FORM OF 5 YEAR WARRANT SULPHCO, INC. WARRANT
FORM
OF 5 YEAR WARRANT
SULPHCO,
INC.
WARRANT
|
Warrant
No. ____
|
Dated: January
__, 2010
|
SulphCo,
Inc., a Nevada corporation (the “Company”), hereby certifies
that, for value received, _________________ or its registered assigns (the
“Holder”), is entitled
to purchase from the Company up to a total of ___________ shares of common
stock, $0.001 par value per share (the “Common Stock”), of the Company
(each such share, a “Warrant
Share” and all such shares, the “Warrant Shares”) at an
exercise price equal to $1.00 per share (as adjusted
from time to time as provided in Section 9, the “Exercise Price”), at any time
and from time to time from and after the date hereof and through and including
the five (5) year anniversary of the date hereof (the “Expiration Date”), and subject
to the following terms and conditions. This Warrant (this “Warrant”) is one of a series
of similar warrants issued pursuant to that certain Subscription Agreement,
dated as of the date hereof, by and among the Company and the Purchasers
identified therein (the “Subscription
Agreement”). All such warrants are referred to herein,
collectively, as the “Warrants”, and together with
the Subscription Agreement, the “Transaction
Documents”.
1. Definitions. In
addition to the terms defined elsewhere in this Warrant, capitalized terms that
are not otherwise defined herein have the meanings given to such terms in the
Subscription Agreement, dated as of January __, 2010 among the Company and the
Purchasers listed thereto.
2. Registration of
Warrant. The Company shall register this Warrant, upon records
to be maintained by the Company for that purpose (the “Warrant Register”), in the
name of the record Holder hereof from time to time. The Company may
deem and treat the registered Holder of this Warrant as the absolute owner
hereof for the purpose of any exercise hereof or any distribution to the Holder,
and for all other purposes, absent actual notice to the contrary.
3. Registration of
Transfers. The Company shall register the transfer of any
portion of this Warrant in the Warrant Register, upon surrender of this Warrant,
with the Form of Assignment attached hereto duly completed and signed, to the
Transfer Agent or to the Company at its address specified
herein. Upon any such registration or transfer, a new warrant to
purchase Common Stock, in substantially the form of this Warrant (any such new
warrant, a “New
Warrant”), evidencing the portion of this Warrant so transferred shall be
issued to the transferee and a New Warrant evidencing the remaining portion of
this Warrant not so transferred, if any, shall be issued to the transferring
Holder. The acceptance of the New Warrant by the transferee thereof
shall be deemed the acceptance by such transferee of all of the rights and
obligations of a holder of a Warrant.
4. Exercise and Duration of
Warrants.
(a) This
Warrant shall be exercisable by the registered Holder at any time and from time
to time on or after the date which is one hundred eighty (180) days after the
date hereof to and including the Expiration Date. At 6:30 P.M., New
York City time on the Expiration Date, the portion of this Warrant not exercised
prior thereto shall be and become void and of no value.
(b) A
Holder may exercise this Warrant by delivering to the Company (i) an exercise
notice, in the form attached hereto (the “Exercise Notice”),
appropriately completed and duly signed, and (ii) payment of the Exercise
Price for the number of Warrant Shares as to which this Warrant is being
exercised, and the date such items are delivered to the Company (as determined
in accordance with the notice provisions hereof) is an “Exercise
Date.” The Holder shall not be required to deliver the
original Warrant in order to effect an exercise hereunder.
5. Delivery of Warrant
Shares.
