Unassociated Document


    Exhibit
      4.12

    

      ALLONGE
        TO PROMISSORY NOTE

      


      This
        Allonge to Promissory Note (“Allonge”) is dated as of this 27th day of April,
        2007. Reference is hereby made to that certain Promissory Note dated December
        31, 2004, delivered by SulphCo, Inc., as Maker (“Maker”) to Rudolf Gunnerman, as
        lender, as assigned in part to ______________ (“Holder”), pursuant to that
        certain Assignment of Promissory Note, dated April 24, 2007 (“Assignment”), and
        as amended and restated by that certain Promissory Note, dated April 24,
        2007,
        delivered by Maker to Holder (“Note”).

      


      WHEREAS,
        Maker has requested that Holder extend the Maturity Date of the Note for
        one
        year, and Holder has agreed to such extension subject to the other terms
        set
        forth herein.

      


      Except
        as
        expressly amended by the terms of this Allonge, the terms of the Note remain
        in
        full force and effect. All capitalized terms used and not defined herein
        are
        used as defined in the Note. As the context requires, all references herein
        to
“Note” refer to the Note as amended by this Allonge.

      


      The
        following terms of the Note are hereby amended by this Allonge:

      


      I.
        Maturity
        Date and Additional Interest Payment Date.
        The
        Maturity Date shall mean December 31, 2008, and in the fourth paragraph of
        the
        Note, in the second line, the words “and December 31, 2006” shall be deleted and
        replaced with “December 31, 2006 and December 31, 2007” so as to add an interest
        payment due on December 31, 2007

      


      II.
        The
        following is hereby added in its entirety:

      


      “Conversion.
        

      


      1.
        Conversion
        Privileges.
        Subject
        to Section II. B.3. below, the Conversion Privileges set forth in paragraph
        2
        below shall remain in full force and effect immediately from the date hereof
        and
        until the Note is paid in full regardless of the occurrence of an Event of
        Default. The Note shall be payable in full on the Maturity Date, unless
        previously converted into Common Stock in accordance with paragraph 2. below;
        provided, that if an Event of Default has occurred, the Holder may extend
        the
        Maturity Date up to an amount of time equal to the pendency of the Event
        of
        Default. Such extension must be on notice in writing.

      


      2.
        Conversion
        Rights.
        The
        Holder shall have the right to convert the principal due under this Note
        into
        shares (“Shares”) of the Maker's Common Stock, $.001 par value per share
        (“Common Stock”) as set forth below.

      


      2.1. Conversion
        into the Maker's Common Stock.

      


      (a) Subject
        to Section II. 3. below, the Holder shall have the right from and after the
        date
        of the issuance of this Note and then at any time until this Note is fully
        paid,
        to convert any outstanding and unpaid principal portion of this Note, at
        the
        election of the Holder (the date of giving of such notice of conversion being
        a
        "Conversion Date") into fully paid and nonassessable shares of Common Stock
        as
        such stock exists on the date of issuance of this Note, or any shares of
        capital
        stock of Maker into which such Common Stock shall hereafter be changed or
        reclassified, at the conversion price as defined in paragraph 2.1(b) hereof
        (the
        "Conversion Price"), determined as provided herein. Upon delivery to the
        Maker
        of a completed Notice of Conversion, a form of which is annexed hereto, Maker
        shall issue and deliver to the Holder within three (3) business days after
        the
        Conversion Date (such third day being the “Delivery Date”) that number of shares
        of Common Stock for the portion of the Note converted in accordance with
        the
        foregoing. At the election of the Holder, the Maker will deliver accrued
        but
        unpaid interest on the Note, if any, through the Conversion Date directly
        to the
        Holder on or before the Delivery Date. The number of shares of Common Stock
        to
        be issued upon each conversion of this Note shall be determined by dividing
        that
        portion of the principal of the Note to be converted by the Conversion
        Price.

       

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      
 

      (b) Subject
        to adjustment as provided in paragraph 2.1(c) hereof, the Conversion Price
        per
        share shall be $3.80, subject to adjustment as described herein.

      


      (c) 
        The
        Conversion Price and number and kind of shares or other securities to be
        issued
        upon conversion determined pursuant to Section 2.1(a), shall be subject to
        adjustment from time to time upon the happening of certain events while this
        conversion right remains outstanding, as follows:

      


      A. Merger,
        Sale of Assets, etc. If the Maker at any time shall consolidate with or merge
        into or sell or convey all or substantially all its assets to any other
        corporation, this Note, as to the unpaid principal portion thereof and accrued
        interest thereon, shall thereafter be deemed to evidence the right to purchase
        such number and kind of shares or other securities and property as would
        have
        been issuable or distributable on account of such consolidation, merger,
        sale or
        conveyance, upon or with respect to the securities subject to the conversion
        or
        purchase right immediately prior to such consolidation, merger, sale or
        conveyance. The foregoing provision shall similarly apply to successive
        transactions of a similar nature by any such successor or purchaser. Without
        limiting the generality of the foregoing, the anti-dilution provisions of
        this
        Section shall apply to such securities of such successor or purchaser after
        any
        such consolidation, merger, sale or conveyance.

