AMENDED AND RESTATED SETTLEMENT AGREEMENT
This Amended and Restated Settlement Agreement (the
"Agreement") is entered into this 30th day of June, 2006 by and between ICOA,
Inc., a Nevada corporation (the "Company"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇.
("Employee") and amends and restates in its entirety the Settlement Agreement
between the parties dated June 23, 2006, and shall be deemed effective on June
26, 2006 (the "Effective Date").
For good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby act and agree as
follows:
1. Resignation. Employee hereby confirms his resignation, and the Company
hereby accepts Employee's resignation, from employment with and as an
officer and director of the Company, and any and all of its subsidiaries,
effective as of the Effective Date.
2. Severance Benefits and Unpaid Compensation and Expenses.
a. In consideration of Employee's resignation, and in lieu of any amounts that
might have become due under the Employment Agreement between the Company
and Employee dated December 15, 2004 (the "Employment Agreement"), the
Company agrees to:
i. pay Employee severance by paying on or before December 31, 2006 his current
salary of $12,000 per month for the period from the Effective Date through
December 31, 2006 (the "Severance Pay");
ii. continue at the Company's cost Employee's health insurance through
December 31, 2006 at the level of participation equal to that in effect on
the Effective Date; and
iii. pay to Employee outstanding expenses owed to him in the amount of
$122,970.22 (the "Outstanding Expenses"), outstanding consulting fees owed
to him in the amount of $71,000 (the "Outstanding Consulting Fees") and
outstanding salary owed to him in the amount of $180,000 (the "Outstanding
Salary"), all of which shall be paid in full by September 30, 2007 as
provided in this Section 2.
b. The Company shall make minimum aggregate payments to Employee of the
amounts to be paid pursuant to Sections 2(a)(i) and (iii) of no less than
$7,500 in each of July, August and September, 2006 and $12,000 thereafter
(each a "Minimum Payment"), it being understood that the Company may fail
to make the Minimum Payment in two (2) months if it complies with the terms
of Section 2(f). Each Minimum Payment must equal or exceed the applicable
amount specified in the preceding sentence after any and all deductions
from the payment for payroll taxes, heath or benefit plan contributions, or
any other purpose or reason.
c. On the date hereof the Company shall pay to Employee $30,000.
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d. The Company shall (i) pay all Severance Pay before paying any Outstanding
Expenses, Outstanding Consulting Fees or Outstanding Salary, and accrued
interest thereon, (ii) pay all Outstanding Expenses and accrued interest
thereon, before paying any Outstanding Consulting Fees or any Outstanding
Salary, and interest thereon, and (iii) pay all Outstanding Consulting Fees
and accrued interest thereon before paying any Outstanding Salary and
interest thereon.
e. Within fourteen (14) days after the Effective Date, the Company shall
deliver to Employee a schedule of payments to be made to Employee in
accordance with this Section 2 of unpaid Severance Pay, Outstanding
Expenses, Outstanding Consulting Fees and Outstanding Salary, and accrued
interest thereon, during the quarter ending September 30, 2006. Prior to
each of September 30, 2006, December 31, 2006, March 31, 2007 and June 30,
2007, the Company shall deliver to Employee a schedule of payments to be
made to Employee in accordance with this Section 2 of any unpaid Severance
Pay, Outstanding Consulting Fees and Outstanding Salary, and accrued
interest thereon, during the calendar quarter immediately following such
date.
f. Interest shall accrue, commencing on the Effective Date, on the unpaid
Outstanding Expenses at the rate of fifteen percent (15%) per annum (or if
lower, the highest rate permitted by applicable law) and on the unpaid
Outstanding Consulting Fees and Outstanding Salary at the rate of twelve
percent (12%) per annum (or if lower, the highest rate permitted by
applicable law). Accrued and unpaid interest for each month shall be due
and payable on or before the fifteenth (15th) day of the following month
commencing in July 2006, with all accrued and unpaid interest being finally
due and payable on September 30, 2007.
g. The failure of the Company to make any payment to Employee within ten (10)
business days of the date when due under this Agreement or any schedule
provided to Employee by the Company pursuant to Section 2(e) will, at the
option of Employee and effective upon notice to the Company, result in all
outstanding amounts payable to Employee by the Company under the terms of
this Agreement becoming immediately due and payable; provided, however,
that the Company shall be entitled to fail to make the Minimum Payment in
any two (2) months without giving rise to the right of acceleration under
this Section 2(g) if within ten (10) business days after the end of the
month in which the failure occurs the Company issues to Employee a warrant
to purchase 2,500,000 shares of the Company's common stock for a purchase
price per share equal to the closing price of the common stock on the last
business day of the month in which the failure occurs as further provided
in this Section 2 (the "Warrant").