(a) Upon
exercise of this Warrant, the Company shall promptly (but in no event later than
three (3) Trading Days (as defined below) after the Exercise Date) issue or
cause to be issued and cause to be delivered to or upon the written order of the
Holder and in such name or names as the Holder may designate, a certificate for
the Warrant Shares issuable upon such exercise, free of restrictive legends
unless a registration statement covering the resale of the Warrant Shares and
naming the Holder as a selling stockholder thereunder is not then effective and
the Warrant Shares are not freely transferable without volume restrictions
pursuant to Rule 144 under the Securities Act. The Holder, or any
individual, corporation, limited liability company, partnership, joint venture,
association, joint-stock corporation, trust estate, or unincorporated
organization (each, a “Person”) so designated by the
Holder to receive Warrant Shares, shall be deemed to have become holder of
record of such Warrant Shares as of the Exercise Date. The Company
shall, upon request of the Holder, use its best efforts to deliver Warrant
Shares hereunder electronically through the Depository Trust Company or another
established clearing corporation performing similar functions. As
used herein, “Trading
Day” means a day on which trades may be made on the U.S. national
securities exchange or over-the-counter trading market on which the Common Stock
is quoted, listed or admitted for trading.
(b) This
Warrant is exercisable, either in its entirety or, from time to time, for a
portion of the number of Warrant Shares. Upon surrender of this
Warrant following one or more partial exercises, the Company shall issue or
cause to be issued, at its expense, a New Warrant evidencing the right to
purchase the remaining number of Warrant Shares, if any.
(c) In
addition to any other rights available to a Holder, if the Company fails to
deliver to the Holder a certificate representing the number of Warrant Shares
purchased hereunder by the close of business on the third Trading Day after the
date on which delivery of such certificate is required by this Warrant, and if
after such third Trading Day the Holder purchases (in an open market transaction
or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the
Holder of the Warrant Shares that the Holder anticipated receiving from the
Company, then the Company shall, within three (3) Trading Days after the
Holder’s written request and at the Company’s sole discretion, either (i) pay
cash to the Holder in an amount equal to the Holder’s total purchase price
(including brokerage commissions, if any) for the shares of Common Stock so
purchased (the “Buy-In
Price”), at which point the Company’s obligation to deliver such
certificate (and to issue such Warrant Shares) shall terminate, or (ii) promptly
honor its obligation to deliver to the Holder a certificate or certificates
representing such Warrant Shares and pay cash to the Holder in an amount equal
to the excess (if any) of the Buy-In Price over the product of (A) such number
of Warrant Shares, and (B) the Closing Price on the date of the event giving
rise to the Company’s obligation to deliver such certificate. As used herein,
“Closing Price” means
the closing sale price on the applicable date on the securities exchange or
other-the-counter trading market on which the Common Stock is quoted, listed or
admitted for trading.
(d) The
Company’s obligations to issue and deliver Warrant Shares in accordance with the
terms hereof are absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same, any waiver or consent with respect
to any provision hereof, the recovery of any judgment against any Person or any
action to enforce the same, or any setoff, counterclaim, recoupment, limitation
or termination, or any breach or alleged breach by the Holder or any other
Person of any obligation to the Company or any violation or alleged violation of
law by the Holder or any other Person, and irrespective of any other
circumstance which might otherwise limit such obligation of the Company to the
Holder in connection with the issuance of Warrant Shares. Nothing
herein shall limit a Holder’s right to pursue any other remedies available to it
hereunder, at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver certificates representing shares of Common Stock upon
exercise of the Warrant as required pursuant to the terms
hereof.
6. Charges, Taxes and
Expenses. Issuance and delivery of certificates for
shares of Common Stock upon exercise of this Warrant shall be made without
charge to the Holder for any issue or transfer tax, withholding tax, transfer
agent fee or other incidental tax or expense in respect of the issuance of such
certificates, all of which taxes and expenses shall be paid by the Company;
provided, however, that the Company shall not be required to pay any tax which
may be payable in respect of any transfer involved in the registration of any
certificates for Warrant Shares or Warrants in a name other than that of the
Holder or an Affiliate thereof. The Holder shall be responsible for
all other tax liability that may arise as a result of holding or transferring
this Warrant or receiving Warrant Shares upon the exercise hereof.
2
7. Replacement of
Warrant. If this Warrant is mutilated, lost, stolen or
destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation hereof, or in lieu of and substitution
for this Warrant, a New Warrant, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction and customary and
reasonable bond or indemnity, if requested by the Company or the transfer agent
for the Common Stock (the “Transfer
Agent”). Applicants for a New Warrant under such circumstances
shall also comply with such other reasonable regulations and procedures and pay
such other reasonable third-party costs as the Company may
prescribe.
