EXHIBIT 10 (25)
AGREEMENT OF MERGER AND DEBT SETTLEMENT
THIS AGREEMENT OF MERGER AND DEBT SETTLEMENT, dated as of September 29,
2000 (this "AGREEMENT" and sometimes referred to herein as "Agreement of
Merger"), among Westlake Technology Corporation, a California corporation
("WESTLAKE"), Teletrac, Inc., a California corporation ("Teletrac"), Teletrac
Acquisition Corporation, a California corporation and a wholly-owned subsidiary
of Teletrac ("ACQUISITION SUB") and Xxxxxxx Xxxxxxxx, the sole stockholder of
Westlake (the "Stockholder"). Westlake and Acquisition Sub are hereinafter
sometimes referred to as the "CONSTITUENT CORPORATIONS."
WHEREAS, Westlake and Teletrac had entered into a Senior Secured Loan
Agreement, dated as of August 12, 1998, as amended (the "Loan Agreement"),
pursuant to which Teletrac had agreed to make one or more loans to Westlake in
an aggregate maximum principal amount of up to $1,900,000 during the period
between August 12, 1998 and August 12, 2001;
WHEREAS, as of the date hereof, the outstanding balance of loans under the
Loan Agreement is $2,010,072.65 consisting of $1,674,702.79 of principal and
$340,050.48 of accrued and unpaid interest;
WHEREAS, Westlake and Teletrac have determined that, in light of
Westlake's current financial condition, Westlake will not be able to fully repay
the principal and interest due under the Loan Agreement;
WHEREAS, in partial repayment of the principal and interest due under the
Loan Agreement, Westlake has agreed to transfer and assign all of its assets to
Teletrac or its designee;
WHEREAS, Westlake and Teletrac have agreed that such transfer and
assignment shall be effected by way of the merger of Westlake into Acquisition
Sub as hereafter provided;
WHEREAS, to give effect to the foregoing, the Boards of Directors of
Westlake, Teletrac and Acquisition Sub deem it advisable and to the welfare and
advantage of each of the Constituent Corporations and their respective
stockholders that Westlake merge under and pursuant to the California General
Corporation Law ("CGCL") with and into Acquisition Sub, which shall be the
surviving corporation (such
corporation in its capacity as such surviving corporation being hereinafter
sometimes called the "SURVIVING CORPORATION"), and have approved this Agreement
and the merger contemplated hereby (the "MERGER"); and
WHEREAS, Teletrac will forgive and cancel the principal and interest due
under the Loan Agreement that is not repaid by Westlake pursuant to the Merger.
Accordingly, it is hereby agreed as follows:
1. THE MERGER. At the Effective Time (as defined in Section 5.2 hereof),
Westlake shall merge with and into Acquisition Sub, and the parties hereto adopt
and agree to the following agreements, terms and conditions relating to the
Merger and the mode of carrying the Merger into effect:
2. CONSTITUENT CORPORATIONS; CERTIFICATE OF INCORPORATION; BYLAWS;
DIRECTORS; AND OFFICERS.
2.1. CONSTITUENT CORPORATIONS.
(a) Acquisition Sub is a corporation duly organized, validly
existing, and in good standing under the laws of the State of California.
(b) Westlake is the disappearing corporation, as that term is
defined in the CGCL, in the merger described in this Agreement.
(c) The name of the Surviving Corporation is Teletrac
Acquisition Corporation.
2.2. ARTICLES OF INCORPORATION. The Articles of Incorporation of
Acquisition Sub, as in effect on the date hereof, shall be the Articles of
Incorporation of the Surviving Corporation, which upon the filing of this
Agreement, shall be amended and restated in the form attached hereto as Exhibit
A and thereafter shall continue as the Articles of Incorporation of the
Surviving Corporation until amended in the manner provided by law.
2.3. BYLAWS. The Bylaws of Acquisition Sub, as in effect on the date
hereof, shall, from and after the Effective Time, be and continue to be the
Bylaws of the Surviving Corporation until amended in the manner permitted by
law.
2.4. DIRECTORS. The directors of Acquisition Sub immediately prior
to the Effective Time shall be the directors of the Surviving Corporation, each
of whom shall hold office until his respective successor is elected and shall
qualify in accordance with law and the Bylaws of the Surviving Corporation.
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2.5. OFFICERS. The officers of Acquisition Sub immediately prior to
the Effective Time shall be the officers of the Surviving Corporation, each of
whom shall hold office until his respective successor is elected and shall
qualify in accordance with the Bylaws of the Surviving Corporation.
