Exhibit 10.1

 

SUBSCRIPTION AGREEMENT

 

Hyperdynamics Corporation

12012 Wickchester Lane, Suite 475

Houston, TX 77079

 

This Subscription Agreement (this “Agreement”) has been executed by the
subscriber set forth on the signature page hereof (the “Subscriber”) in
connection with the private placement offering (the “Offering”) of a minimum of
$500,000 (the “Minimum Offering”) and a maximum of $2,000,000 of Units of
securities (the “Units”), plus up to an additional $1,000,000 of Units to cover
over-subscriptions (the “Maximum Offering”), issued by Hyperdynamics
Corporation, a Delaware corporation (the “Company”), at a purchase price of
$1,000 per Unit (the “Purchase Price”).  Each Unit consists of (i) one share of
the Company’s Series A Convertible Preferred Stock, par value $0.001 per share,
with a Stated Value of $1,040 per share (the “Series A Preferred Stock”), and
(ii) a warrant, substantially in the form of Exhibit A hereto (the “Warrant”),
representing the right to purchase two hundred twenty-three (223) shares of the
Company’s common stock, par value $0.001 per share (“Common Stock”), exercisable
from issuance until two (2) years after the initial Closing of the Offering at
an exercise price of $3.50 per share.  Each share of Series A Preferred Stock is
convertible into shares of Common Stock (the “Conversion Shares”) at a
conversion price and on the other terms set forth in the Certificate of
Designations (as defined below).  The certificate of designations setting forth
the resolution of the Board of Directors of the Company establishing the
Series A Preferred Stock and stating the number of authorized shares thereof and
the voting powers, designations, preferences, limitations, restrictions and
relative rights of the Series A Preferred Stock (the “Certificate of
Designations”) shall be substantially in the form of Exhibit B hereto.

 

Each Subscriber who purchases Units in the Offering shall have an Option (as
defined below) to purchase additional Units on the terms described in Section 22
below.  The terms Unit, Share, Conversion Share, Warrant and Warrant Share
include all such securities purchased by a Subscriber pursuant to the Option.

 

The minimum subscription is $100,000 (100 Units).  The Company may accept
subscriptions for less than $100,000 in its sole discretion.

 

The Units being subscribed for pursuant to this Agreement have not been
registered under the Securities Act of 1933, as amended (the “Securities Act”). 
The Offering is being made on a reasonable best efforts basis to “accredited
investors,” as defined in Regulation D under the Securities Act in reliance upon
the exemption from securities registration afforded by Section 4(a)(2) of the
Securities Act and Rule 506 of Regulation D.. The Subscriber acknowledges
receipt of a copy of the Registration Rights Agreement, substantially in the
form of Exhibit C hereto (the “Registration Rights Agreement”).

 

Each closing of the Offering (including the Option Closing (as defined below))
(a “Closing,” and the date on which such Closing occurs hereinafter referred to
as the “Closing Date”) shall take place at the offices of CKR Law LLP, at 1330
Avenue of the Americas, New York, New York 10019 (or such other place as is
mutually agreed to by the Company and the Placement Agent (as defined below)).

 

The initial Closing will not occur unless:

 

a.              funds deposited in escrow as described in Section 2(b) below
equal at least the Minimum Offering, and corresponding documentation with
respect to such amounts has been delivered by the Subscriber and other
“Subscribers” under Subscription Agreements of like tenor with this Agreement
(collectively, the “Subscribers”) as described in Section 2(a) below; and

 

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b.              the other conditions set forth in Sections 7 and 8 shall have
been satisfied.

 

Thereafter, the Company may conduct one or more additional Closings for the sale
of the Units up to the Maximum Offering amount until the termination of the
Offering, and then for the sale of Units upon any exercise of the Option. 
Unless terminated earlier by the Company, the Offering shall continue until
March 24, 2017, which date may be extended for up to 14 additional days, by the
Company and the Placement Agent, without notice to any Subscriber, past, current
or prospective (such date as so extended the “Offering Termination Date”).

 

Any written disclosure schedules or other written information documents
delivered to the Subscriber prior to Subscriber’s execution of this Agreement,
and any such document delivered to the Subscriber after Subscriber’s execution
of this Agreement and prior to the Closing of the Subscriber’s subscription
hereunder, are collectively referred to as the “Disclosure Materials.”

 

“Business Day” means a day, other than a Saturday or Sunday, on which banks in
New York City are open for the general transaction of business.

 

1.              Subscription.  The undersigned Subscriber hereby subscribes to
purchase the number of Units set forth on the Omnibus Signature Page attached
hereto, for the aggregate Purchase Price as set forth on such Omnibus Signature
Page, subject to the terms and conditions of this Agreement and on the basis of
the representations, warranties, covenants and agreements contained herein.

 

2.              Subscription Procedure.  To complete a subscription for the
Units, the Subscriber must fully comply with the subscription procedure provided
in this Section on or before the Closing Date for Subscriber’s Units.

 

a.              Subscription Documents.  On or before the Closing Date, the
Subscriber shall review, complete and execute the Omnibus Signature Page to this
Agreement, the Investor Profile, Anti-Money Laundering Form and Accredited
Investor Certification, each attached hereto following the Omnibus Signature
Page (collectively, the “Subscription Documents”), and deliver the Subscription
Documents to the Company’s attorneys, CKR Law LLP (“CKR”), at the address set
forth under the caption “How to subscribe for Units in the private offering of
Hyperdynamics Corporation” below.  Executed documents may be delivered to CKR by
facsimile or electronic mail (e-mail), if the Subscriber delivers the original
copies of the documents to CKR as soon as practicable thereafter.

 

b.              Purchase Price.  Simultaneously with the delivery of the
Subscription Documents to CKR as provided herein, and in any event on or prior
to the Closing Date, the Subscriber shall deliver to Delaware Trust Company, in
its capacity as escrow agent (the “Escrow Agent”), under an escrow agreement
among the Company, the Placement Agents (as defined below and the Escrow Agent
(the “Escrow Agreement”), the full Purchase Price by certified or other bank
check or by wire transfer of immediately available funds, pursuant to the
instructions set forth under the caption “How to subscribe for Units in the
private offering of Hyperdynamics Corporation” below. Such funds will be held
for the Subscriber’s benefit and will be returned promptly, without interest or
offset, if this Subscription Agreement is not accepted by the Company or the
Offering is terminated pursuant to its terms by the Company prior to the
Closing.

 

c.               Company Discretion.  The Subscriber understands and agrees that
the Company in its sole discretion reserves the right to accept or reject this
or any other subscription for Units, in whole or in part, notwithstanding prior
receipt by the Subscriber of notice of acceptance of

 

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this subscription.  The Company shall have no obligation hereunder until the
Company shall execute and deliver to the Subscriber an executed copy of this
Agreement.  If this subscription is rejected in whole, or the Offering is
terminated, all funds received from the Subscriber will be returned without
interest or offset, and this Agreement shall thereafter be of no further force
or effect.  If this subscription is rejected in part, the funds for the rejected
portion of this subscription will be returned without interest or offset, and
this Agreement will continue in full force and effect to the extent this
subscription was accepted.

 

3.                                      Placement Agent.  Katalyst Securities
LLC, a broker-dealer licensed with FINRA, has been engaged on an exclusive basis
as placement agent (the “Placement Agent”) for the Offering on a reasonable best
efforts basis.  The Placement Agent and its sub-agents will be paid at each
Closing from the proceeds in the Escrow Account, a cash commission of 9% of the
gross Purchase Price paid by Subscribers in the Offering (including for Units
acquired upon exercise of the Option) and will receive warrants to purchase a
number of shares of Common Stock equal to 7% of the number of Conversion Shares
initially issuable upon conversion of the shares of Series A Preferred Stock
contained in the Units sold in the Offering to Subscriber (including for Units
acquired upon exercise of the Option), with a term of two (2) years after the
initial Closing of the Offering, and at an exercise price of $3.00 per share
(the “Placement Agent Warrants”).  Any sub-agent of the Placement Agent that
introduces investors to the Offering will be entitled to share in the cash fees
and Placement Agent Warrants attributable to those investors as described above,
pursuant to the terms of an executed sub-agent agreement).  The Company will
also pay certain expenses of the Placement Agent.

 

4.                                      Representations and Warranties of the
Company.  The Company hereby represents and warrants to the Subscriber, as of
the date hereof and on each Closing Date after giving effect to the Merger
(unless otherwise specified), the following:

 

a.              Organization and Qualification.  The Company and each of its
subsidiaries is a corporation or other business entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
formation, and has the requisite corporate power to own its properties and to
carry on its business as now being conducted.  The Company and each of its
subsidiaries is duly qualified as a foreign corporation to do business and is in
good standing in every jurisdiction in which the nature of the business
conducted by it makes such qualification necessary, except to the extent that
the failure to be so qualified or be in good standing would not have a material
adverse effect on the assets, business, financial condition or results of
operations of the Company and its subsidiaries taken as a whole (a “Material
Adverse Effect”).

 

b.              Authorization, Enforcement, Compliance with Other Instruments. 
(i) The Company has the requisite corporate power and authority to enter into
and perform its obligations under this Agreement, the Series A Preferred Stock,
the Warrants, the Registration Rights Agreement, the Escrow Agreement and each
of the other agreements and documents that are exhibits hereto or thereto or are
contemplated hereby or thereby or necessary or desirable to effect the
transactions contemplated hereby or thereby (the “Transaction Documents”) and to
issue the shares of Series A Preferred Stock contained in the Units (the
“Shares”) and the Warrants, and Conversion Shares and the shares of Common Stock
issuable upon exercise of the Warrants (the “Warrant Shares”), in accordance
with the terms hereof and thereof, (ii) the execution and delivery by the
Company of each of the Transaction Documents and the consummation by it of the
transactions contemplated hereby and thereby, including, without limitation, the
issuance of the Shares, the Conversion Shares, the Warrants and the Warrant
Shares, have been, or will be at the time of execution of such Transaction
Document, duly

 

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authorized by the Company’s Board of Directors, and no further consent or
authorization is, or will be at the time of execution of such Transaction
Document, required by the Company, its respective Board of Directors or its
stockholders, (iii) each of the Transaction Documents will be duly executed and
delivered by the Company, (iv) the Transaction Documents when executed and
delivered by the Company and each other party thereto will constitute the valid
and binding obligations of the Company enforceable against the Company in
accordance with their terms, except as such enforceability may be limited by
general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors’ rights and remedies.

