Exhibit 10.5
EXECUTION VERSION
AMENDED AND RESTATED PLEDGE
AGREEMENT
THIS AMENDED AND RESTATED PLEDGE
AGREEMENT (this “ Pledge Agreement ”),
dated as of October 24, 2008, is by and among Transmeridian
Exploration Inc., a British Virgin Islands company (“
Pledgor ”), The Bank of New York Mellon
(formerly known as The Bank of New York), in its capacity as
Collateral Agent for the benefit of the Secured Parties referred to
below (in such capacity, the “ Collateral Agent
”), The Bank of New York Mellon, in its capacity as trustee
under the Original Indenture referred to below (in such capacity,
the “ Original Trustee ”), and The Bank
of New York Mellon, in its capacity as trustee under the New
Indenture referred to below (in such capacity, the “
New Trustee ”).
RECITALS
WHEREAS, Pledgor, the Collateral Agent and the Original
Trustee are parties to that certain Pledge Agreement, dated as of
December 22, 2005, as amended by Amendment No. 1 to the
Pledge Agreement, dated as of May 26, 2006 (the “
Existing Pledge Agreement ”), pledging all
Capital Stock held by Pledgor in each of Transmeridian (Kazakhstan)
Incorporated, a British Virgin Islands company (“
Transmeridian Kazakhstan ”), and Bramex
Management, Inc., a British Virgin Islands company (“
Bramex ”), each a wholly-owned subsidiary of
Pledgor;
WHEREAS, pursuant to that certain Indenture, dated as of
December 12, 2005, as amended by the First, Second and Third
Supplemental Indentures thereto, dated as of December 22,
2005, May 24, 2006 and the date hereof, respectively, by
and among Pledgor, the Original Trustee and the Guarantors from
time to time party thereto (as amended by the First and Second
Supplemental Indentures thereto, the “ Existing
Indenture ” and, as further amended by the Third
Supplemental Indenture thereto and as further amended, restated,
supplemented or otherwise modified from time to time, the “
Original Indenture ”), Pledgor has issued an
aggregate $290 million principal amount of its senior secured notes
due 2010 (the “ Original Notes
”);
WHEREAS, pursuant to that certain Indenture, dated as of
the date hereof, by and among Pledgor, the New Trustee and the
Guarantors from time to time party thereto (as amended, restated,
supplemented or otherwise modified from time to time, the “
New Indenture ” and, together with the Original
Indenture, the “ Indentures ”), Pledgor
will issue its senior secured notes due 2010 (the “ New
Notes ” and, together with the Original Notes, the
“ Notes ”) in exchange for all or a
portion of the Original Notes;
WHEREAS, pursuant to the terms of the Original Indenture,
the Original Notes and Pledgor’s payment obligations under
the Original Indenture, including obligations to the Original
Trustee, (a) will continue to be secured, in part, by a pledge
of all of the Capital Stock held by Pledgor in Transmeridian
Kazakhstan and Bramex and by a pledge of all of the Capital Stock
directly held by Pledgor in any other existing or future Restricted
Subsidiary and (b) will be further secured by a pledge of all
existing and future intercompany indebtedness owed to Pledgor by
Transmeridian Exploration Incorporated (“
Parent ”) or any Restricted
Subsidiary;
WHEREAS, pursuant to the terms of the New Indenture, the
New Notes and Pledgor’s payment obligations under the New
Indenture, including obligations to the New Trustee, will be
secured, in part, by (a) a pledge of all of the Capital Stock
held by Pledgor in Transmeridian Kazakhstan and Bramex and by a
pledge of all of the Capital Stock directly held by Pledgor in any
other existing or future Restricted Subsidiary and (b) a
pledge of all existing and future intercompany indebtedness owed to
Pledgor by Parent or any Restricted Subsidiary;
WHEREAS, pursuant to the terms of the Original Indenture
and the New Indenture, Pledgor shall have granted the security
interests in the Pledged Collateral (as defined below) contemplated
under this Pledge Agreement in favor of the Collateral Agent for
the ratable benefit of the holders of the Original Notes, the
holders of the New Notes, the Original Trustee, the New Trustee and
the Collateral Agent (collectively, the “ Secured
Parties ”) to secure the Secured Obligations (as
defined below);
