Document:

Exhibit 10.1

 

SECURITIES
PURCHASE AGREEMENT

 

This Securities Purchase Agreement (this “Agreement”) is entered into as of November 22,
2005 by and among (i) Navtech (Sweden) AB (the “Purchaser”), a company duly organized and registered under the
laws of Sweden, reg. no. 556687-9218, 
and a subsidiary of Navtech Inc., (ii) Navtech, Inc., a
Delaware corporation (“Navtech”),
solely for purposes of Section 1.7, and (iii) SAS AB, a limited
liability company with its registered office at SE-195 87 Stockholm, a company
duly organized and registered under the laws of Sweden, reg. no. 556606-8499
(the “Seller”).

 

Introduction

 

The Purchaser wishes to purchase all of the
issued and outstanding shares of capital stock (the “Securities”) of European Aeronautical Group AB, a limited
liability company with its registered address STOOV, S-19587 Stockholm, Sweden,
a company duly organized and registered under the laws of Sweden, reg. no.
556278-5864 (the “Company”) from
the Seller.  The Seller wishes to sell
the Securities to the Purchaser on the terms set forth herein.  The purchase of the Securities and the other
transactions contemplated hereby are sometimes collectively referred to herein
as the “Transactions.”

 

An index of defined terms used herein is set
forth in ARTICLE 8.

 

NOW THEREFORE, the parties agree as follows:

 

ARTICLE 1

THE TRANSACTIONS; CLOSING

 

1.1.                            Purchase and Sale of Securities.   In reliance upon the representations and
warranties contained herein, and subject to the terms and conditions hereof, at
the Closing the Seller agrees to sell to the Purchaser, and the Purchaser
agrees to purchase from the Seller, the Securities, free and clear of all
liens, claims, encumbrances, security interests and restrictions.  At the Closing, the Seller will deliver
certificates representing the Securities to the Purchaser duly endorsed for
transfer.

 

1.2.                            General.

 

(a)                                  Certain Definitions. 
For purposes of this Agreement, the following terms shall have the
meanings indicated below:

 

(i)                                    “Additional Consideration” means the BA
Payments, as described in Section 1.5.

 

(ii)                                “Estimated Purchase Price” means
SEK180,000,000, plus the estimated amount, if any, by which the Closing Working
Capital exceeds SEK 20,000,000, or minus the estimated amount, if any, by which
the Closing Working Capital is less than SEK 20,000,000, all as provisionally
determined in accordance with this Section 1.2.

 

 

(iii)                            “Final Purchase Price” means SEK 180,000,000
plus the amount, if any, by which the Closing Working Capital exceeds SEK
20,000,000, or minus the amount, if any, by which the Closing Working Capital
is less than SEK 20,000,000, all as finally determined in accordance with Section 1.4.

 

(iv)                               “Closing Working Capital” means (A) total
current assets minus (B) total current liabilities, as determined
inaccordance with generally accepted accounting principles and practices of
Sweden and, as consistently applied to the annual accounts of the Company as
reflected in the audited consolidated financial statements (Consolidated
Accounts) of the Company as of December 31, 2004.  Notwithstanding the foregoing, (X) total
current liabilities shall include all intercompany payables (other than the
Parent Loan) owed by the Company and the Subsidiary to the Seller and any of
its Affiliates (other than the Company and the Subsidiary), and all assets
relating to Swedish pension plans to the extent such assets were included as
current assets and reflected on the Consolidated Accounts of the Company as of December 31,
2004, and all liabilities of the Company and the Subsidiary as of immediately
prior to the Closing in respect of pension obligations and liabilities to
employees of the Company and the Subsidiary, and (Y) total current assets and
total current liabilities shall include all liability for Taxes and prepayments
of Taxes through the end of  the Closing
Date determined based upon a closing of the books of the Company and the
Subsidiary at the end of the Closing Date.

 

(v)                                   “Debt Amount” means all principal, interest,
fees, expenses and other amounts in respect of borrowed money, notes, bonds,
debentures and other debt securities, interest rate, currency or other hedging
arrangements, capital leases, letters of credit or installment purchases
incurred by the Company and the Subsidiary prior to the Closing, or required to
be paid in order to discharge fully all such amounts as of the Closing.

 

(b)                                  Pre-Closing Acknowledgements. 
At least one business (1) day prior to the Closing, the Seller
furnished to the Purchaser (i) a payoff letter from each holder of any portion
of the Debt Amount, if any, indicating the amount required to discharge in full
such portion of the Debt Amount at Closing and including an undertaking by such
holder to discharge at Closing any liens, security interests, mortgages,
restrictions and encumbrances securing such portion of the Debt Amount, and (ii) a
certificate signed by the Seller setting forth the Seller’s (A) estimated
Closing Working Capital, including an itemization of the components of Closing
Working Capital, and (B) estimated calculation of the Estimated Purchase
Price (the “Estimated Closing Purchase Price
Certificate”).  Estimated
Closing Working Capital shall include a reasonable estimate of reserves on any
accounts receivable balances for which collection is in doubt.  This reserve shall include provision for any
accounts receivable balances overdue for 120 days or more at the time of
Closing (the “Closing Overdue Receivables”).

 

(c)                                  Payments at Closing.  
At the Closing, the Purchaser will make the following payments of the Estimated
Purchase Price, with any increase or decrease thereto shown on the Estimated
Closing Purchase Price Certificate and approved by the Purchaser, by wire
transfer as follows: (i) the Purchaser will pay the Debt Amount, if any,
to the respective holders thereof, and (ii) the Purchaser will pay the
balance to the Seller by wire transfer of immediately available funds to a bank
account designated by Seller.

 

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1.3.                            Closing. 
The purchase and sale of the Securities and the other Transactions
contemplated hereby shall take place at a closing (the “Closing”) to be held at the offices of
Choate, Hall & Stewart LLP on (a) November 22, 2005 or (b) if
the Actions at Closing specified in Section 1.6 hereof are not satisfied
or waived as of such date, on the date that is five business days after the
satisfaction or waiver of the Actions at Closing specified in section 1.6
hereof, or on such other date as agreed to in writing by the Seller and the
Purchaser (the “Closing Date”).

 

1.4.                            Determination of Final Purchase Price

 

(a)                                  Within 120
days after the Closing Date, the Purchaser will cause the Company’s current
auditors to prepare, at the Company’s cost and expense, an audited itemized
statement of the Closing Working Capital and the Purchaser will deliver to
Seller within 120 days after the Closing Date a certificate (the “Final Purchase Price Certificate”),
executed by the Purchaser, setting forth such balance sheet and itemized
statement of the Closing Working Capital, and a calculation of the Final
Purchase Price.

 

(b)                                  All accounts
receivable of the Company and the Subsidiary, including the Closing Overdue
Receivables, that were included in the calculation of the Closing Working
Capital set forth in the Estimated Closing Purchase Price Certificate that have
not been collected within the 120 day period after the Closing (except such
accounts receivable that Seller and Purchaser may agree in writing will be
imminently collected), shall be purchased by Seller from the Company or the
Subsidiary on the 130th day after the Closing for cash at the face
value of such accounts receivable less any specific reserves taken for those
accounts receivables and reflected in the Estimated Purchase Price
Certificate.  Upon payment of such cash
amounts by Seller to the Company or the Subsidiary, as applicable, the
Purchaser shall see to it that the Company or Subsidiary, as applicable, shall
notify each other party to such accounts receivables that Seller is now the
holder of such accounts receivable and any collection efforts are to be
directed to and by Seller.  During the
120 day period after the Closing, Purchaser shall see to it that the Company
and the Subsidiary, as applicable, use commercially reasonable efforts to
collect the accounts receivable that were included in the calculation of the
Closing Working Capital and, to the extent the Company collects any amounts on
any receivable during such 120 day period, the current assets set forth on the
Final Closing Working Capital Certificate shall include an amount equal to the
lesser of (i) the amount actually collected on such receivable, and (ii) the
amount of the specific reserve taken for such receivable.

 

(c)                                  If the
Seller delivers written notice (the “Disputed
Items Notice”) to the Purchaser within 30 days after the date of the
Final Purchase Price Certificate, stating that the Seller objects to any items
on the Final Purchase Price Certificate, specifying the basis for such
objection in reasonable detail and setting forth the Seller proposed
modifications to the Final Purchase Price Certificate, the Seller and the
Purchaser will attempt to resolve and finally determine and agree upon the
Final Purchase Price as promptly as practicable.

 

(d)                                  If the
Seller and the Purchaser are unable to agree upon the Final Purchase Price
within 30 days after delivery of the Disputed Items Notice, the Seller and the
Company will select an independent, internationally recognized accounting firm
to resolve the disputed items specified in the Disputed Items Notice.  If the Purchaser and the Seller are unable to
agree on the selection of an accounting firm, the accounting firm will be
chosen by the Stockholm Chamber of

 

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Commerce, with the expenses of the Stockholm
Chamber of Commerce to be shared equally by the Purchaser and the Seller.  The accounting firm will (i) resolve the
disputed items specified in the Disputed Items Notice and (ii) determine
the Final Purchase Price, as modified only by the resolution of such
items.  The accounting firm shall address
only the disputed items set forth in the Disputed Items Notice and may not
assign a value greater than the greatest value claimed for such item by either
party or smaller than the smallest value claimed for such item by either
party.   The determination of the
selected accounting firm will be made within 60 days after being selected and
will be final and  binding upon the parties.  The fees, costs and expenses of the
accounting firm so selected will be borne by the party whose positions
generally did not prevail in such determination, or if the accounting firm
determines that neither party could fairly be found to be the prevailing party,
then 50% of such fees, costs and expenses will be paid by the Seller and the
Purchaser will pay or will cause the Company to pay the other 50% of such fees,
costs and expenses.

 

(e)                                  If the
Seller does not deliver the Disputed Items Notice to the Purchaser within 30
days after the date of the Final Purchase Price Certificate, the calculation of
the Final Purchase Price specified in the Final Purchase Price Certificate will
be conclusively presumed to be true and correct in all respects and will be
final and binding upon the parties.

 

(f)                                    At such time
as the Final Purchase Price is finally determined, either (i) the
Purchaser promptly shall pay the Seller an aggregate amount equal to the Final
Purchase Price less the amount paid at Closing under Section 1.2(c), or (ii) the
Seller shall promptly pay the Purchaser an aggregate amount equal to the excess
of the amount paid at Closing under Section 1.2(c) over the Final
Purchase Price.

 

(g)                                 The final
determination of the Final Purchase Price under this Section 1.4 shall not
impair any other rights of a party under this Agreement including, without
limitation, any rights to indemnification.

 

1.5.                            BA Payments.

 

(a)                                  Definitions.                                For purposes
of this Agreement, the following defined terms shall have the meanings
specified below:

 

“BA Revenue
Period” means the single period, if any, of consecutive months,
commencing with August, 2006, during which the Company and/or Subsidiary
provides Aerad charting software and related services to British Airways and BA
CitiExpress (collectively, “British Airways”),
provided that the BA Revenue Period shall in any event end on July 31,
2008.   By way of example, if the Company
provides to British Airways Aerad charting software and related services during
the months of August, September, October and November of 2006, and
then ceases providing such services to British Airways, but then commences
providing such services to British Airways again in June, 2007, the BA Revenue
Period shall be the period from August, 2006 through November 2006.

 

“2007 BA
Payment Amount” shall equal (i) (A) SEK 15,000,000 multiplied
by (B) a fraction, the numerator of which is the 2007 BA Revenue, and the
denominator of which is

 

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2,037,000 pounds, minus (ii) SEK1,500,000, provided that the 2007
BA Payment Amount shall not exceed SEK13,500,000.

 

“2007 BA
Revenue” means the revenue (in pounds) paid by British Airways to
the Company or Subsidiary for Aerad charting software and related services
provided during the portion, if any, of the BA Revenue Period falling within
the period from August 1, 2006 until July 31, 2007.

 

“2008 BA
Payment Amount” shall equal (i) (A) SEK 15,000,000
multiplied by (B) a fraction, the numerator of which is the 2008 BA
Revenue, and the denominator of which is 2,037,000 pounds, minus (ii) SEK1,500,000,
provided that the 2008 BA Payment Amount shall not exceed SEK13,500,000.

 

“2008 BA
Revenue” means the revenue (in pounds) paid by British Airways to
the Company or Subsidiary for Aerad charting software and related services
provided during the portion, if any, of the BA Revenue Period falling within
the period from August 1, 2007 until July 31, 2008.

 

(b)                                  BA Payments.

 

Not later than July 31, 2006, the
Purchaser shall pay to Seller SEK 3,000,000.

 

Not later than August 31, 2007, the
Purchaser shall pay to Seller an amount equal to the 2007 BA Payment Amount.

 

Not later than August 31, 2008, the
Purchaser shall pay to Seller an amount equal to the 2008 BA Payment Amount.

 

In no event shall the aggregate payments made
pursuant to this Section 1.5 exceed SEK30,000,000.

 

1.6.                            Actions at Closing.

 

(a)                                  At Closing,
the Seller shall:

 

(i)                                    cause the
Company to keep available its share ledger with changes of ownership duly
noted;

 

(ii)                                have
delivered to Purchaser copies of each of the following for the Company
certified to its satisfaction by an officer of the Company:  (A) the Company’s organizational
documents, certified by the appropriate governmental authority as of a recent
date; (B) a certificate of the appropriate governmental authority as of a
recent date as to the legal existence and registration of the Company;

 

(iii)                            have caused
Scandinavian Airlines System to extend its existing agreement with the Company
dated April 7, 2005 and effective as of January 1, 2005, and caused
SAS Braathens A/S to extend their existing agreement with the Company dated as
of September 26, 2004 (copies of which are attached hereto as Exhibit 1.6(a)(iii)) for a

 

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term to expire on November 30, 2008,
pursuant to and in accordance with the form of Extension Agreements attached
hereto as Exhibit 1.6(a)(iii);

 

(iv)                               have caused
all intercompany receivables owed to the Company or the Subsidiary by Seller or
any of its subsidiaries or Affiliates (other than the Company and its
Subsidiary) to be brought current as of the Closing Date and any cash balances
of the Company held in Seller accounts as of the Closing Date shall be paid or
released to the Company; and

 

(v)                                   have
delivered the resignations of each of the members of the respective boards of
directors of the Company and the Subsidiary (other than the employee
representatives).

 

(b)                                  At Closing,
the Purchaser shall:

 

(i)                                    against
delivery by the Seller of documentation of completion of the matters set forth
in and in accordance with Section 1.6(a), pay the Estimated Purchase Price
in accordance with Section 1.2(c); and

 

(ii)                                cause an
extra shareholders meeting of the Company and Subsidiary to be held in order to
appoint new directors of the board of directors of the Company and the
Subsidiary in replacement of those directors who resign at Closing.

 

(c)                                  At Closing,
each party hereto shall deliver to the other all certificates and other
documents required to be delivered by such party under this Agreement and any
of the agreements contemplated hereby that are entered into by such party, and
all such other certificates and documents as such other party may reasonably
require in connection with the Transactions.

 

1.7.                            Navtech Guaranty. 
Navtech hereby guarantees as for its own debt (in Swedish: “såsom för
egen skuld”) the due performance of the obligations of the Purchaser under this
Agreement.

 

ARTICLE 2

REPRESENTATIONS AND WARRANTIES

OF THE SELLER

 

Except as expressly set forth in this Article, the Seller has not made
and will not make any representation or warranty regarding the Seller, the
Company and the Subsidiary, the Securities and the assets and business of the
Company and the Subsidiary and no action or omission on the part of the Seller
or the Company and the Subsidiary shall be construed as implying any
representation or warranty, including but not limited to written materials and
management presentations given to the Purchaser. For the avoidance of doubt, it
shall be specifically understood that any projections or predictions that may
have been made available to the Purchaser are based on good faith estimates,
assumptions and forecasts by the Company at the time which may prove to be
incorrect; and no assurance is given that actual results will correspond to the
results contemplated by any such projections or predictions.

 

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Against this background, the Seller hereby
represents and warrants to the Purchaser that each of the statements contained
in this ARTICLE 2 is true and correct on the Closing Date:

 

2.1.                            Organization, Power and Standing.  The Company is a limited liability company
duly organized, validly existing and registered under the laws of Sweden, and
has all requisite power and authority (company and otherwise) to own, lease and
operate its properties and to carry on the business of the development and sale
of aeronautical software and services, including flight planning, airport
analysis, route documentation and navigation data as currently conducted and as
currently proposed to be conducted (the “Business”).

 

2.2.                            Reserved.

 

2.3.                            Subsidiaries. 
Except as set forth on Schedule 2.3,
the Company has no subsidiaries.  The
entity indicated on such Schedule as subsidiary is referred to herein as
the “Subsidiary”.  Except as set forth on Schedule 2.3 and except for the
Company’s interests in the Subsidiary, neither the Company nor the Subsidiary
directly or indirectly owns any equity interest in any other corporation,
partnership, limited liability company, joint venture, trust or other business
organization.  The Subsidiary is duly
organized, validly existing and, if required, registered under the laws of the
jurisdiction in which it is organized, as set forth on Schedule 2.3.  The Subsidiary has full power and authority
(corporate, company and otherwise) to own, lease and operate its properties and
to carry on its business as such business is now conducted.

 

2.4.                            Due Authorization; Validity and Enforceability.  The Seller has full power and authority and
has taken all required action on its part necessary to permit it to execute and
deliver and to carry out the terms of this Agreement and the other agreements,
instruments and documents of the Seller contemplated hereby.  This Agreement is, and each of the other
agreements, documents and instruments contemplated hereby to which the Seller
is a party shall be when executed, the valid and binding obligations of the
Seller, as the case may be, enforceable in accordance with its terms.

