Document:

Form of Warrant

 Exhibit 4.2 
  

THIS WARRANT AND THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD, ASSIGNED OR
TRANSFERRED, IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT REGISTRATION UNDER SAID ACT IS NOT REQUIRED. 
  
 Warrant No. W-        

  
 COMMON STOCK PURCHASE WARRANT 
  
 To Purchase
                     Shares of Common Stock of 
 TRANSMERIDIAN EXPLORATION INCORPORATED 
  
 THIS IS TO CERTIFY THAT                     , or registered assigns (the “Holder”), is entitled, during the Exercise Period
(as hereinafter defined), to purchase from Transmeridian Exploration Incorporated, a Delaware corporation (the “Company”), the Warrant Stock (as hereinafter defined and subject to adjustment as provided herein), in whole or in part, at a
purchase price of $2.40 per share, all on and subject to the terms and conditions hereinafter set forth. 
  
 1. Definitions. As used in this Warrant, the following terms have the respective meanings set forth below: 
  
 “Additional Shares of Common Stock” means any shares of
Common Stock issued by the Company after the Closing Date other than: (i) Warrant Shares; (ii) shares issued or issuable pursuant to anti-dilution provisions of 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 Closing Date; (v) shares of Common Stock or Common Stock Equivalents 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, 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 Closing Date, 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, (vii) the issuance of shares of Common Stock in connection with a bona-fide underwritten public offering or (viii) shares issued or issuable upon the conversion of the Notes or any Conversion Securities. 
  
 “Affiliate” means any person or entity that, directly or
indirectly through one or more intermediaries, controls or is controlled by or is under common control with a person or entity, as such terms are used in and construed under Rule 144 under the Securities Act. With respect to a 

 
Holder of Warrants, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such Holder will be
deemed to be an Affiliate of such Holder. 
  
 “Appraised
Value” means, in respect of any share of Common Stock on any date herein specified, the fair saleable value of such share of Common Stock (determined without giving effect to the discount for (i) a minority interest or (ii) any lack of
liquidity of the Common Stock or to the fact that the Company may have no class of equity registered under the Exchange Act) as of the last day of the most recent fiscal month ending prior to such date specified, based on the value of the Company on
a fully-diluted basis, as determined by a nationally recognized investment banking firm selected by the Company’s Board of Directors and having no prior relationship with the Company. 
  
 “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. 
  
 “Change of Control” means the (i) acquisition by an individual or legal entity or group (as set forth in
Section 13(d) of the Exchange Act) of more than one-half of the voting rights or equity interests in the Company; or (ii) sale, conveyance, or other disposition of all or substantially all of the assets, property or business of the Company or the
merger into or consolidation with any other corporation (other than a wholly owned subsidiary corporation) or effectuation of any transaction or series of related transactions pursuant to which holders of the Company’s voting securities prior
to such transaction or series of transactions fail to continue to hold at least 50% of the voting power of the Company. 
  
 “Closing Date” means August 30, 2005 
  
 “Commission” means the Securities and Exchange Commission or any other federal agency then administering the Securities Act and other
federal securities laws. 
  
 “Common Stock” means
(except where the context otherwise indicates) the Common Stock, $0.0006 par value per share, of the Company as constituted on the Closing Date, and any capital stock into which such Common Stock may thereafter be changed or converted, and shall
also include (i) capital stock of the Company of any other class (regardless of how denominated) issued to the holders of shares of Common Stock upon any reclassification thereof which is also not preferred as to dividends or assets on liquidation
over any other class of stock of the Company and which is not subject to redemption and (ii) shares of common stock of any successor or acquiring corporation received by or distributed to the holders of Common Stock of the Company in the
circumstances contemplated by Section 4.7. 
  
 “Common
Stock Equivalents” has the meaning set forth in Section 4.4. 
  
 “Conversion Securities” means any securities issuable upon conversion of the Notes, other than Preferred Stock or Common Stock. 
  

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 “Current Market Price” means, in respect of any share of Common Stock on any date herein
specified, 
  
 (1) if there shall not then be a public market for
the Common Stock, the higher of 
  
 (a) the book
value per share of Common Stock at such date, and 
  
 (b) the Appraised Value per share of Common Stock at such date, 
  
 or 
  
 (2) if there shall then be
a public market for the Common Stock, the higher of (x) the book value per share of Common Stock at such date, and (y) the average of the daily market prices for the 20 consecutive trading days immediately before such date. The daily market price
for each such trading day shall be (i) the closing price on such day on the principal stock exchange (including Nasdaq) on which such Common Stock is then listed or admitted to trading, or quoted, as applicable, (ii) if no sale takes place on such
day on any such exchange, the last reported closing price on such day as officially quoted on any such exchange (including Nasdaq), (iii) if the Common Stock is not then listed or admitted to trading on any stock exchange, the last reported closing
bid price on such day in the over-the-counter market, as furnished by the National Association of Securities Dealers Automatic Quotation System or the National Quotation Bureau, Inc., (iv) if neither such corporation at the time is engaged in the
business of reporting such prices, as furnished by any similar firm then engaged in such business, or (v) if there is no such firm, as furnished by any member of the National Association of Securities Dealers, Inc. (the “NASD”) selected
mutually by the holder of this Warrant and the Company or, if they cannot agree upon such selection, as selected by two such members of the NASD, one of which shall be selected by holder of this Warrant and one of which shall be selected by the
Company. 
  
 “Current Warrant Price” means, in
respect of a share of Common Stock at any date herein specified, the price at which a share of Common Stock may be purchased pursuant to this Warrant on such date. Until the Current Warrant Price is adjusted pursuant to the terms herein, the initial
Current Warrant Price shall be $2.40 per share of Common Stock. 
  
 “Exchange Act” means the Securities Exchange Act of 1934, as amended, or any similar federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect from time to time.

  
 “Exercise Period” means the period during
which this Warrant is exercisable pursuant to Section 2.1. 
  
 “Expiration Date” means August 30, 2010. 
  
 “GAAP” means generally accepted accounting principles in the United States of America as from time to time in effect. 
  
 “Investor Rights Agreement” has the meaning set forth in Section 9. 
  
 “NASD” means the National Association of Securities Dealers,
Inc., or any successor corporation thereto. 
  

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 “Notes” means the Convertible Promissory Notes issued by the Company on the Closing
Date. 
  
 “Other Property” has the meaning set
forth in Section 4.7. 
  
 “Person” means any
individual, sole proprietorship, partnership, joint venture, trust, incorporated organization, association, corporation, limited liability company, institution, public benefit corporation, entity or government (whether federal, state, county, city,
municipal or otherwise, including, without limitation, any instrumentality, division, agency, body or department thereof). 
  
 “Preferred Stock” means the Company’s Series A Cumulative Convertible Preferred stock, par value $0.0006 per share. 
  
 “Purchase Agreement” means that certain Convertible
Promissory Note and Warrant Purchase Agreement dated as of August 30, 2005 among the Company and the other parties named therein, pursuant to which this Warrant was originally issued. 
  
 “Registration Statement” has the meaning set forth in the Investor Rights Agreement. 
  
 “Restricted Common Stock” means shares of Common Stock which
are, or which upon their issuance upon the exercise of any Warrant would be required to be, evidenced by a certificate bearing the restrictive legend set forth in Section 3.2. 
  
 “Securities Act” means the Securities Act of 1933, as amended, or any similar federal statute, and the
rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. 
  
 “Trading Day” means any day on which the primary market on which shares of Common Stock are listed is open for trading. 
  
 “Transfer” means any disposition of any Warrant or Warrant
Stock or of any interest in either thereof, which would constitute a sale thereof within the meaning of the Securities Act. 
  
 “Warrants” means this Warrant and all warrants issued upon transfer, division or combination of, or in substitution for, any thereof. All
Warrants shall at all times be identical as to terms and conditions and date, except as to the number of shares of Common Stock for which they may be exercised. 
  

“Warrant Price” means an amount equal to (i) the number of shares of Common Stock being purchased upon exercise of this Warrant
pursuant to Section 2.1, multiplied by (ii) the Current Warrant Price. 
  
 “Warrant Stock” means the                          shares of Common Stock to be purchased upon
the exercise hereof, subject to adjustment as provided herein. 
  
 “Warrant Shares” means the shares of Common Stock issued or issuable upon conversion of the Warrants issued pursuant to the Purchase Agreement. 
  

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 2. Exercise of Warrant. 
  
 2.1. Manner of Exercise. From and after the Closing Date, and until 5:00 P.M., New York time, on the Expiration Date
(the “Exercise Period”), the Holder may exercise this Warrant, on any Business Day, for all or any part of the number of shares of Warrant Stock purchasable hereunder. 
  
 In order to exercise this Warrant, in whole or in part, the Holder shall deliver to the Company at its principal office or
at the office or agency designated by the Company pursuant to Section 12, (i) a written notice of Holder’s election to exercise this Warrant, which notice shall specify the number of shares of Warrant Stock to be purchased, (ii) payment of the
Warrant Price as provided herein, and (iii) this Warrant. Such notice shall be substantially in the form of the subscription form appearing at the end of this Warrant as Exhibit A, duly executed by the Holder or its agent or attorney. Upon
receipt thereof, the Company shall, as promptly as practicable, and in any event within three Business Days thereafter, execute or cause to be executed and deliver or cause to be delivered to the Holder a certificate or certificates representing the
aggregate number of full shares of Warrant Stock issuable upon such exercise, together with cash in lieu of any fraction of a share, as hereinafter provided. The stock certificate or certificates so delivered shall be, to the extent possible, in
such denomination or denominations as the Holder shall request in the notice and shall be registered in the name of the Holder or such other name as shall be designated in the notice. This Warrant shall be deemed to have been exercised and such
certificate or certificates shall be deemed to have been issued, and the Holder or any other Person so designated to be named therein shall be deemed to have become a Holder of record of such shares for all purposes, as of the date when the notice,
together with the payment of the Warrant Price and this Warrant, is received by the Company as described above. If this Warrant shall have been exercised in part, the Company shall, at the time of delivery of the certificate or certificates
representing Warrant Stock, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased shares of Common Stock called for by this Warrant, which new Warrant shall in all other respects be identical with this
Warrant, or at the request of the Holder, appropriate notation may be made on this Warrant and the same returned to the Holder. 
  
 If the Company intentionally and willfully fails to deliver to the holder such certificate or certificates pursuant to this Section 2.1 (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 Holder’s election to exercise this Warrant, which notice shall specify the number of shares of Warrant Stock to be purchased, (ii) payment of the Warrant
Price as provided herein, and (iii) this Warrant (the “Date of Receipt”), the Company shall pay to such Holder, in cash, on a per diem basis, an amount equal to 2% of the value of the undelivered Warrant Stock (based on the Current Market
Price of the Common Stock on the Date of Receipt) per month until such delivery takes place. 
  
 Payment of the Warrant Price may be made at the option of the Holder by: (i) certified or official bank check payable to the order of the Company, (ii) wire transfer to the account of the Company or (iii) if at any
time or from time to time following the date that is 12 months after the Closing Date, the Warrant Stock issuable upon exercise of this Warrant are not registered pursuant to an effective Registration Statement pursuant to which sales may be made,
the 

  

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surrender and cancellation of a portion of shares of Common Stock then held by the Holder or issuable upon such exercise of this Warrant, which shall be
valued and credited toward the total Warrant Price due the Company for the exercise of the Warrant based upon the Current Market Price of the Common Stock. All shares of Common Stock issuable upon the exercise of this Warrant pursuant to the terms
hereof shall be validly issued and, upon payment of the Warrant Price, shall be fully paid and nonassessable and not subject to any preemptive rights. 
  
 2.2. Fractional Shares. The Company shall not be required to issue a fractional share of Common Stock upon exercise of any Warrant. As to any
fraction of a share which the Holder of one or more Warrants, the rights under which are exercised in the same transaction, would otherwise be entitled to purchase upon such exercise, the Company shall pay an amount in cash equal to the Current
Market Price per share of Common Stock on the date of exercise multiplied by such fraction. 
  
 2.3. Continued Validity. A Holder of shares of Common Stock issued upon the exercise of this Warrant, in whole or in part (other than a Holder who acquires such shares after the same have been publicly sold
pursuant to a Registration Statement under the Securities Act or sold pursuant to Rule 144 thereunder), shall continue to be entitled with respect to such shares to all rights to which it would have been entitled as the Holder under Sections 10 and
13 of this Warrant. 
  
 2.4. Restrictions on Exercise
Amount. 
  
 (i) Unless a Holder delivers to the Company
irrevocable written notice (x) prior to the date of issuance hereof or sixty-one days prior to the effective date of such notice that this Section 2.4(i) shall not apply to such Holder or (y) prior to a Change of Control the terms of which require
the conversion of the Notes or Conversion Securities, if applicable, into Common Stock, the Holder may not acquire a number of shares of Warrant Stock to the extent that, upon such exercise, the number of shares of Common Stock then beneficially
owned by such holder and its Affiliates and any other persons or entities whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the Exchange Act (including shares held by any
“group” of which the holder is a member, but excluding shares beneficially owned by virtue of the ownership of securities or rights to acquire securities that have limitations on the right to convert, exercise or purchase similar to the
limitation set forth herein) exceeds 4.999% of the total number of shares of Common Stock of the Company then issued and outstanding. For purposes hereof, “group” has the meaning set forth in Section 13(d) of the Exchange Act and
applicable regulations of the Securities and Exchange Commission, and the percentage held by the holder shall be determined in a manner consistent with the provisions of Section 13(d) of the Exchange Act. Each delivery of a notice of exercise by a
Holder will constitute a representation by such Holder that it has evaluated the limitation set forth in this paragraph and determined, based on the most recent public filings by the Company with the Commission, that the issuance of the full number
of shares of Warrant Stock requested in such notice of exercise is permitted under this paragraph. 
  
 (ii) In the event the Company is prohibited from issuing shares of Warrant Stock as a result of any restrictions or prohibitions under applicable law or
the rules or regulations of any stock exchange, interdealer quotation system or other self-regulatory organization, the Company 

  

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shall as soon as possible seek the approval of its stockholders and take such other action to authorize the issuance of the full number of shares of Common
Stock issuable upon exercise of this Warrant. 
  
