September 24, 1999
Mr. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Director
Skyplan Services Limited
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Dear ▇▇▇▇▇▇▇:
Re: Skyplan Services (UK) Limited (the "Company")
This letter will serve to set out the terms and conditions upon which
Navtech Systems Support Inc. (herein called "Navtech") or an affiliate
designated by Navtech (the "Purchaser") agrees to purchase from Skyplan Services
Limited (the "Shareholder") all of the issued and outstanding common shares of
the Company (the "Purchased Shares"). If acceptable to the Shareholder, once
executed, this letter will become a legally binding agreement. Should the
Purchaser be an affiliate, Navtech will provide a guarantee of performance.
The terms of the offer are as follows:
1. Offer to Purchase
The Purchaser hereby offers to purchase from the Shareholder the
Purchased Shares. On the Closing Date, the Purchased Shares are to be
transferred to the Purchaser free and clear of any security interests, pledges,
charges, or other encumbrances.
2. Purchase Price
The purchase price payable for the Purchased Shares (the "Purchase
Price") shall be One Hundred and Eighty Thousand Dollars ($180,000.00) payable
in accordance with Section 3.
3. Payment of Purchase Price
(a) The Purchase Price shall be paid to the Shareholder as follows:
(i) $125,000.00 on the Closing Date (as hereinafter defined) by
certified cheque, and
(ii) the balance of the Purchase Price shall be deposited into
the trust account of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Purchaser's Counsel")
on the Closing Date, to be held in trust subject to the
terms of this letter agreement. Such funds (the "Holdback")
shall be released for the benefit of the Shareholder upon
expiry of the Post-Closing Term unless ▇▇▇▇▇▇▇▇▇'s Counsel
has received written notice as contemplated by paragraph 5
hereof.
(b) It is agreed that all monies payable pursuant to paragraph 3(a)
above shall be paid to Shareholder's counsel on the trust
condition that the same be remitted to the Toronto Dominion Bank
(the "TD Bank") on behalf of the Shareholder in such amounts as
are necessary to extinguish all indebtedness of the Shareholder
and its affiliates to TD Bank in respect of the Shareholder's
domestic line of credit, as agreed with TD Bank (it being
understood that if the amounts paid pursuant to paragraph 3(a)
are insufficient to discharge such indebtedness, the entire
amount shall be paid to TD Bank).
4. Post-Closing Term
For the time period commencing immediately after Closing and ending on
the close of business on October 22, 1999 (the "Post-Closing Term"), the
Shareholder shall:
(a) continue to "host" the software of the Company in its offices in
Calgary in order to insure that all software currently utilized
and owned by the Company can continue to be utilized, unaffected,
through the Post-Closing Term;
(b) transfer to the Company all data, software and parameter files
owned, used or licenced by the Shareholder or any of its
affiliates which are used or required by the Company to support
its current customer base, including, but not limited to, the
items listed in Schedule "B" hereto, but excluding CyberTrac One;
(c) provide or cause to be provided the following to the Company,
without remuneration:
(i) operational and technical support for the Calgary server and
the London (Gatwick) office including communication links,
twenty four hours a day, seven days a week;
(ii) dedicated technical assistance by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (for a
minimum of forty hours during the Post-Closing Term), for
the purposes of transferring customer-specific data,
parameter files and software to operate and support the
Company's customers; and
(iii)provide all navigation and meteorological data (including
AIRACs) on a timely and routine basis; and
(d) cause all closing documents delivered by fax on the Closing Date
to be delivered in original form.
5. Breach During Post-Closing Term
(a) In the event the Purchaser contends during the Post-Closing Term
that: (i) the Shareholder is in breach of any of the
representations or warranties referred to in Section 9 hereof,
and that such breach is material; or (ii) that paragraph 4 has
been breached by the Shareholder; the Purchaser shall provide the
Shareholder and Purchaser's Counsel with written notice thereof,
which notice shall contain complete particulars of the alleged
breach.
(b) In the event that Purchaser's Counsel has received written notice
as contemplated by subparagraph 5(a) above, it shall retain such
portion of the Holdback as is equal to the amount claimed in such
notice (or all of the Holdback if less than the amount claimed).
The unclaimed portion shall be paid to the Shareholder's counsel
at the end of the Post-Closing Term on the trust condition that
the same be remitted to TD Bank on behalf of the Shareholder in
such amount as may be necessary to pay the balance owed, if any,
on the Shareholder's domestic line of credit, to the extent of
the available funds, with the remainder, if any, released to the
Shareholder. The claimed portion shall remain in trust until the
subject matter of the notice or notices has been resolved.