 

2.5.                            Capitalization.

 

(a)                                  The Company’s
authorized and outstanding capital stock is as set forth on Schedule 2.5(a) hereto.  The Securities constitute all of the Company’s
outstanding capital stock and are owned beneficially and of record by the
Seller in the amounts set forth on Schedule 2.5(a) and
are duly authorized, validly issued, fully paid and nonassessable.  The Seller has good, marketable and
unencumbered title to the Securities.

 

(b)                                  The
Subsidiary’s authorized and outstanding capital stock or other equity interests
are as set forth on Schedule 2.5(b) hereto.  The Subsidiary’s outstanding capital stock or
other equity interests are owned beneficially and of record by the Company and
in the amounts set forth on Schedule 2.5(b) and
have been duly authorized, validly issued, fully paid and nonassessable.

 

(c)                                  The
Purchaser will, at the Closing, acquire good and marketable title to the
Securities, free and clear of any liens, encumbrances, security interests,
claims, or restrictions, other than restrictions under applicable securities
laws.

 

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(d)                                  There are no
outstanding options, warrants, convertible or exchangeable securities or other
rights that could, directly or indirectly, obligate the Company or any
Subsidiary to issue shares of its capital stock or other securities.  There are no outstanding or authorized stock
appreciation, phantom stock or similar rights with respect to the Company or
any Subsidiary.  There are no agreements,
written or oral, relating to the acquisition, disposition, or voting of any
security of the Company or the Subsidiary.

 

(e)                                  Neither the
Company nor the Subsidiary is subject to any obligation (contingent or
otherwise) to redeem, purchase or otherwise acquire or retire any of its equity
securities.  No Person has any right of
first offer, right of first refusal, preemptive right or other similar right in
connection with the issuance or sale of the outstanding securities of the
Subsidiary or the Securities, or with respect to any future offer, sale or
issuance of securities by the Company or the Subsidiary.  As used herein, “Person” means any natural person or corporation, limited
liability company, partnership, trust or other entity.

 

2.6.                            Financial Statements. 
The Seller has delivered to the Purchaser the audited, consolidated
balance sheets of the Company and the Subsidiary as at December 31, 2003
and December 31, 2004, and the audited, profit and loss statements for the
fiscal years then ended (the “Audited
Financial Statements”).  The
Seller has also furnished to the Purchaser the unaudited, consolidated balance
sheet of the Company and the Subsidiary (the “Balance
Sheet”) as at September 30, 2005 (the “Balance Sheet Date”) and the unaudited,
consolidated profit and loss statements of the Company and the Subsidiary for
the nine-month period then ended.  The
Audited Financial Statements and the Balance Sheet and the notes thereto, if
any, are accurate in all material respects and fairly present the financial
condition of the Company and the Subsidiary at the respective dates thereof and
the results of their operations for the periods then ended, and were prepared
in accordance with the books and records of the Company and the Subsidiary in
conformity with generally accepted accounting principles and practices of
Sweden, consistently applied during the periods covered thereby.

 

2.7.                            Material Adverse Changes. 
Since the Balance Sheet Date, other than as shown on Schedule 2.7, the Company and the
Subsidiary has operated only in the usual and ordinary course, and there has
been no (a) acquisition or disposition of assets or securities, or
commitment therefor by the Company or the Subsidiary, except for the
acquisition or disposition of assets in the ordinary course of business; (b) liens,
security interests, restrictions, or encumbrances placed upon any of the
Company’s or the Subsidiary’s assets, except in the ordinary course of
business; (c) increase in the compensation or commission rates payable by
the Company or the Subsidiary to any officer, director, employee, consultant or
sales agent, except for such increases in the ordinary course of business and
consistent with past practice; (d) dividend, distribution, redemption,
recapitalization or other transaction involving the equity securities of the
Company or the Subsidiary, or distribution or payment to the Seller or any of
their relatives or Affiliates (as used herein, an “Affiliate” of, or person “affiliated” with, a person, shall
mean a person that directly or indirectly controls, is controlled by or under
common control with, the person specified); (e) capital expenditures by
the Company or any subsidiary in excess of SEK 400,000; or (f) Company
specific event or condition which individually, or together with any other
events or conditions, has had or could reasonably have a material adverse
effect on the Business or the affairs, assets, condition (financial or
otherwise) of the Company or the Subsidiary.

 

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2.8.                            Material Contracts.  Schedule 2.8 sets forth a complete
and accurate list, in each case whether written or unwritten, with an
indication whether or not a “change of control” clause is included.

 

(a)                                  agreements,
contracts or arrangements (other than customer agreements, contracts or
arrangements) with respect to which the Company or any Subsidiary has any
liability or obligation involving more than SEK 1,000,000 annually, contingent
or otherwise;

 

(b)                                  agreements,
contracts, instruments or arrangements pursuant to which the Company or the
Subsidiary is a party relating to the borrowing of money, any capital lease or
purchase on an installment basis of any asset, or the guarantee of any of the
foregoing;

 

(c)                                  agreements,
contracts or arrangements which place any material limitation on the method of
conducting, or scope of, the Business.; and

 

(d)                                  agreements,
contracts or arrangments with customers with respect to which the Company or
the Subsidiary has an annual, estimated revenue exceeding SEK 1,000,000.

 

All the foregoing (whether written or
unwritten), including all amendments or modifications thereto, are referred to
as “Material Contracts.”  The Seller has furnished to the Purchaser
through a data room copies of all Material Contracts (or descriptions thereof,
in the case of oral contracts).  Each
Material Contract (or description) sets forth the entire agreement and
understanding between the Company and/or the Subsidiary and the other parties
thereto.  Each Material Contract is
valid, binding and in full force and effect, and there is no event or condition
which has occurred or exists, which constitutes or which, with or without
notice, the happening of which and/or the passage of time, could constitute a
default or breach under any such Material Contract by the Company or the
Subsidiary or, to the knowledge of the Seller, any other party thereto, or
could cause the acceleration of any obligation of any party thereto or give
rise to any right of termination or cancellation thereof (a “Default”), except to the extent solely
related to delayed payments of a customer of the Company consistent with the
past payment practices of such customer. 
Neither the Seller nor the Company has any reason to believe that the
parties to any Material Contract will not fulfill their obligations thereunder
in all material respects.

 

2.9.                            Real Property.

 

(a)                                  Neither the
Company nor the Subsidiary owns any land, buildings, easements or other real
property rights.

 

(b)                                  Schedule 2.9(b) sets forth
each interest in real property leased by the Company or the Subsidiary, the
lessor of such leased property, the annual rent payable by the Company or any
Subsidiary in respect of such leased property, and each lease or any other
arrangement under which such property is leased (the “Leased Property”).  The Company and the Subsidiary, as
applicable, enjoys peaceful and quiet possession of its leased premises, and is
not in default or breach under any such leasehold.  Neither the Company nor the Subsidiary has
been informed that any lessor under any of the leases set forth on Schedule 2.9(b) has taken
action in respect of any lease or threatened to terminate any lease before the
expiration date

 

9

 

specified in such lease.   Except as set forth on Schedule 2.9(b), the Company and
the Subsidiary is entitled to the benefit of non-disturbance agreements that
will permit it to continue to occupy any Leased Property under its existing
leases in the event of a change in ownership or foreclosure upon the fee
interest in such Leased Property.

 

(c)                                  The Leased
Real Property constitute all real property currently used in, the conduct of
the Business, and are adequate to conduct the operations of the Company and the
Subsidiaries as currently conducted.

 

(d)                                  To the
knowledge of the Seller, there is no pending or threatened condemnation,
expropriation or similar proceeding with respect to any real property occupied
by the Company or the Subsidiary.

 

(e)                                  To the
knowledge of the Seller, each real property occupied by the Company or the
Subsidiary is in compliance in all material respects with all building, zoning,
subdivision, health, safety and other applicable laws and regulations.  To the knowledge of the Seller, none of the
buildings, plant or structures on the Leased Property is in need of maintenance
or repairs except for ordinary, routine maintenance and repairs that are not
material.  To the knowledge of the
Seller, all utility systems serving the Leased Property are adequate for the
Business as currently conducted.

 

2.10.                     Personal Property, etc.  The Company and the Subsidiary has good title
to or a valid leasehold or license interest in each item of personal property
used by it in the Business (including good and marketable title to all assets
reflected on the Balance Sheet, except for accounts receivable collected and
inventory disposed of in the ordinary course since the Balance Sheet Date),
free and clear of any security interests, liens, restrictions and encumbrances
of every kind, nature and description. 
Except as set forth on Schedule 2.10,
the assets and properties of the Company and the Subsidiary, together with the
benefits and services provided under the Transition Service Agreements, include
all assets currently used in the conduct of the Business and are adequate to
conduct the operations of the Company and the Subsidiary as currently
conducted.

 

2.11.                     Intellectual Property.

 

(a)                                  As used
herein “Intellectual Property”
means all (i) patents, patent applications, patent disclosures and
inventions, (ii) trademarks, service marks, trade dress, trade names,
logos and corporate names (in each case, whether registered or unregistered)
and registrations and applications for registration thereof together, to the
extent applicable, with all of the goodwill associated therewith, (iii) copyrights
(registered or unregistered) and registrations and applications for
registration thereof, (iv) computer software, data, data bases and
documentation thereof, (v) trade secrets and other confidential
information (including, without limitation, ideas, formulas, compositions,
inventions (whether patentable or unpatentable and whether or not reduced to
practice), know-how, manufacturing and production processes and techniques,
research and development information, drawings, specifications, designs, plans,
proposals, technical data, copyrightable works, financial and marketing plans
and customer and supplier lists and information), (vi) World Wide Web
addresses and domain name registrations and (vii) works of authorship
including, without limitation, computer programs, source code and

 

10

 

executable code, whether embodied in
software, firmware or otherwise, documentation, designs, files, records, data
and mask works and any rights in semiconductor masks, layouts, architectures or
topography.  As used herein “Company Intellectual Property” means
Intellectual Property owned or used by the Company or the Subsidiary.

 

(b)                                  Schedule 2.11(a) lists all
Company Intellectual Property, describes the Company Intellectual Property and
describes Company’s and the Subsidiary’s rights in the Company Intellectual
Property.  Except as set forth on Schedule 2.11(a), the Company
Intellectual Property is all of the Intellectual Property used in the Business
as currently conducted and is sufficient to conduct the operations of the
Company and the Subsidiary as currently conducted.

 

(c)                                  Schedule 2.11(a) lists all
licenses and other rights granted by the Company or the Subsidiary to any
Person with respect to any Company Intellectual Property and all licenses and
other rights granted by any Person to the Company or the Subsidiary with
respect to any Company Intellectual Property. 
Except for Company Intellectual Property licensed to the Company
pursuant to licenses listed on Schedule 2.11(a),
the Company and the Subsidiary owns the entire right, title and interest in the
Company Intellectual Property.  The
validity of such licenses will not be affected by the parties’ entry into this
Agreement or the consummation of the transactions contemplated herein.

 

(d)                                  Neither the Company nor the Subsidiary has violated, or is
violating by conducting the Business, any Intellectual Property (other than a
patent, trademark or trade name) of any other Person, and the Seller has no
knowledge of any violation by any Person of any Company Intellectual Property.  To the best of the Seller’s knowledge,
neither the Company nor the Subsidiary has violated, or is violating by
conducting the Business, any patent, trademark or trade name of any other
Person.  Except as set forth on Schedule 2.11(a), none of the
Company or the Subsidiary or the Seller has received any notice from any Person
claiming infringement of a Person’s Intellectual Property rights.

 

(e)                                  Each patent,
trademark, mask work or registered copyright owned by the Company or the
Subsidiary is valid, all necessary fees in connection with such Company
Intellectual Property have been paid, and all necessary documents in connection
with such Company Intellectual Property have been filed with the relevant
authorities. There is no reasonably foreseeable loss of any Company
Intellectual Property.

 

(f)                                    The Company
and the Subsidiary has taken all commercially reasonable steps to obtain and
protect their ownership of, and the confidentiality of, the Company
Intellectual Property including, without limitation, obtaining valid
irrevocable assignment of any Intellectual Property created by current and
former consultants and contractors as set forth on Schedule 2.11(f).

 

2.12.                     Estonia Subsidiary.  On October 17, 2005, the Company sold
all of its ownership in European Aeronautical Group Estonia OU (the “Estonia Sub”) to Carel LLC.  The Estonia Sub was never engaged in any
business or other activity and never had any assets, liabililties or
obligations of any kind.  The Company
does not  have and there will not be any
liabilities or obligations of the Company with respect or related to the
Estonia Sub.

 

11

 

2.13.                     Inventories.  The inventory of the Company and the
Subsidiary consists of  materials,
manufactured and purchased parts and finished goods saleable or usable in the
ordinary course of business within twelve (12) months.  The inventory of the Company and each
Subsidiary is and as of the Closing will be fit and sufficient for the purposes
for which it was provided and will be normal and reasonable in kind and amount
in light of the normal needs of the Business.

 

2.14.                     Warranty Claims.  Except as set forth in Schedule 2.14, there are, and
since January 1, 2004, there have been, no claims in writing against the
Company or the Subsidiary alleging any material defects in the Company’s or any
Subsidiary’s services or products, or alleging any material failure of the
products of the Company or any Subsidiary to meet specifications, or oral
notice thereof under circumstances that, to the knowledge of Seller and good
faith belief of the Seller, could have a reasonable likelihood of giving rise
to such a claim.

 

2.15.                     Customers and Suppliers.  To the knowledge of the Seller with respect
to the customer contracts and arrangements listed on the Material Contracts Schedule 2.8,
(a) all customers will continue purchasing, without significant
reductions, products or services from the Company or the Subsidiary, (b) all
significant suppliers material to the Company or the Subsidiary (defined as
suppliers from which the Company or the Subsidiary ordered materials, supplies,
merchandise, services or other goods for the Business having an aggregate
purchase price of SEK 1,000,000 or more during the last twelve (12) months),
will continue to sell to the Company or such Subsidiary the products and
services currently sold by each of them to the Company or the Subsidiary and (c) all
other parties that have material business relations with the Company and the
Subsidiary will continue such relations. 
To the Seller’s knowledge, the Company’s and the Subsidiary’s
relationships with such customers, suppliers and other parties are good
commercial working relationships.  During
the previous 18 months no material supplier or customer representing more than
SEK 1,000,000 of consolidated annualized revenues or expenses, as applicable,
for the Company or the Subsidiary has terminated or threatened to terminate,
its relationship with the Company or the Subsidiary, or has decreased or
limited materially or threatened to decrease or limit materially the services,
supplies or materials supplied to or purchased from the Company or the
Subsidiary.

 

2.16.                     Required Consents.  Except as specified on Schedule 2.16, no consent, order,
authorization, approval, declaration or filing, including, without limitation,
any consent, approval or authorization of or declaration or filing with any
governmental or non-governmental authority or any party to a Material Contract,
is required on the part of the Company or the Subsidiary or the Seller for or
in connection with the execution, delivery or performance of this Agreement and
the agreements, documents and instruments contemplated hereby, or the conduct
of the Business by the Company or the Subsidiary after the Closing (the “Required Consents”).  The execution, delivery and performance of
this Agreement and the other instruments, documents and agreements contemplated
hereby by the Seller will not result in any violation of, be in conflict with
or constitute a default under, any law, statute, regulation, ordinance,
agreement, contract, instrument, license, permit, authorization, judgment,
decree or order to which the Company, the Subsidiary or the Seller is a party
or by which the Company, the Subsidiary or the Seller is bound.

 

12

 

2.17.                     Regulatory and Legal
Compliance. 
The Company and the Subsidiary are in compliance in all material
respects with all foreign, state and local statutes, laws, ordinances,
judgments, decrees, orders or governmental rules, regulations, policies and
guidelines applicable to it .

 

2.18.                     Licenses and Permits.  Schedule 2.18
sets forth all licenses, permits, authorizations and certifications of
governmental and non-governmental authorities held by the Company or the
Subsidiary which are necessary for the Company and/or the Subsidiary to carry
out their Business.  The Company and the
Subsidiary is in material compliance with all such licenses, permits,
authorizations and certifications, all of which are in full force and effect
and will be in full force and effect immediately after giving effect to the
Transactions.  There are no other such
licenses, permits, authorizations or certifications which are material to the
Company, the Subsidiary or the Business, which the Company or the Subsidiary,
as applicable, has not obtained.  To the
knowledge of the Seller, there are no threatened suspension, revocation or
invalidation of such licenses, permits, authorizations or certifications, or
any basis therefor.

 

2.19.                     Tax Matters.

 

(a)                                  Definitions. 
For purposes of this Agreement, the following definitions shall apply:

 

(i)                                    “Tax” or “Taxes”
means all taxes, charges, fees, levies, penalties, additions or other
assessments imposed by any Swedish, United Kingdom, foreign, federal, state,
local or other taxing authority, including, but not limited to, income, excise,
property (including council rates), sales, transfer, franchise, payroll
(including national insurance contributions), withholding, employment, value
added, social security, customs duties, stamp duties, degrouping charges or
other taxes, including any interest, penalties or additions attributable
thereto.

 

(ii)                                “Tax Returns” means all reports, estimates,
declaration of estimated Tax, information statements and returns relating to,
or required to be filed in connection with, any Taxes and any schedules
attached to or amendments of (including refund claims with respect to) any of
the foregoing.

 

(b)                                  Each of the
Company and the Subsidiary has filed all Tax Returns and other tax related
documents required to be filed by the Company and the Subsidiary under all
relevant law.  Neither the Company nor
the Subsidiary is or, to the knowledge of the Seller is likely to be, the
subject of any dispute with respect to taxation. The Tax Returns of the Company
and the Subsidiary are true  and in all
material respects correctly reflect the income, expenses, deductions, credits,
and Taxes due by the Company and/or the Subsidiary and, except as set forth on Schedule 2.19(b), have not been
amended. The Company and the Subsidiary have paid all Taxes required to be paid
by them which have fallen due prior to the Closing Date. No claims for
assessment or collection of any Taxes have been asserted or to the Seller’s
knowledge will be asserted against the Company or the Subsidiary relating to
any period prior to the Closing Date.