      


      B. Reclassification,
        etc. If the Maker at any time shall, by reclassification or otherwise, change
        the Common Stock into the same or a different number of securities of any
        class
        or classes that may be issued or outstanding, this Note, as to the unpaid
        principal portion thereof and accrued interest thereon, shall thereafter
        be
        deemed to evidence the right to purchase an adjusted number of such securities
        and kind of securities as would have been issuable as the result of such
        change
        with respect to the Common Stock immediately prior to such reclassification
        or
        other change.

      


      C. Stock
        Splits, Combinations and Dividends. If the shares of Common Stock are subdivided
        or combined into a greater or smaller number of shares of Common Stock, or
        if a
        dividend is paid on the Common Stock in shares of Common Stock, the Conversion
        Price shall be proportionately reduced in case of subdivision of shares or
        stock
        dividend or proportionately increased in the case of combination of shares,
        in
        each such case by the ratio which the total number of shares of Common Stock
        outstanding immediately after such event bears to the total number of shares
        of
        Common Stock outstanding immediately prior to such event.

       

      (d) Whenever
        the Conversion Price is adjusted pursuant to paragraph 2.1(c) above, the
        Maker
        shall promptly mail to the Holder a notice setting forth the Conversion Price
        after such adjustment and setting forth a statement of the facts requiring
        such
        adjustment.

      


      (e) During
        the period the conversion right exists, Maker will reserve from its authorized
        and unissued Common Stock a sufficient number of shares to provide for the
        issuance of Common Stock issuable upon the full conversion of this Note and
        as
        described herein below. Maker represents that upon issuance, such shares
        will be
        duly and validly issued, fully paid and non-assessable. Maker agrees that
        its
        issuance of this Note shall constitute full authority to its officers, agents,
        and transfer agents who are charged with the duty of executing and issuing
        stock
        certificates to execute and issue the necessary certificates for shares of
        Common Stock upon the conversion of this Note.

      


      2.2. Method
        of Conversion.
        This
        Note may be converted by the Holder in whole or in part as described in Section
        2.1(a) hereof. Upon partial conversion of this Note, a new Note containing
        the
        same date and provisions of this Note shall, at the request of the Holder,
        be
        issued by the Maker to the Holder for the principal balance of this Note
        and
        interest which shall not have been paid, and in any case, the unconverted
        amount
        of principal and all unpaid interest shall be duly noted in the books and
        records of Maker.

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      
 

      2.3. Maximum
        Conversion.
        The
        Holder shall not be entitled to convert on a Conversion Date that amount
        of the
        Note in connection with that number of shares of Common Stock which would
        be in
        excess of the sum of (i) the number of shares of Common Stock beneficially
        owned
        by the Holder and its affiliates on a Conversion Date, (ii) any Common Stock
        issuable in connection with the unconverted portion of the Note, and (iii)
        the
        number of shares of Common Stock issuable upon the conversion of the Note
        with
        respect to which the determination of this provision is being made on a
        Conversion Date, which would result in beneficial ownership by the Holder
        and
        its affiliates of more than 4.99% of the outstanding shares of Common Stock
        of
        the Maker on such Conversion Date. For the purposes of the provision to the
        immediately preceding sentence, beneficial ownership shall be determined
        in
        accordance with Section 13(d) of the Securities Exchange Act of 1934, as
        amended, and Regulation 13d-3 thereunder. Subject to the foregoing, the Holder
        shall not be limited to aggregate conversions of only 4.99% and aggregate
        conversion by the Holder may exceed 4.99%. The Holder shall have the authority
        and obligation to determine whether the restriction contained in this Section
        2.3 will limit any conversion hereunder and to the extent that the Holder
        determines that the limitation contained in this Section applies, the
        determination of which portion of the Notes are convertible shall be the
        responsibility and obligation of the Holder. The Holder may waive the conversion
        limitation described in this Section 2.3, in whole or in part, upon and
        effective after 61 days prior written notice to the Maker to increase such
        percentage to up to 9.99%. The Holder may allocate which of the equity of
        the
        Maker deemed beneficially owned by the Holder shall be included in the 4.99%
        amount or up to 9.99% amount as described above.

      


      3.
        Reservation.
        Maker
        will reserve on behalf of all of Holder from its authorized but unissued
        Common
        Stock a number of common shares equal to 100% of the amount of Common Stock
        necessary to allow each holder of a Note to be able to convert all such
        outstanding principal balance of holder’s Note.

