ex10-5.htm

Exhibit 10.5

    


    LC
Capital Master Fund, Ltd.

    680 5th
Ave

    New York,
NY 10019

    Attn: Mr.
Steve Lampe

     

    March 3,
2009

    


    Dear Mr.
Lampe,

    


     

    Reference is hereby made to that
certain Purchase Agreement dated as of February 11, 2009 by and among Particle
Drilling Technologies, Inc. a Nevada corporation (the “Company”), Particle
Drilling Technologies, Inc., a Delaware corporation and a subsidiary of the
Company, the Purchasers named therein (each, a “Purchaser”) and LC
Capital Master Fund, Ltd. (“LC”), as agent and
collateral agent for the holders of the securities issued thereunder (the “Purchase
Agreement”).  Capitalized terms used but not defined herein
shall have the meanings set forth in the Purchase Agreement.

     

    WHEREAS, the Purchasers have
agreed to purchase $400,000 in principal amount of the Notes at the First Draw
Down  (such Notes, the “First Draw Down
Notes”) on March 3, 2009 pursuant to Section 3.01(b) of the Purchase
Agreement.

     

    NOW HERETOFORE, the Company
agrees with LC, as Purchaser, as follows:

     

                          On
the date of the First Draw Down, the Company shall issue to LC, and LC shall
purchase from the Company, an additional Note in the principal amount of
$75,000, such Note (the “Additional Note”)
being in addition to LC’s pro
rata portion of the First Draw Down Notes, for a purchase price of
$75,000 (the “Additional Note Purchase
Price”).

    


    The Company instructs LC to pay the
Additional Note Purchase Price directly to Milbank, Tweed, Hadley & McCloy
LLP, as directed in the separate wire instructions provided by Milbank, Tweed,
Hadley & McCloy LLP, in satisfaction of the Company’s obligations to pay the
reasonable fees and disbursements of LC’s legal counsel incurred prior to the
First Draw Down pursuant to Section 3.02 of the Purchase Agreement.

    


    In
connection with the issuance of the Additional Note, the Company’s obligation to
issue Notes to LC and LC’s obligation to purchase Notes from the Company at the
Second Draw Down pursuant to Section 3.01(c) of the Purchase Agreement shall
each be reduced by an amount of $75,000.

    


    This
letter agreement may not be amended or any provision hereof waived or modified
except by an instrument in writing signed by each of the parties
hereto.

     

    THIS
LETTER AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.

     

    EACH
OF THE PARTIES TO THIS LETTER AGREEMENT HEREBY AGREES TO WAIVE ITS RIGHTS TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
LETTER AGREEMENT, THE TRANSACTIONS OR ANY DEALINGS BETWEEN THEM RELATING TO THE
SUBJECT MATTER OF THIS LETTER AGREEMENT.

     

    This letter agreement shall not be
construed to affect (a) the Company’s and LC’s respective rights or obligations
under the Purchase Agreement except to the extent described herein, (b) the
rights or obligations of the Company with respect to the Purchasers other than
LC under the Purchaser Agreement, or (c) the rights or obligations  of
such other Purchasers under the Purchase Agreement.

    


    This letter agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of the
Company and LC; provided, however, that the
Company shall not assign or transfer its rights or obligations hereunder without
the prior written consent of LC.

    


    This
letter agreement may be executed in any number of counterparts, each of which
shall be an original and all of which, when taken together, shall constitute one
agreement.

     

    Delivery
of an executed counterpart of a signature page of this letter agreement by
facsimile or email transmission shall be effective as delivery of a manually
executed counterpart of this letter agreement.

     

    This letter agreement and the
Transaction Documents constitute the entire contract between the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof.

    


     

    [SIGNATURE
PAGE FOLLOWS]

     


    
      
        
           

        

         


      

      
         


        
          

        

      

      
         


      

    


    If you
are in agreement with the foregoing, please countersign a copy of this letter
agreement in the space provided.

     

    
      	
               
      

            	
              PARTICLE DRILLING
      TECHNOLOGIES, INC., as
Company

            


    

    


    By: /s/ Jim B.
Terry________________________

    Name: Jim
B. Terry

    Title:   Chief
Executive Officer

    


    


    Acknowledged
and Agreed by:

    


    LC CAPITAL MASTER FUND, LTD.,
as Purchaser

    


    
      	
               
      

            	
              By:  /s/ Steve
      Lampe________________________

            


    

    
      	
               
      

            	
              Name:
      Steve Lampe

            


    

    
      	
               
      

            	
              Title:
      Managing Member of General Partner

            


    

    


    


    Further
Acknowledged and Agreed by:

    


    PARTICLE DRILLING
TECHNOLOGIES, INC.,

     as
Delaware Sub

    


    By:  /s/ Jim B.
Terry________________________

     

    Name: Jim
B. Terry

     

    Title:   President

     

    DON A. SANDERS, as
Purchaser

    


    By:  /s/ Don A.
Sanders______________________

    Name: Don
A. Sanders

    


    EDWARD F. HEIL, as
Purchaser

    


    By:  /s/ Edward F.
Heil______________________

     

    Name:
Edward F. Heil

     

    LC CAPITAL MASTER FUND, LTD.,
as Agent

    


    
      	
               
      

            	
              By:  /s/ Steve
      Lampe________________________

            


    

    
      	
               
      

            	
              Name:
      Steve Lampe

            


    

    
      	
               
      

            	
              Title:
      Managing Member of General Partner