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h. The Company will withhold all applicable taxes on all compensation to be
paid to Employee under the terms of this Agreement (but not the Outstanding
Expenses or Outstanding Consulting Fees) in accordance with all applicable
local, state and federal laws.
i. The Warrant shall be immediately exercisable and continue to be exercisable
for three (3) years from date of issuance, provide for so-called
"piggyback" registration rights, have other terms and conditions generally
consistent with other warrants issued by the Company, and otherwise be in a
form and contain terms and conditions reasonably acceptable to Employee.
j. In the event that it shall be necessary for a party to this Agreement to
institute legal action to enforce any of the terms and conditions or
provisions contained herein, or for any breach thereof, the prevailing
party shall be entitled to costs and reasonable attorney's fees.
k. To the extent that during the three (3) months prior to or after the
Effective Date the Company reimburses or agrees to reimburse an officer or
former officer of the Company for his or her legal fees in connection with
his or her separation from the Company, the Company shall promptly
reimburse Employee for his legal fees incurred in connection with this
Agreement in the same amount that such other officer or former officer
received or is entitled to receive.
3. Indemnity. To the fullest extent permitted by applicable law, the Company
agrees to indemnify Employee from and against all expenses (including legal
fees), judgments, fines and amounts paid in settlement, actually and
reasonably incurred by him in connection with any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, brought or threatened to be brought
against him by reason of his performance as a director, officer, employee
or agent of the Company, its parent or any of its subsidiaries, or in any
other capacity on behalf of the Company, its parent or any of its
subsidiaries. Further, the Company agrees that any expenses incurred by
Employee in defending any such action, suit or proceeding shall be promptly
advanced by the Company in advance of the final disposition of such action,
upon the request of Employee and following the receipt by the Company of an
undertaking by Employee to repay such amounts as are advanced if it shall
ultimately be determined by a court of law or arbitrator in a decision that
shall not be subject to appeal that Employee is not entitled to be
indemnified by the Company under applicable law.
4. Payroll Taxes. The Company acknowledges and agrees that after Employee
joined the Company he learned that the Company was delinquent in paying
payroll and other taxes to state and federal governments and that such
delinquencies have continued due to cash flow issues. The Company agrees to
use its best efforts to pay in full all payroll and other tax liabilities
outstanding on the Effective Date.
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5. Surviving Provisions of Employment Agreement. All provisions of the
Employment Agreement, including, without limitation, Section 4 (concerning
non-competition), are terminated and shall be of no further force and
effect, other than Sections 5 through 10 (concerning non-solicitation,
confidentiality, dispute resolution and other matters), which shall survive
and continue to be in full force and effect, subject to the terms of this
Agreement; provided, however, that Section 6 of the Employment Agreement
shall only survive for a period of six (6) months from the Effective Date.
6. Property. Employee represents and warrants that to his knowledge he has
returned to the Company all the Company's property in his possession,
including, its books, lists, records, other documents and equipment, which
shall not include the laptop computer used by Employee and the files
thereon. Employee will maintain ownership and possession of said laptop
computer. Any information in the files on such computer that are
Confidential Information of the Company (as defined in Section 3 of the
Employment Agreement) shall continue to be subject to the restrictions on
use and disclosure contained in Section 3 of the Employment Agreement.
Employee covenants that should he later discover in his possession other
items of the Company's property, Employee will promptly return such
property to the Company. Employee acknowledges that to his knowledge he has
received any personal property belonging to him that was on Company's
premises.
7. Release by Employee.
a. Except as expressly provided herein, Employee, for himself, his successors,
administrators, heirs, and assigns, hereby fully releases, waives and
forever discharges the Company and its subsidiaries, and their respective
successors and assigns, and each of their respective directors, officers,
agents, attorneys and employees, whether past, present or future (the
"Company Released Parties"), from any all agreements, actions, suits,
debts, demands, damages, claims, judgments or liabilities of any nature
including costs and attorneys' fees, whether known or unknown, arising on
or before of the date hereof, including, but not limited to, all claims
arising out of Employee's employment with or separation from the Company,
and all claims for breach of contract, wrongful discharge,
misrepresentation, defamation, violation of public policy, breach of the
implied covenant of good faith and fair dealing, personal injury, emotional
distress, sexual harassment, and age, race, sex or other prohibited
discrimination, and all liabilities for the payment of any sums for accrued
earnings, bonuses, stock options or other stock rights, severance pay, sick
leave or holiday plans, and any employee benefits, but excluding (i) any
claim for breach of this Agreement, (ii) any claim that Employee may make
under the Company's directors and officers' insurance policy now or in the
future or (iii) any claim for indemnification that Employee may have under
the By-Laws of the Company.
b. Employee specifically agrees that included in the foregoing release is the
waiver and release of the Company from all claims he may have as of the
date he signs this Agreement regarding claims or rights arising under the
Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. ss. 621
("ADEA"). This paragraph does not waive rights or claims that may arise
under the ADEA after the date Employee signs this Agreement.
