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Title: |
Subscription Agreement |
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Entities: |
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Date: |
2001 |
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Size: |
Preview shows 19KB of 131KB total |
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Price: |
$60 |
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ID: |
#1437803 |
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<SEQUENCE>3
<FILENAME>0003.txt
<DESCRIPTION>SUBSCRIPTION AGREEMENT
<TEXT>
SUBSCRIPTION AGREEMENT
Dear Subscriber:
You (the "Subscriber") hereby agree to purchase, and ICOA, Inc., a
Nevada corporation (the "Company") hereby agrees to issue and to sell to the
Subscriber, 9% Convertible Notes (the "Notes") convertible in accordance with
the terms thereof into shares of the Company's $.0001 par value common stock
(the "Company Shares") for the aggregate consideration as set forth on the
signature page hereof ["Purchase Price"]. The form of Convertible Note is
annexed hereto as Exhibit A. (The Company Shares are sometimes referred to
herein as the "Shares" or "Common Stock"). (The Notes, the Company Shares,
Common Stock Purchase Warrants ("Warrants") issuable to the recipients
identified on Schedule B hereto, the Common Stock issuable upon exercise of the
Warrants, and the Put Securities (as herein defined) are collectively referred
to herein as, the "Securities"). Upon acceptance of this Agreement by the
Subscriber, the Company shall issue and deliver to the Subscriber the Note
against payment, by federal funds (U.S.) wire transfer of the Purchase Price.
The following terms and conditions shall apply to this
subscription.
1. Subscriber's Representations and Warranties. The Subscriber
hereby represents and warrants to and agrees with the Company that:
(a) Information on Company. The Subscriber has been
furnished with the Company's audited financial statements for the year ended
September 30, 1999 (hereinafter referred to as the "Reports"). In addition, the
Subscriber has received from the Company such other information concerning its
operations, financial condition and other matters as the Subscriber has
requested, and considered all factors the Subscriber deems material in deciding
on the advisability of investing in the Securities (such information in writing
is collectively, the "Other Written Information").
(b) Information on Subscriber. The Subscriber is an
"accredited investor", as such term is defined in Regulation D promulgated by
the Commission under the Securities Act of 1933, as amended (the "1933 Act"), is
experienced in investments and business matters, has made investments of a
speculative nature and has purchased securities of United States publicly-owned
companies in private placements in the past and, with its representatives, has
such knowledge and experience in financial, tax and other business matters as to
enable the Subscriber to utilize the information made available by the Company
to evaluate the merits and risks of and to make an informed investment decision
with respect to the proposed purchase, which represents a speculative
investment. The Subscriber has the authority and is duly and legally qualified
to purchase and own the Securities. The Subscriber is able to bear the risk of
such investment for an indefinite period and to afford a complete loss thereof.
(c) Purchase of Note. On the Closing Date, the
Subscriber will purchase the Note for its own account and not with a view to any
distribution thereof.
(d) Compliance with Securities Act. The Subscriber
understands and agrees that the Securities have not been registered under the
1933 Act by reason of their issuance in a transaction that does not require
registration under the 1933 Act, in reliance upon Rule 903 of Regulation S under
the 1933 Act, and that such Securities must be held unless a subsequent
disposition is registered under the 1933 Act or is exempt from such
registration.
<PAGE>
(e) Company Shares Legend. The Company Shares, and
the shares of Common Stock issuable upon the exercise of the Warrants, shall
bear the following legend:
"THESE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"1933 ACT"), OR APPLICABLE STATE OR FOREIGN SECURITIES LAWS.
THESE SHARES MAY NOT BE TRANSFERRED OR RESOLD IN THE UNITED
STATES, OR TO A U.S. PERSON, OR TO OR FOR THE ACCOUNT OR
BENEFIT OF A U.S. PERSON (AS SUCH TERMS ARE DEFINED IN RULE
902 OF REGULATION S UNDER THE 1933 ACT) FOR A PERIOD OF ONE
YEAR EXPIRING ON AUGUST 28, 2001, EXCEPT IN ACCORDANCE WITH
THE PROVISIONS OF REGULATION S UNDER THE 1933 ACT OR UNLESS
REGISTERED UNDER THE 1933 ACT AND APPLICABLE STATE SECURITIES
LAWS OR UNLESS THE HOLDER PROVIDES THE COMPANY WITH AN OPINION
FROM COUNSEL ACCEPTABLE TO THE COMPANY STATING THAT AN
EXEMPTION FROM REGISTRATION IS AVAILABLE AT THE TIME OF SUCH
TRANSFER. HEDGING TRANSACTIONS INVOLVING THESE SHARES MAY NOT
BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT."