      


      III.
        Legend.
        The
        Note bears the following legend: THIS NOTE AND THE COMMON SHARES ISSUABLE
        UPON
        CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
        OF
        1933, AS AMENDED. THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION
        OF
        THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
        ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID
        ACT OR
        AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO SULPHCO, INC. THAT SUCH
        REGISTRATION IS NOT REQUIRED.

      


      IV.
        The
        following is hereby added in its entirety:

      


      “Registration.
        

      


      4.1. Registration
        Rights.
        The Maker hereby grants the following registration rights to holders of the
        Notes and certain Stock Option Agreements being executed and delivered on
        or
        about April 26, 2006 and certain shares of stock purchased in connection
        therewith. The
        Maker
        shall file with the Commission a Form S-3 registration statement (the
“Registration
        Statement”)
        (or
        such other form that it is eligible to use) in order to register (i) all
        shares
        issuable upon Conversion of this Note, (ii) shares issuable upon exercise
        by
        Holder of the Stock Option Agreement, executed and delivered in connection
        with
        the Assignment, (iii) 125,000 shares of Maker Common Stock purchased by certain
        Note holders on or about April 26, 2007 from Gunnerman (“Stock Purchase”), and
        (iv) 125,000 shares issuable upon exercise by Holder of the Stock Option
        Agreement, executed and delivered in connection with the Stock Purchase for
        resale and distribution under the 1933 Act by June 8, 2007 (the “Filing
        Date”),
        and
        shall use commercially reasonable efforts to cause such Registration Statement
        to be declared effective as soon as possible thereafter . The Maker will
        register not less than a number of shares of common stock in the aforedescribed
        registration statement that is equal to 100% of the Shares described in the
        second sentence of this paragraph 4.1 and as more fully set forth on Schedule
        4.1 hereto (collectively the “Registrable
        Securities”).
        The
        Registrable Securities shall be reserved and set aside exclusively for the
        benefit of each holder listed on Schedule 4.1, pro rata,
        and not
        issued, employed or reserved for anyone other than each such holder listed
        on
        Schedule 4.1. The Registration Statement will immediately be amended or
        additional registration statements will be immediately filed by the Maker
        as
        necessary to register additional shares of Common Stock to allow the public
        resale of all Common Stock included in and issuable by virtue of the Registrable
        Securities

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      
 

      4.2. Registration
        Procedures.
        If and whenever the Maker is required by the provisions of Section 4.1 to
        effect
        the registration of any Registrable Securities under the 1933 Act, the Maker
        will, as expeditiously as possible: 

       

      (a) subject
        to the timelines provided in this Agreement, prepare and file with the
        Commission a registration statement required by Section 4, with respect to
        such
        securities and use its best efforts to cause such registration statement
        to
        become and remain effective for the period of the distribution contemplated
        thereby (determined as herein provided but not less than 2 years), promptly
        provide to the holders of the Registrable Securities copies of all filings
        and
        Commission letters of comment and notify Holders (by telecopier and by e-mail
        addresses provided by Holders) and Grushko & Mittman, P.C. (by telecopier
        and by email to Counslers@aol.com)
        on or before the first business day thereafter that the Maker receives notice
        that (i) the Commission has no comments or no further comments on the
        Registration Statement, and (ii) the registration statement has been declared
        effective; 

       

      (b) prepare
        and file with the Commission such amendments and supplements to such
        registration statement and the prospectus used in connection therewith as
        may be
        necessary to keep such registration statement effective until such registration
        statement has been effective for a period of two (2) years, and comply with
        the
        provisions of the 1933 Act with respect to the disposition of all of the
        Registrable Securities covered by such registration statement in accordance
        with
        the Sellers’ intended method of disposition set forth in such registration
        statement for such period; 

       

      (c) furnish
        to the Sellers, at the Maker’s expense, such number of copies of the
        registration statement and the prospectus included therein (including each
        preliminary prospectus) as such persons reasonably may request in order to
        facilitate the public sale or their disposition of the securities covered
        by
        such registration statement or make them electronically available; 

       

      (d) use
        its commercially
        reasonable best efforts to register or qualify the Registrable Securities
        covered by such registration statement under the securities or “blue sky” laws
        of New York and such jurisdictions as the Sellers shall request in writing,
        provided, however, that the Maker shall not for any such purpose be required
        to
        qualify generally to transact business as a foreign corporation in any
        jurisdiction where it is not so qualified or to consent to general service
        of
        process in any such jurisdiction; 

       

      (e) if
        applicable, list the Registrable Securities covered by such registration
        statement with any securities exchange on which the Common Stock of the Maker
        is
        then listed; 

       