 

c.               Capitalization.  The authorized capital stock of the Company
consists of 87,000,000 shares of Common Stock and 20,000,000 shares of preferred
stock, par value of $0.001 per share (the “Preferred Stock”).  As of the date
hereof, the Company has 21,801,536 shares of Common Stock and no shares of
Preferred Stock issued and outstanding. All of the outstanding shares of Common
Stock of the stock of each of the Company’s subsidiaries have been duly
authorized, validly issued and are fully paid and nonassessable.  Except as set
forth in the reports, schedules, forms, statements and other documents filed by
the Company with the Securities and Exchange Commission (the “SEC”) on or prior
to the date hereof and on or prior to the applicable Closing Date (the “SEC
Reports”), no shares of capital stock of the Company or any of its subsidiaries
will be subject to preemptive rights or any other similar rights or any liens or
encumbrances suffered or permitted by the Company; (ii) except as set forth in
the SEC Reports there will be no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Company or any of its subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its subsidiaries is or may become
bound to issue additional shares of capital stock of the Company or any of its
subsidiaries, (iii) there will be no outstanding debt securities of the Company
or any of its subsidiaries other than indebtedness as set forth in the SEC
Reports, (iv) other than pursuant to the Registration Rights Agreement or as set
forth in the SEC Reports, there will be no agreements or arrangements under
which the Company or any of its subsidiaries is obligated to register the sale
of any of their securities under the Securities Act, (v) there will be no
outstanding registration statements of the Company or any of its subsidiaries,
and there will be no outstanding comment letters from the SEC or any other
regulatory agency; (vi) except as provided in this Agreement or as set forth in
the SEC Reports, there will be no securities or instruments of the Company or
any of its subsidiaries containing anti-dilution or similar provisions,
including the right to adjust the exercise, exchange or reset price under such
securities, that will be triggered by the issuance of the Units as described in
this Agreement; and (vii) except as provided in this Agreement, no co-sale
right, right of first refusal or other similar right will exist with respect to
the Units (or will exist with respect to the Conversion Shares or the Warrant
Shares) or the issuance and sale thereof. Upon request, the Company will make
available to the Subscriber true and correct copies of the Company’s Certificate
of Incorporation, as amended and in effect on the date hereof (the “Certificate
of Incorporation”), and the Company’s By-laws, as amended and in effect on the
date hereof (the “By-laws”), and the terms of all securities exercisable for
Common Stock and the material rights of the holders thereof in respect thereto
other than stock options issued to officers, directors, employees and
consultants.

 

d.              Issuance of Securities.  The Shares and the Warrants are duly
authorized and, upon issuance in accordance with the terms hereof, shall be duly
issued, fully paid and nonassessable, and are free and clear of all taxes, liens
and charges with respect to the issue thereof.  Upon issuance of the Conversion
Shares upon conversion of the Shares, in accordance with the

 

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terms of the Certificate of Designations, the Conversion Shares will be duly
issued, fully paid and nonassessable, and will be free from all taxes, liens and
charges with respect to the issue thereof. Upon issuance of the Warrant Shares
upon exercise of the Warrants, against payment therefor and in accordance with
the terms of the Warrants, the Warrant Shares will be duly issued, fully paid
and nonassessable, and will be free from all taxes, liens and charges with
respect to the issue thereof.

 

e.               No Conflicts.  The execution, delivery and performance of each
of the Transaction Documents by the Company, and the consummation by the Company
of the transactions contemplated hereby and thereby will not (i) result in a
violation of the Certificate of Incorporation or the By-laws (or equivalent
constitutive document) of the Company or any of its subsidiaries or (ii) violate
or conflict with, or result in a breach of any provision of, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
the Company or any subsidiary is a party, except for those which would not
reasonably be expected to have a Material Adverse Effect, or (iii) result in a
violation of any law, rule, regulation, order, judgment or decree (including
U.S. federal and state securities laws and regulations) applicable to the
Company or any subsidiary or by which any property or asset of the Company or
any subsidiary is bound or affected except for those which could not reasonably
be expected to have a Material Adverse Effect.  Except those which could not
reasonably be expected to have a Material Adverse Effect, neither the Company
nor any subsidiary is in violation of any term of or in default under its
constitutive documents.  Except those which could not reasonably be expected to
have a Material Adverse Effect, neither the Company nor any subsidiary is in
violation of any term of or in default under any material contract, agreement,
mortgage, indebtedness, indenture, instrument, judgment, decree or order or any
statute, rule or regulation applicable to the Company or any subsidiary.  The
business of the Company and its subsidiaries is not being conducted, and shall
not be conducted in violation of any law, ordinance, or regulation of any
governmental entity, except for any violation which could not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect. 
Except as specifically contemplated by this Agreement and as required under the
Securities Act and any applicable state securities laws, neither the Company nor
any of its subsidiaries is required to obtain any consent, authorization or
order of, or make any filing or registration with, any court or governmental
agency in order for it to execute, deliver or perform any of its obligations
under or contemplated by this Agreement or the other Transaction Documents in
accordance with the terms hereof or thereof.  Neither the execution and delivery
by the Company of the Transaction Documents, nor the consummation by the Company
of the transactions contemplated hereby or thereby, will require any notice,
consent or waiver under any contract or instrument to which the Company or any
subsidiary is a party or by which the Company or any subsidiary is bound or to
which any of their assets is subject, except for any notice, consent or waiver
the absence of which would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect and would not adversely affect the
consummation of the transactions contemplated hereby or thereby.  All consents,
authorizations, orders, filings and registrations which the Company or any of
its subsidiaries is required to obtain pursuant to the preceding two sentences
have been or will be obtained or effected on or prior to the Closing.

 

f.                Absence of Litigation.  Except as set forth in the SEC
Reports, there is no action, suit, claim, inquiry, notice of violation,
proceeding (including any partial proceeding such as a deposition) or
investigation before or by any court, public board, governmental or
administrative agency, self-regulatory organization, arbitrator, regulatory
authority, stock

 

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market, stock exchange or trading facility (an “Action”) now pending or, to the
knowledge of the Company, threatened, against or affecting the Company or any of
its subsidiaries, wherein an unfavorable decision, ruling or finding would
(i) adversely affect the validity or enforceability of, or the authority or
ability of the Company to perform its obligations under, this Agreement or any
of the other Transaction Documents, or (ii) have a Material Adverse Effect.

 

g.               Acknowledgment Regarding Subscriber’s Purchase of the Units. 
The Company acknowledges and agrees that each Subscriber is acting solely in the
capacity of an arm’s length purchaser with respect to the Transaction Documents
and the transactions contemplated hereby and thereby.  The Company further
acknowledges that each Subscriber is not acting as a financial advisor or
fiduciary of the Company (or in any similar capacity) with respect to the
Transaction Documents and the transactions contemplated hereby and thereby and
any advice given by such Subscriber or any of their respective representatives
or agents in connection with the Transaction Documents and the transactions
contemplated hereby and thereby is merely incidental to such Subscriber’s
purchase of the Units (and the Conversion Shares and the Warrant Shares).

 

h.              No General Solicitation.  Neither the Company, nor any of its
“affiliates” As defined in Rule 144 under the Securities Act), nor, to the
knowledge of the Company, any person acting on its or their behalf, has engaged
in any form of general solicitation or general advertising (within the meaning
of Regulation D) in connection with the offer or sale of the Units.

 

i.                  No Integrated Offering.  Neither the Company, nor any of its
affiliates, nor to the knowledge of the Company, any person acting on its or
their behalf has, directly or indirectly, made any offers or sales of any
security or solicited any offers to buy any security, under circumstances that
would require registration of the Units or the securities contained therein
under the Securities Act or cause this offering of the Units or the securities
contained therein to be integrated with prior offerings by the Company for
purposes of the Securities Act.

 

j.                 Employee Relations.  Neither Company nor any subsidiary is
involved in any labor dispute nor, to the knowledge of the Company, is any such
dispute threatened.  Neither Company nor any subsidiary is party to any
collective bargaining agreement.  The Company’s and/or its subsidiaries’
employees are not members of any union, and the Company believes that its and
its subsidiaries’ relationship with their respective employees is good.

 

k.              Permits. The Company and its subsidiaries have all
authorizations, approvals, clearances, licenses, permits, certificates or
exemptions (including manufacturing approvals and authorizations, pricing and
reimbursement approvals, labeling approvals, registration notifications or their
foreign equivalent) issued by any regulatory authority or governmental agency
(collectively, “Permits”) required to conduct their respective businesses as
currently conducted except to the extent that the failure to have such Permits
would not have a Material Adverse Effect.  Except as set forth in the SEC
Reports, the Company or its subsidiaries have fulfilled and performed in all
material respects their obligations under each Permit, and, as of the date
hereof, to the knowledge of the Company, no event has occurred or condition or
state of facts exists which would constitute a breach or default or would cause
revocation or termination of any such Permit except to the extent that such
breach, default, revocation or termination would not have a Material Adverse
Effect.

 

l.                  Title.  Except as set forth in the SEC Reports, each of the
Company and its subsidiaries has good and marketable title to all of its real
and personal property and assets, free and clear of

 

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any material restriction, mortgage, deed of trust, pledge, lien, security
interest or other charge, claim or encumbrance which would have a Material
Adverse Effect.  Except as set forth in the SEC Reports, with respect to
properties and assets it leases, each of the Company and its subsidiaries is in
material compliance with such leases and holds a valid leasehold interest free
of any liens, claims or encumbrances which would have a Material Adverse Effect.

 

l.                  Financial Statements.  The financial statements of the
Company included in the SEC Reports comply in all material respects with
applicable accounting requirements and the rules and regulations of the SEC with
respect thereto as in effect at the time of filing.  Such financial statements
have been prepared in accordance with GAAP applied on a consistent basis during
the periods involved, except as may be otherwise specified in such financial
statements or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP, and fairly present in all
material respects the financial position of the Company and its consolidated
subsidiaries taken as a whole as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, year-end audit adjustments. The pro forma
financial information and the related notes, if any, included in the SEC Reports
have been properly compiled and prepared in accordance with the applicable
requirements of the Securities Act and the regulations promulgated thereunder
and fairly present in all material respects the information shown therein, and
the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions and
circumstances referred to therein.

