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EXHIBIT 10.20
SUBSCRIPTION AGREEMENT
This SUBSCRIPTION AGREEMENT, dated as of this 6th day of October, 1995
(the "Subscription Agreement"), is made and entered into by and between Dart
Group Corporation, a Delaware corporation ("Dart"), and Xxxxxx X. Xxxx ("RSH").
WITNESSETH:
WHEREAS, pursuant to that certain Settlement Agreement, of even date
herewith, between Dart and RSH (the "Settlement Agreement"), RSH is assigning
and transferring to Dart, contemporaneously herewith, the 172,730 shares (the
"Redemption Class B Shares") of Class B Common Stock, $1.00 par value per
share, of Dart that RSH purchased in July 1993 (the "Purchase") from Xxxxxxx X.
Xxxx ("HHH") and which are held of record by RSH;
WHEREAS, HHH has filed a claim for rescission of the Purchase in
Xxxxxxx X. Xxxx v. Xxxxxx X. Xxxx, Civ. A. No. 94CA9883 (D.C. Super. Ct. 17,
1995);
WHEREAS, pursuant to that certain Settlement Agreement, Dart is
loaning $37,925,710 to RSH, and RSH is executing and delivering to Dart that
certain promissory note, of even date herewith, in favor of Dart for such
principal amount (the "$37 Million Note");
WHEREAS, pursuant to the Settlement Agreement, RSH is placing all
shares of Dart Class A Common Stock, $1.00 par value per share, owned by RSH
(the "RSH Class A Shares") and all shares of Dart Class B Common Stock owned by
RSH (the "RSH Class B Shares") in a voting trust pursuant to that certain
Voting Trust Agreement, of even date herewith (the "Voting Trust Agreement"),
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by and among RSH, Dart and Xxxxx X. Schrafan and Xxxxxx X. Xxxxxxxxx, as Voting
Trustees;
WHEREAS, pursuant to that certain Stock and Trust Certificate Pledge
Agreement, of even date herewith (the "Stock and Trust Certificate Pledge
Agreement"), made by RSH in favor of the Voting Trustees, as collateral agent
and bailee, for Dart and Xxxxx-Xxxxxx Real Estate Company, as security for the
payment and performance of RSH's obligations under the $37 Million Note and
certain other obligations of RSH, RSH is pledging and granting to Dart,
contemporaneously herewith, a security interest in all of his right, title and
interest in and to the RSH Class A Shares, the RSH Class B Shares, 288,312
shares of Dart Class A Common Stock (the "New Class A Shares") to be issued to
RSH pursuant to this Subscription Agreement, and the trust certificates issued
to him under the Voting Trust Agreement;
WHEREAS, pursuant to that certain Buy/Sell/Offering Agreement, of even
date herewith (the "Buy/Sell/Offering Agreement"), between RSH and Dart, RSH
may sell to Dart the RSH Class A Shares, the RSH Class B Shares and the New
Class A Shares; and
WHEREAS, pursuant to the Settlement Agreement, RSH and Dart have
agreed to enter into this Subscription Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and in consideration of the mutual
covenants and agreements set forth herein, the parties hereto agree as follows:
1. Subscription. RSH hereby subscribes for and agrees to
purchase the New Class A Shares from Dart subject to the terms
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and conditions hereof (the "Subscription"). Dart hereby accepts the
Subscription, subject to the terms and conditions hereof, and acknowledges
receipt of the Redemption Class B Shares as full consideration for the
Subscription and the issuance and delivery of the New Class A Shares pursuant
hereto.
2. Board Approval. (a) Dart's obligation to issue and deliver
the New Class A Shares pursuant to the Subscription is subject to the adoption
by Dart's Board of Directors (the "Board") of a resolution authorizing such
issuance and delivery of the New Class A Shares. Dart represents and warrants
that the Executive Committee of its Board of Directors, which consists of a
majority of the members of the Board, has unanimously adopted a resolution
approving this Subscription Agreement and recommending that the Board promptly
approve a resolution authorizing the issuance and delivery of the New Class A
Shares pursuant to the Subscription.
(b) If the Board does not adopt a resolution authorizing the
issuance and delivery of the New Class A Shares pursuant to the Subscription,
or the New Class A Shares are not issued for any reason (other than as provided
in Section 3 and Section 6 hereof) pursuant to the Subscription prior to a
closing of any of the Simultaneous Purchase, the Put Option or the Call Option
(each as defined in the Buy/Sell/Offering Agreement), then the Subscription and
Dart's acceptance thereof shall automatically terminate. In such event, the
amount of Twenty-Four Million One Hundred Eighty-Two Thousand Two Hundred
Dollars ($24,182,200) (the "Forgiven Principal") of the outstanding principal
amount of the $37 Million Note, and all interest
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accrued on the Forgiven Principal under the terms of the $37 Million Note,
shall automatically be forgiven, and RSH shall be entitled to no other remedy
or relief as a result of the termination of the Subscription.
