FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
FIRST
AMENDMENT TO LOAN AND SECURITY AGREEMENT
This
First Amendment to Loan and Security Agreement (this “Amendment”),
dated
as of September 22, 2008, is by and among HYDROGEN,
L.L.C., an
Ohio
limited liability company, with its principal place of business located at
0
Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000 (the “Borrower”),
HYDROGEN
CORPORATION, a
Nevada
corporation, with its principal place of business located at 00 Xxxx
00xx
Xxxxxx,
Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000 ( the “Guarantor”
or
“HYDRO
Corp”),
FEDERATED
XXXXXXXX FUND, a
portfolio of Federated Equity Funds, a Massachusetts business trust, with
offices located at 0000 Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000,
in its
capacity as agent for the benefit of the Lenders (together with its successors
and assigns, the “Agent”),
FEDERATED
XXXXXXXX FUND, a
portfolio of Federated Equity Funds, a Massachusetts business trust, with
offices located at 0000 Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000,
in its
capacity as a Lender, and SAMSUNG
C & T CORPORATION,
a
corporation organized under the laws of the Republic of Korea, with offices
at
Samsung C&T Corporation Building, 1321-20, Seocho-2 Dong, Seocho-Gu, Seoul,
Korea, in its capacity as a Lender (together with their respective successors
and assigns, the “Lenders”).
RECITALS
WHERAS,
the
Borrower, Guarantor, Agent and Lenders are parties to that certain Loan and
Security Agreement dated as of August 22, 2008 (as amended, restated,
supplemented and otherwise modified, the “Loan
Agreement”).
WHEREAS,
the
parties hereto desire to amend certain terms and provisions of the Loan
Agreement on the terms and conditions set forth herein.
NOW,
THEREFORE,
in
consideration of the premises herein contained, and for other good and valuable
consideration (the receipt, sufficiency and adequacy of which are hereby
acknowledged), the parties hereto (intending to be legally bound) hereby
agree
as follows:
1. Definitions.Terms
capitalized herein and not otherwise defined herein shall have the meanings
ascribed to such terms in the Loan Agreement, as amended hereby.
2. Amendments
to Loan Agreement.Subject
to the terms and conditions contained herein, the Borrower, Guarantor, Agent
and
Lenders hereby amend the Loan Agreement as follows:
(a)
Section 1.21 of the Loan Agreement is hereby amended and restated as
follows:
1.21
“Default Warrants”
means
the five (5) year warrants to purchase 870,000 shares of Common Stock of
HYDRO
Corp, to be issued to each of the Lenders by the Guarantor having a per share
exercise price equal to $0.01 per share, solely after the occurrence and
existence of an Event of Default that remains either uncured or not waived
by
the Lenders within the applicable cure period, in
the
form annexed hereto as Exhibit
B.
(b)
Exhibit B to the Loan Agreement is hereby amended and restated as Exhibit
B
attached to this Amendment.
(c)
After
Section 11.1 (d), the following shall be added:
(e)
the
day following the occurrence and continuation of an Event of Default that
is
either not cured nor waived by the Lenders within the applicable cure period,
Guarantor shall issue the Default Warrants to each of the Lenders.
3. Condition
Precedent.The
amendment contained in Section
2
hereof
is subject to, and contingent upon, the prior or contemporaneous satisfaction
of
the following condition precedent: the Borrower, Guarantor, Agent and Lenders
shall have executed and delivered to each other this Amendment.
4. Reference
to and Effect on the Loan Agreement.
(a) Except
as
expressly provided herein, the Loan Agreement and all of the other Loan
Documents shall remain unmodified and continue in full force and effect and
are
hereby ratified and confirmed.
(b) Except
as
expressly provided herein, the execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of: (i) any right, power or remedy
of
the Lenders under the Loan Agreement or any of the other Loan Documents,
or (ii)
any Event of Default under the Loan Agreement.