 

m.          SEC Reports. The Company has filed all reports, schedules, forms,
statements and other documents required to be filed by the Company under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), including
pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date
hereof (or such shorter period as the Company was required by law or regulation
to file such material). The SEC Reports taken as a whole do not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein (in the case of SEC Reports) or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.

 

n.              Rights of First Refusal.  Except as set forth in Sections 22 and
23 below, the Company is not obligated to offer the securities offered hereunder
on a right of first refusal basis or otherwise to any third parties including,
but not limited to, current or former stockholders of the Company, underwriters,
brokers, agents or other third parties.

 

o.              Reliance.  The Company acknowledges that the Subscriber is
relying on the representations and warranties made by the Company hereunder and
that such representations and warranties are a material inducement to the
Subscriber purchasing the Units.  The Company further acknowledges that without
such representations and warranties of the Company made hereunder, the
Subscribers would not enter into this Agreement.

 

p.              Material Changes.  Except as set forth in Schedule 4.p. attached
hereto, since the respective date of the latest balance sheet included in the
financial statements contained within the SEC Reports, except as specifically
disclosed herein or in the SEC Reports, (i) there have been no events,
occurrences or developments that have had or would reasonably be expected to
have a Material Adverse Effect with respect to the Company, (ii) there have not
been any changes in the authorized capital, assets, financial condition,
business or operations of the Company from that reflected in the financial
statements contained within the SEC Reports except changes in the ordinary
course of business which have not been, either individually or in the

 

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aggregate, materially adverse to the business, properties, financial condition
or results of operations of the Company, (iii) neither the Company or any
subsidiary has incurred any material liabilities (contingent or otherwise) other
than (A) trade payables, accrued expenses and other liabilities incurred in the
ordinary course of business consistent with past practice and (B) liabilities
not required to be reflected in the financial statements of the Company, as
applicable, pursuant to GAAP or to be disclosed in the SEC Reports, (iv) neither
the Company or any subsidiary has materially altered its method of accounting or
the manner in which it keeps its accounting books and records, and (v) neither
the Company or any subsidiary has declared or made any dividend or distribution
of cash or other property to its stockholders or purchased, redeemed or made any
agreements to purchase or redeem any shares of its capital stock (other than in
connection with repurchases of unvested stock issued to employees of the
Company).

 

q.              Brokers’ Fees.  The Company does not have any liability or
obligation to pay any fees or commissions to any broker, finder or agent with
respect to the transactions contemplated by this Agreement, except for the
payment of fees to the Placement Agent as described above.

 

r.                 Off-Balance Sheet Arrangements.  There is no transaction,
arrangement, or other relationship between the Company or any subsidiary and an
unconsolidated or other off-balance sheet entity that is required to be
disclosed by the Company in its SEC Reports and is not so disclosed or that
otherwise would have a Material Adverse Effect.

 

s.                Investment Company.  The Company is not required to be
registered as, and is not an affiliate of, and immediately following the Closing
will not be required to register as, an “investment company” within the meaning
of the Investment Company Act of 1940, as amended.

 

t.                 Reliance.  The Company acknowledges that the Purchaser is
relying on the representations and warranties made by the Company hereunder and
that such representations and warranties are a material inducement to the
Purchaser purchasing the Shares.  The Company further acknowledges that without
such representations and warranties of the Company made hereunder, the Purchaser
would not enter into this Agreement.

 

5.                                      Representations, Warranties and
Agreements of the Subscriber.  The Subscriber represents and warrants to, and
agrees with,  the Company the following:

 

a.              The Subscriber, its advisers, if any, and its designated
representatives, if any, have the knowledge and experience in financial and
business matters necessary to evaluate the merits and risks of its prospective
investment in the Company, and have carefully reviewed and understand the risks
of, and other considerations relating to, the purchase of Units and the tax
consequences of the investment, and have the ability to bear the economic risks
of the investment.

 

b.              The Subscriber is acquiring the Units, and upon conversion of
the Shares, the Conversion Shares, and upon exercise of the Warrants, the
Warrant Shares, for investment for its own account and not with the view to, or
for resale in connection with, any distribution thereof.  The Subscriber
understands and acknowledges that the Offering and sale of the Units, the Shares
and the Warrants have not been, and the Conversion Shares and the Warrant Shares
will not be, registered under the Securities Act or any state securities laws,
by reason of a specific exemption from the registration provisions of the
Securities Act and applicable state securities laws, which depends upon, among
other things, the bona fide nature of the investment intent as expressed
herein.  The Subscriber further represents that it does not have

 

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any contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participation to any third person with respect to any of the
Units, the Shares, the Conversion Shares, the Warrants or the Warrant Shares. 
The Subscriber understands and acknowledges that the offering of the Units
pursuant to this Agreement will not be registered under the Securities Act nor
under the state securities laws on the ground that the sale provided for in this
Agreement and the issuance of securities hereunder is exempt from the
registration requirements of the Securities Act and any applicable state
securities laws.

 

c.               The Subscriber is an “accredited investor” as defined in
Rule 501 of Regulation D as promulgated by the SEC under the Securities Act, for
the reason(s) specified on the Accredited Investor Certification attached hereto
as completed by Subscriber, and Subscriber shall submit to the Company such
further assurances of such status as may be reasonably requested by the Company.
The Subscriber further acknowledges and understands that it is required to be an
“accredited investor” at the time it exercises the Warrants.  The Subscriber
resides in the jurisdiction set forth on the Subscriber’s Omnibus Signature
Page affixed hereto.  The Purchaser has not taken any of the actions set forth
in, and is not subject to, the disqualification provisions of Rule 506(d)(1) of
the Securities Act.

 

d.              The Subscriber (i) if a natural person, represents that he or
she is the greater of (A) 21 years of age or (B) the age of legal majority in
his or her jurisdiction of residence, and has full power and authority to
execute and deliver this Agreement and all other related agreements or
certificates and to carry out the provisions hereof and thereof; (ii) if a
corporation, partnership, or limited liability company or partnership, or
association, joint stock company, trust, unincorporated organization or other
entity, represents that such entity was not formed for the specific purpose of
acquiring the Units, such entity is duly organized, validly existing and in good
standing under the laws of the state or jurisdiction of its organization, the
consummation of the transactions contemplated hereby is authorized by, and will
not result in a violation of state law or its charter or other organizational
documents, such entity has full power and authority to execute and deliver this
Agreement and all other related agreements or certificates and to carry out the
provisions hereof and thereof and to purchase and hold the Units, the execution
and delivery of this Agreement has been duly authorized by all necessary action,
this Agreement has been duly executed and delivered on behalf of such entity and
is a legal, valid and binding obligation of such entity; or (iii) if executing
this Agreement in a representative or fiduciary capacity, represents that it has
full power and authority to execute and deliver this Agreement in such capacity
and on behalf of the subscribing individual, ward, partnership, trust, estate,
corporation, or limited liability company or partnership, or other entity for
whom the Subscriber is executing this Agreement, and such individual,
partnership, ward, trust, estate, corporation, or limited liability company or
partnership, or other entity has full right and power to perform pursuant to
this Agreement and make an investment in the Company, and represents that this
Agreement constitutes a legal, valid and binding obligation of such entity.  The
execution and delivery of this Agreement will not violate or be in conflict with
any order, judgment, injunction, agreement or controlling document to which the
Subscriber is a party or by which it is bound.

 

e.               The Subscriber understands that the Units are being offered and
sold to it in reliance on specific exemptions from the registration requirements
of United States federal and state securities laws and that the Company is
relying in part upon the truth and accuracy of, and such Subscriber’s compliance
with, the representations, warranties, agreements, acknowledgments and
understandings of such Subscriber set forth herein in order to determine the
availability of such exemptions and the eligibility of such Subscriber to
acquire such securities.  The Subscriber further acknowledges and understands
that the Company is

 

9

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relying on the representations and warranties made by the Subscriber hereunder
and that such representations and warranties are a material inducement to the
Company to sell the Units to the Subscriber.  The Subscriber further
acknowledges that without such representations and warranties of the Subscriber
made hereunder, the Company would not enter into this Agreement with the
Subscriber.

 

f.                The Subscriber understands that no public market now exists,
and there never will be a public market for, the Units or the Warrants, that
only a limited public market for the Company’s Common Stock exists and that
there can be no assurance that an active public market for the Common Stock will
exist or continue to exist.

 

g.               The Subscriber, its advisers, if any, and its designated
representatives, if any, have received and reviewed information about the
Company, including all Disclosure Materials, and have had an opportunity to
discuss the Company’s business, management and financial affairs with the
Company’s management.  The Subscriber understands that such discussions, as well
as any Disclosure Material provided by the Company, were intended to describe
the aspects of the Company’s business and prospects which the Company believes
to be material, but were not necessarily a thorough or exhaustive description,
and except as expressly set forth in this Agreement, the Company makes no
representation or warranty with respect to the completeness of such information
and makes no representation or warranty of any kind with respect to any
information provided by any entity other than the Company.  Some of such
information may include projections as to the future performance of the Company,
which projections may not be realized, may be based on assumptions which may not
be correct and may be subject to numerous factors beyond the Company’s control. 
Additionally, the Subscriber understands and represents that it is purchasing
the Units notwithstanding the fact that the Company may disclose in the future
certain material information the Subscriber has not received, including (without
limitation) financial statements of the Company a for the current or prior
fiscal periods, and any subsequent period financial statements that will be
filed with the Securities and Exchange Commission, that it is not relying on any
such information in connection with its purchase of the Units and that it waives
any right of action with respect to the nondisclosure to it prior to its
purchase of the Units of any such information.  Each Subscriber has sought such
accounting, legal and tax advice as it has considered necessary to make an
informed investment decision with respect to its acquisition of the Units.

 

h.              The Subscriber acknowledges that the Company is not acting as a
financial advisor or fiduciary of the Subscriber (or in any similar capacity)
with respect to the Transaction Documents and the transactions contemplated
hereby and thereby and no investment advice has been given by the Company or any
of its representatives or agents in connection with the Transaction Documents
and the transactions contemplated hereby and thereby.  The Subscriber further
represents to the Company that the Subscriber’s decision to enter into the
Transaction Documents has been based solely on the independent evaluation by the
Subscriber and its representatives.

