AMENDMENT AGREEMENT
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Amendment
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THIS
AMENDMENT AGREEMENT (this “Agreement”), dated as
of November 20, 2008 is entered into by and between Hyperdynamics Corporation, a
Delaware corporation (the “Company”), Enable
Growth Partners LP (“Enable Growth”) and
Enable Opportunity Partners LP (“Enable Opportunity”,
and together with Enable Growth, the “Enable” or the “Holders”).
Capitalized terms used herein, but not otherwise defined, shall have the
meanings ascribed to such terms as set forth in the Purchase Agreements (as
defined below).
WHEREAS,
the Company and the Holders are parties to that certain Securities Purchase
Agreement dated May 11, 2008 (the “May Purchase
Agreement”) pursuant to which the Company issued to the Holders shares of
Common Stock and warrants to purchase Common Stock (the “May
Warrants”);
WHEREAS,
the Company and Enable Growth are parties to that certain Securities Purchase
Agreement dated August 29, 2008 (the “August Purchase
Agreement” and together with the May Purchase Agreement, the “Purchase Agreements”)
pursuant to which the Company issued to Enable Growth a 10% Convertible
Debenture, due September 12, 2012 in the original aggregate principal amount
equal to $5,000,000 (the “Debenture”) and
warrants to purchase Common Stock (the “September Warrants”
and together with the May Warrants, the “Warrants”);
and
WHEREAS,
the Company has requested that the Holders agree to amendments under the
Transaction Documents, and the Holders have agreed to such request, subject to
the terms and conditions of this Agreement.
NOW,
THEREFORE, in consideration of the terms and conditions contained in this
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties, intending to be
legally bound hereby, agree as follows:
10. Adjustment to Conversion
Price of Debenture. The Conversion Price of the Debenture
shall be reduced to be equal to $1.65 per share, subject to further adjustment
as set forth in the Debenture. As such, Section 4(b) of the Debenture is hereby
deleted in its entirety and replaced with the following: “Conversion
Price. The
conversion price in effect on any Conversion Date shall be equal to $1.65,
subject to adjustment herein (the “Conversion
Price”).”
11. Adjustment to Exercise Price
of Warrants. The Exercise Price of the Warrants shall be
amended as follows:
.1 The
May Warrant shall be reduced to equal $2.00 per share, subject to further
adjustment as set forth in the Warrants. As such, Section 2(b) of the Warrants
is hereby deleted in its entirety and replaced with the following: “Exercise
Price. The
exercise price per share of the Common Stock under this Warrant shall be $2.00,
subject to adjustment hereunder (the “Exercise
Price”).”
.2 The
Series A September Warrants shall be reduced to equal $2.25 per share, subject
to further adjustment as set forth in the Warrants. As such, Section 2(b) of the
Warrants is hereby deleted in its entirety and replaced with the following:
“Exercise
Price. The
exercise price per share of the Common Stock under this Warrant shall be $2.25,
subject to adjustment hereunder (the “Exercise
Price”).”
.3 The
Series B September Warrants shall be reduced to equal $2.50 per share, subject
to further adjustment as set forth in the Warrants. As such, Section 2(b) of the
Warrants is hereby deleted in its entirety and replaced with the following:
“Exercise
Price. The
exercise price per share of the Common Stock under this Warrant shall be $2.50,
subject to adjustment hereunder (the “Exercise
Price”).”
12. Issuance of Shares of Common
Stock; Limitation on Conversions of the Debenture; Shareholder
Approval.
.4 Conversion of
Debenture. Pursuant to this Agreement, Enable Growth hereby
elects to convert $3,254,166.30 principal amount of Debentures (this Agreement
shall be deemed delivered in lieu of a Notice of Conversion) resulting in the
issuance of 1,972,222 shares of Common Stock to Enable Growth. On the
Trading Day immediately following the date hereof, the Company shall deliver to
Enable Growth 1,972,222 shares of Common Stock electronically to the DTC account
of Enable Growth as set forth on the signature pages hereto. As a
result of the conversion into 1,972,222 shares pursuant hereto, the Company
shall have a Voluntary Conversion Make-Whole Interest Payment immediately due
and payable in the amount of $1,301,666.50, which amount shall be treated as an
Accreted Payment pursuant to paragraph 4 hereunder resulting in a principal
amount outstanding pursuant to the Debenture immediately following the
consummation of this Agreement of $2,485,000.20. The terms and
conditions of the conversion shall otherwise be governed by the terms and
conditions of the Debenture.
