STOCK PURCHASE AGREEMENT
by and among
ICOA, INC.,
WISE TECHNOLOGIES, INC.
and
SHAREHOLDERS OF WISE TECHNOLOGIES, INC.
Dated as of April 20, 2005
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is entered
into as of April 20, 2005 by and among (i) ICOA, Inc., a Nevada corporation
("ICOA"), (ii) Wise Technologies, Inc., a Maryland corporation ("Wise") and
(iii) the shareholders of Wise listed in Exhibit F (together, "Sellers").
RECITALS
A. Sellers collectively own an aggregate of 2,481,605 shares
of the common stock, with par value of $0.01 per share, of Wise ("Wise Common
Stock").
B. ICOA and Wise deem it advisable and in the best interests
of their respective shareholders for ICOA to acquire all of the shares of Wise
pursuant to the terms of this Agreement.
C. Under this Agreement, the shares of Wise will be converted
into the right to receive consideration in accordance with the terms hereof.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein, and other good and valuable consideration, the
receipt and sufficiency of which the parties hereby acknowledge, the parties
hereto agree as follows:
ARTICLE I.
DEFINITIONS
1.1 Defined Terms. As used herein, the terms below shall have
the following meanings:
"Accountants" means ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, certified
public accountants.
"Affiliate" of a Person means any other Person which directly
or indirectly controls, is controlled by, or is under common control with, such
Person. The term "control" (including, with correlative meaning, the terms
"controlled by" and "under common control with"), as used with respect to any
Person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise.
"Ancillary Agreements" means the Employment Agreements,
Registration Rights and Shareholder Agreement and other agreements, certificates
and documents required hereunder to consummate the Closing.
"Assets" means all of Wise's and its Subsidiaries' right,
title and interest in and to the properties, assets and rights of any kind,
whether tangible or intangible, real or personal.
"Balance Sheet" means the balance sheet of Wise as of the
Balance Sheet Date.
"Balance Sheet Date" means September 30, 2004.
"Business" means the business of Wise and its Subsidiaries as
conducted on the date hereof.
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"Closing" means the consummation of the transactions
contemplated by this Agreement on the Closing Date.
"Closing Date" means the date to be specified by ICOA and
Wise, which shall be no later than the third business day following the
satisfaction or waiver of all of the conditions set forth in Articles VI and VII
hereof. It is the intent of the parties that the Closing Date be the date which
is thirty days after the date hereof, or as promptly as practicable thereafter.
"Closing Place" means the offices of Sack, ▇▇▇▇▇▇ & ▇▇▇▇▇▇,
P.C., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ or such other place as
agreed to by the parties.
"Closing Stock Price" means the average closing asking price
of ICOA Common Stock for the ten trading days immediately prior to the Closing
Date.
"Code" means the Internal Revenue Code of 1986.
"Consents" means any and all licenses, permits, franchises,
approvals, authorizations, consents or waivers from third parties (including
governmental authorities and parties to the Contracts) that are (i) required for
the consummation of the transactions contemplated by this Agreement or (ii)
necessary or desirable in order that ICOA and Wise can conduct the Business
after the Closing Date in the same manner as before the Closing Date.
"Contracts" means all agreements, contracts, leases, purchase
orders, undertakings, covenants not to compete, employment agreements,
confidentiality agreements, licenses, instruments, obligations and commitments
to which Wise or any of its Subsidiaries is a party or by which Wise or any of
its Subsidiaries or any Assets are bound, whether written or oral, express or
implied.
"Court Order" means any judgment, decision, consent decree,
injunction, ruling or order of any federal, state or local court or governmental
agency, department or authority that is binding on any Person or its property
under applicable law.
"Default" means (a) a breach of or default under any Contract,
(b) the occurrence of an event that with the passage of time or the giving of
notice or both would constitute a breach of or default under any Contract or (c)
the occurrence of an event that with or without the passage of time or the
giving of notice or both would give rise to a right of termination,
renegotiation or acceleration under any Contract.
"Effective Time" means the time on the Closing Date when the
stock purchase shall become effective, which time shall be at 5:00 p.m., Eastern
time, on the Closing Date, or such other date and time as the parties may agree
in writing.
"Encumbrance" means any claim, lien, pledge, option, charge,
easement, security interest, deed of trust, mortgage, right-of-way,
encroachment, building or use restriction, conditional sales agreement,
encumbrance or other right of third parties, whether voluntarily incurred or
arising by operation of law, and includes any agreement to give any of the
foregoing in the future, and any contingent sale or other title retention
agreement or lease in the nature thereof; provided, however, that Encumbrance
shall not include the security interest and liens granted by Wise to ICOA
pursuant to the Loan Agreement (as defined herein) or Second Loan Agreement (as
defined herein).
"ERISA" means the Employee Retirement Income Security Act of
1974.
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"Financial Statements" means the Balance Sheet and related
unaudited statements of income for the period ended on the Balance Sheet Date,
all of which are attached as Schedule 1.1(a).
"Fixtures and Equipment" means all of the furniture, fixtures,
furnishings, office equipment, development tools and equipment, lab equipment,
database tapes, test tapes, test fixtures and equipment, computers and software
(including any source or object codes therefor or documentation relating thereto
and computer aided design equipment and software), and other tangible personal
property owned by Wise or its Subsidiaries, wherever located and including any
such Fixtures and Equipment in the possession of any of its respective suppliers
or other vendors.
"Fully Diluted Common Stock Number" means the total number of
shares of Wise Common Stock outstanding immediately prior to the Effective Time
on a fully diluted basis, including (i) the exercise of all outstanding rights
and warrants to acquire Wise Common Stock, regardless of restrictions on
exercise or conversion and (ii) the conversion of all outstanding securities and
notes convertible into Wise Common Stock.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the accounting
profession), or in such other statements by such entity as may be in general use
by significant segments of the U.S. accounting profession, which are applicable
to the facts and circumstances on the date of determination.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976.
"ICOA Material Adverse Effect" or "ICOA Material Adverse
Change" means any effect or change which has, or is reasonably likely to have, a
material adverse effect on the condition (financial or other), business, results
of operations, assets, liabilities, prospects or operations of ICOA.
"Immediate Payment" means a cash payment of $50,000
"Immediate Shares" means 40,000,000 shares of Common Stock of
ICOA, $.01 par value per share ("ICOA Common Stock").
"Indemnifiable Amount" means those amounts for which the
Shareholders, ICOA and the other indemnified Persons identified under Article X
hereof are entitled to indemnity.
"Independent Contractor Agreement" means the Independent
Contractor Agreement to be entered into between ICOA and G2 Enterprises,
Incorporated, substantially in the form of Exhibit A hereto.
"Interim Financing" means a loan from ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ to
Wise in an amount not to exceed
$50,000.
"Inventory" means all merchandise owned and intended for
resale and all raw materials, work in process, finished goods, wrapping, supply
and packaging items and similar items, whether or not located on the premises,
on consignment to a third party, or in transit or storage.
"Leases" means, with respect to any Person, all leases
(including subleases, licenses, any occupancy agreement and any other agreement)
of real or personal property, in each case to which such Person is a party,
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whether as lessor, lessee, guarantor or otherwise, or by which any of them or
their respective properties or assets are bound, or which otherwise relate to
the operation of their respective business.
"Liabilities" mean any direct or indirect liability,
indebtedness, obligation, commitment, expense, claim, deficiency, guaranty or
endorsement of or by any Person of any type, whether accrued, absolute,
contingent, matured, unmatured, liquidated, unliquidated or otherwise, known or
unknown.
"Major Shareholder" means ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇., ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇, Human Vision LLC and Human Vision Technology Ventures,
LLC.
"NDA" means that certain Non-Disclosure Agreement dated
September 27, 2004 between Wise and ICOA.
"Note" means a promissory note in the face amount of $50,000,
due sixty days after the Closing Date, bearing an interest rate of 0%,
substantially in the form of Exhibit B hereto.
"Permits" mean all licenses, permits, franchises, approvals,
authorizations, consents or orders of, or filings with, any governmental
authority, whether foreign, federal, state or local, necessary for the conduct
or operation of the Business or ownership of the Assets.
"Person" means any person or entity, whether an individual,
trustee, corporation, limited liability company, general partnership, limited
partnership, trust, unincorporated organization, business association, firm,
joint venture, governmental agency or authority.
"Proprietary Rights" means all (a) U.S. and foreign patents,
patent applications, patent disclosures and improvements thereto, including
▇▇▇▇▇ patents and utility models and applications therefor, (b) U.S. and foreign
trademarks, service marks, trade dress, logos, trade names and corporate names
and the goodwill associated therewith and registrations and applications for
registration thereof, (c) U.S. and foreign copyrights and registrations and
applications for registration thereof, (d) U.S. and foreign mask work rights and
registrations and applications for registration thereof, (e) trade secrets and
confidential business information (including ideas, formulas, compositions,
inventions (whether patentable or unpatentable and whether or not reduced to
practice), know-how, research and development information, software, drawings,
specifications, designs, plans, proposals, technical data, copyrightable works,
financial, marketing and business data, pricing and cost information, business
and marketing plans and customer and supplier lists and information), (f) copies
and tangible embodiments thereof (in whatever form or medium) and (g) licenses
granting any rights with respect to any of the foregoing.
"Registration Rights and Shareholder Agreement" means the
Registration Rights and Shareholder Agreement, substantially in the form
attached as Exhibit C hereto.
"Regulations" means any laws, statutes, ordinances,
regulations, rules, notice requirements, court decisions, binding agency
guidelines, principles of law and orders of any foreign, federal, state or local
government and any other governmental department or agency, including
Environmental Laws, energy, motor vehicle safety, airport, aviation, public
utility, zoning, building and health codes, occupational safety and health and
laws respecting employment practices, employee documentation, terms and
conditions of employment and wages and hours.
"Related Party" means any Seller, any of the officers and
directors of Wise, any Affiliate of Wise or any Affiliate or immediate family
member of a Seller or the respective officers and directors of any such
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Affiliate, or any Person in which any of Wise, any Seller or any Affiliate of
any such Person or any immediate family member of a Seller has any direct or
material indirect interest.
"Representative" means any officer, director, principal,
attorney, agent, employee or other representative of any Person.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933.
"Shareholders" means the holders of shares of capital stock of
Wise on the Closing Date.
"Subsidiary" when used with respect to any party means any
corporation or other organization, whether incorporated or unincorporated, (i)
of which such party or any other Subsidiary of such party is a general partner
(excluding partnerships, the general partnership interests of which held by such
party or any Subsidiary of such party do not have a majority of the voting and
economic interests in such partnership) or (ii) at least a majority of the
securities or other interests of which having by their terms ordinary voting
power to elect a majority of the Board of Directors or others performing similar
functions with respect to such corporation or other organization is directly or
indirectly owned or controlled by such party or by any one or more of its
Subsidiaries, or by such party and one or more of its Subsidiaries.
"Tax Return" means any report, return, document, declaration
or other information or filing required to be supplied to any taxing authority
or jurisdiction (foreign or domestic) with respect to Taxes, including
information returns, any documents with respect to or accompanying requests for
the extension of time in which to file any such report, return, document,
declaration or other information.
"Taxes" mean any and all taxes, charges, fees, levies or other
assessments, including income, gross receipts, excise, real or personal
property, sales, withholding, social security, retirement, unemployment,
occupation, use, service, license, net worth, payroll, franchise and transfer
and recording, escheat/remittance or unclaimed property, or other tax of any
kind whatsoever imposed by the Internal Revenue Service or any taxing authority
(whether domestic or foreign, including any federal, state, county, local or
foreign government or any subdivision or taxing agency thereof (including a U.S.
possession)), whether computed on a separate, consolidated, unitary, combined or
any other basis; and such term shall include any interest whether paid or
received, fines, penalties or additional amounts attributable to, or imposed
upon, or with respect to, any such taxes, charges, fees, levies or other
assessments.
"To the best knowledge" or "knowledge" of a party (or similar
phrases) means to the extent of matters (i) which are actually known by such
party or (ii) which, based on facts of which such party is aware, would be known
to a reasonable Person in similar circumstances; provided, that "to the best
knowledge of Wise" or "to the knowledge of Wise" means the extent of matters (i)
which are actually known by ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇ or ▇▇▇▇▇ ▇▇▇▇▇▇▇ (ii) which, based
on facts of which ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇ or ▇▇▇▇▇ ▇▇▇▇▇▇▇ is aware, would be known to
a reasonable Person in similar circumstances.
"Wise Material Adverse Effect" or "Wise Material Adverse
Change" means any effect or change which has, or is reasonably likely to have, a
material adverse effect on the condition (financial or other), Business, results
of operations, assets, liabilities, prospects or operations of Wise and its
Subsidiaries taken as a whole; provided, however, that Wise and its Subsidiaries
incurring losses from operating the Business in the ordinary course and
consistent with past practice at a rate per site substantially similar to the
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losses incurred for the nine-month period ended September 30, 2004 shall not
constitute a Wise Material Adverse Effect or Wise Material Adverse Change.
"Wise Options" means options to purchase Wise Common Stock
granted by Wise prior to the date hereof or other rights to or with respect to
options to acquire Wise Common Stock granted, awarded or earned pursuant to any
agreement, arrangement or commitment entered into by Wise prior to the date
hereof.
1.2 Other Defined Terms. The following terms shall have the
meanings defined for such terms in the Sections set forth below:
Term Section
---- -------
Action 3.17
Agreement Preamble
Benefit Arrangement 3.19(a)
Claim 10.2(b)
Closing Statements 7.17
Damage Threshold 10.2(f)
Damages 10.2
Diligence Date 11.1(a)(ii)
Diligence Documents 11.1(a)(ii)
Dissenting Shares 2.9
Employee Plans 3.19(a)
Environmental Condition 3.30(a)
Environmental Laws 3.30(a)
ERISA Affiliate 3.19(a)
Exchange Act 4.7
Exchange Agent 2.6(a)
Expense Threshold 11.8
Extended Diligence Date 11.1(a)(ii)
Hazardous Substance 3.30(a)
ICOA Preamble
ICOA Disclosure Schedule Article IV
ICOA's Closing Certificate 6.1
JAMS 10.3(f)
Leased Real Property 3.9(a)
Letter of Transmittal 2.4(a)
MGCL 2.1
Multiemployer Plan 3.19(a)
Offset Notice 10.3(a)
Offset Shares 10.3(a)
PBGC 3.19(a)
Pension Plan 3.19(a)
Personal Property 3.9(b)
Proposed Acquisition Transaction 5.4(a)
Purchaser Representative 5.10
Release 3.30(a)
SEC Documents 4.7
Sellers Preamble
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Shareholder Representative 7.14
Stock Spreadsheet 7.18
Welfare Plan 3.19(a)
Wise Preamble
Wise Closing Certificates 7.1
Wise Disclosure Schedule Article III
Wise Warrants 3.2(b)
1.3 Interpretation Provisions.
(a) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement refer to this Agreement as a whole
and not to any particular provision of this Agreement, and article, section,
schedule and exhibit references are to this Agreement unless otherwise
specified. The meaning of defined terms shall be equally applicable to the
singular and plural forms of the defined terms. The term "or" is disjunctive but
not necessarily exclusive. The terms "include" and "including" are not limiting
and mean "including without limitation."
(b) References to agreements and other documents shall be deemed
to include all subsequent amendments and other modifications thereto.
(c) References to statutes shall include all regulations
promulgated thereunder and references to statutes or regulations shall be
construed as including all statutory and regulatory provisions consolidating,
amending or replacing the statute or regulation.
(d) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the construction of this
Agreement.
(e) The language used in this Agreement shall be deemed to be
the language chosen by the parties to express their mutual intent, and no rule
of strict construction shall be applied against either party.
(f) The schedules and exhibits to this Agreement are a material
part hereof and shall be treated as if fully incorporated into the body of the
Agreement.
ARTICLE II.
ACQUISITION OF SHARES
2.1 Directors and Officers. At the Effective Time, the
directors and officers of Wise shall be as set forth on Schedule 2.1 hereto,
each such director and officer to hold office from the Effective Time until
their respective successors are duly elected or appointed and qualified in the
manner provided in the Articles of Incorporation and Bylaws of Wise and
applicable law.
2.2 Acquisition of Securities.
(a) Acquisition of Wise Common ▇▇▇▇▇.▇▇ of the Effective Time,
all shares of Wise Common Stock shall be exchanged for the right to receive,
upon the surrender of such certificates, (i) certificates representing Immediate
Shares of ICOA Common Stock, and cash in lieu of any fractional shares of ICOA
Common Stock to the extent provided in Section 2.4(c) to be issued or paid in
connection therefor upon surrender of such certificates in accordance with
Section 2.4, without interest.
2.3 Immediate Consideration
(a) At the Effective Time, ICOA will deliver to each holder of a
certificate or certificates which immediately prior to the Effective Time
represented outstanding shares of Wise Common Stock, their pro rata portion of
the Fully Diluted Common Stock Number (as provided in Schedule 2.3(a)) of the
Immediate Shares.
(b) At the Effective Time, ICOA will waive the repayment of that
certain Note, dated January 10, 2005 for $75,000 made by Wise in favor of ICOA.
2.4 Exchange of Certificates.
(a) Exchange Agent and Procedures. Signature Stock Transfer,
Inc., as exchange agent (the "Exchange Agent"), shall mail as promptly as
practicable after the Effective Time to each holder of a certificate or
certificates which immediately prior to the Effective Time represented
outstanding shares of Wise Common Stock (i) a letter of transmittal (the "Letter
of Transmittal") and (ii) instructions for effecting the surrender of the
certificates in exchange for certificates representing ICOA Common Stock. Upon
surrender of a certificate for cancellation to the Exchange Agent or to such
other agent or agents as may be appointed by ICOA, together with such Letter of
Transmittal, duly executed, and such other documents as may reasonably be
required by the Exchange Agent or ICOA, the holder of such certificate shall be
entitled to receive in exchange therefor, no later than five business days
following the surrender of such certificate, a certificate representing that
number of whole shares of ICOA Common Stock which such holder has the right to
receive pursuant to the provisions of Section 2.3, and the certificate so
surrendered shall forthwith be cancelled. In the event that any certificates
representing shares of Wise Common Stock shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the shareholder
claiming such certificate to be lost, stolen or destroyed, ICOA shall issue in
exchange for such lost, stolen or destroyed certificate the shares of ICOA
Common Stock that such shareholder is entitled to receive pursuant to Section
2.3 hereof; provided, however, that ICOA may in its discretion and as a
condition precedent to the issuance thereof, require such shareholder to provide
ICOA with an indemnity agreement against any claim that may be made against ICOA
with respect to the certificate alleged to have been lost, stolen or destroyed.
The shares of ICOA Common Stock that each shareholder of Wise shall be entitled
to receive pursuant to this Agreement shall be deemed to have been issued at the
Effective Time. If the shares of ICOA Common Stock or cash in lieu of fractional
shares, if any, (or any portion thereof) is to be delivered to any person other
than the person in whose name the certificate or certificates representing
shares of Wise Common Stock surrendered in exchange therefor is registered, it
shall be a condition to such exchange that the person requesting such exchange
shall pay to ICOA any transfer or other taxes required by reason of the payment
of the shares of ICOA Common Stock or cash in lieu of fractional shares, if any,
to a person other than the registered holder of the certificate or certificates
so surrendered, or shall establish to the satisfaction of ICOA that such tax has
been paid or is not applicable. Notwithstanding the foregoing, neither ICOA nor
any other party hereto shall be liable to a holder of shares of Wise Common
Stock for any shares of ICOA Common Stock or cash in lieu of fractional shares,
if any, delivered to a public official pursuant to applicable abandoned
property, escheat and similar laws.
(b) Withholding. ICOA or the Exchange Agent will be entitled to
deduct and withhold from cash paid in lieu of fractional shares, if any, to be
delivered pursuant hereto such amounts as ICOA or the Exchange Agent are
required to deduct and withhold with respect to the making of such payment under
Section 3406 of the Code, relating to backup withholding. To the extent that
amounts are so withheld, such amounts will be treated for all purposes of this
Agreement as having been paid to the former holder of the Wise Common Stock in
respect of whom such deduction and withholding were made by ICOA or the Exchange
Agent.
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(c) No Fractional Shares. No certificates or scrip representing
fractional shares of ICOA Common Stock shall be issued by virtue of this
Agreement, and no dividend, stock split or other distribution with respect to
ICOA Common Stock shall relate to any such fractional interest, and any such
fractional interests shall not entitle the owner thereof to vote or to any
rights of a security holder.
