CONFIDENTIAL SETTLEMENT AGREEMENT AND RELEASE WITH RESERVATION OF RIGHTS
Exhibit
4.17
CONFIDENTIAL
SETTLEMENT
AGREEMENT AND RELEASE
WITH
RESERVATION OF RIGHTS
This
Settlement Agreement and Release with Reservation of Rights (“Settlement
Agreement”), is made and entered into as of July 9, 2008, by and between Xxxx
Xxxxxxx (“Xxxxxxx”), and SulphCo, Inc., a Nevada corporation (“SulphCo”).
Xxxxxxx and SulphCo are referred to herein collectively as the
“Parties.”
WHEREAS,
Xxxxxxx has filed suit against SulphCo and Xxxxxxx Xxxxxxxxx (“Gunnerman”) in
Nevada relating to a Consulting Agreement and Non-Qualified Stock Option
Agreement each dated on or about March 22, 2002 (the Consulting Agreement and
Non-Qualified Stock Option Agreements are collectively referred to herein as
the
“March 2002 Agreements”), identified as Xxxx
Xxxxxxx v. SulphCo, Inc., Xxxxxxx X. Xxxxxxxxx, and Does I-X, and Xxx
Corporations I-10, Defendants; SulphCo, Inc., Counterclaimant v. Xxxx Xxxxxxx;
Coldwater Capital, LLC, a Nevada limited liability company; and DOES I through
X, inclusive, Counterdefendants,
in the
Second Judicial District Court of the State of Nevada, in and for the County
of
Washoe, Case No. CV06 02502, Dept. No. 1 (the “Xxxxxxx Lawsuit”);
WHEREAS,
SulphCo has filed suit against Xxxxxxx in New York, New York, relating to a
Non-Qualified Stock Option Agreement dated on or about August 29, 2001
(hereinafter referred to as the “August 2001 Agreement”), identified as
SulphCo,
Inc. v. Xxxx Xxxxxxx,
Index
No. 602500/07, in the Supreme Court of the State of New York, County of New
York, (“New York Lawsuit”); and
WHEREAS,
the Parties desire to resolve the disputes identified herein to the extent
described herein;
NOW,
THEREFORE, in consideration of the mutual covenants contained in this Settlement
Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Parties hereto, by executing
below, and intending to be legally bound, hereby agree as follows:
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CONSIDERATION.
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1. SulphCo
shall pay to Xxxxxxx the total consideration of $750,000, such payment to be
made as follows:
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a.
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At
the time of execution of this agreement, SulphCo shall pay to Xxxxxxx,
by
wire transfer to the trust account of Xxxxxxxx, Xxxxxx & Xxxxxxxxx,
Ltd., or cashier’s check by check made payable to the trust account of
Xxxxxxxx, Xxxxxx & Xxxxxxxxx, Ltd., the amount of
$250,000.00;
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b.
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SulphCo
shall issue to Xxxxxxx and his lawyers, Xxxxxxxx, Xxxxxx & Xxxxxxxxx,
Ltd., and/or their designees, an aggregate number of shares of SulphCo
common stock, as calculated herein, valued at $500,000 upon approval
by
the American Stock Exchange (“AMEX”) of the Additional Listing Application
(the “Application”) for such shares as described below. The number of
shares issuable hereunder shall be determined by dividing $500,000
by the
closing price of SulphCo stock as of the date the Settlement Agreement
is
executed by the Parties. One-half of the number of shares issuable
hereunder shall be issued in the name of Xxxx Xxxxxxx and the remaining
one-half of shares issuable hereunder shall be issued in the name
of
Xxxxxxxx, Xxxxxx & Xxxxxxxxx, Ltd. Upon determination of the number of
shares to be issued, SulphCo shall submit the Application to AMEX
to issue
such shares. Upon approval of the Application, SulphCo shall issue
and
deliver the shares to Neuhaus, Erickson, Xxxxxx & Xxxxxxxxx, Ltd.,
and/or their designees. Such shares shall be registered by SulphCo
in an
appropriate registration statement that shall be filed by SulphCo
no later
than 30 days from the date of execution of this Settlement Agreement.
SulphCo shall use its commercially reasonable efforts to cause such
registration statement to be declared effective by the Securities
and
Exchange Commission (the “SEC”) as soon as reasonably possible. Once the
SEC declares the registration statement to be effective, SulphCo
shall
file a final prospectus with the SEC as soon as reasonably possible.