5. Representations
and Warranties of the Borrower and Guarantor.Each
of
Borrower and Guarantor hereby represents and warrants to the Agent and the
Lenders, which representations and warranties shall survive the execution
and
delivery hereof, that on and as of the date hereof and after giving effect
to
this Amendment:
(a) It
has
the requisite power and authority to execute, deliver and perform its
obligations under this Amendment. This Amendment has been duly authorized
by all
necessary action of it. This Amendment constitutes the legal, valid and binding
obligation of it, enforceable against it in accordance with its terms, subject
to the effect of any applicable bankruptcy, insolvency, reorganization or
similar law affecting creditors’ rights generally and general principles of
equity;
(b) The
representations set forth in the Loan Agreement and in the Loan Documents
are
true, correct and complete on and as of the date hereof; and
(c) No
Event
of Default has occurred and is continuing.
(d) The
issuance of the Default Warrants in accordance with this Amendment upon an
Event
of Default, and the issuance and delivery of the shares of Common Stock issuable
upon exercise of the Default Warrants have been duly authorized by all necessary
corporate action on the part of the Guarantor. The shares of Common Stock
issuable upon exercise of the Default Warrants have been reserved for issuance
by all necessary corporate action on the part of the Guarantor. The Default
Warrants, when so issued in accordance with the provisions of this Amendment
upon an Event of Default, will represent a binding obligation of the Guarantor
enforceable against it in accordance with its terms, and the Common Stock,
when
issued upon exercise of the Default Warrants upon receipt by the Guarantor
of
the exercise price, will be duly authorized, validly issued, fully paid and
nonassessable.
6. Reference
to Loan Agreement; No Waiver.
(a) Upon
the
effectiveness of this Amendment, each reference in the Loan Agreement to
“this
Loan Agreement,” “this Agreement”, “hereunder,” “hereof,” “herein” or words of
like import shall mean and be a reference to the Loan Agreement as amended
hereby. The term “Loan Documents” as defined in Section 1.53 of the Loan
Agreement shall include (in addition to the Loan Documents described in the
Loan
Agreement) this Amendment and any other agreements, instruments or other
documents executed in connection herewith.
2
(b) The
Agent’s failure, at any time or times hereafter, to require strict performance
by the Borrower of any provision or term of the Loan Agreement, this Amendment
or the other Loan Documents shall not waive, affect or diminish any right
of the
Lender hereafter to demand strict compliance and performance herewith or
therewith. Any suspension or waiver by the Lender of a breach of this Amendment
or any Event of Default under the Loan Agreement shall not, except as expressly
set forth herein, suspend, waive or affect any other breach of this Amendment
or
any Event of Default under the Loan Agreement, whether the same is prior
or
subsequent thereto and whether of the same or of a different kind or character.
None of the undertakings, agreements, warranties, covenants and representations
of the Borrower or Guarantor contained in this Amendment, shall be deemed
to
have been suspended or waived by the Agent unless such suspension or waiver
is:
(i) in writing and signed by the Agent, and (ii) delivered to the Borrower
or
Guarantor. In no event shall the Agent’s execution and delivery of this
Amendment establish a course of dealing among the Agent, Guarantor, Borrower
or
any other obligor or in any other way obligate the Agent to hereafter provide
any amendments or waivers with respect to the Loan Agreement. The terms and
provisions of this Amendment shall be limited precisely as written and shall
not
be deemed: (A) to be a consent to a modification (except as expressly provided
herein) or waiver of any other term or condition of the Loan Agreement or
of any
other Loan Documents, or (B) to prejudice any right or remedy that the Agent
may
now have under or in connection with the Loan Agreement or any of the other
Loan
Documents.
7. Successors
and Assigns.This
Amendment shall be binding upon and inure to the benefit of the Agent, the
Lenders and each of the other parties hereto and their respective successors
and
assigns; provided,
however,
the
Borrower may not assign this Amendment or any of the Borrower’s rights hereunder
without the Agent’s prior written consent. Any prohibited assignment of this
Amendment shall be absolutely null and void. This Amendment may only be amended
or modified by a writing signed by the Agent, Lenders, Borrower and
Guarantor.
8. Severability.Wherever
possible, each provision of this Amendment shall be interpreted in such a
manner
so as to be effective and valid under applicable law, but if any provision
of
this Amendment is held to be prohibited by or invalid under applicable law,
such
provision or provisions shall be ineffective only to the extent of such
provision and invalidity, without invalidating the remainder of this
Amendment.