2.5 Certificate Not Surrendered by Holders of Shares of Wise
Common Stock. Each certificate which immediately prior to the Effective Time
evidenced shares of Wise Common Stock shall, from and after the Effective Time
until such certificate is surrendered to Surviving Corporation or the Exchange
Agent, be deemed, for all corporate purposes, to evidence the right to receive
the consideration per share provided for by Section 2.3. No interest shall be
payable upon any consideration to be delivered pursuant to this Agreement.
2.6 No Transfers After the Effective Time. All shares of ICOA
Common Stock issued upon the surrender of certificates representing shares of
Wise Common Stock in accordance with the terms of this Article II (including any
cash paid pursuant to Section 2.4) shall be deemed to have been issued (and
paid) in full satisfaction of all rights pertaining to shares of Wise Common
Stock theretofore represented by such certificates, and after the Effective
Time, there shall be no transfers of any shares of Wise Common Stock on the
stock transfer books of Wise. If, after the Effective Time, certificates
formerly representing shares of Wise Common Stock are presented to ICOA, they
shall be canceled and exchanged for the consideration per share provided for by
Section 2.3, subject to applicable law in the case of Dissenting Shares.
2.7 Dissenting Shareholders. Notwithstanding anything in this
Agreement to the contrary, shares of Wise Common Stock issued and outstanding
immediately prior to the Effective Time and held by a shareholder who has not
voted in favor of this Agreement or consented thereto in writing and who has
properly demanded dissenter's rights in accordance with MGCL ("Dissenting
Shares"), shall not be converted into the right to receive the consideration as
provided in Section 2.3, unless and until such holder fails to perfect or
withdraws or otherwise loses his right to appraisal and payment under the MGCL,
but shall from and after the Effective Time represent only the right to receive
such consideration as may be determined to be due in accordance with MGCL. If,
after the appraisal, any such holder fails to perfect or withdraws or loses his
right to appraisal, then such Dissenting Shares shall thereupon be treated as if
they had been converted as of the Effective Time into the right to receive the
consideration, if any, to which such holder is entitled. Wise shall give ICOA
prompt notice of any demands received by Wise for appraisal of shares and, prior
to the Effective Time, ICOA shall have the right to participate in all
negotiations and proceedings with respect to such demands. Prior to the
Effective Time, Wise shall not, except with the prior written consent of ICOA,
make any payments with respect to or settle or offer to settle, any such
demands. Each holder of Dissenting Shares who becomes entitled to payment for
such Dissenting Shares in accordance with MGCL shall receive payment therefor in
accordance with MGCL.
2.8 Taking of Necessary Action; Further Action. Each of ICOA,
Wise and Sellers shall take all such reasonable lawful action as may be
necessary or appropriate in order to implement this Agreement. Wise agrees that
if, at any time after the Effective Time, ICOA shall consider or be advised that
any further deeds, assignments, or assurances are necessary or desirable to
vest, perfect, or confirm in ICOA title to any property or rights of Wise, ICOA
and its proper officers and directors may execute and deliver all such proper
deeds, assignments, and assurances and do all other things necessary or
desirable to vest, perfect or confirm title to such property or rights in ICOA
and otherwise to carry out the purpose of this Agreement, in the name of Wise or
otherwise.
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2.9 Wise Securities
(a) Immediately prior to the Effective Time, each holder of a
Wise Warrant shall exercise such warrant for shares of Wise Common Stock
pursuant to the terms thereof. As of the Closing, no Wise Warrants shall be
outstanding.
(b) Immediately prior to the Effective Time, each holder of a
Wise Option shall exercise such warrant for shares of Wise Common Stock pursuant
to the terms thereof. As of the Closing, no Wise Option shall be outstanding.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF AND WISE AND SELLERS
Except as otherwise set forth in a disclosure schedule (the
"Wise Disclosure Schedule") referring specifically to the representations and
warranties in this Agreement which identifies by section number the section to
which such disclosure relates and which is delivered by Wise to ICOA prior to or
simultaneous with the execution of this Agreement, Wise and each Seller
severally, and not jointly, make the following representations and warranties to
ICOA, which representations and warranties are, as of the date hereof, and will
be, as of the Closing Date, true and correct and all of which representations
and warranties have been and will be relied upon by ICOA in entering into this
Agreement and consummating the transactions contemplated hereby.
3.1 Organization of Wise. Wise is a corporation duly
organized, validly existing and duly authorized to transact business in the
corporate form under the laws of the State of Maryland. Wise has full corporate
power and authority to conduct the Business as it is presently being conducted
and to own or lease, as applicable, its properties and the Assets. Wise and each
of its Subsidiaries is duly qualified to do business as a foreign corporation
and is in good standing in each jurisdiction where the character of its
properties owned or leased or the nature of its activities make such
qualification necessary, except where the failure to be so qualified would not,
individually or in the aggregate, have an Wise Material Adverse Effect. Each
jurisdiction in which Wise and its Subsidiaries are qualified to do business as
a foreign corporation is set forth on Section 3.1 of the Wise Disclosure
Schedule.
3.2 Capitalization of Wise.
(a) As of the date of this Agreement, there are 3,000,000 shares
of Wise Common Stock authorized under its Articles of Incorporation, 2,481,605
of which are issued and outstanding. Wise has no other stock authorized, issued
or outstanding.
(b) As of the date of this Agreement, Wise has outstanding
warrants to acquire an aggregate of 102,000 shares of Wise Common Stock at an
exercise price of $0.01 per share, (collectively, the "Wise Warrants"). Wise has
provided ICOA true and complete copies of the Wise Warrants. Section 3.2(b) of
the Wise Disclosure Schedule sets forth a complete and accurate list of the Wise
Warrants, the exercise price per share and the number of shares subject to each
Wise Warrant.
(c) As of the date of this Agreement, Wise Options representing
the right to purchase an aggregate of zero (0) shares of Wise Common Stock are
outstanding.
(d) Except for the Wise securities listed above and for this
Agreement, there are no outstanding options, warrants, convertible securities or
rights of any kind to purchase or otherwise acquire any shares of capital stock
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or other securities of Wise nor are there any other obligations on the part of
Wise to issue any shares of capital stock or other securities.
(e) All outstanding shares of Wise Common Stock are, and any
shares of Wise Common Stock issued upon exercise or conversion, as the case may
be, of any Wise Warrants or Wise Options will be, validly issued, fully paid and
non-assessable and not subject to any preemptive rights created by statute,
Wise's Articles of Incorporation or Bylaws or any Contract. The Wise securities
have been or will be issued in compliance with all federal and state corporate
and securities laws.
(f) There is outstanding no vote, plan or pending proposal for
any redemption of stock of Wise or merger or consolidation of Wise with or into
any other entity.
(g) The Stock Spreadsheet will be true and correct in all
respects at and as of the Closing.
3.3 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. ▇▇▇▇ is its own ultimate parent entity
as defined under the HSR Act. Wise is not a $10 million person as defined
thereunder.
3.4 Authorization.
(a) Subject to the approval of the requisite number of shares of
Wise Common Stock entitled to vote thereon in accordance with the MGCL and
Wise's Articles of Incorporation, Wise has all necessary power and authority and
has taken all corporate action necessary to enter into this Agreement, and the
Ancillary Agreements to which it is a party and has taken all corporate action
necessary to consummate the transactions contemplated hereby and thereby and to
perform its obligations hereunder and thereunder. The execution and delivery of
this Agreement and the Ancillary Agreements by Wise and the performance by Wise
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 Wise. Upon such approval of the requisite number of shares
of Wise Common Stock entitled to vote thereon in accordance with the MGCL and
Wise's Articles of Incorporation, this Agreement will have been duly executed
and delivered by Wise and will be a legal, valid and binding obligation of Wise,
enforceable against Wise 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.
(b) Each Seller has all necessary power and authority to enter
into this Agreement and any Ancillary Agreements to which he is a party and has
taken all action necessary to consummate the transactions contemplated hereby
and thereby and to perform his obligations hereunder and thereunder. This
Agreement has been duly executed by each Seller and this Agreement is, and upon
execution and delivery, the Ancillary Agreements to which any Seller is a party,
will be, a legal, valid and binding obligation of such Person, enforceable
against such Person 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.
3.5 Officers and Directors. Section 3.5 of the Wise Disclosure
Schedule contains a list of all the officers and directors of Wise.
3.6 Bank Accounts. Section 3.6 of the Wise Disclosure Schedule
contains a list of all bank accounts, safe deposit boxes, and related powers of
attorney of Wise and its Subsidiaries, and persons authorized to draw thereon or
have access thereto. None of Wise or any of its Subsidiaries has outstanding
powers of attorney except as contemplated above.
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3.7 Subsidiaries, Etc. Wise does not own or hold any equity
interest of any kind in any Person.
3.8 Absence of Certain Changes or Events. Except as set forth
in Section 3.8 of the Wise Disclosure Schedule, since the Balance Sheet Date
there has not been any:
(a) Wise Material Adverse Change;
(b) failure to operate the Business in the ordinary course or
failure to use commercially reasonable efforts to preserve the Business intact
and to preserve for ICOA the continued services of employees and independent
contractors and the goodwill of suppliers, customers, corporate accounts,
strategic partners/sponsors, airport officials and administrators and others
having business relations with Wise and its Subsidiaries and their
Representatives;
(c) resignation or termination of any officer or employee, or
any increase in the rate of compensation payable or to become payable to any
officer, employee or Representative of Wise or any of its Subsidiaries,
including the making of any loan to, or the payment, grant or accrual of any
bonus, incentive compensation, service award or other similar benefit to, any
such Person, or the addition to, modification of, or contribution to any
Employee Plan (as defined herein) other than the extension of coverage under
such plan to others who became eligible after the Balance Sheet Date;
(d) any payment, loan or advance of any amount to or in respect
of, or the sale, transfer or lease of any properties or Assets to, or entering
into of any Contract with, any Related Party, except compensation to employees
at the rates disclosed pursuant to Section 3.18(d);
(e) sale, assignment, license, transfer of any Assets, tangible
or intangible, singly or in the aggregate, other than sales of products and
services and licenses in the ordinary course of business and consistent with
past practice;
(f) accelerations, extensions, modifications, terminations or
renewals of any Contracts, including any Contracts with airports;
(g) actual or threatened termination of any material corporate
or promotional/sponsorship account or group of accounts or actual or threatened
material reduction in purchases or royalties payable by any such corporate or
promotional/sponsorship account or, to the knowledge of Wise and Sellers, the
occurrence of any event that is likely to result in any such termination or
reduction;
(h) disposition or lapsing of any Proprietary Rights of Wise or
any of its Subsidiaries, in whole or in part or, to the knowledge of Wise and
Sellers, any disclosure of any trade secret, process or know-how to any Person
not an employee;
(i) change in accounting methods or practices by Wise or any of
its Subsidiaries;
(j) revaluation by Wise of any of the Assets, including, without
limitation, writing off notes or accounts receivable other than for which
reserves have been established;
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(k) damage, destruction or loss (whether or not covered by
insurance) that has or would be reasonably likely to have a Wise Material
Adverse Effect;
(l) declaration, setting aside or payment of dividends or
distributions in respect of any stock of Wise or any of its Subsidiaries or any
redemption, purchase or other acquisition of any equity securities of Wise or
any of its Subsidiaries;
(m) issuance of, reservation for issuance by Wise or any of its
Subsidiaries of, or commitment by Wise or any of its Subsidiaries or its
directors or officers to issue or reserve for issuance, any shares of stock or
other equity securities or obligations or securities convertible into or
exchangeable for shares of stock or other equity securities (other than shares
of Wise Common Stock issued upon exercise or conversion, as the case may be, of
the Wise Securities described in Section 3.2);
(n) increase, decrease or reclassification of the stock of Wise
or any of its Subsidiaries;
(o) amendment of the Articles of Incorporation or Bylaws of Wise
or any of its Subsidiaries;
(p) capital expenditure or execution of any lease or any
incurring of liability therefor by Wise or any of its Subsidiaries, involving
payments in excess of $25,000 in the aggregate;
(q) delay or failure to pay any material obligation of Wise or
any of its Subsidiaries;
(r) cancellation of any indebtedness or waiver, compromise or
release of any rights of Wise or any of its Subsidiaries involving more than
$5,000;
(s) indebtedness incurred by Wise or any of its Subsidiaries for
borrowed money or any commitment to borrow money entered into by Wise or any its
Subsidiaries, or any loans made or agreed to be made by Wise or any of its
Subsidiaries, except in connection with the Interim Financing;
(t) liability incurred by Wise or any of its Subsidiaries except
in the ordinary course of business and consistent with past practice, or any
increase or change in any assumptions underlying or methods of calculating any
bad debt, contingency or other reserves, except in connection with the Interim
Financing;
(u) payment, discharge or satisfaction of any Liabilities of
Wise or any of its Subsidiaries other than the payment, discharge or
satisfaction (i) in the ordinary course of business and consistent with past
practice of Liabilities reflected or reserved against in the Financial
Statements or incurred in the ordinary course of business and consistent with
past practice since the Balance Sheet Date and (ii) of other Liabilities of Wise
or any of its Subsidiaries involving $10,000 or less in the aggregate;
(v) acquisition by Wise or any of its Subsidiaries of any equity
interest in any other Person;
(w) mortgage, pledge or encumbrance of any of the Assets of Wise
or any of its Subsidiaries;
(x) execution of any Contracts (or series of related Contracts)
or any incurring of any liability therefor, except in the ordinary course of
business and consistent with past practice; or
(y) agreement by Wise or any of its Subsidiaries to do any of
the foregoing.
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3.9 Title to Assets.
(a) None of Wise or its Subsidiaries owns any improved or
unimproved real property. Wise and its Subsidiaries have validly existing and
enforceable leasehold, subleasehold or occupancy interests in all improved or
unimproved real property leased by Wise and its Subsidiaries (the "Leased Real
Property"), free and clear of all Encumbrances. Section 3.9(a) of the Wise
Disclosure Schedule sets forth, as of the date hereof, a complete list of the
Leased Real Property.
(b) Wise and its Subsidiaries have good and marketable title or
a valid right to use all of the all of the personal assets and personal
properties that are necessary for the conduct of the Business (the "Personal
Property"), free and clear of all Encumbrances. Wise has delivered to ICOA true
and complete copies of all leases, subleases, rental agreements, contracts of
sale, tenancies or licenses to which the Personal Property is subject. Section
3.9(b) of the Wise Disclosure Schedule sets forth, as of the date hereof, a
complete list of all leased Personal Property.
(c) To the knowledge of Wise and Sellers, there are no pending
or threatened condemnation or similar proceedings against Wise or any of its
Subsidiaries or, otherwise relating to any of the Leased Real Property or
Personal Property and none of Wise or any of its Subsidiaries has received any
written notice of the same.
(d) Wise or its Subsidiaries, as the case may be, has in all
material respects performed all obligations on its part required to have been
performed with respect to (A) all assets (other than the Leases) leased by it or
to it (whether as lessor or lessee), and (B) all Leases and there exists no
material default or event which, with the giving of notice or lapse of time or
both, would become a material default on the part of Wise or any of its
Subsidiaries or to the knowledge of Wise, of any other party, under any Lease.
(e) Each of the Leases is valid, binding and enforceable in
accordance with its terms and is in full force and effect, and assuming all
consents required by the terms thereof or applicable law have been obtained, the
Leases will continue to be valid, binding and enforceable in accordance with
their respective terms and in full force and effect immediately following the
consummation of the transactions contemplated hereby. None of Wise or any of its
Subsidiaries has received notice that any Lease that terminates within two years
of the date hereof and which does not provide for a renewal term will not be
renewed. There are no subleases, licenses, options, rights, concessions or other
agreements or arrangements, written or oral, granting any Person the right to
occupy the Leased Real Property or any portion thereof or interest therein.
3.10 Sufficiency of Assets. The Assets constitute all of the
assets, rights and properties, tangible or intangible, real or personal, which
are required for the operation of the Business as it is presently conducted.
3.11 Fixtures and Equipment. Section 3.11 of the Wise
Disclosure Schedule contains accurate lists and summary descriptions of all
Fixtures and Equipment as of September 30, 2004 where the value of an individual
item exceeds $10,000 or where an aggregate of similar items exceeds $25,000. All
tangible assets and properties which are part of the Assets are in good
operating condition and repair, normal wear and tear excepted, and are usable in
the ordinary course of Wise's business.
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3.12 Contracts.
(a) Disclosure. Section 3.12 of the Wise Disclosure Schedule
sets forth a complete and accurate list of all Contracts of Wise and its
Subsidiaries of the following categories:
(i) Contracts not made in the ordinary course of business;
(ii) Strategic partnership/sponsor and promotional
agreements;
(iii) License agreements or royalty agreements, whether
Wise or any of its Subsidiaries is the licensor or licensee thereunder, other
than licenses in the nature of a lease of real property;
(iv) Confidentiality and non-disclosure agreements
(whether Wise or any of its Subsidiaries is the beneficiary or the obligated
party thereunder);
(v) Contracts under which a third-party is to make a
payment to Wise or any of its Subsidiaries after the date hereof of $10,000 or
more;
(vi) Contracts involving future expenditures or
Liabilities, actual or potential, in excess of $10,000 after the date hereof or
otherwise material to the Business or the Assets;
(vii) Contracts or commitments relating to commission
arrangements with others;
(viii) Employment contracts, consulting contracts and
severance agreements, including Contracts (A) to employ or terminate executive
officers or other personnel and other contracts with present or former officers
or directors of Wise or any of its Subsidiaries or (B) that will result in the
payment by, or the creation of any Liability to pay on behalf of ICOA or Wise
any severance, termination, "golden parachute," or other similar payments to any
present or former personnel following termination of employment or otherwise as
a result of the consummation of the transactions contemplated by this Agreement;
(ix) Agreements which primarily relate to the obligation
of Wise or any of its Subsidiaries to indemnify or hold harmless a third-party
for losses or damages;
(x) Promissory notes, loans, agreements, indentures,
evidences of indebtedness, letters of credit, guarantees, or other instruments
relating to an obligation for borrowed money, whether Wise or any of its
Subsidiaries shall be the borrower, lender or guarantor thereunder;
(xi) Contracts containing covenants limiting the freedom
of Wise or any officer, director, employee, Subsidiary or Affiliate of Wise, to
engage in any line of business or compete with any Person that relates directly
or indirectly to the Business;
(xii) Any Contract with the federal, state or local
government or any agency or department thereof including, but not limited to,
agencies and departments regulating airports;
(xiii) Any Contract with a Related Party;
(xiv) Leases and licenses of real or personal property,
including, but not limited to, all such agreements with airports; and
15
(xv) Any other material Contract.
True, correct and complete copies of all of the Contracts listed on Section 3.12
of the Wise Disclosure Schedule, including all amendments and supplements
thereto, have been made available to ICOA.
(b) Absence of Defaults. All of the Contracts are valid, binding
and enforceable in accordance with their terms and, except as listed on Section
3.12(b) of the Wise Disclosure Schedule, with no existing (or to the knowledge
of Wise or any Seller, threatened) Default or dispute. None of Wise or any of
its Subsidiaries is in default of any material provision of any Contract and
each of Wise and its Subsidiaries, as the case may be, has taken all action
necessary to enable it to fulfill when due, all of its material obligations
under each of such Contracts. To the knowledge of Wise and Sellers, all parties
to such Contracts have complied in all material respects with the provisions
thereof, no party is in Default thereunder and no notice of any claim of Default
has been given to Wise or any Seller. None of Wise or Sellers has any reason to
believe that the products and services called for by any unfinished Contract
cannot be supplied in accordance with the terms of such Contract, including time
specifications. Except as set forth on Section 3.13 of the Wise Disclosure
Schedule (List of Consents), no consent of any third party is required for the
assignment of any Contract to ICOA.
(c) Product Warranty. None of Wise or any of its Subsidiaries
has committed any act, and there has been no omission, which may result in, and
there has been no occurrence which may give rise to, product liability or
Liability for breach of warranty (whether covered by insurance or not) on the
part of Wise or any of its Subsidiaries, with respect to products designed,
assembled, sold, repaired, maintained, delivered or installed or services
rendered by Wise or any of its Subsidiaries prior to or on the Closing Date.
