Exhibit 10.2


 


CONFIDENTIAL SETTLEMENT AGREEMENT

AND RELEASE OF CLAIMS


 


THIS CONFIDENTIAL SETTLEMENT AGREEMENT
AND RELEASE OF CLAIMS is made on this 2nd day of October, 2020 by and between Applied Energetics, Inc. a Delaware
Corporation, (“APPLIED ENERGETICS”) and Stein Riso Mantel McDonough, LLP, (now known as Mantel McDonough Riso,
LLP) a New York Limited Liability Partnership (“STEIN RISO”), (collectively with APPLIED ENERGETICS, “the
Parties”).


 


Definitions


 


		A.	“APPLIED ENERGETICS” shall mean Applied
Energetics, Inc. a Delaware Corporation.



 


		B.	“APPLIED ENERGETICS-Related Persons” shall
mean APPLIED ENERGETICS, its predecessors, its successors; assigns; and its current or former attorneys, agents, servants, trustees,
representatives, insurers, and employees; consultants to the company and/or to its board of directors; all past and present shareholders,
all past and present board members and all others acting for or through APPLIED ENERGETICS.



 


		C.	“STEIN RISO-Related Persons” shall mean
STEIN RISO, its predecessors, successors (including but not limited to “Mantel McDonough Riso, LLP”), assigns, subsidiaries,
affiliates, and current and former partners (including Dennis L. Stein, Gerard A. Riso, Allan D. Mantel and Kevin M. McDonough),
of counsels (including Ivan Dreyer), associates, employees, insurers, agents, attorneys and representatives.



 


		D.	“Agreement” shall mean this Confidential
Settlement Agreement and Release of Claims.



 


		E.	“Parties” shall mean APPLIED ENERGETICS
and STEIN RISO, each of which is individually a “Party.”



 


		F.	“Lawsuit” shall mean the case titled
Applied Energetics Inc., a Delaware Corporation v. Stein Riso Mantel McDonough, LLP, Case No. 1:19-cv-01232-AJN, filed
on or about May 15, 2019 in the United States District Court for the Southern District of New York.



 


		G.	“Claims” shall mean all claims,
counterclaims, demands, actions, causes of action, debts, liabilities, damages, costs, fees, expenses, rights, duties, obligations,
liens, petitions, suits, losses, controversies, executions, offsets and sums of any kind or nature, whether direct or indirect,
liquidated or unliquidated, contingent or actual, in law or equity, known or unknown, asserted or unasserted, suspected or unsuspected
or of whatever type or nature from the beginning of time to the present.



 




     


     


    

 


In consideration of the covenants contained
herein, the Parties acknowledge, promise and agree as follows:


 


1. In
exchange for the consideration set forth in Paragraph two (2) below, APPLIED ENERGETICS and APPLIED ENERGETICS-Related Persons,
on the one hand, and STEIN RISO and STEIN RISO-Related Persons, on the other hand, (together, the “Released Parties”)
release each other from the Claims, any and all past and present claims, counterclaims, demands, actions, causes of action, debts,
liabilities, damages, costs, fees, expenses, rights, duties, obligations, liens, petitions, suits, losses, controversies, executions,
offsets and sums of any kind or nature, whether direct or indirect, liquidated or unliquidated, contingent or actual, in law or
equity, known or unknown, suspected or unsuspected or of whatever type or nature.


 


2. Within
thirty (30) days of the fully executed Agreement, STEIN RISO shall (a) cause to be paid to APPLIED ENERGETICS the amount of Three
Million Dollars and Zero Cents ($3,000,000.00) in the form of a check payable to “Enterprise Counsel Group, Client Trust
Account” via check to be delivered by APPLIED ENERGETICS’ counsel; and (b) cause the return of Ten Million (10,000,000)
shares of APPLIED ENERGETICS common stock issued to STEIN RISO on or about March 23, 2016. The date of the return of the original
share certificate(s), duly endorsed, shall be deemed to be the date of the delivery of the shares to APPLIED ENERGETICS. APPLIED
ENERGETICS will provide counsel for STEIN RISO a fully executed Internal Revenue Service W-9 form providing tax identification
for said payee. APPLIED ENERGETICS agrees that it will be responsible for any tax consequences, including the payment of any and
all taxes, as a result of entering into this Agreement. The Released Parties make no representations regarding tax consequences,
if any, of the payment made pursuant to this Agreement. The Parties shall pay their own costs and attorneys’ fees.


