Exhibit 10.6-Irrevocable Transfer Agent Instructions
IRREVOCABLE TRANSFER AGENT INSTRUCTIONS
June 19, 2006
Fidelity Transfer Company
0000 Xxxxx Xxxx Xxxxxx, #000
Xxxx Xxxx Xxxx, XX 00000
RE: HYPERDYNAMICS CORPORATION
Ladies and Gentlemen:
Reference is made to that certain Securities Purchase Agreement (the
"Securities Purchase Agreement") of even date herewith by and between
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Hyperdynamics Corporation, a Delaware corporation (the "Company"), and the
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Buyers set forth on Schedule I attached thereto (collectively the "Buyers").
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Pursuant to the Securities Purchase Agreement, the Company shall sell to the
Buyers, an the Buyers shall purchase from the Company, convertible debentures
(collectively, the "Debentures") in the aggregate principal amount of Six
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Million Dollars ($6,000,000), plus accrued interest, which are convertible into
shares of the Company's common stock, par value $.001 per share (the "Common
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Stock"), at the Buyers discretion. The Company has also issued to the Buyer
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warrants to purchase up to 2,100,000 shares of Common Stock, at the Buyer's
discretion (the "Warrant"). These instructions relate to the following stock or
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proposed stock issuances or transfers:
1. Shares of Common Stock to be issued to the Buyers upon conversion
of the Debentures ("Conversion Shares") plus the shares of Common
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Stock ion of accrued interest and liquidated damages into Common Stock
(the "Interest Shares").
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2. Up to 2,100,000 shares of Common Stock to be issued to the Buyers
upon exercise of the Warrant (the "Warrant Shares"). to be issued to
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the Buyers upon convers
This letter shall serve as our irrevocable authorization and direction to
Fidelity Transfer Company (the "Transfer Agent") to do the following:
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1. Conversion Shares and Warrant Shares.
a. Instructions Applicable to Transfer Agent. With respect to
the Conversion Shares, Warrant Shares and the Interest Shares,
the Transfer Agent shall issue
the Conversion Shares, Warrant Shares and the Interest
Shares to the Buyers from time to time upon delivery to the
Transfer Agent of a properly completed and duly executed
Conversion Notice (the "Conversion Notice") in the form attached
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as Exhibit A to the Debentures, or a properly completed and
duly executed Exercise Notice (the "Exercise Notice") in the form
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attached as Exhibit A to the Warrant, delivered to the Transfer
Agent by Xxxxx Xxxxxxxx, Esq. (the "Escrow Agent") acting as
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agent on behalf of the Company. Upon receipt of a Conversion
Notice or an Exercise Notice, the Transfer Agent shall within
three (3) Trading Days thereafter (i) issue and surrender to a
common carrier for overnight delivery to the address as specified
in the Conversion Notice or the Exercise Notice, a certificate,
registered in the name of the Buyer or its designees, for the
number of shares of Common Stock to which the Buyer shall be
entitled as set forth in the Conversion Notice or Exercise Notice
or (ii) provided the Transfer Agent is participating in The
Depository Trust Company ("DTC") Fast Automated Securities
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Transfer Program, upon the request of the Buyers, credit such
aggregate number of shares of Common Stock to which the Buyers
shall be entitled to the Buyer's or their designees' balance
account with DTC through its Deposit Withdrawal At Custodian
("DWAC") system provided the Buyer causes its bank or broker to
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initiate the DWAC transaction. For purposes hereof "Trading Day"
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shall mean any day on which the Nasdaq Market is open for
customary trading.
