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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________________
FORM 8-K
PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: October 18, 1996
OMNI U.S.A., INC.
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(Exact name of registrant as specified in its charter)
Nevada 0-17493 88-0237223
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(State of (Commission (IRS Employer
Incorporation) File Number) Identification No.)
7502 Mesa Road, Houston, Texas 77028
_____________________________________________________________
(Address of Principal Executive Offices)
Registrants telephone number, including area code: (713) 635-6331
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OMNI U.S.A., INC.
Item 1. Changes in Control of Registrant.
NONE.
Item 2. Acquisitions or Disposition of Assets.
On October 4, 1996, the Company acquired 100% of the common stock
of Butler Products Corporation ("BPC"), a Kentucky corporation
located in Butler, Kentucky. BPC is a manufacturer of stabilizer
and landing gear jacks and trailer products sold to manufacturers
and distributors of heavy duty trailers. The stock was purchased
from the sole shareholders of BPC, Messrs. Frank E. Jakubec and
Dennis W. Swim, who were unaffiliated with the Company at the time
of acquisition. Terms of the transaction included payments to the
shareholders of BPC of $225,000 in cash, $500,000 in junior
subordinated notes due in 2003, and 150,000 shares of common stock
of the Company. BPC has been engaged in the business of
manufacturing jack and trailer products for over 40 years. The
Company intends to utilize the assets of BPC to continue in that
business.
Item 3. Bankruptcy or Receivership.
NONE.
Item 4. Changes in Registrant's Certifying Accountant.
NONE.
Item 5. Other Events.
NONE.
Item 6. Resignation of Registrant's Directors.
NONE.
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Item 7. Financial Statements & Exhibits.
It is currently impracticable to provide all of the required
historical and pro forma financial information. The Company will
provide the required historical and pro forma financial
information as soon as possible, but in any event, not later than
December 15, 1996.
For the eight months ended August 31, 1996, unaudited summary
income statement data for Butler Products Corporation included:
Net Sales $1,926,455
Cost of Goods 1,601,693
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Gross Margin 324,762
Operating expenses 213,862
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Operating income 110,900
As of August 31, 1996, unaudited summary balance sheet data for
Butler Products Corporation included:
Current assets $ 787,878 Current liabilities 518,813
Net fixed assets 297,078 Long-term liabilities 309,068
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Stockholders' equity 257,075
Total liabilities and
Total assets 1,084,956 stockholders' equity 1,084,956
Exhibits include:
10.9 Butler Products Corporation Share Purchase Agreement dated
October 1, 1996, together with exhibits as follows:
-Junior Subordinated Promissory Note to Frank E. Jakubec
-Junior Subordinated Promissory Note to Dennis W. Swim
-Employment Agreement between Butler Products Corporation
and Frank E. Jakubec
-Employment Agreement between Butler Products Corporation
and Dennis W. Swim
-Noncompetition Agreement between Butler Products Corporation
and Frank E. Jakubec
-Noncompetition Agreement between Butler Products Corporation
and Dennis W. Swim
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OMNI U.S.A., INC.
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
OMNI U.S.A., INC.
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(Registrant)
Date: October 18, 1996 By: /s/ Robert S. Moore II
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Robert S. Moore II
Executive Vice President &
Chief Financial Officer
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EXHIBIT 10.9
SHARE PURCHASE AGREEMENT
TABLE OF CONTENTS
Section 1. The Closing
Section 2. Sale of Shares
Section 3. Covenant of Sellers
Section 4. Representations and Warranties of Sellers
Section 5. Representations and Warranties of the Company
Section 6. Representations and Warranties of Buyer
Section 7. Indemnities
Section 8. Additional Covenants of the Company and Sellers
Section 9. Transactions to be Completed at Closing
Section 10. Governing Law
Section 11. Amendment and Waiver
Section 12. Assignment
Section 13. Notices
Section 14. Section Headings
Section 15. Exhibits
Section 16. Entire Agreement
Section 17. Counterparts
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SHARE PURCHASE AGREEMENT
Agreement dated the 1st day of October, 1996 between and among Frank E. Jakubec
("FEJ"), individually, Dennis W. Swim ("DWS"), individually,(collectively, FEJ
and DWS will be referred to as the "Sellers"), Butler Products Corporation, a
Kentucky corporation ("Butler" or the "Company"), and Omni USA, Inc., a Nevada
corporation ("Omni" or "Buyer").
WITNESSETH:
WHEREAS, Sellers own 75 shares (the "Shares") of the Company, no par value per
share, which Sellers wish to sell to Buyer and Buyer wishes to purchase from
Sellers, all on the terms hereinafter set forth:
WHEREAS, the Company deems that it is in the best interest of the Company for
the Buyer to purchase the Shares, and the Company is entering into this
Agreement to induce the Buyer to purchase the Shares in accordance with this
Agreement;
NOW, THEREFORE, the parties hereby agree as follows:
1. THE CLOSING
1.1 Closing (the "Closing") will take place within thirty (30) days after
the Company gives notice to Sellers and Buyer (the "Closing Notice") that the
following condition precedent to the Closing has been satisfied:
The following approvals and consents required in connection with this
Agreement and to conclude duly and legally the transactions contemplated
herein shall have been obtained and shall be in full force and effect.
Frank E. Jakubec, individually
Dennis W. Swim, individually
Butler Products Corporation, a Kentucky corporation
Frank E. Jakubec, as shareholder of Butler
Dennis W. Swim, as shareholder of Butler
The Company will give the Closing Notice promptly after all approvals and
consents have been obtained.
1.2 The Closing will take place on a business day approved by Sellers, the
Company and Buyer, but in the absence of such approval, closing shall take place
on the 20th business day following the day on which the Closing Notice is given
to Buyer.
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As used in this Agreement, the term "business day" is a day on which banks are
open for business in both Texas and Kentucky.
1.3 The Closing will take place by telephone and facsimile connection
between Michael A. Zahorik, Esq., Robert S. Moore, II, Jeffrey K. Daniel, for
Buyer, and FEJ and DWS, for themselves and Butler at a time mutually determined.
1.4 If the Closing Notice has not been given to Sellers and Buyer on or
before September 15, 1996, then Buyer may terminate this Agreement by giving
notice of termination to the other and to the Company at any time prior to
receiving the Closing Notice. On such termination, none of the parties will have
any obligations or liabilities to the others under this Agreement.
2. SALE OF SHARES
2.1 At the Closing, Sellers will sell to Buyer, and Buyer will purchase
from Sellers, the Shares for the following consideration:
(a) U.S. $225,000 at the Closing;
(b) Subject to Section 7.14, Subordinated note in the principal amount
of U.S. $333,333 payable to FEJ, and a subordinated note in the principal amount
of U.S. $166,667 payable to DWS, (the "Notes");
(c) Subject to Section 7.14, 100,000 shares of unregistered Omni
common stock issued to FEJ and 50,000 shares of unregistered Omni common stock
issued to DWS;
(d) Employment agreements at a compensation level of $90,000 per year
for FEJ and $60,000 per year for DWS and agreements not to compete.
2.2 The payments under Section 2.1(b) will be evidenced by and made in
accordance with the Notes set forth in Exhibit 2.1(b) hereto.
3. COVENANTS OF SELLERS
3.1 From the execution of this Agreement until the payment in full of the
Notes, Sellers will not engage directly or indirectly in any business not
related to Omni or Butler (the "Business") and will not invest in or provide
loans or other credit facilities to any person, corporation, partnership or
other entity which engages directly or indirectly in any aspect
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of the Business but this covenant will not preclude Sellers from acquiring
securities which are traded publicly.
3.2 Sellers will not disclose any trade secrets or other proprietary or
confidential information pertaining to any aspect of the Business.
3.3 Sellers acknowledge that violation of any of the provisions of this
Section 3 will cause irreparable loss and harm to both the Company and Buyer
which cannot be reasonably or adequately compensated by damages in an action at
law. Accordingly, in the event of a breach or threatened breach by Sellers of
any of the provisions of this Section 3, each of the Company and Buyer shall be
entitled to injunctive and other equitable relief to prevent or cure any breach
of threatened breach thereof, and Sellers agree that it will not be a defense to
any request for such relief that the Company or Buyer has an adequate remedy at
law. Notwithstanding the foregoing, the Company and Buyer shall have other legal
remedies as may be appropriate under this circumstance including, inter alia,
recovery of damages occasioned by such breach. For purposes of any proceeding
under or with respect to this Section 3, Sellers, the Company and Buyer submit
to the jurisdiction of the court of the State of Texas and of the United States
located in the County of Harris, State of Texas; and each agrees not to raise
and waives any objection to or defense based on the venue of any such court or
forum non conveniens.
3.4 A court of competent jurisdiction, if it determines any of the
provisions of this Section 3 to be unreasonable in scope, time or geography, is
hereby authorized by Sellers, the Company and Buyer to enforce the same in such
narrower scope, shorter time or lesser geography as such court determines to be
reasonable under all the circumstances.
4. REPRESENTATIONS AND WARRANTIES OF SELLERS
4.1 Sellers represent and warrant to the Buyer as follows:
(a) the Company is duly incorporated and validly existing under the
laws of Kentucky; the Company is duly and qualified to conduct business in all
jurisdictions where it is required to qualify; the Company has the corporate
power and authority to execute, deliver and perform this Agreement and any other
agreement or discount executed by either of them under or in connection with
this Agreement; and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement and any such other
agreement or document. This Agreement constitutes, and any such other agreement
or document when executed will constitute, the legal,
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valid and binding obligations of Sellers and the Company enforceable against
Sellers and the Company in accordance with their respective terms.
(b) Neither the execution or delivery of this Agreement or the
transactions contemplated herein, nor compliance with the terms and conditions
of this Agreement will:
(i) contravene any provision of law or any statute, decree, rule
or regulation binding upon Sellers or the Company or contravene any judgment,
decree, franchise, order or permit applicable to Sellers or the Company; or
(ii) conflict with or result in any breach of any terms,
covenants, conditions or provisions of, or constitute a default (with or without
the giving of notice or passage of time or both) under the Articles of
Incorporation or Bylaws of the Company or any agreement or other instrument to
which Sellers or the Company is a party or by which either is bound, or result
in the creation or imposition of any lien, security, charge or encumbrance upon
any of the assets, rights, contracts or other property of the Company.
