Exhibit 10
MUTUAL RELEASE AND SETTLEMENT AGREEMENT
THIS Mutual Release and Settlement Agreement ("Agreement") is
executed as of the 30th day of April, 2001 by and between Innovative
Coatings Corporation ("INNO") and Xxxxx Xxxxx ("Xxxxx").
WHEREAS, Xxxxx is a director and shareholder in INNO, owning
1,250,000 shares of common stock in INNO, which shares are in escrow with
Xxxxxxxx XxXxxx, Esq.;
WHEREAS, Xxxxx is also an officer and employee of INNO pursuant
to an Employment and Consulting Agreement dated July 1, 1998 (the
"Employment Agreement"), under which Xxxxx is entitled, among other
things, to a salary of $80,000 per year;
WHEREAS, INNO and Xxxxx have agreed to terminate their
employment/consulting relationship on the terms set forth herein;
NOW, THEREFORE, in consideration of $10.00 and other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged by the parties hereto, the parties hereby agree as follows:
1. INNO and Xxxxx hereby cancel and rescind all prior written or
oral agreements between themselves, including without limitation the
Employment Agreement, and hereby fully release, discharge and relinquish
any and all claims which either may have against other arising out of such
agreements.
2. By his execution to this Agreement, Xxxxx hereby:
a) resigns as an officer, director and employee of the INNO;
b) relinquishes and waives any claim for wages, severance,
vacation, expenses or other any amount due Xxxxx (except as specifically
set forth below);
c) agrees to provide such information and assistance as the Company
may reasonably request during normal business hours with respect to
matters which were formerly Xxxxx'x duties and responsibilities as an
officer and employee of INNO for a period of three months following the
date of this Agreement;
d) grants INNO options to purchase all of Xxxxx'x shares of INNO
common stock pursuant to the following schedule: $6,000 by May 15, 2001
for 312,500 shares of INNO common stock; $6,000 by June 15, 2001 for
312,500 shares of INNO common stock; $6,000 by July 15, 2001 for 312,500
shares of INNO common stock; and $6,000 by August 15, 2001 for the
remaining 312,500 shares of INNO common stock. The parties agree to
execute such documents as are reasonably necessary to effectuate the
removal from escrow of the shares owned purchased by INNO pursuant to the
exercise of the foregoing options.
3. By its execution to this Agreement, INNO hereby:
a) agrees, with Xxx X. Xxxxxx, Xxxxx X. Xxxxxxxx and Xxxxx Xxxx
(who are signatories hereto solely for purposes of evidencing their
agreement to this subparagraph), to indemnify and hold Xxxxx harmless
against any and all claims, liabilities, causes of action and demands
arising out of or relating to his services as an officer, director and
employee of INNO, including without limitation any liability for unpaid
state and federal withholding taxes;
b) conveys to Xxxxx all right, title and interest in and to the
pump and spray gun (the "Pump/Spray Rights") developed in part by Xxxxx
while serving as an officer and employee of INNO, including any drawings,
specifications or prototypes relating to the Pump/Spray Rights, and to
execute such documents that Xxxxx may reasonably request to evidence such
transfer of ownership and to enable Xxxxx to obtain a patent on the
Pump/Spray Rights in his own name;
c) agrees to designate Xxxxx as the sole "preferred vendor" with
respect to application jobs (other than jobs performable in INNO's inhouse
application facility) for two years following the date of this Agreement.
4. Notwithstanding Paragraph 1 herein, Xxxxx agrees that he shall
remain bound by paragraph 6 of the Employment Agreement, entitled
"Unauthorized Disclosure and Xxxxx'x Right of Ownership," except with the
respect to the Pump/Spray Rights.
5. Xxxxx individually and on behalf of its successors and assigns,
hereby fully releases and discharges INNO and its officers, directors,
employees, subsidiaries, attorneys, representatives and agents from all
rights, claims and actions which Xxxxx now has or may have against them at
law or in equity, including without limitation any claims based upon any
oral or written agreement entered into prior to the date of this
Agreement, except for any claim based upon a breach of INNO's obligations
under this Agreement.
6. INNO individually and on behalf of its successors and assigns,
hereby fully releases and discharges Xxxxx and his representatives and
agents from all rights, claims and actions which INNO now has or may have
against them at law or in equity, including without limitation any claims
based upon any oral or written agreement entered into prior to the date of
this Agreement, except for any claim based upon a breach of Xxxxx'x
obligations under this Agreement.
7. Each party represents and warrants that they own all right,
title and interest of and to any claim released herein, that such claims
are free and clear of all liens, claims and encumbrances, and that they
have the full power and authority to convey and release such claims.
Xxxxx represents and warrants that he owns the shares of INNO common stock
which he has agreed to sell to INNO herein free and clear of all liens,
claims and encumbrances, and that he has full power and authority to
transfer and assign such shares to INNO pursuant to this Agreement.
8. This release is intended by the parties to release all claims,
whether known, unknown, foreseen, unforeseen, patent or latent, which one
party may have against the other arising out of any existing written or
oral agreement, for fraud, breach of fiduciary duty or in tort. Each
party understands and acknowledges the significance and consequence of
such specific intention to release all claims. All persons covered by
this release are intended third-party beneficiaries of this Agreement.
9. This release is freely and voluntarily executed by each party
after having been apprised of all relevant information and data, and after
obtaining the advice, or being given the opportunity to obtain the advice,
of competent counsel.
10. This Agreement represents the entire and complete agreement
between the parties hereto and all prior agreements, understandings,
obligations or statements by and between the parties concerning the
subject matter hereby will be merged with and into and be superseded by
this Agreement and shall be of no further force and effect. No
modification, amendment or waiver of any provision of this Agreement, nor
any consent to any departure by any party from the terms hereof, shall be
effective unless the same be in writing and signed by all parties hereto.
11. If any term or provision of this Agreement, or the application
thereof to any person or circumstance, shall be determined by a court of
competent jurisdiction to be invalid or unenforceable, the remainder of
this Agreement, or the application of such term or provision to persons or
circumstances other than those as to which it is determined to be invalid
or unenforceable, shall not be affected thereby, and each term and
provision of this Agreement shall be valid and enforced to the fullest
extent permitted by law.
12. The person executing this Agreement on behalf of a party hereto
represents to the other party that he/she is duly authorized to execute
this Agreement.
13. Each party has read this Agreement and understands the terms
used herein.
14. This Agreement may be executed in counterpart.
INNOVATIVE COATINGS CORPORATION
/s/ Xxxxx X. Xxxxxxxx
By: Xxxxx X. Xxxxxxxx
Its: Chief Executive Officer
/s/ Xxxxx Xxxxx
By: Xxxxx Xxxxx, Individually
/s/ Xxx X. Xxxxxx
By: Xxx X. Xxxxxx, Individually
/s/ Xxxxx X. Xxxxxxxx
By: Xxxxx X. Xxxxxxxx, Individually
/s/ Xxxxx Xxxx
By: Xxxxx Xxxx, Individually