b. The Company hereby confirms to the Transfer Agent and the
Buyer that certificates representing the Conversion Shares
and the Warrant Shares shall not bear any legend restricting
transfer and should not be subject to any stop-transfer
restrictions and shall otherwise be freely transferable on the
books and records of the Company; provided that counsel to the
Company delivers (i) the Notice of Effectiveness set forth in
Exhibit I attached hereto and (ii) an opinion of counsel in the
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form set forth in Exhibit II attached hereto, and that if the
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Conversion Shares, Warrant Shares and the Interest Shares are not
registered for sale under the Securities Act of 1933, as amended,
then the certificates for the Conversion Shares, Warrant Shares
and Interest Shares shall bear the following legend substantially
as follows:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR
AN OPINION OF COUNSEL, IN A FORM REASONABLY ACCEPTABLE TO THE
COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE
144 UNDER SAID ACT."
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c. In the event that counsel to the Company fails or refuses to
render an opinion as required to issue the Conversion Shares or
the Warrant Shares in accordance with the preceding paragraph
(either with or without restrictive legends, as applicable), then
the Company irrevocably and expressly authorizes counsel to the
Buyer to render such opinion. The Transfer Agent shall accept and
be entitled to rely on such opinion for the purposes of issuing
the Conversion Shares.
d. Instructions Applicable to Escrow Agent. Upon the Escrow
Agent's receipt of a properly completed Conversion Notice or
Exercise Notice and the Aggregate Exercise Price (as defined in
the Warrant), the Escrow Agent shall, within one (1) Trading Day
thereafter, send to the Transfer Agent the Conversion Notice or
Exercise Notice as the case may be, which shall constitute an
irrevocable instruction to the Transfer Agent to process such
Conversion Notice or Exercise Notice in accordance with the terms
of these instructions.
2. All Shares.
a. The Transfer Agent shall reserve for issuance to the Buyers
a minimum of 3,000,000 Conversion Shares and 2,100,000 Warrant
Shares. All such shares shall remain in reserve with the Transfer
Agent until the Buyers provides the Transfer Agent instructions
that the shares or any part of them shall be taken out of reserve
and shall no longer be subject to the terms of these
instructions.
b. The Company hereby irrevocably appoints the Escrow Agent as
a duly authorized agent of the Company for the purposes of
authorizing the Transfer Agent to process issuances and transfers
specifically contemplated herein. Acts, errors, commissions or
omission of the Escrow Agent shall not cause a default of this
Irrevocable Transfer Agent Instructions, nor a default of any
Transaction Documents (as defined in the Securities Purchase
Agreement).
c. The Transfer Agent shall rely exclusively on the Conversion
Notice or the Exercise Notice and shall have no liability for
relying on such instructions. Any Conversion Notice or Exercise
Notice delivered hereunder shall constitute an irrevocable
instruction to the Transfer Agent to process such notice or
notices in accordance with the terms thereof. Such notice or
notices may be transmitted to the Transfer Agent by facsimile or
any commercially reasonable method.
d. The Company hereby confirms to the Transfer Agent and the
Buyers that no instructions other than as contemplated herein
will be given to Transfer Agent by the Company with respect to
the matters referenced herein. The Company hereby authorizes the
Transfer Agent, and the Transfer Agent shall be obligated, to
disregard any contrary instructions in connections with the
Transaction Documents received by or on behalf of the Company.
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Certain Notice Regarding the Escrow Agent. The Company and the Transfer
Agent hereby acknowledge that the Escrow Agent is general counsel to the Buyers,
a partner of the general partner of the Buyers and counsel to the Buyers in
connection with the transactions contemplated and referred herein. The Company
and the Transfer Agent agree that in the event of any dispute arising in
connection with this Agreement or otherwise in connection with any transaction
or agreement contemplated and referred herein, the Escrow Agent shall be
permitted to continue to represent the Buyers and neither the Company nor the
Transfer Agent will seek to disqualify such counsel.
The Company hereby agrees that it shall not replace the Transfer Agent as
the Company's transfer agent without the prior written consent of the Buyers.
If for any reason, during the term of this Agreement, the Transfer Agent
resigns as transfer agent, the Transfer Agent shall provide the Company and
Buyers with thirty (30) days written notice prior to such resignation (the
"Resignation Notice"). The Company shall have five (5) business days after the
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date of the Transfer Agent's Resignation Notice to obtain a suitable replacement
transfer agent, which agent shall have agreed to serve as transfer agent and to
be bound by the terms and conditions of these Transfer Agent Instructions.