8. Reservation of Warrant
Shares. The Company covenants that it will at all times
reserve and keep available out of the aggregate of its authorized but unissued
and otherwise unreserved Common Stock, solely for the purpose of enabling it to
issue Warrant Shares upon exercise of this Warrant as herein provided, the
number of Warrant Shares which are then issuable and deliverable upon the
exercise of this entire Warrant, free from preemptive rights or any other
contingent purchase rights of persons other than the Holder (taking into account
the adjustments and restrictions of Section 9). The
Company covenants that all Warrant Shares so issuable and deliverable shall,
upon issuance and the payment of the applicable Exercise Price in accordance
with the terms hereof, be duly and validly authorized, issued and fully paid and
nonassessable. The Company will take all such actions as may be necessary to
assure that such shares of Common Stock may be issued as provided herein without
violation of any applicable law or regulation, or of any requirements of any
securities exchange or automated quotation system upon which the Common Stock
may be listed.
9. Certain
Adjustments. The Exercise Price and number of Warrant Shares
issuable upon exercise of this Warrant are subject to adjustment from time to
time as set forth in this Section
9.
(a) Stock Dividends and
Splits. If the Company, at any time while this Warrant is
outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a
distribution on any class of capital stock that is payable in shares of Common
Stock, (ii) subdivides outstanding shares of Common Stock into a larger number
of shares, or (iii) combines outstanding shares of Common Stock into a smaller
number of shares, then in each such case the Exercise Price shall be multiplied
by a fraction, of which the numerator shall be the number of shares of Common
Stock outstanding immediately before such event and of which the denominator
shall be the number of shares of Common Stock outstanding immediately after such
event. Any adjustment made pursuant to clause (i) of this paragraph
shall become effective immediately after the record date for the determination
of stockholders entitled to receive such dividend or distribution, and any
adjustment pursuant to clause (ii) or (iii) of this paragraph shall become
effective immediately after the effective date of such subdivision or
combination.
(b) Pro Rata
Distributions. If the Company, at any time while this Warrant
is outstanding, distributes to all holders of Common Stock (i) evidences of its
indebtedness, (ii) any security (other than a distribution of Common Stock
covered by the preceding paragraph), (iii) rights or warrants to subscribe
for or purchase any security, or (iv) any other asset (in each case, “Distributed Property”), then
in each such case the Exercise Price in effect immediately prior to the record
date fixed for determination of stockholders entitled to receive such
distribution shall be multiplied (effective on such record date) by a fraction,
of which the denominator shall be the average of the Closing Prices for the five
Trading Days immediately prior to (but not including) such record date and of
which the numerator shall be such average less the then fair market value of the
Distributed Property distributed in respect of one outstanding share
of Common Stock, as determined by the Company's independent certified public
accountants that regularly examine the financial statements of the Company (the
“Appraiser”). In
such event, the Holder, after receipt of the determination by the Appraiser,
shall have the right, at the Holder’s sole expense, to select an additional
appraiser (which shall be a nationally recognized accounting firm), in which
case such fair market value shall be deemed to equal the average of the values
determined by each of the Appraiser and such additional appraiser. As
an alternative to the foregoing adjustment to the Exercise Price, at the written
request of the Holder delivered no later than the 90th day after such record
date, the Company will deliver to the Holder, within five Trading Days after
receipt of such request (or, if later, on the effective date of such
distribution), the Distributed Property that such Holder would have been
entitled to receive in respect of the Warrant Shares for which this Warrant
could have been exercised immediately prior to such record date. If
such Distributed Property is not delivered to a Holder pursuant to the preceding
sentence, then upon expiration of or any exercise of this Warrant that occurs
after such record date, such Holder shall remain entitled to receive, in
addition to the Warrant Shares otherwise issuable upon such exercise (if
applicable), such Distributed Property.
