ESCROW AGREEMENT
EXHIBIT
10.58
This
Escrow Agreement (“Agreement”) is dated as of the __ day of February 2008 among
Xxxxxx
Xxxxxxxxx and Xxxxx Xxxxxxxxx, as joint owners, the undersigned stockholders
(“Stockholders”) of Sulphco, Inc., a Nevada corporation (the
“Company”),
Iroquois
Master Fund Ltd. (“Iroquois”), Xxxxx Capital LLC (“Xxxxx”) (Iroquois and Xxxxx
each a “Purchaser” collectively the “Purchasers”),
and
Grushko & Xxxxxxx, P.C. (the “Escrow Agent”) (each a “Party” and
collectivley the “Parties”):
WITNESSETH:
WHEREAS,
Concurrently
with the execution of this Agreement, Purchasers and Stockholder have entered
into that certain Stock Purchase Agreement of even date herewith (“SPA”),
pursuant to which Purchasers are purchasing from Stockholders an aggregate
of
2,000,000 shares of Common Stock of the Company (the “Shares”).
Whereas,
to ensure the timely delivery of the Purchase Price and the Shares the
Stockholders and Purchasers desire to enter into an Escrow
Agreement.
WHEREAS,
the Escrow Agent is willing to serve as escrow agent pursuant to the terms
and
conditions of this Agreement;
NOW
THEREFORE, the parties agree as follows:
ARTICLE
I
INTERPRETATION
1.1. Definitions.
Capitalized
terms not otherwise defined herein shall have the meanings attributed to such
terms in the SPA. Whenever
used in this Agreement, the following terms shall have the following respective
meanings:
“Initial
Closing Date” shall have the meaning set forth in the SPA;
“Initial
Closing Purchase Price” shall mean an aggregate $3,000,000 to purchase the
Initial Closing Shares, dividied amongst the Purchasers as follows $2,000,000
from Iroquios and $1,000,000 from Xxxxx;
“Initial
Closing Shares” shall mean the 750,000 of the Shares being purchased on the
Initial Closing Date dividied amongst the Purchasers as follows 500,000 being
purchased by Iroquios and 250,000 being purchased by Xxxxx;
“Payment
Notice Date” shall have the meaning set forth in Section 2(b) of the
SPA;
“Purchase
Price” shall mean the Initial Closing Purchase Price and the Second Closing
Purchase Price in the aggregate;
“Second
Closing Date” shall mean the date the Second Closing Purchase Price is rele3ased
to the Stockholders;
“Second
Closing Purchase Price” shall have the meaning as detrmined pursuant to Section
2(b) of the SPA as set forth in the notice sent by the Escrow Agent to the
Parties, dividied amongst the Purchasers as follows 67% from Iroquios 33% from
Xxxxx;
“Second
Closing Shares” shall mean the 1,250,000 of the Shares being purchased on the
Initial Closing Date dividied amongst the Purchasers as follows 1,333,333 being
purchased by Iroquios and 416,667 being purchased by Xxxxx;
1.2. Entire
Agreement.
This
Agreement constitutes the entire agreement between the parties hereto pertaining
to the Purchase Price and the Shares and supersedes all prior agreements,
understandings, negotiations and discussions, whether oral or written, of the
parties. There are no warranties, representations and other agreements made
by
the parties in connection with the subject matter hereof except as specifically
set forth in this Agreement.
1.3. Extended
Meanings.
In this
Agreement words importing the singular number include the plural and vice versa;
words importing the masculine gender include the feminine and neuter genders.
The word "person" includes an individual, body corporate, partnership, trustee
or trust or unincorporated association, executor, administrator or legal
representative.
1.4. Waivers
and Amendments.
This
Agreement may be amended, modified, superseded, cancelled, renewed or extended,
and the terms and conditions hereof may be waived, only by a written instrument
signed by all parties, or, in the case of a waiver, by the party waiving
compliance. Except as expressly stated herein, no delay on the part of any
party
in exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any party of any right, power
or
privilege hereunder preclude any other or future exercise of any other right,
power or privilege hereunder.
1.5. Headings.
The
division of this Agreement into articles, sections, subsections and paragraphs
and the insertion of headings are for convenience of reference only and shall
not affect the construction or interpretation of this Agreement.
1.6. Law
Governing this Agreement.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York without regard to conflicts
of laws
principles that would result in the application of the substantive laws of
another jurisdiction. Any action brought by either party against the other
concerning the transactions contemplated by this Agreement shall be brought
only
in the state or federal courts located in the state and county of New York.
