REGISTRATION RIGHTS AND SHAREHOLDER AGREEMENT
This
REGISTRATION RIGHTS
AND SHAREHOLDER
AGREEMENT (this
"Agreement") is
entered into as of September 8, 2005 by and among ICOA, Inc., a Nevada
corporation (the "Company"), and Seacoast
Funding, Inc. (the "Investor").
R E C I T A L S
WHEREAS, the
Investor has, pursuant to the terms of that certain Settlement
Agreement, dated as of September 8, 2005, by and among the Company, and the
Investor (the "Settlement Agreement"), agreed to receive rights to acquire
shares of common stock of the Company , the
"Stock");
WHEREAS,
the Company has agreed
to grant the Investor certain registration
rights; and
WHEREAS,
the Company and the Investor desire to provide for the
registration rights of the Investor 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 Settlement Agreement. 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, trust or unincorporated
organization, and a government or agency or
political subdivision thereof;
"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;
<PAGE>
"Registrable
Securities":
means those
shares of Common
Stock issued or
issuable pursuant to the Settlement
Agreement;
"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. If, more than sixty days from the
date
hereof, the Company shall determine to register any of its
equity securities
either for its own account or for the account of any Persons other than the
Investor who, by virtue of agreements with the Company or otherwise, are
entitled to include securities of the Company held by them in any such
registration, other than a registration relating solely to employee benefit
plans, or a registration relating solely to a Commission
Rule 145
transaction,
or a registration on any registration form
which does not permit secondary sales
or does not include substantially the same information as would be
required to
be included in a registration statement covering the sale of Registrable
Securities, the Company will:
(A) promptly give to each of the Holders written notice thereof
(which shall include a list of the
jurisdictions in which the Company intends to
attempt to qualify such securities
under the applicable
blue sky or other state
securities laws); and
(B) include in such registration (and any related qualification
under blue sky laws or other compliance), and in any underwriting involved
therein, all the Registrable
Securities.
(ii) Exception.
This Section 2 shall not apply where the Company
initially files for such registration with the SEC within thirty days of the
Effective Date of the Settlement
Agreement.
(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.
<PAGE>
(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;
(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)
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).
<PAGE>
(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 un
