CONVERSION AGREEMENT
CONVERSION AGREEMENT made as of October 31, 2000 between
NAVTECH, INC., a Delaware corporation (the "Company"), and ST. XXXXXXX CAPITAL
LIMITED PARTNERSHIP, a California limited partnership (the "Debtholder").
WHEREAS, the Company borrowed $128,830 from the Debtholder on
or about October 1, 1999 and the current principal and accrued interest balance
as of October 31, 2000 is $111,203.92 (the "Loan").
AND WHEREAS, under a Loan Acceptance and Commitment Agreement
dated October 4, 1999, the Company agreed that the principal balance of the Loan
was convertible into shares of the Common Stock, $.001 par value ("Common
Shares"), of the Company at a price per share equal to 37.5 cents to be
effective at such time as the Company's authorized share capital was sufficient
to allow the conversion.
AND WHEREAS, as a result of stockholder approval on January
14, 2000 of a proposal to increase the number of authorized shares of Common
Stock of the Company, there is a sufficient number of authorized shares of
Common Stock to allow the conversion.
AND WHEREAS, the Debtholder desires to convert the principal
balance of the Loan into Two Hundred Ninety Six Thousand Five Hundred Forty
Three (296,543) Common Shares (the "Shares").
NOW, THEREFORE, for and in consideration of the mutual
representations and covenants hereinafter set forth, the parties hereto do
hereby agree as follows:
1. Conversion of the Note.
1.1 The Debtholder hereby irrevocably converts the principal
balance of the Loan into the Shares. The certificate evidencing the Shares will
be delivered by the Company to the Debtholder as soon as practicable following
the execution hereof.
2. Representations by Debtholder.
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The Debtholder understands and agrees that the Company is
relying and may rely upon the following representations and warranties made by
the Debtholder in entering into this Agreement:
2.1 The Debtholder recognizes that the acquisition of the
Shares involves a high degree of risk and is suitable only for persons of
adequate financial means who have no need for liquidity in this investment in
that (i) it may not be able to liquidate its investment in the event of
emergency; (ii) transferability is extremely limited; and (iii) it could sustain
a complete loss of its investment.
2.2 The Debtholder represents that it (i) is competent to
understand and does understand the nature of this investment; and (ii) is able
to bear the economic risk of this investment.
2.3 The Debtholder represents that it is an "accredited
investor," as such term is defined in Rule 501 of Regulation D promulgated under
the Securities Act of 1933, as amended (the "1933 Act"), as a result of
application to it of the criteria set forth on Exhibit A attached hereto (please
indicate on such Exhibit A by a checkmark the one or more criteria which apply).
2.4 The Debtholder acknowledges that it has significant prior
investment experience, including investment in restricted securities, and that
it has read all of the documents furnished or made available by the Company to
it to evaluate the merits and risks of such an investment on its behalf.
2.5 The Debtholder hereby represents that it has been
furnished by the Company with the Company's Annual Report on Form 10-KSB for the
fiscal year ended October 31, 1999, Current Report on Form 8-K for an event
dated April 25, 2000, Quarterly Report on Form 10-QSB for the fiscal quarter
ended July 31, 2000 and definitive Proxy Statement for the annual meeting of
stockholders scheduled to be held on July 13, 2000, and all other information
regarding the Company which it has requested or desired to know; that all
documents which could be reasonably provided have been made available for its
inspection and review; that it has been afforded the opportunity to ask
questions of and receive answers from duly authorized representatives of the
Company concerning the terms and conditions of the offering, and any additional
information which it has requested; and that it has had the opportunity to
consult with its own tax or financial advisor concerning an investment in the
Company.
2.6 The Debtholder hereby acknowledges that this offering of
Common Shares has not been reviewed by the Securities and Exchange Commission
(the "SEC") because of the Company's representations that this is intended to be
a non-public offering pursuant to Section 4(2) of the 1933 Act. The Debtholder
represents that the Shares are being acquired for its own account, for
investment and not for distribution or resale to others. The Debtholder agrees
that it will not sell, transfer or otherwise dispose of the Shares, or any
portion thereof, unless they are registered under the 1933 Act or unless an
exemption from such registration is available.