(c) All authorizations, consents or approvals of, or exemptions by,
any governmental, judicial or public body or authority required to authorize, or
required in connection with (i) the execution, delivery or performance of this
Agreement by Sellers and the Company, or (ii) any of the transactions
contemplated by this Agreement, or (iii) any of the certificates, instruments or
agreements executed by Sellers or the Company in connection with this Agreement,
or (iv) the taking of any action by Sellers or the Company, have been or at the
Closing will have been obtained and at the Closing will be in full force and
effect.
(d) Exhibits 4.1(d)-1 and 4.1(d)-2 hereto contain, respectively, true
and complete copies of the Articles of Incorporation and Bylaws of the Company,
and the same have not been amended and are in full force and effect; as of the
Closing the Articles of Incorporation and Bylaws of the Company will be amended,
respectively, in accordance with Exhibits 4.1(d)-3 and 4.1(d)-4 hereto.
(e) The audited financial statements of the Company as of December 31,
1995, and the unaudited financial statements of the Company as of July 31, 1996,
including profit and loss statements for the periods then ended and balance
sheets as of these dates, as set forth in Exhibit 4.1(e) hereto (the "Financial
Statements"), present fairly, in the case of the
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profit and loss statements, the results of operations of the Company for the one
year and seven-month periods then ended, and in the case of the balance sheets,
the financial condition of the Company at said dates. As at said dates, the
Company did not have any liabilities (contingent or otherwise) or assets which
are not disclosed in the Financial Statements or, in the case of liabilities,
reserved against therein. The Financial Statements have been prepared in
accordance with generally accepted accounting principles and practices in the
United States consistently applied. Since the dates of the Financial Statements
there have been no adverse changes in the business or financial condition of the
Company and the Company has not incurred any additional obligations or
liabilities except trade debts in the ordinary course of business.
The Company has filed all tax returns which it has been required to file and has
paid all taxes and interest and penalties, if any, which it has been required to
pay. The Company will prepare and file the Company's short year tax returns
through Closing and Sellers will pay all tax liability as a result of the
Company's operations for 1996.
(f) Exhibit 4.1(f)-1 sets forth all of the patents, copyrights,
trademarks and service marks of the Company; Exhibit 4.1(f)-2 sets forth all of
the furniture and fixtures of the Company; Exhibit 4.1(f)-3 sets forth all of
the machinery and equipment of the Company; Exhibit 4.1(f)-4 sets forth all of
the real estate of the Company (including a description of the improvements
thereon); Exhibit 4.1(f)-5 sets forth all of the contracts in which the Company
is a party, including, but not limited to, labor, employment, service,
maintenance and rental contracts. All of the assets, property, rights and
contracts set forth in Exhibit 4.1(f)-1 through Exhibit 4.1(f)-5, inclusive, are
collectively called the "Company Assets." All of the information concerning the
Company Assets contained in said Exhibits is true and correct. The Company owns
all of the rights in and to the Company Assets; the patents, copyrights,
trademarks and service marks set forth in Exhibit 4.1(f)-1 are valid patents,
copyrights, trademarks and service marks under the laws of the United States and
are duly and properly registered in the name of the Company; and, except as set
forth in Exhibits 4.1(f)-6 respective encumbrances, none of the rights in or to
any of the Company Assets has been sold, leased, assigned, encumbered or
transferred in any way, and there are no rights, options or privileges
outstanding with respect to any of the Company Assets. Excepting for ordinary
wear and tear, the furniture and fixtures and machinery and equipment set forth
in Exhibits 4.1(f)-2 and 4.1(f)-3 are in good condition and in the case of the
machinery and equipment in good operating order. The improvements on the
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real estate set forth in Exhibit 4.1(f)-4 and the fixtures therein are in good
condition.
Apart from the Company Assets and other assets set forth in the Financial
Statements, the Company has no assets, rights or other property.
(g) Exhibit 4.1(f)-5 contains true and complete copies of all of the
contracts set forth therein including any amendments thereto. The Company is
not a party to any other contract. The contracts set forth in Exhibit 4.1(f)-5
are in full force and effect, are enforceable in accordance with the terms, and
no default by any party thereto, or event which with giving of notice or passage
of time or both would constitute a default, exists thereunder. All amounts due
and owing under said contracts have been paid; none of said contracts and none
of the rights of the Company thereunder has been sold, assigned, encumbered or
transferred in any way; and, apart from the rights expressly set forth in said
contracts themselves, there are no rights, options or privileges outstanding
with respect to any of said contracts or the rights therein.
(h) None of the Company Assets (i) violates or infringes any contract,
copyright, trademark, service mark, right of privacy, patent or other right, or
(ii) contains any materials which the Company is not duly authorized to use, or
(iii) misuses or misappropriates any trade secret or confidential or proprietary
information.
(i) Except for the claim by Butler regarding Edward Martin, there is
no litigation or arbitration or administrative proceeding or claim asserted,
pending or threatened respecting or involving the Company, the business of the
Company or any of the Company Assets or other assets of the Company.
(j) There is no order, writ, injunction or decree of any court,
government or governmental agency or any arbitration award affecting the
Company, the business of the Company or any of the Company Assets or other
assets of the Company.
(k) Exhibit 4.1(k) hereto contains a list of all of the officers,
directors, employees and agents of the Company, their salaries and other
compensation arrangements; the Company has no other obligations for salary or
compensation.
(l) Exhibit 4.1(l) hereto contains true and complete copies of all
health, pension, retirement, profit sharing and deferred compensation
arrangements maintained by the Company.
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(m) Exhibit 4.1(m) hereto contains a list of all the banks at which
the Company has accounts and the authorized signatories on such accounts.
(n) Exhibit 4.1(n) hereto contains a description of all insurance
maintained by the Company; no default exists with respect to any of such
insurance and all of such insurance are in full force and effect.
(o) Sellers are the sole owner of the Shares and of all the rights in
and to the Shares; the Shares are represented by share certificates Nos. 1 and
2, and Sellers may sell the Shares to Buyer pursuant to this Agreement without
the consent or approval of any person, corporation, partnership, governmental
authority or other entity; the Shares are fully paid and nonassessable and,
except as provided in this Agreement, Sellers have not sold, transferred or
assigned any of their rights in or to any of the Shares, the Shares are free and
clear of any liens, claims, encumbrances and restrictions of any kind except for
the approvals noted above.
(p) There is no option, warrant, privilege or other right outstanding
with respect to any unissued Shares of the Company, whether treasury shares or
otherwise, and there is no option, warrant, privilege or other right outstanding
with respect to any of the Shares; the Company has issued and outstanding 75
shares of common stock, no par value per share; there are no other shares of the
Company outstanding; the Company is authorized to issue 1000 shares of no par
value common stock.
4.2 Knowledge by Buyer of any event, circumstances or fact will not
vitiate or otherwise impair any of the warranties of Sellers or any of the
rights and remedies available to Buyer with respect to such warranties.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
5.1 The Company represents and warrants to Buyer that the representations
and warranties of Sellers under Section 4.1, insofar as they pertain to the
Company, are true and correct.
5.2 Knowledge by Buyer of any event, circumstance or fact will not vitiate
or otherwise impair any of the warranties of the Company or any of the rights
and remedies available to Buyer with respect to such warranties.
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6. REPRESENTATIONS AND WARRANTIES OF BUYER
6.1 Buyer represents and warrants to Sellers and the Company as follows:
(a) Buyer is duly incorporated and validly existing under the laws of
Nevada; it has the corporate power and authority to execute, deliver and perform
this Agreement, the Notes and any other agreement or document executed by it
under or in connection with this Agreement, and it has taken all necessary
corporate action to authorize the execution, delivery and performance of this
Agreement, the Notes and any such other agreement or document. This Agreement
constitutes, and the Notes and any such other agreement or document when
executed will constitute, the legal, valid and binding obligations of Buyer
enforceable against Buyer in accordance with their respective terms.
(b) Neither the execution nor delivery of this Agreement, nor the
transactions contemplated herein, nor compliance with the terms and conditions
of this Agreement will:
(i) contravene any provision of law or any statute, decree, rule
or regulation binding upon Buyer or contravene any judgment, decree, franchise,
order or permit applicable to Buyer;
(ii) conflict with or result in any breach of any terms,
covenants, conditions or provisions or, or constitute a default (with or without
the giving of notice or passage of time or both) under the Certificate of
Incorporation or Bylaws of Buyer or any agreement or other instrument to which
Buyer is a party or by which it is bound.
(c) No authorization, consent or approval of or exemption by, any
governmental, judicial or public body or authority is required to authorize, or
is required in connection with (i) the execution, delivery and performance by
Buyer of this Agreement or the Notes, or (ii) any of the transactions
contemplated by this Agreement, or (iii) any of the certificates, instruments or
other agreements executed by Buyer in connection with this Agreement, or (iv)
the taking of any action by Buyer.
6.2 Knowledge by Sellers or the Company of any event, circumstances or
fact will not vitiate or otherwise impair any of the representations or
warranties of Buyer or any of the rights and remedies available to Sellers or
the Company with respect to such representations and warranties.
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7. INDEMNITIES
7.1 The representations and warranties of the Company, Sellers and Buyer
will be deemed made on execution of this Agreement and at the Closing, and all
of those representations and warranties and all of the covenants and obligations
of the parties under this Agreement will survive the Closing.
7.2 Buyer will hold each of Sellers and the Company harmless from and pay
any loss, damage, cost or expense (including, without limitation, legal fees and
court costs) which either Sellers or the Company incurs by reason of any
representation or warranty of Buyer being incorrect or by reason of any breach
by Buyer of any if its covenants or obligations under this Agreement.
7.3 The Company will hold Buyer harmless from and pay any loss, damage,
cost or expense (including, without limitation, legal fees and court costs)
which Buyer incurs by reason of any representation or warranty of the Company
being incorrect or by reason of any breach by the Company of any of its
covenants or obligations under this Agreement.
7.4 Sellers will hold Buyer harmless from and pay any loss, damage, cost
or expense (including, without limitation, legal fees and court costs) which
Buyer incurs by reason of any representation or warranty of Sellers being
incorrect or by reason of any breach by Sellers of any of its covenants or
obligations under this Agreement.
7.5 Sellers will hold Buyer and the Company harmless from and pay any
loss, damage, cost or expense (including, without limitation, legal fees and
court costs) which Buyer or the Company incurs by reason of any property damage
or bodily injury arising out of any product liability claims for products sold
prior to Closing.
7.6 Sellers will hold Buyer and the Company harmless from and pay any
loss, damage, cost or expense (including, without limitation, legal fees and
court costs) which Buyer or the Company incurs by reason of any environmental
claims accruing before Closing in or about the manufacturing facility in Butler,
Kentucky.
