Exhibit 10.1

AMENDED AND RESTATED CREDIT AGREEMENT

Dated as of April 20, 2005

among

QUIXOTE CORPORATION
as Borrower

and

LASALLE BANK NATIONAL ASSOCIATION, as Lender

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

 

 

 

 

Section

 

 

 

Page

--------------------------------------------------------------------------------

 

 

 

--------------------------------------------------------------------------------

ARTICLE I: DEFINITIONS

 

2

1.1

 

Certain Defined Terms

 

2

1.2

 

References

 

27

 

 

 

ARTICLE II: REVOLVING LOAN AND TERM LOAN FACILITIES

 

27

2.1

 

Revolving Loans

 

27

2.2

 

Rate Options for all Advances; Maximum Interest Periods

 

28

2.3

 

Optional Payments; Mandatory Prepayments/Repayments

 

28

2.4

 

Reduction of Commitments

 

29

2.5

 

Method of Borrowing

 

29

2.6

 

Method of Selecting Types and Interest Periods for Advances

 

29

2.7

 

Minimum Amount of Each Advance

 

30

2.8

 

Method of Selecting Types, and Interest Periods for Conversion and Continuation
of Advances

 

30

2.9

 

Default Rate

 

31

2.10

 

Method of Payment

 

31

2.11

 

Evidence of Debt

 

31

2.12

 

Telephonic Notices

 

32

2.13

 

Promise to Pay; Interest and Facility Fees; Interest Payment Dates; Interest and
Fee Basis; Taxes

 

32

2.14

 

Lending Installation

 

37

2.15

 

Termination Date

 

37

2.16

 

Judgment Currency

 

37

2.17

 

Security of Obligations

 

37

 

 

 

ARTICLE III: THE LETTER OF CREDIT FACILITY

 

38

3.1

 

Obligation to Issue Letters of Credit

 

38

3.2

 

Transitional Letters of Credit

 

38

3.3

 

Types and Amounts

 

38

3.4

 

Conditions

 

38

3.5

 

Procedure for Issuance of Letters of Credit

 

39

3.6

 

Reimbursement Obligation

 

39

3.7

 

Letter of Credit Fees

 

40

3.8

 

Indemnification; Exoneration

 

40

 

 

 

ARTICLE IV: CHANGE IN CIRCUMSTANCES

 

41

4.1

 

Yield Protection

 

41

4.2

 

Changes in Capital Adequacy Regulations

 

42

4.3

 

Availability of Types of Advances

 

43

4.4

 

Funding Indemnification

 

43

4.5

 

Lender Statements; Survival of Indemnity

 

43

ii

--------------------------------------------------------------------------------

 

 

 

 

 

ARTICLE V: CONDITIONS PRECEDENT

 

44

5.1

 

Initial Advances and Letters of Credit

 

44

5.2

 

Each Advance and Letter of Credit

 

48

 

 

 

ARTICLE VI: REPRESENTATIONS AND WARRANTIES

 

48

6.1

 

Organization; Corporate Powers

 

48

6.2

 

Authority; Enforceability

 

48

6.3

 

No Conflict; Governmental Consents

 

49

6.4

 

Financial Statements

 

49

6.5

 

No Material Adverse Change

 

49

6.6

 

Taxes

 

50

6.7

 

Litigation; Loss Contingencies and Violations

 

50

6.8

 

Subsidiaries

 

50

6.9

 

ERISA

 

50

6.10

 

Accuracy of Information

 

51

6.11

 

Securities Activities

 

51

6.12

 

Material Agreements

 

51

6.13

 

Compliance with Laws

 

52

6.14

 

Assets and Properties

 

52

6.15

 

Statutory Indebtedness Restrictions

 

52

6.16

 

Labor Matters

 

52

6.17

 

Environmental Matters

 

52

6.18

 

Insurance

 

53

6.19

 

Use of Proceeds

 

53

6.20

 

Solvency

 

53

 

 

 

ARTICLE VII: COVENANTS

 

53

7.1

 

Reporting

 

53

7.2

 

Affirmative Covenants

 

59

7.3

 

Negative Covenants

 

62

7.4

 

Financial Covenants

 

68

 

 

 

ARTICLE VIII: DEFAULTS

 

69

8.1

 

Defaults

 

69

 

 

 

ARTICLE IX: ACCELERATION, DEFAULTING LENDERS; WAIVERS, AMENDMENTS AND REMEDIES

 

72

9.1

 

Termination of Revolving Loan Commitments; Acceleration

 

72

9.2

 

Preservation of Rights

 

72

9.3

 

Amendments

 

73

 

 

 

ARTICLE X: GENERAL PROVISIONS

 

73

10.1

 

Survival of Representations

 

73

10.2

 

Governmental Regulation

 

73

 

 

 

 

 

10.3

 

Headings

 

73

10.4

 

Entire Agreement

 

73

iii

--------------------------------------------------------------------------------

 

 

 

 

 

10.5

 

Several Obligations; Benefits of this Agreement

 

73

10.6

 

Expenses; Indemnification

 

73

10.7

 

Numbers of Documents

 

75

10.8

 

Confidentiality

 

75

10.9

 

Severability of Provisions

 

75

10.10

 

Nonliability of Lenders

 

75

10.11

 

GOVERNING LAW

 

75

10.12

 

CONSENT TO JURISDICTION; SERVICE OF PROCESS: JURY TRIAL

 

76

10.13

 

Subordination of Intercompany Indebtedness

 

77

10.14

 

Assignability

 

77

10.15

 

Customer Identification-U.S. Patriot Act Notice

 

77

 

 

 

ARTICLE XI: SETOFF, RATABLE PAYMENTS

 

78

11.1

 

Setoff

 

78

11.2

 

Application of Payments

 

78

 

 

 

ARTICLE XII: NOTICES

 

79

12.1

 

Giving Notice

 

79

12.2

 

Change of Address

 

79

 

 

 

ARTICLE XIII: COUNTERPARTS

 

79

iv

--------------------------------------------------------------------------------

 

 

 

EXHIBITS AND SCHEDULES

 

 

 

Exhibits

 

 

 

EXHIBIT A

—

Form of Borrowing/Election Notice
(Section 2.2, Section 2.7 and Section 2.9)

 

 

 

EXHIBIT B

—

Form of Request for Letter of Credit (Section 3.4)

 

 

 

EXHIBIT C

—

Form of Borrower’s Counsel’s Opinion (Section 5.1)

 

 

 

EXHIBIT D

—

Preliminary Closing Checklist (Section 5.1)

 

 

 

EXHIBIT E-1

—

Form of Officer’s Certificate (Sections 5.1 and 7.1(A)(iv))

 

 

 

EXHIBIT E-2

—

Secretary’s Certificate (Borrower)

