MUTUAL RELEASE
This Mutual Release (the "Agreement") is dated and is effective as of this day
of July, 2005, (the "Effective Date"), and is by and among ICOA, Inc. ("ICOA"),
a Nevada corporation having its principal offices located in the State of Rhode
Island, LinkSpot Networks, Inc. ("LinkSpot"), a Maryland corporation having its
principal offices located in the Commonwealth of Virginia, and Transaction
Network Services, Inc. ("TNS"), a Delaware corporation having its principal
offices located in the Commonwealth of Virginia.
Whereas,
A. LinkSpot and TNS are party to those agreements set forth on Schedule 1
hereto (the "LinkSpot-TNS Agreements");
B. ICOA, ICOA Public Services, Inc. ("Merger Sub"), a Nevada corporation and a
wholly-owned subsidiary of ICOA, and LinkSpot are parties to an Agreement
and Plan of Merger dated July , 2005 (the "Merger Agreement"), pursuant to
which Merger Sub shall be merged into LinkSpot, LinkSpot shall be the
surviving corporation, the shares of the capital stock of LinkSpot shall be
converted into the right to receive the consideration specified in the
Merger Agreement; and LinkSpot shall become a wholly-owned subsidiary of
ICOA;
C. ICOA's obligations under the Merger Agreement are conditioned upon TNS's
execution and delivery of this Agreement immediately upon the closing of
the Merger Agreement;
D. ICOA is willing to deliver to TNS certain cash and securities to induce TNS
to become a party to this Agreement;
E. TNS is willing to become a party to this Agreement; and
F. TNS shall release ICOA and LinkSpot, and ICOA and LinkSpot each shall
release TNS, from any obligations one may have to the other arising under
the LinkSpot-TNS Agreements, arising by virtue of TNS being a shareholder
of LinkSpot, or arising as a result of LinkSpot becoming a wholly-owned
subsidiary of ICOA, other than those obligations arising under this
Agreement, on the terms and conditions hereinafter set forth in this
Agreement.
Now, therefore, in consideration of the foregoing recitals and of the agreements
of the parties herein contained, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. Termination of the LinkSpot-TNS Agreements. All of the LinkSpot-TNS
Agreements are hereby terminated. As a consequence thereof, neither LinkSpot nor
TNS shall have any further obligation to the other under any of the LinkSpot-TNS
Agreements, including, without limitation, (a) LinkSpot's obligations to pay
fees for equipment charges, monitoring charges, circuit charges and any other
fee, charge, cost, expense or the like arising under the Transaction Network
Services, Inc. Services Agreement, as amended, between TNS and LinkSpot (the
"Services Agreement") or otherwise, whether or not such fees, charges, costs,
expenses and the like have been invoiced, and (b) TNS' obligations to provide
equipment and services pursuant to the Services Agreement or otherwise.
2. Ownership of Equipment.
a. Notwithstanding Section 8 of the Services Agreement, TNS does hereby
sell, transfer and convey all of its right, title and interest in all networking
equipment provided under the Services Agreement to LinkSpot that is as of the
date hereof in LinkSpot's or its customers' possession and all of the equipment
listed on Schedule 2 (collectively, the "Equipment"), and TNS does hereby waive
receipt from LinkSpot of any and all Administrative Transfer Fees and Residual
Transfer Fees (as such terms are defined in the Services Agreement) with respect
thereto.
b. TNS shall cause to be delivered to LinkSpot all Equipment which is
listed on Schedule 2 within ten (10) business days after receipt of written
delivery instructions from LinkSpot.