7.7 Sellers will hold Buyer and the Company harmless from and pay any
loss, damage, cost or expense (including, without limitation, legal fees,
collection costs and court costs) as a result of receivables booked at Closing
and not collected within
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120 days of Closing, except for the receivables due from Fruehauf Corporation
("Fruehauf"), which will be indemnified by Sellers as set forth herein.
As of the date of this Agreement, the total due Company from Fruehauf
is $33,036.56. Buyer will withhold $25,000 from the amount due to Sellers at
Closing as specified in Section 2.1(a). Any proceeds from Fruehauf for unpaid
invoices as of the date of this Agreement or any proceeds received for accounts
receivable written off the books of the Company prior to January 1, 1996, will
be retained by Buyer up to the amount of $8,036.56. All proceeds in excess of
this amount will immediately be paid to Sellers up to the total of $25,000.
7.8 Sellers will hold Buyer and the Company harmless from and pay any
loss, damage, cost or expense (including, without limitation, legal fees,
collection costs and court costs) for any other claims made against the Company
for any loss or cause of action accruing before Closing.
7.9 Sellers will hold Buyer and the Company harmless from and pay any
loss, damage, cost or expense (including, without limitation, legal fees,
collection costs and court costs) for any liability arising out of the Bulk
Sales law, as enacted and applicable.
7.10 Sellers will hold Buyer and the Company harmless from and pay any
loss, damage, cost or expense (including, without limitation, legal fees,
collection costs and court costs) for any warranty claims in excess of $100 for
products manufactured prior to Closing.
7.11 Sellers will hold Buyer and the Company harmless from and pay any
loss, damage, cost or expense (including, without limitation, legal fees,
collection costs and court costs) for any liability arising out of or related to
an OSHA violation which accrues prior to Closing.
7.12 Sellers will hold Buyer and the Company harmless from and pay any
loss, damage, cost or expense (including, without limitation, legal fees,
collection costs and court costs) for any liability from third party claims
arising out of, related to, or as a result this Agreement, its contemplated
transaction, or breaches of the representations and warranties contained herein.
7.13 Sellers will hold Buyer and the Company harmless from and pay any
loss, damage, cost or expense (including, without limitation, legal fees,
collection costs and court costs) for any
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current tax liability as a result of Butler operations prior to Closing.
7.14 In order to induce Buyer to agree with Sellers' indemnifications
set forth in this Article 7, Sellers agree that Buyer will hold in escrow (the
"Escrow") in the offices of Buyer consistent with the terms set forth below (the
"Escrow Terms"), 150,000 shares of Omni common stock issued to FEJ and DWS under
Section 2.1(c) ("Omni Shares"), and the Notes payable to FEJ and DWS under
Section 2.1(b).
(a) The Omni Shares will be held in Escrow for two (2) years from
Closing, and the Notes will be held in Escrow for five (5) years from Closing at
Omni's Shareholder Relations Department consistent with these Escrow Terms.
(b) In the event of a claim or occurrence arising under these
indemnity provisions set forth in Section 7, the amount of any loss, damage,
cost or expense (including, without limitation, legal fees, collection costs and
court costs) will be set off against the Notes or the Omni Shares, at the option
of Buyer.
(c) If the loss is set off against the Notes, the note in the
principal amount of U.S. $333,000 payable to FEJ will be reduced by an amount
equal to two-thirds (2/3rds) of the loss, and the note in the principal amount
of U.S. $166,000 payable to DWS will be reduced by an amount equal to one-third
(1/3rd) of the loss.
(d) If the loss is set off against the Omni Shares, the price per
share of the Omni Shares shall first be the average closing bid price of the
Common Stock as reported by Bloomberg, L.P. for shares traded in the United
States for the five consecutive trading days preceding the date the loss is
incurred by Buyer. The Omni Shares issued to FEJ will be reduced by an amount
equal to two-thirds (2/3rds) of the loss, and the Omni Shares issued to DWS will
be reduced by an amount equal to one-third (1/3rd) of the loss.
(e) The handling of a claim or occurrence arising under these
indemnity provisions set forth in Section 7 shall be conducted under the
procedures and by the personnel, including attorneys, designated by Omni.
Sellers, in the reasonable exercise of their discretion, at their costs, may
involve themselves in such claim and jointly control such claim with Omni,
however Omni shall have the ultimate right to control the defense of the claim;
however, a claim may not be settled without the written consent of Sellers.
Omni agrees to furnish Sellers periodic status reports
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and advise Sellers of significant developments with respect to such claim.
Sellers shall cooperate fully in the defense of such claims in the manner and to
such extent as Omni may reasonably require.
8. ADDITIONAL COVENANTS OF THE COMPANY AND SELLERS
8.1 The Company and Sellers will use their best efforts to have the
condition precedent under Section 1.1 satisfied.
8.2 Prior to the Closing, the Company will, and Sellers will cause the
Company to:
(a) continue to conduct, its business in accordance with the Company's
normal and past practices;
(b) maintain the Company's properties and other assets in good repair,
order and condition;
(c) maintain the Company's books of account and records in the usual,
regular and ordinary manner in accordance with generally accepted accounting
principles;
(d) comply in all material respects with all laws applicable to them
and to the conduct of the Company business;
(e) maintain all insurance policies, or equivalent replacement
policies, presently carried by the Company;
(f) notify Buyer in writing of any material adverse change which would
or might be reasonably be expected to materially and adversely affect the
financial condition, business or affairs of the Company.
8.3 Prior to the Closing, the Company will not do, and Sellers will not
permit the Company to do, any of the following without Buyer's prior written
consent:
(a) issue any shares, or issue any rights or privileges to acquire any
shares or other securities of the Company, or issue any other securities;
(b) change the nature of its business;
(c) declare or pay any dividend or make any other distribution or
payment in respect of any of its shares or purchase or redeem any of its shares;
(d) amend its Articles of Incorporation or Bylaws except in accordance
with Exhibits 4.1(d)-3 and 4.1(d)-4 hereto;
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(e) merge or consolidate with any corporation or other entity or
liquidate or dissolve;
(f) adopt or agree to adopt any plan providing for its reorganization;
(g) make any loan or other extension of credit or issue any guaranty
or otherwise incur any contingent liability (except for extensions of credit not
exceeding thirty (30) days to trade creditors in accordance with past practices
and in the normal course of business);
(h) sell, pledge, transfer, assign or grant a security interest in any
of its assets, property, contracts or rights;
(i) enter into or terminate any contract;
(j) employ anyone or terminate anyone's employment;
(k) pay any compensation other than the current monthly payroll, raise
or agree to raise anyone's compensation, or pay or agree to pay any bonus or
other special compensation
(l) dispose of, or encumber any Company property or assets.
8.4 Promptly after the Closing the Company and Sellers will:
(a) Furnish copies of Company books and records;
(b) Furnish true and complete copies of resolutions accepted by
Seller's Board of Directors and all shareholders entitled to vote thereon
confirming this Agreement, authorizing all transactions contemplated herein and
the execution and delivery by Seller of all instruments then or thereafter
required to do so; said resolutions to be duly certified by the Secretary of
Seller;
(c) Opinion of Seller's counsel governed by and interpreted in
accordance with the Legal Opinion Accord of the ABA Section of Business Law
(1991) and subject to the General Qualifications (as defined therein) that:
(i) The Company is organized as a corporation, validly existing
and in good standing in its jurisdiction of incorporation and has the corporate
power and authority to conduct its business;
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(ii) The Company is qualified to do business and is in good
standing as a foreign corporation in each jurisdiction where such qualification
is required;
(iii) The authorized capital stock of the Company consists of 1000
shares, of which 75 shares are outstanding, validly issued, fully paid and non-
assessable;
(iv) The Company has full corporate power and corporate authority
to execute, deliver and perform the Stock Purchase Agreement. The Stock Purchase
Agreement has been duly authorized by all requisite corporate action, has been
validly executed and delivered by the Company and constitutes a valid and
binding obligation of the Company and its shareholders in accordance with its
terms;
(v) The Stock Purchase Agreement, and the transactions
contemplated therein, does not violate Company Charter or Bylaws;
(vi) The Stock Purchase Agreement, and the transactions
contemplated therein, does not violate other agreements or contracts to which
the Company or its shareholders is a party;
(vii) The Stock Purchase Agreement, and the transactions
contemplated therein, does not require governmental consents or filings not
obtained or made previously;
(viii) The Stock Purchase Agreement, and the transactions
contemplated therein, does not violate, and is consistent with, applicable "Bulk
Sales Laws;"
(ix) There are no threatened or pending litigation or claims
against the Company;
(x) There are no judgments outstanding against the Company; and
(xi) Title to Butler Products Corporation stock is consistent
with UCC (S) 8-302.
(d) Assignment of all right, title and interest of any property used
in the Company's business that is not so titled.
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9. TRANSACTIONS TO BE COMPLETED AT CLOSING
9.1 The following requirements will be completed or satisfied, as the case
may be, at the Closing.
(a) Sellers will deliver to Buyer share certificates representing the
Shares, which certificates will be duly endorsed by Sellers to Buyer.
(b) Buyer will deliver said share certificates to the Company and the
Company will deliver to Buyer a certificate, duly executed and issued in the
name of Buyer, representing 75 shares of the Company, no par value per share,
registered in the name of Buyer.
(c) Buyer will pay Sellers by wire transfer to an account designated
by Sellers THE U.S. $250,000 CASH PORTION OF THE PURCHASE PRICE SET FORTH IN
SECTION 2.1(A).
(d) Buyer will issue and hold in Escrow pursuant Section 7.14 100,000
shares of unregistered Omni common stock issued to FEJ and 50,000 shares of
unregistered Omni common stock issued to DWS set forth in Section 2.1(c).
(e) Buyer will execute and hold in Escrow pursuant Section 7.14 the
Notes set forth in Section 2.1(b).
(f) The Company will be furnished with a title insurance policy issued
by a title company licensed in the State of Kentucky confirming that title to
the real estate described in Exhibit 4.1(f)-4 is as set forth in said Exhibit.
(g) The Company and FEJ and DWS, will have entered into employment
contracts (the "Employment Contracts") in the form of Exhibit 9.1(f) hereto, and
the Employment Contracts will be in full force and effect. FEJ and DWS will be
capable of performing their respective duties under the Employment Contracts.