3.13 No Conflict or Violation; Consents. Except as disclosed
in Section 3.13 of the Wise Disclosure Schedule, none of the execution, delivery
or performance of this Agreement, any Ancillary Agreement, the consummation of
the transactions contemplated hereby or thereby, nor compliance by Wise or any
Seller with any of the provisions hereof or thereof, will (a) violate or
conflict with any provision of its respective governing documents, (b) violate,
conflict with, or result in a breach of or constitute a default (with or without
notice or passage of time) under, or result in the termination of, or accelerate
the performance required by, or result in a right to terminate, accelerate,
modify or cancel under, or require a notice under, or result in the creation of
any Encumbrance upon any of its respective assets under, any material contract,
lease, sublease, license, sublicense, franchise, permit, indenture, agreement or
mortgage for borrowed money, instrument of indebtedness, security interest or
other arrangement to which Wise or any of its Subsidiaries or any Seller is a
party or by which any Wise or any of its Subsidiaries or any Seller is bound or
to which any of its respective assets are subject, (c) violate any applicable
Regulation or Court Order or (d) impose any Encumbrance on any Assets or the
Business. Except for the approval of the shareholders of Wise as required by the
MGCL and Wise's Articles of Incorporation, or as set forth on Section 3.13 of
the Wise Disclosure Schedule (including consent of airport authorities), no
notices to, declaration, filing or registration with, approvals or consents of,
or assignments by, any Persons (including any federal, state or local
governmental or administrative authorities, airports and parties to any
contracts) are necessary to be made or obtained by Wise or any of its
Subsidiaries or any Seller in connection with the execution, delivery or
performance of this Agreement.
3.14 Permits. Section 3.14 of the Wise Disclosure Schedule
sets forth a complete list of all Permits held by Wise and its Subsidiaries.
Wise and its Subsidiaries have, and at all times have had, to the best knowledge
of Wise and Sellers, all Permits required under any applicable Regulation in the
operation of their respective businesses or in their ownership of the Assets,
16
and own or possess such Permits free and clear of all Encumbrances. None of Wise
or any of its Subsidiaries is in material default, nor has Wise or any of its
Subsidiaries or any Seller received any notice of any claim of default, with
respect to any such Permit. Except as otherwise governed by law, all such
Permits are renewable by their terms or in the ordinary course of business
without the need to comply with any special qualification procedures or to pay
any amounts other than routine filing fees and, except as set forth on Section
3.14 of the Wise Disclosure Schedule, will not be adversely affected by the
completion of the transactions contemplated by this Agreement or the Ancillary
Agreements.
3.15 Financial Statements; Books and Records.
(a) The Financial Statements are complete, are in accordance
with the books and records of Wise, fairly present the Assets, Liabilities and
financial condition and results of operations indicated thereby in accordance
with GAAP consistently applied throughout the periods covered thereby.
(b) Each of Wise and its Subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed with management's authorizations, (ii) transactions
are recorded as necessary to permit preparation of Wise's or its Subsidiaries,
as the case may be, financial statements in accordance with GAAP and to maintain
accountability for assets, and (iii) access to assets is permitted only in
accordance with management's authorization.
(c) The books and records of Wise and each of its Subsidiaries,
in reasonable detail, accurately and fairly reflect the activities of Wise or
its Subsidiaries, as the case may be, and the Business and have been made
available to ICOA for its inspection.
(d) None of Wise or any of its Subsidiaries has engaged in any
transaction, maintained any bank account or used any corporate funds except for
transactions, bank accounts or funds which have been and are reflected in the
normally maintained books and records of Wise and its Subsidiaries.
(e) The stock records and minute books of Wise and its
Subsidiaries heretofore made available to ICOA fully reflect all minutes of
meetings, resolutions and other actions and proceedings of the shareholders and
board of directors and all committees thereof of Wise and its Subsidiaries, all
issuances, transfers and redemptions of the capital stock of Wise and its
Subsidiaries of which Wise or Sellers are aware and contain true, correct and
complete copies of the Articles of Incorporation and Bylaws and all amendments
thereto of Wise and its Subsidiaries through the date hereof.
3.16 Liabilities. None of Wise or its Subsidiaries has any
Liabilities or obligations (absolute, accrued, contingent or otherwise) except
(i) liabilities which are reflected and properly reserved against in the
Financial Statements, (ii) liabilities incurred in the ordinary course of
business and consistent with past practice since the Balance Sheet Date and
(iii) liabilities arising under the Contracts (other than obligations which are
required to be reflected on a balance sheet prepared in accordance with GAAP)
set forth on Section 3.12 of the Wise Disclosure Schedule.
3.17 Litigation. There is no action, order, writ, injunction,
judgment or decree outstanding or claim, suit, litigation, proceeding,
investigation or dispute (collectively, "Actions") pending or, to the knowledge
of Wise or Sellers, threatened or anticipated (i) against, relating to or
affecting Wise or any of its Subsidiaries, any of the Assets or any of the
officers and directors of Wise or any of its Subsidiaries as such, (ii) which
seek to enjoin or obtain damages in respect of the transactions contemplated
hereby or by the Ancillary Agreements or (iii) with respect to which there is a
reasonable likelihood of a determination which would prevent Wise or any Seller
from consummating the transactions contemplated hereby and by the Ancillary
17
Agreements. Except as specified in the Wise Disclosure Schedule, there are
presently no outstanding judgments, decrees or orders of any court or any
governmental or administrative agency against or affecting Wise or its Business,
any of its Subsidiaries or any of the Assets. Section 3.17 of the Wise
Disclosure Schedule contains a complete and accurate description of all Actions
since September 4, 2001 to which Wise or any of its Subsidiaries has been a
party or which related to any of the Assets or the officers or directors of Wise
or any of its Subsidiaries as such, other than Actions brought by Wise or any of
its Subsidiaries for collection of monies owed in the ordinary course of
business.
3.18 Labor Matters.
(a) None of Wise or any of its Subsidiaries is a party to any
labor agreement with respect to its employees with any labor organization, group
or association and has not experienced any attempt by organized labor or its
representatives to make Wise or any of its Subsidiaries conform to demands of
organized labor relating to its employees or to enter into a binding agreement
with organized labor that would cover the employees of Wise or any of its
Subsidiaries. There is no unfair labor practice charge or complaint against Wise
or any of its Subsidiaries pending before the National Labor Relations Board or
any other governmental agency arising out of the activities of Wise or any of
its Subsidiaries; and Wise and Sellers have no knowledge of any facts or
information which would give rise thereto; there is no labor strike or labor
disturbance pending or, to the knowledge of Wise or Sellers, threatened against
Wise or any of its Subsidiaries nor is any grievance currently being asserted
against it; and none of Wise or any of its Subsidiaries has experienced a work
stoppage or other labor difficulty. There are no material controversies pending
or, to the knowledge of Wise and Sellers, threatened between Wise or any of its
Subsidiaries and any of their employees.
(b) Wise and its Subsidiaries are in material compliance with
all applicable Regulations respecting employment practices, terms and conditions
of employment, wages and hours, equal employment opportunity, and the payment of
social security and similar taxes, and is not engaged in any unfair labor
practice. None of Wise or any of its Subsidiaries is liable for any claims for
past due wages or any penalties for failure to comply with any of the foregoing.
(c) None of Wise or any of its Subsidiaries has entered into any
severance or similar arrangement in respect of any present or former employee
that will result in any obligation (absolute or contingent) of ICOA or Wise or
any of its Subsidiaries to make any payment to any present or former employee
following termination of employment. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will
result in the acceleration or vesting of any other rights of any Person to
benefits under any Employee Plans.
(d) Wise has provided ICOA with a list of the names of all
present employees of Wise and its Subsidiaries and their current salary or
hourly wages and other compensation payable by Wise or any of its Subsidiaries.
Except as set forth in Section 3.18(d) of the Wise Disclosure Schedule, and
except as provided by law, the employment of all persons presently employed or
retained by Wise and its Subsidiaries is terminable at will, at any time and
without advance notice.
3.19 Employee Benefit Plans.
(a) Definitions. The following terms, when used in this Section
3.19, shall have the following meanings. Any of these terms may, unless the
context otherwise requires, be used in the singular or the plural depending on
the reference.
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(i) "Benefit Arrangement" means any employment, consulting,
severance or other similar contract, arrangement or policy and each plan,
arrangement (written or oral), program, agreement or commitment providing for
insurance coverage (including any self-insured arrangements), workers'
compensation, disability benefits, supplemental unemployment benefits, vacation
benefits, retirement benefits, life, health, disability or accident benefits
(including any "voluntary employees' beneficiary association" as defined in
Section 501(c)(9) of the Code providing for the same or other benefits) or for
deferred compensation, profit-sharing bonuses, stock options, stock appreciation
rights, stock purchases or other forms of incentive compensation or
post-retirement insurance, compensation or benefits which (A) is not a Welfare
Plan, Pension Plan or Multiemployer Plan, (B) is entered into, maintained,
contributed to or required to be contributed to, as the case may be, by Wise or
an ERISA Affiliate or under which Wise or any ERISA Affiliate may incur any
liability, and (C) covers any employee or former employee of Wise or any ERISA
Affiliate (with respect to their relationship with such entities).
(ii) "Employee Plans" means all Benefit Arrangements,
Multiemployer Plans, Pension Plans and Welfare Plans.
(iii) "ERISA Affiliate" means any entity which is (or at any
relevant time was) a member of a "controlled group of corporations" with or
under "common control" with Wise, as defined in Section 414(b) or (c) of the .
Code.
(iv) "Multiemployer Plan" means any "multiemployer plan," as
defined in Section 4001(a)(3) of ERISA, (A) which Wise, or any ERISA Affiliate
maintains, administers, contributes to or is required to contribute to, or,
after September 25, 1980, maintained, administered, contributed to or was
required to contribute to, or under which Wise or any ERISA Affiliate may incur
any liability and (B) which covers any employee or former employee of Wise or
any ERISA Affiliate (with respect to their relationship with such entities).
(v) "PBGC" means the Pension Benefit Guaranty Corporation.
(vi) "Pension Plan" means any "employee pension benefit plan"
as defined in Section 3(2) of ERISA (other than a Multiemployer Plan) (A) which
Wise or any ERISA Affiliate maintains, administers, contributes to or is
required to contribute to, or, within the five years prior to the Closing Date,
maintained, administered, contributed to or was required to contribute to, or
under which Wise or any ERISA Affiliate may incur any liability and (B) which
covers any employee or former employee of Wise or any ERISA Affiliate (with
respect to their relationship with such entities).
(vii) "Welfare Plan" means any "employee welfare benefit plan"
as defined in Section 3(1) of ERISA, (A) which Wise or any ERISA Affiliate
maintains, administers, contributes to or is required to contribute to, or under
which Wise or any ERISA Affiliate may incur any liability and (B) which covers
any employee or former employee of Wise or any ERISA Affiliate (with respect to
their relationship with such entities).
(b) Disclosure; Delivery of Copies of Relevant Documents and
Other Information. Section 3.19 of the Wise Disclosure Schedule contains a
complete list of Employee Plans which cover or have covered employees of Wise or
a Subsidiary (with respect to their relationship with such entities). To the
extent applicable, true and complete copies of each of the following documents
have been delivered by Wise to ICOA: (i) each Welfare Plan and Pension Plan
(and, if applicable, related trust agreements) and all amendments thereto, all
written interpretations thereof by Wise and written descriptions thereof by Wise
which have been distributed by Wise or a Subsidiary to the employees of Wise or
19
its Subsidiaries and all annuity contracts or other funding instruments, (ii)
each Benefit Arrangement including written interpretations thereof by Wise and
written descriptions thereof by Wise which have been distributed by Wise or a
Subsidiary to Wise's employees (including descriptions of the number and level
of employees covered thereby) and a complete description of any such Benefit
Arrangement which is not in writing, (iii) the most recent determination letter
issued by the Internal Revenue Service with respect to each Pension Plan, (iv)
for the three most recent plan years, Annual Reports on Form 5500 Series
required to be filed with any governmental agency for each Pension Plan, (v) a
description of complete age, salary, service and related data as of the last day
of the last plan year for employees and former employees of Wise and each
Subsidiary, and (vi) a description setting forth the amount of any liability of
Wise as of the Closing Date for payments more than 30 days past due with respect
to each Welfare Plan.
(c) Representations.
(i) Pension Plans. No Pension Plan is subject to the minimum
funding requirements of ERISA or the Code. Each Pension Plan, each related trust
agreement, annuity contract or other funding instrument that is intended to be
qualified and tax-exempt under the provisions of Code Section 401(a) (or 403(a),
as appropriate) and 501(a) has received a favorable IRS determination letter to
that effect, and to Wise's and Seller's knowledge, nothing has occurred since
the date of the latest IRS determination letter that would adversely affect such
qualified and tax exempt status.
(ii) Multiemployer Plans. Neither Wise nor any ERISA Affiliate
contributes to, or within the past six years has been obligated to contribute
to, any Multiemployer Plan.
(iii) Welfare Plans. None of Wise, any ERISA Affiliate or any
Welfare Plan has any present or future obligation to make any payment to or with
respect to any present or former employee of Wise or any ERISA Affiliate
pursuant to any retiree medical benefit plan, or other retiree Welfare Plan, and
no condition exists which would prevent Wise from amending or terminating any
such benefit plan or Welfare Plan.
(iv) Compliance with Law. Each Pension Plan and each related
trust agreement, annuity contract or other funding instrument is qualified and
tax-exempt under the provisions of Code Sections 401(a) (or 403(a), as
appropriate) and 501(a) and has been so qualified during the period from its
adoption to date. Each Welfare Plan which is a "group health plan," as defined
in Section 607(1) of ERISA, has been operated in material compliance with
provisions of Part 6 of Title I of ERISA and Sections 162(k) and 4980B of the
Code at all times.
(v) Benefit Arrangements. Each Benefit Arrangement which
covers or has covered employees or former employees of Wise or a Subsidiary
(with respect to their relationship with such entities) has been maintained in
material compliance with its terms and with the requirements prescribed by any
and all Regulations which are applicable to such Benefit Arrangement, including
the Code.
(vi) Unrelated Business Taxable Income. No Employee Plan (or
trust or other funding vehicle pursuant thereto) is subject to any Tax under
Code Section 511.
(vii) Deductibility of Payments. There is no Contract covering
any employee or former employee of Wise or a Subsidiary (with respect to their
relationship with such entities) that, individually or collectively, provides
for the payment by Wise of any amount (i) that is not deductible under Section
162(a)(1) or 404 of the Code or (ii) that is an "excess parachute payment"
pursuant to Section 280G of the Code.
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(viii) Fiduciary Duties and Prohibited Transactions. To the
knowledge of Wise and Sellers, neither Wise nor any plan fiduciary of any
Welfare Plan or Pension Plan which covers or has covered employees or former
employees of Wise or any ERISA Affiliate, has engaged in any transaction in
violation of Sections 404 or 406 of ERISA or any "prohibited transaction," as
defined in Section 4975(c)(1) of the Code, for which no exemption exists under
Section 408 of ERISA or Section 4975(c)(2) or (d) of the Code.
(ix) No Amendments. Neither Wise nor any ERISA Affiliate has
any announced plan or legally binding commitment to create any additional
Employee Plans or to amend or modify any existing Employee Plan.
(x) Certain Contracts. None of the Employee Plans holds any
interest in any annuity contract, guaranteed investment contract or any other
investment contract which is issued by an insurance company which is the subject
of bankruptcy, receivership or conservatorship proceedings.
(xi) No Acceleration of Rights or Benefits. Neither the
execution and delivery of this Agreement or the Ancillary Agreements nor the
consummation of the transactions contemplated hereby or thereby will result in
the acceleration or creation of any rights of any person to benefits under any
of the Employee Plans, including but not limited to the acceleration of the
exercisability of any stock options, the acceleration of the vesting of any
restricted stock, the acceleration of the accrual or vesting of any benefits
under any Pension Plan or the creation of rights under any severance, parachute
or change of control agreement.
(xii) No Other Material Liability. No event has occurred in
connection with which Wise or any ERISA Affiliate or any Employee Plan, directly
or indirectly, could be subject to any material liability (i) under any
Regulation or governmental order relating to any Employee Plans or (ii) pursuant
to any obligation of Wise or any Subsidiary to indemnify any Person against
liability incurred under, any such Regulation or order as they relate to the
Employee Plans.
3.20 Transactions with Related Parties and Shareholders.
Except for compensation arrangements in the ordinary course of business and
consistent with past practice or as disclosed on Section 3.20 of the Wise
Disclosure Schedule, no Related Party has (a) borrowed from or loaned to Wise or
any of its Subsidiaries any money or other property which has not been repaid or
returned, (b) any contractual or other claims, express or implied, of any kind
whatsoever against Wise or any of its Subsidiaries or (c) had any interest in
any property or assets used by Wise or any of its Subsidiaries. None of Wise or
any of its Subsidiaries has any contracts or agreements with any shareholder
except as set forth on Section 3.20 of the Wise Disclosure Schedule.
3.21 Compliance with Law. Each of Wise and its Subsidiaries
has conducted its business in material compliance with all applicable
Regulations and Court Orders. Neither Wise nor any Seller has received any
notice to the effect that, or has otherwise been advised (including, with regard
to SEC Regulations, the advice of counsel) that, Wise or any of its Subsidiaries
is not in compliance with any Regulations or Court Orders, and none of Wise or
Sellers are aware of any existing circumstances that are likely to result in any
material violation of any of the foregoing.
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3.22 Intellectual Property.
(a) General. Section 3.22 of the Wise Disclosure Schedule sets
forth with respect to the Proprietary Rights of Wise and its Subsidiaries: (i)
for each patent and patent application, including ▇▇▇▇▇ patents and utility
models and applications therefor, as applicable, the number, normal expiration
date, title and priority information for each country in which such patent has
been issued, or, the application number, date of filing, title and priority
information for each country, (ii) for each trademark, tradename or service ▇▇▇▇
claimed by Wise or any of its Subsidiaries, whether or not registered, the date
first used, the application serial number or registration number, the class of
goods covered, the nature of the goods or services, the countries in which the
names or ▇▇▇▇ is used and the expiration date for each country in which a
trademark has been registered, (iii) for each copyright for which registration
has been sought, whether or not registered, the date of creation and first
publication of the work, the number and date of registration for each country in
which a copyright application has been registered, (iv) for each mask work,
whether or not registered, the date of first commercial exploitation and if
registered, the registration number and date of registration and (v) all such
Proprietary Rights in the form of licenses. True and correct copies of all
Proprietary Rights (including all pending applications and application related
documents and materials) owned, controlled or used by or on behalf of Wise or
any of its Subsidiaries or in which Wise or any of its Subsidiaries has any
interest whatsoever have been provided or made available to ICOA.
(b) Adequacy. The Proprietary Rights of Wise and its
Subsidiaries are all those necessary for the normal conduct of the Business as
presently conducted and as presently contemplated, except as set forth in
Section 3.22(b) of the Wise Disclosure Schedule.
(c) Royalties and Licenses. None of Wise or any of its
Subsidiaries has any obligation to compensate any Person for the use of any of
its Proprietary Rights nor has Wise or any of its Subsidiaries granted to any
Person any license, option or other rights to use in any manner any of its
Proprietary Rights, whether requiring the payment of royalties or not, except as
set forth in Section 3.22(c) of the Wise Disclosure Schedule.
(d) Ownership. Each of Wise and its Subsidiaries owns or has a
valid right to use its Proprietary Rights, and such Proprietary Rights will not
cease to be valid rights of Wise or any of its Subsidiaries, as the case may be,
by reason of the execution, delivery and performance of this Agreement or the
Ancillary Agreements or the consummation of the transactions contemplated hereby
or thereby. None of Wise or any of its Subsidiaries has any patents.
(e) Absence of Claims. Except as set forth in Section 3.22(e) of
the Wise Disclosure Schedule, none of Wise or any of its Subsidiaries or any
Seller has received any notice of (A) alleged invalidity with respect to any of
the Proprietary Rights of Wise or any of its Subsidiaries or (B) alleged
infringement of any rights of others due to any activity by Wise or any of its
Subsidiaries. Wise's and its Subsidiaries' use of its Proprietary Rights in its
past, current and, to the best knowledge of Wise or Sellers, planned products do
not and would not infringe upon or otherwise violate the valid rights of any
third party anywhere in the United States of America. Except as set forth in
Section 3.22(e) of the Wise Disclosure Schedule, no other Person (i) has
notified Wise or any Seller that it is claiming any ownership of or right to use
any of the Proprietary Rights of Wise or any of its Subsidiaries or (ii) to the
best knowledge of Wise and Sellers, is infringing upon any such Proprietary
Rights in any way.
(f) Protection of Proprietary Rights. Except as set forth on
Section 3.22(f) of the Wise Disclosure Schedule, each of Wise and its
Subsidiaries has taken reasonable and prudent steps to protect its Proprietary
Rights from infringement by any other Person. Except as set forth on Section
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3.22(f) of the Wise Disclosure Schedule, each of Wise and its Subsidiaries has
taken all appropriate actions and made all applications and filings pursuant to
applicable laws to perfect or protect its interest in its Proprietary Rights.
All of the pending applications for the Proprietary Rights of Wise and its
Subsidiaries have been duly filed and all other actions to protect such
Proprietary Rights have been taken. Except as set forth on Section 3.22(f) of
the Wise Disclosure Schedule, each of Wise and its Subsidiaries has taken all
reasonable steps necessary or appropriate (including, entering into appropriate
confidentiality and nondisclosure agreements with officers, directors,
subcontractors, independent contractors, full-time and part-time employees,
licensees and customers in connection with the Assets or the Business) to
safeguard and maintain the secrecy and confidentiality of, and the proprietary
rights in, the Proprietary Rights material to the Business.