c. IT IS THE EXPLICIT INTENT AND UNDERSTANDING OF TNS AND LINKSPOT THAT
LINKSPOT TAKES THE EQUIPMENT "AS IS" AND "WITH ALL FAULTS". WITHOUT LIMITING THE
GENERALITY OF THE IMMEDIATELY PRECEDING SENTENCE, TNS HEREBY (I) EXPRESSLY
DISCLAIMS AND NEGATES ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AT
COMMON LAW, BY STATUTE OR OTHERWISE, RELATING TO (A) THE CONDITION OF THE
EQUIPMENT (INCLUDING, WITHOUT LIMITATION, ANY IMPLIED OR EXPRESS WARRANTY OF
QUALITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR OF CONFORMITY
TO MODELS OR SAMPLES OF MATERIALS) OR (B) ANY INFRINGEMENT BY TNS OF ANY PATENT
OR PROPRIETARY RIGHT OF ANY THIRD PARTY; AND (II) NEGATES ANY RIGHTS OF LINKSPOT
UNDER STATUTES TO CLAIM DIMINUTION OF CONSIDERATION AND ANY CLAIMS BY LINKSPOT
FOR DAMAGES BECAUSE OF LATENT VICES OR DEFECTS, WHETHER KNOWN OR UNKNOWN, IT
BEING THE INTENTION OF TNS AND LINKSPOT THAT THE EQUIPMENT IS TO BE ACCEPTED BY
LINKSPOT IN ITS PRESENT CONDITION AND STATE OF REPAIR.
3. Cash Payment to TNS; Issuance of ICOA Common Stock to TNS. Upon the execution
and delivery of this Mutual Release by the parties hereto, ICOA shall:
a. pay to TNS the amount of One Hundred Thousand Dollars ($100,000.00) by
wire transfer to an account to be designated in writing by TNS (the "Funds");
and
b. cause to be issued to TNS Five Hundred Thousand (500,000) shares of ICOA
common stock, par value $0.0001 per share (the "Shares"). Such Shares are, or
will as of their issuance to TNS, validly issued, fully paid and nonassessable
shares of ICOA common stock, free of and not subject to any preemptive rights or
rights of first refusal created by statute or by ICOA's Certificate of
Incorporation or Bylaws.
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4. Deferred Payments.
a. No later than December 31, 2005, ICOA shall pay to TNS the amount of
_____________ Dollars ($__________ ) (the "Deferred Cash"), which is the amount
of all outstanding invoices issued to LinkSpot by TNS as of the Effective Date,
by wire transfer to an account to be designated in writing by TNS.
b. In the event ICOA does not tender the Deferred Cash to TNS by December
31, 2005, then in lieu of the Deferred Cash, ICOA shall cause to be issued to
TNS the number of shares of ICOA common stock, par value $0.0001 per share,
determined in accordance with Section 4.c hereof (the "Deferred Shares"). The
Deferred Shares are, or will be as of their issuance to TNS, validly issued,
fully paid and nonassessable shares of ICOA common stock, free of and not
subject to any preemptive rights or rights of first refusal created by statute
or by ICOA's Certificate of Incorporation or Bylaws.
c. The number of Deferred Shares shall be determined by multiplying the
amount of the Deferred Cash by two (2), and dividing the product by the Price
(as hereinafter defined), with the quotient rounded to the nearest whole number.
That whole number shall be the number of Deferred Shares. The term "Price" shall
mean the average of the closing bid price of ICOA common stock for the first ten
(10) trading days of the year 2006.
5. Delivery to TNS of Warrant to Purchase Additional Shares of ICOA Common
Stock. Upon the execution and delivery of this Mutual Release by the parties
hereto, ICOA shall issue to TNS its warrant, in the form attached as Exhibit I,
to purchase shares of ICOA common stock at an exercise price equal to the
closing bid price of ICOA common stock on the first trading day immediately
prior to the closing date of the transactions contemplated by the Merger
Agreement occurs (the "Warrant"). The number of shares subject to the Warrant
shall be determined by dividing One Hundred Thousand Dollars ($100,000.00) by
such closing price, with the quotient rounded to the nearest whole number. That
whole number shall be the number of shares subject to the Warrant.