Both
parties agree to submit to the jurisdiction of such courts and waive trial
by
jury. Unless otherwise stated in a Court Order (as defined below in Section
3.1(c)), the prevailing party (which shall be the party which receives an award
most closely resembling the remedy or action sought) shall be entitled to
recover from the other party its reasonable attorney's fees and costs. In the
event that any provision of this Agreement or any other agreement delivered
in
connection herewith is invalid or unenforceable under any applicable statute
or
rule of law, then such provision shall be deemed inoperative to the extent
that
it may conflict therewith and shall be deemed modified to conform with such
statute or rule of law. Any such provision which may prove invalid or
unenforceable under any law shall not affect the validity or enforceability
of
any other provision of any agreement.
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1.7. Specific
Enforcement, Consent to Jurisdiction.
The
Stockholders and Purchasers acknowledge and agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
It
is accordingly agreed that the parties shall be entitled to an injuction or
injunctions to prevent or cure breaches of the provisions of this Agreement
and
to enforce specifically the terms and provisions hereof or thereof, this being
in addition to any other remedy to which any of them may be entitled by law
or
equity. Subject to Section 1.6 hereof, each of the Stockholders and Purchasers
hereby waives, and agrees not to assert in any such suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of such court,
that the suit, action or proceeding is brought in an inconvenient forum or
that
the venue of the suit, action or proceeding is improper. Nothing in this Section
shall affect or limit any right to serve process in any other manner permitted
by law.
ARTICLE
II
DELIVERIES
TO THE ESCROW AGENT
2.1 Stockholders
Deliveries.
Within
five (5) days of the execution of this Agreement, the Stockholders shall deliver
the Shares to the Escrow Agent
in the
Purchasers’ names in their Proportionate Amounts or in Gunnerman’s name with two
medallion signature guaranteed stock powers endorsed in blank. In such case,
the
Escrow Agent is instructed to arrange for the Company’s transfer agent to
reissue the Purchased Stock in the Proportionate Amounts of each
Buyer.
2.2 Purchaser
Deliveries:
| (i) |
Within
five (5) days of the
execution of this Agreement, the Purchaser will Deliver the Intial
Closing
Purchase Price to the Escrow Agent.
|
| (ii) |
Within
five (5) days of the
Payment
Notice Date the Purchasers will deliver the Second Closing Purchase
Price
to the Escrow Agent.
|
2.3 Intention
to Create Escrow Over the Purchase Price and Shares.
The
Stockholders
and Purchasers
intend
that the Initial Closing Purchase Price, Second Closing Purchase Price and
Shares shall be held in escrow by the Escrow Agent pursuant to this Agreement
for their benefit as set forth herein.
3
ARTICLE
III
RELEASE
OF PURCHASE PRICE AND SHARES
3.1. Release
of Escrow.
Subject
to the provisions of Section 4.2, the Escrow Agent shall release the Escrowed
Payment as follows:
(a) On
the
Intial Closing Date
the
Escrow Agent will release the Initial
Closing Shares to the Purchasers and the Initial Closing Purchase Price to
the
Stockholders.
(b)
On
the
Second Closing Date
the
Escrow Agent will release the Second
Closing Shares to the Purchasers and the Second Closing Purchase Price to the
Stockholders.
(c) Closings
and the release of the Initial
Closing Purchase Price and Second Closing Purchase Price will not occur until
the certificates representing the Shares are delivered to the Escrow Agent
in
the names Purchasers.
(d) Notwithstanding
the above, upon receipt by the Escrow Agent of a final and non-appealable
judgment, order, decree or award of a court of competent jurisdiction (a "Court
Order"), the Escrow Agent shall deliver the Purchase
Price and Shares
in
accordance with the Court Order. Any Court Order shall be accompanied by an
opinion of counsel for the party presenting the Court Order to the Escrow Agent
(which opinion shall be satisfactory to the Escrow Agent) to the effect that
the
court issuing the Court Order has competent jurisdiction and that the Court
Order is final and non-appealable.
3.2. Acknowledgement
of Stockholders
and Purchasers;
Disputes.
The
Stockholders
and Purchasers
acknowledge that the only terms and conditions upon which the Escrowed Payment
is to be released are set forth in Sections 3 and 4 of this Agreement. The
Stockholders
and Purchasers
reaffirm
their agreement to abide by the terms and conditions of this Agreement with
respect to the release of the Purchase Price and Shares. Any dispute with
respect to the release of the Purchase Price and Shares shall be resolved
pursuant to Section 4.2 or by agreement between the Stockholders
and Purchasers.
ARTICLE
IV
CONCERNING
THE ESCROW AGENT
4.1. Duties
and Responsibilities of the Escrow Agent.
