IRREVOCABLE TRANSFER AGENT INSTRUCTIONS
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Exhibit
10.8
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February
6, 2008
Fidelity
Transfer Company
8915 S.
000 X. Xxxxx 000
Sandy,
Utah 84070
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 Hyperdynamics
Corporation, a Delaware corporation (the “Company”), and YA
Global Investments, L.P. (the “Buyer”). Pursuant
to the Securities Purchase Agreement, the Company shall issue and sell to the
Buyer, and the Buyer shall purchase from the Company, secured notes
(collectively, the “Notes”) which are in
certain instances convertible into shares of the Company’s common stock, par
value $0.001 per share (the “Common Stock”), at
the Buyer’s discretion. The Company has also issued to the Buyer
warrants to purchase additional shares of Common Stock, at the Buyer’s
discretion (the “Warrant”). These
instructions relate to the following stock or proposed stock issuances or
transfers:
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1.
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Shares
of Common Stock to be issued to the Buyer upon conversion of the Notes
plus any shares of Common Stock to be issued to the Buyer upon conversion
of accrued interest into Common Stock (collectively, the “Conversion
Shares”).
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2.
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Shares
of Common Stock to be issued to the Buyer upon exercise of the Warrant
(the “Warrant
Shares”).
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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.
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Conversion Shares and Warrant
Shares.
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a.
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Instructions Applicable to
Transfer Agent. With respect to the Warrant Shares and,
upon an Event of Default (as defined in the Notes) that is not cured
pursuant to the terms of the Notes, the Conversion Shares, the Transfer
Agent shall, without confirmation or instructions from the
Company, issue the Warrant Shares and Conversion Shares to the Buyer from
time to time upon delivery to the Transfer Agent of a properly completed
and duly executed Exercise Notice (the “Exercise
Notice”) in the form attached as Exhibit A to the Warrant or a
properly completed and duly executed Conversion Notice (the “Conversion
Notice”) in the form attached as Exhibit A to the Notes, delivered
to the Transfer Agent by Xxxxx Xxxxxxxx, Esq. (the “Escrow Agent”)
as agent acting 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 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 initiate the DWAC
transaction. For purposes hereof “Trading
Day” shall
mean any day on which the Nasdaq Market is open for customary
trading.
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b.
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No Restrictive
Legends. If 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 form set forth in
Exhibit
II attached hereto, then the 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.
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c.
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Restrictive
Legends. In the
event that the Conversion Shares and Warrant Shares are not registered for
sale under the Securities Act of 1933, as amended, the certificates for
the Conversion and Warrant Shares shall bear the following legend, or its
equivalent:
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“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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d.
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Removal of
Restrictive Legends. In the event
that the Buyer submits to the Transfer Agent the Conversion Shares or
Warrant Shares for the removal of the restrictive legends whether in
connection with a sale of such shares pursuant to any exemption to the registration
requirements the Securities Act of 1933, as amended, or otherwise and such
removal of the restrictive legends is permitted by law, the Transfer Agent
shall without confirmation or instructions from the Company and
within three (3) Trading Days of receipt of all required documentation
from the Buyer, its agent or counsel, (i) issue and surrender to a common
carrier for overnight delivery to the address as specified by the
Buyer(s), 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 pursuant to their submission or (ii)
provided the Transfer Agent is participating in The Depository Trust
Company (“DTC”) Fast Automated Securities
Transfer Program, upon the request of the Buyer, credit such aggregate
number of shares of Common Stock to which the Buyer 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 initiate the DWAC transaction. For purposes
hereof “Trading
Day” shall mean any day on which the
Nasdaq Market is open for customary
trading.
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e.
