AMENDMENT NO. 2 TO SECURITIES PURCHASE AGREEMENTS AND WARRANTS
Exhibit
4.1
AMENDMENT
NO. 2 TO SECURITIES
PURCHASE AGREEMENTS AND WARRANTS
This
AMENDMENT NO. 2 TO SECURITIES PURCHASE AGREEMENT AND WARRANTS (this “Amendment
No. 2”) is made and entered into as of November 28, 2007, by and among Sulphco,
Inc., a Nevada corporation (the “Company”), and the purchasers identified on the
signature pages hereto (each, a “Purchaser” and, collectively, the
“Purchasers”).
RECITALS
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1.
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The
Company and the Purchasers are parties to (i) a Securities Purchase
Agreement, dated as of June 1, 2004 (the “June 1st
Purchase Agreement”) pursuant to which the Company issued and sold to the
Purchasers shares of common stock, par value $0.001 (the “Common Stock”)
and certain warrants (the “June 1st
Warrants”), (ii) a Securities Purchase Agreement, dated as of June 14,
2004 (the “June 14th
Purchase Agreement”) pursuant to which the Company issued and sold to the
Purchasers shares of Common Stock and certain warrants (the “June 14th
Warrants”), (iii) a Securities Purchase Agreement, dated as of March 29,
2006 (the “2006 Purchase Agreement”, and together with the June
1st
Purchase Agreement and the June 14th
Purchase Agreement, the “Purchase Agreements”) pursuant to which the
Company issued and sold to the Purchasers shares of Common Stock
and
certain warrants (the “2006 Warrants”) and (iv) an Amendment No. 1 to
Securities Purchase Agreements and Warrants, dated as of March
12, 2007,
pursuant to which the Company issued and sold to the Purchasers
certain
warrants (the “March Warrants,” and together with the June 1st Warrants
and June 14th Warrants, the “Warrants”). Capitalized terms used and not
defined in this Amendment shall have the respective meanings set
forth in
the Purchase Agreements and
Warrants.
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2.
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The
Company and the Purchasers now wish to further modify certain terms
of the
Warrants.
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NOW,
THEREFORE, in consideration of the foregoing Recitals and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound, the Company and each Purchaser,
severally and not jointly, agree as follows:
| 1. |
Exercise
of Warrants.
Subject to the terms hereof, each Purchaser agrees to exercise
the March
Warrants as set forth herein.
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1.1
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Subject
to the terms hereof, each Purchaser agrees to exercise (i) up to
50% of
the March Warrants issued to such Purchaser as set forth on Schedule
A
hereto on the date hereof (“Closing Date”). In consideration for such
exercise, upon obtaining approval of the Additional Listing Application
from the American Stock Exchange (“AMEX”) of the shares of Common Stock
underlying the Additional Warrants (as defined below), the Company
shall
issue to each Purchaser a warrant in the form of Exhibit
A
attached hereto (the “Additional Warrants”), registered in the name of
such Purchaser, pursuant to which such Purchaser shall have the
right to
acquire the number of shares of Common Stock equal to the number
of March
Warrants exercised on the Closing Date at an Exercise Price of
$7.00 per
share.
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1.2
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Each
Purchaser is also granted the right, until the later of April 15,
2008 and
30 days after the 2008 annual meeting of stockholders of the Company
(the
“Annual Meeting”) to exercise the remaining March Warrants, up to the
number of March Warrants, exercised on the Closing Date, and upon
such
exercise, the Purchaser shall receive an additional warrant, pursuant
to
which such Purchaser shall have the right to acquire the number
of shares
of Common Stock equal to the number of warrants exercised pursuant
to this
Section 1.2 at an Exercise Price of $7.00 per share and be in the
same
form as the Additional Warrant (the “Second Additional Warrant”). The
issuance of the Second Additional Warrant is contingent upon the
Company
obtaining approval by a majority of the Company’s stockholders to increase
the authorized shares of Common Stock by at least 10 million shares
prior
to the later of April 15, 2008 and the date of the Annual Meeting
(the
“Termination Date”).
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1.3
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If
approval of the stockholders described in Section 1.2 above is
not
obtained on or before the Termination Date, then the Company grants
each
Purchaser the right, until 30 days after the Annual Meeting (the
“Rights
Period”) to exercise the remaining March Warrants, up to the number of
March Warrants exercised on the Closing Date, and receive the Second
Additional Warrant, to the extent that there are available authorized
shares of Common Stock. If there are not sufficient authorized
shares of
Common Stock to satisfy the Second Additional Warrant issuances
hereunder,
then the each Purchaser shall be limited to its pro-rata portion
of the
authorized shares available at such time. The pro-rata determination
shall
be made at the end of the Rights Period and shall consider only
the March
Warrants exercised during such
period.
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1.4
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For
the purposes of this Amendment, the shares issuable upon exercise
of the
Additional Warrant and Second Additional Warrant shall be included
in the
registration statements as provided in Section 3 below.
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| 2. |
Closing.
