STOCK PURCHASE AGREEMENT
EXHIBIT 99.3
This Stock Purchase Agreement (this “Agreement”) is entered into as of August 17, 2009, by and
among Xxxxxx Xxxxxxxxx and Xxxxx Xxxxxxxxx (“Gunnerman”), and the entities identified on Schedule A
hereto, as buyers (each a “Buyer” and collectively “Buyers”).
NOW, THEREFORE, for good and valuable consideration, Gunnerman and Buyers agree as follows:
1. Purchase and Sale. Subject to the terms, conditions and representations in this
Agreement, Buyers agree to purchase from Gunnerman and Gunnerman agrees to sell to Buyers in the
amounts indicated on Schedule A (each a “Proportionate Amount”) in the aggregate, all rights, title
and interest of Gunnerman in and to 1,629,000 shares of $.001 par value restricted common stock
(“Common Stock”) of Sulphco, Inc. (the “Company”) (“Purchased Stock”) for the purchase price
(“Purchase Price”) described below.
2. Consideration and Payment of Purchase Price.
The Purchase Price for the Purchased Stock shall be $1.10 per share of Common Stock and be
payable on the closing date (“Closing Date”). On or prior to the Closing Date, Gunnerman will
deliver all of the Purchased Stock to Grushko & Xxxxxxx, P.C. as Escrow Agent, which will be held
and released pursuant to the terms of an Escrow Agreement among Gunnerman, Buyers and the Escrow
Agent relating to the Purchased Stock. The Purchased Stock will be delivered to the Escrow Agent
in the Buyers’ names in their Proportionate Amounts or in Gunnerman’s name with a medallion
signature guaranteed stock powers endorsed in blank for each Buyer. If such Purchased Stock is
delivered in Gunnerman’s name, the Escrow Agent is instructed to arrange for the Company’s transfer
agent to reissue the Purchased Stock in each Buyer’s name in such Buyer’s Proportionate Amount as
set forth on Schedule A. On or prior to the Closing Date, each Buyer will deliver its
Proportionate Amount of $1,791,900 to the Escrow Agent. On the Closing Date, the Escrow Agent will
release up to $1,791,900 to Gunnerman and up to 1,629,000 shares of Purchased Stock to the Buyers
registered in each Buyer’s name, pursuant to the terms of the Escrow Agreement. The date such
funds and shares of Purchased Stock are actually released is the Closing Date.
3. Stock Option Agreements. Gunnerman hereby gives the Buyers the option to purchase
an aggregate of 814,500 of Common Stock as set forth on Schedule A.
4. Purchase and Sale.
(a) Effective upon the Closing Date (each a “Closing Date”), and subject to and conditioned
upon the terms, covenants, limitations, and conditions contained herein, Gunnerman hereby sells,
transfers, and assigns to Buyer, and Buyer hereby purchases and accepts from Gunnerman, in each
case on and as of each Closing Date, all of Gunnerman’s rights, title and interest, in, to, and
under each such Buyer’s Proportionate Share of the Purchased Stock being sold on such Closing Date.
(b) If Gunnerman receives any dividend or other payments from the Company with respect to the
Purchased Stock after the Closing Date, Gunnerman will forward to each Buyer, such Buyer’s
allocated portion of such dividends or other payments.
(c) A Buyer shall not be entitled to purchase any shares of Common Stock on the Closing Date
if the sum of (i) the number of shares of Common Stock beneficially owned by the Buyer and its
Affiliates on the Closing Date, and (ii) the number of shares of Common Stock purchasable on the
Closing Date, would result in beneficial ownership by the Buyer and its affiliates of more than
4.99% of the outstanding shares of Common Stock of the Company on the Closing 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. Each Buyer, for itself only, shall have the authority and obligation
to determine whether the restriction contained in this Section 4(c) will limit any purchases
hereunder and to the extent that the Buyer determines that the limitation contained in this Section
applies, the determination of the amount of shares of Common Stock purchasable by such Buyer
hereunder shall be the responsibility and obligation of the such Buyer. Each Buyer for itself
only, may increase the permitted beneficial ownership amount up to 9.99% upon and effective after
61 days prior written notice to Gunnerman. The Buyer may allocate which of the equity of the
Company deemed beneficially owned by the Buyer shall be included in the 4.99% amount described
above and which shall be allocated to the excess above 4.99%.
5. Buyer’s Obligations. In connection with the sale and transfer of the Purchased
Stock, on or before each Closing Date each Buyer shall deliver to Escrow Agent such Buyer’s
Proportionate Amount of the Purchase Price and an executed copy of this Agreement.
6. Representations and Warranties and Covenants of Gunnerman. Each of Xxxxxx and
Xxxxx Xxxxxxxxx hereby represents and warrants and covenants to Buyer as follows:
(a) Gunnerman is an individual, who is a U.S. citizen.
(b) Gunnerman has the full power and authority to execute, deliver and perform this Agreement
and to enter into and consummate the transactions contemplated by and described in this Agreement.