3.23 Tax Matters.
(a) Filing of Tax Returns. Each of Wise and its Subsidiaries has
timely filed or filed timely extension requests with the appropriate taxing
authorities all Tax Returns in respect of Taxes required to be filed. The Tax
Returns filed are complete and accurate in all material respects. Except as
specified in Section 3.23 of the Wise Disclosure Schedule, none of Wise or any
of its Subsidiaries has requested any extension of time within which to file Tax
Returns in respect of any Taxes. Wise has delivered to ICOA complete and
accurate copies of the federal, state and local Tax Returns for Wise and its
Subsidiaries for the years ended 2001, 2002 and 2003.
(b) Payment of Taxes. All Taxes in respect of periods beginning
before the Closing Date have been timely paid or an adequate reserve has been
established therefor, as set forth in Section 3.23 of the Wise Disclosure
Schedule or the Financial Statements, and none of Wise or any of its
Subsidiaries has any material Liability for Taxes in excess of the amounts so
paid or reserves so established. All Taxes that Wise or any of its Subsidiaries
is required by law to withhold or collect have been duly withheld or collected
and have been timely paid over to the appropriate governmental authorities to
the extent due and payable.
(c) Audits, Investigations or Claims. No deficiencies for Taxes
of Wise or any of its Subsidiaries have been claimed, proposed or assessed in
writing delivered to Wise by any taxing or other governmental authority. There
are no pending or, to the knowledge of Wise and Sellers, threatened audits,
assessments or other Actions for or relating to any Liability in respect of
Taxes of Wise or any of its Subsidiaries, none of Wise or any of its
Subsidiaries has received written notice from governmental authorities with
respect to Taxes that are likely to result in additional Liability in respect of
Taxes of Wise or any of its Subsidiaries and there are no matters under
discussion with any governmental authorities with respect to Taxes that are
likely to result in an additional Liability for Taxes. Audits of federal, state
and local Tax Returns by the relevant taxing authorities have been completed for
the periods set forth on Section 3.23 of the Wise Disclosure Schedule, except as
set forth in such Schedule, neither Wise nor any Seller has been notified that
any taxing authority intends to audit a Tax Return for any other period. No
extension of a statute of limitations relating to Taxes is in effect with
respect to Wise or any of its Subsidiaries.
(d) Lien. There are no Encumbrances for Taxes (other than for
current Taxes not yet due and payable) on the Assets.
(e) Tax Elections. All material elections with respect to Taxes
affecting Wise and its Subsidiaries as of the date hereof that are required to
be set forth on the latest Tax Returns of Wise or its Subsidiaries, as the case
may be, are set forth on the latest Tax Returns of Wise and its Subsidiaries.
None of Wise or any of its Subsidiaries (i) has made nor will make a deemed
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dividend election under Reg. ss. 1.1502-32(f)(2) or a consent dividend election
under Section 565 of the Code; (ii) has consented at any time under Section
341(f)(1) of the Code to have the provisions of Section 341(f)(2) of the Code
apply to any disposition of the assets of Wise or any of its Subsidiaries; (iii)
has agreed, nor is required, to make any adjustment under Section 481(a) of the
Code by reason of a change in accounting method or otherwise; (iv) has made an
election, nor is required, to treat any asset of Wise or any of its Subsidiaries
as owned by another Person pursuant to the provisions of Section 168(f) of the
Code or as tax-exempt bond financed property or tax-exempt use property within
the meaning of Section 168 of the Code; and (v) has not made any of the
foregoing elections or is required to apply any of the foregoing rules under any
comparable state or local Tax provision.
(f) Prior Affiliated Groups. None of Wise or any of its
Subsidiaries has ever been a member of an affiliated group of corporations
within the meaning of Section 1504 of the Code and none of Wise or any of its
Subsidiaries has liability for the Taxes of any other entity under Reg. ss.
1.1502-6 of the Code or any other provision of federal, state, local or foreign
law.
(g) Tax Sharing Agreements. There are no Tax-sharing agreements
or similar arrangements (including indemnity arrangements) with respect to or
involving Wise or any of its Subsidiaries, and, after the Closing Date, none of
Wise or any of its Subsidiaries shall be bound by any such Tax-sharing
agreements or similar arrangements (entered into prior to the Closing) or have
any Liability thereunder for amounts due in respect of periods prior to or after
the Closing Date.
(h) Partnerships. None of Wise or any of its Subsidiaries is
subject to any joint venture, partnership, or other arrangement or contract
which is treated as a partnership for federal income tax purposes. None of Wise
or any of its Subsidiaries is a successor to any other Person by way of merger,
reorganization or similar transaction.
(i) Foreign Person. The Wise Common Stock is not a United States
Real Property Interest as defined in Section 897(c) of the Code.
(j) No Withholding. The transaction contemplated herein is not
subject to the tax withholding provisions of Section 3406 of the Code, or of
Subchapter A of Chapter 3 of the Code or of any other provision of law.
(k) Excess Parachute Payments; Section 162(m) of the Code. None
of Wise or any of its Subsidiaries is a party to any agreement, contract,
arrangement or plan (other than the Employment Agreements and the Non-Compete
Agreements) that has resulted or could result as a result of the transactions
contemplated hereby, separately or in the aggregate, in the payment of any
"excess parachute payments" within the meaning of Section 280G of the Code or
which, without regard to (i) payments in respect of Old Wise Options or (ii)
payments or rights which may be awarded after the Effective Date, would result
in a disallowed deduction under Section 162(m) of the Code.
(l) Other Tax Matters. None of the assets of Wise or any of its
Subsidiaries directly or indirectly secures any debt the interest on which is
Tax-exempt under Section 103(a) of the Code. None of the assets of Wise or any
of its Subsidiaries is "tax-exempt use property" within the meaning of Section
168(h) of the Code. None of Wise or any of its Subsidiaries has participated in,
nor is it participating in, an international boycott within the meaning of
Section 999 of the Code. None of Wise or any of its Subsidiaries has ever had
and does not have a permanent establishment in any foreign country, as defined
in any applicable Tax treaty or convention between the United States and such
foreign country.
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3.24 Insurance. Section 3.24 of the Wise Disclosure Schedule
contains a complete and accurate list of all policies or binders of insurance
(showing as to each policy or binder the name and address of the carrier, policy
number, coverage limits, expiration dates, annual premiums, a general
description of the type of coverage provided and any pending claims thereunder)
of which Wise or any of its Subsidiaries is the owner, insured or beneficiary.
Each of such policies and binders is in full force and effect, provides coverage
as may be required by all material Regulations to which Wise or any of its
Subsidiaries is subject and insures Wise and its Subsidiaries in such amounts as
are sufficient to provide reasonable protection for the businesses of Wise and
its Subsidiaries. None of Wise or any of its Subsidiaries is in default under
any of such policies or binders, and none of Wise or its Subsidiaries has failed
to give any notice or to present any claim under any such policy or binder in a
due and timely fashion. There are no facts known to Wise or Sellers upon which
an insurer might be justified in reducing or denying coverage or increasing
premiums on existing policies or binders. There are no outstanding unpaid claims
under any such policies or binders.
3.25 Accounts Receivable. The accounts and notes receivable
reflected in the Balance Sheet, and all accounts receivable arising since the
Balance Sheet Date, represent bona fide claims against debtors for sales,
services performed or other charges arising on or before the date of recording
thereof, and all the goods delivered and services performed which gave rise to
said accounts were delivered or performed in accordance with the applicable
orders or Contracts. To the knowledge of Wise and Sellers, all such receivables
are fully collectible in the ordinary course of business within three months
except to the extent of an amount not in excess of the reserve for doubtful
accounts reflected on the Balance Sheet and additions to such reserves as
reflected on the books and records of Wise.
3.26 Inventory. The value at which the Inventory is shown on the
Balance Sheet has been determined in accordance with the normal valuation policy
of Wise, consistently applied and in accordance with GAAP. The Inventory (and
the specific items acquired subsequent to the Balance Sheet Date) consists only
of items of quality and quantity commercially usable and salable in the ordinary
course of business, except for any items of obsolete material or material below
standard quality, all of which have been written down to realizable market
value, or for which adequate reserves have been provided, and the present
quantity of all Inventory is reasonable in the present circumstances of the
Business. Section 3.26 of the Wise Disclosure Schedule contains a complete and
accurate list of all Inventory as of the Balance Sheet Date and the addresses at
which the Inventory is located.
3.27 Purchase Commitments and Outstanding Bids. As of the date
of this Agreement, the aggregate of all accepted and unfulfilled orders for the
sale of Inventory and the performance of services entered into by Wise and its
Subsidiaries does not exceed $20,000, and the aggregate of all Contracts for the
purchase of supplies by Wise and its Subsidiaries does not exceed $20,000, all
of which orders and Contracts were made in the ordinary course of business and
consistent with past practice. There are no claims against Wise or any of its
Subsidiaries to return in excess of an aggregate of $5,000 of merchandise by
reason of alleged overshipments, defective merchandise or otherwise, or of
merchandise in the hands of customers under a written agreement that such
merchandise would be returnable. Section 3.27 of the Wise Disclosure Schedule
contains a complete and accurate list of all outstanding leases which Wise and
its Subsidiaries are currently negotiating, including the location of the
property of each such lease and the proposed rent under each such lease. To the
knowledge of Wise and Sellers, the terms of the leases listed on Section 3.27 of
the Wise Disclosure Schedule do not contain terms and conditions that are
materially more onerous than those usual and customary in Wise's business.
3.28 Payments. None of Wise or any of its Subsidiaries or any
of the Representatives of Wise or any of its Subsidiaries acting on the behalf
of Wise or any of its Subsidiaries have, directly or indirectly, paid or
delivered any fee, commission or other sum of money or property, however
25
characterized, to any finder, agent, government official or other party, in the
U.S. or any other country which either Wise or any Seller knows or has reason to
believe to have been illegal under any federal, state or local laws of the U.S.
or any other country having jurisdiction. None of Wise or any of its
Subsidiaries or any of the Representatives of Wise or any of its Subsidiaries
acting on the behalf of Wise or any of its Subsidiaries have accepted or
received any unlawful contributions, payments, gifts or expenditures. None of
Wise or any of its Subsidiaries has participated, directly or indirectly, in any
boycotts or other similar practices affecting any of its actual or potential
customers and has at all times done business in an open and ethical manner.
3.29 Customers and Suppliers.
(a) Section 3.29 of the Wise Disclosure Schedule sets forth a
complete and accurate list of the names and addresses of (i) the ten locations
which generated for Wise and its Subsidiaries the greatest revenues during
calendar year 2004, showing the approximate total revenues in dollars from each
such location during such year; (ii) the ten strategic partners/sponsors who
generated for Wise and its Subsidiaries the greatest revenues during calendar
year 2004, showing the approximate total revenues in dollars from each such
strategic partner/sponsor during such year; and (iii) suppliers with sales to
Wise and its Subsidiaries greater than $10,000 during calendar year 2004,
showing the approximate total purchases in dollars by Wise or its Subsidiaries
from each such supplier during such year. Since the Balance Sheet Date, to the
knowledge of Wise and Sellers, there has been no adverse change in any material
respect in the business relationship of Wise or any of its Subsidiaries with any
location owner, strategic partner/sponsor or supplier named on the Wise
Disclosure Schedule. None of Wise or any of its Subsidiaries has received any
written communication from any airport administration, strategic partner/sponsor
or supplier named on the Wise Disclosure Schedule of any intention to terminate
or materially reduce services from or supplies to Wise or any of its
Subsidiaries.
3.30 Environmental Matters.
(a) Definitions. The following terms, when used in this Section
3.30, shall have the following meanings:
(i) "Wise" for purposes of this Section 3.30 includes (A)
all affiliates of Wise, (B) all partnerships, joint ventures and other business
entities or organizations in which Wise was at any time or is a partner, joint
venturer, member or participant and (C) all predecessor or former corporations,
partnerships, joint ventures, organizations, businesses or other entities,
whether in existence as of the date hereof or at any time prior to the date
hereof, the obligations of which have been assumed by Wise or to which Wise has
succeeded or substantially all of the assets of which have been acquired by Wise
or to which Wise has succeeded.
(ii) "Release" means and includes any spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, dumping or disposing into the environment or the workplace of any
Hazardous Substance, and otherwise as defined in any Environmental Law.
(iii) "Hazardous Substance" means any pollutants,
contaminants, chemicals, waste and any toxic, infectious, carcinogenic,
reactive, corrosive, ignitable or flammable chemical or chemical compound or
hazardous substance, material or waste, whether solid, liquid or gas, including
any quantity of asbestos in any form, urea formaldehyde, PCB's, radon gas, crude
oil or any fraction thereof, all forms of natural gas, petroleum products or
26
by-products or derivatives, radioactive substance, waste waters, sludges and
slag, in each case, in such form or in such concentrations so as to be subject
to regulation or control or required remediation under any Environmental Law.
(iv) "Environmental Laws" mean all Regulations in effect
on the date hereof that require the protection or clean-up of the environment,
or which regulate or control the use, treatment, storage, transportation,
generation, manufacture, processing, distribution, handling or disposal of, or
emission, discharge or other Release or threatened Release of, Hazardous
Substances, the preservation or protection of waterways, groundwater, drinking
water, air, wildlife, plants or other natural resources, or the health and
safety of persons, including protection of the health and safety of employees.
Environmental Laws include the Federal Water Pollution Control Act, Resource
Conservation & Recovery Act, Clean Water Act, Safe Drinking Water Act, Atomic
Energy Act, Occupational Safety and Health Act, Toxic Substances Control Act,
Clean Air Act, Comprehensive Environmental Response, Compensation and Liability
Act, Hazardous Materials Transportation Act and all analogous federal, state or
local Regulations.
(v) "Environmental Conditions" mean the Release of any
Hazardous Substance (whether or not such Release constituted at the time thereof
a violation of any Environmental Law) as a result of which Wise has or may
reasonably be expected to become liable to any Person or by reason of which any
of the Assets may suffer or be subjected to any Encumbrance.
(b) Notice of Violation. Neither Wise nor any Seller has
received any notice of alleged, actual or potential responsibility for, or any
inquiry or investigation regarding, (i) any Release or threatened Release by
Wise of any Hazardous Substance at any location or (ii) an alleged violation of
or non-compliance by Wise with the conditions of any Permit required under any
Environmental Law or the provisions of any Environmental Law. Neither Wise nor
any Seller has received any notice of any other claim, demand or Action by any
Person alleging any actual or threatened injury or damage to any Person,
property, natural resource or the environment arising from or relating to any
Release or threatened Release by Wise of any Hazardous Substances.
(c) Environmental Conditions. To the best knowledge of Wise and
Sellers, there are no present or past Environmental Conditions caused by Wise,
or in any way relating to the Business or the Assets.
(d) Notices, Warnings and Records. Wise has given all notices
and warnings, made all reports, and has kept and maintained all records required
by and is in material compliance with all Environmental Laws.
3.31 Brokers; Transaction Costs. None of Wise or any of its
Subsidiaries or any Seller has entered into and will not enter into any
contract, agreement, arrangement or understanding with any Person which will
result in the obligation of ICOA or Wise or any of its Subsidiaries to pay any
finder's fee, legal or accounting fees, brokerage commission or similar payment
in connection with the transactions contemplated hereby. Except as set forth in
Section 11.8, neither Wise nor ICOA shall be liable for any costs or expenses
pertaining to any finder's fees, legal or accounting fees, brokerage commission
or similar payment incurred by or on behalf of Sellers as a result of the
consummation of the transactions contemplated hereby.
3.32 No Other Agreements to Sell Wise or the Assets. Neither
Wise nor any Seller has any legal obligation, absolute or contingent, to any
other Person to sell all or substantially all the Assets or to sell any capital
stock of Wise or any of its Subsidiaries or to effect any merger, share
exchange, consolidation, business combination, recapitalization, liquidation or
other reorganization of Wise or any of its Subsidiaries or to enter into any
agreement with respect thereto.
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3.33 Interim Financing. Wise has used the proceeds from the
Interim Financing for expenses in the ordinary course of Wise's business and
about which ICOA has been notified.
3.34 Material Misstatements or Omissions. No representations
or warranties by Wise or any Seller in this Agreement or any Ancillary Agreement
or any exhibit, certificate or schedule furnished or to be furnished to ICOA
pursuant hereto or thereto contains or will contain any untrue statement of a
material fact, or omits or will omit to state any material fact necessary to
make the statements or facts contained herein or therein not misleading. There
is no event, condition or fact that has had or would reasonably be expected to
have an Wise Material Adverse Effect.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF ICOA
Except as otherwise set forth in a disclosure schedule (the
"ICOA Disclosure Schedule") referring specifically to the representations and
warranties in this Agreement which identifies by section number the section to
which such disclosure relates and which is delivered by ICOA to Wise prior to or
simultaneous with the execution of this Agreement, ICOA represents and warrants
to Wise and Sellers as follows, which representations and warranties are, as of
the date hereof, and will be, as of the Closing Date, true and correct:
4.1 Organization. ICOA is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada.
ICOA has full corporate power and authority to conduct its business as presently
conducted by it and to own or lease, as applicable, its properties and assets.
ICOA is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction where the character of its properties owned or
leased or the nature of its activities make such qualification necessary, except
where the failure to be so qualified or in good standing would not have a ICOA
Material Adverse Effect.
4.2 Authorization. ICOA has all requisite corporate power and
authority, and has taken all corporate action necessary, to execute and deliver
this Agreement and the Ancillary Agreements to which it is party, to consummate
the transactions contemplated hereby and thereby and to perform its obligations
hereunder and thereunder. The execution and delivery of this Agreement and the
Ancillary Agreements by ICOA and the performance by ICOA of is 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 Agreement has been duly executed and delivered by ICOA and is, and upon
execution and delivery, the Ancillary Agreements to which it is a party each
will be, legal, valid and binding obligations of ICOA, enforceable against ICOA
in accordance with their 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.
4.3 No Conflict or Violation; Consents. None of the execution,
delivery or performance of this Agreement or any Ancillary Agreement, the
consummation of the transactions contemplated hereby or thereby, nor compliance
by ICOA with any of the provisions hereof or thereof, will (a) violate or
conflict with any provision of its governing documents, (b) violate, conflict
with, or result in a breach of or constitute a default (with or without notice
or passage of time) under, or result in the termination of, or accelerate the
28
performance required by, or result in a right to terminate, accelerate, modify
or cancel under, or require a notice under, or result in the creation of any
Encumbrance upon any of ICOA's assets under, any material contract, lease,
sublease, license, sublicense, franchise, permit, indenture, agreement or
mortgage for borrowed money, instrument of indebtedness, security interest or
other arrangement to which ICOA is a party or by which it is bound or to which
any of its assets are subject or (c) violate any Regulation or Court Order.
Except for applicable securities laws, as set forth on Section 4.3 of the ICOA
Disclosure Schedule, no notices to, declaration, filing or registration with,
approvals or consents of, or assignments by, any Persons (including any federal,
state of local governmental or administrative authorities) are necessary to be
made or obtained by ICOA in connection with the execution, delivery or
performance of this Agreement.
4.4 No Brokers. Neither ICOA nor any of its officers,
directors, employees, shareholders or Affiliates has employed or made any
agreement with any broker, finder or similar agent or any Person which will
result in the obligation of any Seller to pay any finder's fee, brokerage fees
or commission or similar payment in connection with the transactions
contemplated hereby.
4.5 Litigation. There are no Actions pending, threatened or
anticipated against, related to, or affecting ICOA seeking to delay, limit or
enjoin the transactions contemplated by this Agreement.
4.6 ICOA Common Stock. The Issue Shares to be issued pursuant
to this Agreement have been, or will be prior to the Effective Time, 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.
4.7 SEC Documents. ICOA has furnished or made available to
Wise a true and complete copy of each statement and report which it has filed
with the SEC pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 (the "Exchange Act") since January 1, 2004 (the "SEC Documents"), which are
all the documents (other than preliminary materials) that ICOA has been required
to file with the SEC since that date. As of their respective filing dates, the
SEC Documents complied in all material respects with the requirements of the
Exchange Act, and none of the SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements made therein, in light of the circumstances
in which they were made, not misleading, except to the extent corrected by a
subsequently filed SEC Document.
4.8 Compliance with Law. ICOA has conducted their respective
businesses in material compliance with all applicable Regulations and Court
Orders. ICOA has not received any notice to the effect that, or has otherwise
been advised that, ICOA is not in material compliance with any Regulations or
Court Orders, and ICOA is not aware of any existing circumstances that are
likely to result in any material violation of any of the foregoing.
