SUBSCRIPTION AND RELEASE AGREEMENT
This SUBSCRIPTION AGREEMENT (this "Agreement") is entered into as of
September 8, 2005 by and among ICOA, Inc., a Nevada corporation (the "Company"),
and Seaport Capital Partners, LLC. (the "Investor").
R E C I T A L S:
WHEREAS, Seaport Capital Partners, LLC. has previously loaned the Company
funds and for which the Company has accrued interest and for which the total
outstanding principal and accrued interest is $880,423.95; and
WHEREAS, in settlement thereof, the Company desires to make and sell, and
the Investor desire to acquire, common stock of the Company on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and agreements contained herein, the parties hereto, each intending to
be legally bound, hereby agree as follows:
SECTION 1. STOCK
1.1. Issuance of Stock
Subject to the terms and conditions set forth in this Agreement and in
reliance upon the Company's and the Investor' representations set forth herein,
on the Closing Date (as hereinafter defined) the Company shall sell to the
Investor, and the Investor shall receive from the Company, 54,819,845 shares of
the Company's common stock and 2,072,222 Warrants with an exercise price of
$0.025 per share to the Investor in exchange for the Investor's execution of a
Securities Acquisition and Release Agreement and surrender and cancellation of
the notes and other evidences of indebtedness.
1.2. Closing
The closing (the "Closing") of the issuance, sale and purchase of the
Common Stock to be purchased by the Investor hereunder shall take place at 3:00
p.m., Eastern Time, on September 8, 2005, or such other date as the Investor and
the Company agree in writing (the "Closing Date"), at the offices of the
Company, or at such other location as the Investor and the Company shall
mutually select.
On the Closing Date, the Company shall deliver to the Investor duly
registered in Investor's name, duly executed certificates being acquired by it
hereunder, against the execution of the Securities Acquisition and Release
Agreement. Investor shall deliver to Company for cancellation the notes and
other documents evidencing certain obligations of the Company as listed on
Exhibit A. The Company and the Investor shall deliver to the other the
Registration Rights and Shareholder Agreement.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Investor that as of the
date hereof:
2.1. Corporate Organization
(a) The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Nevada.
(b) The Company has all requisite power, authority, approvals, licenses,
permits and authorization to own its properties and to carry on its business as
now conducted. The Company has all requisite power and authority to execute and
deliver this Agreement and any other related agreements to be executed and
delivered by it in connection herewith and to perform its obligations hereunder
and thereunder.
(c) The Company has filed all necessary documents to qualify to do business
as a foreign corporation in, and the Company is in good standing under the laws
of, each jurisdiction in which the conduct of its business or the nature of the
property owned by it requires such qualification, except where the failure to so
qualify and be in good standing would not have a material adverse effect on the
business, properties, assets, liabilities, profits, results of operations or
condition (financial or otherwise) of the Company taken as a whole.
2.2. Corporate Proceedings, etc.
The Company has authorized the execution, delivery, and performance of this
Agreement and the transactions contemplated hereby. No other corporate action is
necessary to authorize such execution, delivery and performance of this
Agreement, and upon such execution and delivery this Agreement shall constitute
a valid and binding obligation of the Company, enforceable against the Company
in accordance with its terms, except that such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights and general principles of
equity.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR
3.1. Investment Intent
Each of the Investor severally and not jointly represents and warrants to
the Company that it: (a) is acquiring the stock to be acquired by it hereunder
for its own account and not with a view to, or for sale in connection with, any
resale, transfer or distribution thereof, nor with any present intention of
distributing such stock, but subject, nevertheless, to any requirement of law
that the disposition of the Investor's property shall at all times be within the
Investor' control, and without prejudice to the Investor's right at all times to
sell or otherwise dispose of all or any part of such securities under a
registration under the Securities Act or under an exemption from said
registration available under the Securities Act; (b) has full power and legal
right to execute and deliver this Agreement and to perform its obligations
hereunder; (c) has taken all action necessary for the authorization, execution,
delivery, and performance of this Agreement and its obligations hereunder, and,
upon execution and delivery by the Company, this Agreement shall constitute the
valid and binding obligation of such Investor, enforceable against such Investor
in accordance with its terms, except that such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights and general principles of
equity; (d) has such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of its investment in the
Company as contemplated by this Agreement, and is able to bear the economic risk
of such investment for an indefinite period of time; (e) has been furnished
access to such information and documents as it has requested and has been
afforded an opportunity to ask questions of and receive answers from
representatives of the Company concerning the terms and conditions of this
Agreement and the purchase of the stock contemplated hereby; and (f) is an
"accredited investor" as such term is defined in Section 501(a) of Regulation D
promulgated under the Securities Act.
3.2 Rights
Investor has good and marketable title to the notes made by the Company as
listed in Exhibit A. Investor has not assigned or encumbered such notes in any
way.
