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Exhibit 10.10
Guaranty by Trendsetter Production Company.

GUARANTY
 
This GUARANTY AGREEMENT (“Agreement”), dated as of February 6, 2008 is made by
Trendsetter Production (the “Guarantor”), in favor of YA GLOBAL INVESTMENTS,
L.P. (the “Secured Party”).
 
WHEREAS, in connection with the Securities Purchase Agreement by and
among  HYPERDYNAMICS CORPORATION, a  Delaware corporation (the “Company”) and
the Secured Party of even date herewith (the “Securities Purchase Agreement”),
the Company has agreed, upon the terms and subject to the conditions of the
Securities Purchase Agreement, to issue to the Secured Party (i) an aggregate
original principal amount of Three Million Dollars ($3,000,000) of senior
secured notes (the “Notes”), which shall, in certain instances, be convertible
into shares (the “Conversion Shares”) of the Company’s common stock, par value
$0.001 per share (the “Common Stock”); and (ii) warrants (the “Warrants”) to be
exercisable to acquire additional shares of Common Stock (the “Warrants Shares”)
initially in that number of shares of Common Stock set forth in the Securities
Purchase Agreement;
 
WHEREAS, the Guarantor is executing and delivering a Security Agreement dated
the date hereof (the “Security Agreement”) granting a lien in all of the Pledged
Property (as defined in the Security Agreement) to the Secured Party;
 
WHEREAS, it is a condition precedent to the Secured Party purchasing the Notes
and Warrants pursuant to the Securities Purchase Agreement that the Guarantor
shall have executed and delivered to the Secured Party this Agreement
guaranteeing all of the obligations of the Company under the Transaction
Documents (as defined in the Securities Purchase Agreement, the “Transaction
Documents”);
 
WHEREAS, the Guarantor has determined that the execution, delivery and
performance of this Guaranty directly benefits, and is in the best interest of,
such Guarantor;
 
NOW, THEREFORE, in consideration of the premises and the agreements herein and
in order to induce the Secured Party to perform under the Securities Purchase
Agreement, the Guarantor hereby agrees with the Secured Party as follows:
 
Definitions.  Reference is hereby made to the Securities Purchase Agreement and
the Notes issued pursuant thereto for a statement of the terms thereof.  All
terms used in this Guaranty, which are defined in the Securities Purchase
Agreement or the Notes and not otherwise defined herein, shall have the same
meanings herein as set forth therein.
 
Guaranty.  The Guarantor hereby unconditionally and irrevocably, guaranties the
punctual payment, as and when due and payable, by stated maturity or otherwise,
of all Obligations (as defined in the Security Agreement) of the Company from
time to time owing by it to the Secured Party (such obligations, to the extent
not paid by the Company, being the “Guaranteed Obligations”), and agrees to pay
any and all expenses (including reasonable counsel fees and expenses) reasonably
incurred by the Secured Party in enforcing any rights under this
Guaranty.  Without limiting the generality of the foregoing, the Guarantor’s
liability hereunder shall extend to all amounts that constitute part of the
Guaranteed Obligations and would be owed by the Company to the Secured Party but
for the fact that they are unenforceable or not allowable due to the existence
of an insolvency proceeding involving any Guarantor or the Company (each, a
“Transaction Party”).
 
 
 

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Guaranty Absolute; Continuing Guaranty; Assignments.
 
The Guarantor, guaranties that the Guaranteed Obligations will be paid strictly
in accordance with the terms of the Transaction Documents, regardless of any
law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Secured Party with respect
thereto.  The obligations of the Guarantor under this Guaranty are independent
of the Guaranteed Obligations, and a separate action or actions may be brought
and prosecuted against the Guarantor to enforce such obligations, irrespective
of whether any action is brought against any Transaction Party or whether any
Transaction Party is joined in any such action or actions.  The liability of the
Guarantor under this Guaranty shall be irrevocable, absolute and unconditional
irrespective of, and the Guarantor hereby irrevocably waives, to the extent
permitted by law, any defenses it may now or hereafter have in any way relating
to, any or all of the following:
 
any lack of validity or enforceability of any Transaction Document or any
agreement or instrument relating thereto;
 