(h) Buyer will be furnished with current insurance policies, naming
Buyer as an additional insured, insuring Buyer against the risks of FEJ and DWS
being unable to perform their duties under their respective Employment Contracts
for a period not to exceed the terms of the Employment Contracts from the date
of the Closing by reason of death or incapacity.
(i) Buyer will be furnished with copies of the Company's Articles of
Incorporation and Bylaws amended in
16
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accordance with Exhibits 4.1(d)-3 and 4.1(d)-4 hereto and a certificate by an
officer or director of the Company certifying that the same are in full force
and effect. Buyer will also be furnished with a certified copy of the Company's
Articles of Incorporation as so amended dated within five (5) days of the
Closing.
(j) Buyer will be furnished with copies of all approvals and consents
required in connection with this Agreement and a certificate by an officer or
director of the Company and an officer or director of Sellers certifying that
the same are in full force and effect.
(k) Buyer will be furnished with a certificate of Sellers certifying
(i) that the representations and warranties of Sellers under this Agreement are
true and correct as of the Closing, (ii) that there has been a breach of any
covenant of Sellers under this Agreement, (iii) since the date of this Agreement
there has been no adverse change in the business, financial condition or
prospects of the Company, and (iv) there is no damage to or destruction of any
of the property of the Company or any of the premises where the Company
maintains offices or conducts its business that would materially impair the
Company's operations or ability to conduct its business.
(l) Buyer will be furnished with a certificate by an officer or
director of the Company certifying (i) that the representations and warranties
of the Company under this Agreement are true and correct as of the Closing, (ii)
that there has been no breach of any covenant of the Company under this
Agreement, (iii) since the date of this Agreement there has been no adverse
change in the business, financial condition or prospects of the Company, and
(iv) there is no damage to or destruction of any of the property of the Company
or any of the premises where the Company maintains offices or conducts its
business that would materially impair the Company's operations or ability to
conduct its business.
(m) Sellers and the Company will be furnished with a certificate by an
officer or director of Buyer certifying that the representations and warranties
of Buyer under this Agreement are true and correct as of the Closing and that
there has been no breach of any covenant of Buyer under this Agreement.
(n) Buyer will be furnished with a certificate by an officer or
director of the Company certifying that Buyer will be the only shareholder of
the Company;
17
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(o) Buyer will be furnished with a certificate by an officer or
director of the Company certifying that the officers and directors of the
Company on conclusion of the Closing are as follows:
(i) Officers:
President: Frank E. Jakubec
Vice President: Dennis W. Swim
Secretary: Dennis W. Swim
Treasurer: Frank E. Jakubec
(ii) Directors:
Robert S. Moore II
Michael A. Zahorik
(p) Buyer will be furnished with a certificate by an officer or
director of the Company certifying as of the conclusion of the Closing (i) the
banks at which the Company has accounts, and (ii) the signatories on those
accounts and their authority, all of which shall be subject to Buyer's approval.
(q) The Company will be furnished with resignations by any current
directors of the Company and by any officers and directors elected after the
date of this Agreement who will not serve after the Closing, with a confirmation
by each that such person has no claims whatsoever against the Company; and the
Buyer will be furnished with copies of these.
(r) The parties will furnish each other certificates by one of their
officers or directors (i) certifying the adoption by their directors and, if
necessary, by their shareholders, of resolutions authorizing the execution,
delivery and performance of this Agreement and any other agreements and
documents in connection herewith, and (ii) also certifying the names, positions
and signatures of the persons authorized to sign on their behalf.
(s) Sellers will furnish Buyer with certificates of the appropriate
governmental authority in Kentucky dated within five (5) days of the Closing
confirming that the Company is in existence and in good standing in its
jurisdiction ("Certificates of Good Standing").
18
<PAGE>
9.2 Except for the certified copy of the Company's Articles of
Incorporation and the Certificates of Good Standing, the agreements,
certificates, consents and other documents to be executed and delivered at the
Closing shall be dated the date of the Closing.
9.3 Completion or satisfaction, as the case may be, of all of the
requirements under Section 9.1 (including the correctness of the statements in
the certificates and other documents delivered) are conditions precedent to
completing the Closing under this Agreement. No part of the Closing under this
Agreement will be deemed completed unless all requirements under this Agreement
shall have been completed or satisfied.
10. GOVERNING LAW
10.1 This Agreement will be governed by and construed in accordance with
the law of Texas which law shall, without limitation, govern the enforceability,
validity and interpretation of this Agreement.
10.2 If a dispute arises out of or relates to this Agreement, or the breach
thereof, and if said dispute cannot be settled through negotiations, the parties
agree first to try in good faith to settle the dispute by mediation in Houston,
Texas under the Commercial Mediation Rules of the American Arbitration
Association.
10.3 In the event of any dispute, controversy or claim arising out of or in
connection with this Agreement, or the breach, termination or validity thereof,
and such dispute cannot be settled or mediation is not successful in resolving
such dispute and litigation shall become necessary, the parties agree to
litigate such dispute, controversy or claim before the United States District
Court having jurisdiction over Houston, Texas.
11. AMENDMENT AND WAIVER
11.1 This Agreement may not be amended or terminated except by an
instrument in writing signed by all of the parties hereto.
11.2 No provision of this Agreement and no right or obligation under this
Agreement may be waived except by an instrument in writing signed by the party
waiving the provision, right or obligation in question.
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<PAGE>
12. ASSIGNMENT
No party may transfer or assign any of its rights or obligations under this
Agreement and any attempt thereto shall be null and void.
13. NOTICES
13.1 Any notice, request, demand, waiver, consent, approval or other
communication which is required or permitted to be given to any party under this
Agreement shall be in writing and shall be given to that party with copy at the
addresses or fax numbers set forth below or, in the event of a change in any
address or fax number then to such other address or fax number as to which
notice of the change is given:
(a) If to Sellers:
Mr. Frank E. Jakubec
Mr. Dennis W. Swim
103 South Street, P.O. Box 185
Butler KY 41006
Fax No.: 606-472-7061
(b) If to the Company:
Butler Products Corporation
103 South Street, P.O. Box 185
Butler KY 41006
Attn: President
Fax No.: 606-472-7061
(c) If to Buyer:
Robert S. Moore II
Executive Vice President
Omni USA, Inc.
7502 Mesa Road
Houston TX 77028
Fax No.: 713-635-6360
With a copy to:
Michael A. Zahorik, Esq.
Omni USA, Inc.
7502 Mesa Road
Houston TX 77028
Fax No.: 713-635-6360
20
<PAGE>
13.2 Notice shall be deemed given on receipt.
14. SECTION HEADINGS
Section headings are for convenient reference only and shall not affect the
meaning or have any bearing on the interpretation of any provision of this
Agreement.
15. EXHIBITS
The Exhibits to this Agreement are contained in a separate booklet signed
by Sellers, Buyer and the Company.
16. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement among the parties with
respect to the matters described herein and there have been no other agreements,
representations, or warranties between the parties.
17. COUNTERPARTS
This Agreement may be executed in counterparts and each such counterpart
shall be deemed to be an original instrument, but all such counterparts together
shall constitute one instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
SELLERS: BUYER:
Omni USA, Inc.
/s/ Frank E. Jakubec By:/s/ Robert S. Moore II
- -------------------- -------------------------
Frank E. Jakubec Robert S. Moore II
Executive Vice President
/s/ Dennis W. Swim
- ------------------
Dennis W. Swim THE COMPANY:
Butler Products Corporation
By:/s/ Frank E. Jakubec
--------------------
Frank E. Jakubec
President
21
<PAGE>
Junior Subordinated Promissory Note
$333,333.00 October 1, 1996
Omni U.S.A., Inc., a Nevada corporation (the "Company"), for value
received, hereby promises to pay to Frank E. Jakubec, or registered holder
hereof (the "Holder"), at the principal office of the Holder or at such other
place as the Holder may designate by written notice to the Company, the
principal sum of Three Hundred Thirty-Three Thousand Three Hundred Thirty-Three
Dollars ($333,333.00), together with all accrued interest from and after the
date hereof then unpaid, on October 1, 2003 (the "Maturity Date") or earlier as
shall be provided herein.
Unpaid principal amount hereof shall bear interest at the rate of 8%
per annum from and after the date hereof until all unpaid principal and interest
shall be paid in full on the Maturity Date. Interest shall be paid semi-annually
on each March 31 and September 30 (unless such day is not a Business Day, in
which event, on the next succeeding Business Day), commencing on March 31, 1997,
until the Maturity Date. Principal shall be paid annually on each September 30
(unless such day is not a Business Day, in which event, on the next succeeding
Business Day), commencing on September 30, 2001, until the Maturity Date.
1. Definitions. The following terms for all purposes of this Junior
Subordinated Promissory Note (the "Note") shall have the respective meanings
specified below:
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in the cities of Houston, Texas or Frankfort, Kentucky
are authorized by law to be closed.
"Indebtedness" of any Person means at any date, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, notes or other similar instruments, (iii) all
obligations of such Person in respect of letters of credit or other similar
instruments (or reimbursement obligations with respect thereto), (iv) all
obligations of such Person to pay the deferred purchase price of property or
services, (v) all obligations of such Person as lessee under capital leases,
(vi) all indebtedness of others secured by a lien or any asset of such Person,
whether or not such indebtedness is assumed by such Person, and (vii) all
indebtedness of others guaranteed by such Person.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Senior Indebtedness" means all indebtedness of the Company, whether
outstanding on the date of execution of this Note or thereafter created,
incurred or assumed, except any such Indebtedness that by the terms of the
instrument or instruments by which such Indebtedness was created, assumed or
incurred expressly provides that it (i) is junior in right of payment to the
Note or (ii) ranks pari passu in right of payment with the Note and any
amendments, modifications or supplements to, or any renewals, extensions,
deferrals, refinancing and refunding of any of the foregoing.
2. Subordination of the Note. (a) The Company, for itself, its
successors and assigns, covenants and agrees, and each holder of this Note, by
its acceptance hereof, likewise covenants and agrees, that the obligations,
liability and indebtedness of the Company evidenced by this Note and the payment
of the principal hereof and interest thereon shall be subordinate and junior in
right of payment, to the extent and in the manner hereinafter set forth, to the
prior payment and satisfaction in full of all Senior Indebtedness.
