in the form attached hereto as Exhibit B. 
  
 (d) Piggy-Back Registrations. If at any time when there is not an effective Registration Statement covering all of the Registrable Securities, the Company shall determine to prepare and file with the Commission
a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or its then
equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans, the Company shall send to each
Holder of Registrable Securities written notice of such determination and, if within seven (7) Business Days after receipt of such notice, any such Holder shall so request in 

  

 14 

 
writing (which request shall specify the Registrable Securities intended to be disposed of by the Holder), the Company will cause the registration under the
Securities Act of all Registrable Securities which the Company has been so requested to register by the Holder, to the extent required to permit the disposition of the Registrable Securities so to be registered, provided that if at any time after
giving written notice of its intention to register any securities and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason not to register or to delay
registration of such securities, the Company may, at its election, give written notice of such determination to such Holder and, thereupon, (i) in the case of a determination not to register, shall be relieved of its obligation to register any
Registrable Securities in connection with such registration (but not from its obligation to pay expenses in accordance with Section 4 hereof), and (ii) in the case of a determination to delay registering, shall be permitted to delay registering any
Registrable Securities being registered pursuant to this Section 8(d) for the same period as the delay in registering such other securities. The Company shall include in such registration statement all or any part of such Registrable Securities such
Holder requests to be registered; provided, however, that the Company shall not be required to register any Registrable Securities pursuant to this Section 8(d) that are eligible for sale pursuant to Rule 144(k) of the Securities Act. In the case of
an underwritten public offering, if the managing underwriter(s) or underwriter(s) should reasonably object to the inclusion of the Registrable Securities in such registration statement, then if the Company after consultation with the managing
underwriter should reasonably determine that the inclusion of such Registrable Securities would materially adversely affect the offering contemplated in such registration statement, and based on such determination recommends inclusion in such
registration statement of fewer or none of the Registrable Securities of the Holders, then (x) the number of Registrable Securities of the Holders included in such registration statement shall be reduced pro-rata among such Holders (based upon the
number of Registrable Securities requested to be included in the registration), if the Company after consultation with the underwriter(s) recommends the inclusion of fewer Registrable Securities, or (y) none of the Registrable Securities of the
Holders shall be included in such registration statement, if the Company after consultation with the underwriter(s) recommends the inclusion of none of such Registrable Securities; provided, however, that if securities are being offered for the
account of other persons or entities as well as the Company, such reduction shall not represent a greater fraction of the number of Registrable Securities intended to be offered by the Holders than the fraction of similar reductions imposed on such
other persons or entities (other than the Company). 
  
 (e)
Failure to File Registration Statement and Other Events. The Company and the Holders agree that the Holders will suffer damages if the Registration Statement is not filed on or prior to the Filing Date and maintained in the manner
contemplated herein during the Effectiveness Period. The Company and the Holders further agree that it would not be feasible to ascertain the extent of such damages with precision. Accordingly, if (i) the Registration Statement is not filed on or
prior to the Filing Date, or (ii) except as otherwise permitted herein, the Company intentionally and willfully fails to file with the Commission a request for acceleration in accordance with Rule 461 promulgated under the Securities Act within five
(5) Business Days of the date that the Company is notified (orally or in writing, whichever is earlier) by the Commission that a Registration Statement will not be “reviewed,” or not subject to further review, or (iii) the Registration
Statement is filed with 

  

 15 

 
and declared effective by the Commission but thereafter ceases to be effective as to all Registrable Securities at any time prior to the expiration of the
Effectiveness Period due to an intentional and willful act by the Company, without being succeeded immediately by a subsequent Registration Statement filed with the Commission, except as otherwise permitted by this Agreement, including pursuant to
Section 3(n), or (iv) trading in the Common Stock shall be suspended or if the Common Stock is delisted from any securities exchange, quotation system, market or over-the-counter bulletin board on which Registrable Securities are listed (each an
“Exchange”), without immediately being listed on any other Exchange, for any reason for more than one (1) Business Day, other than pursuant to Section 3(n), due to an intentional and willful act by the Company, or (v) the exercise rights
of the Holders under the Warrant are suspended due to an intentional and willful act by the Company without the consent of the particular Holder other than as set forth in the Warrant or (vi) the Company has breached Section 3(n) of this Agreement
(any such failure or breach being referred to as an “Event”), the Company shall pay in cash as liquidated damages for such failure and not as a penalty to each Holder an amount equal to (A) $150,000, multiplied by such Holder’s
pro-rata portion of all of the Warrants purchased and then outstanding pursuant to the Purchase Agreement and (B) $75,000, multiplied by such Holder’s pro-rata portion of all of the Warrants purchased and then outstanding pursuant to the
Purchase Agreement for each subsequent thirty (30) day period until the applicable Event has been cured which shall be pro rated for such periods less than thirty days (the “Periodic Amount”). Payments to be made pursuant to this Section
8(e) shall be due and payable immediately upon demand in immediately available cash funds. The parties agree that the Periodic Amount represents a reasonable estimate on the part of the parties, as of the date of this Agreement, of the amount of
damages that will be incurred by the Holders if the Registration Statement is not filed on or prior to the Filing Date and maintained in the manner contemplated herein during the Effectiveness Period or if any other Event as described herein has
occurred. Notwithstanding the foregoing, the Company shall remain obligated to cure the breach or correct the condition that caused the Event, and the Holder shall have the right to take any action necessary or desirable to enforce such obligation.

