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Exhibit 10.1

YA GLOBAL INVESTMENTS, L.P.
101 Hudson Street, Suite 3700
Jersey City, NJ 07302

 
December 12, 2007
 
Hyperdynamics Corporation
One Sugar Creek Center Boulevard, Suite 125
Sugar Land, Texas 77478
Attention:       Kent P. Watts
Facsimile:       (713)353-9421

 
Dear Mr. Watts:
 
This Letter Agreement is by and between Hyperdynamics Corporation, a Delaware
corporation (the “Hyperdynamics”), and YA Global Investments, L.P., a Cayman
Islands exempt limited partnership (the “YA Global”).
 
WHEREAS, YA Global is the holder of the following warrants to purchase shares of
common stock (“Common Stock”) of Hyperdynamics: (i) Warrant No. CCP-002 to
purchase 286,000 shares of Common Stock at an exercise price of $2.50 per share,
and (ii) Warrant No. CCP-003 to purchase 258,000 shares of Common Stock at an
exercise price of $2.50 per share (collectively referred to herein as the
“Warrants”)
 
WHEREAS, as of the date hereof, YA Global is entitled to exercise the Warrants
to purchase an aggregate of up to 544,000 shares of Common Stock on either a
cash, or a cashless basis (as set forth in the Warrants) until expiration date
of the Warrants.
 
WHEREAS, in order to induce YA Global to exercise the Warrants into restricted
shares of Common Stock on the date hereof and on a cash basis, Hyperdynamics
desires to, among other things, agree to reduce the exercise price of the
Warrants to $1.00 per share.
 
NOW, THEREFORE, in consideration of the mutual covenants and other agreements
contained in this Letter Agreement, Hyperdynamics and YA Global hereby agree as
follows:
 
1.
Warrant Exercise Price. As of the date hereof, Hyperdynamics hereby permanently
reduces the exercise price of the Warrants to $1.00 per share. Hyperdynamics
represents that it, and its Board of Directors, has approved this reduction to
the exercise price.

 
2.
Dutchess Equity Line. Hyperdynamics agrees that from the date hereof until the
earlier of (i) 6 months from the date hereof, or (ii) the date the 544,000
shares of Common Stock to be issued hereunder are registered on an effective
registration statement, it shall not issue any shares of Common Stock under the
equity line of credit entered into with Dutchess Private Equities Fund II, LP
(or related entity) or any other equity line at prices lower than $2.75 per
share.

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3.
Piggy Back Registration Rights. For a period of six months from the date hereof,
if Hyperdynamics files any registration statement (including, without
limitation, a primary S-3 shelf registration statement, a resale S-3 shelf
registration statement, or any registration statement on Form S-l) Hyperdynamics
shall include YA gloats 544,000 shares of Common Stock to be issued upon
exercise of the Warrants as contemplated herein.

 
4.
Hyperdynamics represents that the adjustment to the exercise price of the
Warrants will not cause a ratchet or repricing of any other outstanding
convertible securities, options, or warrants of Hyperdynamics.

 
5.
Warrant Exercise. In consideration of the agreements of Hyperdynamics set forth
above, YA Global shall exercise all 544,000 shares underlying the Warrants on
the date hereof into restricted shares of Common Stock at the new exercise price
of $1.00 per share by delivering to Hyperdynamics the exercise notices attached
hereto as Exhibit A and the aggregate exercise price of $544,000 by wire
transfer of immediately available fund to the wire instructions attached hereto
as Exhibit B.

 
6.
Hyperdymanics represents that, aside from prior events that have resulted in
adjustments to the exercise price or the number of shares underlying the
Warrants, there has been no event that pursuant to the terms of the Warrants
would have triggered such an adjustment. Hyperdynamics acknowledges that
pursuant to the Warrants, it is Hyperdynamics’ obligation to provide written
notice to YA Global of any event that may cause an adjustment to the warrant
exercise price or number of shares underlying the Warrant.

 
7.
All prior agreements between or among Hyperdynamics, YA Global, Yorkville
Advisors, LLC and any and all successors of CORNELL CAPITAL PARTNERS, LP and its
affiliates or their assigns that have required Hyperdynamics to issue additional
warrants upon any warrant repricing event are hereby extinguished in their
entirety, made null and void, and of no legal force or effect following the
delivery of the 544,000 shares of Common Stock upon the exercise of the Warrants
contemplated herein, provided however, that nothing herein shall be interpreted
as a waiver of any rights of YA Global, Yorkville Advisors, LLC and any
successors of Cornell Capital Partners, LP and its affiliates or assigns with
respect to any events where proper notice from Hyperdynamics has not been
provided.

 
8.
Covenant of YA Global, Yorkville Advisors, LLC and any and all successors of
CORNELL CAPITAL PARTNERS, LP and its affiliates, as follows:

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Other than as described herein, there are no other warrants of Hyperdynamics
outstanding that are the fruit of any prior agreements entered into between or
among Hyperdynamics, YA Global, Yorkville Advisors, LLC and any and all
successors of CORNELL CAPITAL PARTNERS, LP and its affiliates or then-assigns.
 
[Signatures appear on the next page]

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IN WITNESS WHEREOF, the parties hereto have caused this Letter Agreement to be
duly executed as of the date first written above.
 

 
Hyperdynamics Corporation
         
By:
/s/ Kent P. Watts
 
Name:
Kent P. Watts
 
Title:
President and Chief Executive Officer
     
YA Global Investments, L.P.
         
By:
Yorkville Advisors, LLC
 
Its:
Investment Manager
       
By:
/s/ Mark Angelo
 
Name:
Mark Angelo
 
Its:
Portfolio Manager

 
 

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