Upon
the registration of the shares, SulphCo shall cooperate with Xxxxxxx
to
submit the shares for DWAC
eligibility.
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2.
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Xxxxxxx
shall dismiss, with prejudice, his claims against SulphCo in the
Xxxxxxx
Lawsuit, each party to bear his/its own attorneys’ fees and costs. Such
dismissal shall be made by stipulation, if Gunnerman’s counsel will sign
such stipulation, or by joint motion for dismissal filed by the Parties,
if Gunnerman’s counsel will not sign such a
stipulation.
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3.
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In
the Xxxxxxx Lawsuit, SulphCo shall withdraw: (1) its Writ Of Mandamus
filed with the Nevada Supreme Court on or about June 24, 2008; (2)
its
Opposition to Plaintiff’s Motion to Amend Complaint, which was filed on or
about Friday, June 27, 2008, and; (3) its Motion for Summary Judgment
submitted to the Court on or about June 2, 2008.
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4.
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SulphCo
shall dismiss, with prejudice, the New York Lawsuit, by stipulation
or
other appropriate method, each party to bear its/his own attorneys’ fees
and costs;
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5.
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The
Parties acknowledge that in accordance with NRS 17.245, this Settlement
Agreement does not include Xxxxxxx’ claims against Gunnerman that were
made or could have been made in the Xxxxxxx Lawsuit, and that Xxxxxxx
intends to proceed with his claims against Gunnerman in the Xxxxxxx
lawsuit. The Parties agree that if Xxxxxxx prevails against Gunnerman
in
the Xxxxxxx Lawsuit or Xxxxxxx and Gunnerman reach a settlement relating
to such claims and Gunnerman seeks indemnification for such claims
against
SulphCo, then Xxxxxxx and his attorneys, Erickson, Thorpe, and Xxxxxxxxx,
Ltd., shall defend such claims on behalf of SulphCo, at Xxxxxxx’ sole
expense. In the event of such action, SulphCo shall reasonably cooperate
with Xxxxxxx’ counsel in any such defense. Xxxxxxx agrees, until the final
resolution of such indemnification claim by Gunnerman against SulphCo,
to
the extent any such judgment or settlement is not otherwise covered
by any
insurance benefiting Gunnerman or SulphCo, not to enforce any such
judgment against Gunnerman. If Gunnerman prevails against SulphCo
in any
such action seeking indemnification from SulphCo relating to the
March
2002 Agreements, then Xxxxxxx expressly agrees that he will not attempt
to
execute upon his judgment against Gunnerman. The Parties agree and
acknowledge that the intent of the provisions in this Article 5 is
that,
in consideration for SulphCo agreeing to settle its claims with Xxxxxxx
at
this time and pursuant to the terms described herein, SulphCo shall
not be
responsible to make any payments to Gunnerman to indemnify him for
any
liability to Xxxxxxx relating to the March 2002 Agreements. This
provision
does not prevent Xxxxxxx from seeking payment or coverage from any
insurance policy benefiting Gunnerman and/or Xxxxxxx, and is not
intended
to prevent or preclude coverage by any insurer for the alleged errors
or
omissions of Gunnerman referable to the Xxxxxxx claim, so long as
SulphCo
does not incur any cost, expense, or damages as a result of such
insurance
payment.
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| 2. |
RELEASE.
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2.1
Except
as
otherwise provided herein with respect to his reservation of rights as against
Gunnerman, and except as expressly provided in this Settlement Agreement
regarding Xxxxxxx’x ability to seek coverage or payment from any errors or
omissions insurance policy benefiting Gunnerman and/or Xxxxxxx, Xxxxxxx agrees
to fully release, acquit and forever discharge SulphCo, and all of its persons,
firms, associations, corporations, partnerships, subcontractors, employees,
insurers, attorneys, officers, directors, shareholder, partners, affiliates,
successors-in-interest, predecessors-in-interest, and anyone or any entity
related thereto, (with the exception of Gunnerman, as noted below), from all
known or unknown, revealed and concealed, contingent and non-contingent claims,
actions, causes of action, and suits for damages, at law or in equity, filed
or
otherwise, relating to March 2002 Agreements and any claims that were brought,
or should have been brought, in the Xxxxxxx Lawsuit. This release does not
apply
to Xxxxxxx’ claims against Gunnerman in the Xxxxxxx Lawsuit, which claims shall
survive and be unaffected by this Settlement Agreement and does not prohibit
Xxxxxxx from seeking payment or coverage from any insurance policy benefiting
Gunnerman and/or Xxxxxxx so long as SulphCo does not incur any cost, expense,
or
damage as a result of such insurance payment.