any change in the time, manner or place of payment of, or in any other term of,
all or any of the Guaranteed Obligations, or any other amendment or waiver of or
any consent to departure from any Transaction Document, including, without
limitation, any increase in the Guaranteed Obligations resulting from the
extension of additional credit to any Transaction Party or otherwise;
 
any taking, exchange, release or non-perfection of any Pledged Property (as
defined in the Security Documents), or any taking, release or amendment or
waiver of or consent to departure from any other guaranty, for all or any of the
Guaranteed Obligations;
 
any change, restructuring or termination of the corporate, limited liability
company or partnership structure or existence of any Transaction Party; or
 
any other circumstance (including any statute of limitations) or any existence
of or reliance on any representation by the Secured Party that might otherwise
constitute a defense available to, or a discharge of, any Transaction Party or
any other guarantor or surety.
 
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Secured Party or any other Person upon the
insolvency, bankruptcy or reorganization of any Transaction Party or otherwise,
all as though such payment had not been made.
 
 
 

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This Guaranty is a continuing guaranty and shall (i) remain in full force and
effect until the indefeasible cash payment in full of the Guaranteed Obligations
(other than inchoate indemnity obligations) and (ii) be binding upon the
Guarantor and its respective successors and assigns.  This Guaranty shall inure
to the benefit of and be enforceable by the Secured Party and its successors,
and permitted pledgees, transferees and assigns.  Without limiting the
generality of the foregoing sentence, the Secured Party may pledge, assign or
otherwise transfer all or any portion of its rights and obligations under and
subject to the terms of any Transaction Document to any other Person, and such
other Person shall thereupon become vested with all the benefits in respect
thereof granted to the Secured Party herein or otherwise, in each case as
provided in the Securities Purchase Agreement or such Transaction Document.
 
Waivers.  To the extent permitted by applicable law, the Guarantor hereby waives
promptness, diligence, notice of acceptance and any other notice with respect to
any of the Guaranteed Obligations and this Guaranty and any requirement that the
Secured Party exhaust any right or take any action against any Transaction Party
or any other Person or any Pledged Property.  The Guarantor acknowledges that it
will receive direct and indirect benefits from the financing arrangements
contemplated herein and that the waiver set forth in this Section 4 is knowingly
made in contemplation of such benefits.  The Guarantor hereby waives any right
to revoke this Guaranty, and acknowledges that this Guaranty is continuing in
nature and applies to all Guaranteed Obligations, whether existing now or in the
future.
 
Subrogation.  The Guarantor may not exercise any rights that it may now or
hereafter acquire against any Transaction Party or any other guarantor that
arise from the existence, payment, performance or enforcement of the Guarantor’s
obligations under this Guaranty, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution or indemnification and any
right to participate in any claim or remedy of the  Secured Party against any
Transaction Party or any other guarantor or any Pledged Property, whether or not
such claim, remedy or right arises in equity or under contract, statute or
common law, including, without limitation, the right to take or receive from any
Transaction Party or any other guarantor, directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or security solely
on account of such claim, remedy or right, unless and until all of the
Guaranteed Obligations (other than inchoate indemnity obligations) and all other
amounts payable under this Guaranty (other than inchoate indemnity obligations)
shall have indefeasibly been paid in full in cash.  If any amount shall be paid
to the Guarantor in violation of the immediately preceding sentence at any time
prior to the later of the payment in full in cash of the Guaranteed Obligations
and all other amounts payable under this Guaranty, such amount shall be held in
trust for the benefit of the Secured Party and shall forthwith be paid to the
Secured Party to be credited and applied to the Guaranteed Obligations and all
other amounts payable under this Guaranty, whether matured or unmatured, in
accordance with the terms of the Transaction Document, or to be held as Pledged
Property for any Guaranteed Obligations or other amounts payable under this
Guaranty thereafter arising.  If (a) any Guarantor shall make payment to the
Secured Party of all or any part of the Guaranteed Obligations, and (b) all of
the Guaranteed Obligations (other than inchoate indemnity obligations) and all
other amounts payable under this Guaranty (other than inchoate indemnity
obligations) shall indefeasibly be paid in full in cash, the Secured Party will,
at the Guarantor’s request and expense, execute and deliver to the Guarantor
appropriate documents, without recourse and without representation or warranty,
necessary to evidence the transfer by subrogation to the Guarantor of an
interest in the Guaranteed Obligations resulting from such payment by the
Guarantor.
 