(b) Each holder of this Note will not, without the express prior
written consent of the holders of Senior Indebtedness, take or receive, and the
Company will not make, give or permit,
1
<PAGE>
directly or indirectly, by set-off, redemption, purchase or in any other manner,
any payment on, whether of interest or principal for the whole or any part of,
the obligations evidenced by this Note; provided, that so long as no event of
default under the Senior Indebtedness shall have occurred and be continuing or
would occur as a result of, or after giving effect to, such payment, the Company
may make, and the holder of this Note may receive, (i) on each March 31 and
September 30 until the Maturity Date, semi-annual payments of interest accruing
under this Note and (ii) beginning September 30, 2001, and each September 30
thereafter until the Maturity Date, payments of principal and/or unpaid
interest.
(c) Until the Senior Indebtedness shall have been paid in full in cash
and satisfied, the Holder shall not obtain a judgment for the payment of, or
collect the obligation represented by, this Note or any portion hereof without
the express prior written consent of the holders of Senior Indebtedness,
provided, that if any payment of principle set forth in paragragh 2(b) herein is
not timely made, and remains unpaid for a period of ninety (90) days after
written notice of default to the Company, in which case, the Company shall
either (i) within the period of ninety (90) days after written notice of default
to the Company, cure such default by the payment in $US dollars of all uncured
principal amounts then due and owing , or (ii) after the period of ninety (90)
days after written notice of default to the Company, the Company shall cure such
default with the issuance to Holder of unregistered Company common stock at the
conversion rate of four ($4.00) per share, rounded up to the nearest share, in
complete settlement of all uncured principal amounts then due and owing. Except
for payments permitted by this Paragraph 2, no payment or distribution of any
kind or character, whether in cash, property or securities (including, without
limitation, proceeds or collateral for the obligations evidenced by this Note),
which, but for the subordination provisions contained herein, would otherwise be
payable or deliverable to the Holder upon or in respect of the obligations
evidenced by this Note shall be paid with respect to the Senior Indebtedness,
and, except for payments permitted by this paragraph, the Holder shall not
receive or accept any such payment or distribution or any benefit therefrom
unless and until the Senior Indebtedness shall have been fully paid and
satisfied.
(d) Without limiting the generality of the foregoing provisions of
this paragraph, in the event of any liquidation, termination, revocation or
other winding-up of the Company, or in the event of any receivership,
insolvency, reorganization or bankruptcy proceedings, assignment for the benefit
or creditors or any proceeding by or against the Company for any relief under
any bankruptcy, reorganization or insolvency law or laws, federal or state, or
any law, federal or state, relating to the relief of debtors, readjustment or
indebtedness, reorganization, composition or extension of indebtedness, then,
and in any such event, all Senior Indebtedness shall first be paid in full,
before any payment or distribution is made in respect of this Note, and any
payment or distribution of any kind or character, whether in cash, property or
securities (including, without limitation, proceeds or collateral for this
Note), which, but for the subordination provisions contained herein would
otherwise be payable or deliverable to the Holder upon or in respect of this
Note, shall instead by paid over or delivered to the holders of Senior
Indebtedness or its representatives if the Senior Indebtedness has not been paid
in full and satisfied, and the Holder shall not receive any such payment or
distribution or any benefit therefrom unless and until the Senior Indebtedness
shall have been fully paid and satisfied.
(e) Subject to the payment in full of all Senior Indebtedness, the
Holder shall be subrogated to the rights of the holders of Senior Indebtedness
to receive payments or distributions of cash, property or securities of the
Company applicable to the Senior Indebtedness until the principal of and
interest on the Note shall be paid in full, and, for the purpose of such
subrogation, (i) no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the Holder would be
entitled, and no payment pursuant to the provisions of Paragraph 2 of this Note
except for the provisions of Paragraph 2 of this Note to the holders of Senior
Indebtedness by the Holder shall, as between the Company, its creditors other
than holders of Senior Indebtedness, and the Holder, be deemed to be a payment
by the Company to or on account of the Note, and (ii) no payment or
distributions of cash, property or securities to or for the benefit of the
Holder pursuant to this subparagraph 2(e), which would otherwise have been paid
to the holders of Senior Indebtedness shall be deemed to be a payment by the
Company to or for the account of the Note.
2
<PAGE>
If any payment or distribution to which the Holder would otherwise
have been entitled but for the provision of this Paragraph 2 shall have been
applied, pursuant to the provisions of this Paragraph 2, to the payment of all
amounts payable under Senior Indebtedness, then and in such case, the Holder
shall be entitled to receive from the holders of such Senior Indebtedness any
payments of distributions received by such holders of Senior Indebtedness in
excess of the amount required to make payment in full of such Senior
Indebtedness.
3. Loss, Theft, Destruction or Mutilation of this Note. Upon receipt
by the Company of evidence reasonably satisfactory to the Company of the loss,
left, destruction or mutilation of this Note, and, in the case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to the Company,
and upon reimbursement to the Company of all reasonable expenses incidental
thereto, or, in case of mutilation, upon surrender and cancellation of this
Note, the Company will make and deliver a new Note of like tenor, in lieu of
this Note. Any Note made and delivered in accordance with the provisions of
this paragraph shall be dated as of the date to which interest has been paid on
the Note.
4. Transfer of Note. (a) The Holder, by acceptance hereof, agrees
that he will not, directly or indirectly, offer, agree to, sell, pledge,
transfer or otherwise dispose of this Note, in whole or in part without the
written consent of the Company.
5. Events of Default. Subject to the provisions of Paragraph 2
hereof, the entire unpaid portion of this Note may be declared immediately due
and payable by Holder, by written notice from such Holder to the Company upon
the happening and continuing of any of the following events (each, an "Event of
Default"):
(i) The Company shall default in the payment of principal or
interest under this Note when the same shall become due and payable and such
default shall remain uncured for thirty (30) days or more after notice of such
default is given to the Company by such Holder;
(ii) The Company or any present or future subsidiary of the Company
shall make an assignment for the benefit or creditors or shall admit in writing
its inability to pay its debts as they become due, or shall file a voluntary
petition in bankruptcy, or shall be adjudicated a bankrupt or insolvent, or
shall file any arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any present or future statue, law or regulation
pertaining to insolvency or creditors' rights, or shall file any answer
admitting the material allegations of a petition filed against it in any such
proceeding, or shall seek or consent to or acquiesce in the appointment of any
trustee, receiver or liquidator of it or all or any substantial part of its
properties;
(iii) Any proceeding is filed against the Company or any present or
future subsidiary of the Company, seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
present or future statute, law or regulation pertaining to solvency or
creditors' rights, and such proceeding continues for 60 days undismissed,
unstayed, unbonded and discharged; or
(iv) Any adjudication against the Company or any present or future
subsidiary thereof for payment of any money in excess of $5,000,000 shall be
rendered which its not removed, satisfied or bonded within 60 days, except
during such times execution has been stayed.
6. Reimbursement. The Company agrees to reimburse the Holder of the
Note for all its costs and expenses, including reasonable attorney fees,
expended in collecting any amounts due hereunder or in otherwise enforcing any
of its rights hereunder.
7. Notices. All notices and other communications required or
permitted to be given in respect of this Note shall be deemed to have been given
or made if delivered personally or mailed by
3
<PAGE>
registered or certified mail, return receipt, by telecopier or by overnight
courier, to the following parties at the following addresses, or, in each case,
at such other address or addresses an any party shall hereafter specify by
written notice to the others:
(I) If to the Company, to:
Omni U.S.A., Inc.
7502 Mesa Road
Houston, Texas 77028
Attention: Robert S. Moore II
With a copy to:
Omni U.S.A., Inc.
7502 Mesa Road
Houston Texas 77028
Attention: Michael A. Zahorik, Esq.
(ii) If to Holder, to:
Frank E. Jakubec
103 South Street
Butler Kentucky 41006
All such notices and communication, if mailed, shall be deemed to have
been given on the third business day after the mailing thereof.
8. Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of Texas without reference to the
principle of conflicts of law thereof.
9. Successors and Assigns. All covenants, stipulations, promises and
agreements of the Company set forth in this Note shall be binding on its
successor and assigns, whether so expressed or not.
10. Heading. The heading of the paragraphs of this Note are inserted
for convenience only and shall not be deemed to constitute a part hereof.
11. Waivers. The terms of this Note may not be amended, modified or
eliminated except in writing and signed by the Company and Holder.
IN WITNESS WHEREOF, Omni U.S.A., Inc. has caused this Note to be
signed in its corporate name by a duly authorized officer and to be dated as of
the day and year first above written.
OMNI U.S.A., INC.
By: /s/ Robert S. Moore II
----------------------
Robert S. Moore II
Executive Vice President
ATTEST:
By: /s/ Michael A. Zahorik
----------------------
Michael A. Zahorik
Secretary
4
<PAGE>
Junior Subordinated Promissory Note
$166,667.00 October 1, 1996
Omni U.S.A., Inc., a Nevada corporation (the "Company"), for value
received, hereby promises to pay to Dennis W. Swim, or registered holder hereof
(the "Holder"), at the principal office of the Holder or at such other place as
the Holder may designate by written notice to the Company, the principal sum of
One Hundred Sixty-Six Thousand Six Hundred Sixty-Seven Dollars ($166,667.00),
together with all accrued interest from and after the date hereof then unpaid,
on October 1, 2003 (the "Maturity Date") or earlier as shall be provided herein.
Unpaid principal amount hereof shall bear interest at the rate of 8%
per annum from and after the date hereof until all unpaid principal and interest
shall be paid in full on the Maturity Date. Interest shall be paid semi-annually
on each March 31 and September 30 (unless such day is not a Business Day, in
which event, on the next succeeding Business Day), commencing on March 31, 1997,
until the Maturity Date. Principal shall be paid annually on each September 30
(unless such day is not a Business Day, in which event, on the next succeeding
Business Day), commencing on September 30, 2001, until the Maturity Date.
1. Definitions. The following terms for all purposes of this Junior
Subordinated Promissory Note (the "Note") shall have the respective meanings
specified below:
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in the cities of Houston, Texas or Frankfort, Kentucky
are authorized by law to be closed.
"Indebtedness" of any Person means at any date, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, notes or other similar instruments, (iii) all
obligations of such Person in respect of letters of credit or other similar
instruments (or reimbursement obligations with respect thereto), (iv) all
obligations of such Person to pay the deferred purchase price of property or
services, (v) all obligations of such Person as lessee under capital leases,
(vi) all indebtedness of others secured by a lien or any asset of such Person,
whether or not such indebtedness is assumed by such Person, and (vii) all
indebtedness of others guaranteed by such Person.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Senior Indebtedness" means all indebtedness of the Company, whether
outstanding on the date of execution of this Note or thereafter created,
incurred or assumed, except any such Indebtedness that by the terms of the
instrument or instruments by which such Indebtedness was created, assumed or
incurred expressly provides that it (i) is junior in right of payment to the
Note or (ii) ranks pari passu in right of payment with the Note and any
amendments, modifications or supplements to, or any renewals, extensions,
deferrals, refinancing and refunding of any of the foregoing.
