EXHIBIT 2.5
MASTER AGREEMENT
THIS MASTER AGREEMENT (this "Agreement") is dated as of June 27, 2002
(the "Effective Date"), and is by and among TW CONSULTING, INC. (formerly AERO
WELD, INC.), an Oklahoma corporation (`Payee"), EXCALIBUR AEROSPACE, INC., an
Oklahoma corporation ("Maker"), XXXXX WORTH ("Worth'), XXXXXXX X.X. XXXXXX,
("Xxxxxx"), and XXXXXXX X. XXXXXXXX ("Xxxxxxxx"). Payee, Maker, Stuart, and
Xxxxxxxx, are sometimes hereinafter referred to as the "Parties" and singularly
as a `Party."
WHEREAS, Payee and Maker have previously entered into that certain
Asset Purchase Agreement, dated as of November 20,2001, between Payee, as
"Seller," and Maker, as "Purchaser" (as amended by that certain First Amendment
to Asset Purchase Agreement, dated as of November 20, 2001, the "Asset Purchase
Agreement"), pursuant to which Maker purchased substantially all of the assets
of Payee, as more particularly set forth therein;
WHEREAS, in connection with the transactions consummated under the
Asset Purchase Agreement, Maker has executed that certain Promissory Note, dated
as of November 20, 2001 in favor of Payee, in the original principal amount of
$300,000.00 (the `First Note");
WHEREAS, Maker has made one or more payments under the First Note, of
which the amount of $16,026.81 was applied to the principal balance of the First
Note, and as a result of such payment(s) the current outstanding balance under
the First Note is equal to $283,973.19;
WHEREAS, also in connection with the transactions consummated under the
Asset Purchase Agreement, Maker has also executed that certain Promissory Note,
dated as of November 20, 2001 in favor of Payee, in the original principal
amount of $429,887.62 (the "Second Note");
WHEREAS, Maker has made one or more payments under the Second Note, of
which the amount of $23,723.56 was applied to the principal balance of the
Second Note, and as a result of such payment(s) the current outstanding balance
under the Second Note is equal to $406,164.06;
WHEREAS, also in connection with the transactions consummated under the
Asset Purchase Agreement, Maker has also executed that certain Promissory Note,
dated as of December 30, 2001 in favor of Payee, in the original principal
amount of $342,284.56 (the "Third Note"), and the current outstanding balance
under the Third Note is equal to $342,284.56;
WHEREAS, also in connection with the transactions consummated under
the Asset Purchase Agreement, Maker has also executed that certain Promissory
Note, dated as of February, 2001 in favor of Payee, in the original principal
amount of $202,328.82 (the "Fourth Note"), and the current outstanding balance
under the Fourth Note is equal to $202,328.82;
WHEREAS, Maker has also executed that certain Promissory Note, dated
as of December 30, 2001, in favor of Payee, in the original principal amount of
$1,250,000.00 (the "Fifth Note");
WHEREAS, Maker has made one or more payments under the Fifth Note, of
which the amount of $55,178.21 was applied to the principal balance of the Fifth
Note, and the current outstanding balance under the Fifth Note is $1,194,821.79;
WHEREAS, Maker has also executed that certain Promissory Note, dated as
of November 20,2001, in favor of Payee, in the original principal amount of
$1,238,500.00 (the "Sixth Note");
WHEREAS, Maker has made one or more payments under the Sixth Note, of
which the amount of $18,336.86 was applied to the principal balance of the Sixth
Note, and the current outstanding balance under the Sixth Note is $1,220,163.14;
WHEREAS, the First Note, the Second Note, the Third Note, the Fourth
Note, the Fifth Note and the Sixth Note are sometimes collectively referred to
as the "Notes";
WHEREAS, Payee has received a payment equal to $100,000.00 from an
account debtor under an account receivable that was properly owing to Maker, and
the Parties desire to apply such $100,000.00 payment to the outstanding balance
owing under the Third Note;
WHEREAS, Maker has also advanced certain expenses on behalf of Payee
in the total amount of $246,164.21, which amount the Parties also desire to
apply to the outstanding balance owing under the First Note and the Second Note;
WHEREAS, in light of the foregoing, the parties would like to take this
opportunity to consolidate the outstanding balances owing under the First Note
and the Second Note into one promissory note and to set forth the terms of
payment of such new promissory note, and also desire to make certain agreements
regarding the Asset Purchase Agreement;
WHEREAS, in connection with, inter alia, the Third Note and the Fourth
Note, the Parties executed that certain Security Agreement, dated as of December
30, 2001 as to some items, and February, 2002, as to other items (the "Security
Agreement"), pursuant to which Maker granted to Payee a security interest in and
to certain collateral to secure payment of the Third Note and the Fourth Note,
inter alia;
WHEREAS, the Parties now desire to amend and restate the Security
Agreement to remove all references to the Third Note and the Fourth Note from
the Security Agreement and to make certain other changes to the agreements and
understandings between the Parties contained therein;
WHEREAS, all initially capitalized, undefined terms used in this
Agreement shall have the meaning ascribed to such terms in the Asset Purchase
Agreement;
NOW, THEREFORE, for and in consideration of the sum of TEN AND
NO/100THS DOLLARS ($10.00), and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and confessed by the
Parties, the Parties hereby agree as follows:
1. The Parties confirm the truth and accuracy of the above recitals,
and the same are
incorporated herein by reference for all purposes.