  
 (f) Failure of Registration Statement to Become
Effective. The Company and the Holders agree that the Holders will suffer damages if the Registration Statement is not declared effective on or prior to the seventy-fifth (75th) day following the Filing Date. The Company and the Holders further agree that it would not be feasible to ascertain the extent of such damages with
precision. Accordingly, if the Registration Statement is not declared effective within seventy-five (75) days after the Filing Date, the Company shall pay in cash as liquidated damages for such failure and not as a penalty to each Holder an amount
equal to (i) $150,000, multiplied by such Holder’s pro-rata portion of all of the Warrants purchased and then outstanding pursuant to the Purchase Agreement and (ii) $75,000, multiplied by such Holder’s pro-rata portion of all of the
Warrants purchased and then outstanding pursuant to the Purchase Agreement for each subsequent thirty (30) day period (which shall be pro rated for such periods less than thirty (30) days) until the Registration Statement is declared effective.
Payments to be made pursuant to this Section 8(f) shall be due and payable immediately upon demand in immediately available cash funds. The parties agree that the amounts set forth in this Section 8(f) represent a reasonable estimate on the part of
the parties, as of the date of this Agreement, of the amount of damages that will be incurred by the Holders if the Registration Statement is not declared effective on or prior to 

  

 16 

 
the seventy-fifth (75th) day following the Filing Date. Notwithstanding the foregoing, the Company shall remain obligated to cause the Registration Statement
to become effective, and the Holder shall have the right to take any action necessary or desirable to enforce such obligation. 
  
 (g) Specific Enforcement, Consent to Jurisdiction. 
  
 (i) The Company and the Holders acknowledge and agree that irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to seek an injunction or injunctions to prevent or cure breaches of the provisions of this
Agreement and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to which any of them may be entitled by law or equity. 
  
 (ii) Each of the Company and the Holders (i) hereby irrevocably submits to the exclusive jurisdiction of the
state and federal courts located in New York City, New York for the purposes of any suit, action or proceeding arising out of or relating to this Agreement and (ii) hereby waives, and agrees not to assert in any such suit, action or proceeding, any
claim that it is not personally subject to the jurisdiction of such court, that the suit, action or proceeding is brought in an inconvenient forum or that the venue of the suit, action or proceeding is improper. Each of the Company and the Holders
consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service
of process and notice thereof. Nothing in this Section 8(g) shall affect or limit any right to serve process in any other manner permitted by law. 
  
 (h) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and the Holders of at least a majority of the Registrable Securities. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders and that does not directly or indirectly affect the rights of other Holders may be given by Holders of the
Registrable Securities to which such waiver or consent relates; provided, however, that the provisions of this sentence may not be amended, modified, or supplemented except in accordance with the provisions of the immediately preceding sentence.

  
 (i) Notices. Any and all notices or other
communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earlier of (i) the date of transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified for notice prior to 5:00 p.m., New York City time, on a Business Day, (ii) the next Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number
specified in this Section on a day that is not a Business Day or later than 5:00 p.m., New York City time, on any date and earlier than 11:59 p.m., New York City time, on such 

  

 17 

 
date, (iii) the Business Day following the date of mailing, if sent by nationally recognized overnight courier service such as Federal Express or (iv) actual
receipt by the party to whom such notice is required to be given. The addresses for such communications shall be with respect to each Holder at its address set forth under its name on Schedule 1 attached hereto, or with respect to the
Company, addressed to: 
  
 Transmeridian Exploration Incorporated

 397 N. Sam Houston Pkwy E, Suite 300 
 Houston, Texas 77060 
 Attention: Chief Financial Officer 
 Facsimile No.: 281-999-9094 
  
 or to such other address or addresses or facsimile number or numbers as any such party may most recently have designated in writing to the other parties hereto by such
notice. Copies of notices to the Company shall be sent to Weycer, Kaplan, Pulaski & Zuber, P.C., 1400 Summit Tower, Eleven Greenway Plaza, Houston, Texas 77046, Attention: Robert Beasley, Esq, Facsimile: 713-961-5341. Copies of notices to any
Holder shall be sent to the addresses, if any, listed on Schedule 1 attached hereto. 
  
 (j) Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns and shall inure to the benefit of each Holder and its
successors and assigns; provided, that the Company may not assign this Agreement or any of its rights or obligations hereunder without the prior written consent of Holders holding a majority of the Registrable Securities; and provided, further, that
each Holder may assign its rights hereunder in the manner and to the Persons as permitted under the Purchase Agreement. 
  
 (k) Assignment of Registration Rights. The rights of each Holder hereunder, including the right to have the Company register for resale Registrable
Securities in accordance with the terms of this Agreement, shall be automatically assignable by each Holder to any transferee of such Holder of all or a portion of the Warrants or the Registrable Securities if: (i) the Holder agrees in writing with
the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable time after such assignment, (ii) the Company is, within a reasonable time after such transfer or assignment, furnished
with written notice of (a) the name and address of such transferee or assignee, and (b) the securities with respect to which such registration rights are being transferred or assigned, (iii) following such transfer or assignment the further
disposition of such securities by the transferee or assignees is restricted under the Securities Act and applicable state securities laws, (iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this Section
8(k), the transferee or assignee agrees in writing with the Company to be bound by all of the provisions of this Agreement, and (v) such transfer shall have been made in accordance with the applicable requirements of the Purchase Agreement and
applicable securities legislation. The rights to assignment shall apply to the Holders (and to subsequent) successors and assigns. 
  
 The Company may require, as a condition of allowing such assignment in connection with a transfer of Warrants or Registrable Securities (i) that the
Holder or transferee of all or 

  

 18 

 
a portion of the Warrants or the Registrable Securities as the case may be, furnish to the Company a written opinion of counsel that is reasonably acceptable
to the Company to the effect that such transfer may be made without registration under the Securities Act, (ii) that the Holder or transferee execute and deliver to the Company an investment letter in form and substance acceptable to the Company and
(iii) that the transferee be an “accredited investor” as defined in Rule 501(a) promulgated under the Securities Act. 
  