 


3. Within
five (5) business days of the date the payment set forth in Paragraph two (2) clears the bank account wherein said check was caused
to be deposited by APPLIED ENERGETICS, APPLIED ENERGETICS shall file a stipulation of dismissal with prejudice in the Lawsuit in
its entirety against STEIN RISO, in the form annexed hereto at Exhibit A, duly signed by the attorneys for the Parties.


 


4. This
Agreement is the result of compromise, and is entered into in good faith for the purpose of fully and finally settling all disputes
arising out of the facts alleged in or capable of being alleged in the Lawsuit, and to avoid the expense and uncertainty of further
litigation. APPLIED ENERGETICS acknowledges that the consideration set forth in Paragraph two (2) of this Agreement is valuable
and is for, among other things, the purpose of termination of the Lawsuit with prejudice, and obviating further involvement in
litigation based upon disputed claims against STEIN RISO raised by APPLIED ENERGETICS in the Lawsuit and is provided without any
admission of liability or concession whatsoever by the Released Parties that they engaged in any negligent, actionable, wrongful,
tortious or unlawful act, or violated any federal, state or local statute, ordinance, law or regulation, all of which the Released
Parties expressly deny.


 


5. The
Parties warrant and represent the following:


 


		a.	That they have read this Agreement and have consulted with
an attorney of their own choice regarding the contents and significance of this Agreement;



 




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		b.	In executing this Agreement, the Parties do so with full
knowledge of any and all rights they may have, and the contents of this Agreement and its meaning, which have been fully explained
to the Parties by their selected attorney(s);



 


		c.	The Parties understand the contents and significance of
this Agreement and enter into this Agreement freely and voluntarily;



 


		d.	The Parties have executed this Agreement with full knowledge
of any and all rights and Claims it is releasing;



 


		e.	The Parties have entered enter into this Agreement freely
and voluntarily and without duress of any kind;



 


		f.	The Parties represent that each of the individuals executing
this Agreement on its behalf is a duly authorized officer or agent of such entity and has been duly authorized by all necessary
corporate or partnership action to execute and deliver this Agreement;



 


		g.	This Agreement has been duly and validly executed and delivered
by it and constitutes its valid and binding agreement, enforceable against it in accordance with its terms;



 


		h.	The execution and delivery by it of this Agreement and
the performance of its obligations hereunder do not and will not require the consent of any individual or entity that has not
been obtained;



 


		i.	That no person or entity not bound by the Parties’
Agreement has any interest or right in the matters referred to in the Lawsuit, that the Parties have the sole right and exclusive
authority to execute this Agreement on their respective behalves.;



 


		j.	Each is a duly organized and valid entity in good standing
under the laws of its jurisdiction of organization and has full authority to conduct its business as presently conducted and to
enter into and perform its obligations under this Agreement; and



 


		k.	Each has not sold, assigned, transferred, conveyed or otherwise
disposed of any Claim or demand relating to any matter covered by this Agreement.