9. Governing
Law.THIS
AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH
THE LAWS OF THE STATE OF NEW YORK, THE LAWS OF WHICH THE BORROWER HEREBY
EXPRESSLY ELECTS TO APPLY TO THIS AMENDMENT, WITHOUT GIVING EFFECT TO PROVISIONS
FOR CHOICE OF LAW HEREUNDER. THE BORROWER AGREES THAT ANY ACTION OR PROCEEDING
BROUGHT TO ENFORCE OR ARISING OUT OF THIS AMENDMENT SHALL BE COMMENCED IN
ACCORDANCE WITH THE PROVISIONS OF THE LOAN AGREEMENT.
10. Counterparts;
Facsimile or Other Electronic Transmission.This
Agreement may be executed in counterparts and by facsimile or other electronic
signatures, each of which when so executed, shall be deemed an original,
but all
of which shall constitute but one and the same instrument.
***Signature
Page Follows***
3
IN
WITNESS WHEREOF,
the
undersigned have caused this First Amendment to Loan and Security Agreement
to
be duly executed and delivered as of the date first above written.
| BORROWER: | ||
| HYDROGEN, L.L.C. | ||
| By: | /s/ Xxxx Xxxxxxxx | |
| Name: | Xxxx Xxxxxxxx | |
| Title: | President | |
| GUARANTOR: | ||
| HYDROGEN CORPORATION | ||
| By: | /s/ Xxxx Xxxxxxxx | |
| Name: | Xxxx Xxxxxxxx | |
| Title: | President | |
| AGENT: | ||
|
FEDERATED
XXXXXXXX FUND
a
portfolio of Federated Equity Funds
|
||
| By: | /s/ Xxxx Xxxxx | |
| Name: | Xxxx Xxxxx | |
| Title: | Vice President | |
| LENDERS: | ||
|
FEDERATED
XXXXXXXX FUND
a
portfolio of Federated Equity Funds
|
||
| By: | /s/ Xxxx Xxxxx | |
| Name: | Xxxx Xxxxx | |
| Title: | Vice President | |
| SAMSUNG C&T CORPORATION | ||
| By: | /s/ Xxx Xxxxxx Hwan | |
| Name: | Xxx Xxxxxx Hwan | |
| Title: | Vice President | |
EXHIBIT
B
[FORM
OF DEFAULT WARRANT]
NEITHER
THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”)
AND APPLICABLE STATE SECURITIES LAWS AND, ACCORDINGLY, MAY NOT BE OFFERED
OR
SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH
APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES AND THE SECURITIES ISSUABLE
UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA
FIDE
MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
HYDROGEN
CORPORATION
WARRANT
|
|
|
|
|
Warrant
No. XXXX
|
|
Original
Issue Date: __________________
|
HYDROGEN
CORPORATION, a Nevada corporation (the “Company”),
hereby certifies that, for value received, [Lender] or its permitted registered
assigns (the “Holder”),
is
entitled to purchase from the Company up to a total of 870,000 shares of
common
stock, $0.001 par value (the “Common
Stock”),
of
the Company (each such share, a “Warrant
Share”
and
all
such shares, the “Warrant
Shares”)
at an
exercise price per share equal to $0.01 (the “Exercise
Price”),
at
any time and from time to time from and after the Trigger Date (as defined
below) and through and including [FIVE YEARS FROM THE ORIGINAL ISSUE DATE]
(the
“Expiration
Date”),
and
subject to the following terms and conditions:
This
Warrant is issued pursuant to that certain Loan and Security Agreement,
dated
August 22, 2008, as amended or restated from time to time, by and among
the
Company, HydroGen L.L.C., Federated Xxxxxxxx Fund, a portfolio of Federated
Equity Funds, as Agent for Federated Xxxxxxxx Fund and Samsung C&T
Corporation (the “Loan
and Security Agreement”).
The
Warrants and Warrant Shares shall be referred to herein collectively as
the
“Securities.”
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
Security and Loan Agreement.