 (l) Counterparts; Facsimile. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an
original and, all of which taken together shall constitute one and the same Agreement. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid binding obligation of the party executing (or on whose
behalf such signature is executed) the same with the same force and effect as if such facsimile signature were the original thereof. 
  
 (m) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to
principles of conflicts of law thereof. 
  
 (n) Cumulative
Remedies. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. 
  
 (o) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable in any respect, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto
shall use their reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable. 
  
 (p) Headings; Interpretation. The headings herein are for convenience
only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. Any form of the word “include” as used in this Agreement shall be deemed to be followed by the phrase “without
limitation”. 
  
 (q) Registrable Securities Held by the
Company and its Affiliates. Whenever the consent or approval of Holders of a specified percentage of Registrable Securities is required hereunder, Registrable Securities held by the Company or its Affiliates (other than any Holder or transferees
or successors or assigns thereof if such Holder is deemed to be an Affiliate solely by reason of its holdings of such Registrable Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such
required percentage. 
  
 (r) Obligations of Purchasers. The
Company acknowledges that the obligations of each Purchaser under this Agreement, are several and not joint with the obligations of any 

  

 19 

 
other Purchaser, and no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser under this Agreement. The
decision of each Purchaser to enter into this Agreement has been made by such Purchaser independently of any other Purchaser. The Company further acknowledges that nothing contained in this Agreement, and no action taken by any Purchaser pursuant
hereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated hereby. Each Purchaser shall be entitled to independently protect and enforce its rights, including without limitation, the rights arising out of this Agreement, and it shall not be necessary for any
other Purchaser to be joined as an additional party in any proceeding for such purpose. 
  
 Each Purchaser has been represented by its own separate legal counsel in its review and negotiation of this Agreement and with respect to the transactions contemplated hereby. For reasons of administrative convenience
only, this Agreement has been prepared by Special Counsel (counsel for North Sound Capital LLC) and the Special Counsel will perform certain duties under this Agreement. Such counsel does not represent all of the Purchasers but only North Sound
Capital LLC. The Company has elected to provide all Purchasers with the same terms and Agreement for the convenience of the Company and not because it was required or requested to do so by the Purchasers. The Company acknowledges that such procedure
with respect to this Agreement in no way creates a presumption that the Purchasers are in any way acting in concert or as a group with respect to this Agreement or the transactions contemplated hereby or thereby. 
  
 [signature page follows] 
  

 20 

 IN WITNESS WHEREOF, the parties hereto have caused this Investor Rights Agreement to be duly executed by
their respective authorized persons as of the date first indicated above. 
  

			
	COMPANY:
	
	TRANSMERIDIAN EXPLORATION INCORPORATED
		
	By:	 	 
	 Name:
	 	 
	 Title:
	 	 

  

 21 

			
	PURCHASERS:
		
	Print Exact Name:	 	 

			
		
	By:	 	 
	 Name:
	 	 
	 Title:
	 	 

  
 [Omnibus Transmeridian
Investor Rights Agreement Signature Page] 
  

 22 

 SCHEDULE 1 
  
 PURCHASERS 
  

			
	 Name and Address

	 	 Copy of Notice to:

	 North Sound Legacy Institutional Fund LLC
 c/o
North Sound Capital LLC
 53 Forest Avenue, Suite 202
 Old
Greenwich, CT 06870
 Attn: Andrew David
 Tel: (203) 967-5784 or
(203) 340-5784
 Fax: (203) 967-5701 or (203) 340-5701
 Email:
andrew.david@northsound.com
	 	 Wiggin and Dana LLP
 400 Atlantic Street
 Stamford, CT 06901
 Attn: Michael Grundei
 Tel: (203) 363-7630
 Fax: (203) 363-7676
 mgrundei@wiggin.com

		
	 North Sound Legacy International, Ltd.
 c/o North
Sound Capital LLC
 53 Forest Avenue, Suite 202
 Old Greenwich, CT
06870
 Attn: Andrew David
 Tel: (203) 967-5784 or (203)
340-5784
 Fax: (203) 967-5701 or (203) 340-5701
 Email:
andrew.david@northsound.com
	 	 Wiggin and Dana LLP
 400 Atlantic Street
 Stamford, CT 06901
 Attn: Michael Grundei
 Tel: (203) 363-7630
 Fax: (203) 363-7676
 mgrundei@wiggin.com

		
	 Royal Bank of Canada
 c/o RBC Capital Markets
Corporation
 One Liberty Plaza
 165 Broadway
 New York, NY 10006
 Attn: Joe Muskatel
 Tel: (212) 858-7492
 Fax: (212) 858-7439
	 	 

  

 23 

 EXHIBIT A 
  
 PLAN OF DISTRIBUTION 
  
 We are registering the shares of common stock on behalf of the selling security holders. Sales of shares may be made by selling security holders,
including their respective donees, transferees, pledgees or other successors-in-interest directly to purchasers or to or through underwriters, broker-dealers or through agents. Sales may be made from time to time on the American Stock Exchange or
any exchange upon which our shares may trade in the future, in the over-the-counter market or otherwise, at market prices prevailing at the time of sale, at prices related to market prices, or at negotiated or fixed prices. The shares may be sold by
one or more of, or a combination of, the following: 
  

	 	•	 	a block trade in which the broker-dealer so engaged will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the
transaction (including crosses in which the same broker acts as agent for both sides of the transaction); 

  

	 	•	 	purchases by a broker-dealer as principal and resale by such broker-dealer, including resales for its account, pursuant to this prospectus; 

  

	 	•	 	ordinary brokerage transactions and transactions in which the broker solicits purchases; 

  

	 	•	 	through options, swaps or derivatives; 

  

	 	•	 	in privately negotiated transactions; 

  

	 	•	 	in making short sales or in transactions to cover short sales; and 

  

	 	•	 	put or call option transactions relating to the shares. 