      (f) notify
        the Holders within 24 hours of the Maker’s becoming aware that a prospectus
        relating thereto is required to be delivered under the 1933 Act, of the
        happening of any event of which the Maker has knowledge as a result of which
        the
        prospectus contained in such registration statement, as then in effect, includes
        an untrue statement of a material fact or omits to state a material fact
        required to be stated therein or necessary to make the statements therein
        not
        misleading in light of the circumstances then existing or which becomes subject
        to a Commission, state or other governmental order suspending the effectiveness
        of the registration statement covering any of the Registrable
        Securities;

       

      (g) provided
        same would not be in violation of the provision of Regulation FD under the
        1934
        Act, make available for inspection by the Sellers, and any attorney, accountant
        or other agent retained by the Seller or underwriter, all publicly available,
        non-confidential financial and other records, pertinent corporate documents
        and
        properties of the Maker, and cause the Maker's officers, directors and employees
        to supply all publicly available, non-confidential information reasonably
        requested by the seller, attorney, accountant or agent in connection with
        such
        registration statement; and 

       

      (h) provide
        to the Sellers copies of the Registration Statement and amendments thereto
        five
        business days prior to the filing thereof with the Commission.

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

       

      4.3. Provision
        of Documents.
        In connection with each registration described in this Section 4, each Seller
        will furnish to the Maker in writing such information and representation
        letters
        with respect to itself and the proposed distribution by it as reasonably
        shall
        be necessary in order to assure compliance with federal and applicable state
        securities laws. 

       

      4.4. Non-Registration
        Events.
        The Maker and the holders listed on Schedule 4.1 hereto agree that the Sellers
        will suffer damages if any registration statement described in Section 4
        is not
        filed by the Filing Date (the “Non-Registration Event”). If the Non-Registration
        Event occurs, then the Maker shall deliver to the holder of Registrable
        Securities, as Liquidated
        Damages,
        an amount equal to one percent (1%) for each thirty (30) days (or such lesser
        pro-rata amount for any period of less than thirty (30) days) of the Principal
        Amount of the outstanding Notes and purchase price of Shares issued upon
        conversion of the Notes owned of record by such holder which are subject
        to the
        Non-Registration Event. The Maker may pay the Liquidated Damages in cash.
        The
        maximum amount of Liquidated Damages payable in connection with Non-Registration
        Event may not exceed twelve percent (12%). The Liquidated Damages must be
        paid
        within ten (10) days after the end of each thirty (30) day period or shorter
        part thereof for which Liquidated Damages are payable. Notwithstanding the
        foregoing, the Maker shall not be liable to the Holder under this Section
        4.4
        for any events or delays occurring as a consequence of the acts or omissions
        of
        the Holders contrary to the obligations undertaken by Holders in this Agreement.
        Liquidated Damages will not accrue nor be payable pursuant to this Section
        4.4
        nor will the Non-Registration Event be deemed to have occurred for times
        during
        which Registrable Securities are transferable by the holder of Registrable
        Securities pursuant to Rule 144(k) under the 1933 Act.

       

      4.5. Expenses.
        All expenses incurred by the Maker in complying with Section 4, including,
        without limitation, all registration and filing fees, printing expenses (if
        required), fees and disbursements of counsel and independent public accountants
        for the Maker, fees and expenses (including reasonable counsel fees) incurred
        in
        connection with complying with state securities or “blue sky” laws, fees of the
        National Association of Securities Dealers, Inc., transfer taxes, and fees
        of
        transfer agents and registrars, are called “Registration
        Expenses.”
        All underwriting discounts and selling commissions applicable to the sale
        of
        Registrable Securities are called "Selling
        Expenses."
        The Maker will pay all Registration Expenses in connection with the registration
        statement under Section 4. Selling Expenses in connection with each registration
        statement under Section 4 shall be borne by the Seller and may be apportioned
        among the Sellers in proportion to the number of shares sold by the Seller
        relative to the number of shares sold under such registration statement or
        as
        all Sellers thereunder may agree.

       

      4.6. Indemnification
        and Contribution.

       