 3. Transfer,
Division and Combination. 
  
 3.1. Transfer. The
Warrants and the Warrant Stock shall be freely transferable, subject to compliance with all applicable laws, including, but not limited to the Securities Act. If, at the time of the surrender of this Warrant in connection with any transfer of this
Warrant or the resale of the Warrant Stock, this Warrant or the Warrant Stock, as applicable, shall not be registered under the Securities Act, the Company may require, as a condition of allowing such transfer (i) that the Holder or transferee of
this Warrant or the Warrant Stock 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 substantially in the form attached as Exhibit C hereto and (iii) that the transferee be an
“accredited investor” as defined in Rule 501(a) promulgated under the Securities Act. Transfer of this Warrant and all rights hereunder, in whole or in part, in accordance with the foregoing provisions, shall be registered on the books of
the Company to be maintained for such purpose, upon surrender of this Warrant at the principal office of the Company referred to in Section 2.1 or the office or agency designated by the Company pursuant to Section 12, together with a written
assignment of this Warrant substantially in the form of Exhibit B hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if
required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denomination specified in such instrument of assignment, and shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Following a transfer that complies with the requirements of this Section 3.1, the Warrant may be exercised by a new Holder for the purchase of
shares of Common Stock regardless of whether the Company issued or registered a new Warrant on the books of the Company. 
  
 3.2. Restrictive Legends. Each certificate for Warrant Stock initially issued upon the exercise of this Warrant, and each certificate for Warrant
Stock issued to any subsequent transferee of any such certificate, unless, in each case, such Warrant Stock is eligible for resale without registration pursuant to Rule 144(k) under the Exchange Act or such Warrant Stock has been sold pursuant to an
effective Registration Statement, shall be stamped or otherwise imprinted with a legend in substantially the following form: 
  
 “THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED, AND MAY NOT BE OFFERED, SOLD, ASSIGNED OR
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT REGISTRATION UNDER SAID ACT IS NOT REQUIRED.” 
  

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 3.3. Division and Combination; Expenses; Books. This Warrant may be divided or combined with other
Warrants upon presentation hereof at the aforesaid office or agency of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject
to compliance with Section 3.1 as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice. The Company shall prepare, issue and deliver at its own expense the new Warrant or Warrants issued under this Section 3.3. The Company agrees to maintain, at its aforesaid office or agency, books for the registration and the
registration of transfer of the Warrants. 
  
 4.
Adjustments. The number of shares of Common Stock for which this Warrant is exercisable, and the price at which such shares may be purchased upon exercise of this Warrant, shall be subject to adjustment from time to time as set forth in this
Section 4. The Company shall give the Holder notice of any event described below which requires an adjustment pursuant to this Section 4 in accordance with Sections 5.1 and 5.2. 
  
 4.1. Stock Dividends, Subdivisions and Combinations. If at any time while this Warrant is outstanding the Company
shall: 
  
 (i) declare a dividend or make a
distribution on its outstanding shares of Common Stock in shares of Common Stock, 
  
 (ii) subdivide its outstanding shares of Common Stock into a larger number of shares of Common Stock, or 
  
 (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, then: 
  
 (1) the number
of shares of Common Stock acquirable upon exercise of this Warrant immediately after the occurrence of any such event shall be adjusted to equal the number of shares of Common Stock which a record holder of the same number of shares of Common Stock
that would have been acquirable under this Warrant immediately prior to the record date for such dividend or distribution or the effective date of such subdivision or combination would own or be entitled to receive after such record date or the
effective date of such subdivision or combination, as applicable, and 
  
 (2) the Current Warrant Price shall be adjusted to equal: 
  
 (A) the Current Warrant Price in effect at the time of the record date for such dividend or distribution or of the effective date of such subdivision or combination, multiplied by the number of shares of Common Stock
into which this Warrant is exercisable immediately prior to the adjustment, divided by 
  
 (B) the number of shares of Common Stock into which this Warrant is exercisable immediately after such adjustment. 
  

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 Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the
record date for the determination of stockholders entitled to receive such dividend or distribution, and any adjustment pursuant to clauses (ii) or (iii) of this paragraph shall become effective immediately after the effective date of such
subdivision or combination. 
  
 4.2. Certain Other
Distributions. If at any time while this Warrant is outstanding the Company shall cause the holders of its Common Stock to be entitled to receive any dividend or other distribution of: 
  
 (i) cash, 
  
 (ii) any evidences of its indebtedness, any shares of stock
of any class or any other securities or property or assets of any nature whatsoever (other than cash or additional shares of Common Stock as provided in Section 4.1 hereof), or 
  
 (iii) any warrants or other rights to subscribe for or purchase any evidences of its indebtedness, any
shares of stock of any class or any other securities or property or assets of any nature whatsoever, then: 
  
 (1) the number of shares of Common Stock acquirable upon exercise of this Warrant shall be adjusted to equal the product of the number of
shares of Common Stock acquirable upon exercise of this Warrant immediately prior to the record date for such dividend or distribution, multiplied by a fraction (x) the numerator of which shall be the Current Warrant Price per share of Common Stock
at the date of taking such record and (y) the denominator of which shall be such Current Warrant Price minus the amount allocable to one share of Common Stock of any such cash so distributable and of the fair value (as determined in good faith by
the Board of Directors of the Company) of any and all such evidences of indebtedness, shares of stock, other securities or property or warrants or other subscription or purchase rights so distributable; and 
  
 (2) the Current Warrant Price shall be adjusted to equal (x)
the Current Warrant Price in effect at the time at which the holders of Common Stock become entitled to receive such dividend or other distribution, multiplied by the number of shares of Common Stock acquirable upon exercise of this Warrant
immediately prior to the adjustment, divided by (y) the number of shares of Common Stock acquirable upon exercise of this Warrant immediately after such adjustment. 
  
 A reclassification of the Common Stock (other than a change in par value, or from par value to no par value
or from no par value to par value) into shares of Common Stock and shares of any other class of stock shall be deemed a distribution by the Company to the holders of its Common Stock of such shares of such other class of stock within the meaning of
this Section 4.2 and, if the outstanding shares of Common Stock shall be changed into a larger or smaller number of shares of Common Stock as a part of such reclassification, such change shall be deemed a subdivision or combination, as the case may
be, of the outstanding shares of Common Stock within the meaning of Section 4.1. 
  

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 4.3. Issuance of Additional Shares of Common Stock. 
  
 (i) If the Company shall issue or sell, on or after the
first date that is more than six months after the Closing Date, any Additional Shares of Common Stock in exchange for consideration in an amount per Additional Share of Common Stock less than the Current Warrant Price at the time the Additional
Shares of Common Stock are issued or sold, then, if this Warrant is outstanding: 
  
 (A) the Current Warrant Price immediately prior to such issue or sale shall be reduced to a price determined by dividing 
  
 (1) an amount equal to the sum of (a) the number of shares
of Common Stock outstanding immediately prior to such issue or sale multiplied by the then existing Current Warrant Price, plus (b) the consideration, if any, received by the Company upon such issue or sale, by 
  
 (2) the total number of shares of Common Stock outstanding
immediately after such issue or sale; and 
  
 (B)
the number of shares of Common Stock acquirable upon exercise of this Warrant shall be adjusted to equal the amount obtained by 
  
 (1) multiplying the Current Warrant Price in effect immediately prior to such issue or sale by the number of shares of Common Stock
acquirable upon exercise of this Warrant immediately prior to such issue or sale and 
  
 (2) dividing the product thereof by the Current Warrant Price resulting from the adjustment made pursuant to clause (A) of this Section
4.3. 
  
 (ii) The provisions of paragraph 4.3(i)
shall not apply to any issuance of Additional Shares of Common Stock for which an adjustment is provided under Section 4.1 or 4.2. No adjustment of the number of shares of Common Stock acquirable upon exercise of this Warrant shall be made under
paragraph 4.3(i) upon the issuance of any Additional Shares of Common Stock which are issued pursuant to the exercise of any warrants or other subscription or purchase rights or pursuant to the exercise of any conversion or exchange rights in any
convertible securities, if any such adjustment shall previously have been made upon the issuance of such warrants or other rights or upon the issuance of such convertible securities (or upon the issuance of any warrant or other rights therefor)
pursuant to Section 4.4. 
  
 4.4. Issuance of Common Stock
Equivalents. If the Company shall issue or sell, on or after the first date that is more than six months after the Closing Date, any warrants or other rights to subscribe for or purchase any Additional Shares of Common Stock or any securities
convertible into shares of Common Stock (collectively, “Common Stock Equivalents”), whether or not the rights to exchange or convert thereunder are immediately exercisable, and the effective price per share for which Common Stock is
issuable upon the exercise, exchange or conversion of such Common Stock Equivalents shall be less than the Current Warrant Price in effect immediately prior to the time of such issue or sale, then, if this Warrant is outstanding, the number of
shares of Warrant Stock acquirable upon the exercise of this Warrant and the Current 

  

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Warrant Price shall be adjusted as provided in Section 4.3 on the basis that the maximum number of additional shares of Common Stock issuable pursuant to all
such Common Stock Equivalents shall be deemed to have been issued and outstanding and the Company shall have received all of the consideration payable therefor, if any, as of the date of the actual issuance of such Common Stock Equivalents. No
further adjustments to the Current Warrant Price shall be made under this Section 4.4 upon the actual issue of such Common Stock upon the exercise, conversion or exchange of such Common Stock Equivalents. 
  
 4.5. Superseding Adjustment. 
  
 (i) If, at any time after any adjustment of the number of
shares of Common Stock into which this Warrant is exercisable and the Current Warrant Price shall have been made pursuant to Section 4.4 as the result of any issuance of Common Stock Equivalents, (x) the right to exercise, convert or exchange all or
a portion of such Common Stock Equivalents shall expire unexercised, or (y) the conversion rate or consideration per share for which shares of Common Stock are issuable pursuant to such Common Stock Equivalents shall be increased solely by virtue of
provisions therein contained for an automatic increase in such conversion rate or consideration per share upon the occurrence of a specified date or event, then any such previous adjustments to the Current Warrant Price and the number of shares of
Common Stock for which this Warrant is exercisable shall be rescinded and annulled and the Additional Shares of Common Stock which were deemed to have been issued by virtue of the computation made in connection with the adjustment so rescinded and
annulled shall no longer be deemed to have been issued by virtue of such computation. 
  
 (ii) Upon the occurrence of an event set forth in Section 4.5(i) above there shall be a recomputation made of the effect of such Common
Stock Equivalents on the basis of: (i) treating the number of Additional Shares of Common Stock or other property, if any, theretofore actually issued or issuable pursuant to the previous exercise, conversion or exchange of such Common Stock
Equivalents, as having been issued on the date or dates of any such exercise, conversion or exchange and for the consideration actually received and receivable therefor, and (ii) treating any such Common Stock Equivalents which then remain
outstanding as having been granted or issued immediately after the time of such increase of the conversion rate or consideration per share for which shares of Common Stock or other property are issuable under such Common Stock Equivalents; whereupon
a new adjustment to the number of shares of Common Stock for which this Warrant is exercisable and the Current Warrant Price shall be made, which new adjustment shall supersede the previous adjustment so rescinded and annulled. 
  
 4.6. Other Provisions Applicable to Adjustments. The following
provisions shall be applicable to the making of adjustments of the number of shares of Common Stock into which this Warrant is exercisable and the Current Warrant Price provided for in Section 4: 
  
 (a) When Adjustments to Be Made. The adjustments
required by Section 4 shall be made whenever and as often as any specified event requiring an adjustment shall occur, except that any that would otherwise be required may be postponed (except in the case of a subdivision or combination of shares of
the Common Stock, as provided for in Section 4.1) up to, but not beyond the date of exercise if such adjustment either by itself or with other adjustments not previously made adds or subtracts less than 1% of the shares of Common Stock 

  

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into which this Warrant is exercisable immediately prior to the making of such adjustment. Any adjustment representing a change of less than such minimum
amount (except as aforesaid) which is postponed shall be carried forward and made as soon as such adjustment, together with other adjustments required by this Section 4 and not previously made, would result in a minimum adjustment or on the date of
exercise. For the purpose of any adjustment, any specified event shall be deemed to have occurred at the close of business on the date of its occurrence. 
  
 (b) Fractional Interests. In computing adjustments under this Section 4, fractional interests in Common Stock shall be taken into
account to the nearest 1/100th of a share. 
  
 (c) When Adjustment Not Required. If the Company undertakes a transaction contemplated under this Section 4 and as a result takes a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend or
distribution or subscription or purchase rights or other benefits contemplated under this Section 4 and shall, thereafter and before the distribution to stockholders thereof, legally abandon its plan to pay or deliver such dividend, distribution,
subscription or purchase rights or other benefits contemplated under this Section 4, then thereafter no adjustment shall be required by reason of the taking of such record and any such adjustment previously made in respect thereof shall be rescinded
and annulled. 
  
 (d) Escrow of Stock. If
after any property becomes distributable pursuant to Section 4 by reason of the taking of any record of the holders of Common Stock, but prior to the occurrence of the event for which such record is taken, a holder of this Warrant exercises the
Warrant during such time, then such holder shall continue to be entitled to receive any shares of Common Stock issuable upon exercise hereunder by reason of such adjustment and such shares or other property shall be held in escrow for the holder of
this Warrant by the Company to be issued to holder of this Warrant upon and to the extent that the event actually takes place. Notwithstanding any other provision to the contrary herein, if the event for which such record was taken fails to occur or
is rescinded, then such escrowed shares shall be canceled by the Company and escrowed property returned to the Company. 
  
 (e) Overall Cap on Common Stock Issuable. Notwithstanding anything contained in this Warrant to the contrary, the number of Warrant
Shares, together with the number of shares of Common Stock issuable upon conversion of the Notes (and upon conversion of any Conversion Securities or Preferred Stock issuable upon conversion of the Notes, if applicable), 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 Warrant Shares, together with the number of shares of Common Stock issuable upon conversion of the Notes (and upon conversion of any
Conversion Securities or Preferred Stock issuable upon conversion of the Notes, if applicable), would exceed the Maximum Common Stock Issuance but for this Section 4.6(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 

  

 12 

 
additional issuance, each Warrant then outstanding shall be exercisable for the number of shares of Common Stock determined pursuant to this Warrant without
regard to the limitations provided in this Section 4.6(e). 
  
 4.7. Reorganization, Reclassification, Merger, Consolidation or Disposition of Assets. If there shall occur a Change of Control which is approved by the Company’s Board of Directors, then the Holder of this Warrant shall be
entitled, at such Holder’s option, either: 
  
 (a) upon request of Holder delivered to the Company within 10 days of receipt of notice of such Change of Control pursuant to Section 5.2, to have the Company (or any such successor or surviving entity) purchase this Warrant from the Holder
for an aggregate purchase price, payable in cash on the effective date of consummation of such Change of Control, equal to the product of (i) the difference between the Current Market Price and the Current Warrant Price, multiplied by (ii) the
number of shares of Common Stock issuable upon exercise of this Warrant immediately prior to the consummation of such Change of Control; or 
  
 (b) if pursuant to the terms of such Change of Control, shares of common stock of the successor or acquiring corporation, or any cash,
shares of stock or other securities or property of any nature whatsoever (including warrants or other subscription or purchase rights) in addition to or in lieu of common stock of the successor or acquiring corporation (“Other Property”),
are to be received by or distributed to the holders of Common Stock of the Company, and the Holder shall not have elected to have this Warrant purchased by the Company pursuant to Section 4.7(a) above, then the Holder of this Warrant shall have the
right thereafter to receive, upon the exercise of the Warrant, the number of shares of common stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and the Other Property receivable upon or as a
result of such Change of Control by a holder of the number of shares of Common Stock into which this Warrant is exercisable immediately prior to such event. 
  