 

 

 

EXHIBIT E-3

—

Secretary’s Certificate (Subsidiary Guarantors)

 

 

 

EXHIBIT F-1
                 F-2

—

Forms of Compliance Certificate (Pre and Post Collateral
Release Date) (Sections 5.2 and 7.1 (A)(iii))

 

 

 

EXHIBIT G

—

Revolving Loan Note (Section 2.11(D))

 

 

 

EXHIBIT H

—

Officer’s Certificate-Confirmation of Subordination
Agreement (US Traffic) (Section 5.1(5))

 

 

EXHIBIT I

—

Assignment and Assumption Agreement
(California Deed of Trust)

 

 

 

EXHIBIT J

—

Assignment and Assumption Agreement (Pennsylvania Mortgage)

 

 

 

EXHIBIT K

—

Assignment and Assumption Agreement (Alabama Mortgage)

 

 

 

EXHIBIT L

—

Mortgage and Security Agreement (Indiana)

 

 

 

EXHIBIT M

—

Assignment and Assumption Agreement (Security Agreement)

 

 

 

EXHIBIT N

—

Assignment and Assumption Agreement
(Trademark Security Agreement)

 

 

 

EXHIBIT O

—

Assignment and Assumption Agreement
(Patent Security Agreement)

 

 

 

EXHIBIT P-1, P-2,

—

Assignment and Assumption Agreement (Subsidiary
Stock Pledge Agreement)

v

--------------------------------------------------------------------------------

 

 

 

P-3, P-4

 

 

 

 

 

EXHIBIT Q

—

Borrowing Base Certificate

 

 

 

EXHIBIT R

—

Reaffirmation and Amendment of California Deed of Trust

 

 

 

EXHIBIT S

—

Reaffirmation and Amendment of Pennsylvania Mortgage

 

 

 

EXHIBIT T

—

Reaffirmation and Amendment of Alabama Mortgage

 

 

 

EXHIBIT U

—

Reaffirmation and Amendment of Security Agreement

 

 

 

EXHIBIT V

—

Reaffirmation and Amendment of Trademark Security Agreement

 

 

 

EXHIBIT W

—

Reaffirmation and Amendment of Patent Security Agreement

 

 

 

EXHIBIT X-1, X-2, X-3, X-4  

—

Reaffirmation and Amendment of Subsidiary Stock Pledge
Agreements

 

 

 

EXHIBIT Y

—

Collateral Assignment (Lease)

 

 

 

EXHIBIT Z
                 Z-1

—

Subsidiary Guaranty
Reaffirmation and Amendment of Subsidiary Guaranty

 

 

 

Schedules

 

 

 

Schedule 1. 1.1

—

Permitted Existing Indebtedness (Definitions)

 

 

 

Schedule 1.1.2

—

Permitted Existing Investments (Definitions)

 

 

 

Schedule 1.1.3

—

Permitted Existing Liens (Definitions)

 

 

 

Schedule 1.1.4

—

Permitted Existing Contingent Obligations (Definitions)

 

 

 

Schedule 3.2

—

Transitional Letters of Credit (Section 3.2)

 

 

 

Schedule 6.3

—

Conflicts: Governmental Consents (Section 6.3)

 

 

 

Schedule 6.7

—

Litigation

 

 

 

Schedule 6.8

—

Subsidiaries (Section 6.8)

 

 

 

Schedule 6.9

—

ERISA (Section 6.9)

 

 

 

Schedule 6.17

—

Environmental Matters (Section 6.17)

vi

--------------------------------------------------------------------------------

AMENDED AND RESTATED CREDIT AGREEMENT

                    This Amended and Restated CREDIT AGREEMENT, dated as of
April 20, 2005, is entered into by and among QUIXOTE CORPORATION, a Delaware
corporation, as Borrower (the “Borrower”), and LASALLE BANK NATIONAL
ASSOCIATION, a national banking association, as Lender (the “Lender”). The
parties hereto agree as follows:

RECITALS:

                    A.     The Borrower, the Lender and certain other banks,
(“Existing Lenders”) entered into that certain Credit Agreement, dated as of May
16, 2003, as amended by a First Amendment, dated as of December 9, 2003; by a
Second Amendment, dated as of June 30, 2004; by a Third Amendment, dated as of
September 10, 2004; and by a Fourth Amendment dated as of February 9, 2005
(“Existing Credit Agreement”), pursuant to which Existing Credit Agreement the
Existing Lenders have made, (i) Revolving Loans to the Borrower evidenced by
certain Revolving Notes, dated as of September 10, 2004, in the maximum
aggregate principal amount of Thirty Eight Million Dollars and 00/100
($38,000,000), executed by the Borrower and made payable pro rata to the order
of the Existing Lenders (the “Revolving Notes”) and (ii) Term Loans to the
Borrower evidenced by certain Term Notes, dated as of May 16, 2003, in the
aggregate original principal amount of Twenty Million Dollars and 00/100
($20,000,000), executed by the Borrower and made payable pro rata to the order
of the Existing Lenders (the “Term Notes”).

                    B.     The Borrower, as of February 9, 2005, issued
$40,000,000 in aggregate principal amount of 7% Convertible Senior Subordinated
Notes, due February 15, 2025 (the “New Subordinated Notes”), the proceeds of
which New Subordinated Notes (i) repaid in full Borrower’s obligations on the
Term Loans and Notes and terminated the Existing Lender Term Loan Commitment as
defined in the Existing Credit Agreement and (ii) repaid a portion of the
outstanding Revolving Loans.

                    C.     The Lender and Borrower have agreed to amend and
restate the terms of the Existing Credit Agreement, and the Borrower has
requested and the Lender has agreed that Lender, individually on its own,
continue the Revolving Loan Commitment under the Existing Credit Agreement
consisting of a Revolving Credit Commitment in the amount of $30,000,000 (with a
sublimit for the issuance of Letters of Credit in the amount of $10,000,000).

                    D.     The Existing Lenders (other than Lender) have agreed
to sell to Lender their outstanding pro rata share of the Revolving Loans and to
assign their rights and obligations to the Lender.

                    E.     Nothing in this Agreement or in any of the other Loan
Documents shall be deemed to constitute a novation or to have extinguished or
discharged the indebtedness and obligations under the Existing Credit Agreement
and the documents executed and delivered in connection therewith all of which,
except as provided herein, continue under and shall be governed by this
Agreement and the other Loan Documents.

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 2

     ARTICLE I: DEFINITIONS

                    1.1     Certain Defined Terms. The following terms used in
this Agreement shall have the following meanings, applicable both to the
singular and the plural forms of the terms defined.

                    As used in this Agreement:

                    “Accounting Changes” is defined in Section 10.9 hereof.

