Document:

ex10_8.htm

    
      

    

    
      	
              Exhibit
      10.8

            	
              Irrevocable
      Transfer Agent Instructions.

            

    

    

    

     

    IRREVOCABLE
TRANSFER AGENT INSTRUCTIONS

     

    

    

    February
6, 2008

    

    

    Fidelity
Transfer Company

    8915 S.
700 E. Suite 102

    Sandy,
Utah  84070

    

    

    RE:           HYPERDYNAMICS
CORPORATION

    

    Ladies
and Gentlemen:

    

    Reference
is made to that certain Securities Purchase Agreement (the “Securities Purchase
Agreement”) of even date herewith by and between Hyperdynamics
Corporation, a Delaware corporation (the “Company”), and YA
Global Investments, L.P. (the “Buyer”).  Pursuant
to the Securities Purchase Agreement, the Company shall issue and sell to the
Buyer, and the Buyer shall purchase from the Company, secured notes
(collectively, the “Notes”) which are in
certain instances convertible into shares of the Company’s common stock, par
value $0.001 per share (the “Common Stock”), at
the Buyer’s discretion.  The Company has also issued to the Buyer
warrants to purchase additional shares of Common Stock, at the Buyer’s
discretion (the “Warrant”).  These
instructions relate to the following stock or proposed stock issuances or
transfers:

     

     

    
      	
               
      

            	
              1.

            	
              Shares
      of Common Stock to be issued to the Buyer upon conversion of the Notes
      plus any shares of Common Stock to be issued to the Buyer upon conversion
      of accrued interest into Common Stock (collectively, the “Conversion
      Shares”).

            

    

     

     

    
      	
               
      

            	
              2.

            	
              Shares
      of Common Stock to be issued to the Buyer upon exercise of the Warrant
      (the “Warrant
      Shares”).

            

    

     

    This
letter shall serve as our irrevocable authorization and direction to Fidelity
Transfer Company (the “Transfer Agent”) to
do the following:

    

     

    
      	
               
      

            	
              1.

            	
              Conversion Shares and Warrant
      Shares.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              a.

            	
              Instructions Applicable to
      Transfer Agent.  With respect to the Warrant Shares and,
      upon an Event of Default (as defined in the Notes) that is not cured
      pursuant to the terms of the Notes, the Conversion Shares, the Transfer
      Agent shall, without confirmation or instructions from  the
      Company, issue the Warrant Shares and Conversion Shares to the Buyer from
      time to time upon delivery to the Transfer Agent of a properly completed
      and duly executed Exercise Notice (the “Exercise
      Notice”) in the form attached as Exhibit A to the Warrant or a
      properly completed and duly executed Conversion Notice (the “Conversion
      Notice”) in the form attached as Exhibit A to the Notes, delivered
      to the Transfer Agent by David Gonzalez, Esq. (the “Escrow Agent”)
      as agent acting on behalf of the Company.  Upon receipt of a
      Conversion Notice or an Exercise Notice, the Transfer Agent shall within
      three (3) Trading Days thereafter (i) issue and surrender to a common
      carrier for overnight delivery to the address as specified in the
      Conversion Notice or the Exercise Notice, a certificate, registered in the
      name of the Buyer or its designees, for the number of shares of Common
      Stock to which the Buyer shall be entitled as set forth in the Conversion
      Notice or Exercise Notice or (ii) provided the Transfer Agent is
      participating in The Depository Trust Company (“DTC”) Fast
      Automated Securities Transfer Program, upon the request of the Buyers,
      credit such aggregate number of shares of Common Stock to which the Buyers
      shall be entitled to the Buyer’s or their designees’ balance account with
      DTC through its Deposit Withdrawal At Custodian (“DWAC”) system
      provided the Buyer causes its bank or broker to initiate the DWAC
      transaction. For purposes hereof “Trading
      Day” shall
      mean any day on which the Nasdaq Market is open for customary
      trading.

            

    

     

    
      	
               
      

            	
              b.

            	
              No Restrictive
      Legends.  If counsel to the Company delivers (i) the
      Notice of Effectiveness set forth in Exhibit I
      attached hereto and (ii) an opinion of counsel in the form set forth in
      Exhibit
      II attached hereto, then the certificates representing the
      Conversion Shares and the Warrant Shares shall not bear any legend
      restricting transfer and should not be subject to any stop-transfer
      restrictions and shall otherwise be freely transferable on the books and
      records of the Company.

            

    

     

    
      	
               
      

            	
              c.

            	
              Restrictive
      Legends. In the
      event that the Conversion Shares and Warrant Shares are not registered for
      sale under the Securities Act of 1933, as amended, the certificates for
      the Conversion and Warrant Shares shall bear the following legend, or its
      equivalent:

            

    

     

    “THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS.  THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN A
FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO
RULE 144 UNDER SAID ACT.”

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              d.

