EXHIBIT
      10.56

     

    STOCK
      OPTION FUNDS ESCROW AGREEMENT

     

    This
      Agreement is dated as of the 12th
      day of
      February, 2008 among Rudolf Gunnerman and Doris Gunnerman (“Stockholders”),
      those parties listed on the signature pages hereto, as purchasers (“Optionees”),
      and Grushko & Mittman, P.C. (the "Escrow Agent"):

     

    WITNESSETH:

     

    WHEREAS,
      Optionees and Stockholders have entered into a Stock Option Agreement, of even
      date herewith (“Stock Option Agreement”; all capitalized terms used and not
      defined herein are used as defined in the Stock Option Agreement) for the option
      to purchase by the Optionees up to 2,000,000 shares of Common Stock of Sulphco,
      Inc. (“Shares”) for a per share purchase price of $4.50; and

     

    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.
      Whenever used in this Agreement, the following terms shall have the following
      respective meanings:

     

    §
"Agreement"
      means this Agreement and all amendments made hereto by written agreement between
      the parties;

     

    §
“Closing
      Date” shall mean the date of an Option Closing;

     

    §
"Escrowed
      Payment" means a cash payment in the amount equal to the Purchase Price at
      the
      time of exercise of any Option;

     

    §
“Parties”
      shall mean the Stockholders, Optionees, and Escrow Agent;

     

    §
“Release
      Letter” shall mean the letter to Escrow Agent authorizing release of a Stock
      Certificate;

     

    §
“Stock
      Certificate” shall mean one or more stock certificates representing 2,000,000
      shares of Sulphco, Inc. Common Stock being issued upon an exercise of the Option
      under the Stock Option Agreement;

     

    §
Collectively,
      the executed Agreement and Stock Certificate with executed Stock Power are
      referred to as “Stockholder Documents”; and

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    §
Collectively,
      the Escrowed Payment and the Optionee executed Agreement are referred to as
      "Optionee Documents".

     

    §
The
      Stockholder Documents and Optionee Documents are collectively referred to as
      “Parties Documents”.

     

    1.2. Entire
      Agreement.
      This
      Agreement along with the Stockholder Documents and Optionee Documents constitute
      the entire agreement between the parties hereto pertaining to the Stockholder
      Documents and Optionee Documents 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, the Stockholder Documents and Optionee
      Documents.

     

    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, corporation, 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 courts of New York or in the federal courts located in the state
      of
      New York. Both parties and the individuals executing this Agreement agree to
      submit to the jurisdiction of such courts and waive trial by jury. 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.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1.7. Specific
      Enforcement, Consent to Jurisdiction.
      The
      Parties 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 injunction 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 Parties 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.
      On the
      date of execution of this Agreement, the Stockholders will deliver to the Escrow
      Agent all the Stockholder Documents other than the Release Letter. On or before
      each Option Closing date, the Stockholders will deliver to the Escrow Agent
      the
      Release Letter.

     

    2.2. Optionee
      Deliveries.
      On the
      date of execution of this Agreement, the Optionees will deliver to the Escrow
      Agent executed copies of this Agreement. Each Optionee agrees that exercise
      of
      its Allocated Portion of the Option will be in minimum increments of 25,000
      shares and agrees to deliver the written notice in paragraph 1(e) of the Stock
      Option Agreement as specified therein. On or before the Option Closing date,
      Optionee shall deliver to the Escrow Agent the applicable Purchase Price and
      Release Letter. The Escrowed Payment will be delivered pursuant to the following
      wire transfer instructions:

     

    Citibank,
      N.A.

    1155
      6th
      Avenue

    New
      York,
      NY 10036, USA

    ABA
      Number: 0210-00089

    For
      Credit to: Grushko & Mittman, IOLA Trust Account

    Account
      Number: 45208884

     

    2.3. Intention
      to Create Escrow Over Stockholder Documents and Optionee
      Documents.
      The
      Parties intend that the Stockholder Documents and Optionee Documents shall
      be
      held in escrow by the Escrow Agent pursuant to this Agreement for their benefit
      as set forth herein.