 

(c)                                  All Taxes
due by the Company and/or by the Subsidiary on or before the date hereof,
whether or not shown on Tax Returns filed, and all Taxes of the Company and/or
the

 

13

 

Subsidiary through the Closing Date, whether
or not due and whether or not shown on Tax Returns filed, have been fully paid,
or fully reserved for in the respective accounting books of the Company and/or
the Subsidiary and taken into account in the final determination of Closing
Working Capital.  For this purpose, the
liability of the Company and the Subsidiary through the Closing Date for Taxes
shall be determined based upon a closing of the books of the Company and the
Subsidiary at the end of the Closing Date, and in each case Taxes shall include
without limitation any degrouping charges and any liability subsequently
imposed at any time relating to any period prior to and including the Closing
Date by any Tax authority upon audit or examination.

 

2.20.                     Litigation.  Except as set forth on Schedule 2.20, no action,
arbitration, suit, proceeding or investigation is pending or, to the knowledge
of the Seller, threatened against the Company, the Subsidiary or, to the
knowledge of the Seller, against any officer, director or employee of the
Company or the Subsidiary in relation to the affairs of the Company or the
Subsidiary or the Business.  Except as
expressly set forth on Schedule 2.20,
the matters disclosed on such Schedule will be covered by the Company’s
insurance policies.

 

2.21.                     Employees and
Compensation.

 

(a)                                  The names of
all employees with an annual base salary exceeding SEK 300,000 of the Company
and names of all employees with an annual base salary exceeding GBP 21,100 of
the Subsidiary as well as their salaries, pensions and other employment
benefits per that date are listed on Schedule 2.21.  The Company and the Subsidiary have fulfilled
their respective material obligations as regards all Taxes relating to its
respective employees.  All salaries,
remunerations, benefits and pension appropriations to the employees are paid or
fully secured through insurances and, to the knowledge of the Seller, the
employees of the Company and the Subsidiary do not have any claims against the
Company or the Subsidiary. The employees have no additional employment benefits
other than stated in Schedule 2.21.  To the Seller’s knowledge, no claims
whatsoever relating to the period prior to the Closing will  be raised against the Company or the
Subsidiary neither from present or former employees nor from any union or
similar association in which any present or former employee is or has been a
member.

 

(b)                                  No present
employee of the Company or the Subsidiary has as per the Closing Date given or
received notice terminating his/her employment, except as set forth in Schedule 2.21.  Neither the Company nor the Subsidiary has
given notice of any redundancies to any employee or started consultations with
any trade union pursuant to any statute or regulation.

 

(c)                                  The Company
and the Subsidiary has fulfilled its respective obligations under applicable
laws, regulation and collective bargaining agreements with regard to any
obligations to negotiate with the unions.

 

2.22.                     Environmental Matters.  The use of the Company’s and the Subsidiary’s
premises and the occupancy thereof, and the ownership and use of the Company’s
and the Subsidiary’s assets and operation thereof, and the conduct of the
Company’s and the Subsidiary’s operations and business, are in compliance in
all material respects with all applicable foreign, federal, state and local
laws, ordinances, regulations, standards and requirements relating to
pollution, environmental protection, hazardous substances and related

 

14

 

matters. 
To the knowledge of the Seller, there is no liability attaching to the
Company or any Subsidiary or, to the knowledge of the Seller and the Company,
such premises, or the assets or the ownership or operation thereof as a result
of any hazardous substance that may have been discharged on or released from
such premises, or disposed of on-site or off-site, or any other circumstance
occurring prior to the Closing or existing as of the Closing.  For purposes of this Section, “hazardous
substance” shall mean oil or any other substance which is included within the
definition of a “hazardous substance”, “pollutant”, “toxic substance”, “toxic
waste”, “hazardous waste”, “contaminant” or other words of similar import in
any foreign, federal, state or local environmental law, ordinance or
regulation.

 

2.23.                     Insurance.     The Company and the Subsidiary maintain
and/or have reasonable and adequate insurance coverage of a type and amount
customarily carried by companies in the same industry as the Company and the
Subsidiary.  All premiums due on the
insurance policies or renewals thereof have been paid and such policies will be
in full force and effect until the Closing. 
Nothing has been done or omitted to be done by the Seller, the Company
or the Subsidiary which makes any policy of insurance in respect of the Company
or the Subsidiary or its business or assets void or voidable or which would
permit an insurer to cancel the policy or refuse to accept a claim.

 

2.24.                     Affiliate Transactions.  Except as set forth on Schedule 2.24, (a) neither
the Company nor the Subsidiary is a party to any contract or arrangement with,
or indebted, either directly or indirectly, to any of its officers, directors,
managers, or their respective relatives or Affiliates, and (b) to the
Seller’s knowledge, none of such Persons is indebted to the Company or the
Subsidiary or has any direct or indirect ownership interest in, or any
contractual or business relationship with, any Person with which the Company or
the Subsidiary is or was Affiliated or with which the Company or the Subsidiary
has a business relationship, or any Person which, directly or indirectly,
competes with the Company or the Subsidiary.

 

2.25.                     Absence of Material
Undisclosed Liabilities. 
Except for (a) accounts payable and accrued expenses reflected on
the Balance Sheet and other similar amounts incurred in the ordinary course of
business since the Balance Sheet Date, and (b) obligations of future
performance under contracts set forth on a Schedule hereto and other
contracts entered into in the ordinary course in accordance with this Agreement
which are not required to be listed on a Schedule hereto, as of the
Closing Date, the Company and each Subsidiary will have no material liabilities
or obligations, whether absolute, accrued, contingent or otherwise and whether
due or to become due relating to an event pertaining to the conduct of the
Business prior to Closing.

 

2.26.                     Brokers.  No finder, broker, agent, financial advisor
or other intermediary has acted on behalf of the Seller, the Company or the
Subsidiary in connection with the negotiation or consummation of this Agreement
or the Transactions and no such Person is entitled to any fee, payment,
commission or other consideration in connection therewith as a result of any
arrangement made by any of them.

 

2.27.                     Parent Loan.  The Company has repaid in full the
outstanding loan from Seller to the Company. 
As of the Closing, other than intercompany receivables and payables
included in Closing Working Capital, no intercompany loans or advances from
Seller or any of its Affiliates (other than the Company or any of the
Subsidiaries) to the Company or any of the Subsidiaries

 

15

 

shall be outstanding and no amounts (whether
principle, interest, fees or otherwise) shall be due or owing in respect
thereof.

 

2.28.                     UK Pension
Representations.

 

(a)                                  Other than
under the Scandinavian Airlines System (Investments) Limited Pension and
Assurance Scheme and the Scandanavian Airlines System Group Income Protection
Policy and UNUM (“Disclosed Schemes”),
there is not and has not been in operation, and no proposal has been announced
to enter into or establish, and the Subsidiary does not contribute, is not
bound to contribute either now or in the future and has not contributed to, any
agreement, arrangement, scheme, custom or practice (whether enforceable or not,
whether or not exempt approved by the Inland Revenue and whether or not funded
for in advance) for the payment of any pensions, allowances, lump sums or other
benefits on death, retirement or termination of employment (whether voluntary
or not), or during any period of sickness or disablement, for or in respect of
any of the Subsidiary’s employees or officers or former employees or officers,
or any dependant of such an employee or officer, or former employee or officer.

 

(b)                                  Full and
accurate details of the Disclosed Schemes, including current details of the
rate(s) at which the Subsidiary is obliged to contribute in respect of each
employee or officer who is a member of the Disclosed Schemes, have been
disclosed to the Purchaser and there are no members of the Disclosed Schemes
other than those whose names have been supplied to the Purchaser and there are
no other employees of the Subsidiary who are currently eligible for or who have
been offered membership of the Disclosed Schemes.

 

(c)                                  No
undertaking or assurance (whether or not legally enforceable) has been given or
discretion or power exercised by or on behalf of the Subsidiary or the trustees
of the Disclosed Schemes as to the continuance of the Disclosed Schemes or the
continuance, increase or improvement of any benefit provided by, or
contribution to, the Disclosed Schemes or to admit to membership any person who
would not normally be eligible for membership of the Disclosed Schemes or on
terms other than those that would normally be applicable under the Disclosed
Schemes.

 

(d)                                  There is no
requirement for the Subsidiary nor the Disclosed Schemes to provide or procure
the provision of benefits to any person except on the terms and to the extent
applicable to that person that would normally be applicable under the rules of
the Disclosed Schemes.

 

(e)                                  No employee
or officer or former employee or officer of the Subsidiary has a right (whether
under the terms of any contract of employment or otherwise or arising out of
their employment or the termination of any contract of employment) and no
undertaking or assurance has been given (whether or not legally enforceable) by
or on behalf of the Subsidiary or the trustees of the Disclosed Schemes to
continued membership of the Disclosed Schemes or continued entitlement to, or
continued membership of a scheme providing, final salary benefits or any other
benefits calculated by reference to their remuneration.

 

2.29.                     Transition Services.  The Transition Service Agreements listed on Schedule 4.9 hereof constitute the
complete terms and conditions under which the benefits and services

 

16

 

specified in such agreements have been
provided to the Company and/or the Subsidiary by the Seller and/or its
Affiliates or by third parties under agreements or arrangements with Seller
and/or its Affiliates in connection with the operation of the Business as
currently conducted.

 

2.30.                     Wideroe Claim.          The Company
has paid in full any unpaid portion of the liability of the Company and the
Subsidiary in respect of the settlement with Widerøe ́s Flyveselskap AS
concerning the agreement on Rodos services entered into in 2003 and the Company
has no liabilities remaining with respect to such settlement.

 

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

 

The Purchaser represents and warrants to the
Seller that each of the statements contained in this ARTICLE 3 is true and
correct:

 

3.1.                            Authority.  The Purchaser has all
requisite corporate power and authority to enter into this Agreement and
perform the Purchaser’s obligations hereunder, and this Agreement has been duly
authorized by the Purchaser and constitutes a valid and binding obligation of
the Purchaser enforceable against the Purchaser in accordance with its terms.

 

3.2.                            No Conflict. 
The execution, delivery and performance of this Agreement and the other
instruments and agreements contemplated hereby by the Purchaser will not result
in any violation of, be in conflict with or constitute a default under, any
law, statute, regulation ordinance, material contract or agreement, instrument,
judgment, decree or order to which the Purchaser is a party or by which it is
bound.

 

3.3.                            Brokers. 
No finder, broker, agent, financial advisor or other intermediary has
acted on behalf of the Purchaser in connection with this Agreement or any of
the Transactions, and no such Person is entitled to any fee, payment,
commission or other consideration in connection therewith as a result of any
arrangement made by the Purchaser.

 

3.4.                            Due Diligence By Purchaser. 
Purchaser has conducted its own independent review and analysis of the
Company and the Subsidiary and the Business and acknowledges that Seller and
the Company have provided the Purchaser with satisfactory access to the
personnel, properties, premises and records of the Business for this purpose,
including access to documentation relating to the Company, the Subsidiary and
the Business contained in the data room set up by the Seller for this
purpose.  Purchaser has relied solely
upon its own investigation and analysis, and Purchaser acknowledges that neither
the Seller nor the Company makes any representation or warranty, express or
implied, as to the accuracy or completeness of any of the information provided
or made available to Purchaser, except for the representations and warranties
contained in Article 2 of this Agreement.

 

3.5.                            No Breach.                                   The
Purchaser is not aware of any fact or circumstance, which constitute a breach
of any of the representations and warranties in accordance with this Agreement,
which could entitle the Purchaser to raise a claim against the Seller
hereunder.

 

17

 

ARTICLE 4

COVENANTS OF THE SELLER AND THE PURCHASER

 

4.1.                            Confidentiality. 
Following the Closing, the Seller shall not, directly or indirectly,
disclose, divulge or make use of any trade secrets or other information of a
business, financial, marketing, technical or other nature pertaining to the
Company, the  Subsidiary or the Business,
including information of others that the Company or the Subsidiary has agreed
to keep confidential, except to the extent that such information shall have
become public knowledge other than by breach of this Agreement by the Seller,
except to the extent that disclosure of such information is required by
law.  Notwithstanding the foregoing, the
Seller and the Purchaser agree that this restriction and covenant in no event
shall be interpreted as to limit the Seller’s and its Affiliates’ ability to
continue to use information about the Company and the Subsidiary and their
respective products and services only for so long as and solely in connection
with their on-going contractual business relationship with the Company and the
Subsidiary, provided that the internal use by the Seller and its Affiliates of
any such information solely in 
connection with determining whether to use the products or services of
the Company or the Subsidiary or one of their competitors shall not be deemed
to be a violation of this Section 4.1 so long as the Seller and its
Affiliates do not disclose any such information in any manner to any such
competitor.

 

4.2.                            Noncompetition Covenant. 
For a period of two years after the Closing (a)  the Seller will
not, directly or indirectly, or as a stockholder, partner, member, manager,
employee, consultant or other owner or participant in any Person engage in or
assist any other Person to engage in any business in which the Company or any
of their respective subsidiaries is engaged, anywhere in the world where the
Purchaser, the Company or any of their respective subsidiaries does business,
and (b)  other than pursuant to Section 4.4, the Seller will not,
directly or indirectly, solicit or endeavor to entice away from the Purchaser,
the Company or any of their respective subsidiaries, or offer employment or a
consulting position to, or otherwise interfere with the business relationship
of the Purchaser, the Company or any of their respective subsidiaries with, any
Person who is, or was within the one-year period prior thereto, a customer or
employee of, consultant, supplier or service provider to, or other Person
having a business relations with, the Purchaser, the Company or any of their
respective subsidiaries.

 

4.3.                            Injunctive Relief. 
The Seller acknowledges that any breach or threatened breach of the
provisions of Sections 4.1 or 4.2 of this Agreement will cause irreparable injury
to the Purchaser, the Company and/or their respective subsidiaries for which an
adequate monetary remedy does not exist. 
Accordingly, in the event of any such breach or threatened breach of Section 4.1
or 4.2, the Purchaser shall be entitled, in addition to the exercise of other
remedies, to seek and (subject to court approval) obtain injunctive relief,
without necessity of posting a bond, restraining the Seller from committing
such breach or threatened breach.  The
right provided under this Section 4.3 shall be in addition to, and not in
lieu of, any other rights and remedies available to the Purchaser, the Company
or such subsidiaries.

 

4.4.                            Employee Termination Costs. 
Seller shall be liable for and shall pay or promptly reimburse the
Company on or after the Closing for the costs and expenses incurred by the
Company in connection with the termination of up to (but not more than) two
employees of the Company.  Purchaser
shall notify Seller in writing at or prior to the Closing of the identity of
the employee(s) the termination costs for which shall be the responsibility of
Seller.

 

18

 

4.5.                            Travel Benefits Plans. 
Seller shall continue in effect, at its sole cost and expense, for a
period of 24 months after the Closing (or such shorter period as Purchaser
shall specify in writing to Seller) the private ID travel benefits plans for
the employees of the Company and the Subsidiaries as of the Closing.  Seller shall be liable for and shall pay or
promptly reimburse the Company on or after the Closing for the costs and
expenses incurred by the Company or the Subsidiary as a result of a legally
valid employee claim against the Company or the Subsidiary in connection with
the termination of such private ID travel benefits plans when such plans are
terminated for such employees in accordance with this Section. Any such claim
shall be handled in accordance with the procedure for third party claims set
forth herein.

 

4.6.                            Shareholders meeting. The Purchaser, unless the auditors
recommend against it, procure that the retiring board members, alternates and
managing directors of the Company and the Subsidiary shall be discharged from
liability as members of the board and managing director as regards the period
of their offices at the next annual general meeting of shareholders.

 

4.7.                            Sigma. 
The parties agree that all rights and liabilities arising out of and
relating to the systems supplied to the Company prior to the date hereof
pursuant to the terms of the Company’s current systems supply agreements with
Sigma Information Design AB (“Sigma”),
i.e. “Systemleveransavtal rörande Integrated
Document Handling System (IDHS)” between the Company and Sigma,
dated June 15, 2003, and the Supplemental Agreement No 1 concerning the IDHS
dated May 27, 2004 and the Supplemental Agreement No 2 concerning the IDHS
dated 3 January, 2005 (jointly referred to as the “Sigma Agreements”) shall be attributable to the Seller in the
event such systems are rejected by the Company and returned by the Company to
Sigma, and Seller shall indemnify the Company and the Purchaser from any costs,
claims or liabilities arising out of or related to the Sigma Agreements to the
extent not included in Closing Working Capital. 
Notwithstanding the foregoing, if such systems are accepted by the
Company, then the Company shall have the obligation to make payment to Sigma
for such systems in accordance with the terms of the Sigma Agreements, and the
Seller shall have no rights that may arise out of or relate to the Sigma
Agreements or the systems delivered pursuant thereto, and shall only indemnify
the Purchaser to the extent costs relating to the Sigma Agreements due per the
Closing Date exceed the liability included in the Closing Working Capital for
such costs.

 

4.8.                            Seller Pension Covenant. 
The Seller and the Purchaser agree to be bound by the covenants,
agreements, terms and conditions set forth on Schedule 4.8 hereof
pertaining to UK pension matters of the Subsidiary and the relevant employees
of the Subsidiary.