.5 Limitation on
Conversions.
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1.
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From
the date hereof until the earlier of January 12, 2009 or such time that
the trading price of the Common Stock on the Trading Market exceeds $2 per
share (subject to adjustment for reverse and forward stock splits and the
like) (“Limitation
Period”), except for the conversion pursuant to paragraph 5(a),
Enable Growth shall not convert more than $45,833.70 principal amount of
the Debentures, in the aggregate during such period. So long as
this restriction is in effect, the Equity Conditions shall not be deemed
to have been met by the Company.
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2.
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During
the Limitation Period, Enable hereby agrees that it shall not sell shares
of Common Stock on the Trading Market in an amount greater than 50% of the
daily trading volume for the applicable Trading
Day.
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.6 Obligation to List Additional
Shares. Section 4.11 of the Purchase Agreement shall be
deleted in its entirety and replaced with the following obligation of the
Company:
“The
Company hereby agrees to use best efforts to maintain the listing and quotation
of the Common Stock on a Trading Market, and as soon as reasonably practicable
following the date hereof (but not later than the fifth business day following
the date hereof) to list or quote all of the Underlying Shares, but in no event
less than 1,100,000 shares underlying the Debentures on such Trading Market in
addition to the shares already listed or quoted prior to the date
hereof. The Company further agrees, as soon as reasonably practicable
following the date hereof (but not later than the fifth business day following
the date hereof), to amend the listing application previously filed with the
Trading Market to reallocate 888,888 shares of Common Stock previously allocated
for the payment of interest with the listing on the Trading Market to be
allocated for the payment of principal of the Debentures. The Company further
agrees, if the Company applies to have the Common Stock traded on any other
Trading Market, it will then include in such application all of the Underlying
Shares, and will take such other action as is necessary to cause all of the
Underlying Shares to be listed or quoted on such other Trading Market as
promptly as possible. The Company will then take all action
reasonably necessary to continue the listing and trading of its Common Stock on
a Trading Market and will comply in all respects with the Company’s reporting,
filing and other obligations under the bylaws or rules of the Trading
Market. Notwithstanding the removal hereunder of the Company’s
affirmative obligation to seek Shareholder Approval, the Company acknowledges
and agrees that all conditions, terms and restrictions set forth in the
Transaction Documents that require Shareholder Approval remain in full force and
effect and are not waived by the removal of such
provision. Additionally, the Company acknowledges and agrees that the
failure to obtain Shareholder Approval could result in the Company having to
fulfill its obligations by the payment of cash rather than the issuance of
shares of Common Stock.”