3. STATUS OF SECURITIES OF CONSTITUENT CORPORATIONS.
3.1. TELETRAC'S COMMON STOCK. The shares of common stock, par value
$0.01 per share, of Acquisition Sub outstanding at the Effective Time, shall
remain outstanding from and after the Effective Time as shares of the Surviving
Corporation.
3.2. WESTLAKE'S COMMON STOCK. At the Effective Time, the shares of
common stock, no par value, of Westlake shall, by virtue of the Merger,
automatically be canceled, without payment of any consideration to the holders
thereof, and all rights in respect thereof shall cease to exist.
4. PARTIAL REPAYMENT; CANCELLATION; RELEASES.
4.1. PARTIAL REPAYMENT OF LOAN. Westlake and Teletrac hereby agree
that the transfer and assignment by Westlake of all its assets to Acquisition
Sub pursuant to the Merger shall constitute a repayment by Westlake of
$1,674,702.79 of principal and $340,050.48 of interest due and owing under the
Loan Agreement.
4.2 CANCELLATION OF BALANCE OF LOAN. Immediately prior to the
Effective Time, Teletrac shall forgive and cancel the portion of the principal
and interest due and owing by Westlake under the Loan Agreement that is not
being repaid by Westlake pursuant to Section 4.1 hereof.
4.3 STOCKHOLDER ACKNOWLEDGMENT AND RELEASE. The Stockholder
acknowledges that, as the sole stockholder of Westlake, he will not receive any
payment in respect of his holdings of capital stock of Westlake; hereby accepts
and agrees to such treatment; and further releases Teletrac, each of its
affiliates and each of the directors, officers, employees, agents and
representatives of Teletrac and each of its affiliates (collectively, the
"Released Parties") from any and all liabilities, obligations, claims and causes
of action, known or unknown, presently existing or hereafter arising, which he
ever had, now has or hereafter can, shall or may have against any of the
Released Parties, and covenants not to xxx any of the Released Parties, by
reason of any acts or omissions arising prior to the date hereof.
4.4 LOAN AGREEMENT RELEASES. Upon completion of the Merger and the
matters set forth in Section 4.2 hereof, the parties hereto each shall be
released from any further obligations or liabilities under the Loan Agreement
and any guarantees of the loan obligation under the Loan Agreement.
5. APPROVAL AND EFFECT OF MERGER.
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5.1. APPROVAL OF MERGER. This Agreement has been submitted to the
respective Boards of Directors of Westlake and Acquisition Sub for the purpose
of acting on this Agreement in accordance with the applicable provisions of
CGCL. Upon such submissions, the Boards of Directors of Westlake and Acquisition
Sub each unanimously consented to the adoption of this Agreement, as evidenced
by a written consent. This Agreement was submitted to the respective
stockholders of Westlake and Acquisition Sub for the purpose of acting on this
Agreement in accordance with applicable provisions of CGCL and the respective
stockholders holding all of the outstanding shares of Common Stock of Westlake
and Acquisition Sub approved the adoption of this Agreement by unanimous written
consent.
5.2. EFFECTIVE TIME. The Merger shall become effective (the
"Effective Time") upon the filing of this Agreement and the officer's
certificates (the "Filing") prescribed by Section 1103 of CGCL with the
Secretary of State of California. Teletrac shall determine when the Filing shall
occur.
5.3. EFFECT OF MERGER. From and after the Effective Time, the
status, rights and liabilities of, and the effect of the Merger on each of the
Constituent Corporations and the Surviving Corporation shall be as provided
under CGCL. At any time, and from time to time, after the Effective Time, the
authorized officers of Westlake, or the authorized officers of the Surviving
Corporation, may, in the name of Westlake, execute and deliver all such proper
deeds, assignments and other instruments and take or cause to be taken all such
further or other actions as the Surviving Corporation may deem necessary or
desirable in order to vest, perfect or confirm in the Surviving Corporation
title to and possession of all of Westlake's property, rights, privileges,
powers, franchises, immunities and interests and otherwise to carry out the
purposes of this Agreement and the Merger.
6. REPRESENTATION AND WARRANTIES OF TELETRAC AND ACQUISITION SUB
Teletrac and Acquisition Sub hereby represent and warrant as
follows:
6.1. ORGANIZATION, GOOD STANDING AND POWER. Each of Teletrac and
Acquisition Sub is a corporation duly organized, validly existing and in good
standing under the laws of the State of California, and has all requisite power
and authority to own, lease and operate its properties, to carry on its business
as now being conducted, to enter into this Agreement and to perform its
obligations hereunder.