  
 The selling security holders may effect these transactions by selling shares directly to purchasers or to or through broker-dealers, which may act as
agents or principals. These broker-dealers may receive compensation in the form of discounts, concessions or commissions from the selling security holders and/or the purchasers of shares for whom such broker-dealers may act as agents or to whom they
sell as principals, or both (which compensation as to a particular broker-dealer might be in excess of customary commissions). The selling security holders have advised us that they have not entered into any agreements, understandings or
arrangements with any underwriters or broker-dealers regarding the sale of their securities. 
  
 The selling security holders may enter into hedging transactions with broker-dealers or other financial institutions. In connection with those transactions, the broker-dealers or other financial institutions may
engage in short sales of the shares or of securities convertible into or exchangeable for the shares in the course of hedging positions they assume with the selling security holders. The selling security holders may also enter into options or other

  

 24 

 
transactions with broker-dealers or other financial institutions which require the delivery of shares offered by this prospectus to those broker-dealers or
other financial institutions. The broker-dealer or other financial institution may then resell the shares pursuant to this prospectus (as amended or supplemented, if required by applicable law, to reflect those transactions). 
  
 The selling security holders and any broker-dealers that act in connection
with the sale of shares may be deemed to be “underwriters” within the meaning of Section 2(11) of the Securities Act of 1933, and any commissions received by broker-dealers or any profit on the resale of the shares sold by them while
acting as principals may be deemed to be underwriting discounts or commissions under the Securities Act. The selling security holders may agree to indemnify any agent, dealer or broker-dealer that participates in transactions involving sales of the
shares against liabilities, including liabilities arising under the Securities Act. We have agreed to indemnify each of the selling security holders and each selling security holder has agreed, severally and not jointly, to indemnify us against some
liabilities in connection with the offering of the shares, including liabilities arising under the Securities Act. 
  
 The selling security holders will be subject to the prospectus delivery requirements of the Securities Act. We have informed the selling security holders
that the anti-manipulative provisions of Regulation M promulgated under the Securities Exchange Act of 1934 may apply to their sales in the market. 
  
 Selling security holders also may resell all or a portion of the shares in open market transactions in reliance upon Rule 144 under the Securities Act,
provided they meet the criteria and conform to the requirements of Rule 144. 
  
 Upon being notified by a selling security holder that a material arrangement has been entered into with a broker-dealer for the sale of shares through a block trade, special offering, exchange distribution or
secondary distribution or a purchase by a broker or dealer, we will file a supplement to this prospectus, if required pursuant to Rule 424(b) under the Securities Act, disclosing: 
  

	 	•	 	the name of each such selling security holder and of the participating broker-dealer(s); 

  

	 	•	 	the number of shares involved; 

  

	 	•	 	the initial price at which the shares were sold; 

  

	 	•	 	the commissions paid or discounts or concessions allowed to the broker-dealer(s), where applicable; 

  

	 	•	 	that such broker-dealer(s) did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus; and 

  

	 	•	 	other facts material to the transactions. 

  

 25 

 In addition, if required under applicable law or the rules or regulations of the Commission, we will file
a supplement to this prospectus when a selling security holder notifies us that a donee or pledgee intends to sell more than 500 shares of common stock. 
  
 We are paying all expenses and fees in connection with the registration of the shares. The selling security holders will bear all brokerage or
underwriting discounts or commissions paid to broker-dealers in connection with the sale of the shares. 
  

 26 

 EXHIBIT B 
  
 FORM OF NOTICE OF EFFECTIVENESS OF REGISTRATION STATEMENT 
  
 [Name and Address of Transfer Agent] 
  

	Re:	Transmeridian Exploration Incorporated 

  
 Dear [            ]: 
  
 We are counsel to Transmeridian Exploration Incorporated, a Delaware corporation (the “Company”), and have
represented the Company in connection with that certain Convertible Promissory Note and Warrant Purchase Agreement (the “Purchase Agreement”) dated as of
                        , 2005 by and among the Company and the buyers named therein (collectively, the
“Holders”) pursuant to which the Company issued to the Holders its Convertible Promissory Notes and Warrants (“Warrants”) to purchase shares of the Company’s common stock, par value $0.0006 per share (the “Common
Stock”). Pursuant to the Purchase Agreement, the Company has also entered into an Investor Rights Agreement with the Holders (the “Investor Rights Agreement”) pursuant to which the Company agreed, among other things, to register the
shares of Common Stock issuable upon exercise of the Warrants, under the Securities Act of 1933, as amended (the “1933 Act”). In connection with the Company’s obligations under the Investor Rights Agreement, on
                                     ,
            , the Company filed a Registration Statement on Form S-         (File No.
333-            ) (the “Registration Statement”) with the Securities and Exchange Commission (the “SEC”) relating to the Registrable Securities which names each
of the Holders as a selling securityholder thereunder. 
  
 In
connection with the foregoing, we advise you that a member of the SEC’s staff has advised us by telephone that the SEC has entered an order declaring the Registration Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on
[ENTER DATE OF EFFECTIVENESS] and we have no knowledge, after telephonic inquiry of a member of the SEC’s staff, that any stop order suspending its effectiveness has been issued or that any proceedings for that purpose are pending before, or
threatened by, the SEC and the Registrable Securities are available for resale under the 1933 Act pursuant to the Registration Statement. 
  