6. Investment Representations.
a. TNS understands that the sale of the Shares and Warrant is not
registered under the Securities Act or applicable state securities laws in
reliance on exemptions from the registration requirements of the Securities Act
and applicable state securities laws.
b. TNS is acquiring the Shares and Warrant for investment purposes for its
own account and not for distribution or resale thereof in violation of any
federal or state securities laws.
c. TNS is an "accredited investor" within the meaning of Rule 501 under the
Securities Act.
d. TNS acknowledges and agrees that the certificates representing the
Shares and Warrant will bear legends substantially to the following effect:
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THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
UNITED STATES FEDERAL OR STATE SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE,
SOLD, OR OTHERWISE TRANSFERRED OR ASSIGNED FOR VALUE, DIRECTLY OR INDIRECTLY,
NOR MAY THE SECURITIES BE TRANSFERRED ON THE BOOKS OF THE COMPANY, WITHOUT
REGISTRATION OF SUCH SECURITIES UNDER ALL APPLICABLE UNITED STATES FEDERAL OR
STATE SECURITIES LAWS OR COMPLIANCE WITH AN APPLICABLE EXEMPTION THEREFROM
7. Release of Security Interests.
a. TNS does hereby release any security interest it may have in LinkSpot
assets, and TNS agrees to take all action reasonably requested of it with
respect to the termination of any such security interest. TNS does hereby
authorize and appoint any officer of LinkSpot (or anyone acting under his
authority) to execute, deliver and record UCC termination statements on its
behalf with respect to any UCC-1 financing statement (or equivalent notice of
security interest) filed with any public records officer with respect to any
such assets.
b. LinkSpot does hereby release any security interest it may have in shares
of LinkSpot Series A Convertible Preferred Stock owned by TNS, and LinkSpot
agrees to take all action reasonably requested of it with respect to the
termination of any such security interest.
8. TNS's Release of ICOA and LinkSpot. TNS does hereby unconditionally and
forever release and discharge ICOA, LinkSpot and their respective directors,
officers, stockholders, employees, agents, successors and assigns of and from
any and all actions, causes of action, suits, debts, damages, judgments,
liabilities, obligations, claims and demands of any kind or nature whatsoever,
whether in law or in equity, whether known or unknown, which it now has or which
it hereafter may have, for or by reason of any matter whatsoever relating to or
arising under the TNS-LinkSpot Agreements, arising by virtue of TNS being a
shareholder of LinkSpot, or arising as a result of LinkSpot becoming a
wholly-owned subsidiary of ICOA, other than those obligations arising under this
Agreement.
9. ICOA and LinkSpot's Release of TNS. ICOA and LinkSpot, jointly and severally,
do hereby unconditionally and forever release and discharge TNS and its
directors, officers, stockholders, employees, agents, successors and assigns of
and from any and all actions, causes of action, suits, debts, damages,
judgments, liabilities, obligations, claims and demands of any kind or nature
whatsoever, whether in law or in equity, whether known or unknown, which either
now has or which either hereafter may have, for or by reason of any matter
whatsoever relating to or arising under the TNS-LinkSpot Agreements, arising by
virtue of TNS being a shareholder of LinkSpot, or arising as a result of
LinkSpot becoming a wholly-owned subsidiary of ICOA, other than those
obligations arising under this Agreement.
10. Agreements Conditional. The agreements and releases set forth in Sections 1,
2, 7, 8 and 9 hereof are conditioned upon and shall become effective only upon
the delivery of the Funds, the Shares and the Warrant.
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11. No Existing Claims. Each of the parties to this Agreement represents and
warrants to the other parties to this Agreement that it has not filed any claim,
charge, complaint or action against the other parties to this Agreement in or
with any court, agency or other forum, and no such claim, charge, complaint or
action has been filed on his or its behalf.
12. Representations and Warranties of ICOA. ICOA has all requisite corporate
power and authority, and has taken all corporate action necessary, to execute
and deliver this Mutual Release and the Warrant, to consummate the transactions
contemplated hereby and thereby and to perform its obligations hereunder and
thereunder. The execution and delivery of this Mutual Release and the Warrant by
ICOA and the performance by ICOA of its obligations hereunder and thereunder and
the consummation of the transactions contemplated hereby and thereby have been
duly authorized by the Board of Directors of ICOA. This Mutual Release has been
duly executed and delivered by ICOA and it is, and upon execution and delivery,
the Warrant will be, a legal, valid and binding obligation of ICOA, enforceable
against ICOA in accordance with its terms, except that enforceability may be
limited by the effect of bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting the rights of creditors.