6.2. EFFECT OF AGREEMENT. The execution, delivery and performance of
this Agreement by each of Teletrac and Acquisition Sub will not, with or without
the giving of notice and/or the passage of time, violate any provision of law
applicable to it or conflict with, or result in the breach or termination of any
provision of, or constitute a default under, or result in the creation of any
lien, charge or encumbrance
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upon any of its properties or assets pursuant to, any corporate charter, bylaw,
indenture, mortgage, deed of trust or other agreement or instrument to which it
is a party or by which it or any of its properties or assets may be bound.
7. REPRESENTATIONS AND WARRANTIES OF WESTLAKE AND THE STOCKHOLDER
Westlake and the Stockholder represent and warrant as follows:
7.1. ORGANIZATION. Westlake is a corporation, validly existing
and in good standing under the laws of the State of California, is duly
qualified and in good standing in each jurisdiction where such qualification is
necessary and has all requisite power and authority to own, lease and operate
its properties, to carry on its business as now being conducted, to enter into
this Agreement and to perform its obligations hereunder. The copies of
Westlake's Certificate of Incorporation and Westlake's Bylaws, all as amended to
date, which have been delivered to Teletrac, are correct and complete.
7.2. CAPITALIZATION. Westlake's authorized capital stock
consists of 5,000 shares of Common Stock, no par value, of which 1,000 shares
are outstanding and owned by the Stockholder.
7.3. OPTIONS, WARRANTS, RIGHTS, ETC. Other than the Guaranty
and Pledge Agreement, dated August 12, 1998, between the Stockholder and
Teletrac, there are no outstanding subscriptions, options, warrants, calls,
commitments or agreement to which Westlake or the Stockholder is a party or by
which Westlake or the Stockholder is bound which relate to the issuance or sale
by Westlake or the Stockholder of shares of Westlake's capital stock.
7.4. EFFECT OF AGREEMENT. The execution, delivery and
performance of this Agreement by each of Westlake and the Stockholder will not,
with or without the giving of notice and/or the passage of time, violate any
provision of law applicable to Westlake or the Stockholder or conflict with, or
result in the breach or termination of any provision of, or constitute a default
under, or result in the creation of any lien, charge or encumbrance upon any of
the properties or assets of Westlake or the Stockholder pursuant to, any
corporate charter, bylaw, indenture, mortgage, deed of trust or other agreement
or instrument to which Westlake or the Stockholder is a party or by which
Westlake or the Stockholder or any of its or his properties or assets may be
bound.
7.5. CONSENTS. Neither the nature of Westlake or its business
or properties, nor any relationship between Westlake or the Stockholder on the
one hand and any other person on the other hand, nor any circumstances in
connection with the execution, delivery and performance of this Agreement, is
such as to require a consent, approval or authorization of any person or
governmental authority, or filing, registration or qualification with, any
governmental authority on the part of Westlake or the
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Stockholder in connection with execution, delivery and performance of this
Agreement, other than the filing of this Agreement as required by Section 1103
of the CGCL and the certificate of satisfaction of the Franchise Tax Board
referred to therein.
7.6. FINANCIAL STATEMENTS. Westlake has provided to Teletrac
the unaudited balance sheets and statements of operations and retained earnings
of Westlake as of and for the fiscal year ended March 31, 1999 and as of and for
the nine month period ended December 31, 1999, which have been compiled by C.
Xxxxxx Xxxx, certified public accountants (collectively, the "Financial
Statements"). The Financial Statements were prepared in conformity with
generally accepted accounting principles, and fairly present the financial
position of the Company as of such dates and the results of its operations for
the periods then ended. Since December 31, 1999, there has been no (i) material
adverse change in the financial condition or operations of Westlake; (ii) change
in the authorized or issued capital stock of Westlake; (iii) grant of any
option, warrant or other right to purchase shares of capital stock, or
securities convertible into capital stock, of Westlake; (iv) reclassification,
combination, split, purchase, redemption, issuance, sale or other acquisition or
disposition of shares of capital stock of Westlake; (v) declaration, setting
aside or payment of any dividend or other distribution in respect of the capital
stock of Westlake; (vi) amendment or other change in the Westlake's Article of
Incorporation or Bylaws; (vi) substantial acquisition or disposition of assets
by Westlake, (viii) change in the accounting policies, practices or procedures
of Westlake; or (ix) agreement (whether written or oral) regarding any of (ii)
through (viii) above. Westlake does not have any material debts, liabilities or
obligations of any nature, whether absolute, accrued, contingent or otherwise,
except for (a) debts, liabilities or obligations that are fully reflected in, or
reserved against, on the December 31, 1999 balance sheet included in the
Financial Statements and (b) debts, liabilities or obligations arising in the
ordinary course of business consistent with past practice since December 31,
1999 which, individually or in the aggregate, have not had, and would not
reasonably be expected to have, a material adverse effect on the business,
assets, condition (financial or other), prospects or results of operations of
Westlake.
