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SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT AND WAIVER OF DEFAULT

Forbearance Agreement

SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT AND WAIVER OF DEFAULT | Document Parties: BRENDAN TECHNOLOGIES, INC. | OMNI USA, INC | TEXTRON FINANCIAL CORPORATION | BUTLER PRODUCTS CORP | ASIA CAPITAL, INC You are currently viewing:
This Forbearance Agreement involves

BRENDAN TECHNOLOGIES, INC. | OMNI USA, INC | TEXTRON FINANCIAL CORPORATION | BUTLER PRODUCTS CORP | ASIA CAPITAL, INC

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Title: SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT AND WAIVER OF DEFAULT
Governing Law: Rhode Island     Date: 1/5/2006
Industry: Auto and Truck Parts    

SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT AND WAIVER OF DEFAULT, Parties: brendan technologies  inc. , omni usa  inc , textron financial corporation , butler products corp , asia capital  inc
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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


 
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