 (c) In case of any such Change of Control described above, to the extent this Warrant has not been fully purchased by the Company pursuant
to Section 4.7(a) above, the successor or acquiring corporation (if other than the Company) and, if an entity different from the successor or surviving entity, the entity whose capital stock or assets the holders of Common Stock are entitled to
receive as a result of such transaction, shall expressly assume the due and punctual observance and performance of each and every covenant and condition contained in this Warrant to be performed and observed by the Company and all the obligations
and liabilities hereunder, subject to such modifications as may be deemed appropriate (as determined by resolution of the Board of Directors of the Company) in order to provide for adjustments of shares of the Common Stock into which this Warrant is
exercisable which shall be as nearly equivalent as practicable to the adjustments provided for in Section 4. For purposes of Section 4, common stock of the successor or acquiring corporation shall include stock of such corporation of any class which
is not preferred as to dividends or assets on liquidation over any other class of stock of such corporation and which is not subject to redemption and shall also include any evidences of indebtedness, shares of stock or other securities which are
convertible into or exchangeable for any such stock, either immediately or upon the arrival of a specified date or the happening of a specified event and any warrants or other rights to subscribe for or purchase any such stock. The foregoing
provisions of this Section 4 shall similarly apply to successive Change of Control transactions. 
  

 13 

 4.8. Other Action Affecting Common Stock. In case at any time or from time to time the Company
shall take any action in respect of its Common Stock, other than the payment of dividends permitted by Section 4 or any other action described in Section 4, then, unless such action will not have a materially adverse effect upon the rights of the
holder of this Warrant, the number of shares of Common Stock or other stock into which this Warrant is exercisable and/or the purchase price thereof shall be adjusted in such manner as may be equitable in the circumstances. 
  
 4.9. Certain Limitations. Notwithstanding anything herein to the
contrary, the Company agrees not to enter into any transaction which, by reason of any adjustment hereunder, would cause the Current Warrant Price to be less than the par value per share of Common Stock. 
  
 4.10. Stock Transfer Taxes. The issue of stock certificates upon
exercise of this Warrant shall be made without charge to the Holder for any tax in respect of such issue. The Company shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issue and delivery
of shares in any name other than that of the Holder of this Warrant, and the Company shall not be required to issue or deliver any such stock certificate unless and until the person or persons requesting the issue thereof shall have paid to the
Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid. 
  
 5. Notices to Warrant Holders. 
  
 5.1. Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Current Warrant Price, the Company, at its
expense, shall promptly compute such adjustment or readjustment in accordance with the terms hereof and prepare and furnish to the Holder of this Warrant a certificate setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based. The Company shall, upon the written request at any time of the Holder of this Warrant, furnish or cause to be furnished to such Holder a like certificate setting forth (i) such adjustments and
readjustments, (ii) the Current Warrant Price at the time in effect and (iii) the number of shares of Common Stock and the amount, if any, of other property which at the time would be received upon the exercise of Warrants owned by such Holder.

  
 5.2. Notice of Corporate Action. If at any time:

  
 (a) the Company shall take a record of the
holders of its Common Stock for the purpose of entitling them to receive a dividend (other than a cash dividend payable out of earnings or earned surplus legally available for the payment of dividends under the laws of the jurisdiction of
incorporation of the Company) or other distribution, or any right to subscribe for or purchase any evidences of its indebtedness, any shares of stock of any class or any other securities or property, or to receive any other right, or 
  
 (b) there shall be any capital reorganization of the
Company, any reclassification or recapitalization of the capital stock of the Company or any consolidation or merger of the Company with, or any sale, transfer or other disposition of all or substantially all the property, assets or business of the
Company to, another corporation, or 
  

 14 

 (c) there shall be a voluntary or involuntary dissolution, liquidation or winding up of
the Company; then, in any one or more of such cases, the Company shall give to the Holder (i) at least 20 days’ prior written notice of the date on which a record date shall be selected for such dividend, distribution or right or for
determining rights to vote in respect of any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or winding up, and (ii) in the case of any such reorganization, reclassification,
merger, consolidation, sale, transfer, disposition, dissolution, liquidation or winding up, at least 20 days’ prior written notice of the date when the same shall take place. Such notice in accordance with the foregoing clause also shall
specify (A) the date on which any such record is to be taken for the purpose of such dividend, distribution or right, the date on which the holders of Common Stock shall be entitled to any such dividend, distribution or right, and the amount and
character thereof, and (B) the date on which any such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or winding up is to take place and the time, if any such time is to be fixed, as of
which the holders of Common Stock shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution,
liquidation or winding up. Each such written notice shall be sufficiently given if addressed to the Holder at the last address of the Holder appearing on the books of the Company and delivered in accordance with Section 15.2. 
  
 5.3. No Rights as Stockholder. This Warrant does not entitle the
Holder to any voting or other rights as a stockholder of the Company prior to exercise and payment for the Warrant Price in accordance with the terms hereof. 
  
 6. No Impairment. The Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of the Holder against impairment. Without limiting the generality of the foregoing, the Company
will (a) not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the amount payable therefor upon such exercise immediately prior to such increase in par value, (b) take all such action as may be
necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant, and (c) use its best efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may be necessary to enable the Company to perform its obligations under this Warrant. Upon the request of the Holder, the Company will at any time during the period this Warrant
is outstanding acknowledge in writing, in form satisfactory to the Holder, the continuing validity of this Warrant and the obligations of the Company hereunder. 
  

7. Reservation and Authorization of Common Stock; Registration With Approval of Any Governmental Authority. From and after the Closing Date, the
Company shall at all times reserve and keep available for issue upon the exercise of Warrants such number of its authorized but unissued shares of Common Stock as will be sufficient to permit the exercise in full of all outstanding Warrants (without
regard to any ownership limitations provided in Section 2.4(i)). 

  

 15 

 
All shares of Common Stock which shall be so issuable, when issued upon exercise of any Warrant and payment therefor in accordance with the terms of such
Warrant, shall be duly and validly issued and fully paid and nonassessable, and not subject to preemptive rights. Before taking any action which would cause an adjustment reducing the Current Warrant Price below the then par value, if any, of the
shares of Common Stock issuable upon exercise of the Warrants, the Company shall take any corporate action which may be necessary in order that the Company may validly and legally issue fully paid and non-assessable shares of such Common Stock at
such adjusted Current Warrant Price. Before taking any action which would result in an adjustment in the number of shares of Common Stock for which this Warrant is exercisable or in the Current Warrant Price, the Company shall obtain all such
authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof. If any shares of Common Stock required to be reserved for issuance upon exercise of Warrants
require registration or qualification with any governmental authority under any federal or state law before such shares may be so issued (other than as a result of a prior or contemplated distribution by the Holder of this Warrant), the Company will
in good faith and as expeditiously as possible and at its expense endeavor to cause such shares to be duly registered. 
  
 8. Taking of Record; Stock and Warrant Transfer Books. In the case of all dividends or other distributions by the Company to the holders of its
Common Stock with respect to which any provision of Section 4 refers to the taking of a record of such holders, the Company will in each such case take such a record and will take such record as of the close of business on a Business Day. The
Company will not at any time, except upon dissolution, liquidation or winding up of the Company, close its stock transfer books or Warrant transfer books so as to result in preventing or delaying the exercise or transfer of any Warrant. 

 
 9. Registration Rights. The resale of the Warrant Stock shall be
registered in accordance with the terms and conditions contained in that certain Investor Rights Agreement dated of even date hereof, among the Holder, the Company and the other parties named therein (the “Investor Rights Agreement”). The
Holder acknowledges that pursuant to the Investor Rights Agreement, the Company has the right to request that the Holder furnish information regarding such Holder and the distribution of the Warrant Stock as is required by law or the Commission to
be disclosed in the Registration Statement, and the Company may exclude from such registration the shares of Warrant Stock acquirable hereunder if Holder fails to furnish such information within a reasonable time prior to the filing of each
Registration Statement, supplemented prospectus included therein and/or amended Registration Statement. 
  
 10. Supplying Information. Upon any default by the Company of its obligations hereunder or under the Investor Rights Agreement, the Company shall
cooperate with the Holder in supplying such information as may be reasonably necessary for such Holder to complete and file any information reporting forms presently or hereafter required by the Commission as a condition to the availability of an
exemption from the Securities Act for the sale of any Warrant or Restricted Common Stock. 
  
 11. Loss or Mutilation. Upon receipt by the Company from the Holder of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of this Warrant and indemnity or
security reasonably satisfactory to it and reimbursement to the 

  

 16 

 
Company of all reasonable expenses incidental thereto and in case of mutilation upon surrender and cancellation hereof, the Company will execute and deliver
in lieu hereof a new Warrant of like tenor to the Holder; provided, however, that in the case of mutilation, no indemnity shall be required if this Warrant in identifiable form is surrendered to the Company for cancellation. 
  
 12. Office of the Company. As long as any of the Warrants remain
outstanding, the Company shall maintain an office or agency (which may be the principal executive offices of the Company) where the Warrants may be presented for exercise, registration of transfer, division or combination as provided in this
Warrant. 
  
 13. Financial and Business Information.

  
 13.1. Quarterly Information. The Company will deliver
to the Holder, as soon as available and in any event within 45 days after the end of each of the first three quarters of each fiscal year of the Company, one copy of an unaudited consolidated balance sheet of the Company and its subsidiaries as at
the end of such quarter, and the related unaudited consolidated statements of income, retained earnings and cash flow of the Company and its subsidiaries for such quarter and, in the case of the second and third quarters, for the portion of the
fiscal year ending with such quarter, setting forth in each case in comparative form the figures for the corresponding periods in the previous fiscal year. Such financial statements shall be prepared by the Company in accordance with GAAP and
accompanied by the certification of the Company’s chief executive officer or chief financial officer that such financial statements present fairly the consolidated financial position, results of operations and cash flow of the Company and its
subsidiaries as at the end of such quarter and for such year-to-date period, as the case may be; provided, however, that the Company shall have no obligation to deliver such quarterly information under this Section 13.1 to the extent it is required
to file reports pursuant to Section 13 or 15(d) of the Exchange Act; and provided further, that if such information contains material non-public information, the Company shall so notify the Holder prior to delivery thereof and the Holder shall have
the right to refuse delivery of such information. 
  
 13.2.
Annual Information. The Company will deliver to the Holder as soon as available and in any event within 90 days after the end of each fiscal year of the Company, one copy of an audited consolidated balance sheet of the Company and its
subsidiaries as at the end of such year, and audited consolidated statements of income, retained earnings and cash flow of the Company and its subsidiaries for such year; setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year; all prepared in accordance with GAAP, and which audited financial statements shall be accompanied by an opinion thereon of the independent certified public accountants regularly retained by the
Company, or any other firm of independent certified public accountants of recognized national standing selected by the Company; provided, however, that the Company shall have no obligation to deliver such annual information under this Section 13.2
to the extent it is publicly available; and provided further, that if such information contains material non-public information, the Company shall so notify the Holder prior to delivery thereof and the Holder shall have the right to refuse delivery
of such information. 
  
 13.3. Filings. The Company will
file on or before the required date all regular or periodic reports (pursuant to the Exchange Act) with the Commission and will deliver to Holder 

  

 17 

 
promptly upon their becoming available one copy of each report, notice or proxy statement sent by the Company to its stockholders generally. 
  
 14. Limitation of Liability. No provision hereof, in the absence of
affirmative action by the Holder to purchase shares of Common Stock, and no enumeration herein of the rights or privileges of the Holder hereof, shall give rise to any liability of the Holder for the purchase price of any Common Stock, whether such
liability is asserted by the Company or by creditors of the Company. 
  
 15. Miscellaneous. 
  
 15.1. Nonwaiver and
Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of the Holder shall operate as a waiver of such right or otherwise prejudice Holder’s rights, powers or remedies. If the Company fails to
make, when due, any payments provided for hereunder, or fails to comply with any other provision of this Warrant, the Company shall pay to the Holder such amounts as shall be sufficient to cover any third party costs and expenses including, but not
limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder. 
  
 15.2. Notice Generally. All notices, requests, demands or other
communications provided for herein shall be in writing and shall be given in the manner and to the addresses set forth in the Purchase Agreement. 
  
 15.3. Successors and Assigns. Subject to compliance with the provisions of Section 3.1, this Warrant and the rights evidenced hereby shall inure to
the benefit of and be binding upon the successors of the Company and the successors and assigns of the Holder. The provisions of this Warrant are intended to be for the benefit of all Holders from time to time of this Warrant, and shall be
enforceable by any such Holder. 
  
 15.4. Amendment. This
Warrant may be modified or amended or the provisions of this Warrant waived with the written consent of both the Company and the Holder. 
  
 15.5. Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be modified to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or
the remaining provisions of this Warrant. 
  
 15.6.
Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant. 
  

15.7. Governing Law. This Warrant and the transactions contemplated hereby shall be deemed to be consummated in the State of New York and shall
be governed by and interpreted in accordance with the local laws of the State of New York without regard to the provisions thereof relating to conflicts of laws. The Company hereby irrevocably consents to the exclusive jurisdiction of the State and
Federal courts located in New York City, New York in connection with any action or proceeding arising out of or relating to this Warrant. In any such litigation the 

  

 18 

 
Company agrees that the service thereof may be made by certified or registered mail directed to the Company pursuant to Section 15.2. 
  
 [Signature Page Follows] 
  

 19 

 IN WITNESS WHEREOF, Transmeridian Exploration Incorporated has caused this Warrant to be executed by its
duly authorized officer and attested by its Secretary. 
  
 Dated: August 30, 2005

  

			
	TRANSMERIDIAN EXPLORATION INCORPORATED
		
	By:	 	 
	 Name:
	 	 
	 Title:
	 	 

  

			
	 Attest:

		
	By:	 	 
	 Name:
	 	 
	 Title:
	 	Secretary

  

 20 

 EXHIBIT A 
  
 SUBSCRIPTION FORM 
  
 [To be executed only upon exercise of Warrant] 
  
 1. The undersigned hereby elects to purchase              shares of the Common Stock of
Transmeridian Exploration Incorporated pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price of such shares in full. 
  