 

4.9.                            Transition Services Covenant.

 

(a)                                  The Seller
shall cause the benefits and services described and provided for pursuant to
the contracts and agreements listed on Schedule 4.9
hereto to continue to be provided to the Company and/or the Subsidiary, as
applicable, from and after the Closing Date on the same terms and conditions as
set forth in such contracts and agreements (the “Transition Service Agreements”) for the applicable period of
time specified on such Schedule 4.9
opposite the applicable Transition Service Agreement, or for such shorter
period of time as Purchaser may specify to SAS after the Closing for a
particular Transition Service Agreement.

 

19

 

(b)                                  Following
the Closing, if it is determined that there are benefits or services that the
Seller or its Affiliates provide or have provided to the Company and/or the
Subsidiary in connection with the operation of the Business (either directly or
under agreements with third parties whereby such benefits and services are
provided by such third parties under agreements with Seller or its Affiliates)
that are not covered by the Transition Service Agreements (but expressly
excluding duty travel which shall not be continued after Closing, although Seller
and its Affiliates will honor duty travel bookings made prior to Closing), the
Seller shall continue to provide or cause to be provided to the Company and/or
the Subsidiary, as applicable, such benefits and services at a cost equal to
the actual charges paid by the Company and the Subsidiary prior to Closingfor
such benefits and services, each such benefit and service to be provided until
the Company or the Subsidiary, as the case may be, may reasonably obtain such
benefit or service from third parties, it being agreed that in the case of
benefits or services that may not reasonably be obtained from third parties,
the Seller shall continue to provide or cause to be provided to the Company
and/or the Subsidiary, as applicable, such benefits and services for so long as
the Company or Subsidiary requires such benefit or service.

 

(c)                                  For a period
of thirty (30) days following the Closing Date, the Seller shall continue in
effect all of the insurance coverage of the Company and the Subsidiary (other
than crime directors and officers and general liability (aviation) insurance)
on the same terms and conditions (including cost to the Company) as are in
effect immediately prior to the Closing, provided, however, that Purchaser
shall use best efforts to arrange for substituting insurance coverage
immediately after Closing and the Seller shall only continue non-aviation
insurance until December 19, 2005.

 

4.10.                     Facility Lease.  The sublease between Seller and the Company
for the Company’s premises in Sollentuna, Sweden (the “Facility Sublease”) shall continue in full
force and effect after the Closing in accordance with its terms (subject to any
rights of the Company to terminate the Facility Sublease prior to its scheduled
term), regardless of the Transactions, and, unless otherwise requested by the
Purchaser or the Company, the Seller shall continue in full force and effect
the facility lease on which the Facility Sublease is based (the “Facility Lease”) during its term.  At the request of the Company or the
Purchaser after the Closing, the Seller shall cooperate with Purchaser and the
Company to arrange to have the Facility Lease transferred from the Seller to
the Company.

 

4.11.                     Oracle Matters.  As soon as reasonably practicable following
the Closing, the Purchaser shall, or shall cause the Company to, negotiate a
license with Oracle Corporation for the use of Oracle databases similar to the
databases currently used by the Company and/or the Subsidiary pursuant to the
terms of the License Agreement between the Seller and Oracle dated as of September 7,
1994 (the “Oracle License Agreement”).  For a period of ninety (90) days following
the Closing Date (the “Oracle Negotiation
Period”),  the Seller shall
provide access to and continue to permit the Company and the Subsidiary to
utilize the Oracle databases provided to the Seller pursuant to the terms of
the Oracle License Agreement in the same manner and on the same terms
(including cost to the Company and the Subsidiary) as the Company and the
Subsidiary currently utilize such databases.

 

20

 

ARTICLE 5

TAX COVENANT OF THE SELLER AND THE PURCHASER

 

5.1.                            Certain Taxes. All United Kingdom or Swedish transfer,
documentary, sales, use, real property gains, stamp, registration, and other
such Taxes and fees (including any penalties and interest) incurred as a result
of the securities transaction contemplated by this Agreement shall be paid by
the Seller when due, and the Company will, at the Seller’s expense, file all
necessary Tax Returns and other documentation with respect to all such
transfer, documentary, sales, use, real property gains, stamp, registration,
and other Taxes and fees, and, if required by applicable law, the Purchaser and
the Company and the Subsidiaries will join in the execution of any such Tax
Returns and other documentation.

 

ARTICLE 6

SURVIVAL; INDEMNIFICATION

 

6.1.                            Survival. 
The representations, warranties, covenants and agreements contained
herein shall survive the Closing and any investigation or finding made by or on
behalf of the Purchaser, the Seller or the Company.  No action for a breach of the representations
and warranties contained herein shall be brought more than 18 months following
the Closing Date, except for (a) claims arising out of the representations
and warranties contained in Sections 2.5, 2.27 and 2.30 which shall survive
indefinitely or Section 2.19, which shall survive for the applicable
statute of limitations including extensions (the “Specified Representations”) and (b) claims of which the
Seller has been notified with reasonable specificity by the Purchaser, or
claims of which the Purchaser has been notified with reasonable specificity by
the Seller, prior to the expiration of the survival period for the applicable
representation and warranty set forth above.

 

6.2.                            Limits on Claims. 
The Purchaser shall not be entitled to recover any Losses (as
hereinafter defined) for a breach of the representations and warranties of the
Seller contained herein (a) for an aggregate amount in excess of the SEK
Final Purchase Price, (b) in respect of any single Loss of an amount of
SEK 200,000 or less, such claims being disregarded for the purpose of
calculating any such Loss, and (c) unless the aggregate amount of all such
Losses exceeds the sum of SEK 3,000,000, at which time the Purchaser shall be
entitled to recover all Losses, including the first SEK 3,000,000; provided,
that Losses resulting from or arising out of breaches of the Specified
Representations shall not be subject to the foregoing limitations, except that
with respect to Section 2.19, the Purchaser shall not be entitled to
recover any Losses for a breach of the representations and warranties contained
in Section 2.19 hereof in respect of any single Loss of an amount of SEK
50,000 or less, provided however, that claims under any of the similar tax
catagories (by way of example:  (a) corporation
and income tax, (b) value added tax and (c) employment, payroll,
social, labor and insurance taxes.), regardless of when such claims are made or
to which taxable periods they relate, shall be aggregated with other claims
under the same tax category and treated as a single claim.  Subject to the other limitations set forth
herein, in the event of a breach of any of the representations and warranties
by the Seller contained herein, including the Specified Representations, the
Purchaser’s sole and exclusive remedy shall be to recover for Losses pursuant
to the indemnification provisions set forth in this Article 6 and such
Losses shall be deemed to be a reduction of the Final Purchase Price.  Hence it is specifically agreed that no
remedy under the Swedish Sale of Goods Act (Sw. Köplagen

 

21

 

1990:931), as
amended, or any other applicable statue or legal principle shall be available
to the Purchaser in connection with a breach of any of the representations and
warranties of Seller contained herein. 
For purposes of this Article 6, when determining whether the amount
of the Losses resulting from a breach of any representation or warranty of the
Seller, any material adverse effect or other materiality qualifier contained in
such representation or warranty will be disregarded.  Notwithstanding the limitations on
indemnification set forth in Sections 6.1 and this 6.2, such limitations
shall not apply to any claim against the Seller for breach of any
representation or warranty which was actually known by the Seller to be
inaccurate at Closing and which breach was not previously disclosed to the
Purchaser in writing.

 

6.3.                            Indemnification by Seller.   Subject to any applicable limitations set
forth in Section 6.1 and Section 6.2, the Seller shall indemnify and
hold the Purchaser as the purchaser of and stockholder of the Company and the
Subsidiary (it being agreed that Losses (as defined below) suffered by or
occurring at the Company or the Subsidiary shall be deemed Losses  of the Purchaser for purposes of
indemnification pursuant to the terms and conditions of this Article 6)
harmless from and against all claims, liabilities, obligations, costs, damages,
losses and expenses (including reasonable attorneys fees) of any nature
(collectively, “Losses”) arising
out of or relating to (a) any breach of a representation or warranty in Article 2
hereof, (b) any breach or violation of any covenants or agreements of the
Seller set forth in this Agreement or in any certificate or document delivered
by Seller at Closing pursuant to this Agreement and (c) any (i) breach
prior to Closing under the Oracle Licence Agreement or any infringement claim
related thereto, (ii) infringement claim arising out of or related to the
Company’s or the Subsidiary’s continued use of the Oracle databases covered by
the Oracle License Agreement during the Oracle Negotiation Period or any
related or similar claim, including any claim for breach or violation of the
Oracle License during the Negotiation Period and (iii) the inability of
the Company and/or the Subsidiary to utilize or the termination of the Company’s
and/or the Subsidiary’s rights to utilize the Oracle databases covered by the
Oracle License Agreement during the Oracle Negotiation Period.  In
addition to the limits on claims in Section 6.1 and 6.2 above, the Seller’s
liability for Losses shall be limited as follows:

 

(a)                                  to the
extent that a Loss occurs as a result of any legislation not in force at the
date hereof, or takes effect retrospectively;

 

(b)                                  which would
not have arisen but for a voluntary act, intentional omission or transaction
carried out by the Purchaser, or person deriving title from the Purchaser after
Closing;

 

(c)                                  relevant tax
benefits for the Company and/or the Subsidiary shall be taken into account; or

 

(d)                                  with respect
to Losses resulting from products of the Company subject to regular updates
(AIRAC cycles), solely to the extent such Losses result from the failure of the
Company to conduct reasonable updates of such products following the Closing
Date (taking into consideration the nature of the Business, including without
limitation quality standards and procedures).

 

22

 

6.4.                            Indemnification by the Purchaser.  Subject to the limitations set forth in Section 6.1
and 6.2, the Purchaser shall indemnify and hold the Seller harmless from and
against all Losses arising out of or relating to any breach or violation of the
representations, warranties, covenants or agreements of the Purchaser set forth
in this Agreement.

 

6.5.                            Notification of Loss. 
In the event the Purchaser becomes aware of any Loss, for which
Purchaser is entitled to recover from Seller pursuant to the terms of this
Agreement, other than a Loss resulting from a third party Claim, which shall be
governed by Section 6.6 below, Purchaser shall promptly (but in no event
later than forty five (45) days following the date the Purchaser becomes aware
of the facts and circumstances giving rise to any Loss) notify Seller in
writing of the circumstances giving rise to the Loss and provide Seller with
reasonable access to the relevant information describing or relating to such Loss.

 

6.6.                            Procedures for Indemnification of Third Party Claims.

 

(a)                                  A party or
parties entitled to indemnification hereunder with respect to a third party
claim (the “Indemnified Party”)
will give the party or parties required to provide such indemnification (the “Indemnifier”) prompt written notice of any
legal proceeding, claim or demand instituted by any third party (in each case,
a “Claim”) in respect of which the
Indemnified Party is entitled to indemnification hereunder.

 

(b)                                  If the
Indemnifier provides written notice to the Indemnified Party stating that the
Indemnifier is responsible for the Claim within 10 days after its receipt of
written notice from the Indemnified Party of such Claim, the Indemnifier shall
have the right, at the Indemnifier’s expense, to defend against, negotiate,
settle or otherwise deal with such Claim and to have the Indemnified Party
represented by counsel, reasonably satisfactory to the Indemnified Party,
selected by the Indemnifier; provided, that the Indemnified Party may participate
in any proceeding with counsel of its choice and at its expense; provided
further, that the Purchaser, at any time when it believes in good faith
that any Claim with respect to which the Seller is defending it or the Company
or any of the Subsidiaries is having or could reasonably be expected to have a
material adverse effect on the Business or assets, affairs, condition
(financial or otherwise) or prospects of the Company or any of the
Subsidiaries, may assume the defense and settlement of such Claim in good
faith, with counsel of its choice, and be fully indemnified therefor; and provided
further, that the Indemnifier may not enter into a settlement of any Claim
without the written consent of the Indemnified Party unless such settlement
provides the Indemnified Party with a full release from such Claim and requires
no more than a monetary payment for which the Indemnified Party is fully
indemnified.

 

(c)                                  The parties
will cooperate fully with each other in connection with the defense of any
Claim.

 

6.7.                            Right of Set-Off. 
If either party has not satisfied in cash any indemnification obligation
owed by it hereunder as finally determined by a competent court or arbitration
panel, the claiming party or any of its Affiliates may, at their discretion, satisfy
the unpaid portion of such obligation by, to the extent permitted by law,
setting-off against any amounts due and owing from the defaulting party or any
of its Affiliates to the the other party pursuant to this

 

23

 

Agreement, including, without limitation, any
amounts due to the Seller as Additional Consideration.

 

ARTICLE 7

MISCELLANEOUS

 

7.1.                            Notices. 
All notices, demands or other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered in person, or
by international overnight courier service, or otherwise actually delivered:

 

(a)                                  if to the
Seller, to:

 

SAS AB

Frosundaviks alle 1

S-195 87 Stockholm

Attention: Benny Zakrisson

with a copy (which shall not constitute
notice) to:

SAS AB

Frosundaviks alle 1

S-195 87 Stockholm

Attention: General Counsel SAS Group

 

(b)                                  if to the
Purchaser, to:

 

Navtech (Sweden) A.B.

c/o Navtech Systems Support, Inc.

175 Columbia Street West, Suite 102

Waterloo, Ontario N2L 5Z5 Canada

Attention:  David Strucke, CEO

 

with a copy (which shall not constitute
notice) to:

 

Choate, Hall & Stewart LLP

Two International Place 

Boston, Massachusetts  02110, USA

Attention:  William B. Asher, Jr., Esq.

 

and

 

Advokatfirman Delphi & Co.

Box 1432

111 84 Stockholm;
Sweden

Attention:  Per Lagerkvist

 

or at such other address as may have been furnished by such Person in
writing to the other parties.

 

24

 

7.2.                            Severability and Governing Law; Arbitration.

 

(a)                                  This
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision hereof shall be prohibited or
invalid under any such law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating or nullifying the
remainder of such provision or any other provisions of this Agreement.  If any one or more of the provisions
contained in this Agreement shall for any reason be held to be excessively
broad as to duration, geographical scope, activity or subject, such provisions
shall be construed by limiting and reducing it so as to be enforceable to the
maximum extent permitted by applicable law.

 

(b)                                  This
Agreement shall be governed by and construed in accordance with the internal
laws of Sweden, without regard to its conflicts of laws principles.  Any dispute, controversy or claim arising out
of or in connection with this Agreement, or the breach, termination or
invalidity thereof, shall be finally settled by arbitration in Stockholm,
Sweden in accordance with the Rules of the Arbitration Institute of the
Stockholm Chamber of Commerce.  The
arbitral tribunal shall be composed of three arbitrators.  The language to be used in any such arbitral
proceedings, if so requested by a party, shall be English.

 

7.3.                            Amendments, Waivers. 
This Agreement may be amended or modified only with the written consent
of the Purchaser and the Seller.  No
waiver of any term or provision hereof shall be effective unless in writing
signed by the party waiving such term or provision.  No failure to exercise or delay in exercising
any right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or remedy hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy.  The rights
provided hereunder are cumulative and not exclusive of any rights, powers or
remedies provided by law.

 

7.4.                            Expenses. 
The legal, accounting, financing and due diligence expenses and any
broker’s or finder’s fees incurred by the Purchaser in connection with the
Transactions will be borne by the Purchaser and the legal and other costs and
expenses and any broker’s or finder’s fees incurred by the Seller, the Company
or the Subsidiary in connection with the Transactions contemplated hereby will
be borne by the Seller.

 

7.5.                            Successors and Assigns. 
This Agreement, and all provisions hereof, shall be binding upon and
inure to the benefit of the respective successors and permitted assigns of the
parties hereto, provided that this Agreement may not be assigned by any
party without the prior written consent of the other parties hereto.  Notwithstanding the foregoing, this Agreement
may be assigned by the Purchaser to any of its Affiliates or to any Person
acquiring a material portion of the assets, business or securities of the
Purchaser, whether by merger, consolidation, sale of assets or securities or
otherwise, provided, that Purchaser and its successor remains liable for
Purchaser’s obligations hereunder.

 

7.6.                            Entire Agreement. 
This Agreement, the attached exhibits and schedules, and the other
agreements, documents and instruments contemplated hereby contain the entire
understanding of the parties, and there are no further or other agreements or
understanding, written or oral, in effect between the parties relating to the
subject matter hereof unless expressly referred to herein.

 

25

 

7.7.                            Counterparts. 
This Agreement may be executed in one or more counterparts, and with
counterpart facsimile signature pages, each of which shall be an original, but
all of which when taken together shall constitute one and the same Agreement.

 

7.8.                            Headings. 
The headings of Articles and Sections herein are inserted for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.

 

7.9.                            Release. 
The Seller hereby voluntarily, knowingly and irrevocably releases and
forever discharges the Company, the Subsidiary and their respective officers,
directors and employees (the “Released
Parties”) from any and all claims, liabilities, obligations,
damages, expenses and other amounts of every kind, nature or description, known
or unknown, suspected or unsuspected, arising or existing prior to the Closing
Date, except for (i) any rights of the Seller under this Agreement and the
Transition Service Agreements, (ii) intercompany payables included in
Closing Working Capital, and (iii) claims, liabilities, obligations,
damages, expenses and other amounts of every kind, nature or description, known
or unknown, of Seller against a Released Party that were caused by criminal
behavior or willful misconduct of such Released Party.

 

7.10.                     Further Assurances.  Following the Closing, the Seller will
execute and deliver to the Purchaser such documents and take such other actions
as the Purchaser may reasonably request in order to fully consummate the
Transactions.

 

7.11.                     Third Party
Beneficiaries. 
Nothing in the Agreement shall be construed to confer any right, benefit
or remedy upon any Person that is not a party hereto or a permitted assignee of
a party hereto.