2. Subordination of the Note. (a) The Company, for itself, its
successors and assigns, covenants and agrees, and each holder of this Note, by
its acceptance hereof, likewise covenants and agrees, that the obligations,
liability and indebtedness of the Company evidenced by this Note and the payment
of the principal hereof and interest thereon shall be subordinate and junior in
right of payment, to the extent and in the manner hereinafter set forth, to the
prior payment and satisfaction in full of all Senior Indebtedness.
(b) Each holder of this Note will not, without the express prior
written consent of the holders of Senior Indebtedness, take or receive, and the
Company will not make, give or permit,
1
<PAGE>
directly or indirectly, by set-off, redemption, purchase or in any other manner,
any payment on, whether of interest or principal for the whole or any part of,
the obligations evidenced by this Note; provided, that so long as no event of
default under the Senior Indebtedness shall have occurred and be continuing or
would occur as a result of, or after giving effect to, such payment, the Company
may make, and the holder of this Note may receive, (i) on each March 31 and
September 30 until the Maturity Date, semi-annual payments of interest accruing
under this Note and (ii) beginning September 30, 2001, and each September 30
thereafter until the Maturity Date, payments of principal and/or unpaid
interest.
(c) Until the Senior Indebtedness shall have been paid in full in
cash and satisfied, the Holder shall not obtain a judgment for the payment of,
or collect the obligation represented by, this Note or any portion hereof
without the express prior written consent of the holders of Senior Indebtedness,
provided, that if any payment of principle set forth in paragragh 2(b) herein is
not timely made, and remains unpaid for a period of ninety (90) days after
written notice of default to the Company, in which case, the Company shall
either (i) within the period of ninety (90) days after written notice of default
to the Company, cure such default by the payment in $US dollars of all uncured
principal amounts then due and owing, or (ii) after the period of ninety (90)
days after written notice of default to the Company, the Company shall cure such
default with the issuance to Holder of unregistered Company common stock at the
conversion rate of four ($4.00) per share, rounded up to the nearest share, in
complete settlement of all uncured principal amounts then due and owing. Except
for payments permitted by this Paragraph 2, no payment or distribution of any
kind or character, whether in cash, property or securities (including, without
limitation, proceeds or collateral for the obligations evidenced by this Note),
which, but for the subordination provisions contained herein, would otherwise be
payable or deliverable to the Holder upon or in respect of the obligations
evidenced by this Note shall be paid with respect to the Senior Indebtedness,
and, except for payments permitted by this paragraph, the Holder shall not
receive or accept any such payment or distribution or any benefit therefrom
unless and until the Senior Indebtedness shall have been fully paid and
satisfied.
(d) Without limiting the generality of the foregoing provisions of
this paragraph, in the event of any liquidation, termination, revocation or
other winding-up of the Company, or in the event of any receivership,
insolvency, reorganization or bankruptcy proceedings, assignment for the benefit
or creditors or any proceeding by or against the Company for any relief under
any bankruptcy, reorganization or insolvency law or laws, federal or state, or
any law, federal or state, relating to the relief of debtors, readjustment or
indebredness, reorganization, composition or extension of indebtedness, then,
and in any such event, all Senior Indebtedness shall first be paid in full,
before any payment or distribution is made in respect of this Note, and any
payment or distribution of any kind or character, whether in cash, property or
securities (including, without limitation, proceeds or collateral for this
Note), which, but for the subordination provisions contained herein would
otherwise be payable or deliverable to the Holder upon or in respect of this
Note, shall instead by paid over or delivered to the holders of Senior
Indebtedness or its representatives if the Senior Indebtedness has not been paid
in full and satisfied, and the Holder shall not receive any such payment or
distribution or any benefit therefrom unless and until the Senior Indebtedness
shall have been fully paid and satisfied.
(e) Subject to the payment in full of all Senior Indebtedness, the
Holder shall be subrogated to the rights of the holders of Senior Indebtedness
to receive payments or distributions of cash, property or securities of the
Company applicable to the Senior Indebtedness until the principal of and
interest on the Note shall be paid in full, and, for the purpose of such
subrogation, (i) no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the Holder would be
entitled, and no payment pursuant to the provisions of Paragraph 2 of this Note
except for the provisions of Paragraph 2 of this Note to the holders of Senior
Indebtedness by the Holder shall, as between the Company, its creditors other
than holders of Senior Indebtedness, and the Holder, be deemed to be a payment
by the Company to or on account of the Note, and (ii) no payment or
distributions of cash, property or securities to or for the benefit of the
Holder pursuant to this subparagraph 2(e), which would otherwise have been paid
to the holders of Senior Indebtedness shall be deemed to be a payment by the
Company to or for the account of the Note.
2
<PAGE>
If any payment or distribution to which the Holder would otherwise
have been entitled but for the provision of this Paragraph 2 shall have been
applied, pursuant to the provisions of this Paragraph 2, to the payment of all
amounts payable under Senior Indebtedness, then and in such case, the Holder
shall be entitled to receive from the holders of such Senior Indebtedness any
payments of distributions received by such holders of Senior Indebtedness in
excess of the amount required to make payment in full of such Senior
Indebtedness.
3. Loss, Theft, Destruction or Mutilation of this Note. Upon receipt
by the Company of evidence reasonably satisfactory to the Company of the loss,
left, destruction or mutilation of this Note, and, in the case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to the Company,
and upon reimbursement to the Company of all reasonable expenses incidental
thereto, or, in case of mutilation, upon surrender and cancellation of this
Note, the Company will make and deliver a new Note of like tenor, in lieu of
this Note. Any Note made and delivered in accordance with the provisions of
this paragraph shall be dated as of the date to which interest has been paid on
the Note.
4. Transfer of Note. (a) The Holder, by acceptance hereof, agrees
that he will not, directly or indirectly, offer, agree to, sell, pledge,
transfer or otherwise dispose of this Note, in whole or in part without the
written consent of the Company.
5. Events of Default. Subject to the provisions of Paragraph 2
hereof, the entire unpaid portion of this Note may be declared immediately due
and payable by Holder, by written notice from such Holder to the Company upon
the happening and continuing of any of the following events (each, an "Event of
Default"):
(i) The Company shall default in the payment of principal or
interest under this Note when the same shall become due and payable and such
default shall remain uncured for thirty (30) days or more after notice of such
default is given to the Company by such Holder;
(ii) The Company or any present or future subsidiary of the
Company shall make an assignment for the benefit or creditors or shall admit in
writing its inability to pay its debts as they become due, or shall file a
voluntary petition in bankruptcy, or shall be adjudicated a bankrupt or
insolvent, or shall file any arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future statue,
law or regulation pertaining to insolvency or creditors' rights, or shall file
any answer admitting the material allegations of a petition filed against it in
any such proceeding, or shall seek or consent to or acquiesce in the appointment
of any trustee, receiver or liquidator of it or all or any substantial part of
its properties;
(iii) Any proceeding is filed against the Company or any present
or future subsidiary of the Company, seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
present or future statute, law or regulation pertaining to solvency or
creditors' rights, and such proceeding continues for 60 days undismissed,
unstayed, unbonded and discharged; or
(iv) Any adjudication against the Company or any present or future
subsidiary thereof for payment of any money in excess of $5,000,000 shall be
rendered which its not removed, satisfied or bonded within 60 days, except
during such times execution has been stayed.
6. Reimbursement. The Company agrees to reimburse the Holder of the
Note for all its costs and expenses, including reasonable attorney fees,
expended in collecting any amounts due hereunder or in otherwise enforcing any
of its rights hereunder.
7. Notices. All notices and other communications required or
permitted to be given in respect of this Note shall be deemed to have been given
or made if delivered personally or mailed by
3
<PAGE>
registered or certified mail, return receipt, by telecopier or by overnight
courier, to the following parties at the following addresses, or, in each case,
at such other address or addresses an any party shall hereafter specify by
written notice to the others:
(I) If to the Company, to:
Omni U.S.A., Inc.
7502 Mesa Road
Houston, Texas 77028
Attention: Robert S. Moore II
With a copy to:
Omni U.S.A., Inc.
7502 Mesa Road
Houston Texas 77028
Attention: Michael A. Zahorik, Esq.
(ii) If to Holder, to:
Dennis W. Swim
103 South Street
Butler Kentucky 41006
All such notices and communication, if mailed, shall be deemed to have
been given on the third business day after the mailing thereof.
8. Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of Texas without reference to the
principle of conflicts of law thereof.
9. Successors and Assigns. All covenants, stipulations, promises and
agreements of the Company set forth in this Note shall be binding on its
successor and assigns, whether so expressed or not.
10. Heading. The heading of the paragraphs of this Note are inserted
for convenience only and shall not be deemed to constitute a part hereof.
11. Waivers. The terms of this Note may not be amended, modified or
eliminated except in writing and signed by the Company and Holder.
IN WITNESS WHEREOF, Omni U.S.A., Inc. has caused this Note to be
signed in its corporate name by a duly authorized officer and to be dated as of
the day and year first above written.
OMNI U.S.A., INC.
By: /s/ Robert S. Moore II
-----------------------
Robert S. Moore II
Executive Vice President
ATTEST:
By: /s/ Michael A. Zahorik
----------------------
Michael A. Zahorik
Secretary
4
<PAGE>
EMPLOYMENT AGREEMENT
This Agreement made between Frank E. Jakubec (the "Employee"), whose
address is 1644 Jeffrey Lane, Hebron, Kentucky, and Butler Products Corporation
("Butler"), whose principal place of business is located at 103 South Street,
Butler, Kentucky, a wholly owned subsidiary of Omni USA, Inc. ("Omni"), a Nevada
corporation.
Omni is a manufacturer of certain products, including products under
the name of Butler.
Employee is currently employed by Butler and desires to continue his
employment by Butler.