      (a) In
        the event of a registration of any Registrable Securities under the 1933
        Act
        pursuant to Section 4, the Maker will, to the extent permitted by law, indemnify
        and hold harmless the Seller, each officer of the Seller, each director of
        the
        Seller, each underwriter of such Registrable Securities thereunder and each
        other person, if any, who controls such Seller or underwriter within the
        meaning
        of the 1933 Act, against any losses, claims, damages or liabilities, joint
        or
        several, to which the Seller, or such underwriter or controlling person may
        become subject under the 1933 Act or otherwise, insofar as such losses, claims,
        damages or liabilities (or actions in respect thereof) arise out of or are
        based
        upon any untrue statement or alleged untrue statement of any material fact
        contained in any registration statement under which such Registrable Securities
        was registered under the 1933 Act pursuant to Section 4, any preliminary
        prospectus or final prospectus contained therein, or any amendment or supplement
        thereof, or arise out of or are based upon the omission or alleged omission
        to
        state therein a material fact required to be stated therein or necessary
        to make
        the statements therein not misleading in light of the circumstances when
        made,
        and will subject to the provisions of Section 4.6(c) reimburse the Seller,
        each
        such underwriter and each such controlling person for any legal or other
        expenses reasonably incurred by them in connection with investigating or
        defending any such loss, claim, damage, liability or action; provided, however,
        that the Maker shall not be liable to the Seller to the extent that any such
        damages arise out of or are based upon an untrue statement or omission made
        in
        any preliminary prospectus if (i) the Seller failed to send or deliver a
        copy of
        the final prospectus delivered by the Maker to the Seller with or prior to
        the
        delivery of written confirmation of the sale by the Seller to the person
        asserting the claim from which such damages arise, (ii) the final prospectus
        would have corrected such untrue statement or alleged untrue statement or
        such
        omission or alleged omission, or (iii) to the extent that any such loss,
        claim,
        damage or liability arises out of or is based upon an untrue statement or
        alleged untrue statement or omission or alleged omission so made in conformity
        with information furnished by any such Seller, or any such controlling person
        in
        writing specifically for use in such registration statement or prospectus.
        

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

       

      (b) In
        the event of a registration of any of the Registrable Securities under the
        1933
        Act pursuant to Section 4, each Seller severally, but not jointly, will,
        to the
        extent permitted by law, indemnify and hold harmless the Maker, and each
        person,
        if any, who controls the Maker within the meaning of the 1933 Act, each officer
        of the Maker who signs the registration statement, each director of the Maker,
        each underwriter and each person who controls any underwriter within the
        meaning
        of the 1933 Act, against all losses, claims, damages or liabilities, joint
        or
        several, to which the Maker or such officer, director, underwriter or
        controlling person may become subject under the 1933 Act or otherwise, insofar
        as such losses, claims, damages or liabilities (or actions in respect thereof)
        arise out of or are based upon any untrue statement or alleged untrue statement
        of any material fact contained in the registration statement under which
        such
        Registrable Securities were registered under the 1933 Act pursuant to Section
        4,
        any preliminary prospectus or final prospectus contained therein, or any
        amendment or supplement thereof, or arise out of or are based upon the omission
        or alleged omission to state therein a material fact required to be stated
        therein or necessary to make the statements therein not misleading, and will
        reimburse the Maker and each such officer, director, underwriter and controlling
        person for any legal or other expenses reasonably incurred by them in connection
        with investigating or defending any such loss, claim, damage, liability or
        action, provided, however, that the Seller will be liable hereunder in any
        such
        case if and only to the extent that any such loss, claim, damage or liability
        arises out of or is based upon an untrue statement or alleged untrue statement
        or omission or alleged omission made in reliance upon and in conformity with
        information pertaining to such Seller, as such, furnished in writing to the
        Maker by such Seller specifically for use in such registration statement
        or
        prospectus, and provided, further, however, that the liability of the Seller
        hereunder shall be limited to the net proceeds actually received by the Seller
        from the sale of Registrable Securities covered by such registration
        statement.

       

      (c) Promptly
        after receipt by an indemnified party hereunder of notice of the commencement
        of
        any action, such indemnified party shall, if a claim in respect thereof is
        to be
        made against the indemnifying party hereunder, notify the indemnifying party
        in
        writing thereof, but the omission so to notify the indemnifying party shall
        not
        relieve it from any liability which it may have to such indemnified party
        other
        than under this Section 4.6(c) and shall only relieve it from any liability
        which it may have to such indemnified party under this Section 4.6(c), except
        and only if and to the extent the indemnifying party is prejudiced by such
        omission. In case any such action shall be brought against any indemnified
        party
        and it shall notify the indemnifying party of the commencement thereof, the
        indemnifying party shall be entitled to participate in and, to the extent
        it
        shall wish, to assume and undertake the defense thereof with counsel
        satisfactory to such indemnified party, and, after notice from the indemnifying
        party to such indemnified party of its election so to assume and undertake
        the
        defense thereof, the indemnifying party shall not be liable to such indemnified
        party under this Section 4.6(c) for any legal expenses subsequently incurred
        by
        such indemnified party in connection with the defense thereof other than
        reasonable costs of investigation and of liaison with counsel so selected,
        provided, however, that, if the defendants in any such action include both
        the
        indemnified party and the indemnifying party and the indemnified party shall
        have reasonably concluded that there may be reasonable defenses available
        to it
        which are different from or additional to those available to the indemnifying
        party or if the interests of the indemnified party reasonably may be deemed
        to
        conflict with the interests of the indemnifying party, the indemnified parties,
        as a group, shall have the right to select one separate counsel and to assume
        such legal defenses and otherwise to participate in the defense of such action,
        with the reasonable expenses and fees of such separate counsel and other
        expenses related to such participation to be reimbursed by the indemnifying
        party as incurred.