13. Payment-in-Kind of Interest
and Voluntary Conversion Make-Whole Interest Payments. In
addition to any other rights of payment the Company may have under the
Debenture, the Company may, at the Company’s option, accrete interest payments
and Voluntary Conversion Make-Whole Interest Payments to the outstanding
principal amount of the Debenture (the “Accreted Payments”)
which Accreted Payments shall proportionally and equally increase all remaining
Monthly Redemption Amounts; provided, however, any Accreted
Payments shall accrue only ordinary interest of 10% per annum and, upon
conversion or redemption of such Accreted Payments, shall not be subject to any
further make-whole interest payable due pursuant to the Debenture. In
order for the Company to Exercise its right to accrete payments hereunder, as to
any ordinary interest payments, the Company must give at least 20 Trading Days’
prior written notice to the applicable Interest Payment Date to Enable Growth
and as to any Voluntary Conversion Make-Whole Interest Payments, the Company
must have notified Enable Growth prior to a Notice of Conversion being delivered
to the Company that any Voluntary Conversion Make-Whole Interest Payments shall
thereafter be accreted to principal. Any notices to accrete shall be
irrevocable absent 25 Trading Days’ prior notice that such payments shall not
longer be accreted. As to any Accreted Payments relating to ordinary
interest, the Company must include in the applicable notice an amended
Conversion Schedule showing the increase in principal as well as a calculation
of the new Monthly Redemption Amount, which schedule shall be duly certified and
executed by the Company’s Chief Financial Officer. As to any Accreted
Payments relating to a conversion by the Holder thereof, such Conversion
Schedule, duly certified and executed, shall be delivered within 3 Trading Days
of receipt by the Company of the Notice of Conversion. Any failure to
strictly comply with the terms hereunder or the Debenture shall result in an
immediate termination of the Company Right to pay in Accreted
Payments. The Company’s rights under this paragraph 4 are conditioned
upon compliance with all applicable laws, rules and regulations, including but
not limited to the Trust Indenture Act of 1939, and that the shares of Common
Stock underling any Accreted Payments are at all times unrestricted, free
trading and issued without legends of any kind. If, upon the advice
of legal counsel to Enable Growth, the Accreted Payments are believed (the
“Belief”) to
violate any law, rule or regulation, including but not limited to the Trust
Indenture Act of 1939, then Enable shall so advise the Company and within 10
Trading Days thereafter, Enable Growth and the Company shall commence and
complete a discussion (the “Discussion”) to
discuss the Belief. In the event the Discussion does not satisfy
Enable Growth’s Belief, in the sole discretion of Enable Growth, then the rights
of the Company hereunder shall terminate immediately and any Accreted Payments
then outstanding shall be paid in cash to Enable Growth within 10 Trading Days
that demand for such payment is made in writing by Enable Growth. The Company
hereby elects that the interest payment due to Enable Growth on January 1, 2009
shall be treated as an Accreted Payment pursuant to the terms and conditions of
this paragraph 4 resulting in a principal amount outstanding pursuant to the
Debenture immediately following January 1, 2009 to increase by the amount of
such interest payment.
14. Prepayment of
Debenture. During the Limitation Period, the Company may
exercise the Optional Redemption pursuant to Section 6(a) of the Debenture
provided that, during such period only and provided such conditions are met, (a)
the Optional Redemption Amount shall be equal to the sum of (i) 110% of the then
outstanding principal amount of the Debenture, including any Accreted Payments
accreted on the date such payment is made, (ii) accrued but unpaid interest and
(iii) all liquidated damages and other amounts due in respect of the Debentures
and (b) the Optional Redemption Period shall be 3 Trading Days. To
clarify, other than the Accreted Payments, which shall be due and payable, the
Optional Redemption Make-whole Interest Amount shall not be payable if the
Optional Redemption is exercised pursuant to this paragraph
5. Enable Growth hereby agrees that it shall not exercise its
right to convert the Debenture pursuant to Section 4 during the Optional
Redemption Period; provided, however, any Notices
of Conversion delivered prior to such Optional Redemption Period shall be
promptly honored by the Company prior to the applicable Optional Redemption
Date. Any failure to strictly comply with the terms hereunder or
under the Debenture, including the Company’s obligations to duly and timely
honor all Notices of Conversion delivered prior to such 3rd Trading
Day prior to the Optional Redemption Date and obligation to pay the Option
Redemption Amount on the 3rd Trading
Day following the Optional Redemption Notice Date, shall result in the immediate
termination of this paragraph 5 which shall be deemed null and void and no
longer of any force or effect, ab initio.
15. Incurable Events of
Default. Any failure of the Company to strictly comply with
its obligations hereunder shall be deemed an Event of Default without any
opportunity to cure by the Company.
16. Preliminary
Injunction. Within one Trading Day after the date hereof, the Company
shall have withdrawn any and all requests for a preliminary injunction and any
other litigious filings which the Company previously filed against Enable or
Enable Growth. The Company has no intention to, or knowledge of any
facts or circumstances that could lead it to reasonably believe that it will,
undertake any action against Enable or Enable Growth for the foreseeable future
and fully intends to comply in all respects with the terms and conditions of
this Agreement and the Transaction Documents.