                    “Accounts” means and includes all of the Borrower’s and each
Subsidiary’s presently existing and hereafter arising or acquired accounts,
accounts receivable, and all present and future rights of the Borrower or such
Subsidiary to payment for goods sold or leased or for services rendered (except
those evidenced by instruments or chattel paper), whether or not they have been
earned by performance, and all rights in any merchandise or goods which any of
the same may represent, and all rights, title, security and guarantees with
respect to each of the foregoing, including, without limitation, any right of
stoppage in transit.

                    “Acquisition” means any transaction, or any series of
related transactions, consummated on or after the date of this Agreement, by
which the Borrower or any of its Subsidiaries (other than transactions involving
solely the Borrower and its Subsidiaries) (i) acquires any going business or all
or substantially all of the assets of any firm, corporation or division thereof,
whether through purchase of assets, merger or otherwise or (ii) directly or
indirectly acquires (in one transaction or as the most recent transaction in a
series of transactions) at least a majority (in number of votes) of the
securities of a corporation which have ordinary voting power for the election of
directors (other than securities having such power only by reason of the
happening of a contingency) or a majority (by percentage of voting power) of the
outstanding Equity Interests of another Person.

                    “Administrative Agent” shall mean the Northern Trust Company
as Administrative Agent for the benefit of the Existing Lenders under the
Existing Credit Agreement.

                    “Affiliate” of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with such Person.
A Person shall be deemed to control another Person if the controlling Person is
the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange
Act of 1934) of greater than or equal to twenty percent (20%) or more of any
class of voting securities (or other voting interests) of the controlled Person
or possesses, directly or indirectly, the power to direct or cause the direction
of the management or policies of the controlled Person, whether through
ownership of Capital Stock, by contract or otherwise.

                    “Agreement” means this Amended and Restated Credit
Agreement, as it may be amended, restated or otherwise modified and in effect
from time to time.

2

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 3

                    “Alabama Leasehold Mortgage” shall mean the Leasehold
Mortgage and Security Agreement, dated as of June 30, 2004 between Energy
Absorption Systems LLC and the Administrative Agent pursuant to which Energy
Absorption Systems LLC granted a lien to the Administrative Agent in its
leasehold interest in the Alabama Property.

                    “Alabama Property” shall mean that property, as described in
the Alabama Leasehold Mortgage, the lien on which has been granted to the
Administrative Agent and assigned, pursuant to the terms hereof, to Lender by
the Administrative Agent.

                    “Alternate Base Rate” means, for any day, a fluctuating rate
of interest per annum equal to the higher of (i) the Prime Rate for such day and
(ii) the sum of (a) the Federal Funds Effective Rate for such day and
(b) one-half of one percent (0.50%) per annum.

                    “Applicable ABR Margin” means, as at any date of
determination, the rate per annum then applicable to Floating Rate Loans
determined in accordance with the provisions of Section 2.14(D)(ii) hereof.

                    “Applicable Eurodollar Margin” means, as at any date of
determination, the rate per annum then applicable to Eurodollar Rate Loans
determined in accordance with the provisions of Section 2.14(D)(ii) hereof.

                    “Applicable Commitment Fee Percentage” means, as at any date
of determination, the rate per annum then applicable in the determination of the
amount payable under Section 2.14(C)(i) hereof determined in accordance with the
provisions of Section 2.14(D)(ii) hereof.

                    “Applicable L/C Fee Percentage” means, as at any date of
determination, a rate per annum used to calculate Letter of Credit fees equal to
the Applicable Eurodollar Margin then in effect.

                    “Asset Sale” means, with respect to any Person, the sale,
lease, conveyance, disposition or other transfer by such Person of any of its
assets (including by way of a sale-leaseback transaction, and including the sale
or other transfer of any of the Equity Interests of any Subsidiary of such
Person) to any Person other than the Borrower or any of its Subsidiaries other
than (i) the sale of inventory in the ordinary course of business, and (ii) the
sale or other disposition of any obsolete, excess, damaged or worn-out equipment
disposed of in the ordinary course of business and (ii) assignments and licenses
of intellectual property of the Borrower and its Subsidiaries in the ordinary
course of business.

                    “Authorized Officer” means any of the President, Chief
Executive Officer, Chief Financial Officer or Treasurer of the Borrower, acting
singly.

                    “Benefit Plan” means a defined benefit plan as defined in
Section 3(35) of ERISA (other than a Multiemployer Plan) in respect of which the
Borrower or any other member of the Controlled Group is, or within the
immediately preceding six (6) years was, an “employer” as defined in
Section 3(5) of ERISA.

3

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 4

                    “Borrower” means Quixote Corporation, together with its
successors and permitted assigns, including a debtor-in-possession on behalf of
the Borrower.

                    “Borrowing Base Amount” shall mean:

                    (a)     an amount equal to 85% of the net amount (after
deduction of such reserves and allowances as the Lender deems proper and
necessary) of the Eligible Accounts; plus

                    (b)     the lesser of (i) an amount equal to 50% of the
lower of cost or market value (after deduction of such reserves and allowances
as the Lender deems proper and necessary) of the Eligible Inventory, or (ii) Ten
Million Dollars and 00/100 ($10,000,000); plus

                    (c)     the lesser of (i) 80% of the orderly liquidation
value of machinery and equipment of Borrower and its Subsidiaries, plus 75% of
the fair market value (as evidenced by an appraisal acceptable to Lender) of the
real property of Borrower and Subsidiaries as pledged hereunder, or (ii) Ten
Million Seven Hundred Thirty-Seven Thousand Seven Hundred Dollars and 00/100
($10,737,700), reducing, beginning May 1, 2005, on the first day of each month
after the Closing Date by an amount equal to $75,000 per month.

                    “Borrowing Date” means a date on which a Revolving Loan is
made hereunder.

                    “Borrowing/Election Notice” is defined in Section 2.8
hereof.

                    “Business Day” means:

 

 

 

                    (a)     for the purpose of determining the Eurodollar Rate,
a day other than a Saturday or Sunday on which banks are open for the
transaction of domestic and foreign exchange business in London, England;

 

 

 

                    (b)     for the purpose of any payment to be made in
Dollars, a day other than a Saturday or Sunday on which banks are open in
Chicago, Illinois, and New York, New York for the conduct of substantially all
of their commercial lending activities, including the transaction of domestic
and foreign exchange business, interbank wire transfers can be made on the
Fedwire system, and dealings in Dollars are carried on in the London interbank
markets; and

 

 

 

                    (c)     for any other purpose, means a day other than a
Saturday or Sunday on which banks are open in Chicago, Illinois, and New York,
New York for the conduct of substantially all of their commercial lending
activities, including the transaction of domestic and foreign exchange business,
and interbank wire transfers can be made on the Fedwire system.