The Company and the Transfer Agent hereby acknowledge and confirm that
complying with the terms of this Agreement does not and shall not prohibit the
Transfer Agent from satisfying any and all fiduciary responsibilities and duties
it may owe to the Company whether or not concerning this Agreement.
The company will notify in its resolution instructions each time that
shares are to be issued that the shares are those pursuant to this agreement
with the corresponding number. The number that the Transfer Agent has assigned
to this agreement is 4002.
The Company and the Transfer Agent acknowledge that the Buyers is relying
on the representations and covenants made by the Company and the Transfer Agent
hereunder and are a material inducement to the Buyers purchasing convertible
debentures under the Securities Purchase Agreement. The Company and the
Transfer Agent further acknowledge that without such representations and
covenants of the Company and the Transfer Agent made hereunder, the Buyers would
not purchase the Debentures.
Each party hereto specifically acknowledges and agrees that in the event of
a breach or threatened breach by a party hereto of any provision hereof, the
Buyers will be irreparably damaged and that damages at law would be an
inadequate remedy if these Irrevocable Transfer Agent Instructions were not
specifically enforced. Therefore, in the event of a breach or threatened breach
by a party hereto, including, without limitation, the attempted termination of
the agency relationship created by this instrument, the Buyers shall be
entitled, in addition to all other rights or remedies, to an injunction
restraining such breach, without being required to show any actual damage or to
post any bond or other security, and/or to a decree for specific performance of
the provisions of these Irrevocable Transfer Agent Instructions.
Event of Default or Breach. Any default or breach notice requirement and
cure period shall be the same as any default notice and cure periods set forth
in the Convertible Debentures.
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IN WITNESS WHEREOF, the parties have caused this letter agreement regarding
Irrevocable Transfer Agent Instructions to be duly executed and delivered as of
the date first written above.
COMPANY:
HYPERDYNAMICS CORPORATION
By: /s/ Xxxx X/ Xxxxx
Name: Xxxx X. Xxxxx
Title: President and Chief Executive Officer
/s/ Xxxxx Xxxxxxxx, Esq.
Xxxxx Xxxxxxxx, Esq.
FIDELITY TRANSFER COMPANY
By: /s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title:Office Manager
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SCHEDULE I
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SCHEDULE OF BUYERS
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ADDRESS/FACSIMILE
NAME SIGNATURE NUMBER OF BUYERS
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Cornell Capital Partners, LP By: Yorkville Advisors, LLC 000 Xxxxxx Xxxxxx - Xxxxx 0000
Xxx: Xxxxxxx Xxxxxxx Xxxxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
Its: Portfolio Manager
SCHEDULE I-1
EXHIBIT I
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TO IRREVOCABLE TRANSFER AGENT INSTRUCTIONS
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FORM OF NOTICE OF EFFECTIVENESS
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OF REGISTRATION STATEMENT
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_________, 2006
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Attention:
RE: HYPERDYNAMICS CORPORATION
Ladies and Gentlemen:
We are counsel to Hyperdynamics Corporation, (the "Company"), and have
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represented the Company in connection with that certain Securities Purchase
Agreement, dated as of February __, 2006 (the "Securities Purchase Agreement"),
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entered into by and among the Company and the Buyers set forth on Schedule I
attached thereto (collectively the "Buyers") pursuant to which the Company has
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agreed to sell to the Buyers up to $6,000,000 of secured convertible debentures,
which shall be convertible into shares (the "Conversion Shares") of the
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Company's common stock, par value $.001 per share (the "Common Stock"), in
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accordance with the terms of the Securities Purchase Agreement. Pursuant to the
Securities Purchase Agreement, the Company also has entered into a Registration
Rights Agreement, dated as of May ___, 2006, with the Buyers (the "Investor
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Registration Rights Agreement") pursuant to which the Company agreed, among
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other things, to register the Conversion Shares under the Securities Act of
1933, as amended (the "1933 Act"). In connection with the Company's obligations
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under the Securities Purchase Agreement and the Registration Rights Agreement,
on _______, 2006 the Company filed a Registration Statement (File No.