2. The undersigned hereby elects to convert the attached Warrant into Common Stock of Transmeridian Exploration Incorporated through “cashless
exercise” in the manner specified in the Warrant. This conversion is exercised with respect to
                             of the Shares covered by the Warrant. 
  
 3. Please issue a certificate or certificates representing said shares in the
name of the undersigned or in such other name as is specified below: 
  

	
	 
	(Name)
	 
	 
	 
	(Address)

  
 [and, if such
shares of Common Stock shall not include all of the shares of Common Stock issuable as provided in this Warrant, that a new Warrant of like tenor and date for the balance of the shares of Common Stock issuable hereunder be delivered to the
undersigned.] 
  

	
	 
	 (Name of Registered Owner)

	
	 
	 (Signature of Registered Owner)

	
	 
	 (Street Address)

	
	 
	 (State) (Zip Code)

  
 NOTICE: The signature on this
subscription must correspond with the name as written upon the face of the Warrant in every particular, without alteration or enlargement or any change whatsoever. 
  

 21 

 EXHIBIT B 
  
 ASSIGNMENT FORM 
  
 FOR VALUE RECEIVED the undersigned registered owner of this Warrant for the purchase of shares of common stock of Transmeridian Exploration Incorporated hereby sells, assigns and transfers unto the Assignee named
below all of the rights of the undersigned under this Warrant, with respect to the number of shares of common stock set forth below: 
  

	
	  
	
	  
	
	  
	 (Name and Address of Assignee)

	
	  
	 (Number of Shares of Common Stock)

  
 and does hereby irrevocably constitute
and appoint                      attorney-in-fact to register such transfer on the books of the Company, maintained for the purpose, with full
power of substitution in the premises. 
  

			
	 Dated:
	 	 
	
	  
	 (Print Name and Title)

	
	  
	 (Signature)

	
	  
	 (Witness)

  
 NOTICE: The signature on this
assignment must correspond with the name as written upon the face of the Warrant in every particular, without alteration or enlargement or any change whatsoever. 
  

 22 

 EXHIBIT C 
  
 FORM OF INVESTMENT REPRESENTATION LETTER 
  
 In connection with the acquisition of [warrants (the “Warrants”) to purchase          shares of common stock of
Transmeridian Exploration Incorporated (the “Company”), par value $0.0006 per share (the “Common Stock”)][         shares of common stock of Transmeridian Exploration Incorporated
(the “Company”), par value $0.0006 per share (the “Common Stock”) upon the exercise of warrants by             ], by
                     (the “Holder”) from
                    , the Holder hereby represents and warrants to the Company as follows: 
  
 The Holder (i) is an “Accredited Investor” as that term is defined in Rule 501 of
Regulation D promulgated under the Securities Act of 1933, as amended (the “Act”); and (ii) has the ability to bear the economic risks of such Holder’s prospective investment, including a complete loss of Holder’s investment in
the Warrants and the shares of Common Stock issuable upon the exercise thereof (collectively, the “Securities”). 
  
 The Holder, by acceptance of the Warrants, represents and warrants to the Company that the Warrants and all securities acquired upon any and all exercises of the Warrants
are purchased for the Holder’s own account, and not with view to distribution of either the Warrants or any securities purchasable upon exercise thereof in violation of applicable securities laws. 
  
 The Holder acknowledges that (i) the Securities have not been registered under the Act, (ii)
the Securities are “restricted securities” and the certificate(s) representing the Securities shall bear the following legend, or a similar legend to the same effect, until (i) in the case of the shares of Common Stock underlying the
Warrants, such shares shall have been registered for resale by the Holder under the Act and effectively been disposed of in accordance with a registration statement that has been declared effective; or (ii) in the opinion of counsel for the Company
such Securities may be sold without registration under the Act: 
  
 “[NEITHER] THE SECURITIES REPRESENTED BY THIS CERTIFICATE [NOR THE SECURITIES INTO WHICH THEY ARE EXERCISABLE] HAVE [NOT] BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND ALL SUCH SECURITIES ARE
SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AS SET FORTH IN THIS CERTIFICATE. [NEITHER] THE SECURITIES REPRESENTED HEREBY [NOR THE SECURITIES INTO WHICH THEY ARE EXERCISABLE] MAY [NOT] BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION OF COUNSEL, REASONABLY ACCEPTABLE TO COUNSEL FOR THE COMPANY, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER, OR DISPOSITION MAY BE EFFECTUATED WITHOUT REGISTRATION UNDER THE ACT.”

  

 23 

 IN WITNESS WHEREOF, the Holder has caused this Investment Representation Letter to be executed in its corporate name by
its duly authorized officer this      day of                      200  . 
  

			
	 [Name]

		
	By:	 	 
	 Name:
	 	 
	 Title:
	 	 

  

 24Convertible Promissory Note and Warrant Agreement

 Exhibit 10.1 
  

  
 CONVERTIBLE PROMISSORY NOTE AND WARRANT PURCHASE AGREEMENT 
  
 by and among 
  
 Transmeridian Exploration Incorporated,
as Issuer and Seller 
  
 and 
  
 the parties named herein, as Purchasers 
  
 with respect to Seller’s 
  
 Convertible Promissory Notes 
  
 and Warrants to Purchase Common Stock 
  
 August 30, 2005 
  

  
 Table of Exhibits and
Schedules 
  

			
	Exhibit A	  	Form of Convertible Promissory Note
		
	Exhibit B	  	Form of Warrant
		
	Exhibit C	  	Form of Investor Rights Agreement
		
	Exhibit D-1	  	Form of Opinion of Seller’s Counsel
		
	Exhibit D-2	  	Form of Opinion of Kazakhstan Counsel
		
	Exhibit E	  	Form of Closing Escrow Agreement
		
	Schedule 1	  	Purchasers, Amount of Securities Purchased and Purchase Price

 CONVERTIBLE PROMISSORY NOTE AND WARRANT 
  
 PURCHASE AGREEMENT 
  
 This Convertible Promissory Note and Warrant Purchase Agreement (the “Agreement”) is made and entered into as of August 30, 2005, by and
among Transmeridian Exploration Incorporated, a Delaware corporation (the “Seller”) and each of the persons listed on Schedule 1 hereto (each is individually referred to as a “Purchaser” and collectively, as
the “Purchasers”). 
  
 WHEREAS, each of the
Purchasers is willing to purchase from the Seller, and the Seller desires to sell to the Purchasers, (i) up to an aggregate original principal amount of $22,500,000 of Convertible Promissory Notes (the “Notes”) and (ii) Common Stock
Purchase Warrants (the “Warrants”) entitling the holders thereof to purchase up to 4,500,000 shares of the Seller’s common stock, $0.0006 par value (the “Common Stock”) as more fully set forth herein.

  
 NOW THEREFORE, in consideration of the mutual promises and
representations, warranties, covenants and agreements set forth herein, the parties hereto, intending to be legally bound, hereby agree as follows: 
  
 ARTICLE I - PURCHASE AND SALE 
  
 1.1 Purchase and Sale. 
  
 (a) On the terms and subject to the conditions set forth in this Agreement, at the Closing (as defined in Section 2.2), the Seller will sell and each of
the Purchasers will purchase (i) a Note with an aggregate original principal amount as set forth on Schedule 1 and (ii) Warrants to purchase a number of shares of Common Stock as set forth on Schedule 1. 
  
 (b) The securities, other than Common Stock, if any, issuable upon conversion
of the Notes are referred to as “New Securities”. The shares of Common Stock issuable upon conversion of the Notes or the New Securities, as applicable, are referred to herein as the “Common Conversion Shares”. The
New Securities and the Common Conversion Shares are sometimes collectively referred to herein as the “Conversion Shares”. The shares of Common Stock issuable upon exercise of the Warrants are referred to herein as the
“Warrant Shares.” The Notes, Warrants, Warrant Shares, New Securities and Common Conversion Shares are sometimes collectively referred to herein as the “Securities”. 
  
 1.2 Terms of the Notes and Warrants. The terms and provisions
of the Notes are set forth in the form of Convertible Promissory Note, attached hereto as Exhibit A. The terms and provisions of the Warrants are more fully set forth in the form of Common Stock Purchase Warrant, attached hereto as Exhibit
B. 
  
 1.3 Transfers; Legends. 
  
 (a) (i) Except as restricted by federal securities laws and the securities
law of any state or other jurisdictions, the Notes, Warrants and Warrant Shares may be transferred, in whole or in part, by any of the Purchasers at any time. Upon the issuance of the Conversion Shares (and the authorization and designation by the
Seller of the New Securities, if applicable), except 

 
as required by federal securities laws and the securities law of any state or other jurisdiction, the Conversion Shares may be transferred in whole or in
part, by any of the Purchasers at any time. Any such transfer shall be made by a Purchaser in accordance with applicable law. Any transferee shall agree to be bound by the terms of the Investor Rights Agreement and this Agreement. The Seller shall
reissue certificates evidencing the applicable Securities upon surrender of certificates evidencing the Securities being transferred in accordance with this Section 1.3(a). 
  
 (ii) In connection with any transfer of Securities other than pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the “Securities Act”), or to the Seller, the Seller may require the transferor thereof to furnish to the Seller an opinion of counsel selected by the transferor, such counsel and the form and
substance of which opinion shall be reasonably satisfactory to the Seller and Seller’s counsel, to the effect that such transfer does not require registration under the Securities Act; provided, however, that in the case of a transfer
pursuant to Rule 144 under the Securities Act, no opinion shall be required if the transferor provides the Company with a customary seller’s representation letter, and, if such sale is not pursuant to subsection (k) of Rule 144, a customary
broker’s representation letter and Form 144. Notwithstanding the foregoing, the Seller hereby consents to and agrees to register on the books of the Seller and with any transfer agent for the securities of the Seller, without any such legal
opinion, any transfer of Securities by a Purchaser to an Affiliate of such Purchaser, provided that the transferee certifies to the Seller that it is an “accredited investor” as defined in Rule 501(a) under the Securities Act and that it
is acquiring the Securities solely for investment purposes (subject to the qualifications hereof) and not with a view to, or for, resale, distribution or fractionalization thereof in whole or in part in violation of the Securities Act. 

 
 (iii) An “Affiliate” means any Person (as such term is
defined below) that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 144 under the Securities Act. With respect to a
Purchaser, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such Purchaser will be deemed to be an Affiliate of such Purchaser. A “Person” means any individual or
corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision of any thereof) or other entity of any kind. 
  
 (b) The certificates representing the Securities, unless, with respect to the
Common Conversion Shares and the Warrant Shares, such shares are eligible for resale without registration pursuant to Rule 144(k) under the Securities Act or have been sold pursuant to an effective registration statement under the Securities Act,
shall bear the following legend: 
  
 “THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT UNLESS, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY, SUCH REGISTRATION IS NOT REQUIRED.” 
  

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 ARTICLE II - PURCHASE PRICE AND CLOSING 
  
 2.1 Purchase Price. The purchase price (the “Purchase
Price”) to be paid by each of the Purchasers to the Seller to acquire the Notes and the applicable Warrants shall be as set forth beside the name of such Purchaser on Schedule 1 hereto. The Purchase Price paid by each Purchaser shall
be placed in escrow pending the Closing as provided in Article 6.1(b) hereof. 
  
 2.2 The Closing. The closing of the transactions contemplated under this Agreement (the “Closing”) will take place as promptly as practicable, but no later than two (2) business days
following satisfaction or waiver of the conditions set forth in Article 6.1(a) and (b) and 6.2(a) (other than those conditions which by their terms are not to be satisfied or waived until the Closing), at the offices of Wiggin and Dana LLP, 400
Atlantic Street, Stamford, Connecticut 06901. The date on which the Closing occurs is the “Closing Date.” 
  
 ARTICLE III - REPRESENTATIONS AND WARRANTIES OF THE SELLER 
  

The Seller represents and warrants to the Purchasers as follows: 
  
 3.1 Corporate Existence and Power; Subsidiaries. The Seller and its Subsidiaries are corporations duly
incorporated, validly existing and in good standing under the laws of the jurisdiction in which they are incorporated or continued, and have all corporate powers required to carry on their business as now conducted. The Seller and its Subsidiaries
are duly qualified to do business as a foreign corporation and are in good standing in each jurisdiction where the character of the property owned or leased by them or the nature of their activities makes such qualification necessary, except for
those jurisdictions where the failure to be so qualified would not have a Material Adverse Effect on the Seller or any of its Subsidiaries. For purposes of this Agreement, the term “Material Adverse Effect” means, with respect to
any person or entity, a material adverse effect on its and its Subsidiaries’ condition (financial or otherwise), business, properties, assets, liabilities (including contingent liabilities), results of operations or current prospects, taken as
a whole. True and complete copies of the Seller’s Certificate of Incorporation, as amended, and Bylaws, as amended, as currently in effect and as will be in effect on the Closing Date (collectively, the “Certificate and
Bylaws”), have previously been provided or made available to the Purchasers. For purposes of this Agreement, the term “Subsidiary” or “Subsidiaries” means, with respect to any entity, any corporation or other
organization of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are directly or indirectly owned by such entity or of which such
entity is a partner or is, directly or indirectly, the beneficial owner of 50% or more of any class of equity securities or equivalent profit participation interests. The Seller has no Subsidiaries other than as set forth on Schedule 3.1,
each of which, unless otherwise indicated on Schedule 3.1, is wholly-owned by the Seller. 
  
 3.2 Corporate Authorization; Enforceability. The execution, delivery and performance by the Seller of this Agreement, and the Warrants, the
Closing Escrow Agreement (as defined below), the Notes, the Investor Rights Agreement, and each of the other documents executed pursuant to and in connection with this Agreement (collectively, the “Related 

  

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Documents”), and the consummation of the transactions contemplated hereby and thereby (including, but not limited to, (i) the sale and delivery
of the Notes and the Warrants, (ii) the subsequent issuance of the New Securities upon conversion of the Notes, if applicable, (iii) the subsequent issuance of the Common Conversion Shares upon conversion of the New Securities or the Notes, as
applicable, and (iv) the subsequent issuance of the Warrant Shares upon exercise of the Warrants) have been duly authorized, and no additional corporate or stockholder action is required pursuant to the rules of any stock exchange, market or
bulletin board on which the Common Stock is traded or otherwise for the approval of this Agreement, the Related Documents or the consummation of the transactions contemplated hereby or thereby; provided, however, that the authorization, designation
and issuance of the New Securities, if applicable, would require approval of the Seller’s Board of Directors. The Warrant Shares have been duly reserved for issuance by the Seller. Upon the authorization and designation by the Seller of the New
Securities, if applicable, the Conversion Shares will be duly reserved for issuance by the Seller. This Agreement and the Related Documents have been or, to the extent contemplated hereby or by the Related Documents, will be duly executed and
delivered and constitute the legal, valid and binding agreement of the Seller, enforceable against the Seller in accordance with their terms, except as may be limited by bankruptcy, reorganization, insolvency, moratorium and similar laws of general
application relating to or affecting the enforcement of rights of creditors, and except as enforceability of its obligations hereunder are subject to general principles of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law). 
  