            	
              Removal of
      Restrictive Legends.   In the event
      that the Buyer submits to the Transfer Agent the Conversion Shares or
      Warrant Shares for the removal of the restrictive legends whether in
      connection with a sale of such shares pursuant to any exemption to the registration
      requirements the Securities Act of 1933, as amended, or otherwise and such
      removal of the restrictive legends is permitted by law, the Transfer Agent
      shall without confirmation or instructions from  the Company and
      within three (3) Trading Days of receipt of all required documentation
      from the Buyer, its agent or counsel, (i) issue and surrender to a common
      carrier for overnight delivery to the address as specified by the
      Buyer(s), a certificate, registered in the name of the Buyer or its
      designees, for the number of shares of Common Stock to which the Buyer
      shall be entitled as set forth pursuant to their submission or (ii)
      provided the Transfer Agent is participating in The Depository Trust
      Company (“DTC”) Fast Automated Securities
      Transfer Program, upon the request of the Buyer, credit such aggregate
      number of shares of Common Stock to which the Buyer shall be entitled to
      the Buyer’s or their designees’ balance account with DTC through its
      Deposit Withdrawal At Custodian (“DWAC”) system provided the Buyer
      causes its bank or broker to initiate the DWAC transaction. For purposes
      hereof “Trading
      Day” shall mean any day on which the
      Nasdaq Market is open for customary
  trading.

            

    

     

    
      	
               
      

            	
              e.

            	
              Opinions of
      Counsel.  In the event that counsel to the Company fails
      or refuses to render an opinion as required to issue the Conversion Shares
      or Warrant Shares (either with or without restrictive legends, as
      applicable) or to remove a legend from Conversion Shares or Warrant
      Shares, then the Company irrevocably and expressly authorizes counsel to
      the Buyer to render such opinion.  The Transfer Agent shall
      accept and be entitled to rely on such opinion for the purposes of issuing
      the Conversion Shares or Warrant Shares.  In the event the Buyer
      submits an opinion of counsel as contemplated herein, the Transfer Agent
      hereby acknowledges it will rely on and accept such opinion of counsel and
      all documentation submitted in connection therewith, without the
      confirmation or instructions from the Company, and issue such Conversion
      Shares or Warrant Shares in accordance with such
  opinion.

            

    

     

    
      	
               
      

            	
              f.

            	
              Instructions Applicable to
      Escrow Agent.  Upon the Escrow Agent’s receipt of a
      properly completed Exercise Notice and the Aggregate Exercise Price (as
      defined in the Warrant) or, following an Event of Default that has not
      been cured pursuant to the terms of the Notes, a Conversion Notice, the
      Escrow Agent shall, within one (1) Trading Day thereafter, send to the
      Transfer Agent the Conversion Notice or Exercise Notice as the case may
      be, which shall constitute an irrevocable instruction to the Transfer
      Agent to process such Conversion Notice or Exercise Notice in accordance
      with the terms of these
instructions.

            

    

     

    
      	
               
      

            	
              2.

            	
              Other
      Agreements.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              a.

            	
              The
      Transfer Agent shall reserve for issuance to the Buyer a minimum of eleven
      million (11,000,000) Conversion Shares and Warrant Shares.  All
      such shares shall remain in reserve with the Transfer Agent until the
      Buyer provide the Transfer Agent instructions that the shares or any part
      of them shall be taken out of reserve and shall no longer be subject to
      the terms of these instructions. Under no circumstances, including without
      limitation the exhaustion of the number of reserved shares articulated
      herein, shall the reservation of Conversion Shares and Warrant shares
      articulated herein be deemed to be a cap on the number of Conversion
      Shares and Warrant Shares to be issued to the
  Buyer.

            

    

     

    
      	
               
      

            	
              b.

            	
              The
      Company hereby irrevocably appoints the Escrow Agent as a duly authorized
      agent of the Company for the purposes of authorizing the Transfer Agent to
      process issuances and transfers specifically contemplated
      herein.

            

    

     

    
      	
               
      

            	
              c.

            	
              The
      Transfer Agent shall rely exclusively on the Conversion Notice or the
      Exercise Notice and shall have no liability for relying on such
      instructions.  Any Conversion Notice or Exercise Notice
      delivered hereunder shall constitute an irrevocable instruction to the
      Transfer Agent to process such notice or notices in accordance with the
      terms thereof.  Such notice or notices may be transmitted to the
      Transfer Agent by facsimile or any commercially reasonable
      method.

            

    

     

    
      	
               
      

            	
              d.

            	
              The
      Company hereby confirms to the Transfer Agent and the Buyer that no
      instructions other than as contemplated herein will be given to Transfer
      Agent by the Company with respect to the Conversion Shares, the Warrant
      Shares and the matters referenced herein.  The Company hereby
      authorizes the Transfer Agent, and the Transfer Agent shall be obligated,
      to disregard any contrary instructions received by or on behalf of the
      Company with respect to the Conversion Shares, the Warrant Shares and the
      matters referenced herein.

            

    

     

    
      	
               
      

            	
              e.

            	
              The
      Company shall not be entitled to nor will the Transfer Agent grant a
      suspension of the obligations hereunder for any time period in order for
      the Company to obtain a court order or its equivalent in order to prevent
      the Transfer Agent from acting
hereunder.

            

    

     

    
      	
               
      

            	
              f.

