SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT made as of March 31, 2000 between NAVTECH, INC., a
Delaware corporation (the "Company"), and XXXXXX X. XXXXXX (the "Subscriber").
WHEREAS, the Company desires to issue to the Subscriber, and the Subscriber
desires to acquire from the Company, units (the "Units") consisting in the
aggregate of five hundred thousand (500,000) shares of Common Stock, $.001 par
value per share (the "Common Shares"), of the Company, and warrants (the
"Warrants") to purchase one hundred twenty five thousand (125,000) shares of
Common Stock (the "Warrant Shares") of the Company, upon the terms set forth
herein.
NOW, THEREFORE, for and in consideration of the mutual representations and
covenants hereinafter set forth, the parties hereto do hereby agree as follows:
1. Subscription for the Units; Right to Designate Nominee.
1.1 Subject to the terms and conditions hereinafter set forth, the
Subscriber hereby irrevocably subscribes for and agrees to acquire from the
Company, and the Company agrees to sell to the Subscriber, the Units at an
aggregate purchase price of five hundred thousand dollars ($500,000). The
purchase price is payable contemporaneously herewith by certified check
made payable to the order of the Company or by wire transfer to an account
designated by the Company. The certificates evidencing the Common Shares
and Warrants purchased by the Subscriber will be delivered by the Company
to the Subscriber as soon as practicable following the execution hereof.
1.2 The Subscriber will have the right to designate one nominee to the
Board of Directors of the Company, which nominee shall either be Xxxxx X.
XxXxxxx or another person reasonably acceptable to the Company. Such right
shall continue for so long as the Subscriber owns at least five percent
(5%) of the outstanding shares of Common Stock of the Company. The nominee,
if duly elected to the Board of Directors, will be issued options under the
Company's 1999 Stock Option Plan to purchase twenty-five thousand (25,000)
shares of the Common Stock of the Company upon election to the Board, and a
further twenty-five thousand (25,000) shares upon election to a second year
of service as a director.
2. Representations by Subscriber.
The Subscriber understands and agrees that the Company is relying and may
rely upon the following representations and warranties made by the Subscriber in
entering into this Agreement:
2.1 The Subscriber recognizes that the acquisition of the Common
Shares and the Warrants 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) he 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 his investment.
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2.2 The Subscriber represents that he (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 Subscriber represents that he 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 him 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 Subscriber acknowledges that he has significant prior
investment experience, including investment in restricted securities, and
that he has read all of the documents furnished or made available by the
Company to him to evaluate the merits and risks of such an investment on
his behalf.
2.5 The Subscriber hereby represents that he has been furnished by the
Company with the Company's Annual Report on Form 10-KSB for the fiscal year
ended October 31, 1999 and Quarterly Report on Form 10-QSB for the fiscal
quarter ended January 31, 2000 and all other information regarding the
Company which he had requested or desired to know; that all documents which
could be reasonably provided have been made available for his inspection
and review; that he 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 he had requested; and that he has had the opportunity to
consult with his own tax or financial advisor concerning an investment in
the Company.
2.6 The Subscriber hereby acknowledges that this offering of Common
Shares and Warrants 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 and Rule 506 of Regulation D promulgated thereunder. The
Subscriber represents that the Common Shares and Warrants are being
acquired for his own account, for investment and not for distribution or
resale to others. The Subscriber agrees that he will not sell, transfer or
otherwise dispose of the Common Shares and/or Warrants, or any portion
thereof, unless they are registered under the 1933 Act or unless an
exemption from such registration is available.
2.7 The Subscriber consents that the Company may, if he desires,
permit the transfer of the Common Shares and/or Warrants by the Subscriber
out of its name only when his 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
Subscriber agrees to be bound by any requirements of such Securities Laws.
The Subscriber 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 undersigned
Subscriber in violation of any Securities Laws or any misrepresentation
herein.
2.8 The Subscriber acknowledges and agrees that the Company is relying
on the Subscriber's representations contained in this Agreement in
determining whether to accept this subscription.
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2.9 The Subscriber consents to the placement of a legend on the
certificates evidencing the Common Shares and Warrants stating that they
have not been registered under the Act and setting forth or referring to
the restrictions on transferability and sale thereof. The Subscriber is
aware that the Company will make a notation in its appropriate records with
respect to the restrictions on the transferability of the Common Shares and
Warrants.
2.10 The Subscriber represents that (a) it has not been formed within
the last six months, (b) it has not been formed to purchase the Common
Shares and Warrants and (c) the corporate officer signing below is
authorized to subscribe for the Common Shares and Warrants and sign on
behalf of the Subscriber.
2.11 The address set forth below is the Subscribers's true and correct
residence.
2.12 The information provided by the Subscriber herein in connection
with this investment is accurate and complete as of the date of the
execution of this Subscription Agreement.
3. Representations by the Company.
3.1 The Company represents and warrants to the Subscriber 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 execution, delivery and performance of this Agreement by
the Company has been duly approved by the Board of Directors of the
Company.
(c) The Common 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.
(d) The Warrant Shares have been duly and validly authorized and,
when issued upon exercise of the Warrants in accordance with the terms
thereof, will be duly and validly authorized and issued, fully paid
and nonassessable.
4. Notices to Subscriber.
4.1 Neither the Common Shares, nor the Warrants nor the Warrants
Shares have 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. Neither
the Common Shares, nor the Warrants nor the Warrants Shares have 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.
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4.2 The Common Shares, Warrants and Warrant 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
Subscriber should be aware that he may be required to bear the financial
risks of this investment for an indefinite period of time.
5. Investment Restrictions.
5.1 The Subscriber acknowledges that there is limited public market
for the Common Shares. The Subscriber understands that, absent registration
under the 1933 Act, the Common 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
Subscriber 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. Accordingly, the Subscriber
recognizes that, notwithstanding the existence of a public market for the
Common Shares, he 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 Common Shares or Warrant Shares.
6. Miscellaneous.
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
Subscriber at his 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.
62 This Agreement shall 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.
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6.5 This Agreement may be executed in counterparts. Upon the execution
and delivery of this Agreement by the Subscriber, this Agreement shall
become a binding obligation of the Subscriber with respect to the
acquisition of the Units as herein provided.
6.6 Only upon written approval and acceptance of this Subscription
Agreement by the Company shall the Company be obligated hereunder.
6.7 All dollar amounts in this Agreement are United States dollars.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year written below.
Xxxxxx X. Xxxxxx
_____________________________________
Name of Subscriber
/s/ Xxxxxx X. Xxxxxx
_____________________________________
Signature of Subscriber
0000 Xxxxxxxxx Xxxxxx, #000
Xxxxxxxx, XX 00000
_____________________________________
Address of Subscriber
###-##-####
_____________________________________
Social Security Number of Subscriber
Subscription Approved and Accepted:
NAVTECH, INC.
By: /s/ Xxxxxx Xxxxxxxxx
--------------------------
Name: Xxxxxx Xxxxxxxxx
-------------------------
Title: Chief Executive Officer
------------------------
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EXHIBIT A
A. For an individual (i.e., a natural person):
X
_____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
X
_____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 worth, the Subscriber 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 in vestment 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 of 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.
______ 5) The undersigned is an entity in which all of the equity owners are
accredited investors.
/s/ Xxxxxx X. Xxxxxx
____________________________
Xxxxxx X. Xxxxxx