13. Representations and Warranties of TNS. TNS has all requisite corporate power
and authority, and has taken all corporate action necessary, to execute and
deliver this Mutual Release, to consummate the transactions contemplated hereby
and to perform its obligations hereunder. The execution and delivery of this
Mutual Release by TNS and the performance by TNS of its obligations hereunder
and the consummation of the transactions contemplated hereby have been duly
authorized by the Board of Directors of TNS. This Mutual Release has been duly
executed and delivered by TNS, and it is a legal, valid and binding obligation
of TNS, enforceable against TNS in accordance with its terms, except that
enforceability may be limited by the effect of bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
rights of creditors.
14. Representations and Warranties of LinkSpot. LinkSpot has all requisite
corporate power and authority, and has taken all corporate action necessary, to
execute and deliver this Mutual Release, to consummate the transactions
contemplated hereby and to perform its obligations hereunder. The execution and
delivery of this Mutual Release by LinkSpot and the performance by LinkSpot of
its obligations hereunder and the consummation of the transactions contemplated
hereby have been duly authorized by the Board of Directors of LinkSpot. This
Mutual Release has been duly executed and delivered by LinkSpot, and it is a
legal, valid and binding obligation of LinkSpot, enforceable against LinkSpot in
accordance with its terms, except that enforceability may be limited by the
effect of bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights of creditors.
15. Reliance. None of the parties to this Agreement has relied on any
representation, promise or agreement of any kind except as set forth in this
Agreement in connection with its decision to execute and deliver this Agreement.
16. Consultation with Counsel. Each of the parties to this Agreement represents
and warrants to the others that it has consulted with and has been represented
by independent legal counsel selected of its own free will in the negotiation of
the terms of this Agreement and its execution and delivery, and that it has had
the opportunity to discuss the terms, provisions, conditions and obligations
contained herein with such independent legal counsel. Each party to this
Agreement acknowledges that it has read and understands the meaning and
ramifications of the terms, provisions, conditions and obligations this
Agreement.
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17. Intent. Each of the parties to this Agreement hereby represents and warrants
to the other party to this Agreement that it freely and knowingly and after due
consideration has executed and delivered this Agreement intending to waive and
release all claims as set forth herein.
18. Governing Law. This Agreement shall be governed, interpreted and construed
in accordance with the laws of the United States of America and the Commonwealth
of Virginia without giving effect to conflict of law principles.
19. Waiver. A waiver of any breach or any provision of this Agreement shall not
be construed as a continuing waiver of other breaches of the same or other
provisions of this Agreement.
20. Entire Agreement; Amendment. This Agreement, including the Schedules hereto,
sets forth the complete, final and exclusive agreement between the parties
hereto and supersedes and terminates all prior agreements and understandings
between the parties with respect to specific subject matter hereof. There are no
covenants, promises, agreements, warranties, representations, conditions or
understandings, either oral or written, between the parties with respect to the
specific subject matter hereof, other than as are set forth herein. No
subsequent alteration, amendment, change or addition to this Agreement shall be
binding upon the parties unless reduced to writing and signed by an authorized
officer of each party.
21. Benefit. This Agreement shall inure to the benefit of the parties to this
Agreement, and to their respective officers, directors, stockholders, employees,
agents, successors and assigns.
22. Schedules and Exhibit. The schedules and exhibit referred to in this
Agreement are attached hereto and are incorporated herein by reference.
23. Severability. If any provision of this Agreement is declared invalid or
unenforceable by a court having competent jurisdiction, it is mutually agreed
that this Agreement shall endure except for the part declared invalid or
unenforceable by order of such court. The parties shall consult and use their
best efforts to agree upon a valid and enforceable provision which shall be a
reasonable substitute for such invalid or unenforceable provision in light of
the intent of this Agreement.
24. Counterparts. This Agreement shall become binding when any one or more
counterparts hereof, individually or taken together, shall bear the signatures
of each of the parties hereto. This Agreement may be executed in any number of
counterparts, each of which shall be an original as against either party whose
signature appears thereon, but all of which taken together shall constitute but
one and the same instrument.
25. Section Headings. Section headings appearing in this Agreement are for
convenience only and shall not be deemed to have any legal consequence
whatsoever in the interpretation of this instrument.
