STOCK OPTION AGREEMENT
Exhibit
4.13
This
STOCK OPTION AGREEMENT (the "Agreement") is made and entered
into as of April __, 2007 by and between the parties listed on the signature
pages hereto as Optionees ("Optionees"), and Xxxxxx Xxxxxxxxx and Xxxxx
Xxxxxxxxx, as joint owners, the undersigned stockholders ("Stockholders")
of
Sulphco, Inc., a Nevada corporation (the "Company").
BACKGROUND
A.
Concurrently with
the execution of this Agreement, Optionees , Stockholder and the Company
have
entered into that certain Assignment of Promissory Note, of even date herewith
(“Assignment”; all capitalized terms used and not defined herein are used as
defined in the Assignment), pursuant to which Optionees are purchasing from
Stockholders 125,000 shares of Common Stock of Sulphco, of even date herewith
(“Stock Purchase”).
B.
Stockholders are the beneficial owners (as defined in Rule 13d-3
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"))
of
at least 1,750,000 shares of outstanding common stock of the Company ("Shares”
or “Securities”).
NOW,
THEREFORE, in consideration of the execution and delivery by
Optionees of the Assignment and the mutual covenants, conditions and agreements
herein contained, and intending to be legally bound, the parties hereto hereby
agree as follows:
1.
Option.
(a)
Subject to the terms and conditions set forth in this Agreement,
effective immediately, the Stockholders hereby grant to Optionees an option
(the
"Option") to purchase up to 125,000 Shares from the Stockholders (for each
Optionee up to the Allocated Amount set forth on the signature pages hereof)
,
at a per share purchase price equal to Four Dollars ($4.00) per share (the
"Purchase Price").
(b)
The shares subject
to the Option are the following Common Stock Certificates of the Company:
number
____, dated _____ __, ____, in the amount of ______ shares issued to the
Stockholders and number ____, dated _______ __, ____, in the amount of _______
shares issued to the Stockholders (collectively, the “Certificates”).
Simultaneously with the execution of this Option Agreement, the Certificates
shall be delivered into escrow with Grushko & Xxxxxxx, P.C., as escrow agent
(“Escrow Agent”), pursuant to the form of escrow agreement attached hereto as
Exhibit A. If at any time after the date of execution of this Agreement and
during the term hereof, Stockholders receive any further shares of stock
due to
a stock split, or otherwise, with regard to the shares represented by
Certificates, they shall immediately deliver those shares into escrow with
the
Escrow Agent.
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(c)
The Option may be exercised by an Optionee in whole or in part
commencing on the Closing Date and continuing through the eight (8) month
anniversary of the Closing Date. There may be multiple exercises of the Option
and at the time of each partial exercise the Stockholders shall make a notation
in their books and records as to the remaining portion of the Option subject
to
exercise.
(d)
In the event that an Optionee wishes to exercise the Option, it
shall send to the Stockholders and Escrow Agent a written notice (the date
of
each such notice being herein referred to as a "Notice Date") setting forth
its
irrevocable election to that effect, which notice also specifies a date not
earlier than five (5) business days nor later than thirty (30) business days
from the Notice Date for the closing of such purchase (an "Option Closing
Date"). The place of any Option Closing shall be at the offices of Grushko
&
Xxxxxxx, P.C. at 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, XX 00000, and the
time
of the Option Closing shall be 10:00 a.m. (New York Time) on the Option Closing
Date.
(e)
At the Option Closing, an Optionee shall pay to the Stockholders
by delivery to Escrow Agent in immediately available funds by wire transfer
to a
bank account designated in writing in the Escrow Agreement an amount equal
to
the Purchase Price; provided, that failure or refusal of the Escrow Agent
to
designate a bank account shall not preclude Optionee from exercising the
Option.
The terms of the Escrow Agreement shall govern mechanics for release of stock
and funds and related matters.
(f)
At the Option Closing, upon delivery of immediately available
funds as provided above, the Escrow Agent shall deliver: (i) to the Optionee
a
certificate or certificates representing its Securities to be purchased at
such
Option Closing (or, a certificate endorsed in blank) and registered on the
books
and records of the Company in Optionee’s name, which Securities shall be free
and clear of all liens, claims, charges and encumbrances of any kind whatsoever,
and (ii) to Stockholders, the Purchase Price.