                    “California Deed of Trust” shall mean the California Deed of
Trust, Assignment of Rents, Security Agreement and Fixture Filing, dated
September 10, 2004, granted by Energy Absorption Systems, Inc. to the
Administrative Agent and assigned to the Lender by the Administrative Agent.

4

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 5

                    “California Property” shall mean that property as described
in and granted as collateral pursuant to the California Deed of Trust.

                    “Capital Expenditures” shall mean, with respect to any
Person, all expenditures by such Person which are required to be capitalized in
accordance with GAAP, provided capital expenditures relating solely to
Acquisitions effected by an asset purchase agreement shall be excluded.

                    “Capital Stock” means (i) in the case of a corporation,
corporate stock, (ii) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a limited liability
company, membership interests, (iv) in the case of a partnership, partnership
interests (whether general or limited) and (v) any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person;
provided, however, that “Capital Stock” shall not include any debt securities
convertible into equity securities prior to such conversion.

                    “Capitalized Lease” of a Person means any lease of property
by such Person as lessee which would be capitalized on a balance sheet of such
Person prepared in accordance with GAAP.

                    “Capitalized Lease Obligations” of a Person means the amount
of the obligations of such Person under Capitalized Leases which would be
capitalized on a balance sheet of such Person prepared in accordance with GAAP.

                    “Cash Equivalents” means (i) marketable direct obligations
issued or unconditionally guaranteed by the governments of the United States and
backed by the full faith and credit of the United States government;
(ii) domestic and Eurocurrency certificates of deposit and time deposits,
bankers’ acceptances and floating rate certificates of deposit issued by any
commercial bank organized under the laws of the United States, any state
thereof, the District of Columbia, any foreign bank, or its branches or
agencies, the long-term indebtedness of which institution at the time of
acquisition is rated BBB (or better) by S&P or Fitch or Baa (or better) by
Moody’s, and which certificates of deposit and time deposits are fully protected
against currency fluctuations for any such deposits with a term of more than
ninety (90) days; (iii) shares of money market, mutual or similar funds having
assets in excess of $100,000,000 and the investments of which are limited to
investment grade securities (i.e., securities rated BBB (or better) by S&P or
Fitch or Baa (or better) by Moody’s: and (iv) commercial paper of United States
and foreign banks and bank holding companies and their subsidiaries and United
States and foreign finance, commercial industrial or utility companies which, at
the time of acquisition, are rated A-2 (or better) by S&P, P-2 (or better) by
Moody’s, or F-2 (or better) by Fitch; provided that the maturities of such Cash
Equivalents shall not exceed three hundred sixty-five (365) days from the date
of acquisition thereof.

                    “Change” is defined in Section 4.2 hereof.

                    “Change of Control” means an event or series of events by
which:

5

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 6

 

 

 

                    (a)     any “person” or “group” (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934), becomes the
“beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities
Exchange Act of 1934, provided that a person shall be deemed to have “beneficial
ownership” of all securities that such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of thirty percent (30%) or more of the combined voting
power of the Borrower’s outstanding Capital Stock ordinarily having the right to
vote at an election of directors; or

 

 

 

                    (b)     the majority of the board of directors of the
Borrower fails to consist of Continuing Directors; or

 

 

 

                    (c)     the Borrower consolidates with or merges into
another corporation or conveys, transfers or leases all or substantially all of
its property to any Person, in either event pursuant to a transaction in which
the outstanding Capital Stock of the Borrower is reclassified or changed into or
exchanged for cash, securities or other property.

                    “Closing Date” means April 20, 2005.

                    “Code” means the Internal Revenue Code of 1986, as amended,
reformed or otherwise modified from time to time.

                    “Collateral” shall mean (i) the Collateral, as defined in
the Security Agreement, (ii) the Alabama Property in which Energy Absorption LLC
granted a mortgage, security interest and lien under the Alabama Leasehold
Mortgage, (iii) the California Property on which Energy Absorption Systems Inc.
granted a mortgage pursuant to the California Deed of Trust, (iv) the
Pennsylvania Property on which Nu-Metrics, Inc. granted a mortgage pursuant to
the Pennsylvania Mortgage, (v) the Intellectual Property Collateral; (vi) the
stock of each Subsidiary Guarantor pledged by Borrower pursuant to the
Subsidiary Stock Pledge Agreements and (vii) the Indiana Property on which Spin
Cast Plastics, Inc. granted a mortgage pursuant to the Indiana Mortgage.

                    “Collateral Assignment (Lease)” shall mean the Collateral
Assignment of the Option to Purchase Rights under Lease Agreement, between the
Borrower, Energy Absorption Systems (AL) LLC and the Lender as acknowledged by
the Development Board, as hereinafter executed by the parties, in the form of
Exhibit Y attached hereto.

                    “Collateral Documents” shall mean (i) the Security
Agreement; (ii) Alabama Leasehold Mortgage, (iii) California Deed of Trust; (iv)
Pennsylvania Mortgage; (v) Indiana Mortgage; (vi) Patent Security Agreement;
(vii) Trademark Security Agreement; (ix) Subsidiary Stock Pledge Agreements and
(x) the Collateral Assignment (Lease), as the same may be amended, restated,
reaffirmed or modified from time to time.

                    “Collateral Release Date” shall mean that date on which the
Lender pursuant to Section 7.1(J) hereof delivers to Borrower notice of its
acceptance of Borrower’s compliance with the Release Covenants and of its
agreement to release its lien against the Collateral.

6

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 7

                    “Commission” means the Securities and Exchange Commission of
the United States of America and any Person succeeding to the functions thereof.

                    “Consolidated Interest Expense” means the interest expense
of the Borrower and its Subsidiaries calculated on a consolidated basis
(determined, subject to the foregoing parenthetical, in accordance with GAAP).

                    “Consolidated Net Worth” means, at a particular date, all
amounts which would be included under shareholders’ equity (including capital
stock, additional paid-in capital and retained earnings) on the consolidated
balance sheet for the Borrower and its consolidated Subsidiaries determined in
accordance with GAAP.

                    “Contaminant” means any pollutant, hazardous substance,
toxic substance, hazardous waste, special waste, petroleum or petroleum-derived
substance, asbestos, polychlorinated biphenyls (“PCBs”), or any constituent of
any such substance, and includes but is not limited to these terms as defined in
Environmental, Health or Safety Requirements of Law.