2. The Parties agree that the total outstanding aggregate balance owing
under the Third Note and the Fourth Note as of the Effective Date, including
principal and interest and any and all other charges, and after giving effect to
the $100,000.00 credit for the misdirected receivable referred to in the
recitals above, is: FOUR HUNDRED FORTY FOUR THOUSAND SIX HUNDRED THIRTEEN AND
38/100THS DOLLARS ($444,613.38), and that Maker is not in default of or under
any of the terms of either the Third Note or the Fourth Note, nor is Maker in
breach of any of its obligations under any of such notes.
3. The Parties further agree that contemporaneously with the execution of
this Agreement, Maker shall pay to Payee the cash sum of FOUR HUNDRED FORTY FOUR
THOUSAND SIX HUNDRED THIRTEEN AND 38/100THS DOLLARS ($444,613.38), plus all
accrued but unpaid interest on such notes though June 27, 2002 in the amount of
$l5,480.87, making the total payment being equal to $460,094.25 (such payment
being referred to as the "Note Payment"), which Note Payment shall be in full
and complete satisfaction of any and all amounts due and owing under both the
Third Note and the Fourth Note, and upon receipt of the Note Payment, Payee
shall return the originals of both the Third Note and the Fourth Note to Maker
with the legend "PAID" marked conspicuously thereon.
4. The Parties agree that the total outstanding aggregate balance owing
under the First Note and the Second Note as of the Effective Date, including
principal and interest and any and all other charges, and after giving act to
the $246,164.21 credit for the expenses advanced by Maker on behalf of Payee
referred to in the recitals above is: FOUR HUNDRED FORTY-THREE THOUSAND NINE
HUNDRED SEVENTY THREE AND 04/100THS DOLLARS ($443,973.04) (the `New Balance'),
and that Maker is not in default of any of the terms of either the First Note or
the Second Note, nor is Maker in breach of any oft obligations under any of such
notes.
5. The Parties agree that the First Note and the Second Note shall be
consolidated into one new promissory note (the "New Note"), which shall be in
the form attached hereto as Exhibit "A.,* which New Note shall be in the
original principal amount equal to the New Balance, shall bear interest at a
rate of seven and one-half percent (7.5%) per annum, and shall be payable as set
forth in the attached Exhibit "A." The Parties further agree that the New Note
shall be deemed to be given in renewal and extension of the total outstanding
indebtedness owing under the First Notes and the Second Note, and that such
notes shall be deemed consolidated with and merged into the New Note (as more
particularly set forth in the New Note) and shall be of no further force or
legal effect. Upon execution and delivery of the New Note, Payee shall return
the originals of both the First Note and the Second Note to Maker.
6. The Parties further agree that, as of the Effective Date, the only debt
obligations (other than the New Note) outstanding and owing from Maker to Payee
are: (i) the Fifth Note; and (ii) the Sixth Note (the Fifth Note and the Sixth
Note being sometimes hereinafter referred to as the "Surviving Notes"), and that
(assuming Maker makes the June payment on the Sixth Note contemporaneously with
the execution of this Agreement) Maker is not in default of any of the terms of
the Surviving Notes, nor is Maker in breach of any of its obligations under any
of the Surviving Notes.
7. The Parties agree that, as of the Effective Date, the outstanding
principal balance owing under the Fifth Note is $1,194,821.79.
8. The Parties agree that, as of the Effective Date, the outstanding
principal balance owing under the Sixth Note is $1,220,163.14.