3
(c) Fundamental
Transactions. If, at any time while this Warrant is
outstanding, (i) the Company effects any merger or consolidation of the Company
with or into another Person, and the Company is not the surviving entity, (ii)
the Company effects any sale of all or substantially all of its assets in one or
a series of related transactions, (iii) any tender offer or exchange offer
(whether by the Company or another Person) is completed pursuant to which
holders of Common Stock are permitted to tender or exchange their shares of
Common Stock for other securities, cash or property, or (iv) the Company effects
any reclassification of the Common Stock or any compulsory share exchange
pursuant to which the Common Stock is effectively converted into or exchanged
for other securities, cash or property (other than as a result of a subdivision
or combination of shares of Common Stock covered by Section 9(a) above) (in any
such case, a “Fundamental
Transaction”), then the Holder shall have the right thereafter to
receive, upon exercise of this Warrant, the same amount and kind of securities,
cash or property as it would have been entitled to receive upon the occurrence
of such Fundamental Transaction if it had been, immediately prior to such
Fundamental Transaction, the holder of the number of Warrant Shares then
issuable upon exercise in full of this Warrant (the “Alternate
Consideration”). The aggregate Exercise Price for this Warrant
will not be affected by any such Fundamental Transaction, but the Company shall
apportion such aggregate Exercise Price among the Alternate Consideration in a
reasonable manner reflecting the relative value of any different components of
the Alternate Consideration. If holders of Common Stock are given any
choice as to the securities, cash or property to be received in a Fundamental
Transaction, then the Holder shall be given the same choice as to the Alternate
Consideration it receives upon any exercise of this Warrant following such
Fundamental Transaction. In the event of a Fundamental Transaction,
the Company or the successor or purchasing Person, as the case may be, shall
execute with the Holder a written agreement providing that:
(A) this
Warrant shall thereafter entitle the Holder to purchase the Alternate
Consideration in accordance with this section 9(c),
(B) in
the case of any such successor or purchasing Person, upon such consolidation,
merger, statutory exchange, combination, sale or conveyance such successor or
purchasing Person shall be jointly and severally liable with the Company for the
performance of all of the Company's obligations under this Warrant and the
Subscription Agreement, and
(C) if
registration or qualification is required under the Securities Exchange Act of
1934, as amended (the “Exchange
Act”), or applicable state law for the public resale by the Holder of
shares of stock and other securities so issuable upon exercise of this Warrant,
all rights applicable to registration of the Common Stock issuable upon exercise
of this Warrant shall apply to the Alternate Consideration.
If, in
the case of any Fundamental Transaction, the Alternate Consideration includes
shares of stock, other securities, other property or assets of a Person other
than the Company or any such successor or purchasing Person, as the case may be,
in such Fundamental Transaction, then such written agreement shall also be
executed by such other Person and shall contain such additional provisions to
protect the interests of the Holder as the Board of Directors of the Company
shall reasonably consider necessary by reason of the foregoing. Upon
the Holder’s written request, any successor to the Company or surviving entity
in such Fundamental Transaction shall issue to the Holder a new warrant
consistent with the foregoing provisions and evidencing the Holder’s right to
purchase the Alternate Consideration for the aggregate Exercise Price upon
exercise thereof. The terms of any agreement pursuant to which a
Fundamental Transaction is effected shall include terms requiring any such
successor or surviving entity to comply with the provisions of this paragraph
(c) and ensuring that the Warrant (or any such replacement security) will be
similarly adjusted upon any subsequent transaction analogous to a Fundamental
Transaction.