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

       

      (d) In
        order to provide for just and equitable contribution in the event of joint
        liability under the 1933 Act in any case in which either (i) a Seller, or
        any
        controlling person of a Seller, makes a claim for indemnification pursuant
        to
        this Section 4.6 but it is judicially determined (by the entry of a final
        judgment or decree by a court of competent jurisdiction and the expiration
        of
        time to appeal or the denial of the last right of appeal) that such
        indemnification may not be enforced in such case notwithstanding the fact
        that
        this Section 4.6 provides for indemnification in such case, or (ii) contribution
        under the 1933 Act may be required on the part of the Seller or controlling
        person of the Seller in circumstances for which indemnification is not provided
        under this Section 4.6; then, and in each such case, the Maker and the Seller
        will contribute to the aggregate losses, claims, damages or liabilities to
        which
        they may be subject (after contribution from others) in such proportion so
        that
        the Seller is responsible only for the portion represented by the percentage
        that the public offering price of its securities offered by the registration
        statement bears to the public offering price of all securities offered by
        such
        registration statement, provided, however, that, in any such case, (y) the
        Seller will not be required to contribute any amount in excess of the public
        offering price of all such securities sold by it pursuant to such registration
        statement; and (z) no person or entity guilty of fraudulent misrepresentation
        (within the meaning of Section 11(f) of the 1933 Act) will be entitled to
        contribution from any person or entity who was not guilty of such fraudulent
        misrepresentation.

       

      4.7. Delivery
        of Unlegended Shares.

       

      (a) Within
        FIVE (5) business days (such third business day being the “Unlegended
        Shares Delivery Date”)
        after the business day on which the Maker has received (i) a notice that
        shares
        of stock issued upon a conversion of the Note or any other Common Stock deemed
        Registrable Securities have been sold pursuant to the Registration Statement
        or
        Rule 144 under the 1933 Act, (ii) a representation that the prospectus delivery
        requirements, or the requirements of Rule 144, as applicable and if required,
        have been satisfied, (iii) the original share certificates representing the
        shares of Common Stock that have been sold, and (iv) in the case of sales
        under
        Rule 144, customary representation letters of the Holder and/or Holder’s broker
        regarding compliance with the requirements of Rule 144, the Maker at its
        expense, (y) shall deliver, and shall cause legal counsel selected by the
        Maker
        to deliver to its transfer agent (with copies to Holder) an appropriate
        instruction and opinion of such counsel, directing the delivery of shares
        of
        Common Stock without any legends including the legend set forth in Section
        4(i)
        above, reissuable pursuant to any effective and current Registration Statement
        described in Section 4 of this Agreement or pursuant to Rule 144 under the
        1933
        Act (the “Unlegended
        Shares”);
        and (z) cause the transmission of the certificates representing the Unlegended
        Shares together with a legended certificate representing the balance of the
        submitted Shares certificate, if any, to the Holder at the address specified
        in
        the notice of sale, via express courier, by electronic transfer or otherwise
        on
        or before the Unlegended Shares Delivery Date. 

       

      (b) In
        lieu of delivering physical certificates representing the Unlegended Shares,
        if
        the Maker’s transfer agent is participating in the Depository Trust Company
        (“DTC”)
        Fast Automated Securities Transfer program, upon request of a Holder, so
        long as
        the certificates therefor do not bear a legend and the Holder is not obligated
        to return such certificate for the placement of a legend thereon, the Maker
        shall cause its transfer agent to electronically transmit the Unlegended
        Shares
        by crediting the account of Holder’s prime Broker with DTC through its Deposit
        Withdrawal Agent Commission system. Such delivery must be made on or before
        the
        Unlegended Shares Delivery Date.