     

    2.4. Escrow
      Agent to Deliver the Stockholder Documents and Optionee
      Documents.
      The
      Escrow Agent shall hold and release the Stockholder Documents and Optionee
      Documents only in accordance with the terms and conditions of this
      Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.5. Authority
      to Escrow Agent.
      The
      Escrow Agent is authorized from time to time to deliver the Stock Certificates
      to the transfer agent of Sulphco, Inc., for the purpose of reissuing the Shares
      in such denominations as required to be able to deliver Shares in compliance
      with this Agreement.

     

    ARTICLE
      III

     

    RELEASE
      OF ESCROW

     

    3.1. Release
      of Escrow.
      Subject
      to the provisions of Section 4.2, the Escrow Agent shall release the Stockholder
      Documents and Optionee Documents as follows:

     

    (a) On
      each
      Option Closing, the Escrow Agent will simultaneously release the Purchase Price
      to Stockholders and the applicable Stock Certificate with Stock Power endorsed
      in blank to the Optionee.

     

    (b) All
      funds
      to be delivered to the Stockholders shall be delivered pursuant to the following
      wire instructions:

    


    Bank
      of
      Nevada

    4985
      B.
      Kietzke Lane

    Reno,
      NV
      89509

    ABA
      Routing #: 122401778

    Account
      #: 20010000022

    Rudolf
      and Doris Gunnerman

     

    (c) Notwithstanding
      the above, upon receipt by the Escrow Agent of joint written instructions
      ("Joint Instructions") signed by the Parties, it shall deliver the Stockholder
      Documents and Optionee Documents in accordance with the terms of the Joint
      Instructions.

     

    (e) 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 Stockholder Documents and Optionee
      Documents 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 Parties; Disputes.
      The
      Parties acknowledge that the only terms and conditions upon which the
      Stockholder Documents and the Optionee Documents are to be released are set
      forth in Sections 3 and 4 of this Agreement. The Parties reaffirm their
      agreement to abide by the terms and conditions of this Agreement with respect
      to
      the release of the Stockholder Documents and Optionee Documents. Any dispute
      with respect to the release of the Stockholder Documents and the Optionee
      Documents shall be resolved pursuant to Section 4.2 or by agreement between
      the
      Parties.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    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
      Parties 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 any of the
      Parties is entitled to receipt of the Stockholder Documents and Optionee
      Documents 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.

     

    (b) The
      Parties 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.
      The
      Stockholders and Optionees, 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
      Optionees under this Agreement and to no other person.

     

    (c) The
      Stockholders and Optionees, 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 Parties. Prior to the effective
      date of the resignation as specified in such notice, the Stockholders and
      Optionees will issue to the Escrow Agent a Joint Instruction authorizing
      delivery of the Stockholder Documents and Optionee Documents to a substitute
      Escrow Agent selected by the Optionees and Stockholders. If no successor Escrow
      Agent is named by the Optionees and Stockholders, 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 Stockholder Documents and Optionee
      Documents with the clerk of any such court.

     

    (e) The
      Escrow Agent does not have and will not have any interest in the Stockholder
      Documents and Optionee Documents, 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 Optionees in any
      dispute as to the disposition of the Stockholder Documents and Optionee
      Documents, in any other dispute between the Parties, whether or not the Escrow
      Agent is then holding the Stockholder Documents and Optionee Documents and
      continues to act as the Escrow Agent hereunder.

     

    (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 Stockholder Documents and Optionee Documents, 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
      Stockholder Documents and Optionee Documents pending receipt of a Joint
      Instruction from Stockholders and the Optionees, or (ii) deposit the Stockholder
      Documents and Optionee Documents 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 Optionees 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 Stockholder Documents and Optionee Documents.
      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 Parties 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 Stockholder Documents
      and
      Optionee Documents or at any time upon the agreement in writing of the
      Stockholders and Optionees.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    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: 

     

    (a) If
      to
      Stockholders, to:

     

    Rudolf
      Gunnerman and Doris Gunnerman

    6601
      Windy Hill Way

    Reno,
      NV
      89511

    Fax:
      (775) 826-2727

    


    (b) If
      to
      Optionees, to:

    


    the
      addresses and fax numbers as listed on the signature pages hereto

    


    (c) If
      to the
      Escrow Agent, to:

     

    Grushko
      & Mittman, P.C.