In consideration of the preceding and the mutual covenants and
Agreements set forth the Employee, Butler and Omni agree as follows:
1. Employment and Duties.
1.1 Butler employs the Employee for the office of President of
Butler. Employee's duties shall be those provided for the office in the bylaws
of Butler and any additional powers or duties that may be determined from time
to time by the Board of Directors of Butler. Employee's duties will include, at
a minimum, the same duties and responsibilities currently undertaken by
Employee. It is understood that the responsibilities of the Employee shall at
all times be those of a person holding the office of President of Butler, and
Employee shall perform those duties which are customarily performed by one
holding such a position in a similar business enterprise.
1.2 Employee agrees to devote his full time and attention to the
business of Butler and the Employee shall not, at any time while this Agreement
is in effect, directly or indirectly act as a partner, officer, director,
consultant or employee of any other business enterprise in competition with Omni
or Butler without the prior consent and approval of Butler's Board of Directors.
1.3 Employee shall perform his primary duties at the principal place
of business of Butler, located at 103 South Street, Butler, Kentucky except that
the Employee may be required to travel and perform services in a location other
than the principal place of Butler in connection with the performance of his
duties.
2. Term of Employment. This Agreement shall continue in effect for
an initial term of two (2) years commencing October 1, 1996, and ending
September 30, 1998, unless it is terminated sooner
1
<PAGE>
pursuant to the provisions of Section 6 of this Agreement. It is understood,
however, that this Agreement shall not become effective until it has been
approved by the Board of Directors of Butler. This Agreement, at the option of
Butler's Board of Directors, may be extended for an additional three (3) one (1)
year terms on the same terms and conditions set forth herein.
3. Compensation and Expenses.
3.1 Butler will pay to the Employee as compensation for his services
during the term of this Agreement a salary of $90,000 per year payable bi-
monthly. Butler shall withhold from Employee's salary the amounts necessary for
state and federal tax liabilities as may be required by law.
3.2 Butler will pay to the Employee as an annual bonus, at the end
of Omni's fiscal year, ten percent (10%) of Butler's Net Income after taxes in
excess of $200,000. Butler shall withhold from Employee's salary the amounts
necessary for state and federal tax liabilities as may be required by law.
3.3 The Employee shall not be entitled to additional compensation
beyond that provided in Section 3.1 of this Agreement for any services performed
while a member of any committee of Butler. In the event that Employee becomes a
member of the Board of Directors of Butler, he shall be paid such additional
compensation as Butler may provide from time to time to other board members.
3.4 Butler shall reimburse Employee the reasonable expenses which are
incurred by Employee in the performance of his duties. Employee shall be
required to submit to Butler an itemized statement of expenses and applicable
receipts in order to receive reimbursement. Any expense reimbursement shall be
subject to policies which may from time to time be adopted by the Board of
Directors of Butler.
4. Employee Benefits. During the time that he is employed by Butler
the Employee shall be entitled to receive the following benefits in addition to
the compensations specified in Section 3 above:
4.1. The Employee shall be entitled to two weeks of vacation each
year, during which time his compensation shall be paid by Butler. Vacation shall
be taken at a time mutually agreed on between the Employee and the Board of
Directors of Butler.
4.2. Butler shall provide and maintain in effect current medical
insurance with coverage as may be determined by the Board of Directors of
Butler.
2
<PAGE>
4.3. Butler shall provide an automobile for use of the Employee.
Butler will pay for repairs, maintenance and liability and property damage
insurance. Only fuel for sales trips will be reimbursed by Butler. All other
fuel charges will be at Employee's expense.
4.4. The Employee shall have the right to participate in other
employee benefit plans which may from time to time be adopted by the Board of
Directors of Butler including but not limited to any life insurance plans,
pension or profit sharing plans and bonus arrangements.
5. Default by Employee. Omni, Butler and the Employee agree that the
Employee's services to Butler are of a special and unique nature and in the
event that the Employee breaches any provision of this Agreement Butler shall be
entitled to commence an action in any court of competent jurisdiction in order
to obtain damages for the Employee's breach or to enforce specific provisions of
this Agreement or to restrain the Employee from further breaches of the
Agreement. It is understood that Butler may suffer immediate and irreparable
harm from the Employee's breach of this Agreement and if Butler has no adequate
remedy at law it shall be entitled to an injunction in any court of competent
jurisdiction to prevent the Employee's breach.
6. Termination of Agreement. This Agreement shall remain in full
force and effect during the term hereof unless it shall be sooner terminated by
the occurrence of one of the following events:
6.1. Death of the Employee.
6.2. The physical or mental disability of the Employee. The Employee
shall be determined to be physically or mentally disabled if he is continuously
unable or unwilling to perform the full extent of his duties to Butler for a
period of three (3) month(s).
6.3. The Employee and Corporation mutually agree that it would be in
their best interests to terminate this Agreement, and the termination Agreement
is reduced to writing and signed by both parties.
6.4. Butler discontinues its business or is dissolved, liquidated,
merged, consolidated, is determined to be insolvent or bankrupt, or sells
substantially all of its assets.
6.5. The Board of Directors of Butler, upon thirty (30) days prior
written notice to Employee, determines to discharge Employee for cause, as
defined herein, and thereby to terminate this Agreement. In such case, Butler
shall pay Employee the amounts due and owing to Employee under this Agreement up
to the date of
3
<PAGE>
discharge. The term "cause," as used herein, shall include, but shall not be
limited to, wilful misconduct, dishonesty, theft, fraud, negligence, substance
abuse or criminal activity. Notwithstanding, Butler shall have the right to
terminate this Agreement for any reason, at any time, upon payment to Employee
of all remaining installments of salaries due Employee hereunder.
In the event of the Employee's physical or mental disability or in
the event that the Employee breaches this Agreement or fails to faithfully
perform his duties and obligations under this Agreement, immediate notice of
termination may be given to the Employee. In the event of termination, the
Employee shall be entitled to receive his full salary and benefits due and owing
up to and including the day of termination.
7. Assignment and Binding Effect. This Agreement is for personal
services and neither party may assign or transfer any rights or obligations
except as may be specifically provided for in this Agreement.
8. Notices. Any notice which may be given under this Agreement shall
be given in writing and delivered personally or sent by first class mail,
postage prepaid, to the following address:
If to Employee: Frank E. Jakubec
1644 Jeffrey Lane
Hebron KY 41048
If to Corporation: Butler Products Corporation
103 South Street
Butler, KY 41006
Attn: Board of Directors
With a copy to: Michael A. Zahorik, Esq.
Omni USA, Inc.
7502 Mesa Drive
Houston TX 77028
Either party may change their designated address by giving notice pursuant to
this section.
9. Texas Law. This Agreement has been made and entered into in
Texas, and it is intended that this Agreement shall be construed in accordance
with the laws of Texas. Any action which may be brought in any court regarding
this Agreement, shall be brought in the County of Harris, City of Houston,
Texas.
4
<PAGE>
10. Severability and Construction.
10.1. If it is determined that any provision of this Agreement is
invalid or of no force and effect, this shall not impair the remainder of the
Agreement and all other provisions shall remain in full force and effect.
10.2. The headings which are used throughout this Agreement are
inserted for convenience only and do not change the meaning of the paragraphs
which follow.
11. Waiver, Complete Agreement and Modification.
11.1. A waiver of any breach of this Agreement shall not be construed
as a waiver of any subsequent breach of the Agreement.
11.2. This Agreement contains the full and complete Agreement between
the parties, concerning the employment of the Employee and supersedes all prior
statements, Agreements, understandings, or representations with respect to the
employment of the Employee.
11.3. This Agreement may only be modified in writing, signed by
Employee and Butler and approved by Butler's Board of Directors.
Dated: October 1, 1996
BUTLER PRODUCTS CORPORATION
By: /s/ Frank E. Jacubec
- ------------------------
Title: President
EMPLOYEE
/s/ Frank E. Jakubec
- --------------------
Frank E. Jakubec
Approved by the Board of Directors of Butler on this 1st day of October, 1996.
5
<PAGE>
EMPLOYMENT AGREEMENT
This Agreement made between Dennis W. Swim (the "Employee"), whose
address is 183 Meadow Creek Drive, Florence, Kentucky 41042 and Butler Products
Corporation ("Butler"), whose principal place of business is located at 103
South Street, Butler, Kentucky, a wholly owned subsidiary of Omni USA, Inc.
("Omni"), a Nevada corporation.
Omni is a manufacturer of certain products, including products under
the name of Butler.
Employee is currently employed by Butler and desires to continue his
employment by Butler.
In consideration of the preceding and the mutual covenants and
Agreements set forth the Employee, Butler and Omni agree as follows:
1. Employment and Duties.
1.1 Butler employs the Employee for the office of Vice President of
Butler. Employee's duties shall be those provided for the office in the bylaws
of Butler and any additional powers or duties that may be determined from time
to time by the Board of Directors of Butler. Employee's duties will include, at
a minimum, the same duties and responsibilities currently undertaken by
Employee. It is understood that the responsibilities of the Employee shall at
all times be those of a person holding the office of Vice President of Butler,
and Employee shall perform those duties which are customarily performed by one
holding such a position in a similar business enterprise.
1.2 Employee agrees to devote his full time and attention to the
business of Butler and the Employee shall not, at any time while this Agreement
is in effect, directly or indirectly act as a partner, officer, director,
consultant or employee of any other business enterprise in competition with Omni
or Butler without the prior consent and approval of Butler's Board of Directors.
1.3 Employee shall perform his primary duties at the principal place
of business of Butler, located at 103 South Street, Butler, Kentucky except that
the Employee may be required to travel and perform services in a location other
than the principal place of Butler in connection with the performance of his
duties.
2. Term of Employment. This Agreement shall continue in effect for a
term of five (5) years commencing October 1, 1996, and
1
<PAGE>
ending September 30, 2001, unless it is terminated sooner pursuant to the
provisions of Section 6 of this Agreement. It is understood, however, that this
Agreement shall not become effective until it has been approved by the Board of
Directors of Butler.
3. Compensation and Expenses.
3.1 Butler will pay to the Employee as compensation for his services
during the term of this Agreement a salary of $60,000 per year payable bi-
monthly. Butler shall withhold from Employee's salary the amounts necessary for
state and federal tax liabilities as may be required by law.
3.2 Butler will pay to the Employee as an annual bonus, at the end of
Omni's fiscal year, five percent (5%) of Butler's Net Income after taxes in
excess of $200,000. Butler shall withhold from Employee's salary the amounts
necessary for state and federal tax liabilities as may be required by law.
3.3 The Employee shall not be entitled to additional compensation
beyond that provided in Section 3.1 of this Agreement for any services performed
while a member of any committee of Butler. In the event that Employee becomes a
member of the Board of Directors of Butler, he shall be paid such additional
compensation as Butler may provide from time to time to other board members.