 




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6. Except
as described herein, the terms of this Agreement, its contents and the settlement amount set forth in Paragraph two (2) are confidential
and shall not be disclosed by any Party or their counsel except as required by legal process or by regulatory obligations to regulatory
bodies. The Parties acknowledge that APPLIED ENERGETICS has represented that it may be required by law to publicly disclose this
Agreement and its material terms in filings with the Securities and Exchange Commission (“SEC”). Specifically, APPLIED
ENERGETICS may be an issuer with a class of securities registered under Section 12 of the Securities Exchange Act (15 U.S.C. §
78a et seq.) and may be required by 17 C.F.R § 240.13a-11 to file a Form 8-K for any “material definitive agreement
not made in the ordinary course of business[.]” APPLIED ENERGETICS represents that this Agreement amounts to a “material
definitive agreement not made in the ordinary course of [APPLIED ENERGETICS’s] business[.]” Moreover, APPLIED ENERGETICS
may be required to publicly file this Agreement in full with the SEC as an exhibit either in a Form 8-K or in APPLIED ENERGETICS’s
next Form 10-Q, pursuant to Item 601 of Regulation S-K, 17 C.F.R. § 229.601(a)(4), without any information in this Settlement
Agreement being redacted from public disclosure pursuant to 17 C.F.R. § 229.601(a)(6). STEIN RISO acknowledges these representations
and does not object to disclosure of this Agreement in a regulatory filing as set forth in this Paragraph (6) only. The Parties
agree not to disclose this agreement on PACER or any other public forum except for the above-referenced regulatory filings. In
the event the parties must enforce the agreement, the parties agree to file the Agreement in camera or under seal. However, in
the event the court does not accept the agreement in camera and under seal, then and only then may the agreement be publicly filed.
The Parties further acknowledge that Hon. Alison J. Nathan maintains a rule as follows: “The Court will not retain jurisdiction
to enforce confidential settlement agreements. If the parties wish that the Court retain jurisdiction to enforce the agreement,
the parties must place the terms of their settlement agreement on the public record. The parties may either provide a copy of the
settlement agreement for the Court to endorse or include the terms of their settlement agreement in their stipulation of settlement
and dismissal.” The Parties agree that neither Party shall provide a copy of this Agreement for the Court to endorse or include
the terms of this Agreement in a stipulation of settlement and dismissal except, and until, in connection with a motion or application
by a Party to enforce the other Party’s performance under, or compliance with, the terms of this Agreement. To the extent
APPLIED ENERGETICS is required to disclose the within settlement of this Lawsuit with the SEC (or any other regulatory body) APPLIED
ENERGETICS shall include in any such disclosure that the terms of the settlement are confidential; STEIN RISO entered into said
settlement without any admission of liability; the Parties filed (or will be filing) with the Court a Stipulation of Dismissal
with Prejudice as to all claims asserted or which could have been asserted in the Lawsuit; and the Parties released each other
of all Claims. Notwithstanding the foregoing, the Parties shall be allowed to disclose the terms of this Agreement with their respective
tax professionals, administrator(s), accountants, actuaries, and attorney(s) engaged to assist and advise the respective Parties.
In the event either Party is duly served with a subpoena or other governmental or judicial process seeking to compel the disclosure
of this Agreement, its terms or contents, or the negotiations underlying this Agreement, that Party shall promptly notify the other
party. The notification must include copies of the subpoena or other discovery request or judicial process and must be sent within
five (5) business days of the receiving Party’s receipt of the subpoena or other such process or request.


 


7. The
provisions of this Agreement shall inure to the benefit of, and shall be binding upon successors in interest, assigns and legal
representatives of STEIN RISO, STEIN RISO-Related Persons, APPLIED ENERGETICS, and APPLIED ENERGETICS-Related Persons.


 


8. New
York law shall govern the validity and interpretation of this Agreement without regard to its principles on conflicts of laws.


 


9. This
Agreement sets forth the entire understanding and agreement among the Parties with respect to the subject matter hereof and supersedes
any prior or contemporaneous oral and/or written agreements or representations.


 


10. This
Agreement is the product of an arms-length negotiation and any rules of construction that it be construed against the Party preparing
it shall not apply, but rather it shall be construed as if all Parties jointly prepared this Agreement, and any uncertainty and
ambiguity shall not be interpreted against any one party.


 




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11. This
Agreement may not be altered or amended in any of its provisions except by the mutual written and signed agreement of the
Parties.


 


12. Should any of the provisions
set forth herein be determined to be invalid by any court, agency or any other tribunal of competent jurisdiction, such determination
shall not affect the enforceability of the other provisions herein and to this end the provisions of this Agreement are declared
severable.