SECTION 4. ADDITIONAL COVENANTS AND AGREEMENTS OF THE PARTIES
4.1. Resale of Securities
(a) The Investor covenants that it will not sell or otherwise transfer any
Shares, except pursuant to an effective registration under the Securities Act of
1933, as amended (the "Securities Act"), or in a transaction which, in the
opinion of counsel reasonably satisfactory to the Company, qualifies as an
exempt transaction under the Securities Act and the rules and regulations
promulgated thereunder.
(b) The Company and the Investor will enter into a Registration Rights and
Shareholder Agreement, substantially in the form of Exhibit B.
4.2. Further Assurance
Each of the parties shall execute such documents and other papers and take
such further actions as may be reasonably required or desirable to carry out the
provisions hereof and the transactions contemplated hereby.
4.3. Termination and Release
(a) Issuance of the stock hereunder constitutes full payment of any and all
claims arising from or in connection with Acquirer's relationship with the
Company, including as employee, contractor, vendor or lender and specifically
including the notes listed in Exhibit A.
(b) Investor, for himself, his successors, administrators, heirs, and
assigns, hereby fully releases, waives and forever discharges Company, any
affiliated companies or subsidiaries, their successors, affiliates, assigns,
directors, officers, agents, attorneys and contractors, whether past, present or
future (the "Released Parties") from any all actions, suits, liens, demands,
damages, claims judgments or liabilities of any nature including costs and
attorneys' fees, whether known or unknown, including, but not limited to, all
claims arising out of Investor's relationship with any of the Released Parties,
including any claim for any benefits apart from the benefits stated herein;
breach of contract; wrongful discharge; impairment of economic opportunity; any
claim under common-law or at equity; any tort; claims for reimbursement,
commissions or due to discrimination. Investor acknowledges and agrees that this
release, and the covenant not to xxx are essential and material terms of the
Agreement and that, without them, no agreement would have been reached by the
parties.
(c) To the maximum extent permitted by law, Investor covenants not to (a)
file or seek a lien against, or (b) xxx or to institute or cause to be
instituted any action in any federal, state or local agency or court against any
of the Released Parties, including, but not limited to, any of the claims
released in paragraph 4.3.b of this Agreement.
SECTION 5. MISCELLANEOUS
5.1. Notices
(a) All notices and other communications required or permitted to be given
under this Agreement shall be in writing and shall be delivered by hand or
facsimile or mailed by overnight courier or by registered mail or certified
mail, postage prepaid:
(i) if to an Investor, at the address or facsimile number as the
Investor may have furnished the Company in writing; and
(ii) if to the Company, at ICOA, Inc., 000 Xxxxxxx Xxxx, Xxxxxxx Xxxxx
Xxxxxx 00000, marked for the attention of CFO, with a copy by email to
xxxxxxxxx@xxxxxxxx.xxx and xxxxxxx@xxxxxxxx.xxx, or at such other address or
facsimile number as the Company may have furnished the Investor in writing, with
a copy to Xxxxxx X. Xxxxxx, 0000 Xxxxxxx Xxxxxx, Xxx Xxxxxxxxx, XX 00000.
(b) Any notice so addressed shall be deemed to be given (i) if delivered by
hand or facsimile, on the date of such delivery, (ii) if mailed by courier, on
the first business day following the date of such mailing and (iii) if mailed by
registered or certified mail, on the third business day after the date of such
mailing.
5.2. Successors and Assigns
Except as otherwise expressly provided herein, this Agreement shall inure
to the benefit of and be binding upon the successors and assigns of each of the
parties hereto.
5.3. Entire Agreement; Amendment and Waiver
This Agreement constitutes the entire agreement of the parties hereto, and
supersedes all prior agreements or understandings (written or oral) among such
parties, with respect to the subject matter hereof. This Agreement may be
amended, and the observance of any term of this Agreement may be waived, with
(and only with) the written consent of the Company and all of the Investor.
5.4. Severability
In the event that any part or parts of this Agreement, other than paragraph
4.3, shall be held illegal or unenforceable by any court or administrative body
of competent jurisdiction, such determination shall not effect the remaining
provisions of this Agreement which shall remain in full force and effect.
5.5. Governing Law
This Agreement shall be governed by and construed in accordance with the
laws of the State of Nevada applicable to contracts made and to be performed
entirely within such State.
5.6. Counterparts
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original and all of which together shall be considered one
and the same agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first set forth above.
ICOA, INC.
By: /s/ Xxxxx Xxxxxxxx, Xx.
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Xxxxx Xxxxxxxx, Xx.
CFO
INVESTOR:
By: /s/ Xxxxxx Xxxxxxx
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Name: Xxxxxx Xxxxxxx
Title: President