 

7.12.                     No Strict Construction.  The parties hereto have participated jointly
in the negotiation and drafting of this Agreement and the other agreements and
documents contemplated herein.  In the
event an ambiguity or question of intent or interpretation arises under any
provision of this Agreement or any other agreement or documents contemplated
herein, this Agreement and such other agreements or documents shall be
construed as if drafted jointly by the parties thereto, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of
authoring any of the provisions of this Agreement or any other agreements or
documents contemplated herein.

 

7.13.                     Publicity. Each of
the parties will keep confidential and not disclose any details relating to
this Agreement or the Transactions without the prior written consent of the
other parties (other than as required pursuant to an order by a court of law or
governmental agency or otherwise for compulsory legal requirements, provided
that in such instance prior written notice of such disclosure is given by the
disclosing party to the other parties). 
Any press release or other public disclosure or announcement of this
Agreement or the Transactions, including any notice to customers or suppliers
of the Business, shall be in a form approved in advance in writing by Seller
and Purchaser.

 

7.14.                     Schedules and
Exhibits.  All
schedules and exhibits to this Agreement are an integral part of this Agreement
and are incorporated herein by reference. 
All Schedules delivered with this Agreement shall be arranged to
correspond with the numbered and lettered

 

26

 

Sections and Subsections contained in this
Agreement, and the disclosures in such Schedules shall qualify only the
corresponding Sections and Subsections contained in this Agreement, unless
otherwise expressly provided herein.

 

7.15.                     Definition of Knowledge.

 

(a)                                  For the
Purposes of this Agreement, “to the knowledge of the Seller”, “to the Seller’s
knowledge” or any other similar phrase shall mean the actual knowledge of any
of Benny Zakrisson, Ulf Lundmark, Bjorn Nordgren, Bjorn Alegren, Erik Hellners,
Ingvar Soderlund, Lars Brynielsson, Johan Holmqvist, Gunnar Ohrn, Roland
Backlund, Bjorn Nilsson and Goran Pettersson and such knowledge as any of them
reasonably should have, given the circumstances existing at a particular time
and the inquiry and due diligence actually conducted by such person as of such
time.

 

(b)                                  For the
Purposes of this Agreement, “to the knowledge of the Purchaser”, “to the
Purchaser’s knowledge” or any other similar phrase shall mean the actual
knowledge of any of David Strucke, Gordon Heard, Jill Montgomery and Derek
Dawson and such knowledge as any of them reasonably should have, given the
circumstances existing at a particular time and the inquiry and due diligence
actually conducted by such person as of such time.

 

ARTICLE 8

DEFINITIONS

 

The following terms, as used in this
Agreement, have the meanings given to them where indicated below:

 

	
  Term

  	
   

  	
  Section or
  Place

  Where Defined

  
	
   

  	
   

  	
   

  
	
  Additional Consideration

  	
   

  	
  Section 1.2

  
	
  Agreement

  	
   

  	
  Preamble

  
	
  Affiliate

  	
   

  	
  Section 2.7

  
	
  Audited Financial Statements

  	
   

  	
  Section 2.6

  
	
  BA Revenue Period

  	
   

  	
  Section 1.5

  
	
  Balance Sheet

  	
   

  	
  Section 2.6

  
	
  Balance Sheet Date

  	
   

  	
  Section 2.6

  
	
   

  	
   

  	
   

  
	
  British Airways

  	
   

  	
  Section 1.5

  
	
  Business

  	
   

  	
  Section 2.1

  
	
  Claim

  	
   

  	
  Section 6.6

  
	
  Closing

  	
   

  	
  Section 1.3

  
	
  Closing Date

  	
   

  	
  Section 1.3

  
	
   

  	
   

  	
   

  
	
  Closing Overdue Receivables

  	
   

  	
  Section 1.2

  

 

27

 

	
  Term

  	
   

  	
  Section or
  Place

  Where Defined

  
	
   

  	
   

  	
   

  
	
  Closing Working Capital

  	
   

  	
  Section 1.2

  
	
  Company

  	
   

  	
  Introduction

  
	
  Company Intellectual Property

  	
   

  	
  Section 2.11

  
	
  Debt Amount

  	
   

  	
  Section 1.2

  
	
  Default

  	
   

  	
  Section 2.8

  
	
  Disclosed Schemes

  	
   

  	
  Section 2.28

  
	
  Disputed Items Notice

  	
   

  	
  Section 1.4

  
	
   

  	
   

  	
   

  
	
  Estimated Closing Purchase Price
  Certificate

  	
   

  	
  Section 1.2

  
	
  Estimated Purchase Price

  	
   

  	
  Section 1.2

  
	
  Estonia Sub

  	
   

  	
  Section 2.12

  
	
  Facility Lease

  	
   

  	
  Section 4.10

  
	
  Facility Sublease

  	
   

  	
  Section 4.10

  
	
  Final Purchase Price

  	
   

  	
  Section 1.2

  
	
  Final Purchase Price Certificate

  	
   

  	
  Section 1.4

  
	
  Indemnified Party

  	
   

  	
  Section 6.6

  
	
  Indemnifier

  	
   

  	
  Section 6.6

  
	
  Intellectual Property

  	
   

  	
  Section 2.11

  
	
  Leased Property

  	
   

  	
  Section 2.9

  
	
  Losses

  	
   

  	
  Section 6.3

  
	
  Material Contracts

  	
   

  	
  Section 2.8

  
	
  Navtech

  	
   

  	
  Preamble

  
	
   

  	
   

  	
   

  
	
  Oracle License Agreement

  	
   

  	
  Section 4.11

  
	
  Oracle Negotiation Agreement

  	
   

  	
  Section 4.11

  
	
  Person

  	
   

  	
  Section 2.5

  
	
   

  	
   

  	
   

  
	
  Purchaser

  	
   

  	
  Preamble

  
	
  Released Parties

  	
   

  	
  Section 7.9

  
	
  Required Consents

  	
   

  	
  Section 2.16

  
	
  Securities

  	
   

  	
  Introduction

  
	
   

  	
   

  	
   

  
	
  Seller

  	
   

  	
  Preamble

  
	
   

  	
   

  	
   

  
	
  Sigma

  	
   

  	
  Section 4.7

  

 

28

 

	
  Term

  	
   

  	
  Section or
  Place

  Where Defined

  
	
   

  	
   

  	
   

  
	
  Sigma Agreements

  	
   

  	
  Section 4.7

  
	
  Specified Representations

  	
   

  	
  Section 6.1

  
	
  Subsidiary or Subsidiaries

  	
   

  	
  Section 2.3

  
	
  Tax or Taxes

  	
   

  	
  Section 2.19

  
	
  Tax Returns

  	
   

  	
  Section 2.19

  
	
  Transaction Services Agreement

  	
   

  	
  Section 4.9

  
	
  Transactions

  	
   

  	
  Introduction

  
	
   

  	
   

  	
   

  
	
  2007 BA Payment Amount

  	
   

  	
  Section 1.5

  
	
  2007 BA Revenue

  	
   

  	
  Section 1.5

  
	
  2008 BA Payment Amount

  	
   

  	
  Section 1.5

  
	
  2008 BA Revenue

  	
   

  	
  Section 1.5

  

 

29

 

IN WITNESS WHEREOF, the parties hereto have
executed and delivered this Agreement as a sealed instrument as of the date
first above written.

 

 

	
   

  	
  NAVTECH (Sweden) AB

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  (title)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NAVTECH, INC., Solely for Purposes of
  Section

  1.7

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  (title)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SAS AB (publ)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  (title)

  
				

 

30Exhibit 10.2

 

NAVTECH,
INC.

 

 

SERIES
A CONVERTIBLE PARTICIPATING PREFERRED STOCK

AND WARRANT PURCHASE AGREEMENT

 

November
22, 2005

 

 

Table of Contents

 

	
  1.

  	
  Authorization of Preferred
  Stock; Purchase and Sale of Preferred Stock; Authorization of Warrants;
  Closing.

  	
   

  	
   

  
	
   

  	
  1.1.

  	
  Authorization of Preferred Stock

  	
   

  	
   

  
	
   

  	
  1.2.

  	
  Authorization of Warrants

  	
   

  	
   

  
	
   

  	
  1.3.

  	
  Purchase and Sale of the
  Preferred Stock and Warrants; Reservation of Common Stock

  	
   

  	
   

  
	
   

  	
  1.4.

  	
  Purchase Price and the Closing

  	
   

  	
   

  
	
   

  	
  1.5.

  	
  Use of Proceeds

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Representations and
  Warranties of the Company

  	
   

  	
   

  
	
   

  	
  2.1.

  	
  Organization and Corporate Power

  	
   

  	
   

  
	
   

  	
  2.2.

  	
  Authorization

  	
   

  	
   

  
	
   

  	
  2.3.

  	
  Capitalization

  	
   

  	
   

  
	
   

  	
  2.4.

  	
  Subsidiaries.

  	
   

  	
   

  
	
   

  	
  2.5.

  	
  Financial Information

  	
   

  	
   

  
	
   

  	
  2.6.

  	
  Absence of Undisclosed Liabilities

  	
   

  	
   

  
	
   

  	
  2.7.

  	
  Absence of Certain Developments

  	
   

  	
   

  
	
   

  	
  2.8.

  	
  Title to Properties

  	
   

  	
   

  
	
   

  	
  2.9.

  	
  Tax Matters

  	
   

  	
   

  
	
   

  	
  2.10.

  	
  Contracts and Commitments

  	
   

  	
   

  
	
   

  	
  2.11.

  	
  No Defaults

  	
   

  	
   

  
	
   

  	
  2.12.

  	
  Intellectual Property.

  	
   

  	
   

  
	
   

  	
  2.13.

  	
  Effect of Transactions

  	
   

  	
   

  
	
   

  	
  2.14.

  	
  No Governmental Consent or Approval
  Required

  	
   

  	
   

  
	
   

  	
  2.15.

  	
  Litigation

  	
   

  	
   

  
	
   

  	
  2.16.

  	
  Securities Laws

  	
   

  	
   

  
	
   

  	
  2.17.

  	
  Business

  	
   

  	
   

  
	
   

  	
  2.18.

  	
  Brokerage

  	
   

  	
   

  
	
   

  	
  2.19.

  	
  Employees

  	
   

  	
   

  
	
   

  	
  2.20.

  	
  Environmental Matters

  	
   

  	
   

  
	
   

  	
  2.21.

  	
  Retirement Obligations, etc

  	
   

  	
   

  
	
   

  	
  2.22.

  	
  Transactions with Affiliates

  	
   

  	
   

  
	
   

  	
  2.23.

  	
  Books and Records

  	
   

  	
   

  
	
   

  	
  2.24.

  	
  Insurance

  	
   

  	
   

  
	
   

  	
  2.25.

  	
  EAG

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Representations and
  Warranties and other Agreements of the Investors.

  	
   

  	
   

  
	
   

  	
  3.1.

  	
  Representations and Warranties

  	
   

  	
   

  
	
   

  	
  3.2.

  	
  Legends

  	
   

  	
   

  
	
   

  	
  3.3.

  	
  Confidentiality

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  Conditions to the Investors’
  Obligations at the Closing

  	
   

  	
   

  
	
   

  	
  4.1.

  	
  Representations and Warranties of the
  Company

  	
   

  	
   

  
	
   

  	
  4.2.

  	
  Performance

  	
   

  	
   

  
	
   

  	
  4.3.

  	
  Compliance Certificate

  	
   

  	
   

  

 

i

 

	
   

  	
  4.4.

  	
  Certificate of Incorporation

  	
   

  	
   

  
	
   

  	
  4.5.

  	
  Qualifications

  	
   

  	
   

  
	
   

  	
  4.6.

  	
  Proceedings and Documents

  	
   

  	
   

  
	
   

  	
  4.7.

  	
  Other Agreements

  	
   

  	
   

  
	
   

  	
  4.8.

  	
  Opinion of Counsel

  	
   

  	
   

  
	
   

  	
  4.9.

  	
  Secretary’s Certificate

  	
   

  	
   

  
	
   

  	
  4.10.

  	
  Reservation of Conversion Shares and
  Warrant Shares

  	
   

  	
   

  
	
   

  	
  4.11.

  	
  Fees of Investors’ Counsel

  	
   

  	
   

  
	
   

  	
  4.12.

  	
  Purchase by Other Investors

  	
   

  	
   

  
	
   

  	
  4.13.

  	
  Consummation of the EAG Acquisition

  	
   

  	
   

  
	
   

  	
  4.14.

  	
  Board of Directors

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  Conditions to the Company’s
  Obligations at the Closing

  	
   

  	
   

  
	
   

  	
  5.1.

  	
  Representations and
  Warranties

  	
   

  	
   

  
	
   

  	
  5.2.

  	
  Payment of Purchase Price

  	
   

  	
   

  
	
   

  	
  5.3.

  	
  Other Agreements

  	
   

  	
   

  
	
   

  	
  5.4.

  	
  Proceedings and Documents

  	
   

  	
   

  
	
   

  	
  5.5.

  	
  Consummation of the EAG Acquisition

  	
   

  	
   

  
	
   

  	
  5.6.

  	
  Qualifications

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  Preemptive Right of Purchase.

  	
   

  	
   

  
	
   

  	
  6.1.

  	
  Grant

  	
   

  	
   

  
	
   

  	
  6.2.

  	
  Preemptive Right Definitions

  	
   

  	
   

  
	
   

  	
  6.3.

  	
  Notice

  	
   

  	
   

  
	
   

  	
  6.4.

  	
  Sale

  	
   

  	
   

  
	
   

  	
  6.5.

  	
  Limitation

  	
   

  	
   

  
	
   

  	
  6.6.

  	
  Transfer

  	
   

  	
   

  
	
   

  	
  6.7.

  	
  Retrospective Effect of
  Preemptive Right of Purchase

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  Miscellaneous.

  	
   

  	
   

  
	
   

  	
  7.1.

  	
  Certain Defined Terms

  	
   

  	
   

  
	
   

  	
  7.2.

  	
  Survival of Covenants; Assignability of
  Rights

  	
   

  	
   

  
	
   

  	
  7.3.

  	
  Incorporation by Reference

  	
   

  	
   

  
	
   

  	
  7.4.

  	
  Parties in Interest

  	
   

  	
   

  
	
   

  	
  7.5.

  	
  Amendments and Waivers

  	
   

  	
   

  
	
   

  	
  7.6.

  	
  Governing Law

  	
   

  	
   

  
	
   

  	
  7.7.

  	
  Notices

  	
   

  	
   

  
	
   

  	
  7.8.

  	
  Effect of Headings

  	
   

  	
   

  
	
   

  	
  7.9.

  	
  Entire Agreement

  	
   

  	
   

  
	
   

  	
  7.10.

  	
  Severability

  	
   

  	
   

  
	
   

  	
  7.11.

  	
  Restrictions on Transfer

  	
   

  	
   

  
	
   

  	
  7.12.

  	
  Counterparts

  	
   

  	
   

  

 

ii

 

List of Exhibits and Schedules

 

Exhibits

 

	
  Exhibit A - List of
  Investors

  
	
  Exhibit B — Form of the
  Company’s Certificate of Designation

  
	
  Exhibit C — Form of
  Warrant

  
	
  Exhibit D — Form of
  Registration Rights Agreement

  
	
  Exhibit E — Form of
  Closing Opinion of Company Counsel

  

 

Disclosure Schedule

 

	
  Section 2.1 - Foreign
  Qualifications

  
	
  Section 2.3 — Options and Stock
  Purchase Rights

  
	
  Section 2.4 — Subsidiaries

  
	
  Section 2.9 — Tax Matters

  
	
  Section 2.12(a) — Owned
  Intellectual Property

  
	
  Section 2.12(b) — Patents,
  Trademarks and Licenses

  
	
  Section 2.12(c) — Third Party
  Intellectual Property Agreements

  
	
  Section 2.15 — Litigation

  
	
  Section 2.19 — Employment
  Agreements

  
	
  Section 2.21 — Employee Benefit
  Plans

  

 

iii

 

NAVTECH,
INC.

c/o
Navtech Systems Support Inc.

Suite
102, 175 Columbia St. W.

Waterloo,
Ontario

Canada
N2L 5Z5

SERIES A CONVERTIBLE PARTICIPATING PREFERRED

STOCK AND WARRANT PURCHASE AGREEMENT

 

This SERIES A
CONVERTIBLE PREFERRED PARTICIPATING STOCK AND WARRANT PURCHASE AGREEMENT (the “Agreement”)
is made as of the 22nd day of November, 2005 by and among Navtech, Inc., a
Delaware corporation (the “Company”) and, the investors listed on Exhibit
A hereto (each of whom individually is referred to herein as an “Investor”
and collectively as the “Investors”).

 

In consideration
of the mutual promises and covenants contained in this Agreement, the parties
hereto agree as follows:

 

1.             Authorization of
Preferred Stock; Purchase and Sale of Preferred Stock; Authorization of Warrants;
Closing.

 

1.1.          Authorization of Preferred
Stock.  The Company has authorized
the issuance and sale of up to 1,600,000 shares of its Series A Convertible
Participating Preferred Stock, $0.01 par value per share (the “Series A
Preferred Stock”) to be issued under this Agreement.  The rights, privileges, and preferences of
the Series A Preferred Stock are as set forth in the Company’s Certificate of Designation
(the “Certificate of Designation”) in the form attached to this
Agreement as Exhibit B, which the Company shall adopt and file with the
Secretary of State of the State of Delaware on or before the date of the
Closing (as defined below).

 

1.2.          Authorization of Warrants.  The Company has authorized the issue and sale
of its warrants (herein, together with any warrants issued in exchange therefor
or replacement thereof called the “Warrants”) evidencing the rights to
acquire an aggregate of 100,000 shares (subject to adjustment) of Common Stock
(as defined below).  The Warrants shall
be exercisable at a price of $3.00 per share and shall be substantially in the
form attached to this Agreement as Exhibit C.