			
	 Very truly yours,

		
	By:	 	 
	 cc:
	 	 [LIST NAMES OF HOLDERS]

  

 27Convertible Promissory Note dated August 30, 2005

 Exhibit 10.3 
  
 THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES
LAW AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER
THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED. 
  
 TRANSMERIDIAN EXPLORATION INCORPORATED 
  
 CONVERTIBLE PROMISSORY NOTE 
  

			
	U.S. [                ]	 	Houston, Texas
	No.: PN-2005-[    ]	 	August 30, 2005

  
 FOR VALUE
RECEIVED, the undersigned, Transmeridian Exploration Incorporated, a Delaware corporation (the “Company”), hereby promises to pay to the order of
[                            ] or any future holder of this convertible promissory note (the
“Payee”), at the principal office of the Payee set forth herein, or at such other place as the holder may designate in writing to the Company, the principal sum of up to
[                    ] Dollars (U.S.
$[                    ]), or such other amount as may be outstanding hereunder, together with all accrued but unpaid interest, in such coin or
currency of the United States of America as at the time shall be legal tender for the payment of public and private debts and in immediately available funds, as provided in this convertible promissory note (the “Note”). 

 
 1. Principal and Interest Payments. 
  
 (a) The Company shall repay in full the entire principal
balance then outstanding under this Note on the first to occur (the “Maturity Date”) of: (i) the Payment Date; or (ii) the acceleration of the obligations as contemplated by this Note. The “Payment Date” shall be December
15, 2005. 
  
 (b) Interest on the outstanding
principal balance of this Note shall accrue at a rate of ten percent (10%) per annum, compounded quarterly. Interest on the outstanding principal balance of the Note shall be computed on the basis of the actual number of days elapsed and a year of
three hundred and sixty (360) days and shall be payable on the Maturity Date. Furthermore, upon the occurrence of an Event of Default, then to the extent permitted by law, the Company will pay interest to the Payee, payable on demand, on the
outstanding principal balance of the Note from the date of the Event of Default until payment in full at the rate of twelve percent (12%) per annum. 

 (c) The Company may not prepay the outstanding principal amount of this Note prior to the
Maturity Date without the written consent of the Payee; provided, however, that after the Conversion Date (as defined below), the Company may prepay the outstanding principal amount of this Note together with interest accrued thereon or, if only a
portion of this Note shall have been converted, any new note issued with respect to the principal amount not converted. 
  
 (d) Whenever any payment to be made shall be due on a Saturday, Sunday or a public holiday under the laws of the State of Texas, such
payment may be due on the next succeeding business day and such next succeeding day shall be included in the calculation of the amount of accrued interest payable on such date. 
  
 2. Conversion of Note. 
  
 (a) On the date of the consummation by the Company of an offering of the Company’s equity securities (which for purposes of this
Section 2 includes any securities convertible into or exercisable for any of the Company’s capital stock, but does not include any Exempt Securities, as defined below), this Note and all accrued and unpaid interest thereon shall be convertible,
in whole or in part and at the option of the Payee, into a number of shares of such equity securities equal to the quotient obtained by dividing (i) the product of (x) the principal amount of this Note being converted by the Payee (together with all
accrued and unpaid interest thereon) and (y) 1.10, by (ii) the price per security at which such equity securities are sold to other investors in such offering. The Company shall notify the Payee of the proposed closing date of any such offering no
less than 3 business days, but no more than 5 business days, prior to such date 
  
 (b) In the event that the Payee elects to convert all or a portion of the Note pursuant to Section 2(a), the Payee shall surrender the
Note to the Company, along with a written notice to the Company, in the manner specified in Section 9 hereof, at least 1 day prior to the date on which conversion is sought to become effective (the “Conversion Date”) that such Payee elects
to convert the Note or a specified portion thereof on the Conversion Date, and such notice shall specify the names (and addresses) in which certificates for Conversion Shares (as defined below) are to be issued. 
  
 (c) If the Note is surrendered for conversion pursuant to
Section 2(b), then promptly after the Conversion Date, the Company shall deliver or cause to be delivered to the Payee certificates representing the number of fully paid and non-assessable shares of the applicable equity securities (the
“Conversion Shares”), into which the Note may be converted. Such conversion shall be deemed to have been made immediately prior to the close of business on the Conversion Date, so that the rights of the Payee as a holder of the Note shall
cease with respect to the Note at such time (including, without limitation, the right to receive the principal amounts of the Note other than in the form of Conversion Shares), interest shall cease to accrue hereon and the person or persons entitled
to receive the Conversion Shares deliverable upon conversion of the Note shall be treated for all purposes as having become the record holders of such Conversion Shares at such time. If this Note shall have been converted in part, the Company shall,
at the time of delivery of the certificate or certificates representing Conversion 

  

 2 

 
Shares, deliver to the Payee a new Note evidencing the rights of the Payee with respect to the remaining principal amount (and all accrued and unpaid
interest thereon), which new Note shall in all other respects be identical with this Note, or at the request of the Payee, appropriate notation may be made on this Note and the same returned to the Payee. If the Company intentionally and willfully
fails to deliver to the Payee such certificate or certificates pursuant to this Section 2(c) (free of any restrictions on transfer or legends, if such shares have been registered) in accordance herewith, prior to the tenth (10th) Business Day after the receipt by the Company of (i) a written notice of Payee’s election to convert this Note, and (ii)
this Note (the “Date of Receipt”), the Company shall pay to such Payee, in cash, on a per diem basis, an amount equal to 2% of the value of the undelivered Conversion Shares or shares of Common Stock issuable upon conversion of the
Conversion Shares if the Conversion Shares do not consist of Common Stock (based on the current market price of the Common Stock on the Date of Receipt) per month until such delivery takes place. 
  