7.7. LITIGATION. There are no actions, suits, proceedings or
investigations pending, or to the knowledge of Westlake, threatened against or
relating to Westlake or its assets, properties and businesses, or in any way
involving this Agreement, nor is there any basis known to Westlake for any such
action, suit, proceeding or investigation. Westlake is not in default with
respect to any order, judgment, writ, injunction or decree of any governmental
agency or instrumentality.
7.8. BOOKS AND RECORDS. The books and records of Westlake are
in all material respects complete and correct, have been maintained in
accordance with good business practice and accurately reflect the basis for the
financial condition and results of operations of Westlake set forth in the
Financial Statements.
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7.9. COMPLIANCE WITH APPLICABLE LAWS. To the knowledge of
Westlake and the Stockholder, the conduct of its business by Westlake does not
violate or infringe any domestic (federal or local) or foreign law, statute, or
ordinance or regulation or any patent, trademark, trade name, copyright,
know-how or other proprietary right of others, the enforcement of which would
materially and adversely affect the business of Westlake or the value of its
properties or assets.
8. GENERAL.
8.1. BINDING EFFECT. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective heirs, executors,
personal representatives, estates, successors (including, without limitation, by
way of merger) and assigns.
8.2. ENTIRE AGREEMENT. This Agreement sets forth the entire
understanding of the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements, written or oral, between them as to such
subject matter.
8.3. SEVERABILITY. If any provision of this Agreement, or the
application thereof to any circumstances, is invalid, in whole or in part, such
provision or application shall to that extent be severable and shall not affect
the other provisions or application of this Agreement.
8.4. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA,
WITHOUT REFERENCE TO THE PRINCIPLES OF CONFLICT OF LAWS.
8.5. WAIVER OF TRIAL BY JURY. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY
JURY IN CONNECTION WITH ANY ACTION, CLAIM OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT.
8.6. MODIFICATIONS AND WAIVERS. No provision of this Agreement
may be modified, altered or amended except by an instrument in writing executed
by the parties hereto. No waiver by any party hereto of any breach by any other
party hereto of any provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions at the time
or at any prior or subsequent time.
8.7. HEADINGS. The headings contained herein are solely for
the purposes of reference, are not part of this Agreement and shall not in any
way affect the meaning or interpretation of this Agreement.
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8.8. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.
8.9. NOTICES. All notices and other communications given or
made pursuant hereto shall be in writing and shall be effective upon receipt, if
delivered personally, mailed by registered or certified mail (postage prepaid,
return receipt requested) to the parties at the following addresses (or at such
other address for a party as shall be specified by like changes of address) or
sent by electronic transmission to the facsimile number specified below:
if to Teletrac or Acquisition Sub to:
Xxxx Xxxxxx
Axsys Technologies, Inc.
000 Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxx Xxxx, Xx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
If to Westlake or the Stockholder:
Xxxxxxx Xxxxxxxx
0000 Xxx Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
and
Xxxxxxxx X. Xxxx
Xxxxx & Xxxxxxx
00000 Xxxxxxxx Xxxx.
00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
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IN WITNESS WHEREOF, this Agreement has been executed by each of the
parties hereto as of the date first above written.
Westlake Technology Corporation
By:
-----------------------------
Name:
Title:
Teletrac Acquisition Corporation
By:
-----------------------------
Name:
Title:
Teletrac, Inc.
By:
-----------------------------
Name:
Title:
Stockholder
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Xxxxxxx Xxxxxxxx
SPOUSAL CONSENT:
The undersigned acknowledges that the undersigned has read the foregoing
Agreement of Merger between Westlake Technology Corporation, Teletrac, Inc. and
Teletrac Acquisition Corporation and the undersigned's spouse; understands that
the Agreement of Merger provides for the merger of a corporation wholly owned by
the undersigned's spouse; consents to the undersigned's spouse's execution and
delivery of the foregoing Agreement of Merger and agrees to be bound by the
foregoing Agreement of Merger.
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Stockholder's Spouse
Name:
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Westlake Technology Corporation
By:
-----------------------------
Name:
Title:
Teletrac Acquisition Corporation
By:
-----------------------------
Name:
Title: Secretary
Teletrac, Inc.
By:
-----------------------------
Name:
Title: Secretary
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