4.9 Liabilities. Except as set forth in the SEC Documents,
ICOA has no Liabilities or obligations (absolute, accrued, contingent or
otherwise) that would be required to be reflected on, or reserved against in, a
consolidated balance sheet of ICOA or in the notes thereto, prepared in
accordance with GAAP consistently applied, except for (i) liabilities or
obligations that were so reserved on, or reflected in (including the notes to),
the consolidated balance sheet of ICOA as of December 31, 2004, (ii) liabilities
incurred in the ordinary course of business and consistent with past practice
since December 31, 2004 and (iii) liabilities or obligations which would not,
individually or in the aggregate, have a ICOA Material Adverse Effect.
29
4.10 Capitalization. The authorized capital stock of ICOA
consists of 750,000,000 shares of ICOA Common Stock, par value .0001 per share
and 50,000,000 shares of preferred stock. As of March 24, 2005, (i) 157,177,933
shares of ICOA Common Stock and no shares of preferred stock were issued and
outstanding, all of which are validly issued, fully paid and non-assessable,
(ii) ________________ shares of ICOA Common Stock were reserved for future
issuance pursuant to outstanding options, warrants, convertible notes or other
similar contracts (the "ICOA Options"). Except for shares of ICOA Common Stock
issuable pursuant to the ICOA Options and as otherwise set forth in Section 4.10
of the ICOA Disclosure Schedule, there are no options, warrants or other rights,
agreements, arrangements or commitments of any character to which ICOA is a
party or by which ICOA is bound relating the issued or unissued capital stock of
ICOA or obligating ICOA to issue or sell any shares of capital stock of, or
other equity interests in, ICOA. There are no outstanding contractual
obligations of ICOA to repurchase, redeem or otherwise acquire any shares of
ICOA Common Stock. There are no agreements or trusts or other agreements or
understandings to which ICOA is a party with respect to the voting or
disposition of ICOA Common Stock, and ICOA is not aware of any such agreements
among its stockholders. Except as set forth in Section 4.10 of the ICOA
Disclosure Schedule, there are no agreements, undertakings or arrangements
granting any Person the right to require ICOA to register or to allow such
person the right to require ICOA to register or to allow such person to
participate in any registration of ICOA Common Stock.
ARTICLE V.
ACTIONS PRIOR TO THE CLOSING
Wise, ICOA and Sellers covenant as follows for the period from
the date hereof through the Effective Time:
5.1 Conduct of Business. Except as contemplated by this
Agreement or as consented to by ICOA (as evidenced by the written consent of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ which shall include electronic mail), from the date hereof
through the Effective Time, Wise and each of its Subsidiaries shall, and each
Seller shall cause Wise and its Subsidiaries (i) to operate the businesses of
Wise and its Subsidiaries in the ordinary course of business and in accordance
with past practice and (ii) to not take any action inconsistent with this
Agreement or the Ancillary Agreements. Without limiting the generality of the
foregoing, from the date hereof through the Effective Time, none of Wise or any
of its Subsidiaries shall, and no Seller shall permit Wise or any of its
Subsidiaries to, except as specifically contemplated by this Agreement or as
consented to by ICOA in writing:
(a) incur any indebtedness for borrowed money, or assume,
guarantee, endorse (other than endorsements for deposit or collection in the
ordinary course of business), or otherwise become responsible for obligations of
any other Person, except for indebtedness to ICOA or as provided for on Schedule
5.1;
(b) issue or commit to issue any shares of its capital stock or
any other securities or any securities convertible into shares of its capital
stock or any other securities, including options and warrants therefor (other
than shares of Wise Common Stock issued upon the exercise or conversion, as the
case may be, of the Wise Securities described in Section 3.2) or accelerate the
vesting of any Wise Options;
(c) declare, pay or incur any obligation to pay any dividend on
its capital stock or declare, make or incur any obligation to make any
distribution or redemption with respect to capital stock;
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(d) make any change to its Articles of Incorporation or Bylaws;
(e) mortgage, pledge or otherwise encumber any Assets or sell,
transfer, license or otherwise dispose of any Assets except for sales of
products and services and standard customer non-exclusive licenses, in each case
in the ordinary course of business and consistent with past practice;
(f) cancel, release or assign any indebtedness owed to it or any
claims or rights held by it, except in the ordinary course of business and
consistent with past practice;
(g) make any investment of a capital nature either by purchase
of stock or securities, contributions to capital, property transfer or
otherwise, or by the purchase of any property or assets of any other Person,
except capital expenditures in the ordinary course of business consistent with
past practice;
(h) terminate any material Contract or make any change in any
material Contract;
(i) enter into or modify any employment Contract, (ii) pay or
agree to pay any compensation to or for any employee, officer or director of
Wise other than in the ordinary course of business and consistent with past
practice, (iii) pay or agree to pay any bonus, incentive compensation, service
award or other like benefit or (iv) enter into or modify any other Employee
Plan, except as contemplated hereby;
(j) enter into or modify any Contract with a Related Party;
(k) enter into any material Contract which, if entered into on
the date hereof would have been listed on Schedule 3.12, unless the same is
terminable by Wise or any of its Subsidiaries on no more than 30 days' written
notice without penalty or payment and is entered into in the ordinary course of
business consistent with past practice; provided, however, that Wise or any of
its Subsidiaries shall be able to enter into a material Contract under this
subsection (k) without the written consent of ICOA if ICOA shall have failed to
respond to Wise's written request to enter into such material Contract within
five (5) days after Wise provides a written request to ICOA to enter into such
material Contract, which request shall be accompanied by a summary of the terms
of the proposed material Contract;
(l) make any change in any method of accounting or accounting
practice;
(m) fail to pursue the expansion of its Business except as to
deployment schedule adjustments which have been disclosed to ICOA;
(n) fail to use its commercially reasonable efforts to
(i) retain the employees and any independent contractors providing services to
Wise or any of its Subsidiaries, (ii) maintain the Business so that such
employees and independent contractors will remain available to Wise and ICOA on
and after the Closing Date, (iii) maintain existing relationships with
suppliers, customers, corporate accounts, strategic partners/sponsors, airport
officials and others having business dealings with Wise and its Subsidiaries and
(iv) otherwise preserve the goodwill of the Business so that such relationships
and goodwill will be preserved on and after the Closing Date; or
(o) (i) effect or seek, offer or propose (whether publicly or
otherwise) to effect, or cause or participate in or in any way assist any other
person to effect to seek, offer or propose (whether publicly or otherwise) to
effect or participate in (A) any acquisition of any securities (or beneficial
ownership thereof) or assets (other than non-material assets) of the other
party; (B) any tender or exchange offer, merger or other business combination
31
involving the other party; (C) any recapitalization, restructuring, liquidation,
dissolution or other extraordinary transaction with respect to the other party
or any material portion of the other party's business; or (D) any "solicitation"
of "proxies" (as such terms are used in the proxy rules of the Securities and
Exchange Commission) or consents to vote any voting securities of the other
party; (ii) form, join or in any way participate in a "group" (as defined under
the ▇▇▇▇ ▇▇▇) with respect to the securities of ICOA; (iii) otherwise act, alone
or in concert with others, to seek to control or influence the management, Board
of Directors or policies of ICOA; (iv) take any action which might require the
other party to make a public announcement regarding any of the types of matters
set forth in (i) above; or (v) enter into any discussions or arrangements with
any third party with respect to any of the foregoing.
(p) do any other act which would cause any representation or
warranty of Wise or any Seller in this Agreement to be or become untrue in any
material respect.
5.2 Investigation by ICOA. Subject to the NDA and Section 5.7
hereof, from the date hereof through the Closing, Wise shall afford the
Representatives of ICOA and its Affiliates complete access at all reasonable
times to the Business and the Assets and Liabilities for the purpose of
inspecting the same, and to the officers, employees and Representatives,
properties, books and records and Contracts of Wise and its Subsidiaries, and
shall furnish ICOA and its Representatives all financial, operating and other
data and information (including the Proprietary Rights of Wise and its
Subsidiaries) as ICOA or its Affiliates, through their respective
Representatives, may reasonably request.
5.3 Notification of Certain Matters. Each party shall give
prompt notice to the other of (i) the occurrence, or failure to occur, of any
event which occurrence or failure would be likely to cause any representation or
warranty of such party contained in this Agreement to be untrue or inaccurate in
any material respect and (ii) any material failure of such party to comply with
or satisfy any covenant, condition or agreement to be complied with or satisfied
by it hereunder; provided, however, that such disclosure shall not be deemed to
cure any breach of a representation, warranty, covenant or agreement or to
satisfy any condition. Wise and Sellers shall promptly notify ICOA of any
Default, the threat or commencement of any Action, or any development that
occurs before the Closing of which Wise or any Seller is aware that could
reasonably be expected to limit, delay or enjoin the transactions contemplated
by this Agreement, and ICOA shall promptly notify Wise of any threat or
commencement of any Action, or any development that occurs before the Closing
that could reasonably be expected to limit, delay or enjoin the transactions
contemplated by this Agreement.
5.4 No Alternative Transactions.
(a) No Solicitation. From the date hereof through the Closing or
the earlier termination of this Agreement, neither Wise nor any Seller shall,
directly or indirectly (whether on its own or through its Representatives),
enter into, solicit, initiate or continue any discussions or negotiations with,
or encourage or respond (other than to indicate that Wise is contractually
restricted from entering into any discussions) to any inquiries or proposals by,
or participate in any negotiations with, or provide any information to, or
otherwise cooperate in any other way with any Person or group (as defined under
Section 13(d) of the Exchange Act) of Persons, other than ICOA and its
respective Representatives concerning any sale (by license or otherwise) of all
or a portion of the Assets (except in the ordinary course of business) or the
Business, or of any shares of capital stock of Wise, or any merger,
reorganization, share exchange, consolidation, business combination,
recapitalization, liquidation, or similar transaction involving Wise (each such
transaction being referred to herein as a "Proposed Acquisition Transaction").
Wise and each Seller hereby represents that it is not now engaged in discussions
or negotiations with any party other than ICOA with respect to any of the
foregoing. Wise and each Seller agree not to release any third party from, or
waive any provision of, any confidentiality or standstill agreement to which
Wise is a party.
32
(b) Notification. Wise and each Seller will immediately notify
ICOA (orally and in writing), if any discussions or negotiations are sought to
be initiated, any inquiry or proposal is made, or any information is requested
with respect to any Proposed Acquisition Transaction and notify ICOA of the
terms of any proposal which it may receive in respect of any such Proposed
Acquisition Transaction, including, without limitation, the identity of the
prospective purchaser or soliciting party. Wise shall also provide ICOA with a
copy of any written offer received in respect of any Proposed Acquisition
Transaction.
5.5 Approval of Shareholders. Wise shall use diligent good
faith efforts to obtain the approval at a special meeting of shareholders or the
written consent of the Shareholders at the earliest practicable date approving
this Agreement, the Ancillary Agreements and related matters, which approval
will be recommended by the Board of Directors of Wise. Wise shall consult with
ICOA and its counsel in the preparation of any documents and materials to be
distributed to its shareholders in connection with such special meeting or
action by written consent and shall provide ICOA and its counsel copies of any
documents and materials to be distributed to the shareholders prior to any
distribution.
5.6 Dissenting Shares. Prior to the Closing Date, Wise shall
furnish ICOA with the name and address of each Wise shareholder who, prior to
the Closing, has requested or is entitled to request appraisal rights and the
number of shares of Wise Common Stock owned by such shareholder.
5.7 Confidentiality.
(a) Preservation of Confidentiality. In connection with the
negotiation of this Agreement, the preparation for the consummation of the
transactions contemplated hereby and the performance of obligations hereunder,
each party acknowledges that it will have access to confidential information
relating to the other parties. The parties shall treat such information as
confidential, preserve the confidentiality thereof and not disclose such
information, except to their respective advisors and consultants in connection
with the transactions contemplated hereby. Each of the parties agrees to
maintain in confidence, and not to disclose to any third party, any information
which is confidential or proprietary in nature, including, without limitation,
trade secrets, patents, patent applications, copyrights, know-how, processes,
ideas, inventions (whether patentable or not), formulas, computer programs,
databases, technical drawings, designs, algorithms, technology, circuits,
layouts, designs, interfaces, materials, schematics, names and expertise of
employees and consultants, any other technical, business, financial, customer
and product development plans, supplier information, forecasts, strategies and
other confidential information.
(b) Property Right in Confidential Information. Until the
Effective Time, all confidential information shall remain the property of the
party who originally possessed such information. In the event of the termination
of this Agreement for any reason whatsoever, each party shall return to the
other parties all documents, work papers and other material (including all
copies thereof) obtained from such parties in connection with the transactions
contemplated hereby and will use commercially reasonable efforts, including,
without limitation, instructing its employees and others who have had access to
such information, to keep confidential and not to use any such information,
unless such information is now, or is hereafter disclosed, through no act or
omission of such party, in any manner making it available to the general public.
If any party is required by any law or order to disclose any confidential
information, it shall provide the other parties with prompt notice of such
33
request so that such other parties may seek an appropriate protective order or
other appropriate remedy and/or waive compliance with the provisions of this
Agreement. If, in the absence of a protective order or other remedy or the
receipt of such a waiver, a party is nonetheless compelled by law or order to
disclose confidential information, then such party may disclose that portion of
the confidential information which such law or order requires to be disclosed,
provided that such party uses its reasonable efforts to preserve the
confidentiality of the information, whereupon such disclosure shall not
constitute a breach of this Agreement.
5.8 Tax Treatment. ICOA and Wise will cooperate to obtain such
approvals of the shareholders of Wise as may be necessary to avoid
characterization of any payment made hereunder, or under any Ancillary
Agreement, as an "excess parachute payment" within the meaning of Section 280G
of the Code.
5.9 Further Assurances. Upon the terms and subject to the
conditions contained herein, the parties agree, in each case both before and
after the Effective Time, (i) to use all reasonable efforts to take, or cause to
be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable to consummate and make effective the transactions
contemplated by this Agreement and the Ancillary Agreements, (ii) to execute any
documents, instruments or conveyances of any kind which may be reasonably
necessary or advisable to carry out any of the transactions contemplated
hereunder and thereunder, and (iii) to cooperate with each other in connection
with the foregoing. Without limiting the foregoing, the parties agree to use all
reasonable efforts (A) to obtain all necessary Permits, (B) to give all notices
to, and make all registrations and filings with third parties, including
submissions of information requested by governmental authorities, and (C) to
fulfill all conditions to this Agreement. Wise and Sellers further agree to use
their respective best efforts to obtain all Consents from governmental
authorities and other parties necessary to the consummation of the transactions
contemplated hereby and by the Ancillary Agreements and for the operation of the
Business after the Closing (including all required third party consents under
the Contracts and the Leases, as listed on Schedule 3.13); provided, however,
that no amendment or modification shall be made to any Contract or Lease to
obtain such Consent without ICOA's consent.
5.10 Purchaser Representative As promptly as practicable after
the date hereof, Wise shall furnish, at its expense, an individual, who shall be
approved by ICOA, to serve as an independent purchaser representative (the
"Purchaser Representative") to assist the shareholders of Wise in connection
with evaluating the risks and merits of the transactions contemplated by this
Agreement. The Purchaser Representative shall satisfy the definition of
"Purchaser representative" as set forth in Rule 501(h) of the Securities Act.
5.11 Additional Information
As promptly as practicable after the date hereof, but in no
case later than April 30, 2005, (i) Wise shall provide to ICOA the information
required by Section 3.2 (a), (b) and (c), as well as all schedules required of
Wise under this Agreement, and (ii) ICOA shall provide to Wise the information
required by Section 4.10, as well as all schedules required of ICOA under this
Agreement.
34
ARTICLE VI.
CONDITIONS TO OBLIGATIONS OF WISE AND SELLERS
The obligations of Wise and Sellers to consummate this
Agreement and the other transactions contemplated hereby, are subject, in the
discretion of Wise and Sellers, to the satisfaction or waiver, on or prior to
the Closing Date, of each of the following conditions:
6.1 Representations, Warranties and Covenants. All
representations and warranties of ICOA contained in this Agreement shall be true
and correct in all material respects (provided, however, that where a
representation or warranty is already qualified as to materiality, such
representation or warranty shall be true in all respects) at and as of the
Closing Date as if such representations and warranties were made at and as of
the Closing Date, and ICOA shall have performed in all material respects all
agreements and covenants required hereby to be performed by it prior to or at
the Closing Date. There shall be delivered to Wise a certificate (signed by an
officer of ICOA) to the foregoing effect ("ICOA's Closing Certificate").
6.2 Consents. All consents, approvals and waivers from
governmental authorities necessary for the valid consummation of this Agreement
and the other transactions contemplated hereby shall have been obtained;
provided, however, that the foregoing shall not include third party consents
under any Contracts or Leases, as listed on Schedule 3.13.
6.3 No Actions or Court Orders. No Action by any court,
governmental authority or other Person shall have been instituted or threatened
which questions the validity or legality of the transactions contemplated hereby
and by the Ancillary Agreements and which could reasonably be expected to damage
the Shareholders materially if the transactions contemplated hereby or thereby
are consummated.
6.4 Closing Documents. Wise and Sellers shall have received
from ICOA the documents and other items to be delivered by ICOA pursuant to
Section 8.2 of this Agreement.
6.5 Opinion of Counsel. Wise shall have received an opinion of
counsel, dated as of the Closing Date, in form and substance reasonably
acceptable to Wise.
6.6 ICOA Material Adverse Change. There shall have not been
any ICOA Material Adverse Change; provided, however, that for purposes of this
Section 6.6 the term "ICOA Material Adverse Change" shall not include any
change, circumstance or effect directly relating to (i) the economy in general,
(ii) the industry in which ICOA operates or (iii) the announcement of the
transactions contemplated hereby.
6.7 Shareholder Approval. Shareholders representing not less
than 85% of the outstanding shares of Wise Common Stock shall have voted to
approve this Agreement at a duly and properly called special meeting of Wise's
shareholders.
ARTICLE VII.
CONDITIONS TO OBLIGATIONS OF ICOA
The obligations of ICOA to consummate this Agreement and the
other transactions contemplated hereby, are subject, in the discretion of ICOA,
to the satisfaction or waiver, on or prior to the Closing Date, of each of the
following conditions:
35
7.1 Representations, Warranties and Covenants. All
representations and warranties of each Seller and Wise contained in this
Agreement shall be true and correct in all material respects (provided, however,
that where a representation or warranty is already qualified as to materiality,
such representation or warranty shall be true in all respects) at and as of the
Closing Date as if such representations and warranties were made at and as of
the Closing Date, and each Seller and Wise shall have performed in all material
respects all agreements and covenants required hereby to be performed prior to
or at the Closing Date. There shall be delivered to ICOA certificates (executed
by the President of Wise and the Major Shareholders and, as to Sections 3.4.b,
3.31, 3.32 and 3.34 executed by each Seller) to the foregoing effect ("Wise
Closing Certificates").
7.2 Shareholder Approval. Shareholders representing not less
than 100% of the outstanding shares of Wise Common Stock shall have consented
to, approved and adopted this Agreement and agreed to take all other actions
necessary or required to consummate the transactions contemplated hereby or
thereby or shareholders representing not less than 85% of the outstanding shares
of Wise Common Stock shall have voted to approve this Agreement at a duly and
properly called special meeting of Wise's shareholders.
7.3 Approvals. All Consents from governmental authorities and
other parties necessary to the consummation of the transactions contemplated
hereby and by the Ancillary Agreements and for the operation of the Business
after the Closing (including all required third party consents under the
Contracts and Leases, as listed on Schedule 3.13) shall have been obtained. ICOA
shall be satisfied that all approvals required under any Regulations to carry
out the transactions contemplated by this Agreement and the Ancillary Agreements
shall have been obtained and that the parties shall have complied in all
material respects with all Regulations applicable to the transactions
contemplated hereby and thereby.
7.4 No Actions or Court Orders. No Action by any court,
governmental authority or other Person shall have been instituted or threatened
which questions the validity or legality of the transactions contemplated hereby
and by the Ancillary Agreements and which could reasonably be expected to damage
ICOA, the Assets or the Business materially if the transactions contemplated
hereby or thereby are consummated, including any material adverse effect on the
right or ability of ICOA to own or operate Wise after the Closing.
7.5 Opinion of Counsel. Sellers and Wise shall have delivered
to ICOA an opinion of Sack, ▇▇▇▇▇▇ and ▇▇▇▇▇▇, counsel to Sellers and Wise,
dated as of the Closing Date, in form and substance reasonably acceptable to
ICOA.