 


13. In the event that notice to
one of the Parties must be provided under the terms of this Agreement, notice is deemed provided by sending the required notice
and/or documents and materials via certified U.S. Mail, with postage prepaid, to the respective addresses:


 


	a.	For	APPLIED	ENTERPRISE COUNSEL GROUP
	 	 	ENERGETICS:	Attn: Benjamin Pugh
	 	 	 	3 Park Plaza, Suite 1400,
	 	 	 	Irvine, CA 92614-8537


 


	 	 	 	BOND, SCHOENECK & KING, PLLC. 
	 	 	 	Attn: Jonathan Fellows
	 	 	 	One Lincoln Center
	 	 	 	Syracuse, New York 13202-1355
	 	 	 	 
	b.	For	STEIN RISO:	MANTEL MCDONOUGH RISO LLP
	 	 	 	Attn: Gerard Riso
	 	 	 	410 Park Ave 17th Floor,
	 	 	 	New York, NY 10022
	 	 	 	 
	 	 	 	WILSON ELSER MOSKOWITZ EDELMAN &
	 	 	 	DICKER LLP
	 	 	 	Attn: Joseph L. Francoeur
	 	 	 	150 East 42nd Street
	 	 	 	New York, NY 10017


 


14. This Agreement may be executed
in counterparts and/or by facsimile or electronic signatures with the same force and effect as if executed in one complete document
with the original signature of all parties.


 


15. This Agreement shall become
effective on the date that the last signatory duly executes the Agreement and upon delivery of fully executed Agreement.


 


[Signatures on following page.]


 




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IN WITNESS WHEREOF, the Parties have duly
executed this Agreement effective as of the date first above written, regardless of the date on which such Agreement is signed.


 


	STEIN RISO MANTEL MODONOUGH LLP	 
	 	 	 
	By:	/s/ Gerard A. Riso	 
	Name:  	Gerard A. Riso	 
	Title:	Partner	 
	Date:	October 2, 2020	 
	 	 	 
	APPLIED ENERGETICS, INC.	 
	 	 	 
	By:	/s/ Gregory J. Quarles	 
	Name:	Gregory J. Quarles	 
	Title:	CEO	 
	Date:	October 2, 2020	 


 




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EXHIBIT
A


 


	UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF NEW YORK	 	 
	
         

        APPLIED ENERGETICS, INC., a Delaware

         

        Corporation

         

        Plaintiff,

         

        -against-

         

        STEIN RISO MANTEL MCDONOUGH, LLP,

        A New York Limited Liability Partnership,

         

        Defendant.
	 	
        Case No.: 1:19-cv-01232-AJN

         

        STIPULATION OF

        DISCONTINUANCE WITH PREJUDICE 

         

        Electronically Filed



 


IS HEREBY STIPULATED
AND AGREED, by and between the undersigned attorneys of record for all the parties to the above-entitled action, that whereas
no party hereto is an incompetent person for whom a committee has been appointed and no person not a party has an interest in
the subject matter of action, the above entitled action and all claims asserted, or which could have been asserted herein by either
party, are hereby discontinued, with prejudice, without costs to either party as against the other. This stipulation may be filed
without further notice with the Clerk of the Court.


 


	Dated: October 2, 2020	 	 
	 	 	 
	 	 	 
	Jonathan B. Fellows, Esq.	 	Joseph L. Francoeur
	Brendan M. Sheehan, Esq.	 	WILSON ELSER MOSKOWITZ DICKER &
	BOND, SCHOENECK & KING, PLLC	 	EDELMAN, LLP
	Attorneys for Plaintiff APPLIED ENERGETICS, INC.	 	Attorneys for Defendant
	One Lincoln Center	 	STEIN RISO MANTEL MCDONOUGH, LLP
	Syracuse, New York 13202-1355	 	150 East 42nd Street
	 	 	New York, New York 10017-5639
	 	 	File No. 12036.00137