 3.3 Charter, Bylaws and
Corporate Records. The minute books of the Seller and its Subsidiaries contain complete and accurate records of all meetings and other corporate actions of the board of directors, committees of the board of directors, incorporators and
stockholders of the Seller and its Subsidiaries from the date of incorporation of each such entity to the date hereof. All material corporate decisions and actions have been validly made or taken. All corporate books, including without limitation
the share transfer register, comply with applicable laws and regulations and have been regularly updated. 
  
 3.4 Regulatory Authorization. Except as otherwise specifically contemplated in this Agreement and the Related Documents, and except for: (i)
the filings referenced in Section 5.11 and 5.13; (ii) the filing of a Form D with respect to the Notes and Warrants under Regulation D under the Securities Act; (iii) the filing of the Registration Statement with the Commission; and (iv) any filings
required under state or provincial securities laws that are permitted to be made after the date hereof, the execution, delivery and performance by the Seller of this Agreement and the Related Documents, and the consummation of the transactions
contemplated hereby and thereby (including, but not limited to, (i) the sale and delivery of the Notes and Warrants, (ii) the subsequent issuance of the New Securities upon conversion of the Notes, if applicable, (iii) the subsequent issuance of the
Common Conversion Shares upon conversion of the New Securities or the Notes, as applicable, and (iv) the subsequent issuance of the Warrant Shares upon exercise of the Warrants) by the Seller require no action by or in respect of, or filing with,
any governmental or regulatory body, agency, official or authority; provided, however, that the authorization and designation of the New Securities may require the filing with the Secretary of State of the State of Delaware, of a certificate of
designations, rights and preferences of such New Securities. Seller has filed an application to list the Warrant Shares for trading on the American Stock Exchange. 
  

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 3.5 Non-Contravention. The execution, delivery and performance by the Seller of this
Agreement and the Related Documents, and the consummation by the Seller of the transactions contemplated hereby and thereby (including the issuance of the Conversion Shares and Warrant Shares) do not and will not (a) contravene or conflict with the
Certificate and Bylaws of the Seller and its Subsidiaries or any material agreement to which the Seller is a party or by which it is bound; provided, however, that the authorization and designation of the New Securities may require the filing with
the Secretary of State of the State of Delaware of a certificate of designations, rights and preferences of such New Securities; (b) contravene or conflict with or constitute a violation of any provision of any law, regulation, judgment, injunction,
order or decree binding upon or applicable to the Seller or its Subsidiaries; (c) constitute a default (or would constitute a default with notice or lapse of time or both) under or give rise to a right of termination, cancellation or acceleration or
loss of any benefit under any material agreement, contract or other instrument binding upon the Seller or its Subsidiaries or under any material license, franchise, permit or other similar authorization held by the Seller or its Subsidiaries; or (d)
result in the creation or imposition of any Lien (as defined below) on any asset of the Seller or its Subsidiaries. For purposes of this Agreement, the term “Lien” means, with respect to any material asset, any mortgage, lien,
pledge, charge, security interest, claim or encumbrance of any kind in respect of such asset. 
  
 3.6 SEC Documents. The Seller is obligated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) to file reports pursuant to Sections 13 or 15(d) thereof (all such
reports filed or required to be filed by the Seller, including all exhibits thereto or incorporated therein by reference, and all documents filed by the Seller under the Securities Act hereinafter called the “SEC Documents”). The
Seller has filed all reports or other documents required to be filed under the Exchange Act. All SEC Documents filed by the Seller (i) were prepared in all material respects in accordance with the requirements of the Exchange Act and (ii) did not at
the time they were filed (or, if amended or superseded by a filing prior to the date hereof, then on the date of such filing) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The Seller has previously delivered or made available to the Purchasers a correct and complete copy of each report which the Seller
filed with the Securities and Exchange Commission (the “SEC” or the “Commission”) under the Exchange Act for any period ending on or after December 31, 2004 (the “Recent Reports”). None of the
information about the Seller or any of its Subsidiaries which has been disclosed to the Purchasers herein or in the course of discussions and negotiations with respect hereto which is not disclosed in the Recent Reports is or was required to be so
disclosed, and no material non-public information has been disclosed to the Purchasers. 
  
 3.7 Financial Statements. Each of (i) Seller’s audited consolidated balance sheet and related consolidated statements of income, cash flows and changes in stockholders’ equity (including the
related notes) as of and for the years ended December 31, 2004 and December 31, 2003, as contained in the Recent Reports for such periods and (ii) the Seller’s unaudited consolidated balance sheet and related consolidated statements of income
and cash flows as of and for the six months ended June 30, 2005 as contained in the Recent Reports (both of (i) and (ii), collectively, the “Seller’s Financial Statements” or the “Financial Statements”) (x)
present fairly in all material respects the financial position of the Seller and its Subsidiaries on a consolidated basis as of the dates thereof and the results of operations, cash flows and 

  

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stockholders’ equity as of and for each of the periods then ended, except that the unaudited financial statements are subject to normal year-end
adjustments, and (y) were prepared in accordance with United States generally accepted accounting principals (“GAAP”) applied on a consistent basis throughout the periods involved, in each case, except as otherwise indicated in the
notes thereto. 
  
 3.8 Compliance with Law. The
Seller and its Subsidiaries are in compliance and have conducted their business so as to comply with all laws, rules and regulations, judgments, decrees or orders of any court, administrative agency, commission, regulatory authority or other
governmental authority or instrumentality, domestic or foreign, applicable to their operations, the impact of which would have a Material Adverse Effect. There are no judgments or orders, injunctions, decrees, stipulations or awards (whether
rendered by a court or administrative agency or by arbitration), against the Seller or its Subsidiaries or against any of their properties or businesses, the impact of which would have a Material Adverse Effect. 
  
 3.9 No Defaults. Except as disclosed in the Recent Reports or
on Schedule 3.9, the Seller and its Subsidiaries are not, nor have they received notice that they would be with the passage of time, giving of notice, or both, (i) in violation of any provision of their respective Certificates and Bylaws (or other
applicable organizational documents) (ii) in default or violation of any material term, condition or provision of (A) any judgment, decree, order, injunction or stipulation applicable to the Seller or its Subsidiaries or (B) any material agreement,
note, mortgage, indenture, contract, lease or instrument, permit, concession, franchise or license to which the Seller or its Subsidiaries are a party or by which the Seller or its Subsidiaries or their properties or assets may be bound, and no
circumstances exist which would entitle any party to any material agreement, note, mortgage, indenture, contract, lease or instrument to which such Seller or its Subsidiaries are a party, to terminate such, as a result of such Seller or its
Subsidiaries having failed to meet any provision thereof including, but not limited to, meeting any applicable milestone described therein, which individually, or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

  
 3.10 Litigation. Except as disclosed in the
Recent Reports or on Schedule 3.10, there is no action, suit, proceeding, judgment, claim or investigation pending or, to the knowledge of the Seller, threatened against the Seller or its Subsidiaries which could, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect on the Seller or its Subsidiaries or which in any manner challenges or seeks to prevent, enjoin, alter or materially delay any of the transactions contemplated hereby, and to the
knowledge of the Seller or its Subsidiaries, there is no basis for the assertion of any of the foregoing. There are no claims or complaints existing or, to the knowledge of the Seller or its Subsidiaries, threatened for product liability in respect
of any product of the Seller or its Subsidiaries, and the Seller and its Subsidiaries are not aware of any basis for the assertion of any such claim. 
  
 3.11 Absence of Certain Changes. Since December 31, 2004, the Seller has conducted its business only in the ordinary course, consistent with
past practice, and there has not occurred, except as set forth in the Recent Reports or any exhibit thereto or incorporated by reference therein: 
  
 (a) any event that could reasonably be expected to have a Material Adverse Effect on the Seller or any of its Subsidiaries; 
  

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 (b) any amendments or changes in the Certificate or Bylaws (or equivalent organizational documents, as
applicable) of the Seller and its Subsidiaries; 
  
 (c) any
damage, destruction or loss, whether or not covered by insurance, that would, individually or in the aggregate, have or would be reasonably likely to have, a Material Adverse Effect on the Seller or its Subsidiaries; 
  
 (d) except as set forth on Schedule 3.11(d), any 
  
 (i) incurrence, assumption or guarantee by the Seller or its
Subsidiaries of any debt for borrowed money other than for equipment leases made in the ordinary course of business, consistent with past practice; 
  
 (ii) issuance or sale of any securities convertible into or exchangeable for securities of the Seller other than to directors, employees
and consultants pursuant to existing equity compensation or stock option plans of the Seller; 
  
 (iii) issuance or sale of options or other rights to acquire from the Seller or its Subsidiaries, directly or indirectly, securities of
the Seller or any securities convertible into or exchangeable for any such securities, other than options issued to directors, employees and consultants in the ordinary course of business, consistent with past practice; 
  
 (iv) issuance or sale of any stock, bond or other corporate
security; 
  
 (v) discharge or satisfaction of
any material Lien; 
  
 (vi) declaration or making
any payment or distribution to stockholders or purchase or redemption of any share of its capital stock or other security; 
  
 (vii) sale, assignment or transfer of any of its intangible assets except in the ordinary course of business, consistent with past
practice, or cancellation of any debt or claim except in the ordinary course of business, consistent with past practice; 
  
 (viii) waiver of any right of substantial value whether or not in the ordinary course of business; 
  
 (ix) material change in officer compensation, except in the
ordinary course of business and consistent with past practice; or 
  
 (x) other commitment (contingent or otherwise) to do any of the foregoing. 
  
 (e) any creation, sufferance or assumption by the Seller or any of its Subsidiaries of any Lien on any asset (other than in connection with equipment
leases and working capital lines of credit set forth on Schedule 3.11(e)) or any making of any loan, advance or capital 

  

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contribution to or investment in any Person, in an aggregate amount which exceeds $25,000 outstanding at any time; 
  
 (f) any entry into, amendment of, relinquishment, termination or non-renewal
by the Seller or its Subsidiaries of any material contract, license, lease, transaction, commitment or other right or obligation, other than in the ordinary course of business, consistent with past practice; or 
  
 (g) any transfer or grant of a right with respect to the patents, trademarks,
trade names, service marks, trade secrets, copyrights or other intellectual property rights owned or licensed by the Seller or its Subsidiaries, except as among the Seller and its Subsidiaries. 
  
 3.12 No Undisclosed Liabilities. Except as set forth in the
Recent Reports, and except for liabilities and obligations incurred since December 31, 2004 in the ordinary course of business, consistent with past practice, as of the date hereof, (i) the Seller and its Subsidiaries do not have any material
liabilities or obligations (absolute, accrued, contingent or otherwise), and (ii) there has not been any aspect of the prior or current conduct of the business of the Seller or its Subsidiaries which may form the basis for any material claim by any
third party which if asserted could result in any such material liabilities or obligations. 
  
 3.13 Taxes. All tax returns and tax reports required to be filed with respect to the income, operations, business or assets of the Seller and its Subsidiaries have been timely filed (or appropriate
extensions have been obtained) with the appropriate governmental agencies in all jurisdictions in which such returns and reports are required to be filed, and all of the foregoing as filed are correct and complete in all material respects, reflect
accurately all liability for taxes of the Seller and its Subsidiaries for the periods to which such returns relate, and all amounts shown as owing thereon have been paid. All income, profits, franchise, sales, use, value added, occupancy, property,
excise, payroll, withholding, FICA, FUTA and other taxes (including interest and penalties), if any, collectible or payable by the Seller and its Subsidiaries or relating to or chargeable against any of its material assets, revenues or income or
relating to any employee, independent contractor, creditor, stockholder or other third party through the Closing Date, were fully collected and paid by such date if due by such date or provided for by adequate reserves in the Financial Statements as
of and for the periods ended December 31, 2004 (other than taxes accruing after such date) and all similar items due through to the Closing Date will have been fully paid by that date or provided for by adequate reserves, whether or not any such
taxes were reported or reflected in any tax returns or filings. Except as described on Schedule 3.13, no taxation authority has sought to audit the records of the Seller or any of its Subsidiaries for the purpose of verifying or disputing any
tax returns, reports or related information and disclosures provided to such taxation authority, or for the Seller’s or any of its Subsidiaries’ alleged failure to provide any such tax returns, reports or related information and
disclosure. No material claims or deficiencies have been asserted against or inquiries raised with the Seller or any of its Subsidiaries with respect to any taxes or other governmental charges or levies which have not been paid or otherwise
satisfied, including claims that, or inquiries whether, the Seller or any of its Subsidiaries has not filed a tax return that it was required to file, and, to the best of the Seller’s knowledge, there exists no reasonable basis for the making
of any such claims or inquiries. Neither the Seller nor any of its Subsidiaries has waived any restrictions on assessment 

  

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or collection of taxes or consented to the extension of any statute of limitations relating to taxation. 
  
 3.14 Interests of Officers, Directors and Other Affiliates. The
description of any interest held, directly or indirectly, by any officer, director or other Affiliate of the Seller (other than the interests of the Seller and its Subsidiaries in such assets) in any property, real or personal, tangible or
intangible, used in or pertaining to the Seller’s business, including any interest in the Intellectual Property (as defined in Section 3.15 hereof), as set forth in the Recent Reports, is true and complete, and no officer, director or other
Affiliate of the Seller has any interest in any property, real or personal, tangible or intangible, used in or pertaining to the Seller’s business, including the Seller’s Intellectual Property, other than as set forth in the Recent
Reports. 
  
 3.15 Intellectual Property. Other than
as set forth in the Recent Reports: 
  
 (a) the Seller or a
Subsidiary thereof has the right to use or is the sole and exclusive owner of all right, title and interest in and to all material foreign and domestic patents, patent rights, trademarks, service marks, trade names, brands and copyrights (whether or
not registered and, if applicable, including pending applications for registration) owned, used or controlled by the Seller and its Subsidiaries (collectively, the “Rights”) and in and to each material invention, software, trade
secret, technology, product, composition, formula and method or process used by the Seller or its Subsidiaries (the Rights and such other items, the “Intellectual Property”), and, to the Seller’s knowledge, has the right to use
the same, free and clear of any claim or conflict with the rights of others; 
  
 (b) no royalties or fees (license or otherwise) are payable by the Seller or its Subsidiaries to any Person by reason of the ownership or use of any of the Intellectual Property, except as set forth on Schedule
3.15; 
  
 (c) there have been no claims made against the
Seller or its Subsidiaries asserting the invalidity, abuse, misuse, or unenforceability of any of the Intellectual Property, and, to its knowledge, there are no reasonable grounds for any such claims; 
  
 (d) neither the Seller nor its Subsidiaries have made any claim of any
violation or infringement by others of its rights in the Intellectual Property, and to the best of the Seller’s knowledge, no reasonable grounds for such claims exist; and 
  
 (e) neither the Seller nor its Subsidiaries have received notice that it is in conflict with or infringing upon the asserted
rights of others in connection with the Intellectual Property. 
  