WHEREAS, pursuant to the Offering Memorandum and Consent
Solicitation Statement, dated July 23, 2008 (as supplemented
by the supplement thereto dated September 23, 2008, the
“ Solicitation Statement ”), of Parent
and Pledgor, Pledgor has solicited consents of the holders of the
Original Notes to authorize certain amendments to the Existing
Indenture and to the Security Documents (as defined in the Existing
Indenture), including the Existing Pledge Agreement, and, in
connection therewith, Pledgor has obtained the written consent of
the holders of the requisite “outstanding” (as defined
in the Existing Indenture) principal amount of the Original Notes
consenting to the substance of the amendment and restatement in its
entirety of the Existing Pledge Agreement as set forth herein,
evidence of which that is satisfactory to the Original Trustee
having been filed therewith;
WHEREAS, pursuant to Sections 9.6 and 12.4 of the
Existing Indenture, the Original Trustee has received an
officer’s certificate and an opinion of counsel as to the
matters specified therein; and
WHEREAS, Pledgor, the Collateral Agent, the Original
Trustee and the New Trustee have each agreed to enter into this
Pledge Agreement pursuant to the terms of the Original Indenture
and the New Indenture to amend and restate the Existing Pledge
Agreement (a) to provide that the security interests granted
by Pledgor in the Pledged Collateral in favor of the Collateral
Agent shall be granted for the ratable benefit of the Secured
Parties to secure, among other things, the obligations of Pledgor
under each of the Indentures and (b) to make the other
modifications to the Existing Pledge Agreement set forth
herein.
NOW, THEREFORE,
in consideration of these premises
and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. Definitions.
The following terms that are defined
in the Uniform Commercial Code from time to time in effect in the
State of New York (the “ UCC ”) are used
herein as so defined: Certificated Security, Control, Entitlement
Order, Financial Asset, Instrument (as defined in
Section 9-102(47) of the UCC), Investment Company Security,
Securities Account, Security, Security Entitlement, Securities
Intermediary and Uncertificated Security. As used herein, the
following terms shall have the meanings ascribed to such terms in
each of the Indentures (and for greater certainty, shall be
inclusive of all such meanings): “ Capital
Stock ”, “ Guarantor ”,
“ Lien ”, “ Permitted
Lien ”, “ Person ” and
“ Restricted Subsidiary ”.
2. Pledge and Grant of Security
Interest. Subject to the
terms and conditions of this Pledge Agreement and to secure the
performance of the Secured Obligations, Pledgor hereby pledges and
grants to the Collateral Agent, for the ratable benefit of the
Secured Parties, a continuing security interest in any and all
right, title and interest of Pledgor in and to the following,
whether now owned or existing or owned, acquired, or arising
hereafter (collectively, the “Pledged
Collateral” ):
(a) Pledged Capital Stock .
All of the issued and outstanding Capital Stock directly owned by
Pledgor of each Person set forth on Schedule 2(a) attached hereto
(collectively, together with the Capital Stock and other interests
described in clauses (A) and (B) of this
Section 2(a) and in Section 2(c) below, the
“Pledged Capital Stock” ), including, but
not limited to, the following:
(A) all shares, securities,
membership interests or other equity interests representing a
dividend on any of the Pledged Capital Stock, or representing a
distribution or
2
return of capital upon or in respect
of the Pledged Capital Stock, or resulting from a stock split,
revision, reclassification or other exchange therefor, and any
subscriptions, warrants, rights or options issued to the holder of,
or otherwise in respect of, the Pledged Capital Stock;
and
(B) without affecting the
obligations of Pledgor under any provision prohibiting such action
hereunder or under either Indenture, in the event of any
consolidation or merger involving the issuer of any Pledged Capital
Stock and in which such issuer is not the surviving entity, all
shares of each class of the Capital Stock of the successor entity
formed by or resulting from such consolidation or
merger.
