2ND LOAN EXTENSION AND MODIFICATION AGREEMENT
Exhibit
99.1
This
2nd
Loan
Extension and Modification Agreement (this “Agreement”), dated as of the
Effective Date (defined below), is by and between ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (collectively referred to as the “Lender”) and SulphCo, Inc., a
Nevada corporation (the “Borrower”).
RECITALS:
A. On
December 30, 2003, in exchange for funds in the amount of $500,000 advanced
to
Borrower, Borrower executed and delivered to Lender a note (the "Note") in
the
principal sum of $500,000 (the "Loan") and with the original interest fully
prepaid through December 30, 2004 through the issuance of 500,000 shares of
the
Borrower’s common stock, with the principal sum due and payable on December 30,
2004;
B. On
December 12, 2004, Borrower and Lender entered into an agreement to extend
the
term of the Note for the principal sum of $500,000 for one year from December
30, 2004 and becoming due on December 30, 2005 (the “1st
Loan
Extension Agreement”);
C. Lender
and Borrower desire to again extend the term of the Loan for one more year,
provide for additional interest to be accrued and paid during the extension
period, and provide for prepayment upon demand by Lender; and
D. This
Agreement shall be submitted to the Borrower’s Audit Committee and Board of
Directors for their respective approval before it may become
effective.
NOW,
THEREFORE, for and in consideration of the mutual covenants contained herein
and
for other valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. Extension.
The
Lender and Borrower agree that the entire principal amount of the Loan shall
become due and payable, together with any accrued and unpaid interest thereon,
on December 30, 2006.
2. Interest
during Extension Period.
The
principal balance of the Loan from time to time shall bear interest at an annual
rate equal to 8% commencing from December 31, 2005, and continuing, until the
Note is paid in full. The interest shall be due and payable in quarterly
installments commencing on April 1, 2006, provided there are then unrestricted
sources of funds from which such interest payments may be made.
3. Prepayment.
The
Borrower agrees that it will prepay the Note upon demand by Lender. Interest
will accrue until the date of payment and be paid on that date.
4. Audit
Committee Approval; Effective Date.
The
effectiveness of this Agreement is conditioned upon the approval of its terms
by
the Borrower’s Audit Committee. The Effective Date will be the date upon which
the Audit Committee approves this Agreement.
5. Except
as provided in this Agreement, the terms and provisions of the Note shall remain
unchanged and shall remain in full force and effect. The Note as modified and
amended hereby is hereby ratified and confirmed in all respects.
6. Lender
acknowledges that the execution of this Agreement by Borrower is not intended
nor shall it be construed as (i) an actual or implied waiver of any subsequent
default under the Note or the 1st
Loan Extension Agreement or (ii) an actual or implied waiver of any condition
or
obligation imposed upon Lender pursuant to the Note except to the extent
expressly set forth herein.
7. This
Agreement may be executed in any number of counterparts. All such counterparts
shall be construed together and shall constitute one instrument, but in making
proof hereof it shall only be necessary to produce one such
counterpart.
8. The
terms and provisions hereof shall be binding upon and inure to the benefit
of
the parties hereto, their heirs, representatives, successors and
assigns.
IN
WITNESS WHEREOF, the parties have fully executed this Agreement as
of the respective dates of acknowledgment, but is effective as of the Effective
Date
set
forth above.
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Borrower:
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SULPHCO,
INC.
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Lender:
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By
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Chief
Financial Officer
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