The
Escrow Agent's duties and responsibilities shall be subject to the following
terms and conditions:
(a) The
Stockholders
and Purchasers
acknowledge and agree that the Escrow Agent (i) shall not be responsible for
or
bound by, and shall not be required to inquire into whether either the
Stockholders
and Purchasers
is
entitled to receipt of the Purchase Price and Shares pursuant to, any other
agreement or otherwise; (ii) shall be obligated only for the performance of
such
duties as are specifically assumed by the Escrow Agent pursuant to this
Agreement; (iii) may rely on and shall be protected in acting or refraining
from
acting upon any written notice, instruction, instrument, statement, request
or
document furnished to it hereunder and believed by the Escrow Agent in good
faith to be genuine and to have been signed or presented by the proper person
or
party, without being required to determine the authenticity or correctness
of
any fact stated therein or the propriety or validity or the service thereof;
(iv) may assume that any person believed by the Escrow Agent in good faith
to be
authorized to give notice or make any statement or execute any document in
connection with the provisions hereof is so authorized; (v) shall not be under
any duty to give the property held by Escrow Agent hereunder any greater degree
of care than Escrow Agent gives its own similar property; and (vi) may consult
counsel satisfactory to Escrow Agent, the opinion of such counsel to be full
and
complete authorization and protection in respect of any action taken, suffered
or omitted by Escrow Agent hereunder in good faith and in accordance with the
opinion of such counsel.
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(b) The
Stockholders
and Purchasers
acknowledge that the Escrow Agent is acting solely as a stakeholder at their
request and that the Escrow Agent shall not be liable for any action taken
by
Escrow Agent in good faith and believed by Escrow Agent to be authorized or
within the rights or powers conferred upon Escrow Agent by this Agreement.
Each
Purchaser
and
Stockholder,
jointly
and severally, agree to indemnify and hold harmless the Escrow Agent and any
of
Escrow Agent's partners, employees, agents and representatives for any action
taken or omitted to be taken by Escrow Agent or any of them hereunder, including
the fees of outside counsel and other costs and expenses of defending itself
against any claim or liability under this Agreement, except in the case of
gross
negligence or willful misconduct on Escrow Agent's part committed in its
capacity as Escrow Agent under this Agreement. The Escrow Agent shall owe a
duty
only to the Stockholders
and Purchasers
under
this Agreement and to no other person.
(c) The
Stockholders
and Purchasers
jointly
and severally agree to reimburse the Escrow Agent for outside counsel fees,
to
the extent authorized hereunder and incurred in connection with the performance
of its duties and responsibilities hereunder.
(d) The
Escrow Agent may at any time resign as Escrow Agent hereunder by giving five
(5)
days prior written notice of resignation to the Stockholders and Purchasers.
Prior to the effective date of the resignation as specified in such notice,
the
Stockholders and Purchasers will issue to the Escrow Agent a Joint Instruction
authorizing delivery of the Purchase Price and Shares to a substitute Escrow
Agent selected by the Stockholders and Purchasers. If no successor Escrow Agent
is named by the Stockholders and Purchasers, the Escrow Agent may apply to
a
court of competent jurisdiction in the State of New York for appointment of
a
successor Escrow Agent, and to deposit the Purchase Price and Shares with the
clerk of any such court.
(e) The
Escrow Agent does not have and will not have any interest in the Purchase Price
and Shares, but is serving only as escrow agent, having only possession thereof.
The Escrow Agent shall not be liable for any loss resulting from the making
or
retention of any investment in accordance with this Escrow
Agreement.
(f) This
Agreement sets forth exclusively the duties of the Escrow Agent with respect
to
any and all matters pertinent thereto and no implied duties or obligations
shall
be read into this Agreement.
(g) The
Escrow Agent shall be permitted to act as counsel for the Purchasers
in any
dispute as to the disposition of the Purchase Price and Shares, in any other
dispute between the Stockholders
and Purchasers,
whether
or not the Escrow Agent is then holding the Purchase Price and Shares and
continues to act as the Escrow Agent hereunder.
5
(h) The
provisions of this Section 4.1 shall survive the resignation of the Escrow
Agent
or the termination of this Agreement.
4.2. Dispute
Resolution: Judgments.