 

1.3.          Purchase and Sale of the
Preferred Stock and Warrants; Reservation of Common Stock.  Subject to the terms and conditions of this
Agreement and on the basis of the representations and warranties set forth
herein, the Company agrees to sell to the Investors, and each such Investor,
severally and not jointly, agrees to purchase from the Company at the Closing
(as defined below) (a) the number of shares of Series A Preferred Stock
set forth opposite such Investor’s name on Exhibit A hereto, and
(b) for no additional consideration, a Warrant initially exercisable for the
number of shares of Common Stock set forth opposite such 

 

 

Investor’s name on Exhibit
A hereto.  The sale of the Series A
Preferred Stock and the Warrants to each Investor hereunder shall constitute a
separate sale.  The Company has
authorized and reserved and covenants to continue to reserve, free of
preemptive rights and other preferential rights, a sufficient number of its
previously authorized but unissued shares of Common Stock, $0.001 par value per
share (the “Common Stock”) to satisfy the rights of conversion of the
holders of the Series A Preferred Stock and the rights of exercise of the
holders of the Warrants.  Any shares of
Common Stock issuable upon conversion of the Series A Preferred Stock shall be
referred to in this Agreement as “Converted Shares”.  The shares of Series A Preferred Stock issued
to the Investors pursuant to this Agreement and the Converted Shares shall be
referred to in this Agreement as the “Shares.”  The Warrants issued pursuant to this
Agreement and the Shares shall be referred to in this Agreement as the “Securities”.

 

1.4.          Purchase Price and the Closing.  The purchase and sale of the Securities shall
take place at a Closing to be held at the offices of Choate, Hall & Stewart
LLP, Two International Place, Boston, Massachusetts  02110, on such date and at such time as may
be mutually agreed upon by the parties (the “Closing”).  The aggregate purchase price of the Series A
Preferred Stock being purchased by each Investor at the Closing is set forth
opposite such Investor’s name on Exhibit A under the heading “Aggregate
Purchase Price”.  The Closing shall
take place concurrently with the execution and delivery of this Agreement or at
such other time as the parties shall mutually agree.  At the Closing, the Company will deliver to
each of the Investors purchasing Securities a certificate or certificates,
registered in such Investor’s name or such name as otherwise directed by such
Investor, representing the number of Shares and Warrants to be acquired by such
Investor pursuant to this Agreement against payment of the purchase price
thereof by wire transfer, by check payable to the Company or such other form of
payment acceptable to such Investor and the Company.

 

1.5.          Use of Proceeds.  The Company will use the proceeds from the
sale of the Securities to consummate the acquisition of European Aeronautical
Group AB (“EAG”) and for other general corporate purposes as determined
by the Company’s Board of Directors.

 

2.             Representations and
Warranties of the Company.  In order
to induce the Investors to enter into this Agreement and to purchase the Securities
hereunder, the Company hereby represents and warrants to each Investor, as of
the date hereof, in each case subject to such exceptions as are set forth in
the disclosure schedule attached hereto (the “Disclosure Schedule”),
each such exception of which qualifies the representation and warranty that is
specifically identified (by cross-reference or otherwise) as being qualified by
such exception.  For the purposes of this
Section 2, the term “Subsidiaries” shall mean those subsidiaries listed in
Section 2.4 of the Disclosure Schedule and shall not mean EAG.

 

2.1.          Organization and Corporate
Power.  The Company is a corporation
duly organized, validly existing and in corporate good standing under the laws
of the State of Delaware.  The Company is
duly qualified to do business as a foreign corporation and is in good standing
under the laws of each jurisdiction in which either the ownership or use of its
assets, or

 

2

 

the nature of its
activities, requires such qualification, except where failure to be so
qualified would not have a material adverse effect, each such jurisdiction
being set forth in Section 2.1 of Disclosure Schedule.  The Company has all required corporate power
and authority to own its property, to carry on its business as presently conducted
or contemplated to be conducted, and to carry out the transactions contemplated
hereby.  The copies of the Certificate of
Incorporation and By-Laws of the Company, as amended to date, which have been
furnished to the Investors by the Company, are correct and complete.

 

2.2.          Authorization.  This Agreement, the Registration Rights
Agreement dated as of the date of the Closing by and among the Company, the
Investors and the other parties thereto (the “Registration Rights Agreement”),
and any other agreements, instruments or documents entered into at the Closing
by the Company pursuant to this Agreement or the Registration Rights Agreement
(collectively, the “Transaction Documents”) have been duly executed and
delivered by the Company and are the legal, valid and, assuming due execution
and delivery by the other parties hereto and thereto, binding obligations of
the Company, enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency, reorganization and moratorium laws and other laws of
general application affecting enforcement of creditors’ rights generally.  The execution, delivery and performance of
each of the Transaction Documents have been duly authorized by all necessary
corporate action of the Company.

 

2.3.          Capitalization.  The entire authorized capital stock of the
Company consists of 20,000,000 shares of Common Stock of which 4,902,140 shares
are issued and outstanding and 2,000,000 shares of preferred stock, of which,
prior to the issuance of the Series A Preferred Stock contemplated in this
Agreement, no shares are issued and outstanding.  The Company holds 733,188 shares of Common
Stock in its treasury and holds no shares of preferred stock in its
treasury.  The Company has authorized the
issuance of 1,600,000 shares of Series A Preferred Stock for issuance to the
Investors pursuant to this Agreement. 
When issued and paid for in accordance with the terms of this Agreement,
the Shares will be duly authorized, validly issued and outstanding, fully paid
and nonassessable.  Upon exercise of the
Warrants, all shares of Common Stock issued to the Investors in accordance with
the terms thereof will be, duly authorized, validly issued, fully paid and
nonassessable. Except as described in Section 2.3 of the Disclosure
Schedule and except for the Warrants and the warrants issued pursuant to the
Abry Warrant Agreement (defined below), there are no outstanding options or
other rights to purchase or acquire from the Company, or exchangeable for or
convertible into, any shares of capital stock. 
The Company has reserved a total of not less than 400,000 shares of its
Common Stock (the “Reserved Employee Shares”) for purchase upon exercise
of options granted or to be granted in the future to employees and consultants
under the Navtech, Inc. 1999 Stock Option Plan (the “Equity Plan”).  Except as provided in this Agreement, the
other Transaction Documents and that certain Warrant Agreement dated as of the
date of the Closing, by and among the Company, Abry Mezzanine Partners, L.P.
and the other parties thereto (the “Abry Warrant Agreement”), there are
no preemptive rights with respect to the issuance or sale by the Company of the
Securities.  Except as provided in this
Agreement, the Certificate of Designation or as imposed by applicable securities
laws, upon the Closing there will be no restrictions on the

 

3

 

transfer or voting of any
shares of the Series A Preferred Stock or Common Stock other than restrictions
on transfer necessary to preserve the exemptions pursuant to which such
securities were issued without registration under applicable securities
laws.  Other than as set forth in the
Registration Rights Agreement, there are no existing rights with respect to
registration under the Securities Act of 1933, as amended (the “1933 Act”)
of any of the Company’s securities.  The
Company has not violated the 1933 Act or any state Blue Sky or securities laws
in connection with the issuance of any of its securities.

 

2.4.          Subsidiaries.

 

(a)           Section
2.4 of the Disclosure Schedule contains a list of all subsidiaries of the
Company (the “Subsidiaries”). 
Except for the Subsidiaries, the Company does not (i) own of record or
beneficially, directly or indirectly, (A) any shares of capital stock or
securities convertible into capital stock of any other corporation or
(B) any participating interest in any partnership, joint venture or other
non-corporate business enterprise, or (C) any assets comprising the business or
obligations of any other corporation, partnership, joint venture or other
non-corporate business enterprise or (ii) control, directly or indirectly, any
other entity.

 

(b)           Each of
the Subsidiaries is a corporation duly incorporated, validly existing and in
good standing under the laws of its respective jurisdiction of incorporation
and is duly licensed or qualified to transact business as a foreign corporation
and is in good standing in each jurisdiction in which the nature of the
business transacted by it or the character of the properties owned or leased by
it requires such licensing or qualification. 
Each of the Subsidiaries has the corporate power and authority to own
and hold its properties and to carry on its business as now conducted and as
proposed to be conducted.  All of the
outstanding shares of capital stock of each of the Subsidiaries are owned
beneficially and of record by the Company, one of its other wholly owned
Subsidiaries, or any combination of the Company and/or one or more of its other
wholly owned Subsidiaries, all as specified in Section 2.4 of the
Disclosure Schedule, in each case free and clear of any liens, charges,
restrictions, claims or encumbrances of any nature whatsoever, except for those
disclosed in Section 2.4 of the Disclosure Schedule; and, except as
disclosed in Section 2.4 of the Disclosure Schedule, there are no
outstanding subscriptions, warrants, options, convertible securities, or other
rights (contingent or other) pursuant to which any of the Subsidiaries is or
may become obligated to issue any shares of its capital stock to any person
other than the Company or one of the other Subsidiaries.

 

2.5.          Financial Information.  The unaudited financial statements of the
Company as of and for the quarter ended July 31, 2005 and the unaudited
consolidated balance sheet of the Company at July 31, 2005, included in the
Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 31,
2005, present fairly the financial position of the Company as of the dates
thereof and the results of operations for the period covered thereby (subject,
in the

 

4

 

case of such unaudited
financial statements, to normal year-end audit adjustments) and have been
prepared in accordance with generally accepted accounting principles consistently
applied, except for the absence of notes not customarily included in such
statements (the “Financial Statements”). 
The Company does not have, reasonable grounds to know of, any material
liability, contingent or otherwise, not adequately reflected in or reserved
against in the aforesaid financial statements or in the notes thereto.

 

2.6.          Absence of Undisclosed Liabilities.  Except as and to the extent set forth in the
Company’s financial statements contained in its Annual Report on Form 10-K for
the fiscal year ended October 31, 2004 and its Quarterly Reports on Form 10-Q
for the fiscal quarters ended January 31, 2005, April 30, 2005 and July 31,
2005 or occurring in the ordinary course of business since the date of such
financial statements, neither the Company nor any of its Subsidiaries has any material
accrued or contingent liability arising out of any transaction or state of
facts existing on or prior to the date hereof.

 

2.7.          Absence of Certain Developments.  Since October 31, 2003, there
has been no (a) declaration, setting aside or payment of any dividend or
other distribution with respect to the capital stock of the Company or any of
its Subsidiaries, (b) loss, destruction or damage to any material property of
the Company or any of its Subsidiaries, whether or not insured, (c) labor
trouble involving the Company or any of its Subsidiaries or any material change
in any of their respective personnel (except for the resignation of the Company’s
Vice President of Sales and Business Development effective on November 18, 2005)
or the terms and conditions of employment, (d) waiver of any valuable right by
the Company or any of its Subsidiaries (e) loan or extension of credit to any
officer or employee of the Company or any of its Subsidiaries other than in
connection with the Company’s normal payroll practices in the ordinary course
of business, or (f) acquisition or disposition of any assets by the Company or
any of its Subsidiaries (or any contract or arrangement therefor) in excess of $10,000,000 or any other material transaction by the Company or any of
its Subsidiaries otherwise than for fair value in the ordinary course of
business.  Since July 31, 2005, there has
been no material adverse change in the condition, financial or otherwise, of
the Company and its Subsidiaries, taken as a whole, or, to the Company’s
knowledge, EAG or in the assets, liabilities, properties, business, operations
or prospects of the Company and its Subsidiaries, taken as a whole, or to the
Company’s knowledge, EAG (a “Material Adverse Change”).

 

2.8.          Title to Properties.  Other than (a) any lien in respect of current
taxes not yet due and payable and (b) possible minor liens and encumbrances
which do not in any case materially detract from the value of the property subject
thereto or materially impair the operations of the Company or any of its
Subsidiaries, and which have arisen in the ordinary course of business and
shall be removed within a reasonable period, the Company and each of its
Subsidiaries has good and marketable title or leasehold title to all properties
and assets necessary to their respective businesses as presently conducted and
to all of their respective properties and assets, free and clear of all
mortgages, security interests, liens, restrictions or encumbrances.  All machinery and equipment included in such
properties which is necessary to the business of the

 

5

 

Company or any of its
Subsidiaries is in good condition and repair except for reasonable wear and
tear, and all leases of real or personal property to which the Company or any
of its Subsidiaries is a party are fully effective and afford the Company and
its Subsidiaries peaceful and undisturbed possession of the subject matter of
the lease.  Neither the Company nor any
of its Subsidiaries is in material violation of any zoning, building or safety
ordinance, regulation or requirement or other law or regulation applicable to
the operation of owned or leased properties likely to impede the normal operation
of the business of the Company or any of its Subsidiaries, and neither the
Company nor any of its Subsidiaries has received any written notice of
violation with which it has not complied.

 

2.9.          Tax Matters. 
There are no federal, state, county, local or foreign taxes due and
payable by the Company or any of its Subsidiaries that have not been paid.  Except as set forth on Section 2.9 of
the Disclosure Schedule, there have been no examinations or audits of any tax
returns or reports by any applicable federal, state, local or foreign
governmental agency.    The Company and each of its Subsidiaries has
duly filed all federal, state, county, local and foreign tax returns required
to have been filed by it and there are in effect no waivers of applicable statutes
of limitations with respect to taxes for any year.

 

2.10.        Contracts and Commitments.  The Company’s Annual Report on Form 10-K for
the fiscal year ended October 31, 2004 and its Quarterly Reports on Form 10-Q
for the fiscal quarters ended January 31, 2005, April 30, 2005 and July 31,
2005 include each material contract, obligation or commitment of the Company and
each of its Subsidiaries, and any material employment contracts (excluding any
statutory employment arrangements required by law), stock redemption or
purchase agreements, financing agreements, distribution right agreements,
royalty agreements, licenses under which the Company or any of its Subsidiaries
is licensee or licensor, leases of real property, pension, profit-sharing,
retirement or stock option plans, agreements limiting competition or the
conduct of business, agreements which by their terms expire one year or more
after the date hereof, or any material agreements not made in the ordinary
course of business.

 

2.11.        No Defaults. 
Neither the Company nor any of its Subsidiaries is in material default
(a) under its Certificate of Incorporation or its By-laws or any note,
indenture, mortgage, lease, agreement, contract, purchase order or other
instrument, document or agreement to which it is a party or (b) with respect to
any order, writ, injunction or decree of any court or any federal, state,
municipal or other governmental department, commission, board, bureau, agency
or instrumentality, domestic or foreign, that specifically names the Company or
any of its Subsidiaries.  To the best of
the Company’s knowledge, there exists no condition, event or act which after
notice, lapse of time, or both, would constitute a default by the Company or
any of its Subsidiaries under any of the foregoing.  To the best of the Company’s knowledge, no
third party is in default under any agreement, contract or other instrument,
document, or agreement to which the Company or any of its Subsidiaries is a
party, which default would have a material adverse effect on the assets of the
Company or any of its Subsidiaries or the business of the Company or any of its
Subsidiaries, as presently conducted or proposed to be conducted.

 

6

 

2.12.        Intellectual Property.

 

(a)           Except as
listed in Section 2.12(a) of the Disclosure Schedule, the Company and
each of its Subsidiaries owns, free and clear of any mortgage, pledge, security
interest, encumbrance or other lien, or has the valid right to use all
Intellectual Property (as defined below) used by it in its business as
currently conducted or as proposed to be conducted.  To the best of the Company’s knowledge, no
other person or entity (other than licensors of software that is generally
commercially available and non-exclusive licensees of the Company’s or any of
its Subsidiaries’ Intellectual Property in the ordinary course of the Company’s
or any of its Subsidiaries’ business) has any rights to nor is claiming any
rights to any of the Intellectual Property owned or used by the Company or any
of its Subsidiaries, and, to the Company’s knowledge, no other person or entity
is infringing, violating or misappropriating any of the Intellectual Property used
by the Company or any of its Subsidiaries. 
For purposes of this Agreement, “Intellectual Property” means all
(i) patents and patent applications, (ii) copyrights and registrations thereof,
(iii) mask works and registrations and applications for registration thereof,
(iv) computer software, data and documentation, (v) trade secrets and
confidential business information, whether patentable or unpatentable and
whether or not reduced to practice, know-how, manufacturing and production
processes and techniques, research and development information and data,
copyrightable works, financial, marketing and business data, pricing and cost
information, business and marketing plans and customer and supplier lists and
information, (vi) trademarks, service marks, trade names, domain names and
applications and registrations therefor and (vii) any exclusive licenses or
other proprietary rights relating to any of the foregoing.

 

(b)           To the
best of the Company’s knowledge, none of the activities or business conducted
by the Company or any of its Subsidiaries or proposed to be conducted by the
Company or any of its Subsidiaries infringes or violates (or in the past
infringed or violated) any Intellectual Property of any other person or
entity.  None of the activities or
business conducted by the Company or any of its Subsidiaries or proposed to be
conducted by the Company or any of its Subsidiaries constitutes an intentional
misappropriation of (or in the past constituted an intentional misappropriation
of) any Intellectual Property of any other person or entity.  Neither the Company nor any of its Subsidiaries
has received any complaint, claim or notice alleging any such infringement,
violation or misappropriation, and to the knowledge of the Company, there is no
basis for any such complaint, claim or notice. 
Section 2.12(b) of the Disclosure Schedule identifies each
(i) patent that has been issued or assigned to the Company or any of its
Subsidiaries with respect to any of its Intellectual Property,
(ii) pending patent applications that the Company or any of its
Subsidiaries has made with respect to any of its Intellectual Property,
(iii) copyright or trademark registration or application with respect to
the Company’s or any of its Subsidiaries’ Intellectual Property, and
(iv) license or other agreements pursuant to which the Company or any of
its Subsidiaries has granted

 

7

 

any rights to any third party with respect to any of
its Intellectual Property other than in the ordinary course of business.