 

i.                  As of the Closing, all actions on the part of Subscriber,
and its officers, directors and partners, if applicable, necessary for the
authorization, execution and delivery of this Agreement and the Registration
Rights Agreement and the performance of all obligations of the Subscriber
hereunder and thereunder shall have been taken, and this Agreement and the
Registration Rights Agreement, assuming due execution by the parties hereto and
thereto, constitute valid and legally binding obligations of the Subscriber,
enforceable in accordance with their respective terms, subject to: (i) judicial
principles limiting the availability of specific

 

10

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performance, injunctive relief, and other equitable remedies and
(ii) bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect generally relating to or affecting creditors’ rights.

 

j.                 Subscriber represents that neither it nor, to its knowledge,
any person or entity controlling, controlled by or under common control with it,
nor any person having a beneficial interest in it, nor any person on whose
behalf the Subscriber is acting: (i) is a person listed in the Annex to
Executive Order No. 13224 (2001) issued by the President of the United States
(Executive Order Blocking Property and Prohibiting Transactions with Persons Who
Commit, Threaten to Commit, or Support Terrorism); (ii) is named on the List of
Specially Designated Nationals and Blocked Persons maintained by the U.S. Office
of Foreign Assets Control; (iii) is a non-U.S. shell bank or is providing
banking services indirectly to a non-U.S. shell bank; (iv) is a senior non-U.S.
political figure or an immediate family member or close associate of such
figure; or (v) is otherwise prohibited from investing in the Company pursuant to
applicable U.S. anti-money laundering, anti-terrorist and asset control laws,
regulations, rules or orders (categories (i) through (v), each a “Prohibited
Subscriber”). The Subscriber agrees to provide the Company, promptly upon
request, all information that the Company reasonably deems necessary or
appropriate to comply with applicable U.S. anti-money laundering, anti-terrorist
and asset control laws, regulations, rules and orders. The Subscriber consents
to the disclosure to U.S. regulators and law enforcement authorities by the
Company and its affiliates and agents of such information about the Subscriber
as the Company reasonably deems necessary or appropriate to comply with
applicable U.S. anti-money laundering, anti-terrorist and asset control laws,
regulations, rules and orders. If the Subscriber is a financial institution that
is subject to the USA Patriot Act, the Subscriber represents that it has met all
of its obligations under the USA Patriot Act. The Subscriber acknowledges that
if, following its investment in the Company, the Company reasonably believes
that the Subscriber is a Prohibited Subscriber or is otherwise engaged in
suspicious activity or refuses to promptly provide information that the Company
requests, the Company has the right or may be obligated to prohibit additional
investments, segregate the assets constituting the investment in accordance with
applicable regulations or immediately require the Subscriber to transfer the
Shares, the Conversion Shares, the Warrants and/or the Warrant Shares.  The
Subscriber further acknowledges that the Subscriber will have no claim against
the Company or any of its affiliates or agents for any form of damages as a
result of any of the foregoing actions.

 

If the Subscriber is affiliated with a non-U.S. banking institution (a “Foreign
Bank”), or if the Subscriber receives deposits from, makes payments on behalf
of, or handles other financial transactions related to a Foreign Bank, the
Subscriber represents and warrants to the Company that: (1) the Foreign Bank has
a fixed address, other than solely an electronic address, in a country in which
the Foreign Bank is authorized to conduct banking activities; (2) the Foreign
Bank maintains operating records related to its banking activities; (3) the
Foreign Bank is subject to inspection by the banking authority that licensed the
Foreign Bank to conduct banking activities; and (4) the Foreign Bank does not
provide banking services to any other Foreign Bank that does not have a physical
presence in any country and that is not a regulated affiliate.

 

k.              The Subscriber or its duly authorized representative realizes
that because of the inherently speculative nature of businesses of the kind
conducted and contemplated by the Company, the Company’s financial results may
be expected to fluctuate from month to month and from period to period and will,
generally, involve a high degree of financial and market risk that could result
in substantial or, at times, even total losses for investors in securities of
the Company. The Subscriber has carefully read the risk factors and other
information (including

 

11

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the financial statements of the Company) included in the SEC Reports. The
Subscriber has carefully considered such risk factors before deciding to invest
in the Shares.

 

l.                  The Subscriber has adequate means of providing for its
current and anticipated financial needs and contingencies, is able to bear the
economic risk for an indefinite period of time and has no need for liquidity of
the investment in the Units and could afford complete loss of such investment.

 

m.          The Subscriber is not subscribing for Units as a result of or
subsequent to any advertisement, article, notice or other communication,
published in any newspaper, magazine or similar media or broadcast over
television, radio, or the internet, or presented at any seminar or meeting, or
any solicitation of a subscription by a person not previously known to the
Subscriber in connection with investments in securities generally.

 

n.              The Subscriber acknowledges that no U.S. federal or state agency
or any other government or governmental agency has passed upon the Units, the
Shares, the Conversion Shares, the Warrants or the Warrant Shares or made any
finding or determination as to the fairness, suitability or wisdom of any
investments therein.

 

o.              Other than consummating the transactions contemplated hereunder,
the Subscriber has not directly or indirectly, nor has any individual or entity
acting on behalf of or pursuant to any understanding with such Subscriber,
executed any purchases or sales, including Short Sales, of the securities of the
Company during the period commencing as of the time that such Subscriber first
received a term sheet (written or oral) from the Company or any other individual
or entity representing the Company setting forth the material terms of the
transactions contemplated hereunder and ending immediately prior to the
execution hereof.  Notwithstanding the foregoing, in the case of a Subscriber
that is a multi-managed investment vehicle whereby separate portfolio managers
manage separate portions of such Subscriber’s assets and the portfolio managers
have no direct knowledge of the investment decisions made by the portfolio
managers managing other portions of such Subscriber’s assets, the representation
set forth above shall only apply with respect to the portion of assets managed
by the portfolio manager that made the investment decision to purchase the
Shares covered by this Agreement. Other than to other individuals or entities
party to this Agreement, such Subscriber has maintained the confidentiality of
all disclosures made to it in connection with this transaction (including the
existence and terms of this transaction). Notwithstanding the foregoing, for
avoidance of doubt, nothing contained herein shall constitute a representation
or warranty, or preclude any actions, with respect to the identification of the
availability of, or securing of, available shares to borrow in order to effect
Short Sales or similar transactions in the future. For purposes of this
Agreement, “Short Sales” means all “short sales” as defined in Rule 200 of
Regulation SHO under the Exchange Act (but shall not be deemed to include the
location and/or reservation of borrowable shares of Common Stock).

 

p.              The Subscriber agrees to be bound by all of the terms and
conditions of the Registration Rights Agreement and the Warrants and to perform
all obligations thereby imposed upon it.

 

q.              The Subscriber is aware that the anti-manipulation rules of
Regulation M under the Exchange Act may apply to sales of the Conversion Shares
and Warrant Shares and other activities with respect to such shares by the
Subscriber.

 

r.                 All of the information concerning the Subscriber set forth
herein, and any other information furnished by the Subscriber in writing to the
Company or the Placement Agent for use in

 

12

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connection with the transactions contemplated by this Agreement, or which is set
forth herein is true, correct and complete in all material respects as of the
date of this Agreement, and, if there should be any material change in such
information prior to the admission of the undersigned to the Company, the
Subscriber will immediately furnish revised or corrected information to the
Company.

 

s.                (For ERISA plans only)  The fiduciary of the ERISA plan (the
“Plan”) represents that such fiduciary has been informed of and understands the
Company’s investment objectives, policies and strategies, and that the decision
to invest “plan assets” (as such term is defined in ERISA) in the Company is
consistent with the provisions of ERISA that require diversification of plan
assets and impose other fiduciary responsibilities.  The Subscriber fiduciary or
Plan (a) is responsible for the decision to invest in the Company; (b) is
independent of the Company or any of its affiliates; (c) is qualified to make
such investment decision; and (d) in making such decision, the Subscriber
fiduciary or Plan has not relied primarily on any advice or recommendation of
the Company or any of its affiliates.

 

6.                                      Transfer Restrictions.  The Subscriber
acknowledges and agrees as follows:

 

a.              The Units, the Shares, the Conversion Shares, the Warrants and
the Warrant Shares have not been registered for sale under the Securities Act,
in reliance on the private offering exemption in Section 4(a)(2) thereof; other
than as expressly provide in the Registration Rights Agreement, the Company does
not currently intend to register the Units, the Shares, the Conversion Shares,
the Warrants or the Warrant Shares under the Securities Act at any time in the
future; and the undersigned will not immediately be entitled to the benefits of
Rule 144 with respect to the Units, the Conversion Shares, the Shares, the
Warrants and the Warrant Shares.

 

b.              The Subscriber understands that there are substantial
restrictions on the transferability of the Shares, the Conversion Shares, the
Warrants and the Warrant Shares (collectively, the “Securities”) that the
certificates representing the Securities shall bear a restrictive legend in
substantially the following form (or in the case of the Warrants, as shown on
the form of Warrant attached hereto) (and a stop-transfer order may be placed
against transfer of such certificates or other instruments):

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAWS, AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE
OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A
REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES
ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR (2) AN EXEMPTION FROM SUCH
REGISTRATION EXISTS AND THE COMPANY RECEIVES AN OPINION OF COUNSEL, WHICH
COUNSEL AND OPINION ARE SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE
OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
APPLICABLE STATE SECURITIES LAWS. HEDGING TRANSACTIONS INVOLVING THESE
SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.

 

13

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In addition, if any Subscriber is an affiliate of the Company certificates
evidencing the Shares issued to such Subscriber may bear a customary
“Affiliates” legend.

 

The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Securities upon which it is
stamped, if (a) such Shares are sold pursuant to a registration statement under
the Securities Act, or (b) such holder delivers to the Company an opinion of
counsel, reasonably acceptable to the Company, that a disposition of the
Securities is being made pursuant to an exemption from such registration and
that the Securities, after such transfer, shall no longer be “restricted
securities” within the meaning of Rule 144.