17. Representations and
Warranties of the Company. The Company hereby makes the
representations and warranties set forth below to the Holders as of the date of
its execution of this Agreement:
Authorization;
Enforcement. The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by this
Agreement and otherwise to carry out its obligations hereunder and
thereunder. The execution and delivery of this Agreement by the
Company and the consummation by it of the transactions contemplated hereby and
thereby have been duly authorized by all necessary action on the part of the
Company and no further action is required by the Company, the Board of Directors
or the Company’s stockholders in connection therewith other than in connection
with the Required Approvals. This Agreement has been duly executed by
the Company and, when delivered in accordance with the terms hereof and thereof,
will constitute the valid and binding obligation of the Company enforceable
against the Company in accordance with its terms except (i) as limited by
general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law.
No
Conflicts. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby or thereby to which it is a party do not and will not: (i)
conflict with or violate any provision of the Company’s or any Subsidiary’s
certificate or articles of incorporation, bylaws or other organizational or
charter documents, or (ii) conflict with, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, result
in the creation of any Lien upon any of the properties or assets of the Company
or any Subsidiary, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any agreement, credit facility, debt or other instrument (evidencing a Company
or Subsidiary debt or otherwise) or other understanding to which the Company or
any Subsidiary is a party or by which any property or asset of the Company or
any Subsidiary is bound or affected, or (iii) subject to the Required Approvals,
conflict with or result in a violation of any law, rule, regulation, order,
judgment, injunction, decree or other restriction of any court or governmental
authority to which the Company or a Subsidiary is subject (including federal and
state securities laws and regulations), or by which any property or asset of the
Company or a Subsidiary is bound or affected; except in the case of each of
clauses (ii) and (iii), such as could not have or reasonably be expected to
result in a Material Adverse Effect.
Equal
Consideration. No consideration has been offered or paid to
any person to amend or consent to a waiver, modification, forbearance or
otherwise of any provision of any of the Transaction Documents.
Survival and Bring
Down. All of the Company’s representations and warranties
contained in this Agreement shall survive the execution, delivery and acceptance
of this Agreement by the parties hereto. The Company expressly
reaffirms that each of the representations and warranties set forth in the
Purchase Agreement, continues to be true, accurate and complete in all material
respects as of the date hereof (except for any representation and warranty made
as of a certain date, in which case such representation and warranty shall be
true, accurate and complete as of such date), and the Company hereby remake and
incorporate herein by reference each such representation and warranty as though
made on the date of this Agreement.
18. Representations and
Warranties of the Holders. Each Holder hereby makes the
representation and warranty set forth below to the Company as of the date of its
execution of this Agreement. Such Holder represents and warrants that (a) the
execution and delivery of this Agreement by it and the consummation by it of the
transactions contemplated hereby have been duly authorized by all necessary
action on its behalf and (b) this Agreement has been duly executed and delivered
by such Holder and constitutes the valid and binding obligation of such Holder,
enforceable against it in accordance with its terms except (i) as limited by
general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law.
19. Public
Disclosure. On or before 9:30 am (NY time) on the second
business day following the date hereof, the Company shall file a Current Report
on Form 8-K or Form 10-Q, reasonably acceptable to the Holders disclosing the
material terms of the transactions contemplated hereby and attaching this
Agreement as an exhibit thereto. The Company shall consult with the Holders in
issuing any other press releases with respect to the transactions contemplated
hereby.
20. Effect on Transaction
Documents. Except as expressly set forth above, all of the
terms and conditions of the Transaction Documents shall continue in full force
and effect after the execution of this Agreement and shall not be in any way
changed, modified or superseded by the terms set forth herein, including, but
not limited to, any other obligations the Company may have to the Holders under
the Transaction Documents. Notwithstanding the foregoing, this Agreement
shall be deemed for all purposes as an amendment to any Transaction Document as
required to serve the purposes hereof, and in the event of any conflict between
the terms and provisions of any other Transaction Document, on the one hand, and
the terms and provisions of this Agreement, on the other hand, the terms and
provisions of this Agreement shall prevail.