    551
      Fifth
      Avenue, Suite 1601

    New
      York,
      New York 10176

    Fax:
      212-697-3575

     

    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
      Escrowed Payment shall not be held in an interest bearing account nor will
      interest be payable in connection therewith. In the event the Escrowed Payment
      is deposited in an interest bearing account, the Stockholders and Optionees
      shall be entitled to receive its pro rata
      portion
      of any accrued interest thereon, but only if the Escrow Agent receives from
      such
      party the party’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 inure 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.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    5.7. Agreement.
      Each of
      the undersigned states that he has read the foregoing Stock Option Funds Escrow
      Agreement and understands and agrees to it.

     

    RUDOLF
      GUNNERMAN     

    “Stockholder”

    


    


    _____________________________________ 

    


    DORIS
      GUNNERMAN     

    “Stockholder”

    


    


    _____________________________________ 

    


    


    


    ESCROW
      AGENT:

    


    


    


    _____________________________________

    GRUSHKO
      & MITTMAN, P.C.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    [OPTIONEE
      SIGNATURE PAGES TO STOCK OPTION ESCROW]

    


    IN
      WITNESS WHEREOF the undersigned have executed this Stock Option Funds Escrow
      Agreement as of the first date above written.

    


    Name
      of
      Optionee: Iroquois
      Master Fund Ltd.

     

    Signature
      of Authorized Signatory of Optionee:
      _______________________________________

    


    Name
      of
      Authorized Signatory:
      ____________________________________________________

    


    Title
      of
      Authorized Signatory:
      _____________________________________________________

    


    Fax
      Number of Optionee: 212-207-3452

    


    Address
      for Notice to Optionee:

    


    641
      Lexington Avenue

    New
      York, NY 10022

    


    With
      a
      copy to (which shall not constitute notice):

    


    Grushko
      & Mittman, P.C.

    551
      Fifth Avenue, Suite 1601

    New
      York, NY 10176

    Attn:
      Eliezer Drew, Esq.

    Fax:
      (212) 697-3575

    Email:
      counslers@aol.com

    


    Address
      for Delivery of Securities for Optionee (if not same as above):

     

    


    Proportionate
      Amount: Two-Thirds

    


    Number
      of
      Option Shares: 1,333,333

     

    [SIGNATURE
      PAGES CONTINUE]

     

    [OPTIONEE
      SIGNATURE PAGES TO STOCK OPTION FUNDS ESCROW AGREEMENT]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    [OPTIONEE
      SIGNATURE PAGES TO STOCK OPTION ESCROW]

    


    IN
      WITNESS WHEREOF the undersigned have executed this Stock Option Funds Escrow
      Agreement as of the first date above written.

     

    Name
      of
      Optionee: Ellis
      Capital LLC

     

    Signature
      of Authorized Signatory of Optionee:
      ______________________________________

    


    Name
      of
      Authorized Signatory:
      ____________________________________________________

    


    Title
      of
      Authorized Signatory:
      _____________________________________________________

    


    Fax
      Number of Optionee: 516-887-8990

    


    Address
      for Notice to Optionee:

    


    20
      East Sunrise Highway

    Valley
      Stream, New York 11581

    


    


    With
      a
      copy to (which shall not constitute notice):

    


    Grushko
      & Mittman, P.C.

    551
      Fifth Avenue, Suite 1601

    New
      York, NY 10176

    Attn:
      Eliezer Drew, Esq.

    Fax:
      (212) 697-3575

    Email:
      counslers@aol.com

    


    Address
      for Delivery of Securities for Optionee (if not same as above):

     

    


    Proportionate
      Amount: One-Third

    


    Number
      of
      Option Shares: 666,667

    


    [OPTIONEE
      SIGNATURE PAGES TO STOCK OPTION FUNDS ESCROW AGREEMENT]