In Vulcan Power Co. v. Munson, Index No. 600712/09 (Sup. Ct., NY County, Dec. 3, 2010), the Honorable Richard B. Lowe III granted summary judgment to Plaintiff Vulcan Power Company (“Vulcan”) against Defendants Soo Min Fay, Doug Frosh, George Marshall, Cal Mitchell and Tim Shea (collectively, the “Non-Munson Defendants”) on a declaratory judgment claim relating to an agreement that the Non-Munson Defendants executed but never reviewed.

Vulcan, a geothermal energy company, was seeking an investment of over $100 million (the “Investment”) from institutional investors (the “Investors”) in early 2008. Defendant Stephen M. Munson (“Munson”) was the President and Chief Executive Officer of Vulcan until his termination in late 2008. Munson was responsible for negotiating with the Investors and, in April of 2008, Munson and certain of the Investors executed a letter agreement containing a term sheet. The term sheet contemplated multiple agreements, three of which were at issue in Vulcan Power: a stock purchase agreement, an amended and restated stockholders agreement (the “Stockholders Agreement”), and a stock purchase agreement concerning the sale of stock by Munson (collectively, the “Agreements”).

Vulcan was going to use some of the proceeds from the Investment to purchase a drilling rig, which had a closing deadline of July 25, 2008 and was contingent on the closing of the Investment. Negotiations regarding the Investment continued through Spring of 2008 and into late July of 2008. On July 24, 2008, Munson believed that he, Vulcan, and the Investors had reached an agreement on final terms. Munson and the Investors then agreed that once documents reflecting the agreement were presented, Munson would execute and return them.