            	
              The
      Transfer Agent, upon request of the Buyer(s) and without instruction or
      confirmation by the Company, will provide to the Buyer(s) information
      about the total number of authorized shares of the Company’s Common Stock
      as well as information about the current outstanding shares of the
      Company’s Common Stock as of the date of the
  request.

            

    

     

    
      	
               
      

            	
              3.

            	
              Certain Notice Regarding the
      Escrow Agent. The Company and the Transfer Agent hereby acknowledge
      that the Escrow Agent is general counsel to the Buyer, a partner of the
      general partner of the Buyer and counsel to the Buyer in connection with
      the transactions contemplated and referred herein.  The Company
      and the Transfer Agent agree that in the event of any dispute arising in
      connection with this Agreement or otherwise in connection with any
      transaction or agreement contemplated and referred herein, the Escrow
      Agent shall be permitted to continue to represent the Buyer and neither
      the Company nor the Transfer Agent will seek to disqualify such
      counsel.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              4.

            	
              Replacement of Transfer
      Agent.

            

    

     

    
      
        	
              	
                a.

              	
                The
      Company hereby agrees that it shall not replace the Transfer Agent as the
      Company’s transfer agent without the prior written consent of the
      Buyer.    

              

      

       

      
        	
              	
                b.

              	
                Any
      attempt by Transfer Agent to resign as the Company’s transfer agent
      hereunder shall not be effective until such time as the Company provides
      to the Transfer Agent written notice that a suitable replacement has
      agreed to serve as transfer agent and to be bound by the terms and
      conditions of these Irrevocable Transfer Agent
      Instructions.  However, the transfer agent may resign upon 30
      days written notice.

              

      

    

     

    
      	
               
      

            	
              5.

            	
              Miscellaneous.

            

    

     

    
      	
               
      

            	
              a.

            	
              The
      Company and the Transfer Agent hereby acknowledge and confirm that
      complying with the terms of this Agreement does not and shall not prohibit
      the Transfer Agent from satisfying any and all fiduciary responsibilities
      and duties it may owe to the
Company.

            

    

     

    
      	
               
      

            	
              b.

            	
              The
      Company and the Transfer Agent acknowledge that the Buyer is relying on
      the representations and covenants made by the Company and the Transfer
      Agent hereunder and are a material inducement to the Buyer purchasing
      convertible Notes under the Securities Purchase Agreement.  The
      Company and the Transfer Agent further acknowledge that without such
      representations and covenants of the Company and the Transfer Agent made
      hereunder, the Buyer would not purchase the
  Notes.

            

    

     

    
      	
               
      

            	
              c.

            	
              Each
      party hereto specifically acknowledges and agrees that in the event of a
      breach or threatened breach by a party hereto of any provision hereof, the
      Buyer will be irreparably damaged and that damages at law would be an
      inadequate remedy if these Irrevocable Transfer Agent Instructions were
      not specifically enforced.  Therefore, in the event of a breach
      or threatened breach by a party hereto, including, without limitation, the
      attempted termination of the agency relationship created by this
      instrument, the Buyer shall be entitled, in addition to all other rights
      or remedies, to an injunction restraining such breach, without being
      required to show any actual damage or to post any bond or other security,
      and/or to a decree for specific performance of the provisions of these
      Irrevocable Transfer Agent
Instructions.

            

    

     

    

     

    [REMAINDER
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    IN WITNESS WHEREOF, the
parties have caused this letter agreement regarding Irrevocable Transfer Agent
Instructions to be duly executed and delivered as of the date first written
above.

     

    

    COMPANY:

    

    Hyperdynamics
Corporation

    By:
/s/    Kent Watts

    Name:     Kent
Watts

    Title:       President
and CEO

    

    

    ESCROW
AGENT:

    

    /s/ Kent
Watts

    Gonzalez,
Esq.

    

     

    

    BUYER:

    YA
Global Investments, L.P.

    

    By:          Yorkville
Advisors, LLC

    Its:           Investment
Manager

    

    By:
/s/    Mark Angelo

    Name:     Mark
Angelo

    Title:       Portfolio
Manager

    

    

    TRANSFER
AGENT:

    Fidelity Transfer Company

    

    By:
/s/   Kevin Kopaunik

    Name:    Kevin
Kopaunik

    Title:      Presidentex10_9.htm

    
      

    

    
      	
              Exhibit
      10.9

            	
              Guaranty
      by HYD Resources Corporation.

            

    

    

    

    GUARANTY

     

    This GUARANTY AGREEMENT (“Agreement”), dated as
of February 6, 2008 is made by HYD RESOURCES CORPORATION (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”).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    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.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    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.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    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.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (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.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    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.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    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.

     

    

    [REMAINDER
OF THIS PAGE INTENTIONALLY LEFT BLANK]

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    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.

     

    

     

    

    
      	 
      	
              HYD
      Resources Corporation

            
	 
      	 
      
	 
      	
              By:  /s/
      Kent Watts

            
	 
      	
              Name: 
      Kent Watts

            
	 
      	
              Title:   
      President and CEO

            
	 
      	 
      
	 
      	
              Address:

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