(b) Pledged Debt . All of the
existing and future indebtedness owed to Pledgor by Parent or any
Restricted Subsidiary, including all indebtedness listed on
Schedule 2(b) hereto and issued by the obligors named therein, and
any future indebtedness owed to Pledgor by any obligor listed on
Schedule 2(b) hereto (collectively, together with the other
interests described in clauses (A) and (B) of this
Section 2(b), the “ Pledged Debt ”),
including, but not limited to, the following:
(A) the instruments, if any,
evidencing the Pledged Debt, and all interest, cash, instruments
and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all
of the Pledged Debt; and
(B) all additional indebtedness from
time to time owed to Pledgor by any obligor listed on Schedule 2(b)
or any other Restricted Subsidiary and the instruments, if any,
evidencing such indebtedness, and all interest, cash, instruments
and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all
of such indebtedness, in each case whether or not reflected on
Schedule 2(b) and whether or not Schedule 2(b) is amended to refer
to such additional indebtedness.
(c) Additional Interests .
Any and all other Capital Stock or other equity interests directly
owned by Pledgor in Transmeridian Kazakhstan, Bramex or any other
existing or future Restricted Subsidiary, whether or not reflected
on Schedule 2(a) and whether or not Schedule 2(a) is amended to
refer to such additional interests.
(d) Proceeds . All proceeds
and products of the foregoing, however and whenever acquired and in
whatever form, subject to Section 10(e).
Without limiting the generality of
the foregoing, it is hereby specifically understood and agreed that
Pledgor may from time to time hereafter pledge and deliver
additional shares of Capital Stock or other equity interests, or
additional indebtedness or instruments evidencing indebtedness, to
the Collateral Agent as collateral security for the Secured
Obligations. Upon such pledge and delivery to the Collateral Agent,
such additional shares of Capital Stock or other equity interests,
or indebtedness or debt instruments, as the case may be, shall be
deemed to be part of the Pledged Collateral and shall be subject to
the terms of this Pledge Agreement whether or not Schedule 2(a) or
Schedule 2(b) is amended to refer to such additional shares,
interests, indebtedness or instruments.
The parties agree that the pledge
and security interests granted pursuant to the Existing Pledge
Agreement shall continue without any diminution thereof and shall
remain in full force and effect on and after the date hereof,
except as specifically modified by the terms hereof.
3. Security for Secured
Obligations. The security
interest created hereby in the Pledged Collateral of Pledgor
constitutes continuing collateral security for all of the
following, whether now existing or hereafter incurred (the “
Secured Obligations ”): (a) the payment
and performance by Pledgor of all Note Obligations (as defined in
the Original Indenture) of Pledgor; (b) the payment and
performance by Pledgor of all Note Obligations (as defined in the
New Indenture) of Pledgor; (c) all expenses and charges, legal
and otherwise, incurred by the Collateral Agent, the Original
Trustee
3
and/or the holders of the Original Notes in
enforcing Pledgor’s obligations under the Original Indenture
or in realizing on or protecting any security therefor, including
without limitation the security granted hereunder; and (d) all
expenses and charges, legal and otherwise, incurred by the
Collateral Agent, the New Trustee and/or the holders of the New
Notes in enforcing Pledgor’s obligations under the New
Indenture or in realizing on or protecting any security therefor,
including without limitation the security granted
hereunder.
4. Delivery of the Pledged
Collateral; Perfection of Security Interest.