 

7.              Conditions to Company’s Obligations at Closing.  The Company’s
obligation to complete the sale and issuance of the Units and deliver the shares
of Series A Preferred Stock and the Warrants to each Subscriber, individually,
at each Closing (other than the Option Closing) shall be subject to the
following conditions to the extent not waived by the Company:

 

a.              Receipt of Payment.  The Company shall have received payment, by
certified or other bank check or by wire transfer of immediately available
funds, in the full amount of the Purchase Price for the number of Units being
purchased by such Subscriber at such Closing.

 

b.              Representations and Warranties.  The representations and
warranties made by the Subscriber in Section 5 hereof shall be true and correct
in all material respects as of, and as if made on, the date of this Agreement
and as of such Closing Date with the same force and effect as if they had been
made on and as of said date (except in each case to the extent any such
representation and warranty is qualified by materiality, in which case, such
representation and warranty shall be true and correct in all respects as so
qualified). The Subscriber shall have performed in all material respects all
obligations and covenants herein required to be performed by them on or prior to
such Closing Date.

 

c.               Receipt of Executed Documents.  Such Subscriber shall have
executed and delivered to the Company the Omnibus Signature Page, the Investor
Profile, Anti-Money Laundering Form and Accredited Investor Certification.

 

d.              Minimum Offering.  The initial Closing shall be at least for the
number of Units in the Minimum Offering at the Purchase Price.

 

e.               Certificate of Designations. The Certificate of Designations
shall have been filed with the Secretary of State of the State of Delaware.

 

f.                Judgments.  No judgment, writ, order, injunction, award or
decree of or by any court, or judge, justice or magistrate, including any
bankruptcy court or judge, or any order of or by any governmental authority,
shall have been issued, and no action or proceeding shall have been instituted
by any governmental authority, enjoining or preventing the consummation of the
transactions contemplated hereby.

 

8.              Conditions to Subscribers’ Obligations at Closing.  Each
Subscriber’s obligation to accept delivery of the shares of Series A Preferred
Stock and the Warrants and to pay for the Units at each Closing (other than the
Option Closing) shall be subject to the following conditions to the extent not
waived by the Placement Agents on behalf of the Subscribers:

 

a.              Representations and Warranties Correct.  The representations and
warranties made by the Company in Section 4 hereof shall be true and correct in
all material respects (except to the extent any such representation and warranty
is qualified by materiality or reference to

 

14

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Material Adverse Effect, in which case, such representation and warranty shall
be true and correct in all respects as so qualified) as of, and as if made on,
the date of this Agreement and as of such Closing Date with the same force and
effect as if they had been made on and as of said date, except to the extent any
such representation or warranty expressly speaks as of an earlier date, in which
case such representation or warranty shall be true and in all material respects
correct as of such earlier date (except in each case to the extent any such
representation and warranty is qualified by materiality or reference to Material
Adverse Effect, in which case, such representation and warranty shall be true
and correct in all respects as so qualified). The Company shall have performed
in all material respects all obligations and covenants herein required to be
performed by it on or prior to such Closing Date.

 

b.              Receipt of Executed Transaction Documents.  The Company shall
have executed and delivered to the Placement Agent the Registration Rights
Agreement and the Escrow Agreement.

 

c.               Minimum Offering.  The initial Closing shall be at least for
the number of shares of Common Stock in the Minimum Offering at the Purchase
Price.

 

d.              Certificate of Designations. The Certificate of Designations
shall have been filed with the Secretary of State of the State of Delaware.

 

e.               Judgments.  No judgment, writ, order, injunction, award or
decree of or by any court, or judge, justice or magistrate, including any
bankruptcy court or judge, or any order of or by any governmental authority,
shall have been issued, and no action or proceeding shall have been instituted
by any governmental authority, enjoining or preventing the consummation of the
transactions contemplated hereby.

 

9.                                      No Liens on Production Sharing
Contract.  The Company covenants to and agrees with the Subscriber that until
the date that is twelve (12) months following the initial Closing, it will not
create or allow to be created any security interest, lien, charge or other
encumbrance on any of its or any of its subsidiaries’ rights under or interests
in the Hydrocarbon Production Sharing Contract between SCS Corporation Ltd. and
the Republic of Guinea, dated September 22, 2006, as amended to date or
hereafter (the “PSC”), that secures the repayment of indebtedness of the Company
or any of its subsidiaries for money borrowed.

 

10.                               Indemnification.  The Subscriber agrees to
indemnify and hold harmless the Company, the Placement Agent and any other
broker, agent or finder engaged by the Company for the Offering, and their
respective directors, officers, shareholders, members, partners, employees and
agents (and any other persons with a functionally equivalent role of a person
holding such titles notwithstanding a lack of such title or any other title),
each person who controls such Purchaser (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act), and the directors, officers,
shareholders, agents, members, partners or employees (and any other persons with
a functionally equivalent role of a person holding such titles notwithstanding a
lack of such title or any other title) of such controlling person, from and
against all losses, liabilities, claims, damages, costs, fees and expenses
whatsoever (including, but not limited to, any and all expenses incurred in
investigating, preparing or defending against any litigation commenced or
threatened) based upon or arising out of the Subscriber’s actual or alleged
false acknowledgment, representation or warranty, or misrepresentation or
omission to state a material fact, or breach by the Subscriber of any covenant
or agreement made by the Subscriber, contained herein or in any other any other
documents delivered by the Subscriber to the Company in connection with the
transactions contemplated by this Agreement.

 

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11.                               Revocability; Binding Effect.  The
subscription hereunder (excluding an exercise of the Option) may be revoked
prior to the Closing thereon, provided that written notice of revocation is sent
and is received by the Company or either of the Placement Agent at least two
Business Days prior to the Closing on such subscription.  The Subscriber hereby
acknowledges and agrees that this Agreement shall survive the death or
disability of the Subscriber and shall be binding upon and inure to the benefit
of the parties and their heirs, executors, administrators, successors, legal
representatives and permitted assigns.  If the Subscriber is more than one
person, the obligations of the Subscriber hereunder shall be joint and several
and the agreements, representations, warranties and acknowledgments herein shall
be deemed to be made by and be binding upon each such person and such person’s
heirs, executors, administrators, successors, legal representatives and
permitted assigns.

 

12.                               Modification.  This Agreement shall not be
modified or waived except by an instrument in writing signed by the party
against whom any such modification or waiver is sought to be enforced.

 

13.                               Immaterial Modifications to the Registration
Rights Agreement.  The Company may, at any time prior to the initial Closing,
amend the Registration Rights Agreement if necessary to clarify any provision
therein, without first providing notice or obtaining prior consent of the
Subscriber.

 

14.                               Third-Party Beneficiary.  The Placement Agent
shall be an express third-party beneficiary of the representations and
warranties included in this Agreement. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except as otherwise set forth in Section 10 and this
Section.

 

15.                               Notices.  Any notice or other communication
required or permitted to be given hereunder shall be in writing and shall be
mailed by certified mail, return receipt requested, or delivered against receipt
to the party to whom it is to be given (a) if to the Company, at the address set
forth above, with a copy to CKR Law LLP, 1330 Avenue of the Americas, New York,
New York 10019, Attention: Barrett S. DiPaolo, facsimile +1-212-259-8200 or
(b) if to the Subscriber, at the address set forth on the Omnibus Signature
Page hereof (or, in either case, to such other address as the party shall have
furnished in writing in accordance with the provisions of this Section).  Any
notice or other communication given by certified mail shall be deemed given at
the time of certification thereof, except for a notice changing a party’s
address which shall be deemed given at the time of receipt thereof.

 

16.                               Assignability.  This Agreement and the rights,
interests and obligations hereunder are not transferable or assignable by the
Subscriber, and the transfer or assignment of the Units, the Shares, the
Conversion Shares, the Warrants or the Warrant Shares shall be made only in
accordance with all applicable laws.

 

17.                               Applicable Law.  This Agreement shall be
governed by and construed in accordance with the laws of the State of New York,
without reference to the principles thereof relating to the conflict of laws.

 

18.                               Arbitration.  The parties agree to submit all
controversies to arbitration in accordance with the provisions set forth below
and understand that:

 

a.              Arbitration shall be final and binding on the parties.

 

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b.              The parties are waiving their right to seek remedies in court,
including the right to a jury trial.

 

c.               Pre-arbitration discovery is generally more limited and
different from court proceedings.

 

d.              The arbitrator’s award is not required to include factual
findings or legal reasoning and any party’s right to appeal or to seek
modification of rulings by arbitrators is strictly limited.

 

e.               The panel of arbitrators will typically include a minority of
arbitrators who were or are affiliated with the securities industry.

 

f.                All controversies which may arise between the parties
concerning this Agreement shall be determined by arbitration pursuant to the
rules then pertaining to the Financial Industry Regulatory Authority in New York
City, New York.  Judgment on any award of any such arbitration may be entered in
the Supreme Court of the State of New York or in any other court having
jurisdiction of the person or persons against whom such award is rendered.  Any
notice of such arbitration or for the confirmation of any award in any
arbitration shall be sufficient if given in accordance with the provisions of
this Agreement.  The parties agree that the determination of the arbitrators
shall be binding and conclusive upon them. The prevailing party, as determined
by such arbitrators, in a legal proceeding shall be entitled to collect any
costs, disbursements and reasonable attorney’s fees from the other party.  Prior
to filing an arbitration, the parties hereby agree that they will attempt to
resolve their differences first by submitting the matter for resolution to a
mediator, acceptable to all parties, and whose expenses will be borne equally by
all parties.  The mediation will be held in the County of New York, State of New
York, on an expedited basis.  If the parties cannot successfully resolve their
differences through mediation, the matter will be resolved by arbitration.  The
arbitration shall take place in the County of New York, State of New York, on an
expedited basis.

 

19.                               Blue Sky Qualification.  The purchase of Units
under this Agreement is expressly conditioned upon the exemption from
qualification of the offer and sale of the Units from applicable federal and
state securities laws.  The Company shall not be required to qualify this
transaction under the securities laws of any jurisdiction and, should
qualification be necessary, the Company shall be released from any and all
obligations to maintain its offer, and may rescind any sale contracted, in the
jurisdiction.

 

20.                               Use of Pronouns.  All pronouns and any
variations thereof used herein shall be deemed to refer to the masculine,
feminine, neuter, singular or plural as the identity of the person or persons
referred to may require.