                    “Contingent Obligation”, as applied to any Person, means any
Contractual Obligation, contingent or otherwise, of that Person with respect to
any Indebtedness of another or other obligation or liability of another,
including, without limitation, any such Indebtedness, obligation or liability of
another directly or indirectly guaranteed, endorsed (otherwise than for
collection or deposit in the ordinary course of business), co-made or discounted
or sold with recourse by that Person, or in respect of which that Person is
otherwise directly or indirectly liable, including Contractual Obligations
(contingent or otherwise) arising through any agreement to purchase, repurchase,
or otherwise acquire such Indebtedness, obligation or liability or any security
therefor, or to provide funds for the payment or discharge thereof (whether in
the form of loans, advances, stock purchases, capital contributions or
otherwise), or to maintain solvency, assets, level of income, or other financial
condition, or to make payment other than for value received. The amount of any
Contingent Obligation shall be equal to the present value of the portion of the
obligation so guaranteed or otherwise supported, in the case of known recurring
obligations, and the maximum reasonably anticipated liability in respect of the
portion of the obligation so guaranteed or otherwise supported assuming such
Person is required to perform thereunder, in all other cases.

                    “Continuing Director” means, with respect to the Borrower as
of any date of determination, any member of the board of directors of the
Borrower who (a) was a member of such board of directors on the date of this
Agreement, or (b) was nominated for election or elected to such board of
directors with the approval of the Continuing Directors who were members of such
board at the time of such nomination or election.

                    “Contractual Obligation”, as applied to any Person, means
any provision of any equity or debt securities issued by that Person or any
indenture, mortgage, California Deed of Trust, security agreement, pledge
agreement, guaranty, contract, undertaking, agreement or instrument, in any case
in writing, to which that Person is a party or by which it or any of its
properties is bound, or to which it or any of its properties is subject.

7

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 8

                    “Controlled Group” means the group consisting of (i) any
corporation which is a member of the same controlled group of corporations
(within the meaning of Section 414(b) of the Code) as the Borrower; (ii) a
partnership or other trade or business (whether or not incorporated) which is
under common control (within the meaning of Section 414(c) of the Code) with the
Borrower; and (iii) a member of the same affiliated service group (within the
meaning of Section 414(m) of the Code) as the Borrower, any corporation
described in clause (i) above or any partnership or trade or business described
in clause (ii) above.

                    “Customary Permitted Liens” means:

 

 

 

                    (i)     Liens (other than Environmental Liens and Liens in
favor of the PBGC) with respect to the payment of taxes, assessments or
governmental charges in all cases which are not yet due and payable or (if
foreclosure, distraint, sale or other similar proceedings shall not have been
commenced or any such proceeding after being commenced is stayed) which are
being contested in good faith by appropriate proceedings properly instituted and
diligently conducted and with respect to which adequate reserves or other
appropriate provisions are being maintained, which reserves and provisions shall
be maintained in accordance with generally accepted accounting principles as in
effect from time to time, if and to the extent that such GAAP so require;

 

 

 

                    (ii)     statutory Liens of landlords and Liens of
suppliers, mechanics, carriers, materialmen, warehousemen or workmen and other
similar Liens imposed by law created in the ordinary course of business for
amounts not yet due or which are being contested in good faith by appropriate
proceedings properly instituted and diligently conducted and with respect to
which adequate reserves or other appropriate provisions are being maintained,
which reserves and provisions shall be maintained in accordance with generally
accepted accounting principles as may be in effect from time to time, if and to
the extent that such generally accepted accounting principles so require;

 

 

 

                    (iii)     Liens (other than Environmental Liens and Liens in
favor of the IRS or the PBGC) incurred or deposits made in the ordinary course
of business in connection with workers’ compensation, unemployment insurance or
other types of social security benefits or to secure the performance of bids,
tenders, sales, contracts (other than for the repayment of borrowed money),
surety, appeal and performance bonds; provided that (A) all such Liens do not in
the aggregate materially detract from the value of the Borrower’s or such
Subsidiary’s assets or property taken as a whole or materially impair the use
thereof in the operation of the businesses taken as a whole and (B) all Liens
securing bonds to stay judgments or in connection with appeals do not secure at
any time an aggregate amount exceeding $1,000,000;

 

 

 

                    (iv)     Liens arising with respect to zoning restrictions,
easements, encroachments, licenses, reservations, covenants, rights-of-way,
utility easements, building restrictions and other similar charges, restrictions
or encumbrances on the use of real property which do not in any case materially
detract from the value of the property subject thereto or materially interfere
with the ordinary use or occupancy of the real

8

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 9

 

 

 

property or with the ordinary conduct of the business of the Borrower or any of
its Subsidiaries;

 

 

 

                    (v)     Liens of attachment or judgment with respect to
judgments, writs or warrants of attachment, or similar process against the
Borrower or any of its Subsidiaries which do not constitute a Default under
Section 8.1(H) hereof;

 

 

 

                    (vi)     any interest or title of the lessor in the property
subject to any operating lease entered into by the Borrower or any of its
Subsidiaries in the ordinary course of business; and

 

 

 

                    (vii)     financing statements of a lessor’s rights in and
to the property leased to the Borrower or one of the Subsidiaries relating to
leases permitted by this Agreement.

                    “Default” means an event described in Article VIII hereof.

                    “Development Board” shall mean The Industrial Development
Board of the City of Pell City.

                    “Disqualified Stock” means any Capital Stock that, by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
redeemable at the option of the holder thereof, in whole or in part, on or prior
to the date that is ninety-one (9l) days after the Revolving Loan Termination
Date.

                    “DOL” means the United States Department of Labor and any
Person succeeding to the functions thereof.

                    “Dollar” and “$” means dollars in the lawful currency of the
United States of America.

                    “Dollar Amount” of any currency at any date shall mean
(i) the amount of such currency if such currency is Dollars or (ii) the
Equivalent Amount of Dollars if such currency is any currency other than
Dollars.

                    “Domestic Incorporated Subsidiary” means a Subsidiary of the
Borrower organized under the laws of a jurisdiction located in the United States
of America.

                    “EBITDA” means, for any period, on a consolidated basis for
the Borrower and its Subsidiaries, the sum of the amounts for such period,
without duplication, of (i) Net Income, plus (ii) Interest Expense to the extent
deducted in computing Net Income, plus (iii) charges against income for foreign,
federal, state and local taxes to the extent deducted in computing Net Income,
plus (iv) depreciation expense to the extent deducted in computing Net Income,
plus (v) amortization expense, including, without limitation, amortization of
goodwill and other intangible assets to the extent deducted in computing Net
Income, plus (vi) any unusual non-cash charges to the extent deducted in
computing Net Income, plus (vii) non-cash stock based

9

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 10

compensation expense to the extent deducted in computing Net Income and minus
(viii) any unusual non-cash gains to the extent added in computing Net Income.