       

      V.
        The
        following is hereby added in its entirety:

      


      Negative
        Covenants.
        So long as at least $2 million of the principal amount of the Notes is
        outstanding, without the written consent of the holders of a majority of
        the
        aggregate principal amount of the Notes outstanding as of the date of the
        request , the Maker will not and will not permit any of its subsidiaries
        to
        directly or indirectly:

       

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      
 

      (i) create,
        incur, assume or suffer to exist any pledge, hypothecation, assignment, deposit
        arrangement, lien, charge, claim, security interest, security title, mortgage,
        security deed or deed of trust, easement or encumbrance, or preference, priority
        or other security agreement or preferential arrangement of any kind or nature
        whatsoever (including, without limitation, any lease or title retention
        agreement, any financing lease having substantially the same economic effect
        as
        any of the foregoing, and the filing of, or agreement to give, any financing
        statement perfecting a security interest under the Uniform Commercial Code
        or
        comparable law of any jurisdiction) which is senior to the obligations owed
        to
        the Holders under the Note and Allonge (each, a “Lien”) upon any of its
        property, whether now owned or hereafter acquired, except for: (i) (a) Liens
        imposed by law for taxes that are not yet due or are being contested in good
        faith and for which adequate reserves have been established in accordance
        with
        generally accepted accounting principles; (b) carriers’, warehousemen’s,
        mechanics’, material men’s, repairmen’s and other like Liens imposed by law,
        arising in the ordinary course of business and securing obligations that
        are not
        overdue by more than 30 days or that are being contested in good faith and
        by
        appropriate proceedings; (c) pledges and deposits made in the ordinary course
        of
        business in compliance with workers’ compensation, unemployment insurance and
        other social security laws or regulations; (d) deposits to secure the
        performance of bids, trade contracts, leases, statutory obligations, surety
        and
        appeal bonds, performance bonds and other obligations of a like nature, in
        each
        case in the ordinary course of business; (e) Liens created with respect to
        the
        financing of the purchase of property or lease of equipment in the ordinary
        course of the Maker’s business up to the amount of the purchase price of such
        property; and (f) easements, zoning restrictions, rights-of-way and similar
        encumbrances on real property imposed by law or arising in the ordinary course
        of business that do not secure any monetary obligations and do not materially
        detract from the value of the affected property (each of (a) through (f),
        a
“Permitted Lien”) and (ii) indebtedness for borrowed money which is not senior
        or pari passu in right of payment to the payment of the Notes or distribution
        of
        the Maker’s assets, and for which an appropriate subordination agreement has
        been executed and delivered which is acceptable to the Holder in its sole
        discretion;

      


           (ii) amend
        its certificate of incorporation, by-laws or its charter documents so as
        to
        adversely affect any rights of the Holder;

      


      (iii) repay,
        repurchase or offer to repay, repurchase or otherwise acquire or make any
        dividend or distribution in respect of any of its Common Stock, preferred
        stock,
        or other equity securities

      


      (iv) prepay
        or redeem any financing related debt or past due obligations outstanding
        as of
        the Closing Date, unless such financing otherwise provides for prepayment
        or
        redemption by its terms;

       

      or

      


      (v) the
        Maker agrees to provide Holder not
        less than ten days notice prior to becoming
        obligated to or effectuating a Permitted Lien.” 

      


      For
        avoidance of doubt, the Maker may create, incur, assume or suffer to exist
        any
        Lien that is junior or pari passu to the Notes.

      


      VI.
        The following are hereby added as “Events of Default” under the
        Note:

      


      1.
        Breach
        of Material Covenant.
        The Maker breaches any material covenant or other term or condition of this
        Note
        (unless any such covenant, etc. contains a shorter notice or cure period)
        in any
        material respect and such breach, if subject to cure, continues for a period
        of
        ten (10) business days after written notice to the Maker from the
        Holder.

      


      2.
        Delisting of the Maker’s Common Stock from any principal market on which it is
        listed (i.e.: Over the Counter Bulletin Board or American Stock Exchange,
        etc.
        (“Principal Market”); failure to comply with the requirements for continued
        listing on a Principal Market for a period of fifteen consecutive trading
        days;
        or notification from a Principal Market that the Maker is not in compliance
        with
        the conditions for such continued listing on such Principal Market.

      


      3.
        Stop
        Trade.
        An SEC or judicial stop trade order or Principal Market trading suspension
        with
        respect to Maker’s Common Stock that lasts for fifteen or more consecutive
        trading days.4
        Failure
        to Deliver Common Stock or Replacement Note.
        Maker's
        failure to timely deliver Common Stock to the Holder pursuant to and in the
        form
        required by this Note and, if requested by Holder, a replacement
        Note.

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      
 

      4.
        Cross
        Default.
        A default by the Maker of a material term, covenant, warranty or undertaking
        of
        any agreement executed in connection with the Assignment or the Stock Purchase
        agreement to which the Maker and Holder are parties, or the occurrence of
        a
        material event of default under such agreements which is not cured after
        any
        required notice and/or cure period.

