ex4-1.htm


    Exhibit 4.1

       

      AMENDMENT
NO. 1

      TO

      RIGHTS
AGREEMENT

       

      AMENDMENT
NO. 1 to RIGHTS AGREEMENT (this “Amendment”) between Particle Drilling
Technologies, Inc., a Nevada corporation (the “Company”), and Computershare
Trust Company, N.A., a federally chartered trust company, as Rights Agent (the
“Rights Agent”) is effective this 11th day of February, 2009.

       

      W I T N E
S S E T H:

       

      WHEREAS,
on May 23, 2008, the Company and the Rights Agent entered into that one
certain Rights Agreement (the “Rights Agreement”);

       

      WHEREAS,
the Company desires to amend the Rights Agreement pursuant to Section 27
thereof; and

      


      WHEREAS,
the Distribution Date (as defined in the Rights Agreement) has not yet occurred
and the Company has met all requirements for amendment of the Rights
Agreement;

       

      NOW,
THEREFORE, in consideration of the premises and of the mutual agreements herein
set forth, the parties hereto agree as follows:

       

      Section 1.                      Amendments.  The
Rights Agreement is amended as follows:

       

      (a)         The
first sentence of the first paragraph of the definition of “Acquiring Person” in
Section 1(a) is hereby amended and restated to read as follows:

      


      “‘Acquiring Person’
shall mean any Person who or that, together with all Affiliates and Associates
of such Person, shall be or become the Beneficial Owner of 20% or more of the
shares of Common Stock then outstanding, but shall not include the Company or
any subsidiary of the Company, any employee benefit plan of the Company or of
any subsidiary of the Company, any entity organized, appointed or established
pursuant to the terms of any such plan, or any Exempt Person.”

      


      (b)           The
following shall be added as Section 1(p) and the existing Sections 1(p)
through (aa) shall be re-numbered as Sections 1(q) through (bb):

       

      “‘Exempt Person’ means
at any time LC Capital; provided, however, that LC Capital shall cease to be an
Exempt Person if LC Capital makes an acquisition of Common Stock that would
cause LC Capital to be the Beneficial Owner of 37% or more of the shares of
Common Stock then outstanding.”

       

      (c)           The
following shall be added as Section 1(v) and the existing Sections 1(v)
through (bb) shall be re-numbered as Sections 1(w) through (cc)::

      


      “‘LC Capital’ means LC
Capital Master Fund, Ltd., a Cayman Islands exempted company.”

      


      Section 2.                      Effect of this
Amendment.  It is the intent of the parties that this Amendment
constitutes an amendment of the Rights Agreement as contemplated by
Section 27 thereof.  This Amendment shall be deemed effective as of
the date hereof as if executed by both parties hereto on such
date.  Except as expressly provided in this Amendment, the terms of
the Rights Agreement remain in full force and effect.

       

      Section 3.                      Counterparts. 
This Amendment may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute one and the same instrument.

       

      Section 4.        Governing
Law.  This Amendment shall be deemed to be a contract made
under the laws of the State of Nevada and for all purposes shall be governed by
and construed in accordance with the laws of such state applicable to contracts
to be made and performed entirely within such
state.        

      


      Section
5.                      Severability.  If
any term, provision, covenant or restriction of this Amendment is held by a
court of competent jurisdiction or other authority to be invalid, illegal or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Amendment shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.

      


      Section
6.                      Descriptive
Headings.  The captions herein are included for convenience of
reference only, do not constitute a part of this Amendment and shall be ignored
in the construction and interpretation hereof.


      
        
          
             

          

           


        

        
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      IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed as of the day and year first above written.

       

      
        	 
      	
                PARTICLE
      DRILLING TECHNOLOGIES, INC.

              
	 
      	 
      
	 
      	 
      
	
                Attest:

              	 
      
	 
      	 
      
	 
      	
                By:

              	
                /s/
      JIM B. TERRY

              	 
      
	 
      	 
      	
                Name:
      Jim B. Terry

              
	 
      	 
      	
                Title:
      President and Chief Executive

              
	 
      	
                                       Officer

              
	
                By:

              	
                /s/
      JASON D. DAVIS

              	 
      	 
      
	 
      	
                Name:
      Jason D. Davis

              	 
      
	 
      	
                Title:
      Vice President and Interim Chief

              	 
      
	 
      	
                Financial Officer

              	 
      
	 
      	 
      
	 
      	 
      
	 
      	
                COMPUTERSHARE TRUST COMPANY,
      N.A., AS RIGHTS

                AGENT

              
	 
      	 
      
	 
      	 
      
	
                Attest:

              	 
      
	 
      	 
      
	 
      	
                By:

              	
                /s/
      KELLIE GWINN

              	 
      
	 
      	 
      	
                (Signature)

              
	 
      	 
      
	
                By:

              	
                /s/
      IAN YEWER

              	 
      	 
      
	 
      	
                (Signature)

              	
                Kelli
      Gwinn

              	 
      
	 
      	 
      	
                (Typed
      or Printed Name)

              
	
                Ian
      Yewer

              	 
      	 
      
	 
      	
                (Printed
      or Typed Name)

              	
                Vice
      President

              	 
      
	 
      	 
      	
                (Title)

              
	
                Branch
      President

              	 
      	 
      
	 
      	
                (Title)

              	 
      


      

      


       


      
        
          
             

          

           


        

        
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