2. List
of Warrant Holders.
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 (which shall include the initial Holder or,
as the
case may be, any registered assignee to which this Warrant is permissibly
assigned hereunder 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.
List
of Transfers.
(a) This
Warrant is subject to the restrictions noted in the legend set forth on
the
first page of this Warrant.
-1-
(b) The
Company shall register any such transfer of all or any portion of this
Warrant
in the Warrant Register, upon (i) surrender of this Warrant, with the Form
of
Assignment attached hereto duly completed and signed, to the Company at
its
address specified in Section 13 hereof and (ii) if a registration statement
is
not effective, (x) delivery, at the request of the Company, of an opinion
of
counsel reasonably satisfactory to the Company, to the effect that the
transfer
of such portion of this Warrant may be made pursuant to an available exemption
from the registration requirements of the Securities Act and all applicable
state securities or blue sky laws and (y) delivery by the transferee of
a
written statement to the Company certifying that the transferee is an
“accredited investor” as defined in Rule 501(a) under the Securities Act and
making the representations and certifications set forth below in Section
3(c),
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 in respect
of
the New Warrant that the Holder has in respect of this Warrant. Notwithstanding
the foregoing, to the extent a Holder desires to transfer this Warrant
to a
non-affiliate after the effectiveness of any registration statement filed
by the
Company to register for offer and sale the Warrant Shares, then such transferee
shall not be entitled to the registration rights associated with the underlying
Warrant Shares but shall be entitled to all other rights as a Holder hereunder,
including the right to exercise this Warrant on a “cashless” exercise basis
pursuant to Section 10(b) hereof.
(c) Any
transferee of the Warrant shall represent and warrant to the Company the
following:
(i)
Investment
Intent.
Such
transferee understands that the Securities are “restricted securities” and have
not been registered under the Securities Act or any applicable state securities
law and is acquiring the Securities and, upon exercise of the Warrant will
acquire the Warrant Shares issuable upon exercise thereof, as principal
for its
own account for investment purposes only and not with a view to or for
distributing or reselling such Securities or any part thereof, without
prejudice, however, to such transferee's right, subject to the provisions
of
this Agreement, at all times to sell or otherwise dispose of all or any
part of
such Securities pursuant to an effective registration statement under the
Securities Act or under an exemption from such registration and in compliance
with applicable federal and state securities laws. Subject to the immediately
preceding sentence, nothing contained herein shall be deemed a representation
or
warranty by such transferee to hold the Securities for any period of time.
Such
transferee is acquiring the Securities hereunder in the ordinary course
of its
business. Such transferee does not have any agreement, plan or understanding,
directly or indirectly, with any Person to distribute any of the
Securities.
(ii)
Purchaser
Status.
At the
time such transferee was offered the Securities, it was, and at the date
hereof
it is, and on each date on which it exercises the Warrants it will be,
an
“accredited investor” as defined in Rule 501(a) under the Securities Act. Such
transferee is not a registered broker-dealer under Section 15 of the Exchange
Act.
(iii)
General
Solicitation.
Such
transferee is not purchasing the Securities as a result of any advertisement,
article, notice or other communication regarding the Securities published
in any
newspaper, magazine or similar media or broadcast over television or radio
or
presented at any seminar or any other general solicitation or general
advertisement.
4.
Exercise
and Duration of Warrants.
(a)
All
or
any part of this Warrant shall be exercisable by the registered Holder
at any
time and from time to time on or after the Trigger Date (as defined below)
and
through and including the Expiration Date.
(b)
As
used
in this Agreement, the following term shall have the respective
meaning:
(i)
“Trigger Date” shall mean the day following the occurrence and existence of
an Event of Default (as defined in the Loan and Security Agreement) that
is
either not cured by the Borrower or Guarantor (as defined in the Loan and
Security Agreement) nor waived by the Lenders (as defined in the Loan and
Security Agreement) within the applicable cure period.
-2-
(c)
At
5:00
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 and
this
Warrant shall be terminated and no longer outstanding.