                    “Eligible Accounts” shall mean those Accounts of the
Borrower or any Subsidiary which meet the following requirements:

                    (a)     are genuine in all respects and have arisen in the
ordinary course of the Borrower’s business from (i) the performance of services
by the Borrower or the applicable Subsidiary, which services have been fully
performed, acknowledged and accepted by the Account Debtor or (ii) the sale,
license, assignment or lease of Goods by the Borrower, including C.O.D. sales,
which Goods have been completed in accordance with the Account Debtor’s
specifications (if any) and delivered to and accepted by the Account Debtor, and
the Borrower has possession of, or has delivered to the Lender at the Lender’s
request, shipping and delivery receipts evidencing such shipment;

                    (b)     it is subject to a perfected, first priority Lien in
favor of the Lender and is not subject to any other assignment, claim or Lien;

                    (c)     it is the valid, legally enforceable and
unconditional obligation of the Account Debtor with respect thereto, and is not
subject to the fulfillment of any condition whatsoever or any counterclaim,
credit (except as provided in subsection (h) of this definition), trade or
volume discount, allowance, discount, rebate or adjustment by the Account Debtor
with respect thereto, or to any claim by such Account Debtor denying liability
thereunder in whole or in part and the Account Debtor has not refused to accept
and/or has not returned or offered to return any of the Goods or services which
are the subject of such Account;

                    (d)     the Account Debtor with respect thereto is a
resident or citizen of, and is located within, the United States, unless the
sale of goods or services giving rise to such Account is on letter of credit,
banker’s acceptance or other credit support terms reasonably satisfactory to the
Lender;

                    (e)     it is not an Account arising from a “sale on
approval”, “sale or return”, “consignment”, “guaranteed sale” or “bill and
hold”, or are subject to any other repurchase or return agreement;

                    (f)     it is not an Account with respect to which
possession and/or control of the goods sold giving rise thereto is held,
maintained or retained by the Borrower or any Subsidiary (or by any agent or
custodian of the Borrower or any Subsidiary) for the account of, or subject to,
further and/or future direction from the Account Debtor with respect thereto;

                    (g)     it has not arisen out of contracts with the United
States or any department, agency or instrumentality thereof, unless the Borrower
has assigned its right to payment of such Account to the Bank pursuant to the
Assignment of Claims Act of 1940, and evidence (satisfactory to the Lender) of
such assignment has been delivered to the Lender;

10

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 11

                    (h)     if the Borrower maintains a credit limit for an
Account Debtor, the aggregate dollar amount of Accounts due from such Account
Debtor, including such Account, does not exceed such credit limit;

                    (i)     if the Account is evidence by chattel paper or an
instrument, the originals of such chattel paper or instrument shall have been
endorsed and/or assigned and delivered to the bank or, in the case of electronic
chattel paper, shall be in the control of the Lender, in each case in a manner
satisfactory to the Lender;

                    (j)     such Account is evidenced by an invoice delivered to
the related Account Debtor and is not more than (i) sixty 60 days (except in the
case of Energy Absorptions Systems, Inc., ninety (90) days), past the due date
thereof, or (ii) ninety (90) days past the original invoice date thereof, in
each case according to the original terms of sale;

                    (k)     it is not an Account with respect to an Account
Debtor that is located in any jurisdiction which has adopted a statute or other
requirement with respect to which any Person that obtains business from within
such jurisdiction must file a notice of business activities report or make any
other required filings in a timely manner in order to enforce its claims in such
jurisdiction’s courts unless (i) such notice of business activities report has
been duly and timely filed or the borrower or the applicable Subsidiary is
exempt from filing such report and has provided the bank with satisfactory
evidence of such exemption or (ii) the failure to make such filings may be cured
retroactively by the Borrower or the applicable Subsidiary for a nominal fee;

                    (l)     the Account Debtor with respect thereto is not the
Borrower or an Affiliate of the Borrower;

                    (m)     such Account does not arise out of a contract or
order which, by its terms, forbids or makes void or unenforceable the assignment
thereof by the Borrower or any Subsidiary to the Bank and is not unassignable to
the Bank for any other reason;

                    (n)     there is no bankruptcy, insolvency or liquidation
proceeding pending by or against the Account Debtor with respect thereto, nor
has the Account Debtor suspended business, made a general assignment for the
benefit of creditors or failed to pay its debts generally as they come due,
and/or no condition or event has occurred having a material adverse effect on
the Account Debtor which would require the Accounts of such Account Debtor to be
deemed uncollectible in accordance with GAAP;

                    (o)     it is not owed by an Account Debtor with respect to
which twenty five percent (25%) or more of the aggregate amount of outstanding
Accounts owed at such time by such Account Debtor is classified as ineligible
under clause (j) of this definition;

                    (p)     if the aggregate amount of all Accounts owed by the
Account Debtor thereon exceeds twenty five percent (25%) of the aggregate amount
of all Accounts at such time, then all Accounts owed by such Account Debtor in
excess of such amount shall be deemed ineligible; and

11

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 12

                    (q)     it does not violate the negative covenants and does
satisfy the affirmative covenants of the Borrower contained in this Agreement,
and it is otherwise not unacceptable to the Lender for any other reason.

          An Account which is at any time an Eligible Account, but which
subsequently fails to meet any of the foregoing requirements, shall forthwith
cease to be an Eligible Account. Further, with respect to any Account, if the
Lender at any time hereafter determines in its discretion that the prospect of
payment or performance by the Account Debtor with respect thereto is materially
impaired for any reason whatsoever, such Account shall cease to be an Eligible
Account after notice of such determination is given to the Borrower.

                    “Eligible Inventory” shall mean all Inventory of the
Borrower or any Subsidiary which meets each of the following requirements:

                    (a)     it is subject to a perfected, first priority Lien in
favor of the Lender and is not subject to any other assignment, claim or Lien;

                    (b)     it is salable and not slow-moving, obsolete or
discontinued, as determined in the sole and absolute discretion of the Lender;

                    (c)     it is in the possession and control of the Borrower
or any Subsidiary and it is stored and held in facilities owned by the Borrower
or any Subsidiary or, if such facilities are not so owned, the Lender is in
possession of a Collateral Access Agreement with respect thereto;

                    (d)     is not Inventory produced in violation of the Fair
Labor Standards Act and/or subject to the so-called “hot goods” provisions
contained in Title 29 U.S.C. 215(a); and

                    (e)     it is not subject to any agreement or license which
would restrict the Bank’s ability to sell or otherwise dispose of such
Inventory;

                    (f)     it is located in the United States or in any
territory or possession of the United States that has adopted Article 9 of the
Uniform Commercial Code;

                    (g)     it is not “in transit” to the Borrower or any
Subsidiary or held by the Borrower or any Subsidiary on consignment;

                    (h)     it is not “work-in-progress” Inventory;

                    (i)     it is not supply items, packaging or any other
similar materials;

                    (j)     it is not identified to any purchase order or
contract to the extent progress or advance payments are received with respect to
such Inventory;

                    (k)     it does not breach any of the representations,
warranties or covenants pertaining to Inventory set forth in the Loan Documents;
and

12

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 13

                    (l)     the Lender shall not have determined in its
reasonable discretion that it is unacceptable due to age, type, category,
quality, quantity and/or any other reason whatsoever.