3. Issuance of New Class A Shares. Unless the Subscription has
previously terminated pursuant to Section 2 or Section 6 of this Subscription
Agreement, the New Class A Shares shall be issued and delivered pursuant to the
Subscription, and Dart shall issue a stock certificate representing the New
Class A Shares in the name of the Voting Trustees and deliver such certificate
to the Voting Trustees, immediately upon the adoption by the Board of a
resolution authorizing the issuance and delivery of the New Class A Shares
pursuant to the Subscription or, if at the time the Board adopts such a
resolution a preliminary or permanent injunction or other order issued by a
court of competent jurisdiction is in effect prohibiting the issuance of the
New Class A Shares, on the first day after the Board's adoption of such
resolution on which no such injunction or order is in effect.
4. Pledge and Repurchase of New Class A Shares. Upon the
issuance of the New Class A Shares to the Voting Trustees for the benefit of
RSH, such shares (without any need for further action on the part of RSH) shall
be pledged to Dart pursuant to the Stock and Trust Certificate Pledge Agreement
and shall be subject to the terms of the Put/Call/Offering Agreement.
5. Restricted Securities. (a) RSH represents that he is
acquiring the New Class A Shares for his own account with the present intention
of holding such securities in accordance with
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the Voting Trust Agreement and the Buy/Sell/Offering Agreement and that he does
not have any intention of selling such securities in a public distribution in
violation of federal or state securities laws.
(b) The certificate representing the New Class A Shares
will be imprinted with a legend in substantially the following form:
The securities represented by this certificate may
not be transferred except in a transaction registered
under the Securities Act of 1933, as amended, or an
exemption from registration under that act. Any
sale, assignment, transfer, pledge or other
disposition of the shares represented by this
certificate is restricted by the terms specified in
(i) that certain Stock and Trust Certificate Pledge
Agreement, dated October 6, 1995, made by Xxxxxx X.
Xxxx in favor of Xxxxx X. Xxxxxxxx and Xxxxxx X.
Xxxxxxxxx, as collateral agents and bailees for Dart
Group Corporation and Xxxxx-Xxxxxx Real Estate
Company, (ii) that certain Voting Trust Agreement,
dated October 6, 1995, by and among Xxxxxx X. Xxxx,
Dart Group Corporation and Xxxxx X. Xxxxxxxx and
Xxxxxx X. Xxxxxxxxx, as Voting Trustees and (iii)
that certain Buy/Sell/Offering Agreement, dated
October 6, 1995, by and between Dart Group
Corporation and Xxxxxx X. Xxxx.
6. Termination. This Subscription Agreement and the Subscription
shall terminate, and the parties hereto will have no further obligations
hereunder, should delivery to HHH of the Redemption Class B Shares (or
substitute shares therefor) be required and made pursuant to a final judgment
by a court of competent jurisdiction that HHH is the owner of the Redemption
Class B Shares.
7. Miscellaneous.
(a) Notice. Notices under this Subscription Agreement
shall be deemed duly given (if so given) if delivered in person,
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by facsimile, registered or certified mail (postage prepaid, return receipt
requested) to the respective parties as follows:
If to Dart:
Dart Group Corporation
0000 00xx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Secretary
Facsimile: 000-000-0000
If to RSH:
Xxxxxx X. Xxxx
0000 Xxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Facsimile: (000) 000-0000
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of changes of address shall
only be effective upon receipt.
(b) Further Assurances. Dart and RSH will execute and
deliver all such further documents and instruments and take all such further
action as may be necessary in order to consummate the transactions contemplated
hereby.
(c) Cross-Default. This Subscription Agreement, the
Settlement Agreement and all agreements and documents relating thereto
(collectively, the "Agreements") constitute one integrated whole. RSH agrees
that a material breach by RSH under any of the Agreements shall constitute a
material breach under each of the Agreements.
(d) Assignment. No party hereto may assign any of
his/its rights or obligations under this Subscription Agreement without the
prior written consent of the other party. This Subscription Agreement shall be
binding upon the respective
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parties hereto, their heirs, executors, administrators, successors and assigns.
(e) Governing Law. This Subscription Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware,
without regard to its conflict of laws principles.
(f) Severability of Provisions. If any term, provision,
covenant or restriction of this Subscription Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Subscription
Agreement shall remain in full force and effect and shall not be affected,
impaired or invalidated.
(g) Effect of Headings. The descriptive headings
contained herein are for convenience only and shall not affect in any way the
meaning or interpretation of this Subscription Agreement.
(h) Amendment in Writing. In accordance with its terms,
this Subscription Agreement may be amended, but only in a writing that is
signed by each of the parties hereto.
(i) Integration. This Subscription Agreement and the
other Agreements set forth the entire understanding of the parties hereto and
supersedes all prior understandings or agreements, whether written or oral,
with respect to the subject matter hereof.
(j) Counterparts. This Subscription Agreement may be
executed in two counterparts, each of which shall be deemed to be
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an original, but each of which together shall constitute one and the same
document.
IN WITNESS WHEREOF, RSH has executed and Dart has caused this
Subscription Agreement to be duly executed on the day and year first above
written.
DART GROUP CORPORATION
By /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Treasurer and
Chief Financial Officer
/s/ Xxxxxx X. Xxxx
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XXXXXX X. XXXX
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