 

(c)           Section 2.12(c)
of the Disclosure Schedule identifies each agreement with a third party
pursuant to which the Company or any of its Subsidiaries obtains rights to
Intellectual Property (other than software that is generally commercially
available) that is owned by a party other than the Company or any of its Subsidiaries.  Other than license fees for software that is
generally commercially available, neither the Company nor any or any of its
Subsidiaries is obligated to pay any royalties or other compensation to any
third party in respect of its ownership, use or license of any of its
Intellectual Property.

 

(d)           The
Company and each of its Subsidiaries has taken reasonable precautions
(i) to protect its rights in its Intellectual Property and (ii) to
maintain the confidentiality of its trade secrets, know-how and other
confidential Intellectual Property, and, to the best of the Company’s
knowledge, there have been no acts or omissions (other than those made based on
reasonable, good faith business decisions) by the officers, directors,
shareholders and employees of the Company or any of its Subsidiaries the result
of which would be to materially compromise the rights of the Company or any of
its Subsidiaries to apply for or enforce appropriate legal protection of the
Company’s or any of its Subsidiaries’ Intellectual Property.

 

(e)           All of the
Intellectual Property owned by the Company or any of its Subsidiaries has been
created by employees of the Company or its Subsidiaries within the scope of
their employment by the Company or any of its Subsidiaries or by independent
contractors of the Company or any of its Subsidiaries who have executed
agreements expressly assigning all right, title and interest in such
Intellectual Property to the Company or its Subsidiaries, as the case may be.  No portion of the Intellectual Property owned
by the Company or any of its Subsidiaries was jointly developed with any third
party.

 

(f)            Neither the
Company nor any of its Subsidiaries has embedded any open source, copyleft or
community source code in any of its products generally available or in
development, including but not limited to any libraries or code licensed under
any General Public License, Lesser General Public License or similar license
arrangement.

 

2.13.        Effect of Transactions.  The execution, delivery and performance of the
Transaction Documents, the issuance, sale and delivery of the Securities, and
compliance with the provisions hereof and thereof by the Company, do not and
will not, with or without the passage of time or the giving of notice or both,
(a) violate any provision of law, statute, rule or regulation or any ruling,
writ, injunction, order, judgment or decree of any court, administrative agency
or other governmental body’s (b) conflict with, or result in any breach of, any
of the terms, conditions or provisions of, or constitute a default (or give
rise to any right of termination, cancellation or acceleration) under, or
result in the creation of any lien, security interest, charge

 

8

 

or encumbrance upon any
of the properties or assets of the Company under the Certificate of
Incorporation or By-Laws of the Company or under any note, indenture, mortgage,
lease, agreement, contract, purchase order or other instrument, document or
agreement to which the Company is a party or (c) render the Company insolvent.

 

2.14.        No Governmental Consent or Approval
Required.  Based in part on the
representations made by the Investors in Section 3 of this Agreement,
other than federal or state securities law filings which have been made or
which will be made in a timely manner and other than the filing of the Company’s
Certificate of Designation (which is attached hereto as Exhibit B and
will be filed on or before the date of the Closing), no authorization, consent,
approval or other order of, declaration to, or filing with, any governmental
agency or body is required for or in connection with the valid and lawful
authorization, execution and delivery by the Company of any of the Transaction
Documents for, or in connection with, the valid and lawful authorization,
issuance, sale and delivery of the Shares.

 

2.15.        Litigation. 
There is no claim, action, lawsuit, proceeding, complaint, charge or
investigation pending or, to the best knowledge of the Company, threatened
against the Company which questions the validity of any of the Transaction
Documents or the right of the Company to enter into them or to consummate the
transactions contemplated hereby or thereby, or which might result, either
individually or in the aggregate, in any Material Adverse Change, or any change
in the current equity ownership of the Company, nor is the Company aware that
there is any reasonable basis for the foregoing.  The foregoing includes, without limitation,
actions pending or, to the best knowledge of the Company, threatened, involving
the prior employment of any of the employees of the Company or any of its
Subsidiaries, their use in connection with the business of the Company or any
of its Subsidiaries of any information, creations or techniques allegedly proprietary
to any of their former employers or other Persons or entities, or their
obligations under any agreements with prior employers or other Persons or
entities.  Neither the Company, the
Subsidiaries nor any of their respective officers or directors, is a party to,
or subject to the provisions of, any order, writ, injunction, judgment or
decree of any court or governmental agency or instrumentality relating to the
Company or any of its Subsidiaries or the business of the Company or any of its
Subsidiaries.  Except as set forth in Section
2.15 of the Disclosure Schedule, there is no action, suit or proceeding by
the Company or any of its Subsidiaries currently pending or which the Company or
any of its Subsidiaries presently intends to initiate.

 

2.16.        Securities Laws.  Assuming that the Investors’ representations
and warranties contained in Section 3 of this Agreement are true and
correct, the offer, issuance and sale by the Company to the Investors of the Securities
are, and will be as of the Closing, exempt from the registration and prospectus
delivery requirements of the 1933 Act, and have been, or will be as of the
Closing, registered or qualified (or are, or will be as of each Closing, exempt
from registration and qualification, subject to the completion of any post-sale
Blue Sky filings, which filings the Company agrees it will complete) under the
registration, permit or qualification requirements of all applicable state Blue
Sky laws.

 

9

 

2.17.        Business. 
The Company and each of its Subsidiaries has all necessary franchises,
permits, licenses and other rights and privileges necessary to permit it to own
its property and to conduct its present business.  Neither the Company nor any of its
Subsidiaries is in violation of any law, regulation, authorization or order of
any public authority relevant to the ownership of its properties or the
carrying on of its present business which, either individually or in the
aggregate, would result in any Material Adverse Change.

 

2.18.        Brokerage. 
There are no claims for brokerage commissions or finder’s fees or
similar compensation in connection with the transactions contemplated by this
Agreement based on any arrangement made by or on behalf of the Company, and the
Company agrees to indemnify and hold the Investors harmless against any damages
incurred as a result of any such claim.

 

2.19.        Employees. 
There are no controversies or labor troubles pending, or to the best
knowledge of the Company, threatened between it and its employees.  To the best of the Company’s knowledge: (a)
no employee of the Company or any of its Subsidiaries is in violation of any
term of any employment contract, patent or other proprietary information
disclosure agreement or any other contract or agreement relating to the right
of any such employee to be employed by the Company or any of its Subsidiaries,
and the continued employment by the Company and its Subsidiaries of its present
employees will not result in any such violation; (b) except for the resignation
of the Company’s Vice President of Sales and Business Development described in Section
2.7 above, no officer or key employee of the Company or any of its
Subsidiaries has any present intention of terminating his or her employment
therewith nor does the Company or any of its Subsidiaries have any present
intention of terminating any such employment; and (c) the Company and each of
its Subsidiaries has complied in all material respects with all applicable
state, federal and foreign laws and regulations respecting employment and
employment practices, terms and conditions of employment, wages and hours and
other laws related to employment, and there are no arrears in the payments of
wages, withholding or social security taxes, unemployment insurance premiums or
other similar obligations.  Except as
described in Section 2.19 of the Disclosure Schedule, neither the
Company nor any of its Subsidiaries is a party to any agreement with any of its
respective executive officers with respect to such Person’s employment,
including without limitation, non-competition agreements or agreements with
respect to the assignment of proprietary rights with the Company or any third
party.

 

2.20.        Environmental Matters.  The Company and each of its Subsidiaries is
in compliance with all applicable federal, state and local environmental laws
and regulations (the “Environmental Laws”) applicable to the Company and
its Subsidiaries including but not limited to requirements contained in any
permits required pursuant to such Environmental Laws, and there is not now
pending or, to the Company’s knowledge, threatened, any action, suit, lien,
investigation or proceeding against the Company or any of its Subsidiaries in
connection with any past or present noncompliance with such Environmental Laws,
except with respect to non-compliance that is not reasonably expected to
result, either individually or in the aggregate, in

 

10

 

any Material Adverse Change.  To the Company’s knowledge, no hazardous
materials are present on or about any real property currently or previously
owned or leased by the Company or any of its Subsidiaries.

 

2.21.        Retirement Obligations, etc.  Neither the Company nor any of its
Subsidiaries has a pension, retirement or similar plan or obligation.  Neither the Company nor any of its
Subsidiaries is a party to any collective bargaining agreement and, to the
Company’s knowledge, no organizational efforts are presently being made with
respect to any of its employees.  Section
2.21 of the Disclosure Schedule lists the employee benefit plans of the
Company.

 

2.22.        Transactions with Affiliates.  Except as set forth in the Company’s
financial statements contained in its Annual Report on Form 10-K for the fiscal
year ended October 31, 2004 and its Quarterly Reports for the fiscal quarters
ended January 31, 2005, April 30, 2005 and July 31, 2005 or occurring in
the ordinary course of business since the date of such financial statements, no
stockholder, officer or director of the Company or any of its Subsidiaries nor
any “affiliate” or “associate” of such Persons (as such terms are defined in
the rules and regulations promulgated under the 1933 Act) (herein, a “Related
Party”) is a party to any material agreement with the Company or any of its
Subsidiaries, including, without limitation, any contract, agreement or other
arrangement providing for the rental of real or personal property from, or
otherwise requiring payments to, any Related Party.  No employee of the Company or any of its
Subsidiaries nor any Related Party is materially indebted to the Company or any
of its Subsidiaries and, except for accrued payroll obligations, neither the
Company nor any of its Subsidiaries is indebted to any of its employees or any
Related Party.

 

2.23.        Books and Records.  The minute book of the Company contains
complete and accurate records of all meetings and other corporate actions of
its stockholders, Board of Directors and all committees, if any, appointed by
its Board of Directors.  The stock ledger
of the Company is complete and reflects all issuances, transfers, repurchases
and cancellations of shares of capital stock of such company.  The books of account, ledgers, order books,
records and documents of the Company accurately and completely reflect all
material information relating to its business, the nature, acquisition,
maintenance, location and collection of its assets and the nature of all
transactions giving rise to its obligations and accounts receivable.

 

2.24.        Insurance. 
The Company carries insurance covering its properties and business in
the aggregate amount of $1,000,000 and maintains directors and officers’
liability insurance in the aggregate amount of $2,000,000.

 

2.25.        EAG.  To the
Company’s knowledge, the representations and warranties of SAS AB contained in
Article 2 of the Acquisition Agreement are true and correct as of the date
hereof.

 

11

 

3.             Representations
and Warranties and other Agreements of the Investors.

 

3.1.          Representations and Warranties.  Each Investor severally and not jointly
hereby represents and warrants as of the date hereof that:

 

(a)           Authorization.  Such Investor has full power and authority to
execute, deliver and perform each of the Transaction Documents and to acquire
the Securities.  Each of the Transaction
Documents constitute the valid and legally binding obligation of such Investor,
enforceable against such Investor in accordance with their respective
terms.  Such Investor is an “accredited
investor” within the meaning of that term as defined in Rule 501(a) promulgated
under the 1933 Act.

 

(b)           Purchase
Entirely for Own Account.  The Securities
will be acquired for investment for such Investor’s own account and not with a
view to the distribution of any part thereof. 
Other than the transfer permitted by the Stockholders’ Agreement, such
Investor does not have any contract, undertaking, agreement or arrangement with
any Person to sell, transfer, or grant participations to such Person or to any
third person, with respect to any of the Securities.

 

(c)           Restricted
Securities.  Such Investor
understands that the Securities may not be sold, transferred, or otherwise
disposed of without registration under the 1933 Act, or an exemption therefrom,
and that in the absence of an effective registration statement covering the Securities
or an available exemption from registration under the 1933 Act, the Securities
must be held indefinitely.  In the
absence of an effective registration statement covering the Securities such
Investor will sell, transfer, or otherwise dispose of the Securities only in a
manner consistent with its representations and agreements set forth herein and
the terms and conditions set forth in the Registration Rights Agreement.

 

(d)           Financial
Condition.  Such Investor’s financial
condition is such that it is able to bear the risk of holding the Securities
for an indefinite period of time and can bear the loss of its entire investment
in its Securities.

 

(e)           Experience.  Such Investor has such knowledge and
experience in financial and business matters and in making high-risk
investments of this type that it is capable of evaluating the merits and risks
of the purchase of the Securities.

 

(f)            Receipt
of Information.  Such Investor has
been furnished access to the business records of the Company and such
additional information and documents as such Investor has requested and has
been afforded an opportunity to ask questions of and receive answers from
representatives of the Company concerning the terms and conditions of this
Agreement, the purchase of the Securities, the Company’s business, operations,
market potential, capitalization, financial condition and prospects, and all
other matters deemed relevant by such Investor.

 

12

 

(g)           Brokerage.  There are no claims for brokerage commissions
or finder’s fees or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement made by or
on behalf of such Investor, and such Investor agrees to indemnify and hold the
Company and the other Investors harmless against any damages incurred as a
result of any such claims.

 

(h)           Address.  Such Investor has provided the Company with
its true and correct address.

 

3.2.          Legends. 
It is understood that the certificates evidencing the Securities may
bear substantially the following legends:

 

(a)           “These
securities have not been registered under the Securities Act of 1933.  They may not be sold, offered for sale, pledged
or hypothecated in the absence of a registration statement in effect with
respect to the securities under such Act or an exemption from such registration
(including pursuant to Rule 144 or Rule 144A of such Act).”

 

(b)           Any legend
required by the laws of any applicable jurisdiction.

 

3.3.          Confidentiality.  Each of the Investors covenants and agrees
that he, she or it will keep confidential and will not disclose, divulge or use
for any purpose other than to monitor his, her or its investment in the Company
any confidential, proprietary or secret information which such Investor may
obtain from the Company pursuant to financial statements, reports or other
materials submitted by the Company to such Investor pursuant to this Agreement
or any other Transaction Document, or pursuant to visitation or inspection
rights granted hereunder or thereunder (“Confidential Information”).  Notwithstanding the preceding sentence, each
Investor may (a) disclose Confidential Information to the extent required by
law or governmental order or regulation, or when required by a subpoena or
other process, provided that such Investor first gives the Company advance
notice of such disclosure as soon as practicable, (b) disclose Confidential Information
to the extent necessary to enforce this Agreement, (c) disclose Confidential Information
to its attorneys, accountants, consultants and other professionals to the
extent necessary to obtain their services in connection with its investment in
the Company, and (d) disclose Confidential Information as may be required by
any prospective purchaser of any Securities from such Investor, provided that
such prospective purchaser shall first execute a confidentiality and
non-disclosure agreement in form acceptable to counsel for the Company.  An Investor may also disclose Confidential Information
to any affiliate of such Investor provided that the requirements of this
subsection shall in turn be binding on any such affiliate, or to a partner,
member, shareholder or subsidiary of such Investor, and further provided that
such partner, member, shareholder or subsidiary agrees to be bound by the
provisions of this subsection.

 

13

 

4.             Conditions to the Investors’
Obligations at the Closing.  The
obligations of the Investors under Section 1 of this Agreement to
purchase the Securities at the Closing are subject to the fulfillment on or
before such Closing of each of the following conditions unless waived by the
Investors in accordance with Section 7.5 hereof:

 

4.1.          Representations and Warranties of
the Company.  The representations and
warranties of the Company contained in Section 2 shall be true and
correct on and as of the date of the Closing.

 

4.2.          Performance. 
The Company shall have performed and complied with all agreements,
obligations and conditions contained in this Agreement that are required to be
performed or complied with by it on or before the Closing.

 

4.3.          Compliance Certificate.  The President and Chief Executive Officer of
the Company shall deliver to the Investors at the  Closing a certificate certifying that the
conditions specified in this Section 4 have been fulfilled.

 

4.4.          Certificate of Incorporation.  On or prior to the Closing, the Company shall
have filed with the Secretary of State of the State of Delaware the Certificate
of Designation in the form attached hereto as Exhibit B which shall
continue to be in full force and effect as of the Closing.

 

4.5.          Qualifications.  All authorizations, approvals, consents or
permits, if any, of any governmental authority or regulatory body of the United
States or of any state or of any third party that are required in connection
with the lawful issuance and sale of the Securities to the Investors pursuant
to this Agreement or that are necessary in connection with the execution of
this Agreement shall have been duly obtained and shall be effective on and as
of the Closing other than those which are not required to be obtained before the
Closing, which will be obtained in a timely manner after the Closing.

 

4.6.          Proceedings
and Documents.  All corporate and
other proceedings in connection with the transactions contemplated at the
Closing and all documents incident thereto shall be reasonably satisfactory in
form and substance to the Investors and the Investors’ special counsel, and
they shall have received all such counterpart original and certified or other
copies of such documents as they may reasonably request.

 

4.7.          Other Agreements.  On or prior to the Closing, the Registration
Rights Agreement substantially in the form of Exhibit D attached hereto shall have been executed and delivered by
the parties thereto, which shall continue to be in full force and effect as of the
Closing.

 

14

 

4.8.          Opinion of Counsel.  The Investors shall have received from Choate,
Hall & Stewart LLP, counsel for the Company, an opinion dated as of the
Closing in substantially the form attached hereto as Exhibit E.

 

4.9.          Secretary’s Certificate.  The Secretary of the Company shall deliver to
the Investors purchasing the Securities at the Closing a Certificate, dated as
of the Closing, certifying:  (a) that
attached thereto is a true and complete copy of the By-Laws of the Company as
in effect on the date of such certification; (b) that attached thereto is a
true and complete copy of all resolutions adopted by the Board of Directors of
the Company authorizing the execution, delivery and performance of each of the
Transaction Documents, the issuance, sale and delivery of the Securities and
that all such resolutions are in full force and effect and are all the
resolutions adopted in connection with the transactions contemplated by the
Transaction Documents; (c) that attached thereto is a true and complete copy of
the Certificate of Designation as in effect on the date of such certification;
and (d) to the incumbency and specimen signature of certain officers of the
Company.