Subject to the terms hereof, each Purchaser and the Company agrees
that
the closing of the issuance of the Additional Warrants (the “Closing”)
shall occur on the Closing Date.
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2.1.
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On
the Closing Date, each Purchaser shall deliver to the Company the
Exercise
Notice required under the Warrants and the Exercise Price in immediately
available funds.
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2
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2.2.
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Following
the Closing Date, the Company shall issue to each Purchaser a certificate
representing the number of Warrant Shares exercised under the March
Warrants.
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| 3. |
Registration.
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3.1
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The
Company shall use commercially reasonable efforts to prepare and
file a
registration statement (the “Additional Registration Statement”) to cover
all shares of Common Stock issuable under the Additional Warrants
as soon
as possible, but in no event later than 90 days after the Closing
Date
(the “Filing Date”). The Company shall use its commercially reasonable
efforts to cause the Additional Registration Statement to be declared
effective as soon as possible.
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3.2
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The
Company shall use commercially reasonable efforts to prepare and
file a
registration statement (the “Second Additional Registration Statement”) to
cover all shares of Common Stock issuable under the Second Additional
Warrants as soon as possible, but in no event later than 90 days
after the
Rights Period (the “Second Filing Date”). The Company shall use its
commercially reasonable efforts to cause the Second Additional
Registration Statement to be declared effective as soon as
possible.
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3.3
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In
the event the Company does not file the Additional Registration
Statement
by the Filing Date or Second Additional Registration Statement
by the
Second Filing Date (each, an “Event”), each Purchaser shall be entitled to
receive on the date of such Event (the “Event Date”) an amount in cash, as
partial liquidated damages and not as a penalty, equal to 1% of
the
aggregate Exercise Price paid by such Purchaser pursuant to Section
2.2 of
this Amendment; and on each monthly anniversary of the Event Date
thereof
(if the applicable Event has not been cured), the Company shall
pay to
each Purchaser an amount in cash, as partial liquidated damages
and not as
a penalty, equal to 1% of the aggregate purchase price paid by
such
Purchaser pursuant to the Section 2.2 of this Amendment (the “Liquidated
Damages”). The Liquidated Damages shall not exceed 12% of the aggregate
Exercise Price paid by each respective Purchaser pursuant to Section
2.2
of this Amendment.
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| 4. |
Continued
Validity of Transaction Documents under the Purchase Agreement;
Waiver of
Prior Defaults.
The parties hereto agree that the Purchase Agreements and the other
transaction documents (the “Transaction Documents”) entered into in
connection therewith (as amended by this Amendment), remain in
full force
and effect, modified to the extent and only to the extent necessary
to
give effect to this Amendment and the transactions herein contemplated.
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3
| 5. |
Representations
and Warranties.
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| 5.1. |
The
Company hereby represents and warrants to the Purchasers that each
of the
representations and warranties set forth in Section
3.1
of
the June 14th
Purchase Agreement are true and correct as of the date hereof with
the
exception of Sections 3.1(i), 3.1 (s), 3.1(w), 3.1(x) and 3.1(y)
for which
the Company makes no representations and warranties. Current Company
information may be found in the Company’s public SEC
filings.
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| 5.2. |
Each
Purchaser hereby, as to itself only and for no other Purchaser,
represents
and warrants to the Company that each of the representations and
warrants
set forth in Section
3.2
of
the June 14th
Purchase Agreement are true and correct as of the date
hereof.
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| 6. |
Miscellaneous.
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| 6.1. |
Entire
Agreement.
This Amendment and the Transaction Documents, together with the
exhibits
and schedules thereto, contain the entire understanding of the
parties
with respect to the subject matter hereof and supersede all prior
agreements and understandings, oral or written, with respect
to such
matters, which the parties acknowledge have been merged into
such
documents, exhibits and
schedules.
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| 6.2. |
Equal
Treatment of Purchasers.
No consideration shall be offered or paid to any person to
amend or
consent to a waiver or modification of any provision of any
of the
Transaction Documents unless the same consideration is also
offered to all
of the parties to the Transaction
Documents.
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| 6.3. |
Notices.
Any and all notices or other communications or deliveries
required or
permitted to be provided hereunder shall be in writing
and shall be deemed
given and effective as specified in the Purchase Agreement.
The address
for such notices and communications shall be as set forth
on the signature
pages attached to the Purchase
Agreement.
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| 6.4. |
Amendments;
Waivers.
No provision of this Amendment may be waived or amended
except in a
written instrument signed, in the case of an amendment,
by the Company and
each Purchaser or, in the case of a waiver, by the
party against whom
enforcement of any such waiver is sought. No waiver
of any default with
respect to any provision, condition or requirement
of this Amendment shall
be deemed to be a continuing waiver in the future
or a waiver of any
subsequent default or a waiver of any other provision,
condition or
requirement hereof, nor shall any delay or omission
of either party to
exercise any right hereunder in any manner impair
the exercise of any such
right.
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4
| 6.5. |
Amendment
Controls.
If any topic is addressed both in the Purchase
Agreement (or any document
related thereto) and in this Amendment, this
Amendment shall
control.
