ASSIGNMENT OF PROMISSORY NOTE
Exhibit
10.1
This
Assignment of Promissory Note (this “Assignment”) is entered into as of April
24, 2007, by and among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (“Gunnerman”), SulphCo, Inc., a Nevada
corporation (the “Borrower”), and the entities identified on the signature pages
hereto (each a “Buyer” and collectively “Buyers”), regarding assignment of
that
certain Promissory Note, dated December 31, 2004, in the principal amount of
$7,000,000 issued by Borrower to Gunnerman
(the
“Note”).
NOW,
THEREFORE, for good and valuable consideration, Gunnerman, Borrower and Buyer
agree as follows:
1. Purchase
and Sale.
Subject
to the terms and conditions of this Assignment, Buyer agrees to purchase from
Gunnerman and Gunnerman agrees to sell to Buyer the percentage share indicated
on the signature pages hereto (“Allocated Portions”), all
outstanding principal, interest and other sums due and owing under the Note
(the
“Assigned Loan”)
and all
right, title and interest of Gunnerman as "Lender" under the
Note.
The
sale, transfer and assignment of the Assigned Loan shall be subject to the
representations and warranties of Gunnerman as are provided in Section
7
of
this
Assignment.
2. Consideration.
The
consideration to be given by Buyers to Gunnerman for the Assigned Loan
(“Purchase Price”) shall,
in
the aggregate, be ninety
percent (90%) of the principal and interest balance of the Note as of the
Closing Date (defined below).
3. Closing.
The
consummation of the sale and purchase pursuant to this Assignment (the
“Closing”) is contemplated to occur on or before April 24, 2007 (the “Closing
Date”) upon satisfaction of all conditions to Closing. As a condition precedent
to Closing, Gunnerman agrees to cause to be delivered to Grushko & ▇▇▇▇▇▇▇,
P.C. on behalf of the Buyers an original Note reissued by Borrower in each
Buyer’s name in the principal amount being assigned to each such Buyer pursuant
to this Assignment and indicating therein the amount of interest assigned to
each such Buyer (each a “Reissued Note”). Upon receipt of the Reissued Notes by
Grushko & ▇▇▇▇▇▇▇, P.C., each Buyer
agrees to wire transfer to Gunnerman its Allocated Portion of the Purchase
Price
in accordance with wiring instructions set forth below. Upon
confirmation of delivery by a Buyer of its Allocated Portion of the Purchase
Price, Grushko & ▇▇▇▇▇▇▇, P.C. will deliver a Reissued Note to such Buyer.
In the event Grushko & ▇▇▇▇▇▇▇, P.C. is not reasonably satisfied that a
Buyer has transmitted its proportionate amount of the Purchase Price (as
provided on the signature pages hereto (“Proportionate Amount”) to Gunnerman on
or before April 27, 2007, then such Buyer’s Reissued Note shall be promptly
delivered to Gunnerman for reissuance by Borrower to Gunnerman, and such Buyer
shall no longer have the right to purchase any portion of the Assigned Loan.
The
address for deliveries and notices to Grushko & ▇▇▇▇▇▇▇, P.C. is ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, fax: (▇▇▇) ▇▇▇-▇▇▇▇. Gunnerman and each
Buyer may terminate this Assignment if the Closing has not occurred by the
Closing Date. Buyer shall pay the Purchase Price by wire transfer in immediately
available United States funds to the following account (the “Seller Account”):
to Grushko & ▇▇▇▇▇▇▇, P.C., as escrow agent, pursuant to wire instructions
provided.
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4. Purchase
and Sale.
(a) Effective
upon the Closing, 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 the Closing Date, all of Gunnerman’s right, title and
interest, in, to, and under each such Buyer’s Allocated Portion of the Assigned
Loan.
(b) If
Gunnerman receives any payments from
the
Company with
respect to the Assigned Loan after the Closing Date, Gunnerman will forward
to
each Buyer, such Buyer’s Allocated Portion of such payments.
5. Gunnerman’s
Closing Documents.
In
connection with the Closing, Gunnerman shall deliver to Buyer, as provided
in
Section 3, original Reissued Note for each Buyer, executed Stock Option
Agreement in the form agreed upon by Gunnerman and Buyers, an executed copy
of
this Assignment, and any
other
documents reasonably required by Buyer to effect the transactions contemplated
hereunder (collectively
“Gunnerman’s Closing Documents”).