                    Inventory which is at any time Eligible Inventory but which
subsequently fails to meet any one of the foregoing requirements, shall
forthwith cease to be Eligible Inventory.

                    “Energy Absorption LLC” shall mean Energy Absorption Systems
(AL) LLC, a Delaware limited liability company.

                    “Environmental Health or Safety Requirements of Law” means
all Requirements of Law derived from or relating to foreign, federal, state and
local laws or regulations relating to or addressing pollution or protection of
the environment, or protection of worker health or safety, including, but not
limited to, the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. § 9601 et seq., the Occupational Safety and Health Act of 1970,
29 U.S.C. § 651 et seq., and the Resource Conservation and Recovery Act of 1976,
42 U.S.C. § 6901 et seq., in each case including any amendments thereto, any
successor statutes, and any regulations or guidance promulgated thereunder, and
any state or local equivalent thereof.

                    “Environmental Lien” means a lien in favor of any
Governmental Authority for (a) any liability under Environmental, Health or
Safety Requirements of Law, or (b) damages arising from, or costs incurred by
such Governmental Authority in response to, a Release or threatened Release of a
Contaminant into the environment.

                    “Environmental Property Transfer Act” means any applicable
requirement of law that conditions, restricts, prohibits or requires any
notification or disclosure triggered by the closure of any property or the
transfer, sale or lease of any property or deed or title for any property for
environmental reasons, including, but not limited to, any so-called “Industrial
Site Recovery Act” or “Responsible Property Transfer Act.”

                    “Equity Interests” means Capital Stock and all warrants,
options or other rights to acquire Capital Stock (but excluding any debt
security that is convertible into, or exchangeable for, Capital Stock).

                    “ERISA” means the Employee Retirement Income Security Act of
1974, as amended from time to time including (unless the context otherwise
requires) any rules or regulations promulgated thereunder.

                    “Eurodollar Base Rate” means a rate of interest equal to (a)
the per annum rate of interest at which United States dollar deposits for a
period equal to the relevant Interest Period are offered in the London Interbank
Eurodollar market at 11:00 a.m. (London time) two Business days prior to the
commencement of such Interest Period (or three Business Days prior to the
commencement of such Interest Period if banks in London, England were not open
and dealing in offshore United States dollars on such second preceding Business
Day), as displayed in the Bloomberg Financial Markets system (or other
authoritative source selected by the Bank in its

13

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 14

sole discretion), divided by (b) a number determined by subtracting from 1.00
the then stated maximum reserve percentage for determining reserves to be
maintained by member banks of the Federal Reserve System for Eurocurrency
funding or liabilities as defined in Regulation D (or any successor category of
liabilities under Regulation D), or as LIBOR is otherwise determined by the Bank
in its sole and absolute discretion. The Bank’s determination of LIBOR shall be
conclusive absent manifest error.

                    “Eurodollar Payment Office” of the Lender shall mean any
agency, branch or Affiliate of the Lender, specified as the “Eurodollar Payment
Office” on Exhibit A hereto or such other agency, branch, Affiliate or
correspondence bank of the Lender, as it may from time to time specify to the
Borrower and each Lender as its Eurodollar Payment Office.

                    “Eurodollar Rate” means, with respect to a Eurodollar Rate
Loan for the relevant Interest Period, the Eurodollar Base Rate applicable to
such Interest Period plus the Applicable Eurodollar Margin then in effect.

                    “Eurodollar Rate Advance” means an Advance which bears
interest at the Eurodollar Rate.

                    “Eurodollar Rate Loan” means a Loan made pursuant to
Section 2.1 which bears interest at the Eurodollar Rate.

                    “Existing Credit Agreement” has the meaning assigned to such
term in Section A of the “Recitals” section of this Agreement.

                    “Federal Funds Effective Rate” means, for any day, an
interest rate per annum equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers on such day, as published for such day (or, if such day
is not a Business Day, for the immediately preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations at approximately
10:00 a.m. (Chicago time) on such day on such transactions received by the
Lender from three (3) Federal funds brokers of recognized standing selected by
the Lender in its sole discretion.

                    “Fitch” means Fitch Investors Service, L.P., together with
its successors and assigns.

                    “Fixed-Rate Loan” means any Eurodollar Rate Loan bearing a
fixed rate of interest for the applicable Interest Period.

                    “Floating Rate” means, for any day for any Loan, a rate per
annum equal to the Alternate Base Rate for such day, changing when and as the
Alternate Base Rate changes, plus the Applicable ABR Margin then in effect.

                    “Floating Rate Advance” means an Advance which bears
interest at the Floating Rate.

14

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 15

                    “Floating Rate Loan” means a Loan, or portion thereof, which
bears interest at the Floating Rate.

                    “GAAP” shall mean generally accepted accounting principles,
using the accrual basis of accounting and consistently applied with prior
periods, provided, however, that GAAP with respect to any interim financial
statements or reports shall be deemed subject to fiscal year-end adjustments and
footnotes made in accordance with GAAP.

                    “Governmental Acts” is defined in Section 3.10(A) hereof.

                    “Governmental Authority” means any nation or government, any
federal, state, local or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
authority or functions of or pertaining to government, including any authority
or other quasi-governmental entity established to perform any of such functions.

                    “Hedging Agreements” is defined in Section 7.3(M) hereof.

                    “Hedging Arrangements” is defined in the definition of
“Hedging Obligations” below.

                    “Hedging Obligations” of a Person means any and all
obligations of such Person, whether absolute or contingent and howsoever and
whensoever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor), under (i) any
and all agreements, devices or arrangements designed to protect at least one of
the parties thereto from the fluctuations of interest rates, commodity prices,
exchange rates or forward rates applicable to such party’s assets, liabilities
or exchange transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants or any similar derivative
transactions (“Hedging Arrangements”), and (ii) any and all cancellations, buy
backs, reversals, terminations or assignments of any of the foregoing.