(f) Warrants Legend. The Warrants shall bear the
following legend:
"THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "1933 ACT"), OR APPLICABLE STATE OR
FOREIGN SECURITIES LAWS. THIS WARRANT AND THE COMMON SHARES
ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE TRANSFERRED
OR RESOLD IN THE UNITED STATES, OR TO A U.S. PERSON, OR TO OR
FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON (AS SUCH TERMS ARE
DEFINED IN RULE 902 OF REGULATION S UNDER THE 1933 ACT) AND
THIS WARRANT MAY NOT BE EXERCISED BY OR ON BEHALF OF ANY U.S.
PERSON FOR A PERIOD OF ONE YEAR EXPIRING ON AUGUST 28, 2001,
EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER
THE 1933 ACT OR UNLESS REGISTERED UNDER THE 1933 ACT AND
APPLICABLE STATE SECURITIES LAWS OR UNLESS THE HOLDER PROVIDES
THE COMPANY WITH AN OPINION FROM COUNSEL ACCEPTABLE TO THE
COMPANY STATING THAT AN EXEMPTION FROM REGISTRATION IS
AVAILABLE AT THE TIME OF SUCH TRANSFER. HEDGING TRANSACTIONS
INVOLVING THIS WARRANT OR THE COMMON SHARES ISSUABLE UPON
EXERCISE OF THIS WARRANT MAY NOT BE CONDUCTED UNLESS IN
COMPLIANCE WITH THE 1933 ACT."
(g) Note Legend. The Note shall bear the following
legend:
2
<PAGE>
"THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF
THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT"), OR APPLICABLE STATE OR
FOREIGN SECURITIES LAWS. THIS NOTE AND THE COMMON SHARES
ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE TRANSFERRED
OR RESOLD IN THE UNITED STATES, OR TO A U.S. PERSON, OR TO OR
FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON (AS SUCH TERMS ARE
DEFINED IN RULE 902 OF REGULATION S UNDER THE 1933 ACT) FOR A
PERIOD OF ONE YEAR EXPIRING ON AUGUST 28, 2001, EXCEPT IN
ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933
ACT OR UNLESS REGISTERED UNDER THE 1933 ACT AND APPLICABLE
STATE SECURITIES LAWS OR UNLESS THE HOLDER PROVIDES THE
COMPANY WITH AN OPINION FROM COUNSEL ACCEPTABLE TO THE COMPANY
STATING THAT AN EXEMPTION FROM REGISTRATION IS AVAILABLE AT
THE TIME OF SUCH TRANSFER. HEDGING TRANSACTIONS INVOLVING THIS
NOTE OR THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS
NOTE MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933
ACT."
(h) Communication of Offer. The offer to sell the
Securities was directly communicated to the Subscriber. At no time was the
Subscriber presented with or solicited by any leaflet, newspaper or magazine
article, radio or television advertisement, or any other form of general
advertising or solicited or invited to attend a promotional meeting otherwise
than in connection and concurrently with such communicated offer. To the
knowledge of the Subscriber, the offer to sell the Securities was not the result
of "directed selling efforts" (as that term is defined in Regulation S) by any
Distributor (as that term is defined in Regulation S) or any affiliate thereof.
(i) Offshore Transaction. Subscriber further
represents and warrants to Company as follows:
(i) Subscriber is not, and at the time the
offer to purchase the Securities was made to Subscriber was not, a "U.S.
Person", as that term is defined under Regulation S of the 1933 Act ("Regulation
S").
(ii) Subscriber is outside of the United
States, as of the date of the execution of this Subscription Agreement.
(iii) No resale of any of the Securities
subscribed for under this Agreement has been pre-arranged with a purchaser in
the United States.
(iv) Subscriber is not a Distributor (as that
term is defined under Regulation S) and is not purchasing Securities with the
intent of distributing the Securities on behalf of the Company or a Distributor
or any of their affiliates, and to the knowledge of the Subscriber there is no
Distributor of the Securities.
3
<PAGE>
(v) Subscriber is purchasing the Securities for
its own account (and/or for the account of other non-U.S. Persons who are
outside of the United States) and not for the account or benefit of any U.S.
Person.
(vi) Subscriber hereby covenants and agrees to
transfer or resell any of the Securities only in accordance with the provisions
of Regulation S including, without limitation, Rules 902(c), 902(d), 902(g),
902(h), 902(k), 903(a), 903(b)(3) and 903(b)(5) thereof, pursuant to
registration of the Securities under the 1933 Act or pursuant to an available
exemption from registration under the 1933 Act.
(vii) Subscriber hereby covenants and agrees
not to engage in hedging transactions with regard to the Securities unless in
compliance with the 1933 Act.