Pledgor hereby agrees
that:
(a) Delivery of Certificates and
Instruments . Pledgor shall deliver as security to the
Collateral Agent, (i) simultaneously with or prior to the
amendments to the Existing Pledge Agreement effected by this Pledge
Agreement becoming operative, (A) all certificates
representing the Pledged Capital Stock owned by Pledgor and
(B) all instruments representing or evidencing the Pledged
Debt (excluding, unless an Event of Default (as defined below) has
occurred and is continuing and the Collateral Agent has requested
such delivery, Pledged Debt in an aggregate principal amount not in
excess of $100,000), in each case together with the delivery of
signed, undated instruments of transfer for the Pledged Collateral
to the Collateral Agent or its designee; and (ii) promptly
upon the receipt thereof by or on behalf of Pledgor, all other
certificates and instruments constituting Pledged Collateral owned
by Pledgor (except, in the case of Pledged Debt, unless an Event of
Default has occurred and is continuing and the Collateral Agent has
requested such delivery, instruments representing Pledged Debt in
an aggregate principal amount not in excess of $100,000). Prior to
delivery to the Collateral Agent, all such certificates and
instruments constituting Pledged Collateral of Pledgor shall be
held in trust by Pledgor for the benefit of the Collateral Agent
pursuant hereto. All such certificates and instruments shall be
delivered in suitable form for transfer by delivery or shall be
accompanied by duly executed instruments of transfer or assignment
in blank, in forms reasonably acceptable to the Collateral
Agent.
(b) Additional Securities .
If Pledgor shall receive by virtue of its being or having been the
owner of any Pledged Collateral, any (i) certificate,
including, without limitation, any certificate representing a
dividend or distribution in connection with any increase or
reduction of capital, reclassification, merger, consolidation, sale
of assets, combination of shares of Capital Stock, stock splits,
spin-off or split-off, promissory notes or other instruments;
(ii) option or right, whether as an addition to, substitution
for, or an exchange for, any Pledged Collateral or otherwise;
(iii) dividends payable in Capital Stock; or
(iv) distributions of Capital Stock or other equity interests
in connection with a partial or total liquidation, dissolution or
reduction of capital, capital surplus or paid-in surplus, then
Pledgor shall receive such certificate, instrument, option, right
or distribution in trust for the benefit of the Collateral Agent,
shall segregate it from Pledgor’s other property and shall
deliver it forthwith to the Collateral Agent, for the ratable
benefit of the Secured Parties entitled thereto, in the exact form
received accompanied by duly executed instruments of transfer or
assignment in blank, in forms reasonably acceptable to the
Collateral Agent, to be held by the Collateral Agent as Pledged
Collateral and as further collateral security for the Secured
Obligations.
(c) Financing Statements; Other
Perfection Actions . Pledgor hereby agrees to prepare and file
such financing statements (including continuation statements) or
amendments thereof or supplements thereto or other instruments as
are necessary or appropriate in order to perfect and maintain the
security interests granted hereunder in accordance with the UCC
that specifically describes the Pledged Collateral in such manner
as is necessary or advisable. Pledgor shall also execute and
deliver to the Collateral Agent and/or file such agreements,
assignments or instruments (including affidavits, notices,
reaffirmations, amendments and restatements of existing documents
and, subject to the terms of each Indenture, any documents as may
be necessary if the law of any jurisdiction other than New York
becomes or is applicable to the Pledged Collateral or any portion
thereof, in each case, including as the Collateral Agent may
reasonably request) and do all such other things as are necessary
or appropriate (i) to assure to the Collateral Agent its
security interests hereunder are perfected, including such
financing statements (including continuation statements)
or
4
amendments thereof or supplements thereto or
other instruments, including as the Collateral Agent may from time
to time reasonably request in order to perfect and maintain the
security interests granted hereunder in accordance with the UCC and
any other personal property security legislation in the appropriate
jurisdictions, (ii) to consummate the transactions
contemplated hereby and (iii) to otherwise protect and assure
the Collateral Agent of its rights and interests
hereunder.
(d) With respect to the Pledged
Capital Stock of each of Transmeridian Kazakhstan and Bramex,
Pledgor shall request and procure the entry on the share register
of Transmeridian Kazakhstan and Bramex, as applicable, of
(i) a statement that the Capital Stock is charged;
(ii) the name of the Collateral Agent; and (iii) the date
on which the aforesaid particulars are entered into the share
register. In addition, Pledgor shall procure the filing of same
with the Registrar of Corporate Affairs in the British Virgin
Islands.