6. Closing
The purchase and sale of the Purchased Shares shall be completed on
October 1, 1999, or such other date as may be mutually agreed upon (herein
called the "Closing Date"). Closing shall occur on the basis of faxed
signatures, which are to be delivered as soon as practicable thereafter by
courier.
7. Non-Solicitation Agreement
On the Closing Date, the Shareholder shall provide to the Purchaser its
written covenant, binding upon all of its subsidiaries and affiliates, in form
and substance satisfactory to the Purchaser, not to solicit customers or
employees of the Company, for a period of two years following the Closing Date.
8. Communications with Company Employees
From the date hereof until the Closing Date the Purchaser shall be
entitled to hold discussions with each employee of the Company.
9. Representations and Warranties of Shareholder
The Shareholder represents and warrants to the Purchaser as follows,
and acknowledges that the Purchaser is relying on such representations and
warranties in connection with its purchase of the Purchased Shares:
(a) Third Party Rights. No third party has any written or oral
agreement or option or any right or privilege (whether by law,
pre-emptive or contractual) capable of becoming an agreement or
option for the purchase or acquisition of any shares of any
nature or kind in the capital of the Company.
(b) Authorization. This Agreement has been duly executed and
delivered by the Shareholder and is a legal, valid and binding
obligation of the Shareholder, enforceable against the
Shareholder by the Purchaser in accordance with its terms, except
as enforcement may be limited by bankruptcy, insolvency and other
laws affecting the rights of creditors generally and except that
equitable remedies may be granted only in the discretion of a
court of competent jurisdiction.
(c) No Other Agreements to Purchase. No third party has any written
or oral agreement or option or any right or privilege (whether by
law, pre-emptive or contractual) capable of becoming an agreement
or option for the purchase or acquisition from the Shareholder of
any of the Purchased Shares.
(d) Ownership of the Purchased Shares. The Shareholder is the legal
and beneficial owner of record of the Purchased Shares, free and
clear of all Encumbrances (as hereinafter defined) and, without
limiting the generality of the foregoing, the Purchased Shares
are not subject to any voting trust, shareholder agreement or
voting agreement. At the time of completion of the transaction
contemplated by this Agreement, the Purchaser will own all of the
issued and outstanding share capital of the Company.
(e) Encumbrances. "Encumbrance" means any encumbrance, lien, charge,
hypothec, pledge, mortgage, title retention agreement, security
interest of any nature, adverse claim, any matter capable of
registration against title, option, right of pre-emption,
privilege or any contract to create any of the foregoing.
(f) No Violation. The execution and delivery of this letter of
agreement by the Shareholder and the consummation of the
transactions herein provided for will not result in either:
(i) the breach or violation of any of the provisions of, or
constitute a default under, or conflict with or cause the
acceleration of any obligation of the Shareholder or the
Company under:
(A) any judgment, decree, order or award of any court,
governmental body or arbitrator having jurisdiction
over the Shareholder or the Company;
(B) to the best of its knowledge, any contract to which the
Company is a party or by which its assets are bound;
(C) any contract to which the Shareholder is a party or by
which its assets are bound;
(D) to the best of its knowledge, any applicable law,
statute, ordinance, regulation or rule; or
(E) the articles of incorporation and any amendments
thereto, the by-laws and resolutions of the Company and
the Shareholder; or
(ii) the creation or imposition of any Encumbrance on any of the
Purchased Shares or to the best of its knowledge, any of the
property or assets of the Company.
(g) Financial Statements. The financial statements for the Company as
provided to the Purchaser have been prepared in accordance with
generally accepted accounting principles, and present fairly the
assets, liabilities (whether accrued, absolute, contingent, or
otherwise) and the financial condition of the Company as at the
respective dates of the relevant statements, and in particular
the financial statement for the period ending May 31st, 1999, as
well as the sales, earnings, and liabilities of the Company
during the periods covered by the financial statements. Further,
the Shareholder and the Company have made complete and accurate
disclosure to the Purchaser of all liabilities of the Company.
(h) Accounts Payable. The accounts payable of the Company to ordinary
creditors (other than its affiliates), exclusive of secured or
preferred creditors, do not exceed (pound)125,000 as of the
Closing Date.
(i) Corporate Records. To the knowledge of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇, the Company has complied with
all corporate legislation and is in good standing; the
corporate records of the Company fully disclose all
shareholder and director resolutions relating to the
business and affairs of the Company; all corporate
proceedings and actions reflected in the corporate records
shall have been conducted or taken in compliance with all
applicable laws and with the articles and by-laws of the
Company; and the minute books of the Company contain all
resolutions, certificates, articles, bylaws, agreements and
registers properly to be contained therein.
(j) Contracts.
(i) To the best of its knowledge each of the contracts to which
the Company is party is in full force and effect, unamended,
and there exists no default or event of default relating to
any such contract which has not been disclosed to Navtech;
(ii) There are no agreements or contracts, written or verbal,
under which the Company has any obligation, or pursuant to
which the Company derives any benefit, and to which any
affiliate of the Company is a party or has in the past
customarily assisted in the performance thereof; and
(iii)There are no existing facts, circumstances or relationships
in existence which may reasonably be expected to be harmed
or prejudiced by a change in ownership of the Company and
the consequent severing of the relationship of the Company
with its current affiliates.
(k) Employees. None of the employees of the Company has any written
contract of employment with the Company, other than as disclosed
to the Purchaser.
(l) Claims. There is no claim, at law or in equity, by any person,
pending or threatened, against or affecting the Company.
(m) Compliance with Laws. To the best of its knowledge, the business
and affairs of the Company has been conducted in accordance and
compliance with all applicable laws and regulations.
(n) Subsidiaries. The Company has no subsidiaries.
(o) Income Taxes. The liability for income tax for the Company does
and shall not exceed(pound)5,000 as of the Closing Date.
(p) Usual Course of Business. The Company has carried on business in
the usual course, without extraordinary transactions since July
1, 1999 and without restricting the foregoing the Company has
made no loans or other dispositions to any of the affiliates,
employees, consultants, officers or directors, other than has
been disclosed to Navtech.
(q) Assets. As of the Closing Date, the Company is the legal and
beneficial owner of all of the items set forth in Schedule "A"
hereto.
(r) Ability to Carry on Business. Other than the items required to be
transferred by the Shareholder pursuant to subparagraph 4(b), the
Company has, and as of the Closing Date will have, all assets,
including software, data, hardware and personnel, required to
carry on the business as currently conducted by it.
10. Conditions of Closing
The parties acknowledge that completion of the transaction provided for
herein is conditional upon the following:
(a) the Purchaser shall be satisfied, acting reasonably, that the
Company has, as of the Closing Date, no outstanding liabilities,
except for (i) unsecured liabilities to trade creditors incurred
in the ordinary course of the Company's business, which shall not
exceed (pound)125,000 and (ii) with respect to income taxes
payable, as disclosed in such subparagraph 9(o) above.
(b) the Purchaser shall be satisfied with its negotiations with the
employees and consultants of the Company with respect to
Post-Closing employment;
(c) the Purchaser shall have received written confirmation from all
secured parties and governmental bodies that the Purchased Shares
may be transferred as contemplated hereby, free of all charges or
encumbrances;
(d) all directors and officers of the Company shall have resigned and
released the Company of further liability, except for those
directors and officers whom the Purchaser wishes to retain;
(e) the Shareholder shall provide the Company with a general release,
in form and substance satisfactory to the Purchaser, of any claim
existing as at the Closing Date;
(f) the Shareholder and the directors of the Company shall have
executed the various corporate documents and resolutions of the
Company that require execution by the Shareholder and the
directors of the Company, and in the event that any of the
corporate records have deficiencies, the Shareholder will assist
the Purchaser to rectify such deficiencies;
(g) the representations and warranties of the Shareholder contained
in this Agreement shall be true and correct as of the Closing
Date with the same force and effect as if such representations
and warranties had been made on and as of such date;
(h) all approvals requested for the transfer of the Purchased Shares
shall have been obtained including the approval of the board of
directors of the Company;
(i) the Shareholder shall have returned all material and documents of
the Company in his possession, and shall verify that any
electronically stored information has been returned with all
copies destroyed;
(j) TD Bank shall have provided its written consent to this
transaction in terms satisfactory to the Shareholder and the
Purchaser; and
(k) the Purchaser and the Shareholder shall have executed and
delivered a forbearance agreement addressing the status of the
Navtech Flight Operations Support Software, systems products and
services (including without limitation Navtech Master Products &
Services Agreement No. 94-05) ("Navtech FOMS").
11. Inter-Company Payables
Provided that Closing has occurred, all amounts owing to affiliates by
the Company, and all amounts owing by affiliates to the Company shall be deemed
to have been extinguished.
12. Professional Costs
The parties shall be responsible for their respective legal and other
professional costs incurred in connection with negotiating and completing this
Agreement. For greater certainty the Shareholder will be responsible for the
costs for the services for his own personal legal, accounting, tax and other
related matters.
13. Public Announcement
Any public announcement or other communication concerning this
Agreement shall be subject to the joint approval of the Purchaser and the
Shareholder. The Shareholder acknowledges that the Purchaser is subject to
certain disclosure obligations based on the materiality of this Agreement and as
such the Purchaser shall have the right to make such disclosure upon giving
written notice to the Shareholder.
14. Further Assurances
Each party to this Agreement covenants and agrees that, from time to
time subsequent to the Closing Date, it will at the request and expense of the
requesting party, execute and deliver all such documents, including, without
limitation, all such additional conveyance, transfers, consents and other
assurances and do all such other acts and things as any other party hereto,
acting reasonably, may from time to time request be executed or done in order to
better evidence or perfect or effectuate any provision of this Agreement or of
any agreement or other document executed pursuant to this Agreement or any of
the respective obligations intended to be created hereby or thereby.
15. Change of Name
Within 180 days of the Closing Date, the Purchaser shall change the name of
the Company to a name which does not reference "Skyplan".
16. Binding Agreement
This Letter, if accepted by the Shareholder, shall constitute a legally
binding agreement in accordance with the terms hereof.
17. Jurisdiction
This Agreement shall be governed by and construed in accordance with
the laws of the Province of Alberta and the parties hereto hereby irrevocably
attorn to the exclusive jurisdiction of the courts of that province.
18. Counterparts
This Letter may be executed in separate counterparts each of which
shall be an original and all of which shall constitute one and the same
agreement.
19. Notices
Any notices to be provided by this Agreement may be mailed, delivered,
or forwarded by facsimile. If to the Shareholder, the address is as follows:
▇▇. ▇▇▇▇▇▇ ▇▇▇▇
President
Skyplan Services Limited
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇, ▇▇▇ ▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Purchaser, the address is as follows:
Mr. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Chief Executive Officer
Navtech Systems Support Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇, ▇▇▇ ▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
20. Time of the Essence
Time shall in all respects be of the essence.
21. Arbitration
All disputes arising out of or in connection with the matters set forth
in this letter agreement shall be decided by a single arbitrator pursuant to the
Arbitration Act (Alberta).
22. Acceptance
If the foregoing general terms and conditions are acceptable to you,
please sign the enclosed duplicate copy of this Letter and return it to us.
Yours truly,
NAVTECH SYSTEMS SUPPORT INC.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------
Per:
Title: Chief Executive Officer
For good and valuable consideration the receipt and sufficiency of
which is hereby acknowledged, Skyplan Services Limited, by its duly authorized
officer, hereby agrees to the terms and conditions above set forth and by the
acceptance hereof, the foregoing shall constitute a binding agreement between
Navtech Systems Support Inc. and Skyplan Services Limited, as set forth above,
this 24th day of September, 1999.
SKYPLAN SERVICES LIMITED
Per: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Director and Officer
Per: /s/ ▇▇▇▇▇▇ ▇▇▇▇
----------------------------------------
▇▇▇▇▇▇ ▇▇▇▇
President
Schedule "A"
Fixed Asset Listing As of December 31, 1998 audit working papers:
Improvements to property
------------------------
Stamp duty
Partitioning/Redecorations
Installation network points
Electrical works
Office Furniture
----------------
Office furniture
Chairs/Bookcase
Desks/Ops table/Filing cabinet
5 Chairs/Arms
Office Equipment
----------------
Office equipment
Mobile phone
Printing calculator
Fans
Vacuum cleaner
Call logging equipment
Photocopier
Handset for answer system
Telephone equipment
Computer Equipment
Computer equipment
Power supply unit
Modem cable
Processor motherboard
Processor motherboard
Modem cable
Network (WAN) equipment
Computer memory
Lap top computer ▇. ▇▇▇▇▇
Various computer equipment
Monitor
HP Jet printer server
Computer system IBM (4 computers)
Laser Jet printer
Network equipment Tricom
Computer system
Schedule "B"
- Aircraft Performance Data;
- Aircraft Characteristics Files;
- Customer Policies for Fuel Reserves and ETPs;
- Customer Stored Routes;
- Customer Networking Addresses (AFTN, SITA, ARINC, Fax);
- Customer-specific NOTAMs;
- Flight Plan Format Files;
- Airport Data for Airport(s) in a designated city-pair for any customer of
the Company;
- Enhancements to the FOMS system as currently provided to the Company's
customers (e.g. ▇▇▇▇).