 3.16 Restrictions on Business Activities. Other than as set forth in the Recent Reports, there is no agreement, judgment, injunction, order or decree binding upon the Seller or its Subsidiaries which has or could reasonably be
expected to have the effect of prohibiting or materially impairing any business practice of the Seller or its Subsidiaries, any acquisition of property by the Seller or its Subsidiaries or the conduct of business by the Seller or its Subsidiaries as
currently conducted or as currently proposed to be conducted by the Seller. 
  

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 3.17 Preemptive Rights. No Person possesses any right of first refusal, preemptive rights
or similar rights in respect of (i) the Notes or Warrants, (ii) the New Securities to be issued to the Purchasers upon conversion of the Notes, if applicable, (iii) the Common Conversion Shares to be issued upon conversion of the New Securities or
the Notes, as applicable, or (iv) the Warrant Shares to be issued upon exercise of the Warrants. 
  
 3.18 Insurance. The insurance policies providing insurance coverage to the Seller or its Subsidiaries, including the policies in respect of
product liability, are, in the reasonable opinion of Seller, adequate for the business conducted by the Seller and its Subsidiaries and are sufficient for compliance by the Seller and its Subsidiaries with all requirements of law and all material
agreements to which the Seller or its Subsidiaries are a party or by which any of their assets are bound. All of such policies are in full force and effect and are valid and enforceable in accordance with their terms, and the Seller and its
Subsidiaries have complied with all material terms and conditions of such policies, including premium payments. None of the insurance carriers has indicated to the Seller or its Subsidiaries an intention to cancel any such policy. 
  
 3.19 Subsidiaries and Investments. Except as set forth in the
Recent Reports or on Schedule 3.1 or Schedule 3.19, the Seller has no Subsidiaries or Investments. For purposes of this Agreement, the term “Investments” shall mean, with respect to any Person, all advances, loans or
extensions of credit to any other Person, all purchases or commitments to purchase any stock, bonds, notes, debentures or other securities of any other Person, and any other investment in any other Person, including partnerships or joint ventures
(whether by capital contribution or otherwise) or other similar arrangement (whether written or oral) with any Person, including but not limited to arrangements in which (i) the Person shares profits and losses, (ii) any such other Person has the
right to obligate or bind the Person to any third party, or (iii) the Person may be wholly or partially liable for the debts or obligations of such partnership, joint venture or other arrangement. 
  
 3.20 Capitalization. (a) The authorized capital stock of the
Seller consists of 200,000,000 shares of common stock, $0.0006 par value per share, of which 81,798,797 shares are issued and outstanding as of the date hereof, and 5,000,000 shares of preferred stock, issuable in one or more classes or series, with
such relative rights and preferences as the Board of Directors may determine, 1,785.714 of which are designated as the Series A Cumulative Convertible Preferred Stock (the “Series A Preferred”) and are issued and outstanding
immediately prior to the execution of this Agreement. 
  
 (b) All
shares of the Seller’s issued and outstanding capital stock have been duly authorized, are validly issued and outstanding, and are fully paid and non-assessable. No securities issued by the Seller from the date of its incorporation to the date
hereof were issued in violation of any statutory or common law preemptive rights. There are no dividends which have accrued or been declared but are unpaid on the capital stock of the Seller. All taxes required to be paid by Seller in connection
with the issuance and any transfers of the Seller’s capital stock have been paid. Except as set forth on Schedule 3.20, all permits or authorizations required to be obtained from, or registrations required to be effected with, any Person
in connection with any and all issuances of securities of the Seller from the date of the Seller’s incorporation to the date hereof have been obtained or effected, and all securities of the Seller have been issued and are held in accordance
with the provisions of all applicable securities and other laws. 
  

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 3.21 Options, Warrants, Rights. Except as set forth on Schedule 3.21, there are no
outstanding (a) securities, notes or instruments convertible into or exercisable for any of the capital stock or other equity interests of the Seller or its Subsidiaries; (b) options, warrants, subscriptions or other rights to acquire capital stock
or other equity interests of the Seller or its Subsidiaries; or (c) commitments, agreements or understandings of any kind, including employee benefit arrangements, relating to the issuance or repurchase by the Seller or its Subsidiaries of any
capital stock or other equity interests of the Seller or its Subsidiaries, any such securities or instruments convertible or exercisable for securities or any such options, warrants or rights. Other than the rights of the Purchasers under the
Warrants, and except as set forth on Schedule 3.21 and in connection with the Series A Preferred, neither the Seller nor the Subsidiaries have granted anti-dilution rights to any person or entity in connection with any outstanding option,
warrant, subscription or any other instrument convertible or exercisable for the securities of the Seller or any of its Subsidiaries. Other than the rights granted to the Purchasers under the Investor Rights Agreement, there are no outstanding
rights which permit the holder thereof to cause the Seller or the Subsidiaries to file a registration statement under the Securities Act or which permit the holder thereof to include securities of the Seller or any of its Subsidiaries in a
registration statement filed by the Seller or any of its Subsidiaries under the Securities Act, and there are no outstanding agreements or other commitments which otherwise relate to the registration of any securities of the Seller or any of its
Subsidiaries for sale or distribution in any jurisdiction, except as set forth on Schedule 3.21 and pursuant to the Investor Rights Agreement dated as of November 12, 2004, among the Company and the other signatories thereto. 
  
 3.22 Employees, Employment Agreements and Employee Benefit
Plans. Except as set forth in the Recent Reports or on Schedule 3.22, there are no employment, consulting, severance or indemnification arrangements, agreements or understandings between the Seller or its Subsidiaries and any officer,
director, consultant or employee of the Seller or its Subsidiaries (the “Employment Agreements”). No Employment Agreement provides for the acceleration or change in the award, grant, vesting or determination of options, warrants,
rights, severance payments or other contingent obligations of any nature whatsoever of the Seller or its Subsidiaries in favor of any such parties in connection with the transactions contemplated by this Agreement. 
  
 3.23 Absence of Certain Business Practices. Neither the Seller,
nor any Affiliate of the Seller, nor to the knowledge of the Seller, any agent or employee of the Seller, any other Person acting on behalf of or associated with the Seller, or any individual related to any of the foregoing Persons, acting alone or
together, has: (a) received, directly or indirectly, any rebates, payments, commissions, promotional allowances or any other economic benefits, regardless of their nature or type, from any customer, supplier, trading company, shipping company,
governmental employee or other Person with whom the Seller has done business directly or indirectly; or (b) directly or indirectly, given or agreed to give any gift or similar benefit to any customer, supplier, trading company, shipping company,
governmental employee or other Person who is or may be in a position to help or hinder the business of the Seller (or assist the Seller in connection with any actual or proposed transaction) which (i) may subject the Seller to any damage or penalty
in any civil, criminal or governmental litigation or proceeding, (ii) if not given in the past, may have had an adverse effect on the Seller or (iii) if not continued in the future, may adversely affect the assets, business, operations or prospects
of the Seller or subject the Seller to suit or penalty in any private or governmental litigation or proceeding. 
  

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 3.24 Products and Services. To the knowledge of the Seller and except as disclosed in the
Recent Reports, there exists no set of facts (i) which could furnish a basis for the withdrawal, suspension or cancellation of any registration, license, permit or other governmental approval or consent of any governmental or regulatory agency with
respect to any product or service developed or provided by the Seller or its Subsidiaries, (ii) which could furnish a basis for the withdrawal, suspension or cancellation by order of any state, federal or foreign court of law of any product or
service, or (iii) which could have a Material Adverse Effect on the continued operation of any facility of the Seller or its Subsidiaries or which could otherwise cause the Seller or its Subsidiaries to withdraw, suspend or cancel any such product
or service from the market or to change the marketing classification of any such product or service. Each product or service provided by Seller or its Subsidiaries has been provided in accordance in all material respects with the specifications
under which such product or service normally is and has been provided and the provisions of all applicable laws or regulations. 
  
 3.25 Environmental Matters. None of the premises or any properties owned, occupied or leased by the Seller or its Subsidiaries (the
“Premises”) has been used by the Seller or the Subsidiaries or, to the Seller’s knowledge, by any other Person, to manufacture, treat, store, or dispose of any substance that has been designated to be a “hazardous
substance” under applicable Environmental Laws (hereinafter defined) (“Hazardous Substances”) in violation of any applicable Environmental Laws, violation of which would have a Material Adverse Effect. To its knowledge, the
Seller has not disposed of, discharged, emitted or released any Hazardous Substances which would require, under applicable Environmental Laws, remediation, investigation or similar response activity. No Hazardous Substances are present as a result
of the actions of the Seller or, to the Seller’s knowledge, any other Person, in, on or under the Premises which would give rise to any liability or clean-up obligations of the Seller under applicable Environmental Laws, the impact of which
would have a Material Adverse Effect. The Seller and, to the Seller’s knowledge, any other Person for whose conduct it may be responsible pursuant to an agreement or by operation of law, are in compliance with all laws, regulations and other
federal, state or local governmental requirements (foreign and domestic), and all applicable judgments, orders, writs, notices, decrees, permits, licenses, approvals, consents or injunctions in effect on the date of this Agreement relating to the
generation, management, handling, transportation, treatment, disposal, storage, delivery, discharge, release or emission of any Hazardous Substance (the “Environmental Laws”). Neither the Seller nor, to the Seller’s knowledge,
any other Person for whose conduct it may be responsible pursuant to an agreement or by operation of law has received any written complaint, notice, order, or citation of any actual, threatened or alleged noncompliance with any of the Environmental
Laws, and there is no proceeding, suit or investigation pending or, to the Seller’s knowledge, threatened against the Seller or, to the Seller’s knowledge, any such Person with respect to any violation or alleged violation of the
Environmental Laws, and, to the knowledge of the Seller, there is no basis for the institution of any such proceeding, suit or investigation, which would have a Material Adverse Effect. 
  
 3.26 Licenses; Compliance With Regulatory Requirements. 
  
 Except as disclosed in the Recent Reports, the Seller holds all material
authorizations, consents, approvals, franchises, licenses and permits required under applicable law or regulation for the operation of the business of the Seller and its Subsidiaries as presently operated (the 

  

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“Governmental Authorizations”). All the Governmental Authorizations have been duly issued or obtained and are in full force and effect, and
the Seller and its Subsidiaries are in material compliance with the terms of all the Governmental Authorizations. The Seller’s and its Subsidiaries’ direct and indirect operating activities in Kazakhstan are subject to the Model 1 royalty
regime in effect as of the date hereof, and the Seller has no knowledge of any fact or circumstances which could reasonably be expected to cause the Seller to believe that such royalty regime will be revoked or materially amended. The Seller and its
Subsidiaries have not engaged in any activity that, to their knowledge, would cause revocation or suspension of any such Governmental Authorizations. The Seller has no knowledge of any facts which could reasonably be expected to cause the Seller to
believe that the Governmental Authorizations will not be renewed by the appropriate governmental authorities in the ordinary course. Neither the execution, delivery nor performance of this Agreement shall adversely affect the status of any of the
Governmental Authorizations. 
  
 3.27 Brokers. No
broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement, based upon any arrangement made by or on behalf of the Seller, which would
make any Purchaser liable for any fees or commissions. 
  
 3.28
Securities Laws. Neither the Seller nor its Subsidiaries, nor any agent acting on behalf of the Seller or its Subsidiaries, has taken or will take any action which might cause this Agreement or the Notes or Warrants to violate the
Securities Act or the Exchange Act or any rules or regulations promulgated thereunder, as in effect on the Closing Date. Assuming that all of the representations and warranties of the Purchasers set forth in Article IV are true, all offers and sales
of the Notes and Warrants were conducted and completed in compliance with the Securities Act. All shares of capital stock and other securities issued by the Seller and its Subsidiaries prior to the date hereof have been issued in transactions that
were either registered offerings or were exempt from the registration requirements under the Securities Act and all applicable state securities or “blue sky” laws and in compliance with all applicable corporate laws. 
  
 3.29 Disclosure. No representation or warranty made by the
Seller in this Agreement or the Related Documents or in any Schedule or Exhibit hereto or thereto, contains or will contain any untrue statement of a material fact, or omits to state a material fact necessary to make the statements or facts
contained herein or therein not misleading in light of the circumstances under which they were furnished. 
  
 3.30 Poison Pill. Except as otherwise provided for in Section 203 of the Delaware General Corporation Law, the Seller and its Board
of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision
under the Seller’s Certificate of Incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the Seller fulfilling their
obligations or exercising their rights under this Agreement and the Related Documents, including without limitation the Company’s issuance of the Securities and the Purchasers’ ownership of the Securities. 
  

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 ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS 
  
 Each Purchaser, for itself only, severally and not jointly, hereby represents
and warrants to the Seller as follows: 
  
 4.1 Existence and
Power. The Purchaser, if not a natural person, is duly organized, validly existing and in good standing under the laws of the jurisdiction of such Purchaser’s organization. Such Purchaser has all powers required to bind it to the
representations, warranties and covenants set forth herein. 
  
 4.2 Authorization. The execution, delivery and performance by the Purchaser of this Agreement, the Related Documents to which such Purchaser is a party, and the consummation by the Purchaser of the transactions contemplated
hereby and thereby have been duly authorized, and no additional action is required for the approval of this Agreement or such Related Documents. This Agreement and the Related Documents to which the Purchaser is a party have been or, to the extent
contemplated hereby, will be duly executed and delivered and constitute valid and binding agreements of the Purchaser, enforceable against such Purchaser in accordance with their terms, except as may be limited by bankruptcy, reorganization,
insolvency, moratorium and similar laws of general application relating to or affecting the enforcement of rights of creditors and except that enforceability of their obligations thereunder are subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law). 
  
 4.3 Investment. The Purchaser is acquiring the securities described herein for the Purchaser’s own account and not with a view to, or for sale in connection with, any distribution thereof, nor with
the intention of distributing or reselling the same; provided, however, that by making the representation in this Section 4.3, the Purchaser does not agree to hold any of the securities for any minimum or other specific term, and reserves the
right to dispose of the securities at any time in accordance with or pursuant to a registration statement or an exemption under the Securities Act. The Purchaser is aware that none of the securities has been registered under the Securities Act or
under applicable state securities or blue sky laws. The Purchaser is an “Accredited Investor” as such term is defined in Rule 501 of Regulation D, as promulgated under the Securities Act. 
  