(d) The
Holder may exercise this Warrant by delivering to the Company (i) an exercise
notice, in the form attached hereto (the “Exercise
Notice”),
completed and duly signed, together with the aggregate Exercise Price for
the
number of Warrant Shares to be issued pursuant to such exercise, and (ii)
if
such Holder is not utilizing the cashless exercise provisions set forth
in this
Warrant, 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
delivery by (or on behalf of) the Holder of the Exercise Notice and the
applicable Exercise Price shall be accompanied by a statement by the Holder
certifying to the Company the representations and warranties contained
in
Section 3(c) hereof. The Holder shall not be required to deliver the original
Warrant in order to effect an exercise hereunder. Execution and delivery
of the
Exercise
Notice
shall have the same effect as cancellation of the original Warrant and
issuance
of a New Warrant evidencing the right to purchase the remaining number
of
Warrant Shares.
5.
Delivery
of Warrant Shares.
(a)
Upon
exercise of this Warrant, the Company shall promptly (but in no event later
than
three Trading Days 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 (provided that, if a registration
statement is not effective and the Holder directs the Company to deliver
a
certificate for the Warrant Shares in a name other than that of the Holder
or an
Affiliate of the Holder, it shall deliver to the Company on the Exercise
Date an
opinion of counsel reasonably satisfactory to the Company to the effect
that the
issuance of such Warrant Shares in such other name may be made pursuant
to an
available exemption from the registration requirements of the Securities
Act and
all applicable state securities or blue sky laws), 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 or the
Warrant
Shares are not freely transferable pursuant to Rule 144 under the Securities
Act. The Holder, or any Person permissibly so designated by the Holder
to
receive Warrant Shares, shall be deemed to have become the holder of record
of
such Warrant Shares as of the Exercise Date.
(b)
If
by the
close of the third Trading Day after delivery of an Exercise Notice, the
Company
fails to deliver to the Holder a certificate representing the required
number of
Warrant Shares in the manner required pursuant to Section 5(a), and if
after
such third Trading Day and prior to the receipt of such Warrant Shares,
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
which the Holder anticipated receiving upon such exercise (a “Buy-In”),
then
the Company shall, within three Trading Days after the Holder’s request and in
the Holder’s sole discretion, either (1) pay in cash to the Holder 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 (2) 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,
times
(B) the closing bid price of a share of Common Stock on the date of the
event
giving rise to the Company’s obligation to deliver such certificate.
-3-
(c)
To
the
extent permitted by law, 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. 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 exercise hereof.
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 indemnity (which shall
not
include a surety bond), if requested. 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. If a New Warrant is requested as a result of a mutilation of
this
Warrant, then the Holder shall deliver such mutilated Warrant to the Company
as
a condition precedent to the Company’s obligation to issue the New Warrant.
8.
Reservation
of Warrant Shares.
The
Company covenants that it will initially 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, [one hundred twenty percent (120%)] of
the
number of Warrant Shares which are initially 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. The Company
further
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.
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.
-4-
(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
its
outstanding shares of Common Stock into a larger number of shares, or (iii)
combines its 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,
upon any exercise of this Warrant that occurs after the record date fixed
for
determination of stockholders entitled to receive such distribution, the
Holder
shall be entitled to receive, in addition to the Warrant Shares otherwise
issuable upon such exercise (if applicable), the Distributed Property that
such
Holder would have been entitled to receive in respect of such number of
Warrant
Shares had the Holder been the record holder of such Warrant Shares immediately
prior to such record date.
(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, in which the
Company
is not the survivor, (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 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 (each, 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”).
(d)
Number
of Warrant Shares.
Simultaneously with any adjustment to the Exercise Price pursuant to paragraph
(a) 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 adjusted 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. 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
issue or
sale of Common Stock.
(f)
Notice
of Adjustments.
Upon
the occurrence of each adjustment pursuant to this Section
9,
the
Company at its expense will, at the written request of the Holder, promptly
compute such adjustment, in good faith, 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 Company’s Transfer Agent.
-5-
(g)
Notice
of Corporate Events.