 

21.                               Confidentiality.  The Subscriber acknowledges
and agrees that any information or data the Subscriber has acquired from or
about the Company or may acquire in the future, not otherwise properly in the
public domain, including, without limitation, the Disclosure Materials, was
received in confidence.  The Subscriber agrees not to divulge, communicate or
disclose, except as may be required by law or for the performance of this
Agreement, or use to the detriment of the Company or for the benefit of any
other person, or misuse in any way, any confidential information of the Company,
including any scientific, technical, trade or business secrets of the Company
and any scientific, technical, trade or business materials that are treated by
the Company as confidential or proprietary, including, but not limited to,
internal personnel and financial information of the Company or its affiliates,
the manner and methods of conducting the business of the Company or its
affiliates and confidential information obtained by or given to the

 

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Company about or belonging to third parties.  The Subscriber understands that
the Company may rely on Subscriber’s agreement of confidentiality to comply with
the exemptive provisions of Regulation FD under the Securities Act of 1933 as
set forth in Rule 100(a)(b)(2)(ii) of Regulation FD.  In addition, the
Subscriber acknowledges that it is aware that the United States securities laws
generally prohibit any person who is in possession of material nonpublic
information about a public company such as the Company from purchasing or
selling securities of such company.  The provisions of this Section are in
addition to and not in replacement of any other confidentiality agreement
between the Company and the Subscriber.

 

22.                               Option.

 

a.              Upon the SEC Effective Date (as defined in the Registration
Rights Agreement), each Subscriber who previously purchased Units in the
Offering (an “Option Holder”) shall have an option to purchase such Option
Holder’s pro rata share of 3,000 additional Units (the “Additional Units”) at
the Purchase Price on the terms set forth in this Section (the “Option”).

 

b.              The Company shall send to each Option Holder within three
(3) Business Days after the SEC Effective Date a written notice (the “First
Option Notice”). The First Option Notice shall set forth the SEC Effective Date
and the number of Additional Units such Option Holder has the Option to purchase
(such Option Holder’s “Initial Option Amount”), which shall be a percentage of
the total number of Additional Units equal to (i) the total number of Units
previously purchased by such Option Holder divided by (ii) the total number of
Units previously sold by the Company; and the First Option Notice shall include
a copy of this Section.  Each Option Holder wishing to exercise its Option on
all or part of its Initial Option Amount shall so notify the Company in writing
within seven (7) Business Days after the Company’s transmittal of the First
Option Notice (a “First Option Exercise Notice”). If First Option Exercise
Notices for fewer that the total number of Additional Units are received by the
Company, it shall within three (3) Business Days after receipt of all First
Option Exercise Notices send to each Option Holder that theretofore submitted a
First Option Exercise Notice a second written notice (the “Second Option
Notice”) setting forth the number of Additional Units such Option Holder has the
Option to purchase in addition to the number of Units elected in such Option
Holder’s First Option Exercise Notice (such Option Holder’s “Second Option
Amount”), which shall be a percentage of the total number of Additional Units
that were not elected to be purchased in all First Option Exercise Notices equal
to (i) the total number of Units previously purchased by such Option Holder plus
the number of Units such Option Holder elected to purchase in its First Option
Exercise Notice divided by (ii) the total number of Units previously sold by the
Company plus the number of Additional Units elected to be purchased in all First
Option Exercise Notices.  Each Option Holder receiving a Second Option Notice
wishing to exercise his Option on all or part of his Second Option Amount shall
so notify the Company in writing within five (5) Business Days after the
Company’s transmittal of the Second Option Notice (a “Second Option Exercise
Notice”).

 

c.               The Closing for all Additional Units elected to be purchased in
all First Option Exercise Notices and all Second Option Exercise Notices shall
occur on the thirtieth (30th) day (or if not a Business Day, the next succeeding
Business Day) (the “Option Closing Date”).  On or prior to the Closing Date,
each Option Holder that exercised the Option in the manner specified above shall
deliver to the Company the full Purchase Price for all Units elected by such
Option Holder in its First Option Exercise Notice and, if any, Second Option
Exercise Notice, by certified or other bank check or by wire transfer of
immediately available funds to the Escrow Agent as provided in Section 2b.

 

18

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d.              The Company’s obligation to complete the sale and issuance of
the Additional Units on the Option Closing Date and deliver the shares of
Series A Preferred Stock and the Warrants contained therein to each exercising
Option Holder, individually, shall be subject to the following conditions to the
extent not waived by the Company:

 

i.                  Receipt of Payment.  The Company shall have received
payment, by certified or other bank check or by wire transfer of immediately
available funds, in the full amount of the Purchase Price for the number of
Additional Units being purchased by such Subscriber at such Closing.

 

ii.               Representations and Warranties.  The representations and
warranties made by the Option Holder in Section 5 hereof shall be true and
correct in all material respects when made, and shall be true and correct in all
material respects with the same force and effect as if they had been made on and
as of said date(except in each case to the extent any such representation and
warranty is qualified by materiality, in which case, such representation and
warranty shall be true and correct in all respects as so qualified) on such
Option Closing Date with the same force and effect as if they had been made on
and as of said date. The Subscriber shall have performed in all material
respects all obligations and covenants herein required to be performed by them
on or prior to such Closing Date.

 

iii.            Judgments.  No judgment, writ, order, injunction, award or
decree of or by any court, or judge, justice or magistrate, including any
bankruptcy court or judge, or any order of or by any governmental authority,
shall have been issued, and no action or proceeding shall have been instituted
by any governmental authority, enjoining or preventing the consummation of the
transactions contemplated hereby.

 

e.               Each Option Holder’s obligation to accept delivery of the
shares of Series A Preferred Stock and the Warrants and to pay for the
Additional Units at on the Option Closing Date shall be subject to the following
conditions to the extent not waived by the Placement Agent on behalf of the
Option Holders:

 

i.                  Representations and Warranties Correct.  The representations
and warranties made by the Company in Section 4 hereof shall be true and correct
in all material respects (except to the extent any such representation and
warranty is qualified by materiality or reference to Material Adverse Effect, in
which case, such representation and warranty shall be true and correct in all
respects as so qualified) on such Option Closing Date with the same force and
effect as if they had been made on and as of said date, except to the extent any
such representation or warranty expressly speaks as of an earlier date, in which
case such representation or warranty shall be true and in all material respects
correct as of such earlier date (except in each case to the extent any such
representation and warranty is qualified by materiality or reference to Material
Adverse Effect, in which case, such representation and warranty shall be true
and correct in all respects as so qualified). The Company shall have performed
in all material respects all obligations and covenants herein required to be
performed by it on or prior to such Closing Date.

 

ii.               Judgments.  No judgment, writ, order, injunction, award or
decree of or by any court, or judge, justice or magistrate, including any
bankruptcy court or judge, or any order of or by any governmental authority,
shall have been issued, and no action or proceeding shall have been instituted
by any governmental authority, enjoining or preventing the consummation of the
transactions contemplated hereby.

 

19

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23.                               Right of First Refusal.

 

a.              In the event that, after the Offering Termination Date and prior
to the date that is nine (9) months following the initial Closing, the Company
determines to offer for sale or to accept an offer to purchase any shares of
Series A Preferred Stock (or class or series of Preferred Stock having the same
terms) (the “Additional Series A Preferred Stock”), each Subscriber who
previously purchased Units in the Offering (a “ROFR Holder”) shall have an
option to purchase such ROFR Option Holder’s pro rata share of Additional
Series A Preferred Stock on the same terms and conditions on which the
Additional Series A Preferred Stock is proposed to be issued, as set forth in
this Section (the “ROFR”).

 

b.              The Company shall send to each ROFR Holder a written notice (the
“First ROFR Notice”). The First ROFR Notice shall set forth the material terms
of the proposed sale of Additional Series A Preferred Stock and the number of
Additional Series A Preferred Stock such ROFR Holder has the ROFR to purchase
(such ROFR Holder’s “Initial ROFR Amount”), which shall be a percentage of the
total number of Additional Series A Preferred Stock proposed to be sold equal to
(i) the total number of Units previously purchased by such ROFR Holder divided
by (ii) the total number of Units previously sold by the Company; and the First
ROFR Notice shall include a copy of this Section.  Each ROFR Holder wishing to
exercise its ROFR on all or part of its Initial ROFR Amount shall so notify the
Company in writing within ten (10) Business Days after the Company’s transmittal
of the First ROFR Notice (a “First ROFR Exercise Notice”). If First ROFR
Exercise Notices for fewer that the total number of Additional Series A
Preferred Stock are received by the Company, it shall within three (3) Business
Days after receipt of all First ROFR Exercise Notices send to each ROFR Holder
that theretofore submitted a First ROFR Exercise Notice a second written notice
(the “Second ROFR Notice”) setting forth the number of Additional Series A
Preferred Stock such ROFR Holder has the ROFR to purchase in addition to the
number of Units elected in such Subscriber’s First ROFR Exercise Notice (such
ROFR Holder’s “Second ROFR Amount”), which shall be a percentage of the total
number of Additional Series A Preferred Stock that were not elected to be
purchased in all First ROFR Exercise Notices equal to (i) the total number of
Units previously purchased by such ROFR Holder plus the number of shares of
Additional Series A Preferred Stock such ROFR Holder elected to purchase in its
First ROFR Exercise Notice divided by (ii) the total number of Units previously
sold by the Company plus the number of shares of Additional Series A Preferred
Stock elected to be purchased in all First ROFR Exercise Notices.  Each ROFR
Holder receiving a Second ROFR Notice wishing to exercise its ROFR on all or
part of his Second ROFR Amount shall so notify the Company in writing within
five (5) Business Days after the Company’s transmittal of the Second ROFR Notice
(a “Second ROFR Exercise Notice”).

 

c.               If the total shares of Additional Series A Preferred Stock
elected to be purchased in all First ROFR Exercise Notices and all Second ROFR
Exercise Notices is less than the total number set forth in the First ROFR
Notice, the Company may sell the excess shares to persons other than ROFR
Holders, but only on substantially the same terms as set forth in the First ROFR
Notice.  ROFR Holders who have elected to purchase shares of Additional Series A
Preferred Stock shall execute the subscription and other related agreements for
the sale of the Additional Series A Preferred Stock, the closing of which shall
occur as provided in such documents.