 (d) The Company covenants that it will at all times reserve
and keep available out of its authorized shares of capital stock, solely for purpose of issue or delivery upon conversion of the Note as herein provided, such number of Conversion Shares as shall then be issuable or deliverable upon the conversion
of the Note and such number of shares of Common Stock as shall then be issuable upon conversion of the Conversion Shares, if applicable. The Company covenants that all Conversion Shares which shall be so issuable or deliverable (and all shares of
Common Stock issuable upon conversion of the Conversion Shares, if applicable) shall, when issued or delivered, be duly and validly issued and fully paid and non-assessable.  
  
 (e) Notwithstanding anything contained in this Note to the contrary, the number of Conversion Shares (if the
Conversion Shares consist of the Company’s common stock, par value $0.0006 per share (the “Common Stock”) and otherwise the number of shares of Common Stock issuable upon conversion of the Conversion Shares), together with the number
of shares of Common Stock issuable upon exercise of the warrants issued pursuant to the Purchase Agreement (as defined below) (such warrants, the “Warrants”, and such shares of Common Stock issuable upon exercise thereof, the “Warrant
Shares”), shall not exceed 19.99% of the number of shares of Common Stock outstanding on the Closing Date, subject to appropriate adjustment for stock splits, stock dividends, or other similar recapitalizations affecting the Common Stock (the
“Maximum Common Stock Issuance”), unless the issuance of shares hereunder and thereunder in excess of the Maximum Common Stock Issuance shall first be approved by the Company’s stockholders in accordance with applicable law and the
By-laws and Certificate of Incorporation of the Company. If at any point in time and from time to time (each a “Trigger Date”), the number of Conversion Shares or shares of Common Stock issuable upon conversion of the Conversion Shares, as
applicable, together with the number of Warrant Shares, would exceed the Maximum Common Stock Issuance but for this Section 2(e), then the Company shall promptly call a shareholders meeting to request shareholder approval for the issuance of Common
Stock hereunder and thereunder in excess of the Maximum Common Stock Issuance. Following any approval by the shareholders of such an additional issuance, the Note shall be convertible into the number of shares of Common Stock determined pursuant to
this Note without regard to the limitations provided in this Section 2(e). 
  

 3 

 (f) The Company shall use commercially reasonable efforts to consummate an offering of
its equity securities prior to the Maturity Date. If the Company does consummate such an offering and the Payee elects to convert this Note or any portion of this Note pursuant to Section 2(a), then Payee shall participate in such transaction on
substantially identical terms to those on which the other investors in such transaction participate, including, without limitation, warrant coverage, if applicable. Without limiting the generality of the foregoing, the Payee shall benefit from the
registration and other rights granted to the other investors in such an offering with respect to the Conversion Shares, or the shares of Common Stock issuable upon conversion of the Conversion Shares, as applicable. 
  
 (g) “Exempt Securities” means any shares of
Common Stock issued by the Company after the date of issuance of this Note that are: (i) Warrant Shares; (ii) shares issued or issuable pursuant to anti-dilution provisions of the Series A Cumulative Convertible Preferred Stock of the Company (the
“Preferred Stock”); (iii) shares issued or issuable upon the conversion of the Preferred Stock; (iv) shares issued or issuable upon the exercise of any warrants or options outstanding as of the date of the issuance of this Note; (v) shares
of Common Stock or Common Stock Equivalents (as defined in the Warrants) issued in connection with a bona-fide strategic transaction, partnership, joint venture or acquisition, except for shares of Common Stock or Common Stock Equivalents issued in
connection with a transaction involving the entity that, as of the date of the Purchase Agreement (as defined below), owns a 50% interest in the Company’s principal operating subsidiary in Kazakhstan or (vi) shares of Common Stock issued in
connection with any stock-based compensation plans of the Company in existence as of the date of the issuance of this Note, or any issuance (at issuance or exercise prices at or above fair market value) of Common Stock, stock awards or options
under, or the exercise of options granted pursuant to, any Board approved employee stock option or similar plan for the issuance of options or capital stock of the Company or (vii) shares of Common Stock issued in connection with a bona-fide
underwritten public offering. 
  
 3. Representations and
Warranties of the Company. The Company represents and warrants to the Payee as follows: 
  
 (a) The Company has been duly incorporated and is validly existing and in good standing under the laws of the state of Delaware, with full
corporate power and authority to own, lease and operate its properties and to conduct its business as currently conducted. 
  
 (b) This Note has been duly authorized, validly executed and delivered on behalf of the Company and is a valid and binding obligation of
the Company enforceable against the Company in accordance with its terms, subject to limitations on enforcement by general principles of equity and by bankruptcy or other laws affecting the enforcement of creditors’ rights generally, and the
Company has full power and authority to execute and deliver this Note and to perform its obligations hereunder. 
  
 (c) The execution, delivery and performance of this Note will not (i) conflict with or result in a breach of or a default under any of the
terms or provisions of, (A) the Company’s certificate of incorporation or by-laws, or (B) any material provision of any 

  

 4 

 
indenture, mortgage, deed of trust or other material agreement or instrument to which the Company is a party or by which it or any of its material properties
or assets is bound, (ii) result in a violation of any material provision of any law, statute, rule, regulation, or any existing applicable decree, judgment or order by any court, Federal or state regulatory body, administrative agency, or other
governmental body having jurisdiction over the Company, or any of its material properties or assets or (iii) result in the creation or imposition of any material lien, charge or encumbrance upon any material property or assets of the Company or any
of its subsidiaries pursuant to the terms of any agreement or instrument to which any of them is a party or by which any of them may be bound or to which any of their property or any of them is subject. 
  