6. Buyer’s
Closing Obligations.
In
connection with the Closing, Buyer shall deliver to Gunnerman, Buyer’s
Proportionate Amount of the Purchase Price and an executed copy of this
Assignment (collectively “Buyer’s Closing Items”):
7. Representations
and Warranties and Covenants of Gunnerman.
Gunnerman 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 Assignment
and to enter into and consummate the transactions contemplated by and described
in this Assignment. Gunnerman has duly authorized the execution, delivery and
performance of this Assignment, has duly executed and delivered this Assignment
and this Assignment constitutes a legal, valid and binding obligation of
Gunnerman, enforceable against Gunnerman in accordance with its
terms.
(c) As
of the
Closing Date, the outstanding principal balance of the Note is $5,000,000 and
accrued and unpaid interest on the Note is $66,570.
(d) Gunnerman
is the legal and beneficial owner and holder of the Assigned Loan and Gunnerman
has not pledged, assigned or otherwise previously transferred the Assigned
Loan.
The Assigned Loan and Note are free and clear of any adverse claims created
by
Gunnerman or any liens, encumbrances, etc. whatsoever.
(e) Gunnerman
has not modified nor amended the Assigned Loan
nor
agreed to modify or amend the Assigned Loan.
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(f) Gunnerman
is not aware of any valid offset, defense, counterclaim or right of rescission
as to the Assigned Loan.
(g) Gunnerman
was provided with the opportunity to present this Assignment and related
documentation to an attorney for review and has determined upon his own free
will to not avail himself of such right. He understands that the transaction
contemplated by this Assignment is a sophisticated business and financial
transaction, and he has 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. Gunnerman acknowledges that he has not
relied upon the advice, judgment or counsel of attorneys for either the Borrower
or Buyer and he waives any claims he may have against them arising out of this
transaction.
(h) Gunnerman
is responsible for making any filings required to be made by him with all
regulatory bodies arising from the transactions contemplated
hereby.
8. 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
Assignment and to enter into and consummate the transactions contemplated by
this Assignment. The officer or officers of Buyer who shall execute and deliver
this Assignment 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 Assignment,
has duly executed and delivered this Assignment and this Assignment 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 Assigned Loan, and of
any
and all facts and circumstances necessary to evaluate the Assigned Loan 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 transactions contemplated; 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 any of the, except
for
such representations and warranties of Gunnerman as are specifically and
expressly provided in this Assignment.
(c) Buyer
is
acquiring the Assigned Loan without any view either to participate in (other
than as described in this Assignment), or to sell the Assigned Loan in
connection with, any public distribution thereof, and Buyer has no intention
of
making any distribution of the Assigned Loan in a manner which would violate
applicable securities laws; provided, however, that nothing in this Assignment
shall restrict or limit in any way Buyer’s ability and right to dispose of all
or part of the Assigned Loan in accordance with such laws if at some future
time
Buyer deems it advisable to do so.
9. Representations
and Warranties and Agreements of Borrower.
Borrower hereby represents and warrants and agrees as follows:
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(a) To
our
knowledge, no third party or regulatory approval is necessary to enter into
the
transactions contemplated hereby, other than of Gunnerman, which approval is
evidenced by a fully executed and delivered Assignment.
(b)
Borrower
has not entered into any subordination agreement, nor is the Note subordinated
to any other obligations of Borrower.
(c)
Borrower
makes for the benefit of Buyers, as of the Closing Date, the representations
and
warranties made for the benefit of Gunnerman at the time the Note was issued.
(d)
At
all
times after the date hereof, Borrower will not take or permit any action, or
cause or permit any other person or entity to take any action that impairs
or
adversely affects the rights of Buyers under the Reissued Note.
(e)
Borrower
expressly waives for the benefit of Buyers any rights it may have to offset,
defense, counterclaim or right of rescission as to the Assigned Loan which
it
may have had against Gunnerman.
(f)
Borrower
acknowledges that the Buyers are not waiving any currently existing defaults
or
events of default under the Assigned Loan, and that the maturity date of the
Assigned Loan remains as originally stated in the Note and that the Assigned
Loan is due on the maturity date as set forth in the Note.