5. Representations and
Warranties. Pledgor
hereby represents and warrants to the Collateral Agent for the
benefit of the Secured Parties that:
(a) Authorization of Pledged
Collateral . The Pledged Capital Stock is duly authorized and
validly issued, is fully paid and nonassessable and is not subject
to the preemptive rights of any Person. The Pledged Debt has been
duly authorized, authenticated or issued and delivered, is the
legal, valid and binding obligation of the issuers thereof, is
evidenced by one or more promissory notes (which promissory notes,
to the extent required hereunder, have been delivered to the
Collateral Agent) and is not in default.
(b) Title . Pledgor has good
and indefeasible title to the Pledged Collateral and will at all
times be the legal and beneficial owner of such Pledged Collateral
free and clear of any Lien, other than Permitted Liens. There
exists no “adverse claim” within the meaning of
Section 8-102 of the UCC with respect to the Pledged Capital
Stock.
(c) Exercising of Rights .
The exercise by the Collateral Agent of its rights and remedies
hereunder will not violate any law or governmental regulation or
any material contractual restriction binding on or affecting
Pledgor or any of its property.
(d) Pledgor’s Authority
. No authorization, approval or action by, and no notice or filing
with any governmental authority, the issuer of any Pledged Capital
Stock, the obligor of any Pledged Debt or third party is required
either (i) for the pledge made by Pledgor or for the granting
of the security interest by Pledgor pursuant to this Pledge
Agreement or (ii) for the exercise by any Secured Party of its
rights and remedies hereunder (except as may be required by laws
affecting the offering and sale of securities).
(e) Security
Interest/Priority . This Pledge Agreement creates a valid
security interest in favor of the Collateral Agent, for the ratable
benefit of the Secured Parties, in the Pledged Collateral. The
taking of possession by the Collateral Agent of the certificates or
instruments (if any) representing the Pledged Collateral and the
relevant instruments of transfer and all other certificates and
instruments constituting Pledged Collateral will perfect and
establish the first priority of the Collateral Agent’s
security interest in all Pledged Collateral consisting of
Certificated Securities and Instruments. Upon the filing of a UCC
financing statement describing the Pledged Collateral in the
applicable filing office in the State of Texas, and the filing of
such other documents and/or the taking by Pledgor of such other
actions as may be required in Pledgor’s jurisdiction of
organization and/or in the jurisdiction of organization of any
applicable obligor, issuer, partnership or limited liability
company in order to perfect such security interest, the Collateral
Agent shall have a first priority perfected security interest in
(i) all Pledged Debt not evidenced by an Instrument and
(ii) in all Pledged Capital Stock consisting of partnership or
limited liability company interests that do not constitute
Securities under Section 8-103(c) of the UCC. With respect to
any Pledged Collateral consisting of an Uncertificated Security or
a Security Entitlement or any Pledged Collateral held in a
Securities Account, upon execution and delivery by Pledgor, the
Collateral Agent and the applicable
5
Securities Intermediary or the applicable issuer
of the Uncertificated Security of an agreement granting Control to
the Collateral Agent over such Pledged Collateral, the Collateral
Agent shall have a first priority perfected security interest in
such Pledged Collateral. Except as set forth in this
Section 5(e), no action is necessary to perfect the Collateral
Agent’s security interest.
6. Covenants.
Pledgor hereby covenants and agrees
with the Collateral Agent that Pledgor shall:
(a) Defense of Title .
Warrant and defend title to and ownership of the Pledged Collateral
at its own expense against the claims and demands of all other
parties claiming an interest therein; keep the Pledged Collateral
free from all Liens, other than Permitted Liens; and not sell,
exchange, transfer, assign, lease or otherwise dispose of the
Pledged Collateral or any interest therein, except as permitted
under the Indentures.
(b) Further Assurances .
Subject to the terms of the Indentures, promptly execute and
deliver at its expense all further instruments and documents and
take all further action that may be necessary and desirable or that
the Collateral Agent may request in order to (i) perfect and
protect the security interest created hereby in the Pledged
Collateral (including, without limitation, executing and delivering
one or more control agreements reasonably acceptable to the
Collateral Agent, and filing of UCC financing statements
an