___-_________) (the "Registration Statement") with the Securities and Exchange
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Commission (the "SEC") relating to the sale of the Conversion Shares.
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In connection with the foregoing, we advise the Transfer Agent that a
member of the SEC's staff has advised us by telephone that the SEC has entered
an order declaring the Registration Statement effective under the 1933 Act at
____ P.M. on __________, 2006 and we have no knowledge, after telephonic inquiry
of a member of the SEC's staff, that any stop order suspending its effectiveness
has been issued or that any proceedings for that purpose are pending before, or
threatened by, the SEC and the Conversion Shares are available for sale under
the 1933 Act pursuant to the Registration Statement.
EXHIBIT I-1
The Buyers has confirmed it shall comply with all securities laws and
regulations applicable to it including applicable prospectus delivery
requirements upon sale of the Conversion Shares.
Very truly yours,
By:
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EXHIBIT I-2
EXHIBIT II
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TO IRREVOCABLE TRANSFER AGENT INSTRUCTIONS
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FORM OF OPINION
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________________ 2006
VIA FACSIMILE AND REGULAR MAIL
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________
Attention:
RE: HYPERDYNAMICS CORPORATION
Ladies and Gentlemen:
We have acted as special counsel to Hyperdynamics Corporation (the
"Company"), in connection with the registration of ___________shares (the
"Shares") of its common stock with the Securities and Exchange Commission (the
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"SEC"). We have not acted as your counsel. This opinion is given at the
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request and with the consent of the Company.
In rendering this opinion we have relied on the accuracy of the Company's
Registration Statement on Form SB-2, as amended (the "Registration Statement"),
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filed by the Company with the SEC on _________ ___, 2005. The Company filed the
Registration Statement on behalf of certain selling stockholders (the "Selling
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Stockholders"). This opinion relates solely to the Selling Shareholders listed
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on Exhibit "A" hereto and number of Shares set forth opposite such Selling
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Stockholders' names. The SEC declared the Registration Statement effective on
__________ ___, 2005.
We understand that the Selling Stockholders acquired the Shares in a
private offering exempt from registration under the Securities Act of 1933, as
amended. Information regarding the Shares to be sold by the Selling
Shareholders is contained under the heading "Selling Stockholders" in the
Registration Statement, which information is incorporated herein by reference.
This opinion does not relate to the issuance of the Shares to the Selling
Stockholders. The opinions set forth herein relate solely to the sale or
transfer by the Selling Stockholders pursuant to the Registration Statement
under the Federal laws of the United States of America. We do not express any
opinion concerning any law of any state or other jurisdiction.
In rendering this opinion we have relied upon the accuracy of the foregoing
statements.
EXHIBIT II
Based on the foregoing, it is our opinion that the Shares have been
registered with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, and that ________ may remove the restrictive legends
contained on the Shares. This opinion relates solely to the number of Shares set
forth opposite the Selling Stockholders listed on Exhibit "A" hereto. The
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shares may therefore be originally issued directly from the transfer agent
without restrictive legend as the shares have been sold and the prospectus
delivery requirements have been met.
This opinion is furnished to Transfer Agent specifically in connection with
the sale or transfer of the Shares, and solely for your information and benefit.
This letter may not be relied upon by Transfer Agent in any other connection,
and it may not be relied upon by any other person or entity for any purpose
without our prior written consent. This opinion may not be assigned, quoted or
used without our prior written consent. The opinions set forth herein are
rendered as of the date hereof and we will not supplement this opinion with
respect to changes in the law or factual matters subsequent to the date hereof.
Very truly yours,
EXHIBIT II-2
EXHIBIT A
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(LIST OF SELLING STOCKHOLDERS)
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NAME: NO. OF SHARES:
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EXHIBIT A