 (d) No consent, approval or authorization of or designation,
declaration or filing with any governmental authority on the part of the Company is required in connection with the valid execution and delivery of this Note. 
  

4. Events of Default. The occurrence of any of the following events shall be an “Event of Default” under this Note: 

 
 (a) the Company shall fail to make the payment of any
amount of any principal outstanding for a period of three (3) business days after the date such payment shall become due and payable hereunder; or 
  
 (b) the Company shall fail to make any payment of interest for a period of three (3) business days after the date such interest shall
become due and payable hereunder; or 
  
 (c) any
representation, warranty or certification made by the Company herein or in the Convertible Promissory Note and Warrant Purchase Agreement of even date herewith (the “Purchase Agreement”) shall prove to have been false or incorrect
or breached in any material respect on the date as of which made; or 
  
 (d) the holder of any indebtedness of the Company or any of its subsidiaries shall accelerate any payment of any amount or amounts of principal or interest on any indebtedness (“Indebtedness”) (other
than the Indebtedness hereunder) prior to its stated maturity or payment date on account of a default by the Company or any of its subsidiaries under the documents or agreements evidencing such Indebtedness, the aggregate principal amount of which
Indebtedness of all such persons is in excess of $1,000,000, whether such Indebtedness now exists or shall hereinafter be created, and such accelerated payment entitles the holder thereof to immediate payment of such Indebtedness which is due and
owing and such indebtedness has not been discharged in full or such acceleration has not been stayed, rescinded or annulled within five (5) business days of such acceleration; or 
  
 (e) A judgment or order for the payment of money shall be rendered against the Company or any of its
subsidiaries in excess of $1,000,000 in the aggregate (net of any applicable insurance coverage) for all such judgments or orders against all such persons (treating any deductibles, self insurance or retention as not so covered) that shall not be

  

 5 

 
discharged, and all such judgments and orders remain outstanding, and there shall be any period of sixty (60) consecutive days following entry of the
judgment or order in excess of $1,000,000 or the judgment or order which causes the aggregate amount described above to exceed $1,000,000 during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall
not be in effect; or 
  
 (f) the Company shall
(i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property or assets, (ii) make a general assignment for the benefit of its
creditors, (iii) commence a voluntary case under the United States Bankruptcy Code (the “Bankruptcy Code”) or under the comparable laws of any jurisdiction (foreign or domestic), (iv) file a petition seeking to take advantage of any
bankruptcy, insolvency, moratorium, reorganization or other similar law affecting the enforcement of creditors’ rights generally, (v) acquiesce in writing to any petition filed against it in an involuntary case under the Bankruptcy Code or
under the comparable laws of any jurisdiction (foreign or domestic), or (vi) take any action under the laws of any jurisdiction (foreign or domestic) analogous to any of the foregoing; or 
  
 (g) a proceeding or case shall be commenced in respect of
the Company or any of its subsidiaries without its application or consent, in any court of competent jurisdiction, seeking (i) the liquidation, reorganization, moratorium, dissolution, winding up, or composition or readjustment of its debts, (ii)
the appointment of a trustee, receiver, custodian, liquidator or the like of it or of all or any substantial part of its assets or (iii) similar relief in respect of it under any law providing for the relief of debtors, and such proceeding or case
described in clause (i), (ii) or (iii) shall continue undismissed, or unstayed and in effect, for a period of thirty (30) consecutive days or any order for relief shall be entered in an involuntary case under the Bankruptcy Code or under the
comparable laws of any jurisdiction (foreign or domestic) against the Company or any of its subsidiaries or action under the laws of any jurisdiction (foreign or domestic) analogous to any of the foregoing shall be taken with respect to the Company
or any of its subsidiaries and shall continue undismissed, or unstayed and in effect for a period of thirty (30) consecutive days; or 
  
 (h) the suspension from listing or the failure of the Company’s common stock to be listed on any of the OTC Bulletin Board, American
Stock Exchange, Nasdaq National Market or Nasdaq SmallCap Market for a period of five (5) consecutive trading days. 
  
 5. Remedies Upon An Event of Default. If an Event of Default shall have occurred and shall be continuing, the Payee of this Note may at any time at
its option, (a) declare the entire unpaid principal balance of this Note, together with all interest accrued hereon, due and payable, and thereupon, the same shall be accelerated and so due and payable; provided, however, that upon the
occurrence of an Event of Default described in (i) Sections 4(f) and (g), without presentment, demand, protest, or notice, all of which are hereby expressly unconditionally and irrevocably waived by the Company, the outstanding principal balance and
accrued interest hereunder shall be automatically due and payable, and (ii) Sections 4(a) through (e) and Section 4(h), the Payee may exercise or otherwise enforce any one or more of the Payee’s 

  

 6 

 
rights, powers, privileges, remedies and interests under this Note or applicable law. No course of delay on the part of the Payee shall operate as a waiver
thereof or otherwise prejudice the right of the Payee. No remedy conferred hereby shall be exclusive of any other remedy referred to herein or now or hereafter available at law, in equity, by statute or otherwise. 
  
 6. Replacement. Upon receipt of a duly executed, notarized and
unsecured written statement from the Payee with respect to the loss, theft or destruction of this Note (or any replacement hereof) and upon receipt of a written agreement of indemnification reasonably acceptable to the Company signed by the Payee
(or holder at the time thereof) or, in the case of a mutilation of this Note, upon surrender and cancellation of such Note, the Company shall issue a new Note, of like tenor and amount, in lieu of such lost, stolen, destroyed or mutilated Note.