(viii) The certificates representing the
Securities will bear the legends in Sections 1(e), 1(f) and 1(g) above.
(j) Correctness of Representations. The Subscriber
represents that the foregoing representations and warranties are true and
correct as of the date hereof and, unless the Subscriber otherwise notifies the
Company prior to the Closing Date (as hereinafter defined), shall be true and
correct as of the Closing Date. The foregoing representations and warranties
shall survive the Closing Date.
2. Company Representations and Warranties. The Company
represents and warrants to and agrees with the Subscriber that:
(a) Due Incorporation. The Company and each of its
subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the respective jurisdictions of their incorporation
and have the requisite corporate power to own their properties and to carry on
their business as now being conducted. The Company and each of its subsidiaries
is duly qualified as a foreign corporation to do business and is in good
standing in each jurisdiction where the nature of the business conducted or
property owned by it makes such qualification necessary, other than those
jurisdictions in which the failure to so qualify would not have a material
adverse effect on the business, operations or prospects or condition (financial
or otherwise) of the Company.
(b) Outstanding Stock. All issued and outstanding
shares of capital stock of the Company and each of its subsidiaries has been
duly authorized and validly issued and are fully paid and non-assessable.
Schedule 2(b) annexed hereto is a description of the authorized capitalization
of the Company and the equity and rights to acquire equity outstanding as of
July 31, 2000.
(c) Authority; Enforceability. This Agreement has
been duly authorized, executed and delivered by the Company and is a valid and
binding agreement enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
generally and to general principles of equity; and the Company has full
corporate power and authority necessary to enter into this Agreement and to
perform its obligations hereunder and all other agreements entered into by the
Company relating hereto.
(d) Additional Issuances. There are no outstanding
agreements or preemptive or similar rights affecting the Company's common stock
or equity and no outstanding rights, warrants or options to acquire, or
instruments convertible into or exchangeable for, or agreements or
understandings with respect to the sale or issuance of any shares of common
stock or equity of the Company or other equity interest in any of the
subsidiaries of the Company, except as described in the Reports or Other Written
Information.
4
<PAGE>
(e) Consents. No consent, approval, authorization or
order of any court, governmental agency or body or arbitrator having
jurisdiction over the Company, or any of its affiliates, the NASD, NASDAQ or the
Company's Shareholders is required for execution of this Agreement, and all
other agreements entered into by the Company relating thereto, including,
without limitation issuance and sale of the Securities, and the performance of
the Company's obligations hereunder.
(f) No Violation or Conflict. Assuming the
representations and warranties of the Subscriber in Paragraph 1 are true and
correct and the Subscriber complies with its obligations under this Agreement,
neither the issuance and sale of the Securities nor the performance of its
obligations under this Agreement and all other agreements entered into by the
Company relating thereto by the Company will:
(i) violate, conflict with, result in a breach
of, or constitute a default (or an event which with the giving of notice or the
lapse of time or both would be reasonably likely to constitute a default) under
(A) the articles of incorporation, charter or bylaws of the Company or any of
its affiliates, (B) to the Company's knowledge, any decree, judgment, order,
law, treaty, rule, regulation or determination applicable to the Company or any
of its affiliates of any court, governmental agency or body, or arbitrator
having jurisdiction over the Company or any of its affiliates or over the
properties or assets of the Company or any of its affiliates except as to
foreign law applicable to the Subscriber, (C) the terms of any bond, debenture,
note or any other evidence of indebtedness, or any agreement, stock option or
other similar plan, indenture, lease, mortgage, deed of trust or other
instrument to which the Company or any of its affiliates is a party, by which
the Company or any of its affiliates is bound, or to which any of the properties
of the Company or any of its affiliates is subject, or (D) the terms of any
"lock-up" or similar provision of any underwriting or similar agreement to which
the Company, or any of its affiliates is a party; or
(ii) result in the creation or imposition of
any lien, charge or encumbrance upon the Securities or any of the assets of the
Company, or any of its affiliates.
(g) The Securities. The Securities upon issuance:
(i) are, or will be, free and clear of any
security interests, liens, claims or other encumbrances, subject to restrictions
upon transfer under the 1933 Act and State laws;
(ii) have been, or will be, duly and validly
authorized and on the date of issuance and on the Closing Date, as hereinafter
defined, and the date the Note is converted, and the Warrants are exercised, the
Securities will be duly and validly issued, fully paid and nonassessable (and if
registered pursuant to the 1933 Act, and resold pursuant to an effective
registration statement will be free trading and unrestricted, provided that the
Subscriber complies with the Prospectus delivery requirements);
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