7.6 Employees. The employees listed on Schedule 7.6 serving
Wise as of the date hereof shall remain on the payroll of Wise as of the Closing
Date and shall not have notified ICOA, Wise or any director or officer of Wise
that they have a present intent to terminate employment within three months
after the Closing Date.
7.7 Certificates. Wise shall furnish ICOA with a certificate
from the Secretary of Wise attaching a copy of (a) Wise's board resolutions
authorizing the transactions contemplated hereby, (b) a document or documents
evidencing that the requisite shareholder approval specified in Section 7.2 has
been obtained, (c) the Articles of Incorporation of Wise, certified by the
Maryland Secretary of State and (d) the Bylaws of Wise.
36
7.8 Closing Documents. ICOA shall have received from Wise and
Sellers the documents and other items described in Section 8.1 and such other
documents and items as ICOA may reasonably require.
7.9 Wise Material Adverse Change. There shall not have been
any Wise Material Adverse Change; provided, however, for purposes of this
Section 7.9 the term "Wise Material Adverse Change" shall not include any
change, circumstance or effect directly relating to (i) the economy in general,
(ii) the industry in which Wise operates, or (iii) the announcement of the
transactions contemplated hereby .
7.10 Wise Securities. All Wise Securities shall have been
exercised or converted, as the case may be, for shares of Wise Common Stock
immediately prior to the Effective Time. ICOA shall have received from Wise
documentation evidencing the cancellation of all outstanding options, warrants,
convertible securities or rights of any kind to purchase or otherwise acquire
shares of capital stock or other securities of Wise.
7.11 Outstanding Loans. The principal and accrued interest
under all loans and agreements for borrowed money under which Wise is the
borrower which shall not convert into shares of Wise Common Stock at and as of
the Closing.
7.12 Non-Foreign Affidavit. ICOA shall have received from
Wise, pursuant to Section 1445 of the Code, a Foreign Investment in Real
Property Tax Act Affidavit substantially in the form of Exhibit E hereto.
7.13 Dissenter Rights. Holders of more than 95% of the Wise
Common Stock shall have executed this Agreement and shall not have delivered
before the Effective Time timely written notice of such holder's intent to
demand payment as a dissenting shareholder for such shares in accordance with
Maryland law.
7.14 Shareholder Representative. Each shareholder of Wise
shall have irrevocably authorized and appointed ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇ (the
"Shareholder Representative"), with full power of substitution and
resubstitution, as his, her or its representative and true and lawful
attorney-in-fact and agent to act in his, her or its name, place and stead as
contemplated by this Agreement, including, but not limited to, by the provisions
of Article X hereof.
7.15 Securities Act Exemption. ICOA (a) shall have received
from each Shareholder a Shareholder Investment Representation Letter addressed
to ICOA, in form and substance reasonably acceptable to ICOA, which sets forth,
among other things, that such Shareholder is an "accredited investor" as defined
in Rule 501 under the Securities Act or that such Shareholder shall have
appointed a purchaser representative satisfying the requirements of Section
501(h) of the Securities Act (which may include, without limitation, the
Purchaser Representative) or (b) shall be satisfied in its reasonable discretion
that the issuance of the Issue Shares is exempt from the registration
requirements of the Securities Act.
7.16 Financial Statements. ICOA shall have received from an
accountant to be engaged by ICOA, at ICOA's cost, reviewed balance sheets and
related statements of income, cash flow and shareholders' equity for Wise for
each fiscal reporting period since December 31, 2001, together, in each
instance, with any notes thereon and the opinion of the accountant with respect
thereto (collectively, the "Closing Statements").
37
7.17 Fully Diluted Common Stock Number. No less than five
business days prior to the Closing Date, Wise shall have delivered to ICOA a
spreadsheet (the "Stock Spreadsheet"), which shall be certified as being true
and correct by the President of Wise and which shall be true and correct in all
respects at and as of the Closing, which sets forth (a) the name of each Person
who owns, or will at and as of the Closing own, shares of Wise Common Stock, (b)
the number of shares of Wise Common Stock held by each such Person at and as of
the Closing and (c) the Fully Diluted Common Stock Number.
ARTICLE VIII.
CLOSING
On the Closing Date at the Closing Place:
8.1 Deliveries by Sellers and Wise to ICOA . Each Seller and
Wise, as applicable, shall deliver (or cause to be delivered) to ICOA:
(a) the Ancillary Agreements to which it is a party;
(b) a certificate of corporate existence issued by the Secretary
of State of the State of Maryland for Wise, dated not more than five days prior
to the Closing Date;
(c) Wise Closing Certificates and the Secretary's certificate
referenced in Sections 7.1 and 7.7, respectively;
(d) the opinion of counsel to Sellers and Wise described in
Section 7.5;
(e) the written resignations of all officers and directors of
Wise.
8.2 Deliveries by ICOA to Sellers and Wise. ICOA and shall
deliver to Sellers and Wise, as applicable:
(a) ICOA's Closing Certificate;
(b) the opinion described in Section 6.5; and
(c) the Ancillary Agreements to which ICOA is a party.
ARTICLE IX. ACTIONS BY WISE, SELLERS, AND ICOA AFTER CLOSING
9.1 Books and Records; Tax Matters.
(a) Wise, Sellers, and ICOA agree that so long as any books,
records and files relating to the Business, Assets or operations of Wise or any
of its Subsidiaries, to the extent that they pertain to the operations of Wise
or any of its Subsidiaries prior to the Closing Date, remain in existence and
available, each party (at its expense) shall, upon prior notice, have the right
to inspect and to make copies of the same at any time during business hours for
any proper purpose.
(b) ICOA covenants and agrees that in the event it or Wise
receives any notice or inquiry from the Internal Revenue Service with respect to
the characterization of any payments made under this Agreement or any Ancillary
Agreement, ICOA will give prompt written notice to the Shareholder
Representative concerning such notice or inquiry. ICOA agrees to report the
consideration delivered under this Agreement in a manner consistent with the
terms hereof.
38
9.2 Non-Competition. Each Major Shareholder agrees that it
will not, for a period of two years from the Closing Date, directly or
indirectly, whether as owner, partner, investor, consultant, agent, employee,
co-venturer or otherwise, compete with the ICOA or any of its Affiliates;
provided, that this provision shall not preclude the passive ownership of three
percent (3%) or less of the equity securities of any publicly traded company.
ARTICLE X.
SURVIVAL; INDEMNIFICATION
10.1 Survival of Representations. All statements contained in
this Agreement, any schedule or in any certificate or instrument of conveyance
delivered by or on behalf of the parties pursuant to this Agreement or in
connection with the transactions contemplated hereby shall be deemed to be
representations and warranties by the parties hereunder. The representations and
warranties of Sellers and Wise and ICOA contained herein shall survive the
Closing Date until (and claims based upon or arising out of such representations
and warranties may be asserted at any time before the date which shall be) the
date which is eighteen (18) months following the Closing Date; provided,
however, the representations and warranties of Sellers in Section 3.2
(Capitalization of Wise) shall survive for a period equal to three years after
the Closing Date, the representations and warranties of Sellers in 3.23 (Tax
Matters) shall survive for a period equal to the relevant statute of limitations
(including any extensions thereof) and the representations and warranties of
Sellers in Section 3.30 (Environmental Matters) shall survive for a period equal
to three years following the Closing Date. No investigation made by any of the
parties hereto shall in any way limit the representations and warranties of the
parties. On the Closing Date, all representations and warranties contained in
this Agreement and made by any Seller and Wise shall expire as to Wise and
thereafter will be deemed to have been made exclusively by the Major
Shareholders. The termination of the representations and warranties provided
herein shall not affect the rights of a party in respect of any claim made by
such party in a writing received by the other party prior to the expiration of
the applicable survival period provided herein.
10.2 Indemnification.
(a) Indemnification by the Shareholders. The Shareholders shall
severally, and not jointly, indemnify, save and hold harmless ICOA and its
affiliates and its and their respective Representatives from and against any and
all costs, losses (including diminution in value), Taxes (including, but not
limited to, any Taxes or other costs or damages arising under, caused by or
related to Section 280G of the Code), liabilities, obligations, damages,
lawsuits, deficiencies, claims, demands, and expenses (whether or not arising
out of third-party claims), including interest, penalties, costs of mitigation,
losses in connection with any Environmental Law (including any clean-up or
remedial action), damages to the environment, attorneys' fees and all amounts
paid in investigation, defense or settlement of any of the foregoing, in each
case after taking into account any insurance proceeds received by the
indemnified Person and related tax benefits (herein, "Damages"), incurred in
connection with, arising out of, resulting from or incident to: (i) any breach
of any representation or warranty or the inaccuracy of any representation or
warranty, made by Wise or any Seller in this Agreement, and (ii) any breach of
any covenant or agreement made by Wise or any Seller in this Agreement.
(b) Indemnification by ICOA. ICOA shall indemnify, save and hold
harmless the Shareholders and their affiliates and their respective
representatives from and against any and all Damages incurred in connection
with, arising out of, resulting from or incident to: (i) any breach of any
representation or warranty or the inaccuracy of any representation or warranty,
made by ICOA in this Agreement; and (ii) any breach of any covenant or agreement
made by ICOA in this Agreement.
39
The term "Damages" as used in this Article X is not limited to
matters asserted by third parties against an indemnified Person, but includes
Damages incurred or sustained by the indemnified Person in the absence of third
party claims. Payments by an indemnified Person of amounts for which it is
indemnified hereunder shall not be a condition precedent to recovery, provided
that with respect to matters asserted by third parties the payments made
pursuant to this Section 10.2 are fully applied to satisfy any such third party
claim.
(c) Procedure for Claims between Parties. If a claim for Damages
is to be made by a party entitled to indemnification hereunder (a "Claim"), the
party claiming such indemnification shall give written notice to the
indemnifying party as soon as practicable after the indemnified Person becomes
aware of any fact, condition or event which may give rise to Damages for which
indemnification may be sought under this Section 10.2. Any notice of a claim for
indemnification by ICOA under 10.2 shall be delivered to the Shareholder
Representative. Any failure to submit any such notice of claim to the
indemnifying Person(s) shall not relieve such Person(s) of any liability
hereunder, except to the extent such Person(s) is actually prejudiced by such
failure.
(d) Defense of Third Party Claims. If any lawsuit or enforcement
action is filed against any indemnified Person, written notice thereof shall be
given to the indemnifying Person(s) as promptly as practicable (and in any event
within 15 calendar days after the service of the citation or summons). The
failure of any indemnified Person to give timely notice hereunder shall not
affect rights to indemnification hereunder, except to the extent that the
indemnified Person(s) demonstrate that the indemnifying Person(s) were not
prejudiced by such failure. After such notice, if the indemnifying Person(s)
shall acknowledge in writing to the indemnified Person that the indemnifying
Person(s) shall be obligated under the terms of its indemnity hereunder in
connection with such lawsuit or action, then the indemnifying Person(s) shall be
entitled, if its so elects at its own cost, risk and expense, (i) to take
control of the defense and investigation of such lawsuit or action, (ii) to
employ and engage attorneys of their own choice to handle and defend the same
unless the named parties to such action or proceeding include both an
indemnifying Person and the indemnified Person and the indemnified Person has
been advised in writing by counsel that there may be one or more legal defenses
available to such indemnified Person that are different from or additional to
those available to the indemnifying Person(s), in which event the indemnified
Person shall be entitled, at the indemnifying Person(s)'s cost, risk and
expense, to separate counsel of its own choosing, and (iii) to compromise or
settle such claim, which compromise or settlement shall be made only with the
written consent of the indemnified Person, such consent not to be unreasonably
withheld. The indemnified Person shall cooperate in all reasonable respects with
the indemnifying Person(s) and its attorneys in the investigation, trial and
defense of such lawsuit or action and any appeal arising therefrom; provided,
however, that the indemnified Person may, at its own cost, participate in the
investigation, trial and defense of such lawsuit or action and any appeal
arising therefrom. The parties shall cooperate with each other in any
notifications to insurers. If the indemnifying Person fails to assume the
defense of such claim within 15 calendar days after receipt of the notice of
claim, the indemnified Person against which such claim has been asserted will
(upon delivering notice to such effect to the indemnifying Person) have the
right to undertake, at the indemnifying Person's cost, risk and expense, the
defense, compromise or settlement of such claim on behalf of and for the account
and risk of the indemnifying Person; provided, however, that such claim shall
not be compromised or settled without the written consent of the indemnifying
Person, which consent shall not be unreasonably withheld. If the indemnified
Person assumes the defense of the claim, the indemnified Person will keep the
indemnifying Person reasonably informed of the progress of any such defense,
compromise or settlement. The indemnifying Person shall be liable for any
settlement of any action effected pursuant to and in accordance with this
Section 10.2 and for any final judgment (subject to any right of appeal), and
the indemnifying Persons agree to indemnify and hold harmless an indemnified
Person from and against any Damages by reason of such settlement or judgment.
40
(e) Brokers and Finders. Pursuant to the provisions of this
Section 10.2, ICOA, on the one hand, and the Shareholders, on the other, shall
indemnify, hold harmless and defend the other from the payment of any and all
brokers' and finders' expenses, commissions, fees or other forms of compensation
which may be due or payable from or by the indemnifying party, or may have been
earned by any third party acting on behalf of the indemnifying party in
connection with the negotiation and execution hereof and the consummation of the
transactions contemplated hereby.
(f) Limitations.
(i) The obligation of the Shareholders to indemnify ICOA
and the other indemnified Persons under this Section 10.2 shall be ICOA's sole
remedy under this Agreement against the Shareholders in the absence of fraud or
willful misrepresentation. Notwithstanding any provision hereof to the contrary,
except for Damages relating to the breach of any representation and warranty in
Section 3.2 and Section 3.23 hereof, ICOA shall not be entitled to recover for
any Damages or deliver the first Offset Notice pursuant to Section 10.3 hereof
until such time as the Damages in the aggregate reasonably claimed by ICOA
exceed $50,000 (the "Damage Threshold"), at which time ICOA shall be entitled to
be indemnified against and compensated and reimbursed for all such Damages
including Damages included in the Damage Threshold. Notwithstanding any other
provision hereof, no Shareholder (other than a Major Shareholder) shall be
liable for more than his pro rata share, based on the number of shares of Wise
Common Stock held by the Shareholder on the Closing Date, of any Damages.
(ii) The obligation of ICOA to indemnify the Shareholders
and the other indemnified Persons under this Section 10.2 shall be the sole
remedy of the Shareholders under this Agreement against ICOA in the absence of
fraud or willful misrepresentation.
10.3 Offset.
(a) ICOA shall have the right to make one or more Claims on or
prior to the date which is twenty-four (24) months following the Closing Date by
delivering a notice of such Claim (an "Offset Notice") to the Shareholder
Representative prior to such time. Each Offset Notice shall state (i) sufficient
facts relating to the offset so that the Shareholder Representative may
reasonably evaluate such Claim, (ii) ICOA's estimate of the Indemnifiable Amount
relating to such Claim, and (iii) a calculation of the amount to be offset in
connection with such Claim (the "Offset Amount").
(b) If the Shareholder Representative disputes either the
validity, amount or calculation of the Claim and the related Indemnifiable
Amount, the Shareholder Representative shall give written notice of such dispute
to ICOA within fifteen (15) calendar days after delivery of the Offset Notice by
ICOA to the Shareholder Representative.
(c) If the Shareholder Representative fails to respond to the
Offset Notice within fifteen (15) calendar days after delivery thereof to the
Shareholder Representative, or if the Shareholder Representative notifies ICOA
that there is no dispute with respect to the Claim and the related Indemnifiable
Amount, the Indemnifiable Amount shall be charged as specified in the Offset
Notice and no offsetting payment or Shares shall thereafter be delivered to any
Shareholder and all rights and claims of any Shareholder to such payments or
shares shall terminate.
41
(d) If the Shareholder Representative and ICOA reach an
agreement with respect to the proper determination of the Claim and the related
Indemnifiable Amount, the affected payments and shares that the Shareholder
Representative and ICOA agree should be subject to the Claim and the related
Indemnifiable Amount shall not be delivered to any Shareholder and all rights
and claims of any Shareholder to such payments or shares shall terminate. Any
balance due of payments or shares shall be, within ten (10) business days
following such determination, delivered to each Shareholder. In the event that
ICOA and the Shareholder Representative agree that the then currently due
payments or shares are not sufficient to satisfy the Claim and the related
Indemnifiable Amount, ICOA shall have the right to withhold from any future
payment or delivery shares, such amount as will satisfy in full such Claim and
the related Indemnifiable Amount.
(e) In the event that the Claim involves a third party and has
not been reduced to a liquidated amount, the Shareholder Representative and
ICOA, in the absence of an agreement with respect to the proper determination of
the Claim and the related Indemnifiable Amount, may agree to defer such
determination until resolution of the Claim with the third party. In such
instance, the Offset Shares with respect to the Claim shall not be delivered to
the Shareholders, nor shall the rights and claims of any Shareholder to such
Offset Shares terminate, until resolution of the Claim with the third party, at
which time the procedures specified in this Section 10.3 shall again apply.
(f) Except with respect to a Claim the resolution of which is
deferred pursuant to Section 10.3(e), if the Shareholder Representative and ICOA
are unable to reach agreement with respect to the proper determination of the
Claim and the related Indemnifiable Amount within fifteen (15) calendar days
after delivery by the Shareholder Representative of its response to the Offset
Notice, ICOA and the Shareholder Representative agree that (i) each party shall
attempt in good faith to resolve such dispute by mediation in New York, New York
in accordance with the rules of practice of Judicial Arbitration & Mediation
Services, Inc. ("JAMS") as then in effect or such other procedures as the
parties may agree and (ii) if such dispute is not resolved within 30 days of
commencing mediation, or such other period as the parties may agree, such
dispute shall be resolved by a single arbitrator mutually satisfactory to ICOA
and the Shareholder Representative pursuant to final and binding arbitration in
New York, New York, administered by JAMS in accordance with JAMS' rules of
practice then in effect or such other procedures as the parties may agree. The
arbitrator shall set a limited time period and establish procedures designed to
reduce the cost and time for discovery while allowing the parties the
opportunity, adequate in the sole judgment of the arbitrator, to discover
relevant information from the opposing parties about the subject matter of the
dispute. The arbitrator shall rule upon motions to compel or limit discovery and
shall have the authority to impose sanctions, including attorneys fees and
costs, to the same extent as a court of competent jurisdiction, should the
arbitrator determine that discovery was sought without substantial justification
or that discovery was refused or objected to without substantial justification.
The arbitrator's decision shall be written and supported by written findings of
fact and conclusions which shall set forth the award, judgment, decree or order
awarded by the arbitrator. Any determination as to payments or shares of ICOA
Common Stock to be offset, if any, as a result of such arbitration shall be
final and binding upon the parties hereto, and judgment upon any such award may
be entered in any court of competent jurisdiction. The parties shall pay their
own costs and expenses in connection with any such arbitration and shall share
equally (as between the Shareholders and ICOA) the administrative fees and costs
of the arbitration. Following the determination by the arbitrator, ICOA shall be
entitled to act in accordance with such decision.
10.4 No Right of Contribution. After the Closing, Wise shall
have no liability to indemnify ICOA or any Shareholder on account of the breach
of any representation or warranty or the nonfulfillment of any covenant or
agreement of any Seller; and no Shareholder shall have any right of contribution
against Wise (unless such claim for contribution relates to a Liability of Wise
42
existing at or arising after the Closing Date and the existence of such
Liability does not breach any of Sellers representations and warranties
contained herein).
ARTICLE XI.
MISCELLANEOUS
11.1 Termination.
(a) This Agreement may be terminated:
(i) At any time prior to Closing by mutual written consent
of ICOA and Wise;
(ii) At any time within 30 days hereof (the "Diligence
Date") by ICOA in the event that ICOA shall not be satisfied on the basis of its
due diligence review that it should proceed with the transactions contemplated
hereby; provided, that in the event that ICOA shall not have received the
documents, agreements and other items listed on Schedule 11.1 hereto (as
specified by ICOA within one week of its receipt of the information required
under Section 5.11) (the "Diligence Documents") on or before the date which is
one week following Wise's receipt of Schedule 11.1, the Diligence Date shall be
extended until such date which is one week following receipt by ICOA of a
Diligence Document (in each case, the "Extended Diligence Date") and ICOA shall
be entitled, at any time prior to or on the Extended Diligence Date, to
terminate this Agreement if ICOA shall not be satisfied on the basis of its due
diligence review of such item that it should proceed with the transactions
contemplated hereby. In no event shall any review by ICOA hereunder have any
effect whatsoever on the liability of Wise or any Seller to ICOA under this
Agreement or otherwise for breach of any representations, warranties or
covenants of Wise and Sellers hereunder;
(iii) At any time prior to Closing by Wise if each of the
conditions set forth in Article VII shall have been satisfied and the Closing
shall not have occurred on or before the day which is thirty (30) days following
the date on which all conditions in Article VII have been satisfied;
(iv) At any time prior to Closing by ICOA if there is (a)
a material breach of any representation or warranty set forth in Article III and
such breach or failure would result in a Wise Material Adverse Change (as
defined in Section 7.9) or (b) a material breach of any covenant or agreement to
be complied with or performed by Wise or any Seller pursuant to the terms of
this Agreement and, in each case, such breach or failure, if capable of cure,
shall not have been cured within fifteen days after notice thereof is delivered
by ICOA to Wise in accordance with the provisions of Section 11.3 hereof; or
(v) At any time prior to Closing by Wise if there is (a)
a material breach of any representation or warranty set forth in Article IV
hereof and such breach or failure would result in a ICOA Material Adverse Change
(as defined in Section 6.6) or (b) a material breach of any covenant or
agreement to be complied with or performed by ICOA pursuant to the terms of this
Agreement and, in each case, such breach or failure, if capable of cure, shall
not have been cured within fifteen days after notice thereof is delivered by
Wise to ICOA in accordance with the provisions of Section 11.3 hereof.