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c. To the maximum extent permitted by law, Employee covenants not to ▇▇▇ or to
institute or cause to be instituted any action in any federal, state or
local agency or court against any of the Company Released Parties with
respect to any claim that is released in this Section 7.
d. Employee agrees that Company has advised Employee to consult an attorney
prior to signing this Agreement and that he has done so.
8. Release by the Company.
a. The Company, for itself and its successors, assigns and subsidiaries,
hereby fully releases, waives and forever discharges Employee and his
successors, administrators, heirs, and assigns (the "Employee Released
Parties") from any all agreements, actions, suits, debts, demands, damages,
claims, judgments or liabilities of any nature including costs and
attorneys' fees, whether known or unknown, arising on or before of the date
hereof, including, but not limited to, all claims arising out of Employee's
employment with or separation from the Company, and all claims for breach
of contract, but excluding any claim for breach of this Agreement and the
surviving provisions of the Employment Agreement arising on or after the
date of this Agreement.
b. To the maximum extent permitted by law, the Company covenants not to ▇▇▇ or
to institute or cause to be instituted any action in any federal, state or
local agency or court against any of the Employee Released Parties with
respect to any claim that is released in this Section 8.
9. Enforcement to Maximum Extent Possible. It is intended that the provisions
of this Agreement shall be enforced to the fullest extent permissible under
the laws and public policies applied in each jurisdiction in which
enforcement is sought. The provisions of this Agreement shall be construed
in accordance with the internal laws of the State of Rhode Island, without
regard to its principles concerning conflicts of law. In the event that any
paragraph, subparagraph or provision of this Agreement shall be determined
to be partially contrary to governing law or otherwise unenforceable, the
paragraph, subparagraph, or provision and this Agreement shall be enforced
to the maximum extent permitted by law, and if any paragraph, subparagraph
or provision of this Agreement shall be determined to be totally contrary
to governing law or otherwise totally unenforceable, the paragraph,
subparagraph, or provision shall be severed and disregarded and the
remainder of this Agreement shall be enforced to the maximum extent
permitted by law.
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10. Confidentiality and Disparagement. The parties agree that the terms of this
Agreement and the Agreement itself will be made public in accordance with
applicable law, but that until this time as disclosure is so required,
they, their agents and their family members, directors, officers, employees
shall keep confidential the terms of this Agreement. Except in connection
with any legal proceedings between the parties, Employee agrees not to
disparage in the future the Company Released Parties and the Company agrees
not to disparage in the future the Employee Released Parties.
11. Entire Agreement. The parties agree that this Agreement and Sections 5, 6
(to the extent provided by Section 5 of this Agreement) and Sections 7
through 10 of the Employment Agreement constitutes the entire understanding
between the parties with reference to the subject matter of this Agreement,
including employment, independent contractor status, all loans, advances,
investments made by Employee, all promises and representations made by the
Company or its officers, directors or employees, and all prior negotiations
and understandings, verbal or written, between Employee and the Company,
relating to the items and things referred to in this Agreement have been
merged herein.
12. Dispute Resolution. Any and all disputes arising out of or in any way
related to Employee's employment with, or separation from, the Company, as
well as any and all disputes or claims arising out of or in any way related
to this Agreement, including, without limitations, fraud in the inducement
of this Agreement, or relating to the general validity or enforceability of
this Agreement, shall be submitted to arbitration before an arbitrator of
the American Arbitration Association, Providence, Rhode Island, in
accordance with the rules of that body governing commercial disputes, and
prevailing party shall be entitled to reasonable costs and attorneys' fees.
Judgment on the award rendered by the arbitrator may be entered in any
court having jurisdiction thereof. Notwithstanding the foregoing, Employee
shall not be required to enforce Employee's payment rights under Section 2
of this Agreement in an arbitration proceeding under this Section 12 and
may pursue any other remedy available to him.
IN WITNESS WHEREOF, the parties have executed this Agreement as of this
30th day of June, 2006.
ICOA, Inc.
By _______________
Its ______________
________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇.