SECOND AMENDMENT TO LOAN AND
SECURITY AGREEMENT
AND WAIVER OF
DEFAULT
THIS SECOND AMENDMENT TO LOAN AND SECURITY
AGREEMENT AND WAIVER OF DEFAULT (this “Agreement”) is
made and entered into as of the ___ day of December, 2005, by and
among TEXTRON FINANCIAL CORPORATION , a Delaware
corporation (“Lender”), and OMNI USA,
INC. , a Washington corporation, and BUTLER
PRODUCTS CORP. , a Kentucky corporation (individually a
“Borrower” and collectively the
“Borrowers”).
W
I
T N E S
S E T
H
:
WHEREAS, Borrowers and Lender are parties to that
certain Loan and Security Agreement dated as of August 2, 2004 (as
amended, restated, modified or supplemented from time to time, the
“Loan Agreement”; all documents and instruments
executed in connection therewith may be referred to collectively as
the Loan Documents); and
WHEREAS, Each
Borrower is currently a wholly-owned subsidiary of Omni U.S.A.,
Inc., a Nevada corporation, (“Omni Nevada”);
and
WHEREAS, among other documents and instruments
the Obligations (as defined in the Loan Agreement) are secured by
that certain Stock Pledge Agreement dated as of August 2, 2004 from
Omni Nevada to Lender; and
WHEREAS, Omni
Nevada shall sell all of the capital stock of the Borrowers to
Jeffrey K. Daniel and Craig L. Daniel, and Edward Daniel
(collectively the “Daniels”) in accordance with that
certain Stock Purchase Agreement dated as of _______________, 2005
(the “Spin Off Agreement”), and the Daniels intend to
subsequently contribute all of the capital stock of the Borrowers
to Asia Capital, Inc., a Nevada corporation (“Asia”)
wholly-owned by Jeffrey K. Daniel, Craig L. Daniel, and Edward
Daniel (the “Spin Off”); and
WHEREAS, Jeffrey K. Daniel, Craig L. Daniel, and
Edward Daniel each intend to enter into a promissory note in favor
of Omni Nevada as payment of the entire purchase price of the Spin
Off (the “Spin Off Debt”); and
WHEREAS, Omni Nevada has entered into an
Agreement and Plan of Merger dated as of _______________, 2005 (the
“Merger Agreement”) by and among Omni Nevada, Omni
Merger Sub, Inc., a wholly-owned subsidiary of Omni Nevada
(“Omni Sub”) and Brendan Technologies, Inc.
(“Brendan”) whereby immediately subsequently to or
contemporaneously with the Spin Off, Omni Sub will be merged into
Brendan (the “Merger”), and Brendan will be the
surviving corporation in the Merger; and
WHEREAS the
Merger and the Spin Off (collectively, the
“Transaction”) each separately and collectively
constitute a Change of Control which is a default and an Event of
Default under the Loan Agreement; and
WHEREAS,
Borrowers have requested that Lender waive such defaults
prospectively, and Lender is willing to do so on the terms and
conditions set forth herein; and
WHEREAS,
Borrowers and Lender desire to amend the Loan Agreement and other
Loan Documents on the terms and conditions set forth
herein.
NOW, THEREFORE,
in consideration of the foregoing premises, and other good and
valuable consideration, the receipt and legal sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Capitalized Terms . All capitalized terms used herein and not
otherwise expressly defined herein shall have the respective
meanings given to such terms in the Loan Agreement.
2. Acknowledgment of Defaults
. Borrowers hereby acknowledge and
agree that the Transaction would constitute, inter alia, a default
under Section 7.7 of the Loan Agreement (the “Change
of Control Covenant”) and an Event of Default under
Section 9.1(c) as a result of the Change of Control of
Borrower (the “Change of Control Default”).
3. Waiver of Default Resulting from Change of
Control . Lender hereby
waives the Change of Control Default occasioned by the Transaction.
Lender reserves its rights and remedies with respect to any other
Event of Default.
4. Amendment of Definition of “Change of
Control” . The Loan
Agreement is hereby amended by deleting the definition of
“Change of Control” in its entirety and substituting
the following in lieu thereof:
“Change of Control” means the
occurrence of any of the following events: (i) the sale or transfer
of all or substantially all of the assets of the Borrower as an
entirety to any person or related group of persons other than an
Affiliate or Affiliates of the Borrower; (ii) Jeffrey K. Daniel
and/or Craig L. Daniel shall cease to control the Borrower, or
either of them; (iii) Asia Capital, Inc., a Nevada corporation,
shall cease to own all of the stock of Borrower, or either of them,
or (iv) the Borrower, or either of them, is liquidated, dissolved,
or adopts a plan of liquidation pursuant to the Bankruptcy Code or
any other bankruptcy law.
5. Amendment of Definition of
“Guarantor” and “Guarantors”
. The Loan Agreement is hereby
amended to reflect the release of Omni Nevada’s Guaranty by
deleting the definition of “Guarantor” or
“Guarantors” in its entirety and substituting the
following in lieu thereof:
“Guarantor” or
“Guarantors” means (a) with respect to those recourse
Guaranties executed or to be executed in connection herewith, Asia
Capital, Inc., a Nevada corporation, Jeffery K. Daniel, and Craig
L. Daniel, (b) with respect to the Validity Guaranty executed in
connection herewith, Frank Jakubec, and (c) each other Person
guaranteeing to Lender all or part of the Obligations.
6. Amendment of Definition of “Guaranty”
and “Guaranties” . The Loan Agreement is hereby amended by
deleting the definition of “Guaranty” or
“Guaranties” in its entirety and substituting the
following in lieu thereof:
“Guaranty” or
“Guaranties” means each of (a) that recourse Guaranty
dated on or about December __, 2005 by Asia Capital, Inc., a Nevada
corporation, (b) that recourse Guaranty dated as of August 2, 2004
by Jeffrey K. Daniel, (c) that recourse Guaranty dated on or about
July 16, 2004 by Craig L. Daniel, (d) that Validity Guaranty dated
on or about July 15, 2004 by Frank Jakubec, and (e) any other
guaranty executed and delivered by a Guarantor in favor of Lender,
in each case in form and substance satisfactory to
Lender.
7. Amendment of Adjusted Tangible Net Worth
Covenant . Borrowers and
Lender understand and agree that, upon completion of the
Transaction, Section 7.6 (b) of the Loan Agreement shall be
amended to reset the Adjusted Tangible Net Worth covenant to a
level reflective, in the Lender’s sole discretion, of each
Borrower’s equity structure as it is exists after the
completion of the Transaction.
8. Delivery in Trust of Shares of
Borrowers . Lender shall
deliver the originals of certificates representing one hundred
percent (100%) of the issued and outstanding shares of each
Borrower to Omni Nevada to hold in trust for the purpose of
allowing Omni Nevada to consummate the Spin Off as set forth in the
Spin Off Agreement.
9. Conditions of Effectiveness
. This Amendment, and the consents,
waivers, releases, and modifications contained herein, shall become
effective as of the date of this Amendment upon satisfaction of all
of the following conditions precedent:
(a) Lender’s receipt of a true and correct
copy of each of the Spin Off Agreement and Merger Agreement, fully
executed by the parties thereto, each in form and substance
accepta