(g)
In the event of any change in the Company Common Stock by reason
of a stock dividend, split-up, merger, recapitalization, combination, exchange
of shares or similar transaction, the type and number of Securities subject
to
the Option, and the per share purchase price therefor, shall be adjusted
appropriately, so that Optionee shall receive upon exercise of the Option
the
number and class of shares or other securities or property that Optionee
would
have received if the Option had been exercised immediately prior to such
event
or the record date therefor, as applicable.
2.
Termination. The right to exercise this Option shall terminate
upon the eight (8) month anniversary of the date of this Agreement.
Notwithstanding the foregoing, if the Option cannot be exercised by reason
of
any applicable judgment, decree, order, law or regulation, the Option shall
remain exercisable and shall not terminate until the earlier of (x) the date
on
which such impediment shall become final and not subject to appeal, and (y)
5:00
p.m. New York Time, on the thirtieth (30th) business day after such impediment
shall have been removed. Notwithstanding the termination of the Option or
this
Agreement, Optionees shall be entitled to purchase the Securities if it has
exercised the Option in accordance with the terms hereof prior to such
termination and such termination shall not affect any rights hereunder which
by
their terms do not terminate or expire prior to or as of such termination.
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3.
Representations and Warranties of the Stockholders. The
Stockholders hereby represent and warrant to Optionees as follows:
(a)
Due Authorization; Enforceability. The Stockholders have full
power and authority to execute and deliver this Agreement. The execution
and
delivery of this Agreement and the consummation of the transactions contemplated
hereby have been duly and validly authorized by all necessary action on the
part
of the Stockholders, and no other proceedings on the part of the Stockholders
are necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by the Stockholders and constitutes a valid and binding agreement
of
the Stockholders, enforceable against such Stockholders in accordance with
its
terms, subject to applicable bankruptcy, insolvency, moratorium or other
similar
laws relating to creditors' rights and to general principles of equity.
(b)
Ownership of Securities; Voting Rights. The Stockholders have
sole voting power with respect to the Shares. The Shares are not subject
to any
voting trust agreement or other contract, agreement, arrangement, commitment
or
understanding to which the Stockholders are a party restricting or otherwise
relating to the voting, dividend rights or disposition of the Shares.
(c)
No Encumbrances. Upon the exercise of the Option and the delivery
to an Optionee by Stockholders of a certificate or certificates, or other
similar document, evidencing the Shares, Optionee will receive good, valid
and
marketable title to the Shares, free and clear of all security interests,
liens,
claims, pledges, options, rights of first refusal, agreements, limitations
on
Optionees’ voting rights, charges and other encumbrances of any nature
whatsoever (except any security interest created by Optionees ).
(d)
No Conflicts. No authorization, consent or approval of any court
or any public body or authority is necessary for the consummation by the
Stockholders of the transactions contemplated by this Agreement. The execution,
delivery and performance of this Agreement by the Stockholders will not
constitute a breach, violation or default (or any event which, with notice
or
lapse of time or both, would constitute a default) under, or result in the
termination of, or accelerate the performance required by, or result in a
right
of termination or acceleration under, or result in the creation of any lien
or
encumbrance upon any of the properties or assets of such Stockholders under,
any
note, bond, mortgage, indenture, deed of trust, license, lease, agreement
or
other instrument to which such Stockholders are a party or by which his,
her or
its properties or assets are bound, other than breaches, violations, defaults,
terminations, accelerations or creation of liens and encumbrances which,
in the
aggregate, would not materially impair the ability of such Stockholders to
perform his, her or its obligations hereunder.
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(e)
Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf
of
the Stockholders.
(f)
Stockholders were provided with the opportunity to present this
Agreement and related documentation to an attorney for review and have
determined upon their own free will to not avail themselves of such right.
They
understand that the transaction contemplated by this Assignment is a
sophisticated business and financial transaction, and they have the acumen
and
experience to review this Assignment and related documentation and to enter
into
the transactions set forth in the Assignment without the aid of counsel.
They
acknowledge that they have not relied upon the advice, judgment or counsel
of
attorneys for either the Borrower or Optionees and they waive any claims
they
may have against them arising out of this transaction
4.