If any
Fundamental Transaction constitutes or results in a Change of Control, then at
the request of the Holder delivered before the 90th day after such Fundamental
Transaction, the Company (or any such successor or surviving entity) will
purchase the Warrant from the Holder for a purchase price, payable in cash
within five Trading Days after such request (or, if later, on the effective date
of the Fundamental Transaction), equal to the Black-Scholes value of the
remaining unexercised portion of this Warrant on the date of such request. As
used herein, “Change of
Control” means the occurrence of any of the following: (i) an acquisition
by a Person or “group” (as described in Rule 13d-5(b)(1) under the Exchange Act)
of a majority of the voting rights or equity interests in the Company; (ii) a
change in the majority of members of the Company’s Board of Directors within a
24-month period unless the election or nomination for election by the Company’s
stockholders of each new director was approved by a vote of two-thirds of the
directors then still in office who were also in office at the beginning of the
24-month period; (iii) a merger or consolidation of the Company or a sale of all
or substantially all of the assets of the Company in one or a series of related
transactions, unless following such transaction or series of transactions, the
holders of the Company’s securities prior to the first such transaction continue
to hold at least a majority of the voting rights and equity interests in the
surviving entity or acquirer of such assets; (iv) a recapitalization,
reorganization or other transaction involving the Company or any significant
Subsidiary that constitutes or results in a transfer of more than a majority of
the voting rights or equity interests in the Company; or (v) consummation of a
“Rule 13e-3 transaction” as defined in Rule 13e-3 under the Exchange Act with
respect to the Company.
4
(d) Number of Warrant
Shares. Simultaneously with any adjustments to the Exercise
Price pursuant to paragraphs (a) or (b) of this Section 9, the number
of Warrant Shares that may be purchased upon exercise of this Warrant shall be
increased or decreased proportionately, so that after such adjustment the
aggregate Exercise Price payable hereunder for the increased or decreased number
of Warrant Shares shall be the same as the aggregate Exercise Price in effect
immediately prior to such adjustment.
(e) Calculations. All
calculations under this Section 9 shall be
made to the nearest cent or the nearest 1/100th of a share, as applicable, and
may include such reasonable assumptions as may be made by the
Company. The number of shares of Common Stock outstanding at any
given time shall not include shares owned or held by or for the account of the
Company, and the disposition of any such shares shall be considered an issuance
or sale of Common Stock.
(f) Notice of
Adjustments. Upon the occurrence of each adjustment pursuant
to this Section
9, the Company will, at its expense, promptly compute such adjustment in
accordance with the terms of this Warrant and prepare a certificate setting
forth such adjustment, including a statement of the adjusted Exercise Price and
adjusted number or type of Warrant Shares or other securities issuable upon
exercise of this Warrant (as applicable), describing the transactions giving
rise to such adjustments and showing in detail the facts upon which such
adjustment is based. Upon written request, the Company will promptly
deliver a copy of each such certificate to the Holder and to the Transfer
Agent.
(g) Notice of Corporate
Events. If the Company (i) declares a dividend or any other
distribution of cash, securities or other property in respect of its Common
Stock, including without limitation any granting of rights or warrants to
subscribe for or purchase any capital stock of the Company or any subsidiary of
the Company, (ii) authorizes or approves, enters into any agreement
contemplating or solicits stockholder approval for any Fundamental Transaction
or (iii) authorizes the voluntary dissolution, liquidation or winding up of the
affairs of the Company, then the Company shall deliver to the Holder a notice
describing the material terms and conditions of such transaction, at least 10
calendar days prior to the applicable record or effective date on which a Person
would need to hold Common Stock in order to participate in or vote with respect
to such transaction, and the Company will take all steps reasonably necessary in
order to ensure that the Holder is given the practical opportunity to exercise
this Warrant prior to such time so as to participate in or vote with respect to
such transaction; provided, however, that the failure to deliver such notice or
any defect therein shall not affect the validity of the corporate action
required to be described in such notice.
10. Payment of Exercise
Price. The Holder shall pay the Exercise Price in immediately
available funds.
