[FORM OF
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: August 22,
2008
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HYDROGEN
CORPORATION, a Nevada corporation (the “ Company
”), hereby certifies that, for value received, [NAME OF
LENDER] or its permitted registered assigns (the “
Holder ”), is entitled to purchase from the Company
up to a total of 400,000 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 the Exercise Price (as defined herein), at
such time and in such amount as more fully described herein, and
subject to the following terms and conditions:
This Warrant is
issued pursuant to that certain Loan and Security Agreement, dated
August 22, 2008, by and among the Company, HydroGen L.L.C.,
Federated Kaufmann Fund, a portfolio of Federated Equity Fund, as
Agent for Federated Kaufmann 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.
(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, Price and Duration of Warrants .
(a)
This Warrant shall be exercisable
by the registered Holder in the amounts and at the times as stated
below:
(i) At any time
and from time to time on or after the Closing Date and through and
including the Expiration Date, the registered Holder of this
Warrant may exercise this Warrant by purchasing up to 200,000
Warrant Shares at the Exercise Price.
(ii) At any
time and from time to time on or after the date on which the amount
in the Borrower’s Account is released to the Borrowers
pursuant to Section 2.1 of the Loan and Security Agreement (such
date a “Vesting Date” and together with the Closing
Date, the “Vesting Dates”) and through and including
the Expiration Date, the registered Holder of this Warrant may
exercise this Warrant by purchasing up to 200,000 Warrant Shares at
the Exercise Price.
(b)
As used in this Agreement, the
following terms shall have their respective meaning:
(i)
“Exercise Price” shall mean the per share price equal
to the volume weighted average sale price (regular way) for each
trade for the period starting on the 25th trading day prior to the
respective Vesting Date and ending on the 10th trading day prior to
such Vesting Date.
(ii)
“Expiration Date” shall mean August 22,
2013.
(c)
Subject to Section 11 hereof, 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.
(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