  
 7. Parties in Interest, Transferability. This Note
shall be binding upon the Company and its successors and permitted assigns and the terms hereof shall inure to the benefit of the Payee and its successors and assigns. This Note may be transferred or sold, subject to the provisions of Section 15 of
this Note, or pledged, hypothecated or otherwise granted as security by the Payee. 
  
 8. Amendments. This Note may not be modified or amended in any manner except in writing executed by the Company and the Payee. 
  
 9. Notices. Any notice, demand, request, waiver or other communication required or permitted to be given hereunder
shall be in writing and shall be effective (a) upon hand delivery by telecopy or facsimile at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first
business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully
prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The Company will give written notice to the Payee at least twenty (20) days prior to the date on which dissolution, liquidation or winding-up
will take place and in no event shall such notice be provided to the Payee prior to such information being made known to the public. Notices to the Payee and the Company shall be made to the addresses set forth in the Purchase Agreement. 

 
 10. Governing Law. This Note shall be governed by and construed in
accordance with the internal laws of the State of New York, without giving effect to the choice of law provisions. This Note shall not be interpreted or construed with any presumption against the party causing this Note to be drafted. 
  
 11. Headings. Article and section headings in this Note are included
herein for purposes of convenience of reference only and shall not constitute a part of this Note for any other purpose. 
  
 12. Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Note shall be cumulative and in
addition to all other remedies available under this Note, at law or in equity (including, without limitation, a decree of 

  

 7 

 
specific performance and/or other injunctive relief), no remedy contained herein shall be deemed a waiver of compliance with the provisions giving rise to
such remedy and nothing herein shall limit a Payee’s right to pursue actual damages for any failure by the Company to comply with the terms of this Note. Amounts set forth or provided for herein with respect to payments and the like (and the
computation thereof) shall be the amounts to be received by the Payee and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of
its obligations hereunder may cause irreparable and material harm to the Payee and that the remedy at law for any such breach may be inadequate. Therefore the Company agrees that, in the event of any such breach or threatened breach, the Payee shall
be entitled, in addition to all other available rights and remedies, at law or in equity, to seek such equitable relief, including but not limited to an injunction restraining any such breach or threatened breach, without the necessity of showing
economic loss and without any bond or other security being required. 
  
 13. Failure or Indulgence Not Waiver. No failure or delay on the part of the Payee in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such
power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. 
  
 14. Enforcement Expenses. The Company agrees to pay all costs and expenses of enforcement of this Note, including, without limitation, reasonable
attorneys’ fees and expenses, to the extent the Payee prevails in such enforcement action. 
  
 15. Compliance with Securities Laws. The Payee of this Note acknowledges that this Note is being acquired solely for the Payee’s own account
and not as a nominee for any other party, and for investment, and that the Payee shall not offer, sell or otherwise dispose of this Note other than in compliance with the laws of the United States of America and as guided by the rules of the
Securities and Exchange Commission. This Note and any Note issued in substitution or replacement therefore shall be stamped or imprinted with a legend in substantially the following form: 
  
 “THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE COMPANY SHALL HAVE RECEIVED
AN OPINION OF COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.” 
  
 16. Severability. The provisions of this Note are severable, and if any provision shall be held invalid or
unenforceable in whole or in part in any jurisdiction, then such invalidity or unenforceability shall not in any manner affect such provision in any other jurisdiction or any other provision of this Note in any jurisdiction. 
  

 8 

 17. Consent to Jurisdiction. Each of the Company and the Payee (i) hereby irrevocably submits to
the jurisdiction of the United States District Court sitting in the Southern District of New York and the courts of the State of New York located in New York county for the purposes of any suit, action or proceeding arising out of or relating to
this Note and (ii) hereby waives, and agrees not to assert in any such suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such court, that the suit, action or proceeding is brought in an inconvenient forum
or that the venue of the suit, action or proceeding is improper. Each of the Company and the Payee consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address set forth in Section 9
hereof and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing in this Section 17 shall affect or limit any right to serve process in any other manner permitted by law. 
  
 18. Company Waivers. Except as otherwise specifically provided herein,
the Company and all others that may become liable for all or any part of the obligations evidenced by this Note, hereby waive presentment, demand, notice of nonpayment, protest and all other demands and notices in connection with the delivery,
acceptance, performance and enforcement of this Note, and do hereby consent to any number of renewals of extensions of the time or payment hereof and agree that any such renewals or extensions may be made without notice to any such persons and
without affecting their liability herein and do further consent to the release of any person liable hereon, all without affecting the liability of the other persons, firms or Company liable for the payment of this Note, AND DO HEREBY WAIVE TRIAL BY
JURY. 
  
 THE COMPANY ACKNOWLEDGES THAT THE TRANSACTION OF WHICH
THIS NOTE IS A PART IS A COMMERCIAL TRANSACTION, AND TO THE EXTENT ALLOWED BY APPLICABLE LAW, HEREBY WAIVES ITS RIGHT TO NOTICE AND HEARING WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE PAYEE OR ITS SUCCESSORS OR ASSIGNS MAY DESIRE TO USE.

  
 19. Payment Set Aside. To the extent that the Company
makes a payment or payments to any Payee pursuant to this Note or a Payee enforces or exercises its rights hereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other person under any law (including, without limitation, any
bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall, to the extent permissible under applicable law, be
revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred. 
  
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 
  

 9 

 IN WITNESS WHEREOF, the Company has executed and delivered this Convertible Promissory Note as of
the date first written above. 
  

			
	TRANSMERIDIAN EXPLORATION INCORPORATED
		
	By:	 	 
	 Name:
	 	 
	 Title:
	 	 

  

 10

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