(vi) In the event of termination of this Agreement, the
provisions of the NDA shall continue in full force and effect; and no party
hereto shall have any liability to any other party to this Agreement, except for
any willful breach of, or knowing misrepresentation made in, this Agreement
occurring prior to the proper termination of this Agreement; provided, however,
that
43
(1) if ICOA terminates this Agreement for reasons
other than as set forth above in Section 11.1(a), or if Wise terminates this
Agreement pursuant to Section 11.1(a)(v), ICOA shall pay to Wise the sum of
$100,000 as Wise's sole and exclusive remedy under this Agreement, and
(2) if Wise terminates this Agreement for reasons
other than as set forth above in Section 11.1 (a) (iii) or (v) or if ICOA
terminates this Agreement pursuant to Section 11.1 (a) (iv), Wise shall pay to
ICOA the sum of $250,000 as ICOA's sole and exclusive remedy under this
Agreement.
11.2 Assignment; No Third Party Beneficiaries. Neither
this Agreement nor any of the rights or obligations hereunder may be assigned by
Wise or any Seller without the prior written consent of ICOA, or by ICOA without
the prior written consent of Wise and Sellers. Subject to the foregoing, this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns. Nothing herein expressed
or implied shall give or be construed to give to any Person, other than the
parties hereto and such successors and assigns and the Persons indemnified
pursuant to Section 10.2 hereof, any legal or equitable rights hereunder.
11.3 Notices. All notices, requests, demands and other
communications which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given when received if
personally delivered; when transmitted if transmitted by telecopy; the day after
it is sent, if sent for next day delivery to a domestic address by recognized
overnight delivery service (e.g., Federal Express); and upon receipt, if sent by
certified or registered mail, return receipt requested, as follows:
If to Wise prior to Closing or to the Shareholder
Representative after Closing:
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
Sack, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to ICOA or, if after the Closing, to Wise:
ICOA, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
44
If to a Seller, to the address of
such Seller set forth after the signature page hereto
or to such other place and with such other copies as either party may designate
as to itself by written notice to the others.
11.4 Choice of Law. This Agreement shall be construed,
interpreted and the rights of the parties determined in accordance with the laws
of the State of Rhode Island except with respect to matters of law concerning
the internal corporate affairs of any corporate entity which is a party to or
the subject of this Agreement, and as to those matters the law of the
jurisdiction under which the respective entity derives its powers shall govern.
11.5 Entire Agreement; Amendments and Waivers. This
Agreement, together with all exhibits and schedules hereto, and the NDA (which
the parties agree shall terminate on the Closing Date), constitute the entire
agreement among the parties pertaining to the subject matter hereof and
supersede all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the parties. No supplement, modification or waiver
of this Agreement shall be binding unless executed in writing by the party to be
bound thereby. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provision hereof (whether or
not similar), nor shall such waiver constitute a continuing waiver unless
otherwise expressly provided.
11.6 Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
11.7 Invalidity. In the event that any one or more of the
provisions contained in this Agreement or in any other instrument referred to
herein, shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement or any other such instrument.
11.8 Expenses. ICOA, Wise and Sellers will each be liable
for their own expenses incurred in connection with the negotiation, preparation,
execution and performance of this Agreement and the transactions contemplated
hereby. Such obligation is independent of the indemnification obligations
contained herein. Notwithstanding the foregoing, ICOA shall reimburse Wise for
expenses incurred in connection with this transaction in the amount of One
Hundred Thousand Dollars ($100,000), $50,000 of which shall be in the form of
the Immediate Payment and $50,000 of which shall be in the form of the Note, all
of which shall be payable to the Shareholder Representative, who shall in turn
make disbursements to the appropriate parties.
11.9 Publicity. Except as required by law or on advice of
counsel, neither party shall issue any press release or make any public
statement regarding the transactions contemplated hereby without the prior
written approval of the other party, and the parties hereto shall issue a
mutually acceptable press release as soon as practicable after the date hereof.
11.10 Legends.
(a) Each certificate representing the Immediate Shares shall be
endorsed with a legend in substantially the following form: "THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT") OR QUALIFIED UNDER ANY APPLICABLE STATE
SECURITIES LAWS AND ARE "RESTRICTED SECURITIES" AS DEFINED UNDER RULE 144
PROMULGATED UNDER THE ACT. THE SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE OR
OTHERWISE DISTRIBUTED EXCEPT (i) IN CONJUNCTION WITH AN EFFECTIVE REGISTRATION
45
STATEMENT FOR THE SHARES UNDER THE ACT, (ii) IN COMPLIANCE WITH RULE 144 OR
(iii) PURSUANT TO AN OPINION OF COUNSEL, SATISFACTORY TO ICOA, INC., THAT SUCH
DISTRIBUTION OR COMPLIANCE IS NOT REQUIRED AS TO SAID SALE, OFFER OR
DISTRIBUTION."
(b) ICOA, at its discretion, may cause stop transfer
orders to be placed with its transfer agent with respect to certificates
representing the Issue Shares bearing the foregoing legend.
(c) Any legend endorsed on a certificate representing the
Immediate Shares and the stop transfer instructions with respect to such shares
shall be removed, and ICOA shall issue a certificate without such legend to the
holder of such shares if (i) such shares are sold or otherwise disposed of
pursuant to an effective registration statement under the Securities Act, (ii)
the holder of such shares has met the requirements for transfer of Rule 144(k)
of the Securities Act or (iii) the holder of such shares provides to ICOA an
opinion of counsel, which shall be satisfactory to ICOA, that such sale, offer
or distribution is otherwise exempt from registration under the Securities Act.
46
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement or caused this Agreement to be duly executed on its behalf by its
officer thereunto duly authorized, as of the day and year first above written.
ICOA, INC.,
a Nevada corporation
By:
----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
President
WISE TECHNOLOGIES, INC.,
a Maryland corporation
By:
----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
President
---------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇, an individual
---------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an individual
---------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., an
individual
---------------------------------
Human Vision Technology Ventures,
LLC
▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Manager of Managing Member
-----------------------------
Human Vision, LLC
▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Manager of Managing Member
47
EXHIBITS
48
Exhibit A- Form of Independent Contractor Agreement
INDEPENDENT CONTRACTOR AGREEMENT
This Independent Contractor Agreement ("Agreement") is between ICOA, Inc.
("Company"), with its principal place of business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇, and G2 Enterprises, Incorporated ("Contractor"), with its principal
place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
In consideration of the agreements set forth below, the parties agree as
follows:
1.0 SCOPE OF SERVICES
Contractor shall furnish services to the Company as described in Exhibit A,
attached hereto and incorporated herein by this reference (the "Services").
Contractor shall determine the method, details and means of performing the
Services; provided, however, that all Services shall be performed by ▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇.
2.0 TERM
The Effective Date of the Agreement shall be [Closing Date].
The term of this Agreement ("Term") shall commence on the Effective Date
and shall continue for a period of one year unless terminated by either party
pursuant to paragraph 7 or extended by written mutual agreement of the parties.
3.0 CONSIDERATION
Company shall pay to Contractor, as consideration for Contractor's complete
performance of the Services the amount or rate specified in Exhibit A. Company
shall reimburse Contractor for all reasonable expenses incurred in association
with the performance of the Services and which are approved in advance by
Company and consistent with Company's standard terms and procedures.
4.0 TAXES
Contractor shall have sole responsibility for payment of any and all taxes
incurred as a result of Contractor's compensation hereunder, including but not
limited to, estimated, foreign, federal, state, and local taxes or contributions
imposed or required under unemployment insurance, social security and income tax
laws and for filing all required tax forms with respect to any amounts paid by
Company to Contractor hereunder. Contractor further agrees to provide Company
with proof of such payments upon demand. Contractor shall indemnify and hold
Company harmless against any claim of liability, including penalties, damages or
injuries suffered by Company resulting from failure of Contractor to pay such
taxes or contributions, or failure of Contractor to file any such tax forms.
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5.0 INVENTIONS, CREATIONS, IMPROVEMENTS OR OTHER DEVELOPMENTS
Contractor shall disclose and does hereby assign to Company, its successors
and assigns, any and all inventions, creations, improvements, or other
developments, each whether patentable, copyrightable or not, which Contractor
may hereafter make or assist in making and which result from the Services
performed under this Agreement. Contractor hereby assigns to Company, its
successors or assigns, any and all patents, copyrights, and applications
therefore, both in the United States and in any foreign country, in connection
with any such inventions, creations, improvements, or developments, and agrees
to do, and cause its employees to do, at Company's sole cost and expense, any
and all acts, and to execute any and all instruments, which Company may
reasonably request to secure for itself, its successors or assigns, any rights
relating to such inventions, creations, improvements, developments, patents,
copyrights, or registrations.
6.0 CONFIDENTIALITY AND CONFLICTS
6.1 Except as hereinafter specifically provided, all information
disclosed by Company to Contractor pursuant to this Agreement shall be
in confidence. Contractor shall not use such information, except as
needed to perform his/her obligations under this Agreement, and shall
take all reasonable precautions to prevent such information from being
disclosed to third parties. All materials containing such information
shall be returned to Company upon termination of this Agreement.
6.2 The following information shall not be considered confidential:
(a) Information which was known by Contractor as of the date of
this Agreement;
(b) Information which is publicly known as of the date of this
Agreement;
(c) Information which hereafter becomes publicly known, unless
as a result of the fault of Contractor; and
(d) Information which Company agrees in writing is not
confidential.
6.3 In addition, all information and data developed by Contractor as
a result of performing Services under this Agreement shall be
transmitted by Contractor to Company, shall become the property of
Company and shall likewise be regarded by Contractor as confidential,
subject to the same exceptions as set forth above with respect to
information disclosed to Contractor by Company, provided however, that
Contractor shall only be required to treat such information and such
data as confidential for a period of one year after the termination of
this Agreement.
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6.5 During the term of this Agreement and for one year thereafter,
Contractor will not engage in employment, consulting or otherwise
provide services to a competing provider of internet access services.
7.0 TERMINATION
This Agreement will terminate on the date in Section 2.0 (Term) or as set
forth below. In such case, Company's obligation to Contractor for performance of
the Services shall be limited to payment to Contractor of amounts due through
the date of termination. The obligations of Contractor under Paragraphs 4.0,
5.0, 6.0, 8.0, 11.0, and 12.0 shall survive any termination of this Agreement.
7.1 Automatic termination upon the occurrence of any of the
following:
(a) Bankruptcy or insolvency of either party;
(b) Sale of the Company;
(c) Death of ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
7.2 Termination for Default: If either party defaults in the
performance of this Agreement or materially breach any of the
provisions, the non-breaching party may terminate this Agreement by
giving written notice of such breach. Termination shall be effective
five days from mailing such notice.
7.3 Termination for Cause: The Company may terminate the Agreement for
"Cause". For purposes of this Section 7.3, "Cause" means (i) fraud,
embezzlement or acts of gross negligence or gross misconduct on the
part of Contractor in the course of his or her employment or services,
(ii) a Contractor's engagement in conduct that is materially injurious
to the Company, (iii) a Contractor's conviction by a court of
competent jurisdiction of, or pleading "guilty" or "no contest" to,
(x) a felony, or (y) any other criminal charge (other than minor
traffic violations) which could reasonably be expected to have a
material adverse impact on the Company's or an Affiliate's reputation
or business; (iv) public or consistent drunkenness by a Contractor or
his illegal use of narcotics which is, or could reasonably be expected
to become, materially injurious to the reputation or business of the
Company or an Affiliate or which impairs, or could reasonably be
expected to impair, the performance of Contractor's duties to the
Company; or (v) willful failure by Contractor to follow the lawful
directions of a superior officer or the Board. Contractor's decision
not to accept a work location outside the Washington, D.C.
metropolitan area shall not constitute "Cause."
8.0 IMPAIRING OBLIGATIONS
Contractor agrees to devote such time as is necessary to the performance of
the Services, as authorized by Company. Contractor may also perform Services or
be employed by other clients provided such obligations would not in any material
way prevent, limit or otherwise impair the providing of the Services to Company.
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9.0 RELATIONSHIP OF PARTIES
The relationship of Contractor to Company shall at all times be one of
independent contractor, and neither party shall be nor represent itself to be an
employee, agent, representative, partner or joint venturer of the other, nor
shall either party have the right or authority to assume or create any
obligation on behalf of or in the name of the other or to otherwise act on
behalf of the other. Contractor shall not be entitled to any benefits accorded
to Company's employees, including but not limited to, workers compensation,
disability insurance, vacation, health benefits, 401K participation, or tuition
reimbursement. Contractor shall be responsible for providing, at Contractor's
sole expense, any disability or worker's compensation insurance required by
applicable law, or any other required insurance as well as all licenses and
permits usual and/or necessary for conducting the Services.
10. ASSIGNMENT
All covenants, stipulations, promises and other terms in this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors in interest, assignees and legal representatives.
Contractor shall not assign this Agreement without the express written consent
of Company.
11. PERSONNEL ON PREMISES OF OTHER PARTY; INDEMNIFICATION
All representatives of either party, while on the premises of, or
designated by, the other party, shall comply with all reasonable rules and
regulations established at such premises. Contractor hereby agrees to indemnify
and hold harmless Company, and its officers, directors, agents and employees,
from and against any and all liabilities, losses, damages, costs and expenses
(including attorneys fees) on account of any claim, suit or action made or
brought against Company, or its officers, directors, agents or employees,
arising from any act of negligence or willful misconduct of Contractor, or
related to any breach or failure of Contractor in connection with the Services.
12. INFRINGEMENT
Contractor warrants that, in rendering the Services hereunder, it shall not
knowingly infringe any patent, copyright, trademark, trade secret, or other
intellectual property right of any third party, and it shall use best efforts to
avoid any such infringement. Contractor hereby agrees to defend Company against
any claim of patent, copyright, trademark, trade secret, or other intellectual
property infringement made against Company on account of the services rendered
by Contractor. Contractor further agrees to indemnify and hold Company harmless
against any loss, damage, award or expense (including reasonable attorneys fees)
resulting from such a claim.
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13.0 WAIVERS
A waiver of any breach or default hereunder by any party shall not
constitute the waiver of a subsequent breach or default of the same or a
different provision of this Agreement.
14.0 INVALIDITY
If any provision of this Agreement, shall be held to be invalid, illegal or
unenforceable, that provision shall be deemed modified to the extent necessary
to make it valid and operative, or if it cannot be so modified then it shall be
severed, and the validity, legality or enforceability of the remaining
provisions shall not be affected or impaired thereby.
15.0 ARBITRATION
Should any dispute occur between the parties arising out of or related to
this Agreement, that dispute shall be settled and determined by arbitration
under the then current rules of the American Arbitration Association. The
decision and award of the Arbitrator shall be final and binding and the award so
rendered may be entered in any court having jurisdiction thereof. The
arbitration shall be held and the award shall be deemed to be made in Kent
County, Rhode Island. Further, all questions of law shall be decided in
accordance with the laws of the State of Rhode Island.
16.0 COMPLETE UNDERSTANDING
Each party acknowledges that it has read this Agreement and agrees that it
is the complete and exclusive understanding between the parties.
"Contractor" " Company"
G2 Enterprises, Incorporated ICOA, Inc.
a Nevada corporation
By _________________________ By __________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇
President
[date] [date]
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APPENDIX A
SERVICES TO BE PROVIDED
Contractor shall provide business development and sales services as directed by
the President of ICOA.
PAYMENTS TO CONTRACTOR
Contractor shall be paid bi-monthly at a rate of $10,000 per month.
Contractor shall also be paid a commission in the amount of six percent (6%) of
the gross amount of any debt or equity investment in the Company made by ,
during the period ending one (1) year after the date of the Effective Date. Such
commission shall be payable in cash upon the closing of such debt or equity
investment.
Exhibit B -- Form of Note
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT") OR ANY STATE SECURITIES LAWS AND NEITHER THIS NOTE NOR ANY INTEREST
THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND SUCH
LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS WHICH, IN
THE OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, IS AVAILABLE.
Promissory Note
$50,000 May ___, 2005
FOR VALUE RECEIVED, ICOA, INC., a Nevada corporation having an office at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (the "Company"), hereby promises to
pay to ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇ (the "Holder"), an individual having an address at
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ on July ____, 2005, or earlier upon
acceleration or prepayment of this Note as provided herein, the principal sum of
$50,000 without interest.
All or some of the principal amount of this Note may be prepaid by the
Company, without premium or penalty, at any time.
All payments shall be made to the Holder in lawful currency of the United
States of America to the address set forth above or such other address as to
which the Holder shall notify the Company in writing three days prior to the due
date hereof.
If the Company shall fail to make a payment of principal when due and such
failure shall continue for ten days after notice of such failure; or shall make
an assignment for the benefit of creditors, file a petition in bankruptcy, be
adjudicated insolvent or bankrupt, suffer an order for relief under any federal
bankruptcy law, petition or apply to any tribunal for the appointment of a
custodian, receiver or any trustee for the Company or any substantial part of
its assets, or shall commence any proceeding under any bankruptcy,
reorganization, arrangement, readjustment of debt, dissolution or liquidation
law or statue of any jurisdiction, whether now or hereafter in effect; or if
there shall have been filed any such petition or application, or any such
proceeding shall have been commenced against the Company, which remains
undismissed, unstayed or unbonded for a period of thirty days or more; or if the
Company, by any act or omission shall indicate consent to, approve or
acquiescence in any such petition, application or proceeding or the appointment
of a custodian, receiver or any trustee for all or any substantial part of its
properties, or if the Company shall allow such custodianship, receivership, or
trusteeship to continue undischarged, unstayed or unbonded for a period of
thirty days or more, or the Company violates any term or provision of this Note
and same remains uncured for a period of ten days after notice thereof by the
Holder of this Note, then and in any such event, the outstanding principal
amount of this Note, shall be and become immediately due and payable.
All notices and other communications provided for herein shall be sent by
registered or certified mail, return receipt requested, or by personal delivery
or via a nationally recognized overnight courier to the Holder or the Company,
at their respective addresses as set forth herein, or to such other address as
to which either party may advise the other by notice given in accordance with
this provision. All such notices shall be deemed given upon the earlier of
receipt or within five business days of mailing if receipt is refused.
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The undersigned agrees to pay on demand all expenses of collecting and
enforcing this Note, including, without limitation, reasonable expenses and fees
of legal counsel, court costs and the cost of appellate proceedings.
The provisions of this Note shall in all respects be construed according
to, and the rights and liabilities of the parties hereto and shall in all
respects be governed by, the laws of the State of Rhode Island. This Note shall
be deemed a contract made under the laws of the State of Rhode Island to be
fully performed therein, and the validity of this Note and all rights an
liabilities hereunder shall be determined under the laws of said State without
reference to the conflicts of laws provisions thereof.
This Note may be amended only by a written instrument executed by the
Company and the Holder.
IN WITNESS WHEREOF, ICOA, Inc. has caused this Promissory Note to be
executed in its corporate name by its Chief Financial Officer, thereunto duly
authorized.
Dated: May ___, 2005
ICOA, INC.
By:__________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
Exhibit C -- Form of Registration Rights Agreement
REGISTRATION RIGHTS AND SHAREHOLDER AGREEMENT
This REGISTRATION RIGHTS AND SHAREHOLDER AGREEMENT (this "Agreement")
is entered into as of April __, 2005 by and among ICOA, Inc., a Nevada
corporation (the "Company"), and the investors listed on Schedule I attached
hereto (collectively, the "Investors").