11. Limitation on
Exercise. (a) Notwithstanding anything to the contrary contained herein,
the number of shares of Common Stock that may be acquired by the Holder upon any
exercise of this Warrant (or otherwise in respect hereof) shall be limited to
the extent necessary to ensure that, following such exercise (or other
issuance), the total number of shares of Common Stock then beneficially owned by
such Holder and its Affiliates and any other Persons whose beneficial ownership
of Common Stock would be aggregated with the Holder’s for purposes of Section
13(d) of the Exchange Act, does not exceed 4.999% (the “Threshold Percentage”) or
9.999% (the “Maximum
Percentage”) of the total number of issued and outstanding shares of
Common Stock (including for such purpose the shares of Common Stock issuable
upon such exercise). For such purposes, beneficial ownership shall be
determined in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder. Each delivery of an Exercise
Notice hereunder will constitute a representation by the Holder that it has
evaluated the limitations set forth in this paragraph and determined that
issuance of the full number of Warrant Shares requested in such Exercise Notice
is permitted under this paragraph. The Company’s obligation to issue
shares of Common Stock in excess of the limitation referred to in this Section 11 shall be
suspended (and shall not terminate or expire notwithstanding any contrary
provisions hereof) until such time, if any, as such shares of Common Stock may
be issued in compliance with such limitation. By written notice to
the Company, the Holder shall have the right (x) at any time and from time to
time to reduce its Maximum Percentage immediately upon notice to the Company in
the event and only to the extent that Section 16 of the Exchange Act or the
rules promulgated thereunder (or any successor statute or rules) is changed to
reduce the beneficial ownership percentage threshold thereunder to a percentage
less than 9.999% and (y) at any time and from time to time, to waive the
provisions of this Section 11 insofar as
they relate to the Threshold Percentage or to increase or decrease its Threshold
Percentage (but not in excess of the Maximum Percentage) unless the Holder shall
have, by written instrument delivered to the Company, irrevocably waived its
rights to so increase or decrease its Threshold Percentage, but (i) any such
waiver, increase or decrease will not be effective until the 61st day after such
notice is delivered to the Company, and (ii) any such waiver or increase or
decrease will apply only to the Holder and not to any other holder of
Warrants.
5
(b) Notwithstanding
anything to the contrary contained herein the maximum number of shares of Common
Stock that the Company may issue pursuant to the Transaction Documents at an
effective purchase price less than the Closing Price on the Trading Day
immediately preceding the Closing Date equals 19.99% of the outstanding shares
of Common Stock immediately preceding the Closing Date (the “Issuable Maximum”), unless the
Company obtains stockholder approval in accordance with the rules and
regulations of the NYSE-Amex or other securities exchange or trading market on
which the Common Stock is quoted, listed or admitted for trading, if
applicable. If, at the time any Holder requests an exercise of any of
the Warrants, the Actual Minimum (excluding any shares issued or issuable at an
effective purchase price in excess of the Closing Price on the Trading Day
immediately preceding the Closing Date) exceeds the Issuable Maximum (and if the
Company has not previously obtained the required stockholder approval), then the
Company shall issue to the Holder requesting such exercise a number of shares of
Common Stock not exceeding such Holder’s pro-rata portion of the Issuable
Maximum (based on such Holder’s share (vis-à-vis other Holders) of the aggregate
purchase price paid under the Subscription Agreement and taking into account any
Warrant Shares previously issued to such Holder). For the purposes
hereof, “Actual Minimum”
shall mean, as of any date, the maximum aggregate number of shares of Common
Stock then issued or potentially issuable in the future pursuant to the
Transaction Documents, including any Warrant Shares issuable upon exercise in
full of all Warrants, without giving effect to any limits on the number of
shares of Common Stock that may be owned by a Holder at any one
time.
12. Fractional
Shares. The Company shall not be required to issue or cause to
be issued fractional Warrant Shares upon the exercise of this
Warrant. If any fraction of a Warrant Share would, except for the
provisions of this Section 12, be
issuable upon exercise of this Warrant, the number of Warrant Shares to be
issued will be rounded down to the nearest whole share.
13. Cashless
Exercise. Notwithstanding anything contained herein to the
contrary (other than Section 11 above), if
at the time of exercise of all or a portion of this Warrant, a registration
statement is not effective (or the prospectus contained therein is not available
for use) for the resale by the Holder of all of the Warrant Shares, then the
Holder may, in its sole discretion, exercise this Warrant in whole or in part
and, in lieu of making the cash payment otherwise contemplated to be made to the
Company upon such exercise in payment of the aggregate Exercise Price, elect
instead to receive upon such exercise the “Net Number” of shares of
Common Stock determined according to the following formula (a “Cashless
Exercise”):
Net Number = (A x B) - (A x
C)
B
For
purposes of the foregoing formula:
A= the
total number of shares of Common Stock with respect to which this Warrant is
then being exercised;
B= the
Closing Price of the Common Stock on the date of the applicable Exercise Notice
or, if such date is not a Trading Day, the immediately preceding Trading Day;
and
C= the
Exercise Price then in effect for the applicable Warrant Shares at the time of
such exercise.