Gunnerman has duly authorized the execution, delivery and performance of this Agreement, has duly
executed and delivered this Agreement and this Agreement constitutes a legal, valid and binding
obligation of Gunnerman, enforceable against Gunnerman in accordance with its terms.
(c) As of the date of issuance of the Purchased Stock to Gunnerman, the Purchased Stock was
validly issued, fully paid and nonassessable.
(d) Gunnerman is the legal and beneficial owner and holder of the Purchased Stock and
Gunnerman has not pledged, assigned or otherwise previously transferred the Purchased Stock. The
Purchased Stock is free and clear of any liens, encumbrances, etc. whatsoever.
(e) Gunnerman has not entered into any agreement or arrangement which would affect their
ability to sell the Purchased Stock hereunder.
(f) The Gunnermans were provided with the opportunity to present this Agreement and related
documentation to an attorney for review. They understand that the transaction contemplated by this
Agreement is a sophisticated business and financial transaction, and they have the acumen and
experience to review this Agreement and related documentation and to enter into the transactions
set forth in the Agreement without the aid of counsel. They acknowledge that they have not relied
upon the advice, judgment or counsel of attorneys for Buyers and they waive any claims the may have
against such counsel arising out of this transaction.
(g) Gunnerman is responsible for making any filings required to be made by him with all
regulatory bodies arising from the transactions contemplated hereby.
(h) 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 Gunnerman.
7. Representations and Warranties of Buyer. Each Buyer for itself only, hereby
represents and warrants to Gunnerman:
(a) Buyer has all requisite power and authority to execute, deliver and perform this Agreement
and to enter into and consummate the transactions contemplated by this Agreement. The officer or
officers of Buyer who shall execute and deliver this Agreement have been duly authorized to do so
by all requisite action on the part of Buyer. Buyer has duly authorized the execution, delivery
and performance of this Agreement, has duly executed and delivered this Agreement and this
Agreement constitutes a legal, valid and binding obligation of Buyer, enforceable against Buyer in
accordance with its terms.
(b) Buyer has made such examination, review and investigation of the Purchased Stock and the
Company, and of any and all facts and circumstances necessary to evaluate the Purchased Stock it
has deemed necessary or appropriate. Except for the representations and warranties specifically
and expressly made by Gunnerman above (a) Buyer has been and will continue to be solely responsible
for Buyer’s own independent investigations as to all aspects of the contemplated transactions; and
(b) Buyer has not relied upon any expressed or implied, written or oral, representation, warranty
or other statement by or on behalf of Gunnerman concerning the Purchased Stock and the Company,
except for such representations and warranties of Gunnerman as are specifically and expressly
provided in this Agreement.
(c) Buyer is acquiring the Purchased Stock without any view either to participate in (other
than as described in this Agreement), or to sell the Purchased Stock in connection with any public
distribution thereof, and Buyer has no intention of making any distribution of the Purchased Stock
in a manner which would violate applicable securities laws; provided, however, that nothing in this
Agreement shall restrict or limit in any way Buyer’s ability and right to dispose of all or part of
the Purchased Stock in accordance with such laws if at some future time Buyer deems it advisable to
do so.
8. Excluded Information. Each of Gunnerman and the Buyers may have come into
possession of non-public information related to the Company that may not be known to the other, and
will not be disclosed to the other, which information, may be material to the Company and/or the
value of the Purchased Stock (collectively “Excluded Information”). The foregoing notwithstanding,
each party hereto has decided to proceed with the transactions described herein and all other
agreements among the parties. Each party shall have no liability to the other or its affiliates
and each party, on behalf of itself and its affiliates, waives any and all claims it might have
against the other or any of its officers, directors, agents, affiliates, partners, managers or
members, whether under applicable securities laws or otherwise, with respect to the nondisclosure
of the Excluded Information. Each party has not requested and does not want to receive any of the
Excluded Information.
9. Taxes. Each party shall be responsible for the payment of all taxes and charges,
including sales and transfer taxes and recording taxes, resulting from or payable in connection
with the Agreement for which each party is liable as a matter of law. No party shall have the
obligation to pay taxes due by another party.
10. Further Assurances. Effective upon the date of this Agreement, Gunnerman, and
each Buyer each hereby covenant and agree to execute and deliver all such documents and
instruments, and to take such further actions as may be reasonably necessary or appropriate, from
time to time, to carry out the intent and purpose of this Agreement and to consummate the
transactions contemplated hereby.
11. Miscellaneous.
(a) 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 Gunnerman: | Xxxxxx Xxxxxxxxx and Xxxxx 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.
| If to Buyers: | To the one or more addresses and telecopier numbers | |||
| indicated on Schedule A hereto | ||||
| With a copy to: | Grushko & Xxxxxxx, P.C. | |||
| 000 Xxxxx Xxxxxx, Xxxxx 0000 | ||||
| Xxx Xxxx, Xxx Xxxx 00000 | ||||
| Fax: (000) 000-0000 |
(b) No Waiver. No delay or omission by either party hereto in exercising any right or
power arising from any default by the other party hereto shall be construed as a waiver of such
default or as an acquiescence therein, nor shall any single or partial exercise thereof preclude
any further exercise thereof or the exercise of any other right or power arising from any default
by the other party hereto. No waiver of any breach of any of the covenants or conditions contained
in this Agreement shall be construed to be a waiver of or an acquiescence in or a consent to any
previous or subsequent breach of the same or of any other condition or covenant.