If,
while this Warrant is outstanding, 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,
(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, except if such notice and the contents thereof shall
be
deemed to constitute material non-public information, the Company shall
deliver
to the Holder a notice describing the material terms and conditions of
such
transaction at least ten (10) Trading 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 reasonable steps to give the Holder the practical opportunity
to
exercise this Warrant prior to such time; 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 may pay the Exercise Price in one of the following manners:
(a)
Cash
Exercise.
The
Holder may deliver immediately available funds; or
(b)
Cashless
Exercise.
If an
Exercise Notice is delivered at a time when a registration statement permitting
the Holder to resell the Warrant Shares is required to be effective and
is not
then effective or the prospectus forming a part thereof is not then available
to
the Holder for the resale of the Warrant Shares, then the Holder may notify
the
Company in an Exercise Notice of its election to utilize cashless exercise,
in
which event the Company shall issue to the Holder the number of Warrant
Shares
determined as follows:
X
= Y
[(A-B)/A]
where:
X
= the
number of Warrant Shares to be issued to the Holder.
Y
= the
number of Warrant Shares with respect to which this Warrant is being exercised.
A
= the
average of the closing prices of a share of Common Stock for the five Trading
Days immediately prior to (but not including) the Exercise Date.
B
= the
Exercise Price.
For
purposes of Rule 144 promulgated under the Securities Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction shall be deemed to have been acquired by the Holder,
and
the holding period for the Warrant Shares shall be deemed to have commenced,
on
the date this Warrant was originally issued.
11.
No
Fractional Shares.
No
fractional Warrant Shares will be issued in connection with any exercise
of this
Warrant. In lieu of any fractional shares which would otherwise be issuable,
the
Company shall pay cash equal to the product of such fraction multiplied
by the
closing price of one Warrant Share as reported by the applicable Trading
Market
on the Exercise Date.
-6-
12.
Registration
Rights and SEC Reporting Obligations of Company.
(a)
Piggy
Back Registration Rights. If
the
Investor exercises any portion of the Warrant, and thereafter the Company
proposes to file a registration statement under the Securities Act with
respect
to an offering for its own account of any class of its equity securities
(other
than a registration statement on Form S-8 (or any
successor
form) or any other registration statement relating solely to employee benefit
plans or filed in connection with an exchange offer, then the Company shall
in
each case give written notice of such proposed filing to the Holder as
soon as
practicable (but no later than 20 business days) before the anticipated
filing
date, and such notice shall offer each Holder the opportunity to register
such
number of shares of Warrant Shares as such Holder may request. Each Holder
desiring to have Warrant Shares included in such registration statement
shall so
advise the Company in writing within 10 business days after the date on
which
the Company’s notice is so given, setting forth the number of shares of Warrant
Shares for which registration is requested. If the Company's offering is
to be
an underwritten offering, the Company shall use its reasonable best efforts
to
cause the managing underwriter or underwriters to permit the Holders of
the
Warrant Shares requested to be included in the registration for such offering
to
include such Warrant Shares in such offering on the same terms and conditions
as
any similar securities of the Company included therein.
(b)
SEC
Reporting Obligation.
The
Company agrees to make publicly available adequate public information necessary
for the Holder to transfer the Warrant Shares pursuant to Rule 144 promulgated
under the Securities Act (“Rule
144”)
by
providing the following:
|
(i)
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For
so long at the Company is subject to the reporting requirements
of Section
13 or 15(d) of the Securities Exchange Act of 1934, as amended,
(the
“Exchange
Act”),
the Company shall timely file (inclusive of any extensions) all
required
reports under Section 13 or 15(d) of the Exchange Act, as applicable,
(other than Form 8-K reports).
|
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(ii)
|
If
the Company is not subject to the reporting requirements of Section
13 or
15(d) of the Exchange Act, the Company shall make publicly available
that
information specified in Rule 144 necessary for the Holder to
transfer the
Warrant Shares pursuant to Rule 144.
|
13.