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26. Execution of Additional Documents. The parties hereto agree that they will
promptly execute any and all further documents necessary and/or appropriate for
the consummation of this Agreement according to its terms and conditions or as
one party may reasonably request of the other.
27. Enforcement. The parties hereto stipulate that the obligations undertaken by
the parties hereto shall survive execution hereof and shall be specifically
enforceable in a court of proper jurisdiction.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
by its duly-authorized officer as of date set forth adjacent to his signature.
ICOA:
ICOA, Inc.
July __, 2005 By: _____________________________________
Xxxxxxx Xxxxxxxxxx, President
LinkSpot:
LinkSpot Networks, Inc.
July __, 2005 By: _____________________________________
Xxxxxxx Xxxxxxxxxx, President
TNS:
Transaction Network Systems, Inc.
July __, 2005 By: _____________________________________
Name:________________________
Title:_________________________
(Acknowledgements appear on the following pages.)
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County of Kent )
) ss:
State of Rhode Island )
On the day of July, 2005, before me, the undersigned, a notary public in and for
the jurisdiction aforesaid, personally appeared XXXXXXX XXXXXXXXXX, personally
known to me or proved to me on the basis of satisfactory evidence to be the
individual whose name is subscribed to the within instrument, who appeared to be
of sound mind and not under or subject to duress, fraud or undue influence, and
who acknowledged to me that he executed the same in his capacity as president of
ICOA, Inc., that he is duly-authorized to act on behalf of said corporation, and
that he executed the same, freely and voluntarily, on behalf of said corporation
as the act and deed of said corporation for the purposes therein contained.
_____________________________________
Notary Public
My Commission expires:
___________________
County of Kent )
) ss:
State of Rhode Island )
On the day of July, 2005, before me, the undersigned, a notary public in and for
the jurisdiction aforesaid, personally appeared XXXXXXX XXXXXXXXXX, personally
known to me or proved to me on the basis of satisfactory evidence to be the
individual whose name is subscribed to the within instrument, who appeared to be
of sound mind and not under or subject to duress, fraud or undue influence, and
who acknowledged to me that he executed the same in his capacity as president of
LinkSpot Networks, Inc., that he is duly-authorized to act on behalf of said
corporation, and that he executed the same, freely and voluntarily, on behalf of
said corporation as the act and deed of said corporation for the purposes
therein contained.
_____________________________________
Notary Public
My Commission expires:
___________________
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County of _____________ )
) ss:
State of _____________ )
On the day of July, 2005, before me, the undersigned, a notary public in and for
the jurisdiction aforesaid, personally _______________ personally known to me or
proved to me on the basis of satisfactory evidence to be the individual whose
name is subscribed to the within instrument, who appeared to be of sound mind
and not under or subject to duress, fraud or undue influence, and who
acknowledged to me that he executed the same in his capacity as
__________________ of Transaction Networks Services, Inc., that he is
duly-authorized to act on behalf of said corporation, and that he executed the
same, freely and voluntarily, on behalf of said corporation as the act and deed
of said corporation for the purposes therein contained.
_____________________________________
Notary Public
My Commission expires:
___________________
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SCHEDULE 1
LinkSpot-TNS Agreements
Registration Rights Agreement, dated April 28, 2003.
Transaction Network Services, Inc. Services Agreement, dated July 10, 2003.
Amendment No. 1 to the Transaction Network Services, Inc. Services Agreement,
dated January 28, 2004.
Security Agreement referred to in Amendment No. 1 to the Transaction Network
Services, Inc. Services Agreement, dated January 28, 2004.
Preferred Stock Purchase Agreement, dated April 28, 2004.
Amended and Restated Supplemental Stockholders Agreement, dated April 28, 2004.
Amended and Restated Pledge Agreement, dated June 30, 2004.
Pledge Agreement, dated June 30, 2004.
Amendment No. 2 to the Transaction Network Services, Inc. Services Agreement,
dated June 30, 2004.
Each other agreement, oral or written, to which LinkSpot Networks, Inc. and
Transaction Network Services, Inc. are parties, excepting only the Mutual
Release to which this Schedule is attached.
SCHEDULE 2
Network Equipment
(see attached)
EXHIBIT A
WARRANT
(see attached)