(c) No Third Party Beneficiary. This Agreement is made for the sole benefit of
Gunnerman and Buyers and their respective successors and permitted assigns, and no other person or
persons shall have any rights or remedies under or by reason of this Agreement or any right to the
exercise of any right or power of either party hereto or arising from any default by either party
hereto.
(d) Attorney Fees and Costs. In the event any legal action is undertaken in order to
enforce or interpret any provision of this Agreement, the prevailing party in such legal action, as
determined by the court, shall be entitled to receive from the other party the prevailing party’s
reasonable attorneys’ fees and court costs.
(e) No Agreement to Third Party. This Agreement shall not be assigned by either party
without the written consent of the other parties, which consent may be withheld in such other
party’s sole discretion.
(f) Integration; Entire Agreement. This Agreement and any documents executed in
connection herewith or pursuant hereto constitute the entire understanding between the parties
hereto with respect to the subject matter hereof, superseding all prior written or oral
understandings, and may not be terminated, modified or amended in any way except by a written
agreement signed by each of the parties hereto.
(g) Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall constitute but one and the same
document. This Agreement may be executed by facsimile signature and delivered by facsimile
transmission.
(h) Legal Effect. If any provision of this Agreement conflicts with applicable law,
such provision shall be deemed severed from this Agreement, and the balance of this Agreement shall
remain in full force and effect.
(i) Choice of Law and Venue; Jury Trial Waiver. This Agreement 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. GUNNERMAN AND BUYER WAIVE ANY RIGHT TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT 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.
(j) On the Initial Closing Date Gunnerman, shall pay the Buyers’ legal fees of 510,000 to
Grushko & Xxxxxxx, P.C., out of the Purchase Price (the “Legal Fees”).
[Balance of Page Intentionally Left Blank]
In Witness Whereof, the undersigned have executed this Stock Purchase Agreement as of
the first date above written
GUNNERMAN
/s/ Xxxxxx Xxxxxxxxx
|
/s/ Xxxxx Xxxxxxxxx
|
BUYER
_____________________
Schedule A
| Investors | Shares | Purchase Price | Option Shares | |||||||||
Iroquois Master Fund Ltd. 000 Xxxxxxxxx Xxx., 00xx Xxxxx, Xxx Xxxx XX 00000 (000) 000-0000 |
450,000 | $ | 495,000 | 225,000 | ||||||||
Iroquois Capital Opportunity Fund LP 000 Xxxxxxxxx Xxx., 00xx Xxxxx, Xxx Xxxx XX 00000 (000) 000-0000 |
225,000 | $ | 247,500 | 112,500 | ||||||||
Xxxx Xxxxx 000 Xxxxxxxxx Xxx., 00xx Xxxxx, Xxx Xxxx XX 00000 (000) 000-0000 |
129,000 | $ | 141,900 | 64,500 | ||||||||
Xxxxx International LP 00 Xxxx Xxxxxxx XXX, Xxxxx 000 Xxxxxx Xxxxxx XX, 00000 (000) 000-0000 |
330,000 | $ | 363,000 | 165,000 | ||||||||
Xxxxx Xxxx Xx. 000 Xxxxxxxxx Xxx., 00xx Xxxxx, Xxx Xxxx XX 00000 (000) 000-0000 Attn: Xxxxxxx Xxxx |
45,000 | $ | 49,500 | 22,500 | ||||||||
Xxxxx Xxxxxxx c/o Mayflower Oak LLC Xxx Xxxxx Xxxxxx Xxxxx 00xx xxxxx Xxx Xxxx XX 00000 |
150,000 | $ | 165,000 | 75,000 | ||||||||
Xxxxxx Xxxxxxx c/o Mayflower Oak LLC Xxx Xxxxx Xxxxxx Xxxxx 00xx xxxxx Xxx Xxxx XX 00000 |
70,000 | $ | 77,000 | 35,000 | ||||||||
Xxx Xxxxxxx c/o Mayflower Oak LLC Xxx Xxxxx Xxxxxx Xxxxx 00xx xxxxx Xxx Xxxx XX 00000 |
70,000 | $ | 77,000 | 35,000 | ||||||||
South Ferry #2 LP c/o Mayflower Oak LLC Xxx Xxxxx Xxxxxx Xxxxx 00xx xxxxx Xxx Xxxx XX 00000 |
70,000 | $ | 77,000 | 35,000 | ||||||||
Empire Group 000, Xxxxxxxxxxxxxxxxxxxx Xxxxxx, Xxxxxxxxxxx 0000 |
45,000 | $ | 49,500 | 22,500 | ||||||||
Xxxxxx Xxxxxxxxx 0 Xxxxxxxxx Xxxxxx Xxxxxxxxx, XX 00000 |
45,000 | $ | 49,500 | 22,500 | ||||||||
Total |
1,629,000 | $ | 1,791,900 | 814,500 | ||||||||