R E C I T A L S
WHEREAS, the Investors have, pursuant to the terms of that certain
Stock Purchase Agreement, dated as of April __, 2005, by and among the Company,
Wise Technologies, Inc. and the Investors (the "SPA"), agreed to receive shares
of common stock of the Company , the "Stock");
WHEREAS, the Company has agreed to grant the Investors certain
registration rights; and
WHEREAS, the Company and the Investors desire to provide for the
registration rights of the Investors on the terms and subject to the conditions
herein set forth.
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
Capitalized terms used and not otherwise defined herein shall have the
meanings ascribed to them in the SPA. As used in this Agreement, the following
terms have the respective meanings set forth below:
"Commission": means the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act;
"Exchange Act": means the Securities Exchange Act of 1934, as amended;
"Holder": means any holder of Registrable Securities;
"Permitted Transferee" means (a) an Affiliate of an Investor, (b) any
spouse, ancestor, descendant or other member of an Investor's immediate family,
and any trust for the benefit of such Investor.
"Person": means an individual, partnership, joint-stock company,
corporation, limited liability company, trust or unincorporated organization,
and a government or agency or political subdivision thereof;
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"register", "registered" and "registration": means a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act (and any post-effective amendments filed or required to be filed)
and the declaration or ordering of effectiveness of such registration statement;
"Registrable Securities": means (i) those shares of Common Stock issued
or issuable pursuant to Paragraph 2 of the SPA and (ii) any Company Stock issued
as a dividend or other distribution with respect to, or in exchange for, or in
replacement of, such above-described securities;
"Registration Expenses": means all expenses incurred by the Company in
connection with a registration of Registrable Securities as described in Section
2 hereof, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel for the Company, blue sky
fees and expenses and the expense of any special audits incident to or required
by any such registration (but excluding the compensation of regular employees of
the Company, which shall be paid in any event by the Company);
"Security" and "Securities": shall have the meanings set forth in
Section 2(1) of the Securities Act;
"Securities Act": means the Securities Act of 1933, as amended; and
"Selling Expenses": means all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities.
SECTION 2. REGISTRATION RIGHTS
(a) Company Registration.
(i) Inclusion in Registration. The Company will use its best
efforts to file a statement registering the Registrable Securities within thirty
days of the later of (a) the Closing Date or (b) the effective date of any
registration of its equity securities which had been filed prior to the Closing
Date.
(b) Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to this
Section 2 shall be borne by the Company, except that all Selling Expenses shall
be borne by the Holders of the securities so registered pro rata on the basis of
the number of their shares so registered.
(c) Registration Procedures. In the case of each registration effected
by the Company pursuant to this Section 2, the Company will keep the Holders, as
applicable, advised in writing as to the initiation of each registration and as
to the completion thereof. At its expense, the Company will:
(i) keep such registration effective for a period of 120 days or
until the Holders, as applicable, have completed the distribution described in
the registration statement relating thereto, whichever first occurs;
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(ii) furnish such number of prospectuses and other documents
incident thereto as each of the Holders, as applicable, from time to time may
reasonably request;
(iii) use all commercially reasonable efforts to register and
qualify the securities covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by the Holders, provided that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions;
(iv) cause all such Registrable Securities registered pursuant to
this Section 2 to be listed on each securities exchange and trading system on
which similar securities issued by the Company are then listed;
(v) provide a transfer agent and registrar for all Registrable
Securities registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of such
registration;
(vi) notify each Holder of Registrable Securities covered by such
registration at any time when a prospectus relating thereto is required to be
delivered under the Securities Act of the happening of any event as a result of
which the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing.
(d) Indemnification.
(i) The Company will indemnify each of the Holders, as applicable,
each of its officers, directors, members and partners (whether retired or
currently serving), and each person controlling each of the Holders, with
respect to each registration which has been effected pursuant to this Section 2,
against all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on (A) any untrue statement (or alleged untrue
statement) of a material fact contained in any prospectus, offering circular or
other document (including any related registration statement, notification or
the like) incident to any such registration, qualification or compliance, or
based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or (B) any violation by the Company of the Securities Act, the
Exchange Act or any applicable state securities laws, or any rule or regulation
thereunder applicable to the Company, and will reimburse each of the Holders,
each of such Holder's officers, directors, members and partners (whether retired
or currently serving), and each person controlling each of the Holders, each
such underwriter and each person who controls any such underwriter, for any
legal and any other expenses reasonably incurred in connection with
investigating and defending any such claim, loss, damage, liability or action;
provided, however, that the Company will not be liable in any such case to any
Holder, to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission based upon written
information furnished to the Company by such Holder, for use therein. Any
amounts to be paid by the Company to any Holder pursuant to this Section 2(f)
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shall be so paid by the Company within 30 days after receipt by the Company from
such Holder of appropriate documentation evidencing the incurrence by such
Holder of any amounts to which it is entitled under this Section 2(f).
(ii) Each of the Holders will, if Registrable Securities held by it
are included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Company, each of its directors and
officers and each person who controls the Company against all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any such registration statement, prospectus, offering circular or
other document made by such Holder in writing, or any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements by such Holder therein not misleading, and will
reimburse the Company and such directors, officers, partners, persons or control
persons for any legal or any other expenses reasonably incurred in connection
with investigating or defending any such claim, loss, damage, liability or
action, in each case to the extent, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or alleged omission) is
made in such registration statement, prospectus, offering circular or other
document in reliance upon and in conformity with written information furnished
to the Company by such Holder and stated to be specifically for use therein;
provided, however, that the obligations of each of the Holders hereunder shall
be limited to an amount equal to the net proceeds to such Holder of securities
sold as contemplated herein.
(iii) Each party entitled to indemnification under this Section
2(f)(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld) and the Indemnified Party may participate in such
defense at such party's expense (unless the Indemnified Party shall have
reasonably concluded that there may be a conflict of interest between the
Indemnifying Party and the Indemnified Party in such action, in which case the
fees and expenses of counsel shall be at the expense of the Indemnifying Party),
and provided further that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
under this Section 2 unless the Indemnifying Party is materially prejudiced
thereby. No Indemnifying Party, in the defense of any such claim or litigation
shall, except with the consent of each Indemnified Party, consent to entry of
any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation. Each Indemnified Party shall furnish such information regarding
itself or the claim in question as an Indemnifying Party may reasonably request
in writing and as shall be reasonably required in connection with the defense of
such claim and litigation resulting therefrom.
(iv) If the indemnification provided for in this Section 2(f) is
held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any loss, liability, claim, damage or expense referred to
herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable by such
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Indemnified Party as a result of such loss, liability, claim, damage or expense
in such proportion (not to exceed an amount equal to the net proceeds to such
Indemnifying Party of any securities sold as contemplated herein) as is
appropriate to reflect the relative fault of the Indemnifying Party on the one
hand and of the Indemnified Party on the other in connection with the statements
or omissions which resulted in such loss, liability, claim, damage or expense,
as well as any other relevant equitable considerations. The relative fault of
the Indemnifying Party and of the Indemnified Party shall be determined by
reference to, among other things, whether the untrue (or alleged untrue)
statement of a material fact or the omission (or alleged omission) to state a
material fact relates to information supplied by the Indemnifying Party or by
the Indemnified Party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
(v) The foregoing indemnity agreement of the Company and Holders is
subject to the condition that, insofar as they relate to any loss, claim,
liability or damage made in a preliminary prospectus but eliminated or remedied
in the amended prospectus on file with the Commission at the time the
registration statement in question becomes effective or the amended prospectus
filed with the Commission pursuant to Commission Rule 424(b) (the "Final
Prospectus"), such indemnity or contribution agreement shall not inure to the
benefit of any underwriter or Holder if a copy of the Final Prospectus was
furnished to the underwriter and was not furnished to the person asserting the
loss, liability, claim or damage at or prior to the time such action is required
by the Securities Act.
(e) Delay of Registration. No Holder shall have any right to obtain or
seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 2.
(f) Information by the Holders.
(i) Each of the Holders holding securities included in any
registration shall furnish to the Company such information regarding such Holder
and the distribution proposed by such Holder as the Company may reasonably
request in writing and as shall be reasonably required in connection with any
registration, qualification or compliance referred to in this Section 2.
(ii) In the event that, either immediately prior to or subsequent
to the effectiveness of any registration statement, any Holder shall distribute
Registrable Securities to its partners or members (or retired partners or
members) or other Affiliates thereof, such Holder shall so advise the Company
and provide such information as shall be necessary to permit an amendment to
such registration statement to provide information with respect to such
partners, members and/or Affiliates, as selling security holders. Promptly
following receipt of such information, the Company shall file an appropriate
amendment to such registration statement reflecting the information so provided.
Any incremental expense to the Company resulting from such amendment shall be
borne by the Company.
(g) Rule 144 Reporting.
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With a view to making available the benefits of certain rules and
regulations of the Commission which may permit the sale of restricted securities
to the public without registration, the Company agrees to:
(i) make and keep public information available as those terms are
understood and defined in Rule 144 under the Securities Act ("Rule 144");
(ii) file with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act; and
(iii) so long as any Holder owns any Registrable Securities,
furnish to such Holder upon request, a written statement by the Company as to
its compliance with the reporting requirements of Rule 144, and of the
Securities Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so filed
as such Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing such Holder to sell any such securities
without registration.
(h) Assignment. The registration rights set forth in this Section 2 may
be assigned, in whole or in part, only to Permitted Transferees; provided,
however, that such Permitted Transferee shall, as a condition to the
effectiveness of such assignment, be required to execute a counterpart to this
Agreement agreeing to be treated as an Investor hereunder whereupon such
Permitted Transferee shall have the benefits of, and shall be subject to the
restrictions contained in, this Agreement as if such Permitted Transferee was
originally included in the definition of an Investor herein and had originally
been a party hereto.
(i) Termination.
(i) Notwithstanding anything to the contrary contained herein, this
Agreement shall terminate, and its provisions shall have no force or effect, on
the second anniversary of the date hereof.
(j) Discontinuance. The Investors agree that upon receipt of any notice
from the Company of the happening of any event of the kind described in Section
2(c)(vi), the Investors will, to the extent appropriate, discontinue their
disposition of Registrable Securities pursuant to the registration statement
relating to such Registrable Securities until their receipt of the copies of the
supplemented or amended prospectus that shall not include an untrue statement of
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances under which they were made and, if so directed by the Company,
will deliver to the Company all copies, other than permanent file copies, then
in their possession, of the prospectus relating to such Registrable Securities
current at the time of receipt of such notice.
SECTION 3. TRANSFER RESTRICTIONS
(a) Transfer of Stock. Until one year from the date hereof, no Major
Shareholder shall sell, give or transfer any shares of Common Stock other than
to its Permitted Transferee in a transaction which qualifies as an exempt
transaction under the Securities Act and the rules and regulations promulgated
thereunder; provided, however, that such Permitted Transferee shall, as a
6
condition to the effectiveness of such sale, gift or transfer, be required to
execute a counterpart to this Agreement, whereupon such Permitted Transferee
shall have the benefits of, and shall be subject to the restrictions contained
in, this Agreement as if such Permitted Transferee was originally included in
the definition of a Investor herein and had originally been a party hereto in
the same capacity as the transferor.
(b) Notwithstanding the provisions of paragraph 3 (a), during the 180
days following the later of (i) Closing Date or (ii) the date the Registrable
Shares are registered, the Major Shareholders (as a group) may sell, give or
transfer that number of shares which is fifteen percent (15%) of the Registrable
Securities.
(c) Notwithstanding the provisions of paragraph 3 (a), commencing on a
date which is 180 days after the later of (i) the Closing Date or (ii) the date
the Registrable Shares are registered, in any thirty day period, the Major
Shareholders (as a group) may sell, give or transfer that number of shares which
is ten percent of the Registrable Securities.
SECTION 4. MISCELLANEOUS
(a) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Rhode Island (without giving effect to
the choice of law principles thereof) which are applicable to contracts made and
to be performed entirely within such State.
(b) Section Headings. The headings of the sections and subsections of
this Agreement are inserted for convenience only and shall not be deemed to
constitute a part hereof.
(c) Notices.
(i) All communications under this Agreement shall be in writing and
shall be delivered by hand or facsimile or mailed by a nationally recognized
overnight courier or by registered or certified mail, postage prepaid:
(A) if to an Investor, at the address or facsimile number of
such Investor set forth on Schedule I attached hereto, or at such other address
or facsimile number as the Investor may have furnished the Company in writing;
and
(B) if to the Company, at ICOA, Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇ (Fax: ▇▇▇-▇▇▇-▇▇▇▇), marked for the attention of the CFO, with a copy
by email to ▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇, or at such other address, facsimile number
or email address as the Company may have furnished the Investors in writing,
with a copy to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇., ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (Fax:
▇▇▇-▇▇▇-▇▇▇▇), with a copy by email to ▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇.
(ii) Any notice so addressed shall be deemed to be given: if
delivered by hand or facsimile, with written confirmation of receipt, on the
date of such delivery; if mailed by courier, on the first business day following
the date of such mailing; and if mailed by registered or certified mail, on the
third business day after the date of such mailing.
7
(d) Successors and Assigns. Subject to Section 2 hereof, this Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties.
(e) Entire Agreement; Amendment and Waiver. This Agreement constitutes
the entire understanding of the parties hereto relating to the subject matter
hereof and supersedes all prior agreements or understandings with respect to the
subject matter hereof among such parties. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, with (and only with,
unless otherwise set forth herein) the written consent of the Company and the
Investors. Notwithstanding the terms of the immediately preceding sentence or
any other provision herein, no such amendment or waiver may: (i) adversely
effect the rights or preferences of any Investor in a manner materially
different from the other Investors without the prior written consent of such
Investor; (ii) increase the potential liabilities or obligations of any Investor
without the prior written consent of such Investor; or (iii) increase the
indemnity obligations of such Investor or decrease the indemnity protections for
such Investor.
(f) Severability. In the event that any part or parts of this Agreement
shall be held illegal or unenforceable by any court or administrative body of
competent jurisdiction, such determination shall not affect the remaining
provisions of this Agreement, which shall remain in full force and effect.
(g) 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.
(h) Time is of the Essence. The Company acknowledges and agrees that
time is of the essence in this contract, and that in entering into the SPA, the
Investors are relying on the Company's agreement to satisfy each and every time
deadline contained herein, subject to the conditions hereof.
(i) Attorneys' Fees. In the event that any dispute among the parties to
this Agreement should result in litigation, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first set forth above.
ICOA, INC.
By:
------------------------------------------
Name:
Title:
8
------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇
HUMANVISION TECHNOLOGY VENTURES, LLC
By:__________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Manager of Managing
Member
------------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
[ADDITIONAL INVESTORS]
By:
------------------------------------------
Name:
Title:
9
SCHEDULE I
Investors
▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇
Human Vision Technology Ventures, LLC
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Each at
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇
Sack, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax : ▇▇▇-▇▇▇-▇▇▇▇
[Additional Investors]
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS........................................................1
1.1 Defined Terms...............................................1
1.2 Other Defined Terms.........................................6
1.3 Interpretation Provisions...................................7
ARTICLE II. ACQUISITION OF SHARES.............................................7
2.1 Directors and Officers......................................7
2.2 Acquisition of Securities...................................7
2.3 Immediate Consideration.....................................8
2.4 Exchange of Certificates....................................8
2.5 Certificate Not Surrendered by Holders of Shares
of Wise Common Stock........................................9
2.6 No Transfers After the Effective Time.......................9
2.7 Dissenting Shareholders.....................................9
2.8 Taking of Necessary Action; Further Action..................9
2.9 Wise Securities............................................10
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF AND WISE AND SELLERS..........10
3.1 Organization of Wise.......................................10
3.2 Capitalization of Wise.....................................10
3.3 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇..........................................11
3.4 Authorization..............................................11
3.5 Officers and Directors.....................................11
3.6 Bank Accounts..............................................11
3.7 Subsidiaries, Etc..........................................12
3.8 Absence of Certain Changes or Events.......................12
3.9 Title to Assets............................................14
3.10 Sufficiency of Assets......................................14
3.11 Fixtures and Equipment.....................................14
3.12 Contracts..................................................15
3.13 No Conflict or Violation; Consents.........................16
3.14 Permits....................................................16
3.15 Financial Statements; Books and Records....................17
3.16 Liabilities................................................17
3.17 Litigation.................................................17
3.18 Labor Matters..............................................18
3.19 Employee Benefit Plans.....................................18
3.20 Transactions with Related Parties and Shareholders.........21
3.21 Compliance with Law........................................21
3.22 Intellectual Property......................................22
3.23 Tax Matters................................................23
3.24 Insurance..................................................25
3.25 Accounts Receivable........................................25
3.26 Inventory..................................................25
3.27 Purchase Commitments and Outstanding Bids..................25
3.28 Payments...................................................25
3.29 Customers and Suppliers....................................26
3.30 Environmental Matters......................................26
3.31 Brokers; Transaction Costs.................................27
i
3.32 No Other Agreements to Sell Wise or the Assets.............27
3.33 Interim Financing..............................................28
3.34 Material Misstatements or Omissions............................28
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF ICOA...........................28
4.1 Organization...............................................28
4.2 Authorization..............................................28
4.3 No Conflict or Violation; Consents.........................28
4.4 No Brokers.................................................29
4.5 Litigation.................................................29
4.6 ICOA Common Stock..........................................29
4.7 SEC Documents..............................................29
4.8 Compliance with Law........................................29
4.9 Liabilities................................................29
ARTICLE V. ACTIONS PRIOR TO THE CLOSING......................................30
5.1 Conduct of Business........................................30
5.2 Investigation by ICOA......................................32
5.3 Notification of Certain Matters............................32
5.4 No Alternative Transactions................................32
5.5 Approval of Shareholders...................................33
5.6 Dissenting Shares..........................................33
5.7 Confidentiality............................................33
5.8 Tax Treatment..............................................34
5.9 Further Assurances.........................................34
5.10 Purchaser Representative...................................34
5.11 Additional Information.....................................34
ARTICLE VI. CONDITIONS TO OBLIGATIONS OF WISE AND SELLERS....................35
6.1 Representations, Warranties and Covenants..................35
6.2 Consents...................................................35
6.3 No Actions or Court Orders.................................35
6.4 Closing Documents..........................................35
6.5 Opinion of Counsel.........................................35
6.6 ICOA Material Adverse Change...............................35
6.7 Shareholder Approval.......................................35
ARTICLE VII. CONDITIONS TO OBLIGATIONS OF ICOA...............................35
7.1 Representations, Warranties and Covenants..................36
7.2 Shareholder Approval.......................................36
7.3 Approvals..................................................36
7.4 No Actions or Court Orders.................................36
7.5 Opinion of Counsel.........................................36
7.6 Employees..................................................36
7.7 Certificates...............................................36
7.8 Closing Documents..........................................37
7.9 Wise Material Adverse Change...............................37
7.10 Wise Securities............................................37
7.11 Outstanding Loans..........................................37
7.12 Non-Foreign Affidavit......................................37
7.13 Dissenter Rights...........................................37
7.14 Shareholder Representative.................................37
7.15 Securities Act Exemption...................................37
ii
7.16 Financial Statements.......................................37
7.17 Fully Diluted Common Stock Number..........................38
ARTICLE VIII. CLOSING........................................................38
8.1 Deliveries by Sellers and Wise to ICOA.....................38
8.2 Deliveries by ICOA to Sellers and Wise.....................38
ARTICLE IX. ACTIONS BY WISE, SELLERS, AND ICOA AFTER CLOSING.................38
9.1 Books and Records; Tax Matters.............................38
9.2 Non-Competition. .........................................39
ARTICLE X. SURVIVAL; INDEMNIFICATION.........................................39
10.1 Survival of Representations................................39
10.2 Indemnification............................................39
10.3 Offset.....................................................41
10.4 No Right of Contribution...................................42
ARTICLE XI. MISCELLANEOUS....................................................43
11.1 Termination................................................43
11.2 Assignment; No Third Party Beneficiaries...................44
11.3 Notices....................................................44
11.4 Choice of Law..............................................45
11.5 Entire Agreement; Amendments and Waivers...................45
11.6 Counterparts...............................................45
11.7 Invalidity.................................................45
11.8 Expenses...................................................45
11.9 Publicity..................................................45
11.10 Legends....................................................45
iii
TABLE OF EXHIBITS
Exhibit A Form of Independent Contractor Agreement
Exhibit B Form of Note
Exhibit C Form of Registration Rights and Shareholder
Agreement
Exhibit D [reserved]
Exhibit E Form of Foreign Investment in Real Property
Tax Act Affidavit
Exhibit F List of Wise Shareholders and Fully Diluted
Shares
SCHEDULES
1.1(a) Financial Statements
2.1 Post Closing Directors and Officers of Wise:
Directors: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇
President: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Vice-President: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
7.6 Employees
11.1 Diligence Documents
iv