 4.4 Reliance on Exemptions. The Purchaser understands that the
Notes and Warrants are being offered and sold to such Purchaser in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Seller is relying upon the truth and accuracy of,
and such Purchaser’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of such Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of such
Purchaser to acquire the Securities. 
  
 4.5 Experience of
the Purchaser. The Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective
investment in the Securities, and has so evaluated the merits and risks of such investment. The Purchaser is able to 

  

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bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment. 
  
 4.6 General Solicitation. The Purchaser is not purchasing the
Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general
solicitation or general advertisement. 
  
 ARTICLE V - COVENANTS
OF THE SELLER AND PURCHASERS 
  
 5.1 Insurance.
The Seller and its Subsidiaries shall maintain insurance policies such that the representations contained in the first sentence of Section 3.18 hereof continue to be true and correct and shall, from time to time upon the written request of the
Purchasers, promptly furnish or cause to be furnished to the Purchasers evidence, in form and substance reasonably satisfactory to the Purchasers, of the maintenance of all insurance maintained by it. 
  
 5.2 Reporting Obligations. So long as any of the Notes or New
Securities, if applicable, is outstanding, and so long as any Warrant has not been exercised and has not expired by its terms, the Seller shall furnish to the Purchasers, or any other persons who hold any of the Notes or New Securities, if
applicable, or Warrants (provided that such subsequent holders give notice to the Seller that they hold such securities and furnish their addresses) promptly upon their becoming available one copy of (A) each report, notice or proxy statement sent
by the Seller to its stockholders generally, and of each regular or periodic report (pursuant to the Exchange Act) and (B) any registration statement, prospectus or written communication pursuant to the Securities Act relating to the issuance or
registration of Common Conversion Shares and the Warrant Shares and filed by the Seller with the Commission or any securities market or exchange on which shares of Common Stock are listed; provided, however, that the Company shall have no
obligation to deliver periodic reports (pursuant to the Exchange Act) under this Section 5.2 to the extent such reports are publicly available. 
  
 The Purchasers are hereby authorized to deliver a copy of any financial statement or any other information relating to the business, operations or
financial condition of the Seller which may have been furnished to the Purchasers hereunder, to any regulatory body or agency having jurisdiction over the Purchasers or to any Person which shall, or shall have the right or obligation to succeed to
all or any part of the Purchasers’ interest in the Seller or this Agreement. 
  
 5.3 Investigation. The representations, warranties, covenants and agreements set forth in this Agreement shall not be affected or diminished in any way by any investigation (or failure to investigate) at
any time by or on behalf of any party for whose benefit such representations, warranties, covenants and agreements were made. Without limiting the generality of the foregoing, the inability or failure of the Purchasers to discover any breach,
default or misrepresentation by the Seller under this Agreement or the Related Documents (including under any certificate furnished pursuant to this Agreement), notwithstanding the exercise by the Purchasers or other holders of the Securities of
their rights hereunder to conduct an investigation, shall not in any way diminish any liability hereunder. 
  

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 5.4 Further Assurances. The Seller shall, at its cost and expense, upon written request of
Purchasers holding a majority of the aggregate original principal amount of the Notes then outstanding, duly execute and deliver, or cause to be duly executed and delivered, to the Purchasers such further instruments and do and cause to be done such
further acts as may be necessary, advisable or proper, in the absolute discretion of the Purchasers, to carry out more effectually the provisions and purposes of this Agreement. The parties shall use their best efforts to timely satisfy each of the
conditions described in Article VI of this Agreement. 
  
 5.5
Use of Proceeds. The Seller covenants and agrees that the proceeds of the Purchase Price paid by each Purchaser shall be used by the Seller for working capital and general corporate purposes; under no circumstances shall any portion of
the proceeds be applied to: 
  
 (i) accelerated
repayment of debt existing on the date hereof; 
  
 (ii) the payment of dividends or other distributions on any capital stock of the Seller; 
  
 (iii) increased executive compensation or loans to officers, employees, stockholders or directors, unless approved by a majority of the
disinterested members of the Board of Directors; 
  
 (iv) the purchase of debt or equity securities of any Person, including the Seller and its Subsidiaries, except in connection with (A) investment of excess cash in high quality (A1/P1 or better) money market instruments having maturities of
one year or less, or (B) a potential transaction involving the purchase of equity securities of the entity that, as of the date hereof, owns a 50% interest in the Seller’s principal operating Subsidiary in Kazakhstan; or 
  
 (v) any investment not directly related to the business of
the Seller. 
  
 5.6 Corporate Existence. So long as
a Purchaser owns Notes, Warrants, Conversion Shares or Warrant Shares, the Seller shall preserve and maintain and cause its Subsidiaries to preserve and maintain their corporate existence and good standing in the jurisdiction of their incorporation
and the rights, privileges and franchises of the Seller and its Subsidiaries (except, in each case, in the event of a merger or consolidation in which the Seller or its Subsidiaries, as applicable, is not the surviving entity) in each case where the
failure to so preserve or maintain could have a Material Adverse Effect on the financial condition, business or operations of the Seller and its Subsidiaries taken as a whole. 
  
 5.7 Licenses. The Seller shall, and shall cause its Subsidiaries to, maintain at all times all material
licenses or permits necessary to the conduct of its business and as required by any governmental agency or instrumentality thereof. 
  
 5.8 Like Treatment of Purchasers and Holders. Neither the Seller nor any of its affiliates shall, directly or indirectly, pay or cause to be
paid any consideration (immediate or contingent), whether by way of interest, fee, payment for redemption, conversion or exercise of the Securities, or otherwise, to any Purchaser or holder of Securities, for or as an inducement to, or in connection
with the solicitation of, any consent, waiver or amendment to any terms or 

  

 - 16 - 

 
provisions of this Agreement or the Related Documents, unless such consideration is required to be paid to all Purchasers or holders of Securities bound by
such consent, waiver or amendment. The Seller shall not, directly or indirectly, redeem any Securities unless such offer of redemption is made pro rata to all Purchasers or holders of Securities, as the case may be, on identical terms. 

 
 5.9 Taxes and Claims. The Seller and its Subsidiaries shall
duly pay and discharge (a) all taxes, assessments and governmental charges upon or against the Seller or its properties or assets prior to the date on which penalties attach thereto, unless and to the extent that such taxes are being diligently
contested in good faith and by appropriate proceedings, and appropriate reserves therefor have been established, and (b) all lawful claims, whether for labor, materials, supplies, services or anything else which might or could, if unpaid, become a
lien or charge upon the properties or assets of the Seller or its Subsidiaries, unless and to the extent only that the same are being diligently contested in good faith and by appropriate proceedings and appropriate reserves therefor have been
established. 
  
 5.10 Perform Covenants. The Seller
shall (a) make full and timely payment of any and all payments on the Notes, and all other obligations of the Seller to the Purchasers in connection therewith, whether now existing or hereafter arising, and (b) duly comply with all the terms and
covenants contained herein and in each of the instruments and documents delivered to the Purchasers in connection with or pursuant to this Agreement, all at the times and places and in the manner set forth herein or therein. 
  
 5.11 Additional Covenants. 
  
 (a) Except for transactions approved by a majority of the disinterested
members of the Board of Directors, neither the Seller nor any of its Subsidiaries shall enter into any transaction with any (i) director, officer, employee or holder of more than 5% of the outstanding capital stock of any class or series of capital
stock of the Seller or any of its Subsidiaries, (ii) member of the family of any such person, or (iii) corporation, partnership, trust or other entity in which any such person, or member of the family of any such person, is a director, officer,
trustee, partner or holder of more than 5% of the outstanding capital stock thereof. 
  
 (b) The Seller shall timely prepare and file with the Securities and Exchange Commission the form of notice of the sale of securities pursuant to the requirements of Regulation D regarding the sale of the Notes and
Warrants under this Agreement. 
  
 (c) The Seller shall timely
prepare and file such applications, consents to service of process (but not including a general consent to service of process) and similar documents and take such other steps and perform such further acts as shall be required by the state securities
law requirements of each jurisdiction where a Purchaser resides, as indicated on Schedule 1, with respect to the sale of the Notes and Warrants under this Agreement. 
  
 5.12 Securities Laws Disclosure; Publicity. The Seller shall (i) on or promptly after the Closing Date, issue
a press release acceptable to North Sound Capital LLC disclosing the transactions contemplated hereby, and (ii) within four business days after the Closing Date, file with the Commission a Report on Form 8-K disclosing the transactions contemplated
hereby. Except as provided in the preceding sentence, neither the Company nor the Purchasers shall 

  

 - 17 - 

 
make any press release or other public announcement of the terms of this Agreement or the transactions contemplated hereby without the prior approval of the
other, unless otherwise required by applicable law or the rules of the Commission or other applicable regulatory authority. 
  
 5.13 Listing of Warrant Shares. Seller shall use its best efforts to obtain, as promptly as practicable, the approval of the application to
the American Stock Exchange for the listing or qualification of the Warrant Shares for trading thereon. 
  
 5.14 Kazakhstan Legal Opinion. Seller shall use its best efforts to obtain and cause to be delivered to the Purchasers, as promptly as
practicable, but in no case later than 5 business days following the Closing, a legal opinion from Kazakhstan counsel to the Seller reasonably acceptable to North Sound Capital LLC and substantially in the form attached hereto as Exhibit D-2.

  
 ARTICLE VI - CONDITIONS TO CLOSING 
  
 6.1 Conditions to Obligations of Purchasers to Effect the
Closing. The obligations of a Purchaser to effect the Closing and the transactions contemplated by this Agreement shall be subject to the satisfaction at or prior to the Closing, of each of the following conditions, any of which may be
waived, in writing, by a Purchaser: 
  
 (a) The Seller shall
deliver or cause to be delivered to each of the Purchasers the following: 
  
 1.     (i) A certificate evidencing the Note in the principal amount equal to such Purchaser’s Purchase Price as set forth on Schedule 1, registered in the name of such Purchaser; and

  
 (ii) A certificate evidencing the Warrant,
registered in the name of such Purchaser, pursuant to which such Purchaser shall be initially entitled to purchase that number of shares of Common Stock as set forth on Schedule 1. 
  
 2. The Investor Rights Agreement, in the form attached
hereto as Exhibit C (the “Investor Rights Agreement”), duly executed by the Seller. 
  
 3. A legal opinion from Weycer, Kaplan, Pulaski & Zuber, P.C., counsel to the Seller, in the form attached hereto as Exhibit
D-1. 
  
 4. A certificate of the Secretary of
the Seller (the “Secretary’s Certificate”), in form and substance satisfactory to the Purchasers, certifying as follows: 
  
 (i) that attached thereto is a true and complete copy of the Certificate of Incorporation of the Seller, as amended, to the Closing Date;

  
 (ii) that attached thereto is a true copy of
the Bylaws of the Seller, as amended to the Closing Date; 
  

 - 18 - 

 (iii) that attached thereto are true and complete copies of the resolutions of the Board
of Directors of the Seller authorizing the execution, delivery and performance of this Agreement and the Related Documents, instruments and certificates required to be executed by it in connection herewith and approving the consummation of the
transactions in the manner contemplated hereby including, but not limited to, the authorization and issuance of the Notes and Warrants and that such resolutions are in full force and effect as of the Closing Date and that no other resolutions exist
regarding the subject matter thereof; 
  
 (iv)
the names and true signatures of the officers of the Seller signing this Agreement and all other documents to be delivered in connection with this Agreement; 
  

(v) such other matters as required by this Agreement; and 
  
 (vi) such other matters as the Purchasers may reasonably request. 
  
 5. A wire transfer representing the Purchasers’ legal
fees and other third-party expenses as described in Section 8.2 hereof; such fee may, at the election of the Purchasers, be paid out of the funds due from the Purchasers at the Closing. 
  
 6. This Agreement, duly executed by the Seller. 
  
 7. Such other documents as the Purchasers shall reasonably
request. 
  
 (b) The Seller shall have entered into a Closing
Escrow Agreement with Wiggin and Dana LLP (the “Escrow Agent”) in the form attached hereto as Exhibit E (the “Closing Escrow Agreement”) pursuant to which the Escrow Agent shall hold certain funds and
documents described therein. 
  
 (c) All representations and
warranties of the Seller contained herein shall remain true and correct as of the Closing Date as though such representations and warranties were made on such date (except those representations and warranties that address matters only as of a
particular date will remain true and correct as of such date). 
  
 (d) As of the Closing Date, there shall have been no Material Adverse Effect with respect to the Seller since the date hereof. 
  
 (e) From the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission (except for any suspension of
trading of limited duration agreed to by the Company, which suspension shall be terminated prior to the Closing), and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg Financial Markets shall not have
been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or on any trading market, nor shall a banking moratorium have been declared either by the United States or New York
State authorities. 
  

 - 19 - 

 (f) Evidence satisfactory to North Sound Capital LLC that the Seller has duly filed an application with
the American Stock Exchange to list the Warrant Shares for trading thereon. 
  
 (g) A certificate executed by the chief executive officer or the chief financial officer of the Seller certifying to the Purchasers that: 
  
 (i) OJSC Caspi Neft TME, a Kazakhstan legal entity (“Caspi Neft”) is an open joint stock
company duly registered and validly existing under Kazakhstan law; 
  
 (ii) Caspi Neft has the full legal power as a Kazakhstan open joint stock company to own or lease property and to conduct its business as it is currently conducted; 
  
 (iii) The charter capital of Caspi Neft consists of 19,100
ordinary shares, par value 1,000 tenge. The shares of Caspi Neft have been duly authorized, issued and properly registered with the Agency of the Republic of Kazakhstan for Regulation and Supervision of the Financial Market and Financial
Organizations; and 
  
 (iv) The execution and
delivery of this Agreement by the Seller, and performance by the Seller of the transactions contemplated by this Agreement (i) does not violate any provision of the constituent documents of Caspi Neft; (ii) does not violate Kazakhstan law applicable
to Caspi Neft; and (iii) does not require any filing, approval, registration, authorization or other action by any person, entity or government body in Kazakhstan. 
  
 6.2 Conditions to Obligations of the Seller to Effect the Closing. The obligations of the Seller to effect the
Closing and the transactions contemplated by this Agreement shall be subject to the satisfaction at or prior to the Closing of each of the following conditions, any of which may be waived, in writing, by the Seller: 
  
 (a) Each of the Purchasers shall deliver or cause to be delivered to the
Seller (i) payment of the Purchase Price set forth opposite such Purchaser’s name on Schedule 1, in cash by wire transfer of immediately available funds in accordance with the Escrow Agreement; (ii) an executed copy of this Agreement;
(iii) an executed copy of the Investor Rights Agreement; and (iv) such other documents as the Seller shall reasonably request. 
  