Representations and Warranties of Optionees,
Each
Optionee represents warrants as follows:
(a)
Compliance with
the Securities Act of 1933. The Optionee understands and agrees that the
Securities have not been registered under the Securities Act of 1933 (“1933
Act”) or any applicable state securities laws, by reason of their issuance in
a
transaction that does not require registration under the 1933 Act (based
in part
on the accuracy of the representations and warranties of Optionee contained
herein), and that such Securities must be held indefinitely unless a subsequent
disposition is registered under the 1933 Act or any applicable state securities
laws or is exempt from such registration.
(b)
Status of
Optionee. The Optionee is, and will be at the time of the exercise of the
Option, an "accredited investor", as such term is defined in
Regulation D promulgated by the Commission under the 1933 Act, is experienced
in
investments and business matters, has made investments of a speculative nature
and has purchased securities of United States publicly-owned companies in
private placements in the past and, with its representatives, has such knowledge
and experience in financial, tax and other business matters as to enable
the
Optionee to utilize the information made available by the Company to evaluate
the merits and risks of and to make an informed investment decision with
respect
to the proposed purchase, which represents a speculative investment. The
Optionee has the authority and is duly and legally qualified to purchase
and own
the Securities. The Optionee is able to bear the risk of such investment
for an
indefinite period and to afford a complete loss thereof. The information
set
forth on the signature page hereto regarding the Optionee is accurate.
(c)
Restricted
Securities. Optionee understands that the Securities have not been registered
under the 1933 Act and such Optionee will not sell, offer to sell, assign,
pledge, hypothecate or otherwise transfer any of the Securities unless pursuant
to an effective registration statement under the 1933 Act, or unless an
exemption from registration is available.
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(d)
Upon exercise of
the Option in whole or in part, the Securities issued shall bear the following
or similar legend:
"THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THESE SHARES MAY
NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT OR ANY APPLICABLE STATE
SECURITIES LAW OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO SULPHCO,
INC.
THAT SUCH REGISTRATION IS NOT REQUIRED."
5.
Stockholders Covenants. The Stockholders hereby covenant and agree
as follows:
(a)
The Stockholders hereby agree, while this Agreement is in effect,
and except as contemplated hereby, not to sell, transfer, pledge, encumber,
assign or otherwise dispose of, or enter into any contract, option or other
arrangement or understanding with respect to the sale, transfer, pledge,
encumbrance, assignment or other disposition of (all of the foregoing, "Sell,"
"Sold" or "Sale," as the case may be), any of the Securities.
(b)
The Stockholders agree not to engage in any action or omit to
take any action which would have the effect of preventing or disabling
Stockholders from delivering its Securities to Optionees or otherwise performing
its obligations under this Agreement.
(c)
The Stockholders
are responsible for making any filings required to be made by him with all
regulatory bodies arising from the transactions contemplated hereby.
6.
Miscellaneous.
(a)
Fees and Expenses. All costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be borne
by
the party incurring such expenses.
(b)
Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties.
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(c)
Choice of Law and Venue; Jury Trial Waiver. This Assignment shall
be governed by, and construed in accordance with, the internal laws of the
State
of New York, without regard to principles of conflicts of law. STOCKHOLDERS,
COMPANY AND OPTIONEESWAIVE ANY RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF
ACTION BASED UPON OR ARISING OUT OF THIS ASSIGNMENT OR ANY TRANSACTION
CONTEMPLATED HEREIN, INCLUDING CLAIMS BASED ON CONTRACT, TORT, BREACH OF
DUTY
AND ALL OTHER COMMON LAW OR STATUTORY BASES. Each party hereby submits to
the
exclusive jurisdiction of the state and federal courts located in the County
of
New York, State of New York.
(d)
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:
If
to Stockholders: Xxxxxx
Xxxxxxxxx
If
to Optionees: To
the one or more
addresses and telecopier numbers indicated on the signature pages hereto
With
a copy to:
Grushko
&
Xxxxxxx,
P.C.