3.4 Butler shall reimburse Employee the reasonable expenses which are
incurred by Employee in the performance of his duties. Employee shall be
required to submit to Butler an itemized statement of expenses and applicable
receipts in order to receive reimbursement. Any expense reimbursement shall be
subject to policies which may from time to time be adopted by the Board of
Directors of Butler.
4. Employee Benefits. During the time that he is employed by Butler
the Employee shall be entitled to receive the following benefits in addition to
the compensations specified in Section 3 above:
4.1 The Employee shall be entitled to two weeks of vacation each
year, during which time his compensation shall be paid by Butler. Vacation shall
be taken at a time mutually agreed on between the Employee and the Board of
Directors of Butler.
4.2. Butler shall provide and maintain in effect current medical
insurance with coverage as may be determined by the Board of Directors of
Butler.
4.3. Butler shall provide an automobile for use of the Employee.
Butler will pay for repairs, maintenance and liability
2
<PAGE>
and property damage insurance. Only fuel for sales trips will be reimbursed by
Butler. All other fuel charges will be at Employee's expense.
4.4. The Employee shall have the right to participate in other
employee benefit plans which may from time to time be adopted by the Board of
Directors of Butler including but not limited to any life insurance plans,
pension or profit sharing plans and bonus arrangements.
5. Default by Employee. Omni, Butler and the Employee agree that the
Employee's services to Butler are of a special and unique nature and in the
event that the Employee breaches any provision of this Agreement Butler shall be
entitled to commence an action in any court of competent jurisdiction in order
to obtain damages for the Employee's breach or to enforce specific provisions of
this Agreement or to restrain the Employee from further breaches of the
Agreement. It is understood that Butler may suffer immediate and irreparable
harm from the Employee's breach of this Agreement and if Butler has no adequate
remedy at law it shall be entitled to an injunction in any court of competent
jurisdiction to prevent the Employee's breach.
6. Termination of Agreement. This Agreement shall remain in full
force and effect during the term hereof unless it shall be sooner terminated by
the occurrence of one of the following events:
6.1. Death of the Employee.
6.2. The physical or mental disability of the Employee. The Employee
shall be determined to be physically or mentally disabled if he is continuously
unable or unwilling to perform the full extent of his duties to Butler for a
period of three (3) month(s).
6.3. The Employee and Corporation mutually agree that it would be in
their best interests to terminate this Agreement, and the termination Agreement
is reduced to writing and signed by both parties.
6.4. Butler discontinues its business or is dissolved, liquidated,
merged, consolidated, is determined to be insolvent or bankrupt, or sells
substantially all of its assets.
6.5. The Board of Directors of Butler, upon thirty (30) days prior
written notice to Employee, determines to discharge Employee for cause, as
defined herein, and thereby to terminate this Agreement. In such case, Butler
shall pay Employee the amounts due and owing to Employee under this Agreement up
to the date of discharge. The term "cause," as used herein, shall include, but
shall not be limited to, wilful misconduct, dishonesty, theft,
3
<PAGE>
fraud, negligence, substance abuse or criminal activity. Notwithstanding, Butler
shall have the right to terminate this Agreement for any reason, at any time,
upon payment to Employee of all remaining installments of salaries due Employee
hereunder.
In the event of the Employee's physical or mental disability or in the
event that the Employee breaches this Agreement or fails to faithfully perform
his duties and obligations under this Agreement, immediate notice of termination
may be given to the Employee. In the event of termination, the Employee shall be
entitled to receive his full salary and benefits due and owing up to and
including the day of termination.
7. Assignment and Binding Effect. This Agreement is for personal
services and neither party may assign or transfer any rights or obligations
except as may be specifically provided for in this Agreement.
8. Notices. Any notice which may be given under this Agreement shall
be given in writing and delivered personally or sent by first class mail,
postage prepaid, to the following address:
If to Employee: Dennis W. Swim
183 Meadow Creek Drive
Florence KY 41042
If to Corporation: Butler Products Corporation
103 South Street
Butler, KY 41006
Attn: Board of Directors
With a copy to: Michael A. Zahorik, Esq.
Omni USA, Inc.
7502 Mesa Drive
Houston TX 77028
Either party may change their designated address by giving notice pursuant to
this section.
9. Texas Law. This Agreement has been made and entered into in
Texas, and it is intended that this Agreement shall be construed in accordance
with the laws of Texas. Any action which may be brought in any court regarding
this Agreement, shall be brought in the County of Harris, City of Houston,
Texas.
10. Severability and Construction.
10.1. If it is determined that any provision of this Agreement is
invalid or of no force and effect, this shall not
4
<PAGE>
impair the remainder of the Agreement and all other provisions shall remain in
full force and effect.
10.2. The headings which are used throughout this Agreement are
inserted for convenience only and do not change the meaning of the paragraphs
which follow.
11. Waiver, Complete Agreement and Modification.
11.1. A waiver of any breach of this Agreement shall not be construed
as a waiver of any subsequent breach of the Agreement.
11.2. This Agreement contains the full and complete Agreement between
the parties, concerning the employment of the Employee and supersedes all prior
statements, Agreements, understandings, or representations with respect to the
employment of the Employee.
11.3 This Agreement may only be modified in writing, signed by
Employee and Butler and approved by Butler's Board of Directors.
Dated: October 1, 1996.
BUTLER PRODUCTS CORPORATION
By: /s/ Frank E. Jakubec
- ------------------------
Title: President
EMPLOYEE
/s/ Dennis W. Swim
- ------------------
Dennis W. Swim
Approved by the Board of Directors of Butler on this 1st day of October, 1996.
5
<PAGE>
NONCOMPETITION AGREEMENT
This agreement is entered into between Frank E. Jakubec (the "Employee"),
whose address is 1644 Jeffrey Lane, Hebron, KY 41048, Butler Products
Corporation ("Butler"), a Kentucky corporation, whose principal place of
business is 103 South Street, Butler, Kentucky, and Omni USA, Inc. ("Omni"), a
Nevada corporation, whose principal place of business is 7502 Mesa Drive,
Houston, Texas.
Omni is a manufacturer of certain products, including products under the
name of Butler, Omni's wholly owned subsidiary.
Butler desires to employ the Employee but would be injured if the Employee
were allowed to compete with Butler or Omni.
The Employee is to be employed by Butler in the position of President and
Treasurer.
It is a condition of the employment that Employee execute a covenant not to
compete with Butler.
Therefore, in consideration of mutual covenants and agreements it is agreed
as follows:
1. Employee is being employed by Butler for the position of President and
Treasurer, however, this Agreement shall apply so long as Employee is employed
by Butler in any capacity and for a period of two (2) years following
termination of that employment. The Employee will not, directly or indirectly,
become an officer, director, shareholder, employee, agent, partner, investor,
advisor or owner of any business enterprise which is of a type or character
similar to the business of Butler or Omni, or which competes with Butler or Omni
and which business enterprise is doing business within North America.
2. During the time that this agreement is in effect, Employee agrees to
promptly notify Butler and Omni Board of Directors of any business enterprise in
which he is engaged that is of a type or character similar to the business of
Butler or Omni or which competes with Butler or Omni.
3. During the time that this agreement is in effect, Employee agrees that
he will not solicit or offer employment to any other employee of Butler or Omni,
on behalf of any business enterprise of a type or character similar to the
business of Butler or Omni or which competes with Butler or Omni.
1
<PAGE>
4. Employee agrees that in the event of breach of this agreement by
Employee, Butler and Omni may pursue a civil action in any court of competent
jurisdiction for damages it may sustain by reason of breach of this agreement by
Employee, and in addition shall have the right to restrain any threatened or
actual breach by Employee by seeking a temporary restraining order, preliminary
injunction and permanent injunction.
Dated: October 1, 1996
Employee Butler Products Corporation
/s/ Frank E. Jakubec By: /s/ Frank E. Jakubec
- -------------------- ------------------------
Frank E. Jakubec Title: President
Omni USA, Inc.
By: /s/ Robert S. Moore II
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Title: Executive Vice President
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NONCOMPETITION AGREEMENT
This agreement is entered into between Dennis W. Swim (the "Employee"),
whose address is 183 Meadow Creek Drive, Florence, KY 41042, Butler Products
Corporation ("Butler"), a Kentucky corporation, whose principal place of
business is 103 South Street, Butler, Kentucky, and Omni USA, Inc. ("Omni"), a
Nevada corporation, whose principal place of business is 7502 Mesa Drive,
Houston, Texas.
Omni is a manufacturer of certain products, including products under the
name of Butler, Omni's wholly owned subsidiary.
Butler desires to employ the Employee but would be injured if the Employee
were allowed to compete with Butler or Omni.
The Employee is to be employed by Butler in the position of Vice President
and Secretary.
It is a condition of the employment that Employee execute a covenant not to
compete with Butler.
Therefore, in consideration of mutual covenants and agreements it is agreed
as follows:
1. Employee is being employed by Butler for the position of Vice President
and Secretary, however, this Agreement shall apply so long as Employee is
employed by Butler in any capacity and for a period of two (2) years following
termination of that employment. The Employee will not, directly or indirectly,
become an officer, director, shareholder, employee, agent, partner, investor,
advisor or owner of any business enterprise which is of a type or character
similar to the business of Butler or Omni, or which competes with Butler or Omni
and which business enterprise is doing business within North America.
2. During the time that this agreement is in effect, Employee agrees to
promptly notify Butler and Omni Board of Directors of any business enterprise in
which he is engaged that is of a type or character similar to the business of
Butler or Omni or which competes with Butler or Omni.
3. During the time that this agreement is in effect, Employee agrees that
he will not solicit or offer employment to any other employee of Butler or Omni,
on behalf of any business enterprise of
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a type or character similar to the business of Butler or Omni or which competes
with Butler or Omni.
4. Employee agrees that in the event of breach of this agreement by
Employee, Butler and Omni may pursue a civil action in any court of competent
jurisdiction for damages it may sustain by reason of breach of this agreement by
Employee, and in addition shall have the right to restrain any threatened or
actual breach by Employee by seeking a temporary restraining order, preliminary
injunction and permanent injunction.
Dated: October 1, 1996
Employee Butler Products Corporation
/s/ Dennis W. Swim By: /s/ Frank E. Jakubec
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Dennis W. Swim Title: President
Omni USA, Inc.
By: /s/ Robert S. Moore II
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Title: Executive Vice President
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