 
 

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Representations, Warranties and Covenants.
 
 
(a)           The Guarantor hereby represents and warrants as of the date first
written above as follows:
 
(i)           The Guarantor (A) is a corporation, limited liability company or
limited partnership duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (B) has all corporate, limited
liability company or limited partnership power and authority to conduct its
business as now conducted and as presently contemplated and to execute and
deliver this Guaranty and each other Transaction Document to which the Guarantor
is a party, and to consummate the transactions contemplated hereby and thereby
and (C) is duly qualified to do business and is in good standing in each
jurisdiction in which the character of the properties owned or leased by it or
in which the transaction of its business makes such qualification necessary
except where the failure to be so qualified would not result in a Material
Adverse Effect.
 
(ii)           The execution, delivery and performance by the Guarantor of this
Guaranty and each other Transaction Document to which the Guarantor is a party
(A) have been duly authorized by all necessary corporate, limited liability
company or limited partnership action, (B) do not and will not contravene its
charter or by-laws, its limited liability company or operating agreement or its
certificate of partnership or partnership agreement, as applicable, or any
applicable law or any contractual restriction binding on the Guarantor or its
properties (except where the contravention of such contractual restriction would
not result in a Material Adverse Effect), (C) do not and will not result in or
require the creation of any lien (other than pursuant to any Transaction
Document) upon or with respect to any of its properties, and (D) do not and will
not result in any default, noncompliance, suspension, revocation, impairment,
forfeiture or nonrenewal of any material permit, license, authorization or
approval applicable to it or its operations or any of its properties.
 
(iii)           No authorization or approval or other action by, and no notice
to or filing with, any governmental authority is required in connection with the
due execution, delivery and performance by the Guarantor of this Guaranty or any
of the other Transaction Documents to which the Guarantor is a party (other than
expressly provided for in any of the Transaction Documents).
 
(iv)           Each of this Guaranty and the other Transaction Documents to
which the Guarantor is or will be a party, when delivered, will be, a legal,
valid and binding obligation of the Guarantor, enforceable against the Guarantor
in accordance with its terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance, suretyship or
other similar laws and equitable principles (regardless of whether enforcement
is sought in equity or at law).
 
(v)           There is no pending or, to the knowledge of the Guarantor,
threatened action, suit or proceeding against the Guarantor or to which any of
the properties of the Guarantor is subject, before any court or other
governmental authority or any arbitrator that (A) if adversely determined, could
reasonably be expected to have a Material Adverse Effect or (B) relates to this
Guaranty or any of the other Transaction Documents to which the Guarantor is a
party or any transaction contemplated hereby or thereby.
 
 
 

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(vi)           The Guarantor (A) has read and understands the terms and
conditions of the Securities Purchase Agreement and the other Transaction
Documents, and (B) now has and will continue to have independent means of
obtaining information concerning the affairs, financial condition and business
of the Company and the other Transaction Parties, and has no need of, or right
to obtain from the Secured Party, any credit or other information concerning the
affairs, financial condition or business of the Company or the other Transaction
Parties that may come under the control of the Secured Party.
 
Right of Set-off.  Upon the occurrence and during the continuance of any Event
of Default, the Secured Party may, and is hereby authorized to, at any time and
from time to time, without notice to the Guarantor (any such notice being
expressly waived by the Guarantor) and to the fullest extent permitted by law,
set-off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by the Secured Party to or for the credit or the account of the Guarantor
against any and all obligations of the Guarantor now or hereafter existing under
this Guaranty or any other Transaction Document, irrespective of whether or not
the Secured Party shall have made any demand under this Guaranty or any other
Transaction Document and although such obligations may be contingent or
unmatured.  The Secured Party agrees to notify the Guarantor promptly after any
such set-off and application made by the Secured Party, provided that the
failure to give such notice shall not affect the validity of such set-off and
application.  The rights of the Secured Party under this Section 7 are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) which the Secured Party may have under this Guaranty or any
other Transaction Document in law or otherwise.
 