      


      VII.
        The governing law for the Note shall be the State of New York and the Note
        shall
        be deemed to be executed and delivered in the State of New York. The following
        governing law provision shall apply:

      


      “This
        Note
        shall be governed by and construed in accordance with the laws of the State
        of
        New York. Any action brought by either party against the other concerning
        the
        transactions contemplated by this Agreement shall be brought only in the
        state
        courts of New York or in the federal courts located in the state of New York.
        Both parties and the individual signing this Agreement on behalf of the Maker
        agree to submit to the jurisdiction of such courts. The prevailing party
        shall
        be entitled to recover from the other party its reasonable attorney's fees
        and
        costs. This
        Note shall be deemed an unconditional obligation of Maker for the payment
        of
        money and, without limitation to any other remedies of Holder, may be enforced
        against Maker by summary proceeding pursuant to New York Civil Procedure
        Law and
        rules Section 3213 or any similar rule or statute in the jurisdiction where
        enforcement is sought.”

      


      Miscellaneous.
        This
        Allonge must be delivered by original signature for Maker, but the Holder
        may
        execute and deliver by facsimile copy.

      


      



      
        
           

           

        

        
          9

          
            

          

        

        
           

        

      


      IN
        WITNESS WHEREOF, the parties hereto have executed this Allonge as of the
        date
        first written above.

      


      SULPHCO,
        INC.

      


      


      


      By:__________________

      Name:

      Title:

      


      [NAME
        OF
        HOLDER]

      


      


      


      By:__________________

      Name:

      Title:


      
        
           

           

        

        
          10

          
            

          

        

        
           

        

      


      NOTICE
        OF CONVERSION

      


      (To
        be
        executed by the Registered Holder in order to convert the Note)

      


      


      The
        undersigned hereby elects to convert $_________ of the principal and $_________
        of the interest due on the Note issued by SulphCo Inc. on April __, 2007
        into
        Shares of Common Stock of SulphCo Inc. (the "Maker") according to the conditions
        set forth in such Note, as of the date written below.

      


      


      


      Date
        of
        Conversion:____________________________________________________________________

      


      


      Conversion
        Price:______________________________________________________________________

      


      


      Shares
        To
        Be
        Delivered:_______________________________________________________________

      


      


      Signature:______________________________________________________________________

      


      


      Print
        Name:_________________________________________________________________________

      


      


      Address:______________________________________________________________________

      


      ____________________________________________________


      
        
           

           

        

        
          11

          
            

          

        

        
           

        

      


      

        Schedule
          4.1 to Allonge to Promissory Note, dated April 27, 2007

         

        
          	
                  Name

                	 	
                  Note
                    Conversion Shares

                	 	
                  Option
                    Shares from Note Assignment Option

                	 	
                  Stock
                    Purchase Shares

                	 	
                  Option
                    Shares from Stock Purchase Option

                	 	
                  Total

                	 
	 	 	 	 	 	 	 	 	 	 	 	 
	
                  Ellis
                    Capital LLC

                	 	 	
                  305,281

                	 	 	
                  348,020

                	 	 	 	 	 	 	 	 	
                  653,301

                	 
	
                  Mayflower
                    Oak LLC

                	 	 	
                  348,939

                	 	 	
                  397,790

                	 	 	
                  62,500

                	 	 	
                  62,500

                	 	 	
                  871,729

                	 
	
                  Iroquois
                    Master Fund Ltd.

                	 	 	
                  218,087

                	 	 	
                  248,619

                	 	 	
                  62,500

                	 	 	
                  62,500

                	 	 	
                  591,705

                	 
	
                  Scott
                    Cohen

                	 	 	
                  114,819

                	 	 	
                  130,893

                	 	 	 	 	 	 	 	 	
                  245,712

                	 
	
                  Scott
                    Jason Cohen Foundatation Inc.

                	 	 	
                  23,263

                	 	 	
                  26,519

                	 	 	 	 	 	 	 	 	
                  49,782

                	 
	
                  Merav
                    Abbe Irrevocable Trust

                	 	 	
                  138,081

                	 	 	
                  157,412

                	 	 	 	 	 	 	 	 	
                  295,494

                	 
	
                  Ed
                    Rosenblum

                	 	 	
                  43,617

                	 	 	
                  49,724

                	 	 	 	 	 	 	 	 	
                  93,341

                	 
	
                  Devidas
                    Budrani 

                	 	 	
                  94,464

                	 	 	
                  107,689

                	 	 	 	 	 	 	 	 	
                  202,153

                	 
	
                  Joshua
                    Silverman

                	 	 	
                  14,620

                	 	 	
                  16,667

                	 	 	 	 	 	 	 	 	
                  31,287

                	 
	
                  Phil
                    Mirabelli

                	 	 	
                  14,620

                	 	 	
                  16,667

                	 	 	 	 	 	 	 	 	
                  31,287

                	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
                  TOTALS

                	 	 	
                  1,315,789

                	 	 	
                  1,500,000

                	 	 	
                  125,000

                	 	 	
                  125,000

                	 	 	
                  3,065,789

                	 


        

        




       

      12