6
14. Registration
Statement. The Company shall use its best efforts to keep a
registration statement registering the issuance or resale of the Warrant Shares
effective during the term of this Warrant. If at any time following
the date hereof a registration statement is not effective or is not otherwise
available for the sale or resale of the Warrant Shares, the Company shall
promptly notify the Holder in writing that such registration statement is not
then effective and thereafter shall promptly notify the Holder when the
registration statement is effective again and available for the sale or resale
of the Warrant Shares (it being understood and agreed that the foregoing shall
not limit the ability of the Company to issue, or the Holder to sell, any of the
Warrant Shares in compliance with applicable federal and state securities laws).
If, at the time of exercise of all or a portion of this Warrant, a registration
statement is effective to cover the issuance or resale by the Holder of the
Warrant Shares, the Warrant Shares issued pursuant to such exercise shall be
issued free of all legends. Upon a cashless exercise of all or a portion of this
Warrant in accordance with Section 13, the
holding period for purposes of Rule 144 shall tack back to the original date of
issuance of this Warrant.
15. Notices. Any
and all notices or other communications or deliveries hereunder (including
without limitation any Exercise Notice) shall be in writing and shall be deemed
given and effective on the earliest of (i) the date of transmission, if such
notice or communication is delivered via facsimile prior to 6:30 p.m. (New York
City time) on a Trading Day, (ii) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile on a
day that is not a Trading Day or later than 6:30 p.m. (New York City time) on
any Trading Day, (iii) the Trading Day following the date of mailing, if sent by
nationally recognized overnight courier service, or (iv) upon actual receipt by
the party to whom such notice is required to be given. The address
and facsimile number for such notices or communications shall be as set forth in
the Subscription Agreement.
16. Warrant
Agent. The Company shall serve as warrant agent under this
Warrant. Upon 30 calendar days’ notice to the Holder, the Company may
appoint a new warrant agent. Any entity into which the Company or any
new warrant agent may be merged or any entity resulting from any consolidation
to which the Company or any new warrant agent shall be a party or any entity to
which the Company or any new warrant agent transfers substantially all of its
corporate trust or stockholders services business shall be a successor warrant
agent under this Warrant without any further act. Any such successor
warrant agent shall promptly cause notice of its succession as warrant agent to
be mailed (by first class mail, postage prepaid) to the Holder at the Holder's
last address as shown on the Warrant Register.
17. Miscellaneous.
(a) Subject
to the restrictions on transfer set forth on the first page hereof, this Warrant
may be assigned by the Holder. This Warrant may not be assigned by the Company
except to a successor in the event of a Fundamental Transaction. This Warrant
shall be binding on and inure to the benefit of the parties hereto and their
respective successors and assigns. Subject to the preceding sentence,
nothing in this Warrant shall be construed to give to any Person other than the
Company and the Holder any legal or equitable right, remedy or cause of action
under this Warrant. This Warrant may be amended only in writing
signed by the Company and the Holder and their respective successors and
assigns.
(b) The
Company will not, by amendment of its governing documents or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the Holder against impairment. Without limiting the
generality of the foregoing, the Company (i) will not increase the par value of
any Warrant Shares above the amount payable therefor on such exercise, (ii) will
take all such action as may be reasonably necessary or appropriate in order that
the Company may validly and legally issue fully paid and nonassessable Warrant
Shares on the exercise of this Warrant, and (iii) will not close its stockholder
books or records in any manner which interferes with the timely exercise of this
Warrant.