9. The Parties agree that the form of Promissory Note attached hereto as
Exhibit "B" shall be deemed to be the form of Net Receivable Note, and such form
shall be deemed to be attached as Exhibit "C" to the Asset Purchase Agreement
for all purposes thereunder.
10. The Parties agree that, contemporaneously with the execution of this
Agreement, Maker (as "Tenant") shall execute a triple-net lease (the "Lease")
with Payee (as "Landlord") in accordance with Section 6.10 of the Asset Purchase
Agreement, and upon execution of the Lease, the provisions of Section 6.10 shall
be deemed satisfied. The Lease shall be for a term of two (2) years, with an
option to extend on the part of the Tenant for an additional two (2) years. The
rent under the Lease will total $8,000 per month, subject to increase at renewal
based upon increases in the national CPI since November 20, 2001. The Lease
shall be in form and substance reasonably satisfactory to Maker and Payee. In
addition, Maker, contemporaneously with the execution of this Agreement, shall
pay to Payee a total of $49,192.00 in complete satisfaction for all "back rent"
and all other obligations whatsoever for the real property as well as for that
certain additional building that was at one time being leased by Payee from Xxxx
Close ("Close'), and sublet by Payee to Maker until March 31, 2002. Maker
further acknowledges that Payee owes no obligation to Maker with respect to such
additional building (and similarly, Maker owes no further obligation to Payee
with respect to such additional building), and if Maker desires to procure a
lease or some other arrangement with respect to such additional building (which
it may choose to do in its sole discretion), it shall contract directly with
Close.
11. Maker agrees that, to its knowledge, neither Payee nor Worth is in
breach of any of its or his representations, warranties, covenants or other
obligations under the Asset Purchase Agreement, including, without limitation,
the "no material adverse change" representations under Sections 4.6(c) and 4.28
of the Asset Purchase Agreement.
12. Maker agrees that no further Schedules are required to be delivered by
Payee under Section 6.12 oldie Asset Purchase Agreement.
13. The Parties agree that the Security Agreement is hereby deemed
terminated, and is of no further force or legal effect, and is void. In lieu
thereof, Maker and Payee agree that, contemporaneously with the execution of
this Agreement, they shall execute an amended and restated Security Agreement in
the form attached hereto as Exhibit "C." In this regard, Payee agrees that it
expressly authorizes Maker to make and file any and all releases, termination
statements and the like in order to release and terminate the liens and security
interests created or evidenced by the Security Agreement, including, without
limitation, those certain UCC Financing Statements filed with the Oklahoma
County Clerk, under File Nos. 2002002651327 and 2002002651226. Maker agrees that
the total indebtedness of principal and accrued interest owed by Maker and its
Affiliates to
Stillwater National Bank for its equipment loan financing (but expressly
excluding other types of loans and financing arrangements that arc not secured
by a lien in the equipment of Maker and its Affiliates) shall not exceed $5
million.
14. Stuart and Xxxxxxxx hereby agree that the amendments to the Sixth Note
and the amendment and restatement of the Security Agreement, as described above,
shall not affect their respective obligations under that certain Guaranty,
executed by each of them on November 20, 2001.
15. The Parties agree that that, effective as of November 20, 2001, that
certain Consulting Agreement, dated as of November 20, 2001, between Worth and
Maker, is hereby deemed terminated, and is of no further force or legal effect,
and is void, and neither Maker nor Worth shall have any further rights or
obligations thereunder, and each releases the other from all obligations
thereunder. In lieu thereof, Maker and Worth agree that, contemporaneously with
the execution of this Agreement, they shall execute an amended and restated
Consulting Agreement in the form attached hereto as Exhibit "D."
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK
EXECUTED to be effective as of the Effective Date (other than as to Section
16, which shall be effective as of November 20, 2001).
PAYEE:
TW CONSULTING, INC., an Oklahoma corporation
By: /s/ Xxxxx Worth
---------------------------------
Name: Xxxxx Worth
Title: President
MAKER:
EXCALIBUR AEROSPACE, INC., an Oklahoma
corporation
By: /s/ Xxxxxxx Xxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxx
Title: CEO
WORTH
/s/ Xxxxx Worth
-------------------------------------
XXXXX WORTH
STUART:
/s/ Xxxxxxx X.X. Xxxxxx
-------------------------------------
WILLIAM S.H. XXXXXX
XXXXXXXX:
/s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
XXXXXXX X. XXXXXXXX