21. Amendments and
Waivers. The provisions of this Agreement, including the provisions of
this sentence, may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be given, unless the
same shall be in writing and signed by the Company and the Holders.
22. Notices. Any and all
notices or other communications or deliveries required or permitted to be
provided hereunder shall be delivered as set forth in the Purchase
Agreements.
23. Successors and
Assigns. This Agreement shall inure to the benefit of and be binding upon
the successors and permitted assigns of each of the parties; provided, however, that no
party may assign this Agreement or the obligations and rights of such party
hereunder without the prior written consent of the other parties
hereto.
24. Execution. This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, 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 or “.pdf” signature page were an original thereof.
25. Fees and
Expenses. Except as expressly set forth herein, each party
shall pay the fees and expenses of its advisers, counsel, accountants and other
experts, if any, and all other expenses incurred by such party incident to the
negotiation, preparation, execution, delivery and performance of this
Agreement.
26. Governing
Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be determined pursuant to
the Governing Law provision of the Purchase Agreements.
27. Survival. The
representations and warranties contained herein shall survive the Closing and
the delivery of the Securities for the applicable statute of
limitations.
28. Severability. If any
term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their commercially reasonable
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
29. Construction. The
parties agree that each of them and/or their respective counsel has reviewed and
had an opportunity to revise this Agreement and, therefore, the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
any amendments hereto. In addition, each and every reference to share prices in
this Agreement shall be other subject to adjustment for reverse and forward
stock splits, stock dividends, stock combinations and similar transactions of
the Common Stock that occur after the date of this Agreement.
30. Entire
Agreement. The Agreement, together with the exhibits and
schedules thereto, contain the entire understanding of the parties with respect
to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and
schedules.
31. Headings. The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof
32. Independent Nature of
Holders’ Obligations and Rights. The obligations of each
Holder hereunder are several and not joint with the obligations of any other
Holders hereunder, and no Holder shall be responsible in any way for the
performance of the obligations of any other Holder hereunder. Nothing contained
herein or in any other agreement or document delivered at any closing, and no
action taken by any Holder pursuant hereto, shall be deemed to constitute the
Holders as a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Holders are in any way acting in
concert with respect to such obligations or the transactions contemplated by
this Agreement. Each Holder shall be entitled to protect and enforce its rights,
including without limitation the rights arising out of this Agreement, and it
shall not be necessary for any other Holder to be joined as an additional party
in any proceeding for such purpose.
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment Agreement to be
duly executed by their respective authorized signatories as of the date first
indicated above.
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HYPERDYNAMICS
CORPORATION
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By:
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/s/
Xxxx Xxxxx
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Name:
Xxxx Xxxxx
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Title:
President
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[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGE FOR HOLDER FOLLOWS]
[HOLDER’S
SIGNATURE PAGE TO HDY AMENDMENT AGREEMENT]
IN
WITNESS WHEREOF, the undersigned have caused this Amendment Agreement to be duly
executed by their respective authorized signatories as of the date first
indicated above.
Name of
Holder: Enable Growth
Partners LP
Signature of Authorized Signatory of
Holder: /s/ Xxxxxxx X’Xxxx
Name of
Authorized Signatory: Xxxxxxx X’Xxxx
Title of
Authorized Signatory: President & CIO
DTC
Instructions:
[SIGNATURE
PAGES CONTINUE]
[HOLDER’S
SIGNATURE PAGE TO HDY AMENDMENT AGREEMENT]
IN
WITNESS WHEREOF, the undersigned have caused this Amendment Agreement to be duly
executed by their respective authorized signatories as of the date first
indicated above.
Name of
Holder: Enable
Opportunity Partners LP
Signature of Authorized Signatory of
Holder: /s/ Xxxxxxx X’Xxxx
Name of
Authorized Signatory: Xxxxxxx X’Xxxx
Title of
Authorized Signatory: President & CIO