2.7 The Debtholder consents that the Company may, if it
desires, permit the transfer of the Shares by the Debtholder out of its name
only when its request for transfer is accompanied by an opinion of counsel
satisfactory to the Company that neither the sale nor the proposed transfer
results in a violation of the 1933 Act or any applicable state "blue sky" laws
(collectively, "Securities Laws"). The Debtholder agrees to be bound by any
requirements of such Securities Laws. The Debtholder agrees to hold the Company
and its controlling persons and their respective heirs, representatives,
successors and assigns harmless and to indemnify them against all liabilities,
costs and expenses incurred by them as a result of any sale or distribution by
the Debtholder in violation of any Securities Laws or any misrepresentation
herein.
2.8 The Debtholder acknowledges and agrees that the Company is
relying on the Debtholder's representations contained in this Agreement in
issuing the Shares.
2.9 The Debtholder consents to the placement of a legend on
the certificates evidencing the Shares stating that they have not been
registered under the 1933 Act and setting forth or referring to the restrictions
on transferability and sale thereof. The Debtholder is aware that the Company
will make a notation in its appropriate records with respect to the restrictions
on the transferability of the Shares.
2.10 The address set forth below is the Debtholder's true
and correct business address.
2.11 The information provided by the Debtholder herein in
connection with this investment is accurate and complete as of the date of the
execution of this Conversion Agreement.
3. Representations by the Company.
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3.1 The Company represents and warrants to the Debtholder
as follows:
(a) The Company is a corporation duly organized, existing and in
good standing under the laws of the State of Delaware and has the
corporate power to conduct its business.
(b) The issuance of the Shares by the Company has been duly
approved by the Board of Directors of the Company.
(c) The Shares have been duly and validly authorized and, when
issued in accordance with the terms hereof, will be duly and validly
authorized and issued, fully paid and nonassessable.
4. Notices to Debtholder.
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4.1 The Shares have not been registered under the 1933 Act, or
the securities laws of any state, and they are being offered and sold in
reliance on exemptions from the registration requirements of the 1933 Act and
such laws. The Shares have not been approved or disapproved by the SEC, any
state securities commission or other regulatory authority, nor have any of the
foregoing authorities passed upon or endorsed the merits of the offering. Any
representation to the contrary is unlawful.
4.2 The Shares are subject to restrictions on transferability
and resale and may not be transferred or resold except as permitted under the
1933 Act, and applicable state securities laws, pursuant to registration or
exemption therefrom. The Debtholder should be aware that it may be required to
bear the financial risks of this investment for an indefinite period of time.
5. Investment Restrictions.
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5.1 The Debtholder acknowledges that there is limited
public market for the Common Shares. The Debtholder understands that, absent
registration under the 1933 Act, the
Shares may only generally be publicly sold pursuant to Rule 144 (the "Rule")
promulgated under the 1933 Act. The Rule permits, subject to all of its terms
and conditions, the public resale (in limited amounts) of securities acquired in
non-public offerings without having to satisfy the registration requirements of
the 1933 Act. The Debtholder further understands that the Company makes no
representation or warranty regarding its fulfillment in the future of any
reporting requirements under the Securities Exchange Act of 1934, as amended, or
its dissemination to the public of any current financial or other information
concerning the Company, which in most circumstances is required by the Rule as
one of the conditions of its availability; however, the Company will use its
best efforts to comply with such reporting requirements. The Debtholder
recognizes that, notwithstanding the existence of a public market for the Common
Shares, it may not be able to take advantage of the resale provisions of the
Rule and may be unable to publicly offer or sell any of the Shares.
6. Miscellaneous.
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6.1 Any notice or other communication given hereunder shall be
deemed sufficient if in writing and hand delivered or sent by first class mail,
postage prepaid, or overnight mail, addressed to the Company, c/o Navtech
Systems Support Inc., 000 Xxxxxxxx Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxx
Xxxxxx N2L 5Z5, Attention: Corporate Secretary, and to the Debtholder at its
address indicated on the last page of this Agreement. Notices shall be deemed to
have been given on the date of mailing, except notices of change of address,
which shall be deemed to have been given when received.
6.2 This Agreement may not be changed, modified or amended
except by a writing signed by the party to be charged, and this Agreement may
not be discharged except by performance in accordance with its terms or by a
writing signed by the party to be charged.
6.3 This Agreement shall be binding upon and inure to the
benefit of the parties hereto and to their respective successors and assigns.