(g) Borrower
acknowledges that as of the Closing Date, the aggregate outstanding principal
amount of the Note, and upon reissuance of the Reissued Notes is $5,000,000
and
the aggregate outstanding interest as of such date is $66,570.
10. 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 Gunnerman’s assignment of the Assigned Loan for which each party
is liable as a matter of law. No party shall have the obligation to pay taxes
due by another party.
11. Further
Assurances.
Effective upon the Closing, Gunnerman, Borrower and 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 Assignment and to consummate
the transactions contemplated hereby.
12. 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:
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|
If to Gunnerman:
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▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
|
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇,
▇▇
▇▇▇▇▇
| If to Borrower: |
SulphCo.,
Inc.
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▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
| with a copy to: |
K&L
Gates
|
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
| If to Buyers: |
To
the one or more addresses and telecopier numbers
indicated on Schedule A hereto
|
| With a copy to: |
Grushko
& ▇▇▇▇▇▇▇, P.C.
|
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇▇▇ ▇▇▇▇, Esq.
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
(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
Assignment 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
Assignment 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 Assignment or any
right to the exercise of any right or power of either party hereto or arising
from any default by either party hereto.
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(d) Attorney
Fees and Costs.
In the
event any legal action is undertaken in order to enforce or interpret any
provision of this Assignment, 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
Assignment to Third Party.
Prior
to Closing, this Assignment shall not be assigned by either party without the
written consent of the other party, which consent may be withheld in such other
party’s sole discretion.
(f) Integration;
Entire Agreement.
This
Assignment 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
Assignment 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 Assignment conflicts with applicable law, such provision
shall
be deemed severed from this Assignment, and the balance of this Assignment
shall
remain in full force and effect.
(i) 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.
GUNNERMAN,
BORROWER AND BUYER WAIVE
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.
(j) Gunnerman,
Borrower and Buyer shall each bear their own expenses, including legal fees,
incident to the negotiation and preparation of this Assignment and the
consummation of the transaction contemplated thereby.
[Balance
of Page Intentionally Left Blank]
6
IN
WITNESS WHEREOF the undersigned have executed this Assignment of Promissory
Note
as of the date above written.
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▇▇▇▇▇▇▇▇▇
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____________________________________________
|
[Signature
Page to Assignment Promissory
Note,
etc.]
[Signatures
of Buyers Continued Next Page]
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[BUYER
SIGNATURE PAGES TO ASSIGNMENT OF PROMISSORY NOTE]
IN
WITNESS WHEREOF the undersigned have executed this Assignment as of the first
date above written.
Name
of
Buyer: _________________
Signature
of Authorized Signatory of Buyer:
__________________________________________
Name
of
Authorized Signatory:
____________________________________________________
Title
of
Authorized Signatory:
_____________________________________________________
Fax
Number of Buyer:
Address
for Notice to Buyer:
With
a
copy to (which shall not constitute notice):
Grushko
& ▇▇▇▇▇▇▇, P.C.
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇▇▇ ▇▇▇▇, Esq.
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
Email:
▇▇▇▇▇▇▇▇▇@▇▇▇.▇▇▇
Address
for Delivery of Securities for Buyer (if not same as above):
Proportionate
Amount of Purchase Price: $__________
Wire
Amount:$______________
Proportionate
Amount: _______%
Reissued
Note Principal Amount: $_________
8
ACKNOWLEDGEMENT,
AGREEMENT AND CONSENT
The
undersigned hereby consents to the foregoing Assignment of Promissory
Note.
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SULPHCO,
INC.
|
Address
for Notice:
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
|
|
By:
__________________________________________
Name:
Title:
|
|
|
With
a copy to (which shall not constitute notice):
K&L
Gates
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
|
[Signature
Page to Assignment of Promissory Note, etc.
Acknowledgement,
Agreement and Consent]
9
ACKNOWLEDGEMENT,
AGREEMENT AND CONSENT
The
undersigned hereby consents to the foregoing Assignment of Promissory
Note.
___________________________________________
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
[Signature
Page to Assignment of Promissory Note, etc.
Acknowledgement,
Agreement and Consent]
10