 

24.                               No Short Selling.  The Subscriber agrees that
during the period of nine (9) months following the first Closing Date, the
Subscriber will not, directly or indirectly, effect or agree to effect any Short
Sale with respect to any shares of Common Stock, whether or not against the box,
establish

 

20

--------------------------------------------------------------------------------

 

any “put equivalent position” (as defined in Rule 16a-1(h) under the Exchange
Act) with respect to any shares of Common Stock, borrow or pre-borrow any shares
of Common Stock, or grant any other right (including, without limitation, any
put or call option) with respect to shares of the Common Stock, or, in each
case, with respect to any security that includes, is convertible into or
exercisable for or derives any significant part of its value from shares of the
Common Stock or otherwise seek to hedge the Subscriber’s position in the Common
Stock.

 

25.                               Miscellaneous.

 

a.              This Agreement, together with the Registration Rights Agreement,
the Warrant and any confidentiality agreement between the Purchaser and the
Company, constitute the entire agreement between the Subscriber and the Company
with respect to the Offering and supersede all prior oral or written agreements
and understandings, if any, relating to the subject matter hereof.  The terms
and provisions of this Agreement may be waived, or consent for the departure
therefrom granted, only by a written document executed by the party entitled to
the benefits of such terms or provisions.

 

b.              The representations and warranties of the Company and the
Subscriber made in this Agreement shall survive the execution and delivery
hereof and delivery of the Common Stock and the Warrants contained in the Units
for a period of twelve (12) months following the Closing Date.

 

c.               Each of the parties hereto shall pay its own fees and expenses
(including the fees of any attorneys, accountants, appraisers or others engaged
by such party) in connection with this Agreement and the transactions
contemplated hereby, whether or not the transactions contemplated hereby are
consummated.

 

d.              This Agreement may be executed in one or more original or
facsimile or by an e-mail which contains a portable document format (.pdf) file
of an executed signature page counterparts, each of which shall be deemed an
original, but all of which shall together constitute one and the same instrument
and which shall be enforceable against the parties actually executing such
counterparts. The exchange of copies of this Agreement and of signature pages by
facsimile transmission or in .pdf format shall constitute effective execution
and delivery of this Agreement as to the parties and may be used in lieu of the
original Agreement for all purposes. Signatures of the parties transmitted by
facsimile or by e-mail of a document in pdf format shall be deemed to be their
original signatures for all purposes.

 

e.               Each provision of this Agreement shall be considered separable
and, if for any reason any provision or provisions hereof are determined to be
invalid or contrary to applicable law, such invalidity or illegality shall not
impair the operation of or affect the remaining portions of this Agreement.

 

f.                Paragraph titles are for descriptive purposes only and shall
not control or alter the meaning of this Agreement as set forth in the text.

 

g.               The Subscriber understands and acknowledges that there may be
multiple Closings for the Offering.

 

h.              The Subscriber hereby agrees to furnish the Company such other
information as the Company may request prior to the Closing with respect to its
subscription hereunder.

 

21

--------------------------------------------------------------------------------

 

i.                  The representations and warranties of the Company and the
Purchaser made in this Agreement shall survive the execution and delivery hereof
and the delivery of the Shares for a period of twelve (12) months following the
first Closing Date or the Option Closing Date, as the case may be.

 

26.                               Omnibus Signature Page.  This Agreement is
intended to be read and construed in conjunction with the Registration Rights
Agreement.  Accordingly, pursuant to the terms and conditions of this Agreement
and the Registration Rights Agreement, it is hereby agreed that the execution by
the Subscriber of this Agreement, in the place set forth on the Omnibus
Signature Page below, shall constitute agreement to be bound by the terms and
conditions hereof and the terms and conditions of the Registration Rights
Agreement, with the same effect as if each of such separate but related
agreement were separately signed.

 

27.                               Public Disclosure.  Neither the Subscriber nor
any officer, manager, director, member, partner, stockholder, employee,
affiliate, affiliated person or entity of the Subscriber shall make or issue any
press releases or otherwise make any public statements or make any disclosures
to any third person or entity with respect to the transactions contemplated
herein and will not make or issue any press releases or otherwise make any
public statements of any nature whatsoever with respect to the Company without
the Company’s express prior approval.  The Company has the right to withhold
such approval in its sole discretion.

 

28.                               Potential
Conflicts.                                    The Placement Agent, its
sub-agents, legal counsel to the Placement Agents, CKR and/or their respective
affiliates, principals, representatives or employees may now or hereafter own
shares of the Company.

 

29.                               Independent Nature of Each Purchaser’s
Obligations and Rights.  For avoidance of doubt, the obligations of the
Purchaser under this Agreement are several and not joint with the obligations of
any other Purchaser, and the Purchaser shall not be responsible in any way for
the performance of the obligations of any other Purchaser under any other
Subscription Agreement. Nothing contained herein and no action taken by the
Purchaser shall be deemed to constitute the Purchaser 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 this
Agreement and any other Subscription Agreements. The Purchaser shall be entitled
to independently protect and enforce its rights, including without limitation
the rights arising out of this Agreement, and it shall not be necessary for any
other Purchaser to be joined as an additional party in any proceeding for such
purpose.

 

[SIGNATURE PAGE FOLLOWS.]

 

22

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the Company has duly executed this Subscription Agreement as
of the      day of       , 2017.

 

 

HYPERDYNAMICS CORPORATION

 

 

 

 

 

By:

 

 

 

Name:

Raymond C. Leonard

 

 

Title:

Chief Executive Officer

 

23

--------------------------------------------------------------------------------

 

How to subscribe for Units in the private offering of

Hyperdynamics Corporation:

 

1.              Date and Fill in the number of Units being purchased and
complete and sign the Omnibus Signature Page.

 

2.              Initial the Accredited Investor Certification in the appropriate
place or places.

 

3.              Complete and sign the Investor Profile.

 

4.              Complete and sign the Anti-Money Laundering Information Form.

 

5.              Fax or email all forms and then send all signed original
documents to:

 

CKR LAW LLP

1330 Avenue of the Americas

New York, NY 10019

Facsimile Number:  212.259.8200

Telephone Number:  212.259.7300

Attn:

E-mail address:

 

6.              If you are paying the Purchase Price by check, a certified or
other bank check for the exact dollar amount of the Purchase Price for the
number of Shares you are purchasing should be made payable to the order of
“Delaware Trust Company], as Escrow Agent for Hyperdynamics Corporation, Acct. #
79-2938” and should be sent directly to Delaware Trust Company, 2711 Centerville
Road, One Little Falls Centre, Wilmington, DE 19808, Attn:  Alan R. Halpern.

 

Checks take up to 5 business days to clear. A check must be received by the
Escrow Agent at least 6 business days before the closing date.

 

7.              If you are paying the Purchase Price by wire transfer, you
should send a wire transfer for the exact dollar amount of the Purchase Price
for the number of Shares you are purchasing according to the following
instructions:

 

 

Bank:

PNC Bank
300 Delaware Avenue
Wilmington, DE 19899

 

ABA Routing #:

031100089

 

SWIFT CODE:

PNCCUS33

 

Account Name:

Delaware Trust Company

 

Account #:

5605012373

 

Reference:

“FFC: Hyperdynamics Corporation, Acct. # 79-2938 —[INSERT SUBSCRIBER’S NAME]”

 

Delaware Trust Contact:

Alan R. Halpern

 

Thank you for your interest,

 

Hyperdynamics Corporation

 

--------------------------------------------------------------------------------

 

OMNIBUS SIGNATURE PAGE TO

SUBSCRIPTION AGREEMENT AND REGISTRATION RIGHTS AGREEMENT

 

The undersigned, desiring to: (i) enter into the Subscription Agreement, dated
as of                 ,(1) 2017 (the “Subscription Agreement”), between the
undersigned, Hyperdynamics Corporation, a Delaware corporation (the “Company”),
and the other parties thereto, in or substantially in the form furnished to the
undersigned, (ii) enter into the Registration Rights Agreement (the
“Registration Rights Agreement”), among the undersigned, the Company and the
other parties thereto, in or substantially in the form furnished to the
undersigned, and (iii) purchase the Shares of the Company’s securities as set
forth in the Subscription Agreement and below, hereby agrees to purchase such
Shares from the Company and further agrees to join the Subscription Agreement
and the Registration Rights Agreement as a party thereto, with all the rights
and privileges appertaining thereto, and to be bound in all respects by the
terms and conditions thereof.  The undersigned specifically acknowledges having
read the representations section in the Subscription Agreement entitled
“Representations, Warranties and Agreements of the Subscriber” and hereby
represents that the statements contained therein are complete and accurate with
respect to the undersigned as a Subscriber.

 

IN WITNESS WHEREOF, the Subscriber hereby executes this Agreement and the
Registration Rights Agreement.

 

Dated:                            , 2017

 

 

 

X

$1,000

 

=

$

 

 

Number of Units

 

Purchase Price per Unit

 

Total Purchase Price

 

 

SUBSCRIBER (individual)

 

SUBSCRIBER (entity)

 

 

 

 

 

 

Signature

 

Name of Entity

 

 

 

 

 

By:

 

Print Name

 

 

Signature

 

 

 

 

 

Print Name:

 

Signature (if Joint Tenants or Tenants in Common)

 

Title:

 

 

 

 

Address of Principal Residence:

 

Address of Executive Offices:

 

 

 

 

 

 

 

 

 

Social Security Number(s):

 

IRS Tax Identification Number:

 

 

 

                                                                

 

                                                                

 

 

 

Telephone Number:

 

Telephone Number:

 

 

 

                                                                

 

                                                                

 

 

 

Facsimile Number:

 

Facsimile Number:

 

 

 

                                                                

 

                                                                

 

 

 

E-mail Address:

 

E-mail Address:

 

 

 

                                                                

 

                                                                

 

--------------------------------------------------------------------------------

(1) Will reflect the Closing Date.  Not to be completed by Purchaser.