2.2 SulphCo
agrees to fully release, acquit and forever discharge Xxxxxxx from all known
or
unknown, revealed and concealed, contingent and non-contingent claims, actions,
causes of action, and suits for damages, at law or in equity, filed or
otherwise, relating to the August 2001 Agreement and any claims that were
brought, or should have been brought, in the New York Lawsuit.
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| 3. |
CONFIDENTIALITY.
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3.1 The
Parties agree that the terms of this Settlement Agreement shall remain
confidential. Except as ordered by a Court of Competent Jurisdiction or as
otherwise required by law (in SulphCo's case, based on the advice of SEC counsel
to the company), the Parties and their counsel will make no disclosure to any
third party of the terms of this Settlement Agreement and agree to treat as
completely confidential the amount of the consideration for the settlement
between the Parties and the terms of the Settlement Agreement. It will not
constitute a violation of this paragraph if the Parties indicate that a
settlement was reached between the Parties, so long as there is no disclosure
revealing any specific term, consideration, or element of consideration given.
It is also understood that the Parties may discuss these matters with their
attorneys and accountants and may reflect this settlement upon income tax or
other necessary accounting documents. If the terms of this Settlement Agreement
arise as an issue in Xxxxxxx’ prosecution of his case against Gunnerman, Xxxxxxx
may provide this Agreement to the Court for its utilization.
| 4. |
GENERAL
PROVISIONS.
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4.1
This
Settlement Agreement and the releases herein shall inure to the benefit of
the
Parties and releasees, their respective agents, affiliates, partners,
shareholders, successors, predecessors, assigns, and other legal
representatives, except as otherwise expressly stated herein with respect to
Gunnerman.
4.2
It
is
understood and agreed that the Parties hereto have not been influenced to any
extent whatsoever in entering into this Settlement Agreement and/or in making
the releases herein by any representative, agent or employee of an adverse
party, or by any attorney, person or persons representing or employed by the
undersigned, and that this Settlement Agreement and the releases herein are
entered into freely and voluntarily.
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4.3
The
Parties hereto have received the independent advice of their respective
attorneys prior to the execution hereof.
4.4
This
Settlement Agreement is a settlement and release of disputed claims and does
not
constitute an admission of liability or responsibility on the part the
Parties.
4.5
The
terms of this Settlement Agreement are contractual and not a mere recital.
The
Parties hereto further declare that this entire Settlement Agreement has been
carefully read, that the contents thereof are fully known and understood and
that the said Settlement Agreement is signed as a free and voluntary act of
the
undersigned.
4.6
This
Settlement Agreement shall be construed and interpreted, and the rights and
obligations of the Parties hereto determined, in accordance with the laws of
the
State of Nevada. The Parties consent to the jurisdiction of the courts of the
State of Nevada as to any issues related to this Settlement Agreement, including
the validity, enforceability, or interpretation thereof, which require judicial
resolution.
4.7 If
the
Parties have any dispute over the terms of this Settlement Agreement, they
shall
first submit such dispute to Honorable Xxxxx Xxxx Xxxxxxxxx for
mediation.
4.8
This
document constitutes the entire Settlement Agreement between the undersigned,
except that the terms and provisions of the “Settlement Agreement Dated
June 27, 2008,” may be referred to for any clarification of the terms of
this Settlement Agreement and Release. Each Party cooperated in drafting this
Settlement Agreement. It should not be construed against either of the
Parties.
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4.9
If
any
legal action is brought to enforce the terms and conditions of this Settlement
Agreement, the prevailing party shall be entitled to an award of attorneys’ fees
and costs incurred therefor.
4.10
This
Settlement Agreement may be executed in counterparts, each of which shall
constitute an original.
IN
WITNESS WHEREOF, the undersigned have executed this Settlement Agreement and
Release on the following date(s).
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Xxxx
Xxxxxxx
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Date:
______________________
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SULPHCO,
INC.
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By:
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Name:
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Title:
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