Notices, Etc.  All notices and other communications provided for hereunder shall
be in writing and shall be mailed, telecopied or delivered, if to the Guarantor,
to it at its address set forth on the signature page hereto, or if to the
Secured Party, to it at its respective address set forth in the Securities
Purchase Agreement; or as to either such Person at such other address as shall
be designated by such Person in a written notice to such other Person complying
as to delivery with the terms of this Section 8.  All such notices and other
communications shall be effective (i) if mailed (by certified mail, postage
prepaid and return receipt requested), when received or three Business Days
after deposited in the mails, whichever occurs first; (ii) if telecopied, when
transmitted and confirmation is received, provided same is on a Business Day
and, if not, on the next Business Day; or (iii) if delivered by hand, upon
delivery, provided same is on a Business Day and, if not, on the next Business
Day.
 
Governing Law.  This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New Jersey without regard to the
principles of conflict of laws.  The parties further agree that any action
between them shall be heard in Hudson County, New Jersey, and expressly consent
to the jurisdiction and venue of the Superior Court of New Jersey, sitting in
Hudson County and the United States District Court for the District of New
Jersey sitting in Newark, New Jersey for the adjudication of any civil action
asserted pursuant to this Paragraph.
 
 
 

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WAIVER OF JURY TRIAL, ETC.  THE GUARANTOR HEREBY WAIVES ANY RIGHT TO A TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS
GUARANTY OR THE OTHER TRANSACTION DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER,
CONSENT, INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE
FUTURE MAY BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH, OR ARISING FROM ANY
FINANCING RELATIONSHIP EXISTING IN CONNECTION WITH THIS GUARANTY OR THE OTHER
TRANSACTION DOCUMENTS, AND AGREES THAT ANY SUCH ACTION, PROCEEDING OR
COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.  THE GUARANTOR
CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF THE SECURED
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE SECURED PARTY WOULD NOT,
IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE
FOREGOING WAIVERS.  THE GUARANTOR HEREBY ACKNOWLEDGES THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE SECURED PARTY ENTERING INTO THIS AGREEMENT.
 
Miscellaneous.
 
The Guarantor will make each payment hereunder in lawful money of the United
States of America and in immediately available funds to the Secured Party, at
such address specified by the Secured Party from time to time by notice to the
Guarantor.
 
No amendment or waiver of any provision of this Guaranty and no consent to any
departure by any Guarantor therefrom shall in any event be effective unless the
same shall be in writing and signed by each Guarantor and the Secured Party, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given.
 
No failure on the part of the Secured Party to exercise, and no delay in
exercising, any right hereunder or under any other Transaction Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right hereunder or under any Transaction Document preclude any other or further
exercise thereof or the exercise of any other right.  The rights and remedies of
the Secured Party provided herein and in the other Transaction Documents are
cumulative and are in addition to, and not exclusive of, any rights or remedies
provided by law.  The rights of the Secured Party under any Transaction Document
against any party thereto are not conditional or contingent on any attempt by
the Secured Party to exercise any of their respective rights under any other
Transaction Document against such party or against any other Person.
 
Any provision of this Guaranty that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining portions
hereof or affecting the validity or enforceability of such provision in any
other jurisdiction.
 
 
 

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This Guaranty shall (i) be binding on the Guarantor and its respective
successors and assigns, and (ii) inure, together with all rights and remedies of
the Secured Party hereunder, to the benefit of the Secured Party and their
respective successors, transferees and assigns.  Without limiting the generality
of clause (ii) of the immediately preceding sentence, the Secured Party may
assign or otherwise transfer its rights and obligations under the Securities
Purchase Agreement or any other Transaction Document to any other Person in
accordance with the terms thereof, and such other Person shall thereupon become
vested with all of the benefits in respect thereof granted to the Secured Party,
as the case may be, herein or otherwise.  None of the rights or obligations of
the Guarantor hereunder may be assigned or otherwise transferred without the
prior written consent of Secured Party.
 
This Guaranty reflects the entire understanding of the transaction contemplated
hereby and shall not be contradicted or qualified by any other agreement, oral
or written, entered into before the date hereof.
 
Section headings herein are included for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose.
 

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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed by its
respective duly authorized officer, as of the date first above written.
 

 

 
Trendsetter Production
     
By: /s/ Kent Watts
 
Name: Kent Watts
 
Title:  President and CEO
     
Address:

 
 
 Signature page to Closing Statement

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