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 at the facsimile number specified
in
this Section prior to 5:00 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 at the facsimile number specified in this Section
on
a day that is not a Trading Day or later than 5:00 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 addresses for
such
notices or communications shall be: (i) if to the Company, to HydroGen
Corporation, 00 Xxxx 00xx
Xxxxxx,
Xxxx 0000, Xxx Xxxx, Xxx Xxxx 00000, Attn: Chief Executive Officer or to
facsimile number (000) 000-0000 (or such other address as the Company shall
indicate in writing in accordance with this Section) or (ii) if to the
Holder,
to the address or facsimile number appearing on the Warrant Register (or
such
other address as the Company shall indicate in writing in accordance with
this
Section).
14.
Warrant
Agent.
The
Company shall serve as warrant agent under this Warrant. Upon thirty (30)
days’
notice to the Holder, the Company may appoint a new warrant agent. Any
corporation into which the Company or any new warrant agent may be merged
or any
corporation resulting from any consolidation to which the Company or any
new
warrant agent shall be a party or any corporation to which the Company
or any
new warrant agent transfers substantially all of its corporate trust or
shareholders 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.
-7-
15.
Miscellaneous.
(a)
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, or their successors and assigns.
(b)
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
this
Warrant and the transactions herein contemplated (“Proceedings”)
(whether brought against a party hereto or its respective Affiliates, employees
or agents) shall be commenced exclusively in the New York Courts. Each
party
hereto hereby irrevocably submits to the exclusive jurisdiction of the
New York
Courts for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any Proceeding, any claim
that
it is not personally subject to the jurisdiction of any New York Court,
or that
such Proceeding has been commenced in an improper or inconvenient forum.
Each
party hereto hereby irrevocably waives personal service of process and
consents
to process being served in any such 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 the transactions contemplated hereby. If either
party shall commence a Proceeding to enforce any provisions of this Warrant,
then the prevailing party in such Proceeding shall be reimbursed by the
other
party for its attorney’s fees and other costs and expenses incurred in
connection with the investigation, preparation and prosecution of such
Proceeding.
(c)
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.
(d)
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.
(e)
Other
than as otherwise set forth herein, prior to exercise of this Warrant,
the
Holder hereof shall not, by reason of by being a Holder, be entitled to
any
rights of a stockholder with respect to the Warrant Shares
[REMAINDER
OF PAGE 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.
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HYDROGEN
CORPORATION
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| By: | ||
|
Name: |
||
| Title: | ||
EXERCISE
NOTICE
HYDROGEN
CORPORATION
WARRANT
DATED _________________, 2008
Ladies
and Gentlemen:
(1) The
undersigned hereby elects to purchase ______ shares of Common Stock pursuant
to
the above-referenced Warrant. Capitalized terms used herein and not otherwise
defined herein have the respective meanings set forth in the Warrant.
(2) The
Holder intends that payment of the Exercise Price shall be made as (check
one):
Cash
Exercise under Section 10
Cashless
Exercise under Section 10
(3) If
the
Holder has elected a Cash Exercise, the holder shall pay the sum of $_______
to
the Company in accordance with the terms of the Warrant.
(4) Pursuant
to this Exercise Notice, the Company shall deliver to the Holder ______
Warrant
Shares in accordance with the terms of the Warrant.
(5) By
its
delivery of this Exercise Notice, the undersigned represents and warrants
to the
Company that in giving effect to the exercise evidenced hereby the Holder
will
not beneficially own in excess of the number of shares of Common Stock
(as
determined in accordance with Section 13(d) of the Securities Exchange
Act of
1934) permitted to be owned under Section 11 of this Warrant to which this
notice relates.
Dated:_______________,
_____
Name
of
Holder:
By:__________________________________
Name:
_______________________________
Title:
_______________________________
(Signature
must conform in all respects to name of Holder as specified on the face
of the
Warrant)
HYDROGEN
CORPORATION
WARRANT
ORIGINALLY ISSUED August __, 2008
WARRANT
NO.
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 to which the within Warrant relates and appoints ___________
attorney to transfer said right on the books of the Company with full power
of
substitution in the premises.
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Dated:
_________, ___
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___________________________________
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|
|
(Signature
must conform in all respects to name of holder as specified on
the face of
the Warrant)
|
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___________________________________
|
|
|
|
Address
of Transferee
|
|
|
|
___________________________________
|
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|
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___________________________________
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In
the presence of:
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____________________________
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