THIS AGREEMENT made the 29 day of June, 1998
BETWEEN:
XXXXXXX X. ENGLISH
(hereinafter called "Xxxxxxx")
AND:
XXX XXXXXXX AND ASSOCIATES INC.
(hereinafter called the "Corporation").
WHEREAS Xxxxxxx was a shareholder of the Corporation;
AND WHEREAS Xxxxxxx has transferred all of the issued and outstanding common
shares in the capital stock of the Corporation which were registered in his name
(the "Shares") to Xxxxxxx English;
AND WHEREAS the Corporation and Xxxxxxx wish to enter into this Agreement to
evidence the terms for the repayment of a shareholder loan owing to Xxxxxxx.
NOW THEREFORE for good and valuable consideration, receipt of which is hereby
acknowledged by each of the parties hereto, the parties agree as follows:
1. The Corporation and Xxxxxxx acknowledge and agree that the aggregate amount
due and owing by the Corporation to Xxxxxxx on account of principal and interest
is Six Hundred Thousand Dollars ($600,000) (in Canadian funds) (herein called
the "Loan"), less any amounts paid to Xxxxxxx by Navtech Systems Support Inc. on
or after the lst day of January, l998, which amount will be credited to the
amounts due by the Corporation. The payments of the Loan will be allocated as
follows:
(a) as to principal Four Hundred Fifty-Three Thousand Dollars Three
Hundred, Thirteen Dollars ($453,313.00) (Cdn); and
(b) as to interest One Hundred Forty-Six Thousand Six Hundred,
Eighty-Seven Dollars ($146,687.00) (Cdn).
2. The Corporation and Xxxxxxx covenant and agree that the Loan shall be paid by
the Corporation to Xxxxxxx by one hundred and twenty (120) consecutive equal
blended monthly payments, including both principal and interest, each in the
amount of Five Thousand Dollars ($5,000.00) (Cdn.) commencing on the 1st day of
April, 1998 and ending on the lst day of March, 2008. Provided, however, that
any payment by Navtech Systems Support Inc., referred to in paragraph l, above
shall reduce, in order, the payments due under this agreement, commencing with
the payment due on the first payment date. Provided that the Corporation may, at
any time, prepay any or all of the outstanding balance without notice or
penalty.
3. Xxxxxxx acknowledges and agrees with the Corporation that the sum of One
Hundred Forty- Six Thousand Six Hundred Eighty-Seven Dollars ($l46,687.00) (Cdn)
shall constitute his entire entitlement to interest during the whole of the
period that any part of the Loan is outstanding without default. In the event of
default, simple interest shall be added to all amounts in default at the rate of
Ten Percent (10%) per annum until payment is made or Shares are released to
Xxxxxxx in accordance with the terms of this Agreement.
4. All payments to be made by the Corporation to Xxxxxxx shall be made to Waters
& Hastings in trust, or as Xxxxxxx may, from time to time, direct, and shall be
subject to such deductions and withholdings as may be required by applicable
law.
5. Xxxxxxx acknowledges that Xxxxxxx has acquired from Xxxxxxx all of the issued
and outstanding shares in the capital stock of the Corporation as provided in a
Share Purchase Agreement between Xxxxxxx and Xxxxxxx (the "Share Purchase
Agreement") executed contemporaneously with this agreement. Xxxxxxx acknowledges
that one of the terms of the said Share Purchase Agreement is that the
Corporation and Xxxxxxx enter into this agreement.
6. The parties acknowledge and agree that in the event of any Claim, as defined
in the Share Purchase Agreement, the provisions of Articles IX and X of the
Share Purchase Agreement shall govern.
7. The principal asset of the Corporation, as of the date hereof, is Eight
Hundred and Two Thousand, Seven Hundred and Sixty-six (802,766) Common shares
(the "Shares") in the capital stock of Compuflight, Inc. a Delaware Corporation.
The Corporation covenants and agrees that until all payments are made pursuant
to this Agreement, the Corporation shall not be entitled to encumber or sell the
Shares except as may be provided herein:
(a) The Corporation shall have no right to encumber the Shares
except as may be necessary to provide security to any government
department, including, without limitation, Department of National
Revenue, Ontario Ministry of Revenue and the Internal Revenue Service,
with respect to any liabilities of the Corporation in respect of
transactions occurring prior to the 19th day of April, 1996. The
Corporation shall also be entitled to encumber the Shares as a
requirement of borrowing, provided that all sums borrowed as a result
of such encumbrance are used to pay any such government liabilities.
Provided however, that any such encumbering of the Shares may only be
effected as part of an overall pledge of the assets of the Corporation
and not a specific encumbrance in respect of the Shares alone.
(b) If any or all of the Shares are sold, after payment of any
outstanding liabilities provided for in sub-paragraph (a), above, any
remaining balance of proceeds shall immediately be paid to Xxxxxxx on
the closing date of any such sale, and shall be credited against the
Payments still outstanding.
8. During the term of this Agreement, and when not otherwise in default the
Corporation shall be entitled to vote the Shares and shall be entitled to
receive all benefits and advantages accruing therefrom. In the event that the
Corporation fails to make any payment due under this Agreement and the said
failure continues for a period of twenty (20) clear days after the date that
such payment was due (a "Default"), then the Escrow Agent shall transfer to
Xxxxxxx such number of Shares as shall equal in value the amount of the
defaulted payment together with interest as provided in paragraph 3, above,
based upon the market price of the Shares at the date of transfer. In the event
that an aggregate of three (3) Defaults shall occur in any twelve (12) month
period, then the balance owing pursant to this Loan Repayment Agreement shall
immediately become due and payable and the Escrow Agent shall transfer all of
the Shares held by it to Xxxxxxx in full satisfaction of the balance owing to
him pursuant to this Agreement.
9. Any condoning, excusing or overlooking of any default at any time or times on
the part of Xxxxxxx shall not act as a waiver by Xxxxxxx of his rights herein in
respect to any subsequent default.
10. This Agreement shall enure to the benefit of the Corporation and Xxxxxxx and
their heirs, executors, administrators, personal legal representative,
successors and assigns, and shall be binding upon the Corporation and Xxxxxxx
and their heirs, executors, administrators, personal legal representative,
successors and assigns.
11. The parties to this Agreement shall not assign this Agreement or any
interest, benefit or right hereunder without the prior written approval of the
other party. Any assignment made in contravention of the foregoing shall be null
and void.
12. This Agreement shall be governed by and construed in accordance with the
laws of the Province of Ontario.
13. The provisions of Articles IX et seq. of the Share Purchase Agreement are
incorporated into this Agreement by reference.
14. To the extent that the terms of this Agreement and the Share Purchase
Agreement conflict, the terms of the Share Purchase Agreement shall govern.
IN WITNESS WHEREOF the parties have executed this Agreement.
XXX XXXXXXX AND ASSOCIATES INC.
Per: /s/ Xxxxxxx X. English
--------------------------
Title: President
/s/ Xxxxxx Xxxxx /s/ Xxxxxxx X. English
------------------------- ----------------------------
Witness Xxxxxxx X. English