7
(c) Governing
Law; Venue; Waiver Of Jury Trial. All questions concerning the
construction, validity, enforcement and interpretation of this
Warrant shall be governed by and construed and enforced in accordance
with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all
legal proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by any of the Transaction Documents (whether brought
against a party hereto or its respective Affiliates, directors, officers,
stockholders, employees or agents) shall be commenced exclusively in the state
and federal courts sitting in the City of New York, Borough of
Manhattan. Each party hereto hereby irrevocably submits to the
exclusive jurisdiction of the state and federal courts sitting in the City of
New York, Borough of Manhattan for the adjudication of any dispute hereunder or
in connection herewith or with any transaction contemplated hereby or discussed
herein (including with respect to the enforcement of any of this Warrant), and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is
improper. Each party hereto hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action
or proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Warrant and agrees that such service shall
constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law. Each party hereto
hereby irrevocably waives, to the fullest extent permitted by applicable law,
any and all right to trial by jury in any legal proceeding arising out of or
relating to this Warrant or any of the Transaction Documents or the transactions
contemplated hereby or thereby. If either party shall commence an action or
proceeding to enforce any provisions of this Warrant or any Transaction
Document, then the prevailing party in such action or proceeding shall be
reimbursed by the other party for its reasonable attorneys fees and other
reasonable costs and expenses incurred with the investigation, preparation and
prosecution of such action or proceeding.
(d) The
headings herein are for convenience only, do not constitute a part of this
Warrant and shall not be deemed to limit or affect any of the provisions
hereof.
(e) In
case any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Warrant shall not in any way be affected or
impaired thereby and the parties will attempt in good faith to agree upon a
valid and enforceable provision which shall be a commercially reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.
[REMAINDER
OF ▇▇▇▇ INTENTIONALLY LEFT BLANK,
SIGNATURE
PAGE FOLLOWS]
8
IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its
authorized officer as of the date first indicated above.
|
SULPHCO,
INC.
|
|
|
By:
|
|
|
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
|
|
|
Title: Vice
President, Chief Financial Officer,
|
|
|
Treasurer
and Corporate Secretary
|
|
9
FORM OF
EXERCISE NOTICE
(To be
executed by the Holder to exercise the right to purchase shares of Common Stock
under the foregoing Warrant)
To: SulphCo,
Inc.
The
undersigned is the Holder of Warrant No. _______ (the “Warrant”) issued by SulphCo,
Inc., a Nevada corporation (the “Company”). Capitalized
terms used herein and not otherwise defined have the respective meanings set
forth in the Warrant.
|
1.
|
The
Warrant is currently exercisable to purchase a total of ______________
Warrant Shares.
|
|
2.
|
The
undersigned Holder hereby exercises its right to purchase ________ Warrant
Shares pursuant to the Warrant.
|
|
3.
|
The
holder shall pay the sum of $______ to the Company in accordance with the
terms of the Warrant as follows: (Check as
appropriate)
|
____ CASH
EXERCISE: With respect to ______ Warrant Shares.
____ CASHLESS
EXERCISE: With respect to ______Warrant Shares. [See Section
13]
|
4.
|
Pursuant
to this exercise, the Company shall deliver to the holder _______________
Warrant Shares in accordance with the terms of the
Warrant.
|
|
5.
|
Following
this exercise, the Warrant shall be exercisable to purchase a total of
______________ Warrant Shares.
|
|
Dated:
_________________, _______
|
Name
of ▇▇▇▇▇▇:
|
|
|
(Print)
_______________________________________
|
||
|
By: _________________________________________
|
||
|
Name: _______________________________________
|
||
|
Title:
________________________________________
|
||
|
(Signature
must conform in all respects to name of holder as specified on the face of
the Warrant)
|
10
FORM OF
ASSIGNMENT
[To be
completed and signed only upon transfer of Warrant]
FOR VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
________________________________ the right represented by the within Warrant to
purchase ____________ shares of Common Stock of SulphCo, Inc. to
which the within Warrant relates and appoints ________________ attorney to
transfer said right on the books of SulphCo, Inc. with full power of
substitution in the premises.
|
Dated:
_________________, _______
|
||
|
(Signature
must conform in all respects to name of holder as specified on the face of
the Warrant)
|
||
|
Address
of Transferee
|
||
|
In
the presence of:
|
||
11