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| 6.6. |
Construction.
The headings herein are for convenience only,
do not constitute a part of
this Amendment and shall not be deemed to
limit or affect any of the
provisions hereof. The language used in this
Amendment will be deemed to
be the language chosen by the parties to
express their mutual intent, and
no rules of strict construction will be applied
against any
party.
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| 6.7. |
Governing
Law.
All questions concerning the construction,
validity, enforcement and
interpretation of this Amendment 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. The parties
agree that Section
7.9
of
the June 14th
Purchase Agreement shall apply to this
Amendment as if set forth in its
entirety herein.
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| 6.8. |
Survival.
The representations and warranties
contained herein shall survive the
delivery, exercise and/or conversion
of the securities, as applicable
for
the applicable statute of
limitations.
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| 6.9. |
Execution.
This Amendment may be executed
in two or more counterparts,
all of which
when taken together shall be
considered one and the same document
and
shall become effective when counterparts
have been signed by each party
and delivered to the other party,
it being understood that both
parties
need not sign the same counterpart.
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| 6.10. |
Severability.
If any provision of this Amendment
is held to be invalid or unenforceable
in any respect, the validity
and enforceability of the remaining
terms and
provisions of this Amendment
shall not in any way be affected
or impaired
thereby and the parties will
attempt to agree upon a valid
and enforceable
provision that is a reasonable
substitute therefor, and upon
so agreeing,
shall incorporate such substitute
provision in this
Amendment.
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5
| 6.11. |
Independent
Nature of Purchasers’ Obligations and Rights.
The obligations of each Purchaser
hereunder are several and
not joint with
the obligations of any other
Purchaser, and no Purchaser
shall be
responsible in any way for
the performance of the obligations
of any other
Purchaser. Nothing contained
herein, and no action taken
by any Purchaser
pursuant hereto, shall be
deemed to constitute the
Purchasers as a
partnership, an association,
a joint venture or any other
kind of entity,
or create a presumption that
the Purchasers are in any
way acting in
concert or as a group with
respect to such obligations
or the transactions
contemplated hereby. Each
Purchaser shall be entitled
to independently
protect and enforce its rights,
including, without limitation,
the rights
arising out of this Amendment
and it shall not be necessary
for any other
Purchaser to be joined as
an additional party in any
proceeding for such
purpose. The Purchasers have
not relied upon the same
legal counsel in
their review and negotiation
of this Amendment. The Company
has elected to
provide all Purchasers with
the same terms and form of
Amendment for the
convenience of the Company
and not because it was required
or requested to
do so by the Purchasers.
Each Purchaser represents
that it has been
represented by its own separate
legal counsel in its review
and
negotiations of this
Amendment.
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(Signature
Pages Follow)
6
IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed by their respective authorized signatories as of the date first
indicated above.
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SULPHCO,
INC.
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| By: | ||
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Name:
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Title:
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[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGE FOR PURCHASERS FOLLOWS]
7
IN
WITNESS WHEREOF, the undersigned have caused this Amendment to be duly executed
by their respective authorized signatories as of the date first indicated
above.
Name
of
Investing Entity:
_______________________________________________________________________________
Signature
of Authorized Signatory of Investing Entity:
_______________________________________________________
Name
of
Authorized Signatory:
__________________________________________________________________________
Title
of
Authorized Signatory:
__________________________________________________________________________
Email
Address of Authorized
Entity:_______________________________________________________________________
8
Schedule
A
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Purchaser
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March
Warrants
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|
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Xxxxx
Xxxx Trust
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95,295
|
|
|
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Xxxxx
Xxxx Irrevocable Trust
|
190,587
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|
|
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||
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Xxxxxxx
Xxxx
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47,648
|
|
|
|
||
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Xxxxx
Xxxxxxxxx
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71,470
|
|
|
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||
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Romana
Ltd
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190,587
|
|
|
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||
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Xxxxx
International Ltd Inc.
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433,020
|
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|
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Xxxxx
International, Inc.
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300,000
|
|
|
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Xxxx
X. Xxxxx
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682,640
|
|
|
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||
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Cranshire
Capital LP
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175,000
|
|
|
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||
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Xxxxxxx
Xxxxxxxx
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21,000
|
|
|
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||
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Xxxxxx
Xxxxxxxxx
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21,000
|
|
|
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Xxxxx
Xxxx
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23,821
|
|
|
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||
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Northfield
Advisors Inc.
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500,000
|
|
|
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||
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Iroquois
Master Fund, Ltd.
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700,000
|
|
|
|
||
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Xxx
Xxxxxxx
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20,000
|
|
|
|
||
|
Xxxxxx
Xxxxxxx
|
50,000
|
|
|
|
||
|
Xxxxx
Xxxxxxx
|
100,000
|
|
|
|
||
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Xxxxxxx
Xxxxxxx
|
30,000
|
|
|
|
||
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South
Ferry #2
|
200,000
|
|
|
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Ari
Dani Corp.
|
100,000
|
|
|
Total
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3,952,068
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9