000
Xxxxx Xxxxxx, Xxxxx 0000
Xxx
Xxxx, Xxx Xxxx 00000
telecopier:
(000) 000-0000
(e)
Assignment; Binding Effect; No Third Party Beneficiaries. Neither
this Agreement nor any of the rights, interests or obligations hereunder
shall
be assigned by any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other parties. Any purported
assignment without the consent required pursuant to the preceding sentence
shall
be null and void. Subject to the second preceding sentence, this Agreement
(including, without limitation, the obligations of the Stockholders under
Section 1 and Section 2 hereof) shall be binding upon and shall inure to
the
benefit of the parties hereto and their respective successors and assigns.
Notwithstanding anything contained in this Agreement to the contrary, nothing
in
this Agreement, expressed or implied, is intended to confer on any person
other
than the parties hereto or their respective successors and assigns any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
Notwithstanding the foregoing, any Optionee may assign this agreement to
one or
more of its affiliates.
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(f)
Severability. In the event that any provision of this Agreement,
or the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties. The parties further agree to replace
such
void or unenforceable provision of this Agreement with a valid and enforceable
provision that will achieve, to the extent possible, the economic, business
and
other purposes of such void or unenforceable provision.
(g)
Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute
one
and the same instrument. Each counterpart may consist of a number of copies
hereof each signed by less than all, but together signed by all of the parties
hereto.
(h)
Further Assurances. Each party hereto shall perform such further
acts and execute such further documents as may reasonably be required to
carry
out the provisions of this Agreement.
IN
WITNESS WHEREOF, the undersigned have executed this Agreement on
the
date
first above written.
STOCKHOLDERS
________________________________________
XXXXXX
XXXXXXXXX
________________________________________
XXXXX
XXXXXXXXX
ACKNOWLEDGED
BY:
SULPHCO,
INC.
By:_____________________________________
[SIGNATURE
PAGE TO STOCK OPTION AGREEMENT]
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[OPTIONEE
SIGNATURE PAGES TO STOCK OPTION AGREEMENTS]
IN
WITNESS WHEREOF the undersigned have executed this Stock Option
Agreement as of the first date above written.
Name
of Optionee:
Signature
of Authorized Signatory of Optionee:
_______________________________________
Name
of Authorized Signatory:
____________________________________________________
Title
of Authorized Signatory:
_____________________________________________________
Email
Address of
Optionee:_______________________________________________________
Address
for Notice to Optionee:
With
a copy to (which shall not constitute notice):
Grushko
&
Xxxxxxx,
P.C.
000
Xxxxx Xxxxxx, Xxxxx 0000
Xxx
Xxxx, XX 00000
Attn:
Xxxxxxx Xxxx, Esq.
Fax:
(000) 000-0000
Email:
xxxxxxxxx@xxx.xxx
Address
for Delivery of Securities for Optionee (if not same as
above):
Proportionate
Amount: _____%
Number
of Shares of Option (“Allocated Portion”):______________
[SIGNATURE
PAGES CONTINUE]
[OPTIONEE
SIGNATURE PAGES TO STOCK OPTION AGREEMENT]
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[OPTIONEE
SIGNATURE PAGES TO STOCK OPTION AGREEMENT]
IN
WITNESS WHEREOF the undersigned have executed this Stock Option
Agreement as of the first date above written.
Name
of Optionee:
Signature
of Authorized Signatory of Optionee:
_______________________________________
Name
of Authorized Signatory:
____________________________________________________
Title
of Authorized Signatory:
_____________________________________________________
Email
Address of
Optionee:_______________________________________________________
Address
for Notice to Optionee:
With
a copy to (which shall not constitute notice):
Grushko
&
Xxxxxxx,
P.C.
000
Xxxxx Xxxxxx, Xxxxx 0000
Xxx
Xxxx, XX 00000
Attn:
Xxxxxxx Xxxx, Esq.
Fax:
(000) 000-0000
Email:
xxxxxxxxx@xxx.xxx
Address
for Delivery of Securities for Optionee (if not same as
above):
Proportionate
Amount: _____%
Number
of Shares of Option (“Allocated Portion”):______________
[SIGNATURE
PAGES CONTINUE]
[OPTIONEE
SIGNATURE PAGES TO STOCK OPTION AGREEMENT]
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EXHIBIT
A
ESCROW
AGREEMENT
10