 

4.10.        Reservation of Conversion Shares
and Warrant Shares.  The shares of
Common Stock (a) issuable upon conversion of Series A Preferred Stock shall
have been duly authorized and reserved for issuance upon such conversion, and
(b) issuable upon the exercise of the Warrant shall have been duly authorized
are reserved for issuance upon such exercise.

 

4.11.        Fees of Investors’ Counsel.  The Company shall have paid the fees and
disbursements of Investors’ counsel invoiced at the Closing and the reasonable
out-of pocket expenses incurred by the Investors in connection with the
transactions contemplated by this Agreement, which in the aggregate shall not
exceed $75,000.

 

4.12.        Purchase by Other Investors.  Each Investor shall have purchased and paid
for the Securities to be purchased by it, as set forth on Exhibit A
hereto, on or before the date of the Closing.

 

4.13.        Consummation of the EAG Acquisition.  The conditions set forth in the Securities
Purchase Agreement dated as of the date hereof by and between the Company and
SAS AB (the “Acquisition Agreement”) shall have been satisfied and the
Company shall have consummated the acquisition of EAG on terms set forth in the
Acquisition Agreement.

 

4.14.        Board of Directors.  Michael Jakobowski and Andrew M. Snyder shall
have been appointed to serve on the Company’s Board of Directors.

 

5.             Conditions to the Company’s
Obligations at the Closing.  The
obligations of the Company under Section 1 of this Agreement are subject
to the fulfillment on or before the Closing of each of the following conditions
unless waived by the Company.

 

15

 

5.1.          Representations
and Warranties.  The representations
and warranties of the Investors contained in Section 3 shall be true and
correct on and as of the date of the Closing.

 

5.2.          Payment of Purchase Price.  The Investors shall have delivered payment of
the aggregate purchase price of the Securities to be purchased by them at the
Closing as set forth in Section 1.

 

5.3.          Other Agreements.  On or prior to the Closing the Registration
Rights Agreement substantially in the form of Exhibit D attached hereto shall have been executed and delivered by
the Investors, and the other parties thereto.

 

5.4.          Proceedings and Documents.  All corporate and other proceedings in
connection with the transactions contemplated at the Closing and all documents
incident thereto shall be reasonably satisfactory in form and substance to the
Company and the Company’s counsel, and they shall have received all such
counterpart original and certified or other copies of such documents as they
may reasonably request.

 

5.5.          Consummation of the EAG Acquisition.  The conditions set forth in the Acquisition
Agreement shall have been satisfied and the Company shall have consummated the
acquisition of EAG on terms set forth in the Acquisition Agreement.

 

5.6.          Qualifications.  All authorizations, approvals, consents or
permits, if any, of any governmental authority or regulatory body of the United
States or of any state or of any third party that are required in connection
with the lawful issuance and sale of the Securities to the Investors pursuant
to this Agreement or that are necessary in connection with the execution of
this Agreement shall have been duly obtained and shall be effective on and as
of the Closing other than those which are not required to be obtained before
the Closing, which will be obtained in a timely manner after the Closing.

 

6.             Preemptive Right of Purchase.

 

6.1.          Grant.  For
so long as an Investor shall hold Series A Preferred Stock, the Company hereby
grants to each such Investor, the right to purchase all or part of such
Investor’s pro rata share of New Securities (as defined below) which the
Company, from time to time, proposes to sell and issue.  An Investor’s pro  rata share,
for purposes of this purchase right, is the ratio of the number of Investors’
Common Shares (as defined below) which such Investor owns or has the right to
acquire from the Company to the total number of shares of Common Stock then
outstanding, on a fully diluted and as converted basis.

 

6.2.          Preemptive Right Definitions.  For the purpose of this Section 6, the term “Investors’
Common Shares” shall mean the Common Stock issued or issuable to the Investors upon
the Conversion of the Series A Preferred Stock and the term “New Securities”
shall mean any capital stock of the Company whether now authorized or not, and
rights, options or warrants

 

16

 

to purchase capital
stock, and securities that in any way rank senior to the Common Stock; provided
that the term “New Securities” does not include Series A Preferred Stock.

 

6.3.          Notice.  In
the event the Company proposes to undertake an issuance of New Securities, it
shall give each Investor written notice of its intention, describing the type
of New Securities and the price and the terms upon which the Company proposes
to issue the same.  Each Investor shall
have 20 business days from the date of receipt of any such notice to agree to
purchase up to the Investor’s pro rata share of such New Securities for the
price and upon the terms specified in the notice by giving written notice to
the Company and stating therein the quantity of New Securities to be purchased.

 

6.4.          Sale.  In the
event any Investor fails to exercise in full such Investor’s purchase right,
the Company shall have 90 days thereafter to sell the New Securities with
respect to which such Investor’s option was not exercised, at a price and upon
terms no more favorable to the purchasers thereof than specified in the Company’s
notice.  To the extent the Company does
not sell all the New Securities offered within said (90) day period, the
Company shall not thereafter issue or sell such New Securities without first
again offering such securities to each Investor in the manner provided above.

 

6.5.          Limitation. 
The Company shall not have any obligation under this Section 6 to any
Person that is not an “accredited investor”, as such term is used in Regulation
D under the Securities Act of 1933, as amended.

 

6.6.          Transfer. 
Each Investor shall have the right to assign its rights to purchase all
or any New Securities hereunder to an Affiliate, provided that such investor
has transferred its Series A Preferred Stock to such Affiliate pursuant to and
in accordance with the terms of Section 7.11 of this Agreement.

 

6.7.          Retrospective Effect of
Preemptive Right of Purchase.  The
Company may proceed with the issuance of New Securities without first following
procedures in Section 6.1 through Section 6.5 above, provided,
that (i) the purchaser of such New Securities agrees in writing to take such
New Securities subject to the provisions of this Section 6.7, and (ii)
within ten (10) days following the issuance of such New Securities, the Company
undertakes steps substantially similar to those in Section 6.1 through Section
6.5 above to offer to all Investors the right to purchase from the Company
a pro  rata portion of such New Securities or equivalent at the
same price and terms applicable to the purchaser’s purchase thereof so as to
achieve substantially the same effect from a dilution protection standpoint as
if the procedures set forth in Section 6.1 through Section 6.5
have been followed prior to the issuance of such New Securities.

 

7.             Miscellaneous.

 

7.1.          Certain Defined Terms.  As used in this Agreement, the term “Person”
shall mean an individual, corporation, trust, partnership, limited liability
company, joint venture,

 

17

 

unincorporated
organization, government agency or any agency or political subdivision thereof,
or other entity, and the terms “knowledge,” “known,” “awareness,” “aware,” and
similar expressions, when used with reference to the Company, refer to the
actual knowledge or awareness of David Strucke and Gordon Heard.  As used in this Agreement, each of the
following terms is defined in the Section of this Agreement indicated below:

 

	
  Defined Term

  	
   

  	
  Section

  	
   

  
	
  1933 Act

  	
   

  	
  Section 2.3

  	
   

  
	
  Abry Warrant Agreement

  	
   

  	
  Section 2.3

  	
   

  
	
  Additional Agreements

  	
   

  	
  Section 7.9

  	
   

  
	
  Affiliate

  	
   

  	
  Section 7.11

  	
   

  
	
  Aggregate Purchase Price

  	
   

  	
  Section 1.4

  	
   

  
	
  Agreement

  	
   

  	
  Preamble

  	
   

  
	
  Certificate of Designation

  	
   

  	
  Section 1.1

  	
   

  
	
  Closing

  	
   

  	
  Section 1.4

  	
   

  
	
  Common Stock

  	
   

  	
  Section 1.2

  	
   

  
	
  Company

  	
   

  	
  Preamble

  	
   

  
	
  Confidential Information

  	
   

  	
  Section 3.3

  	
   

  
	
  Converted Shares

  	
   

  	
  Section 1.3

  	
   

  
	
  Disclosure Schedule

  	
   

  	
  Section 2

  	
   

  
	
  EAG

  	
   

  	
  Section 1.5

  	
   

  
	
  Environmental Laws

  	
   

  	
  Section 2.20

  	
   

  
	
  Equity Plan

  	
   

  	
  Section 2.3

  	
   

  
	
  Financial Statements

  	
   

  	
  Section 2.5

  	
   

  
	
  Intellectual Property

  	
   

  	
  Section 2.12(a)

  	
   

  
	
  Investor/Investors

  	
   

  	
  Preamble

  	
   

  
	
  Investors’ Common Shares

  	
   

  	
  Section 6.2

  	
   

  
	
  Material Adverse Change

  	
   

  	
  Section 2.7

  	
   

  
	
  New Securities

  	
   

  	
  Section 6.2

  	
   

  
	
  Permitted Transfer

  	
   

  	
  Section 7.11

  	
   

  
	
  Person

  	
   

  	
  Section 7.1

  	
   

  
	
  Related Party

  	
   

  	
  Section 2.22

  	
   

  
	
  Registration Rights Agreement

  	
   

  	
  Section 2.2

  	
   

  
	
  Reserved Employee Shares

  	
   

  	
  Section 2.3

  	
   

  
	
  Securities

  	
   

  	
  Section 1.3

  	
   

  
	
  Series A Preferred Stock

  	
   

  	
  Section 1.1

  	
   

  
	
  Shares

  	
   

  	
  Section 1.3

  	
   

  
	
  Subsidiaries

  	
   

  	
  Section 2.4

  	
   

  
	
  Transaction Documents

  	
   

  	
  Section 2.2

  	
   

  
	
  Warrants

  	
   

  	
  Section 1.2

  	
   

  

 

18

 

7.2.          Survival of Covenants;
Assignability of Rights.  All
covenants, agreements, representations and warranties of the Company made
herein and in the certificates, lists, exhibits, schedules or other written
information delivered or furnished to any Investor in connection with the Closing
shall be deemed material and to have been relied upon by such Investor, and,
except as provided otherwise in this Agreement, shall survive the delivery of
the Securities, and shall bind the Company’s successors and assigns, whether so
expressed or not.

 

7.3.          Incorporation by Reference.  All exhibits and schedules appended to this
Agreement are herein incorporated by reference and made a part hereof.

 

7.4.          Parties in Interest.  All covenants, agreements, representations,
warranties and undertakings in this Agreement made by and on behalf of any of
the parties hereto shall bind and inure to the benefit of the respective
successors and permitted assigns of the parties hereto and to permitted
transferees of the Securities whether so expressed or not.

 

7.5.          Amendments and Waivers.  Except as set forth in this Agreement,
changes in or additions to this Agreement may be made, or compliance with any
term, covenant, agreement, condition or provision set forth herein may be
omitted or waived (either generally or in a particular instance and either
retroactively or prospectively) upon the written consent of the Company and the
holders of two-thirds (2/3) of the shares of Series A Preferred Stock sold
hereunder and any shares of Common Stock into which any shares of Series A
Preferred Stock have been converted, acting or voting together as a single
class; provided, however, that no Investor shall, without its
consent, be materially adversely affected by any amendment, change or waiver in
which the other Investors are not likewise adversely affected.

 

7.6.          Governing Law.  This Agreement shall be deemed a contract
made under the laws of the State of Delaware (excluding choice-of-law
provisions) and, together with the rights and obligations of the parties
hereunder, shall be construed under and governed by the laws of such state.

 

7.7.          Notices. 
All notices, requests, consents and demands shall be in writing and
shall be personally delivered (effective upon receipt), mailed, postage prepaid
(effective three business days after dispatch), telecopied or telegraphed
(effective upon receipt of the telecopy in complete, readable form), or sent
via a reputable overnight courier service (effective the following business
day), to the Company at:

 

Navtech, Inc.

c/o Navtech Systems Support Inc.

Suite 102, 175
Columbia St. W.

Waterloo, Ontario

Canada N2L 5Z5

Tel:  (519) 747-1170

Fax:  (519) 747-5282

 

19

 

with a copy sent
at the same time and by the same means to:

 

William B. Asher, Jr., Esq.

Choate, Hall & Stewart
LLP

Two International Place

Boston, Massachusetts  02110

Tel.:        (617) 248-5000

Fax:         (617)
248-4000

 

and

 

Andrew J. Hickey., Esq.

Choate, Hall & Stewart
LLP

Two International Place

Boston, Massachusetts  02110

Tel.:        (617) 248-5000

Fax:         (617)
248-4000

 

or to each Investor at its address set out on Exhibit
A hereto, and with respect to Cambridge Information Group, Inc., with a
copy to:

 

Fried, Frank, Harris,
Shriver & Jacobson LLP

1001 Pennsylvania Avenue,
N.W., Suite 800

Washington, DC  20004-2505

Fax: 202-639-7003

Attn: Alan S. Kaden

 

 

or such other
address as is set forth on the exhibits hereto, as the case may be, or as may
be furnished in writing to the other parties hereto.

 

7.8.          Effect of Headings.  The section and paragraph headings herein are
for convenience only and shall not affect the construction hereof.

 

7.9.          Entire Agreement.  This Agreement and the Exhibits and Schedules
hereto together with any other agreement referred to herein (the “Additional
Agreements”) constitute the entire agreement among the Company and the
Investors with respect to the subject matter hereof.  This Agreement and such Additional Agreements
supersede all prior understandings and agreements between the parties, whether
written or oral, with respect to the Securities purchased hereunder and the
subject matter hereof.

 

20

 

7.10.        Severability. 
In case any one or more of the provisions contained in this Agreement
shall for any reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision of this Agreement and such invalid, illegal and unenforceable
provision shall be reformed and construed so that it will be valid, legal, and
enforceable to the maximum extent permitted by law.

 

7.11.        Restrictions on Transfer.  Until November 22, 2006, no
Investor shall sell, assign, transfer, pledge, hypothecate, mortgage or dispose
of, by gift or otherwise, or in any way encumber, any Securities owned by such
Series A Investor other than in a Permitted Transfer.  Any attempted sale, assignment, transfer,
pledge, hypothecation, mortgage, disposition or encumbrance of any Securities
other than in accordance with this Agreement shall be null and void and the
Company shall not (i) recognize any such sale, assignment, transfer,
pledge, hypothecation, mortgage, disposition or encumbrance or (ii) reflect
in its stock register any change in registered ownership pursuant thereto.  For the purposes of this Section 7.11,
the following terms shall have the following meanings:

 

“Affiliate” means, (i) with respect to any
Person, any Person which, directly or indirectly, controls, is controlled by or
is under common control with such Person, including, without limitation, any
member,  partner or employee of such
Person and any venture capital fund now or hereafter existing which is
controlled by or under common control with one or more members or general
partners of such Person and (ii) with respect to any natural person, such
person’s spouse, parent, parent-in-law, sibling, child, step-child, grandchild,
niece or nephew, the issue and spouses of any of the foregoing and any trust
for the benefit of any of the foregoing.

 

“Permitted Transfer” means any assignment,
transfer, pledge, hypothecation, mortgage, disposition or encumbrance of any Securities
owned by an Investor to an Affiliate of such Investor, provided that
such Affiliate is a Person to whom securities of the Company may lawfully be
transferred pursuant to exemptions from applicable federal and state securities
laws (with the burden of proving availability of such exemptions to be on the
Person proposing such transfer of such Securities (or of rights to acquire such
securities)).

 

7.12.        Counterparts.  This Agreement may be executed in
counterparts, all of which together shall constitute one and the same
agreement.

 

[Remainder of Page Intentionally Left Blank.]

 

21

 

IN WITNESS
WHEREOF, the Company and the Investors have executed this Series A Convertible Participating
Preferred Stock and Warrant Agreement as of the day and year first above
written.

 

	
   

  	
  NAVTECH, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name: David Strucke

  
	
   

  	
   

  	
  Title: President and Chief Executive Officer

  

 

 

[SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT]

 

 

SERIES A INVESTOR:

 

	
   

  	
  CAMBRIDGE INFORMATION GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Andrew M. Snyder

  
	
   

  	
   

  	
  Title: President

  

 

 

SERIES A INVESTOR:

 

	
   

  	
  EXTERNALIS S.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Alain Mallart

  
	
   

  	
   

  	
  Title: Administrateur delegue

  

 

 

Exhibit A

 

INVESTORS

 

	
  Investors

  	
   

  	
  Total Series A Preferred

  Stock # of Shares

  	
   

  	
  

  Total #

  of Warrants

  	
   

  	
  Price

  Per Share of Series A Preferred Stock

  	
   

  	
  Aggregate

  Purchase Price

  	
   

  	
  % Ownership of 

  the Company on 

  a fully-diluted
 basis

  	
   

  
	
  Cambridge Information
  Group, Inc.

  7200 Wisconsin Ave, Suite 601

  Bethesda, MD 20814

  	
   

  	
  1,200,000

  	
   

  	
  75,000

  	
   

  	
  $

  	
  2.50

  	
   

  	
  $

  	
  3,000,000

  	
   

  	
  30.2

  	
  %

  
	
  Externalis S.A.

  38 Avenue des Klauwaerts

  1050 Brussels Belgium

  	
   

  	
  400,000

  	
   

  	
  25,000

  	
   

  	
  $

  	
  2.50

  	
   

  	
  $

  	
  1,000,000

  	
   

  	
  15.3

  	
  %

  

 

 

Exhibit B

 

Form of Certificate
of Designation

 

 

Exhibit C

 

Form of Warrant

 

 

Exhibit D

 

Form of Registration
Rights Agreement

 

 

Exhibit E

 

Form of Closing
Opinion of Company Counsel

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