Resolution of disputes arising under this Agreement shall be subject to the
following terms and conditions:
(a) If
any
dispute shall arise with respect to the delivery, ownership, right of possession
or disposition of the Purchase Price and Shares, or if the Escrow Agent shall
in
good faith be uncertain as to its duties or rights hereunder, the Escrow Agent
shall be authorized, without liability to anyone, to (i) refrain from taking
any
action other than to continue to hold the Purchase Price and Shares pending
receipt of a Joint Instruction from the Stockholders
and Purchasers,
or (ii)
deposit the Purchase Price and Shares with any court of competent jurisdiction
in the State of New York, in which event the Escrow Agent shall give written
notice thereof to the Stockholders
and Purchasers
and
shall thereupon be relieved and discharged from all further obligations pursuant
to this Agreement. The Escrow Agent may, but shall be under no duty to,
institute or defend any legal proceedings which relate to the Purchase Price
and
Shares. The Escrow Agent shall have the right to retain counsel if it becomes
involved in any disagreement, dispute or litigation on account of this Agreement
or otherwise determines that it is necessary to consult counsel.
(b) The
Escrow Agent is hereby expressly authorized to comply with and obey any Court
Order. In case the Escrow Agent obeys or complies with a Court Order, the Escrow
Agent shall not be liable to the Stockholders
and Purchasers
or to
any other person, firm, corporation or entity by reason of such
compliance.
ARTICLE
V
GENERAL
MATTERS
5.1. Termination.
This
escrow shall terminate upon the release of all of the Purchase Price and Shares
or at any time upon the agreement in writing of the Stockholders
and Purchasers.
5.2. Notices.
All
notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in the mail,
registered or certified, return receipt requested, postage prepaid, (iii)
delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice. Any notice or other communication required or permitted
to be
given hereunder shall be deemed effective (a) upon hand delivery or delivery
by
facsimile, with accurate confirmation generated by the transmitting facsimile
machine, at the address or number designated below (if delivered on a business
day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be:
6
(a) If
to the
Stockholders,
to:
Xxxxxx
Xxxxxxxxx
0000
Xxxxx Xxxx Xxx
Xxxx,
XX
00000
Fax:
(000) 000-0000
Notice
to
either Xxxxxx Xxxxxxxxx or Xxxxx Xxxxxxxxx shall be deemed notice to both of
Xxxxxx Xxxxxxxxx and Xxxxx Xxxxxxxxx.
(b) If
to the
Purchasers,
to: the
addresses and fax numbers listed on Schedule A hereto with a copy by fax only
to
the Escrow Agent
(c) If
to the
Escrow Agent, to:
Grushko
& Xxxxxxx, P.C.
000
Xxxxx
Xxxxxx, Xxxxx 0000
Xxx
Xxxx,
Xxx Xxxx 00000
Fax:
(000) 000-0000
or
to
such other address as any of them shall give to the others by notice made
pursuant to this Section 5.2.
5.3. Interest.
The
Purchase Price shall not be held in an interest bearing account nor will
interest be payable in connection therewith. In the event the Purchase Price
is
deposited in an interest bearing account, each Purchaser shall be entitled
to
receive its pro rata
portion
of any accrued interest thereon, but only if the Escrow Agent receives from
such
Purchaser the Purchaser’s United States taxpayer identification number and other
requested information and forms.
5.4. Assignment;
Binding Agreement.
Neither
this Agreement nor any right or obligation hereunder shall be assignable by
any
party without the prior written consent of the other parties hereto. This
Agreement shall enure to the benefit of and be binding upon the parties hereto
and their respective legal representatives, successors and assigns.
5.5. Invalidity.
In the
event that any one or more of the provisions contained herein, or the
application thereof in any circumstance, is held invalid, illegal, or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be in any way impaired thereby, it being
intended that all of the rights and privileges of the parties hereto shall
be
enforceable to the fullest extent permitted by law.
5.6. Counterparts/Execution.
This
Agreement may be executed in any number of counterparts and by different
signatories hereto on separate counterparts, each of which, when so executed,
shall be deemed an original, but all such counterparts shall constitute but
one
and the same instrument. This Agreement may be executed by facsimile
transmission and delivered by facsimile transmission.
7
5.7. Agreement.
Each of
the undersigned states that he has read the foregoing Escrow Agreement and
understands and agrees to it.
STOCKHOLDERS
|
XXXXXX
XXXXXXXXX
|
XXXXX
XXXXXXXXX
|
|
“Stockholder”
|
“Stockholder”
|
|
__________________________
|
__________________________
|
PURCHASERS
|
Xxxxx
Capital LLC
|
|
|
____________________________
|
____________________________
|
|
By:
|
By:
|
|
Its:
|
|
ESCROW
AGENT:
______________________________________
GRUSHKO
& XXXXXXX, P.C.
SCHEDULE
A TO FUNDS ESCROW AGREEMENT
Iroquois
Master Fund Ltd.
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
XX 00000
(000)
000-0000
Xxxxx
Capital LLC
00
Xxxx
Xxxxxxx Xxxxxxx
Xxxxxx
Xxxxxx, Xxx Xxxx 00000
(516)
887-8990
8