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Opinions of
Counsel. In the event that counsel to the Company fails
or refuses to render an opinion as required to issue the Conversion Shares
or Warrant Shares (either with or without restrictive legends, as
applicable) or to remove a legend from Conversion Shares or Warrant
Shares, 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 or Warrant Shares. In the event the Buyer
submits an opinion of counsel as contemplated herein, the Transfer Agent
hereby acknowledges it will rely on and accept such opinion of counsel and
all documentation submitted in connection therewith, without the
confirmation or instructions from the Company, and issue such Conversion
Shares or Warrant Shares in accordance with such
opinion.
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f.
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Instructions Applicable to
Escrow Agent. Upon the Escrow Agent’s receipt of a
properly completed Exercise Notice and the Aggregate Exercise Price (as
defined in the Warrant) or, following an Event of Default that has not
been cured pursuant to the terms of the Notes, a Conversion Notice, 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.
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2.
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Other
Agreements.
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a.
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The
Transfer Agent shall reserve for issuance to the Buyer a minimum of eleven
million (11,000,000) Conversion Shares and Warrant Shares. All
such shares shall remain in reserve with the Transfer Agent until the
Buyer provide 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. Under no circumstances, including without
limitation the exhaustion of the number of reserved shares articulated
herein, shall the reservation of Conversion Shares and Warrant shares
articulated herein be deemed to be a cap on the number of Conversion
Shares and Warrant Shares to be issued to the
Buyer.
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b.
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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.
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c.
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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.
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d.
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The
Company hereby confirms to the Transfer Agent and the Buyer that no
instructions other than as contemplated herein will be given to Transfer
Agent by the Company with respect to the Conversion Shares, the Warrant
Shares and the matters referenced herein. The Company hereby
authorizes the Transfer Agent, and the Transfer Agent shall be obligated,
to disregard any contrary instructions received by or on behalf of the
Company with respect to the Conversion Shares, the Warrant Shares and the
matters referenced herein.
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e.
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The
Company shall not be entitled to nor will the Transfer Agent grant a
suspension of the obligations hereunder for any time period in order for
the Company to obtain a court order or its equivalent in order to prevent
the Transfer Agent from acting
hereunder.
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f.
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The
Transfer Agent, upon request of the Buyer(s) and without instruction or
confirmation by the Company, will provide to the Buyer(s) information
about the total number of authorized shares of the Company’s Common Stock
as well as information about the current outstanding shares of the
Company’s Common Stock as of the date of the
request.
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3.
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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 Buyer, a partner of the
general partner of the Buyer and counsel to the Buyer 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 Buyer and neither
the Company nor the Transfer Agent will seek to disqualify such
counsel.
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4.
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Replacement of Transfer
Agent.
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a.
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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
Buyer.
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b.
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Any
attempt by Transfer Agent to resign as the Company’s transfer agent
hereunder shall not be effective until such time as the Company provides
to the Transfer Agent written notice that a suitable replacement has
agreed to serve as transfer agent and to be bound by the terms and
conditions of these Irrevocable Transfer Agent
Instructions. However, the transfer agent may resign upon 30
days written notice.
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5.
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Miscellaneous.
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a.
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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.
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b.
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The
Company and the Transfer Agent acknowledge that the Buyer is relying on
the representations and covenants made by the Company and the Transfer
Agent hereunder and are a material inducement to the Buyer purchasing
convertible Notes 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 Buyer would not purchase the
Notes.
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c.
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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
Buyer 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 Buyer 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.
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[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
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 Xxxxx
Name: Xxxx
Xxxxx
Title: President
and CEO
ESCROW
AGENT:
/s/ Xxxx
Xxxxx
Xxxxxxxx,
Xxx.
BUYER:
YA
Global Investments, L.P.
By: Yorkville
Advisors, LLC
Its: Investment
Manager
By:
/s/ Xxxx Xxxxxx
Name: Xxxx
Xxxxxx
Title: Portfolio
Manager
TRANSFER
AGENT:
Fidelity Transfer Company
By:
/s/ Xxxxx Xxxxxxxx
Name: Xxxxx
Xxxxxxxx
Title: President