This Agreement sets forth the entire agreement and understanding between the
parties as to the subject matter thereof and merges and supersedes all prior
discussions, agreements and understandings of any and every nature between them.
6.4 This Agreement and its validity, construction and
performance shall be governed in all respects by the laws of the State of
Delaware, applicable to agreements to be performed wholly within the State of
Delaware.
6.5 This Agreement may be executed in counterparts. Upon the
execution and delivery of this Agreement by the Debtholder, this Agreement shall
become a binding obligation of the Debtholder with respect to the acquisition of
the Shares as herein provided.
6.8 All dollar amounts in this Agreement are United States
dollars.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year written below.
ST. XXXXXXX CAPITAL LIMITED PARTNERSHIP
By: ST. XXXXXXX TECHNOLOGY ASSOCIATES, INC.,
GENERAL PARTNER
/s/ Xxxxxx Xxxxxxxxx
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Xxxxxx Xxxxxxxxx
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Name
Chairman
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Title
c/o Kintyre & Company Limited
00 Xxxxxxx Xxxxxxxx
Xxxxxx, Xxxxxxx, Xxxxxx
X0X 0X0
Subscription Approved and Accepted:
NAVTECH, INC.
By: /s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
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Name
Chief Financial Officer
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Title
EXHIBIT A
A. For an individual (i.e., a natural person):
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______ 1) The undersigned had an individual income in excess of
$200,000 (or in excess of $300,000 with his or her
spouse) in each of the past two years and has a
reasonable expectation of reaching the same income
level in the current year; or
______ 2) The undersigned has an individual net worth, or joint
net worth with his or her spouse, of more than
$1,000,000.
Note: For the purpose of determining net wroth, the undersigned may
include, without limitation, the value of his or her spouse's
principal residence, home furnishings and automobiles.
B. For a legal entity (i.e., other than a natural person):
------------ ----
______1) The undersigned is (a) any bank, as defined in Section 3(a)(2) of
the 1933 Act, or a savings and loan association or other institution
as defined in Section 3(a)(5)(A) of the 1933 Act, whether acting in
its individual or fiduciary capacity; (b) any broker or dealer
registered pursuant to Section 23 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"); (c) any insurance company, as
defined in Section 2(13) of the 1933 Act; (d) any investment company
registered under the Investment Company Act of 1940 or a business
development company as defined in Section 310(c) or (d) of the Small
Business Investment Act of 1958; (e) any plan established and
maintained by a state, its political subdivisions, or any agency or
instrumentality of a state or its political subdivisions, or any
agency or instrumentality of a state or its political subdivisions,
for the benefit of its employees if such plan has total assets in
excess of $5,000,000; or an employee benefit plan within the meaning
of the Employee Retirement Income Security Act of 1974 ("ERISA"), if
the investment decision is made by a plan fiduciary, as defined in
Section 3(21) of ERISA, that is either a bank, savings and loan
association, insurance company or registered investment adviser, or if
the employee benefit plan has total assets in excess of $5,000,000 or,
if a self-directed plan, with investment decisions made solely by
persons that are accredited investors; or
_______2) The undersigned is a "private business development company" as
defined in Section 202(a)(22) of the Investment Advisers Act or 1940;
or
______ 3) The undersigned is an organization described in Section
501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or
similar business trust
or partnership, not formed for the specific purpose of making the
investment, with total assets in excess of $5,000,000; or
_______4) The undersigned is a trust, with total assets in excess of
$5,000,000, not formed for the specific purpose of acquiring the
Units, and the purchase of the units is directed by a sophisticated
person as described in Rule 506(b)(2) (ii) promulgated under the
Exchange Act.
_X____ 5) The undersigned is an entity in which all of the equity owners are
accredited investors.
ST, XXXXXXX CAPITAL LIMITED PARTNERSHIP
By: ST. XXXXXXX TECHNOLOGY ASSOCIATES, INC.
GENERAL PARTNER
/s/ Xxxxxx Xxxxxxxxx
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Xxxxxx Xxxxxxxxx, Chairman
c/o Kintyre & Company Limited
00 Xxxxxxx Xxxxxxxx
Xxxxxx, Xxxxxxx, Xxxxxx
X0X XX0
Taxpayer Identification Number: 00-0000000
October 31, 2000
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Date of Execution