 

--------------------------------------------------------------------------------

 

Hyperdynamics Corporation

 

ACCREDITED INVESTOR CERTIFICATION

 

For Individual Investors Only

(all Individual Investors must INITIAL where appropriate):

 

Initial          

 

I have a net worth of at least US$1 million either individually or through
aggregating my individual holdings and those in which I have a joint, community
property or other similar shared ownership interest with my spouse. (For
purposes of calculating your net worth under this paragraph, (a) your primary
residence shall not be included as an asset; (b) indebtedness secured by your
primary residence, up to the estimated fair market value of your primary
residence at the time of your purchase of the securities, shall not be included
as a liability (except that if the amount of such indebtedness outstanding at
the time of your purchase of the securities exceeds the amount outstanding sixty
(60) days before such time, other than as a result of the acquisition of your
primary residence, the amount of such excess shall be included as a liability);
and (c) indebtedness that is secured by your primary residence in excess of the
estimated fair market value of your primary residence at the time of your
purchase of the securities shall be included as a liability.)

 

 

 

Initial          

 

I have had an annual gross income for the past two (2) years of at least
US$200,000 (or US$300,000 jointly with my spouse) and expect my income (or joint
income, as appropriate) to reach the same level in the current year.

 

 

 

Initial          

 

I am a director or executive officer of Hyperdynamics Corporation.

 

For Non-Individual Investors (Entities)

(all Non-Individual Investors must INITIAL where appropriate):

 

Initial          

 

The investor certifies that it is a partnership, corporation, limited liability
company or business trust that is 100% owned by persons who meet at least one of
the criteria for Individual Investors set forth above (in which case each such
person must complete the Accreditor Investor Certification for Individuals above
as well the remainder of this questionnaire).

 

 

 

Initial          

 

The investor certifies that it is a partnership, corporation, limited liability
company or business trust that has total assets of at least US$5 million and was
not formed for the purpose of investing the Company.

 

 

 

Initial          

 

The investor certifies that it is an employee benefit plan whose investment
decision is made by a plan fiduciary (as defined in ERISA §3(21)) that is a
bank, savings and loan association, insurance company or registered investment
advisor.

 

 

 

Initial          

 

The investor certifies that it is an employee benefit plan whose total assets
exceed US$5,000,000 as of the date of this Agreement.

 

 

 

Initial          

 

The undersigned certifies that it is a self-directed employee benefit plan whose
investment decisions are made solely by persons who meet at least one of the
criteria for Individual Investors.

 

 

 

Initial          

 

The investor certifies that it is a U.S. bank, U.S. savings and loan association
or other similar U.S. institution acting in its individual or fiduciary
capacity.

 

 

 

Initial          

 

The undersigned certifies that it is a broker-dealer registered pursuant to §15
of the Securities Exchange Act of 1934.

 

 

 

Initial          

 

The investor certifies that it is an organization described in §501(c)(3) of the
Internal Revenue Code with total assets exceeding US$5,000,000 and not formed
for the specific purpose of investing in the Company.

 

 

 

Initial          

 

The investor certifies that it is a trust with total assets of at least
US$5,000,000, not formed for the specific purpose of investing in the Company,
and whose purchase is directed by a person with such knowledge and experience in
financial and business matters that such person is capable of evaluating the
merits and risks of the prospective investment.

 

 

 

Initial          

 

The investor certifies that it is a plan established and maintained by a state
or its political subdivisions, or any agency or instrumentality thereof, for the
benefit of its employees, and which has total assets in excess of US$5,000,000.

 

 

 

Initial          

 

The investor certifies that it is an insurance company as defined in §2(13) of
the Securities Act of 1933, or a registered investment company.

 

--------------------------------------------------------------------------------

 

Hyperdynamics Corporation

 

INVESTOR PROFILE
(Must be completed by Investor)

 

Section A - Personal Investor Information

 

Investor Name(s):                                               

 

Individual executing Profile or
Trustee:                                               

 

Social Security Numbers / Federal I.D.
Number:                                               

 

 

 

 

Date of Birth:                                   

Marital Status:                                           

Joint Party Date of Birth:                 

Investment Experience (Years):                 

Annual Income:                                

Liquid Net Worth:                                

 

Net Worth*:                                

 

Tax Bracket:

o

15% or below

o

25% - 27.5%

o

Over 27.5%

 

Home Street Address:                                               

 

Home City, State & Zip Code:                                               

 

Home Phone:                  

Home Fax:             

Home Email:              

 

Employer:                                               

 

Employer Street Address:                                               

 

Employer City, State & Zip Code:                                               

 

Bus. Phone:                   

Bus. Fax:                         

Bus. Email:                  

 

Type of Business:                                                         

 

Outside Broker/Dealer:                                               

 

Section B — Certificate Delivery Instructions

 

o Please deliver certificate to the Employer Address listed in Section A.

 

o Please deliver certificate to the Home Address listed in Section A.

 

o Please deliver certificate to the following address:                         

 

Section C — Form of Payment — Check or Wire Transfer

 

o Check payable to Delaware Trust Company, as Escrow Agent for Hyperdynamics
Corporation, ACCT# 79-2938

 

o Wire funds from my outside account according to Section 2(b) of the
Subscription Agreement.

 

o The funds for this investment are rolled over, tax deferred from           
within the allowed 60-day window.

 

Please check if you are a FINRA member or Affiliate of a FINRA member firm:

 

 

 

 

 

 

Investor Signature

 

Date

 

--------------------------------------------------------------------------------

*                             For purposes of calculating your net worth in this
form, (a) your primary residence shall not be included as an asset;
(b) indebtedness secured by your primary residence, up to the estimated fair
market value of your primary residence at the time of your purchase of the
securities, shall not be included as a liability (except that if the amount of
such indebtedness outstanding at the time of your purchase of the securities
exceeds the amount outstanding sixty (60) days before such time, other than as a
result of the acquisition of your primary residence, the amount of such excess
shall be included as a liability); and (c) indebtedness that is secured by your
primary residence in excess of the estimated fair market value of your primary
residence at the time of your purchase of the securities shall be included as a
liability.

 

--------------------------------------------------------------------------------

 

ANTI MONEY LAUNDERING REQUIREMENTS

 

The USA PATRIOT Act

 

The USA PATRIOT Act is designed to detect, deter, and punish terrorists in the
United States and abroad.  The Act imposes new anti-money laundering
requirements on brokerage firms and financial institutions.  Since April 24,
2002 all brokerage firms have been required to have new, comprehensive
anti-money laundering programs.

 

To help you understand these efforts, we want to provide you with some
information about money laundering and our steps to implement the USA PATRIOT
Act.

 

What is money laundering?

 

Money laundering is the process of disguising illegally obtained money so that
the funds appear to come from legitimate sources or activities.  Money
laundering occurs in connection with a wide variety of crimes, including illegal
arms sales, drug trafficking, robbery, fraud, racketeering, and terrorism.

 

How big is the problem and why is it important?

 

The use of the U.S. financial system by criminals to facilitate terrorism or
other crimes could well taint our financial markets.  According to the U.S.
State Department, one recent estimate puts the amount of worldwide money
laundering activity at $1 trillion a year.

 

What are we required to do to eliminate money laundering?

 

Under rules required by the USA PATRIOT Act, our anti-money laundering program
must designate a special compliance officer, set up employee training, conduct
independent audits, and establish policies and procedures to detect and report
suspicious transaction and ensure compliance with such laws.  As part of our
required program, we may ask you to provide various identification documents or
other information.  Until you provide the information or documents we need, we
may not be able to effect any transactions for you.

 

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ANTI-MONEY LAUNDERING INFORMATION FORM

The following is required in accordance with the AML provision of the USA
PATRIOT ACT.

(Please fill out and return with requested documentation.)

 

INVESTOR
NAME:                                                                                                                                                         

 

LEGAL
ADDRESS:                                                                                                                                                         

 

SSN# or TAX ID# OF
INVESTOR:                                                                                                                              

 

YEARLY
INCOME:                                                                                                                                                         

 

NET WORTH:
                                                                                                                                                                       *

 

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* For purposes of calculating your net worth in this form, (a) your primary
residence shall not be included as an asset; (b) indebtedness secured by your
primary residence, up to the estimated fair market value of your primary
residence at the time of your purchase of the securities, shall not be included
as a liability (except that if the amount of such indebtedness outstanding at
the time of your purchase of the securities exceeds the amount outstanding sixty
(60) days before such time, other than as a result of the acquisition of your
primary residence, the amount of such excess shall be included as a liability);
and (c) indebtedness that is secured by your primary residence in excess of the
estimated fair market value of your primary residence at the time of your
purchase of the securities shall be included as a liability.

 

INVESTMENT OBJECTIVE(S) (FOR ALL
INVESTORS):                                                                                     

 

ADDRESS OF BUSINESS OR OF
EMPLOYER:                                                                                     

 

FOR INVESTORS WHO ARE INDIVIDUALS:
AGE:                                                                                     

 

FOR INVESTORS WHO ARE INDIVIDUALS:
OCCUPATION:                                                                                     

 

FOR INVESTORS WHO ARE ENTITIES: TYPE OF
BUSINESS:                                                                                     

 

IDENTIFICATION & DOCUMENTATION AND SOURCE OF FUNDS:

 

1.                                      Please submit a copy of non-expired
identification for the authorized signatory(ies) on the investment documents,
showing name, date of birth, address and signature.  The address shown on the
identification document MUST match the Investor’s address shown on the Investor
Signature Page.

 

Current Driver’s License

or

Valid Passport

or

Identity Card

 

(Circle one or more)

 

 

 

2.                                      If the Investor is a corporation,
limited liability company, trust or other type of entity, please submit the
following requisite documents: (i) Certificate of Incorporation, By-Laws,
Certificate of Formation, Operating Agreement, Trust or other similar documents
for the type of entity; and (ii) Corporate Resolution or power of attorney or
other similar document granting authority to signatory(ies) and designating that
they are permitted to make the proposed investment.

 

3.                                      Please advise where the funds were
derived from to make the proposed investment:

 

Investments

Savings

Proceeds of Sale

Other

 

(Circle one or more)

 

 

Signature:

 

 

 

 

 

Print Name:

 

 

 

 

 

Title (if applicable):

 

 

 

 

 

Date:

 

 

 

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EXHIBIT A

 

Form of Warrant

 

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EXHIBIT B

 

Form of Certificate of Designations

 

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EXHIBIT C

 

Form of Registration Rights Agreement

 

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