 (b) All representations and warranties of each of the Purchasers contained herein shall remain true and correct as of the Closing Date as though such
representations and warranties were made on such date. 
  
 ARTICLE VII - INDEMNIFICATION, TERMINATION AND DAMAGES 
  
 7.1 Survival of Representations. Except as otherwise provided herein, the representations and warranties of the Seller and the Purchasers contained in or made pursuant to this Agreement shall survive the execution and delivery
of this Agreement and the Closing Date and shall continue in full force and effect for a period of three (3) years from the Closing Date; provided, however, that the Seller’s warranties and representations under Sections 3.13 (Taxes), 3.19
(Subsidiaries and Investments), 3.20 (Capitalization), and 3.21 (Options, Warrants, Rights), shall survive the Closing Date and continue in full force and effect until the expiration of all 

  

 - 20 - 

 
applicable statutes of limitation; and further provided that the Seller’s warranties and representations under Section 3.25 (Environmental Matters)
shall survive the Closing Date and continue in full force and effect for a period of six (6) years from the Closing Date. The Seller’s and the Purchasers’ warranties and representations shall in no way be affected or diminished in any way
by any investigation of (or failure to investigate) the subject matter thereof made by or on behalf of the Seller or the Purchasers. 
  
 7.2 Indemnification. 
  
 (a) The Seller agrees to indemnify and hold harmless the Purchasers, their Affiliates, each of their officers, directors, partners, employees and agents
and their respective successors and assigns, from and against any losses, damages, or expenses which are caused by or arise out of (i) any breach or default in the performance by the Seller of any covenant or agreement made by the Seller in this
Agreement or in any of the Related Documents; (ii) any breach of warranty or representation made by the Seller in this Agreement or in any of the Related Documents (iii) any and all third party actions, suits, proceedings, claims, demands,
judgments, costs and expenses (including reasonable legal fees and expenses) incident to any of the foregoing. 
  
 (b) The Purchasers, severally and not jointly, agree to indemnify and hold harmless the Seller, its Affiliates, each of their officers, directors,
employees and agents and their respective successors and assigns, from and against any losses, damages, or expenses which are caused by or arise out of (A) any breach or default in the performance by the Purchasers of any covenant or agreement made
by the Purchasers in this Agreement or in any of the Related Documents; (B) any breach of warranty or representation made by the Purchasers in this Agreement or in any of the Related Documents; and (C) any and all third party actions, suits,
proceedings, claims, demands, judgments, costs and expenses (including reasonable legal fees and expenses) incident to any of the foregoing; provided, however, that a Purchaser’s liability under this Section 7.2(b) shall not exceed the
Purchase Price paid by such Purchaser hereunder less any amounts paid to such Purchaser pursuant to any repayment of the Notes. 
  
 7.3 Indemnity Procedure. A party or parties hereto agreeing to be responsible for or to indemnify against any matter pursuant to this
Agreement is referred to herein as the “Indemnifying Party” and the other party or parties claiming indemnity is referred to as the “Indemnified Party”. An Indemnified Party under this Agreement shall, with respect
to claims asserted against such party by any third party, give written notice to the Indemnifying Party of any liability which might give rise to a claim for indemnity under this Agreement within thirty (30) business days of the receipt of any
written claim from any such third party, but not later than twenty (20) days prior to the date any answer or responsive pleading is due, and with respect to other matters for which the Indemnified Party may seek indemnification, give prompt written
notice to the Indemnifying Party of any liability which might give rise to a claim for indemnity; provided, however, that any failure to give such notice will not waive any rights of the Indemnified Party except to the extent the rights of
the Indemnifying Party are materially prejudiced. 
  
 The
Indemnifying Party shall have the right, at its election, to take over the defense or settlement of such claim by giving written notice to the Indemnified Party at least fifteen (15) days prior to the time when an answer or other responsive pleading
or notice with respect thereto 

  

 - 21 - 

 
is required. If the Indemnifying Party makes such election, it may conduct the defense of such claim through counsel of its choosing (subject to the
Indemnified Party’s approval of such counsel, which approval shall not be unreasonably withheld), shall be solely responsible for the expenses of such defense and shall be bound by the results of its defense or settlement of the claim. The
Indemnifying Party shall not settle any such claim without prior notice to and consultation with the Indemnified Party, and no such settlement involving any equitable relief or which might have an adverse effect on the Indemnified Party may be
agreed to without the written consent of the Indemnified Party (which consent shall not be unreasonably withheld). So long as the Indemnifying Party is diligently contesting any such claim in good faith, the Indemnified Party may pay or settle such
claim only at its own expense and the Indemnifying Party will not be responsible for the fees of separate legal counsel to the Indemnified Party, unless the named parties to any proceeding include both parties or representation of both parties by
the same counsel would be inappropriate in the reasonable opinion of the Indemnified Party, due to conflicts of interest or otherwise. If the Indemnifying Party does not make such election, or having made such election does not, in the reasonable
opinion of the Indemnified Party proceed diligently to defend such claim, then the Indemnified Party may (after written notice to the Indemnifying Party), at the expense of the Indemnifying Party, elect to take over the defense of and proceed to
handle such claim in its discretion and the Indemnifying Party shall be bound by any defense or settlement that the Indemnified Party may make in good faith with respect to such claim. In connection therewith, the Indemnifying Party will fully
cooperate with the Indemnified Party should the Indemnified Party elect to take over the defense of any such claim. The parties agree to cooperate in defending such third party claims and the Indemnified Party shall provide such cooperation and such
access to its books, records and properties as the Indemnifying Party shall reasonably request with respect to any matter for which indemnification is sought hereunder; and the parties hereto agree to cooperate with each other in order to ensure the
proper and adequate defense thereof. 
  
 With regard to claims of
third parties for which indemnification is payable hereunder, such indemnification shall be paid by the Indemnifying Party upon the earlier to occur of: (i) the entry of a judgment against the Indemnified Party and the expiration of any applicable
appeal period, or if earlier, five (5) days prior to the date that the judgment creditor has the right to execute the judgment; (ii) the entry of an unappealable judgment or final appellate decision against the Indemnified Party; or (iii) a
settlement of the claim. Notwithstanding the foregoing, the reasonable expenses of counsel to the Indemnified Party shall be reimbursed on a current basis by the Indemnifying Party. With regard to other claims for which indemnification is payable
hereunder, such indemnification shall be paid promptly by the Indemnifying Party upon demand by the Indemnified Party. 
  
 ARTICLE VIII - MISCELLANEOUS 
  
 8.1 Further Assurances. Each party agrees to cooperate fully with the other parties and to execute such further instruments, documents and
agreements and to give such further written assurances as may be reasonably requested by any other party to better evidence and reflect the transactions described herein and contemplated hereby and to carry into effect the intents and purposes of
this Agreement, and further agrees to take promptly, or cause to be taken, all actions, and to do promptly, or cause to be done, all things necessary, proper or advisable under applicable law to consummate and make effective the transactions
contemplated hereby, to 

  

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obtain all necessary waivers, consents and approvals, to effect all necessary registrations and filings, and to remove any injunctions or other impediments
or delays, legal or otherwise, in order to consummate and make effective the transactions contemplated by this Agreement for the purpose of securing to the parties hereto the benefits contemplated by this Agreement. 
  
 8.2 Fees and Expenses. The Seller shall be responsible for the
payment of the Purchasers’ actual and reasonable legal fees and other third-party expenses relating to the preparation, negotiation and execution of this Agreement and the Related Documents and the consummation of the transactions contemplated
herein and therein. 
  
 8.3 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 earliest of (a) the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number specified in this Section prior to 5:00 p.m. (New York City time) on a business day, (b) 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 business day, or (c) the business day following the date of mailing, if sent by U.S. nationally recognized overnight
courier service such as Federal Express. The address for such notices and communications shall be as follows: 
  
 If to the Purchasers at each Purchaser’s address set forth under its name on Schedule 1 attached hereto, or with respect to the Seller,
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 Seller 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
Purchaser shall be sent to the addresses, if any, listed on Schedule 1 attached hereto. 
  
 Unless otherwise stated above, such communications shall be effective when they are received by the addressee thereof in conformity with this section. Any party may change its address for such communications by giving
notice thereof to the other parties in conformity with this section. 
  
 8.4 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and enforced in accordance with the laws of the State of New York without reference
to the conflicts of laws principles thereof. 
  

 - 23 - 

 8.5 Jurisdiction and Venue. This Agreement shall be subject to the exclusive jurisdiction
of the Federal District Court, Southern District of New York and if such court does not have proper jurisdiction, the State Courts of New York County, New York. The parties to this Agreement agree that any breach of any term or condition of this
Agreement shall be deemed to be a breach occurring in the State of New York by virtue of a failure to perform an act required to be performed in the State of New York and irrevocably and expressly agree to submit to the jurisdiction of the Federal
District Court, Southern District of New York and if such court does not have proper jurisdiction, the State Courts of New York County, New York for the purpose of resolving any disputes among the parties relating to this Agreement or the
transactions contemplated hereby. The parties irrevocably waive, to the fullest extent permitted by law, any objection which they may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this
Agreement, or any judgment entered by any court in respect hereof brought in New York County, New York, and further irrevocably waive any claim that any suit, action or proceeding brought in Federal District Court, Southern District of New York and
if such court does not have proper jurisdiction, the State Courts of New York County, New York has been brought in an inconvenient forum. Each of the parties hereto 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 8.5 shall affect or limit
any right to serve process in any other manner permitted by law. 
  
 8.6 Successors and Assigns. This Agreement is personal to each of the parties and may not be assigned without the written consent of the other parties; provided, however, that any of the Purchasers shall be
permitted to assign this Agreement to any Person to whom it assigns or transfers Securities in compliance with applicable securities laws. Any assignee must be an “accredited investor” as defined in Rule 501(a) promulgated under the
Securities Act. 
  
 8.7 Severability. If any
provision of this Agreement, or the application thereof, shall for any reason or to any extent be invalid or unenforceable, the remainder of this Agreement and application of such provision to other persons or circumstances shall continue in full
force and effect and in no way be affected, impaired or invalidated. 
  
 8.8 Entire Agreement. This Agreement, the Related Documents and the other agreements and instruments referenced herein constitute the entire understanding and agreement of the parties with respect to the subject matter hereof
and supersede all prior agreements and understandings. 
  
 8.9
Other Remedies. Except as otherwise provided herein, any and all remedies herein expressly conferred upon a party shall be deemed cumulative with and not exclusive of any other remedy conferred hereby or by law, or in equity on such
party, and the exercise of any one remedy shall not preclude the exercise of any other. 
  
 8.10 Amendment and Waivers. Any term or provision of this Agreement may be amended, the observance of any term of this Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively) and this Agreement may be amended or supplemented only by a writing signed by the Seller and the holders of at least a 

  

 - 24 - 

 
majority of the aggregate original principal amount of Notes then outstanding, and such waiver or amendment, as the case may be, shall be binding upon all
Purchasers. The waiver by a party of any breach hereof or default in the performance hereof shall not be deemed to constitute a waiver of any other default or any succeeding breach or default. No amendment shall be effected to impact a holder of
Notes in a disproportionately adverse fashion without the consent of such individual holder of Notes. 
  
 8.11 No Waiver. The failure of any party to enforce any of the provisions hereof shall not be construed to be a waiver of the right of such
party thereafter to enforce such provisions. 
  
 8.12
Counterparts; Interpretation. This Agreement may be executed in any number of counterparts, each of which shall be an original as against any party whose signature appears thereon and all of which together shall constitute one and the
same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as signatories. In the event that any signature is delivered
by electronic means, including electronic mail or facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such
facsimile signature page were an original thereof. Headings used in this Agreement are for convenience only, and will not affect the interpretation of this Agreement. Any form of the word “include” used in this Agreement shall be deemed to
be followed by the phrase “without limitation.” 
  
 8.13 No Third Party Beneficiary. Nothing expressed or implied in this Agreement is intended, or shall be construed, to confer upon or give any person other than the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and permitted assigns, any rights or remedies under or by reason of this Agreement. 
  
 8.14 Waiver of Trial by Jury. THE PARTIES HERETO IRREVOCABLY WAIVE TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. 
  
 8.15
Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under this Agreement or any Related Documents are several and not joint with the obligations of any other Purchaser, and no Purchaser shall
be responsible in any way for the performance of the obligations of any other Purchaser under any such agreement. Nothing contained herein or in any Related Documents, and no action taken by any Purchaser pursuant thereto, 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 by such agreement. Each Purchaser shall be entitled to independently protect and enforce its rights, including without limitation, the rights arising out of this Agreement or out of the other Related Documents, 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 represents that it has been represented by its own separate legal counsel in its review and negotiation of this Agreement and
the Related Documents. For reasons of administrative convenience only, the Purchasers acknowledge and agree that they and their respective counsel have chosen to communicate with 

  

 - 25 - 

 
the Company through Wiggin and Dana LLP, but Wiggin and Dana LLP does not represent any of the Purchasers in this transaction other than North Sound Capital
LLC. 
  
 [signature page follows] 
  

 - 26 - 

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

  

			
	SELLER:
	
	TRANSMERIDIAN EXPLORATION INCORPORATED
		
	By:	 	 
	 Name:
	 	 
	 Title:
	 	 

  

 - 27 - 

			
	PURCHASERS:
		
	Print Exact Name:	 	 

  

			
		
	By:	 	 

			
	 Name:
	 	 
	 Title:
	 	 

  

			
	Address:	 	 
		
	 	 	 
		
	 	 	 

  

			
	Telephone:	 	 
		
	Facsimile:	 	 

			
		
	Email:	 	 

			
		
	SSN/EIN:	 	 

  
 Amount of
Investment:$                                      
           
  
 [Omnibus Transmeridian Exploration Incorporated Convertible Promissory Note and Warrant Purchase Agreement Signature Page] 
  

 - 28 - 

 Schedule 1 
  

to Convertible Promissory Note and Warrant Purchase Agreement 
  

Purchasers, Amount of Securities Purchased and Purchase Price 
  

											
	 Name, Address and Fax Number of Purchaser and
Registration Instructions

	  	Copies of Notices to

	 	Original
Principal
Amount of
Notes

	  	Common
Stock
Underlying
Warrants

	  	Purchase
Price

					
	 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	 	$	4,900,000	  	980,000	  	$	4,900,000
					
	 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	 	$	12,600,000	  	2,520,000	  	$	12,600,000
					
	 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
	  	 	 	$	5,000,000	  	1,000,000	  	$	5,000,000
	 	  	 	 	
	
	  	
	  	
	

	 Totals:
	  	 	 	$	22,500,000	  	4,500,000	  	$	22,500,000

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00090-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00090-of-00352.parquet"}]]