                    “Indebtedness” of a Person means, without duplication, such
Person’s (i) obligations for borrowed money, including, without limitation,
subordinated indebtedness, (ii) obligations representing the deferred purchase
price of property or services (other than accounts payable arising in the
ordinary course of such person’s business payable on terms customary in the
trade and other than earn-outs or other similar forms of contingent purchase
prices), (iii) obligations, whether or not assumed, secured by Liens on or
payable out of the proceeds or production from property or assets now or
hereafter owned or acquired by such Person, (iv) obligations which are evidenced
by notes, acceptances, or other instruments, (v) Capitalized Lease Obligations,
(vi) Contingent Obligations with respect to the Indebtedness of other Persons,
(vii) obligations with respect to letters of credit, (viii) Off-Balance Sheet
Liabilities, (ix) Disqualified Stock, and (x) Hedging Obligations. The amount of
Indebtedness of any Person at any date shall be without duplication (i) the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability of any such Contingent

15

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 16

Obligations at such date and (ii) in the case of Indebtedness of others secured
by a Lien to which the property or assets owned or held by such Person is
subject, the lesser of the fair market value at such date of any asset subject
to a Lien securing the Indebtedness of others and the amount of the Indebtedness
secured.

                    “Indemnified Matters” is defined in Section 10.7(B) hereof.

                    “Indemnitees” is defined in Section 10.7(B) hereof.

                    “Indiana Mortgage” shall mean the mortgage, dated as of the
date hereof, granted by Spin-Cast Plastics, Inc. to Lender in the Indiana
Property.

                    “Indiana Property” shall mean that property as described in
and granted as collateral pursuant to the Indiana Mortgage.

                    “Intellectual Property Collateral” shall mean (i) the
Collateral, as defined in the Patent Security Agreement and (ii) the Collateral
as defined in the Trademark Security Agreement.

                    “Interest Expense” means, without duplication, for any
period, the total interest expense of the Borrower and its consolidated
Subsidiaries, whether paid or accrued (including the interest component of
Capitalized Leases, commitment and letter of credit fees, Off-Balance Sheet
Liabilities and net payments or receipts (if any) pursuant to Hedging
Arrangements relating to interest rate protection), all as determined in
conformity with GAAP.

                    “Interest Period” means, with respect to a Eurodollar Rate
Loan, a period of one (1), two (2), three (3) or six (6) months, commencing on a
Business Day selected by the Borrower on which a Eurodollar Rate Advance is made
to the Borrower pursuant to this Agreement. Such Interest Period shall end on
(but exclude) the day which corresponds numerically to such date one (1),
two (2), three (3) or six (6) months thereafter; provided, however, that if
there is no such numerically corresponding day in such next, second, third or
sixth succeeding month, such Interest Period shall end on the last Business Day
of such next, second, third or sixth succeeding month. If an Interest Period
would otherwise end on a day which is not a Business Day, such Interest Period
shall end on the next succeeding Business Day, provided, however, that if said
next succeeding Business Day falls in a new calendar month, such Interest Period
shall end on the immediately preceding Business Day.

                    “Investment” means, with respect to any Person, (i) any
purchase or other acquisition by that Person of any Indebtedness, Equity
Interests or other securities, or of a beneficial interest in any Indebtedness,
Equity Interests or other securities, issued by any other Person, (ii) any
purchase by that Person of all or substantially all of the assets of a business
(whether of a division, branch, unit operation, or otherwise) conducted by
another Person, and (iii) any loan, advance (other than deposits with financial
institutions, prepaid expenses, accounts receivable, advances to employees and
similar items made or incurred in the ordinary course of business) or capital
contribution by that Person to any other Person, including all Indebtedness to

16

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 17

such Person arising from a sale of property by such Person other than in the
ordinary course of its business.

                    “IRS” means the Internal Revenue Service and any Person
succeeding to the functions thereof.

                    “Last Twelve-Month Period” means, with respect to any fiscal
quarter, the preceding four-fiscal quarter periods ending on the last day of
such fiscal quarter.

                    “L/C Documents” is defined in Section 3.4 hereof.

                    “L/C Draft” means a draft drawn on Lender pursuant to a
Letter of Credit.

                    “L/C Interest” shall have the meaning ascribed to such term
in Section 3.6 hereof.

                    “L/C Obligations” means, without duplication, an amount
equal to the sum of (i) the aggregate of the Dollar Amount then available for
drawing under each of the Letters of Credit and (ii) the aggregate outstanding
Dollar Amount of all Reimbursement Obligations at such time.

                    “Lease” shall mean the Supplemental Lease Agreement, dated
as of March 1, 1995 between the Development Board and Energy Absorption Systems,
Inc. (“EAS”), as assigned to and assumed by Energy Absorption LLC pursuant to
the Assignment and Assumption of Lease Agreement, dated as of December 31, 2002
between Energy Absorption LLC and EAS.

                    “Lender” means LaSalle Bank National Association and its
respective successors and assigns.

                    “Lending Installation” means, with respect to the Lender,
any office, branch, subsidiary or affiliate of the Lender.

                    “Letters of Credit” means the standby letters of credit
(i) to be issued by the Lender, as Lender pursuant to Section 3.1 hereof or
(ii) deemed issued by the Lender pursuant to Section 3.2 hereof.

                    “Lien” means any lien (statutory or other), mortgage,
pledge, hypothecation, assignment, deposit arrangement, encumbrance or
preference, priority or security agreement or preferential arrangement of any
kind or nature whatsoever (including, without limitation, the interest of a
vendor or lessor under any conditional sale, Capitalized Lease or other title
retention agreement).

                    “Loan(s)” means, any Advance made pursuant to Section 2.1
hereof, as applicable, and collectively, all Revolving Loans, whether made or
continued as or converted to Floating Rate Loans or Fixed-Rate Loans.

17

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 18

                    “Loan Documents” means this Agreement, any promissory notes
executed pursuant to Section 2.12(D), the Subsidiary Guaranty, the Collateral
Documents and all other documents. instruments, notes and agreements executed in
connection therewith or contemplated thereby, as the same may be amended,
restated or otherwise modified and in effect from time to time.

                    “Margin Stock” shall have the meaning ascribed to such term
in Regulation U.

                    “Material Adverse Effect” means a material adverse effect
upon (a) the business, financial condition, operations, affairs, assets, or
properties of the Borrower, or the Borrower and its Subsidiaries, taken as a
whole, (b) the ability of the Borrower or any of its Subsidiaries to perform its
obligations under the Loan Documents in any material respect, or (c) the ability
of the Lenders or the Lender to enforce in any material respect the Obligations.

                    “Maximum Letter of Credit Obligation” shall mean an
aggregate amount of L/C Obligations not to exceed Ten Million Dollars and 00/100
($10,000,000).

                    “Moody’s” means Moody’s Investors Service. Inc., together
with its successors and assigns.

                    “Multiemployer Plan” means a “Multiemployer Plan” as defined
in Section 4001(a)(3) of ERISA which is, or within the immediately preceding
six (6) years was, contributed to by either the Borrower or any member of the
Controlled Group.

                    “Net Cash Proceeds” shall mean the gross cash proceeds
(including any cash received by way of deferred payment pursuant to a promissory
note, receivable or otherwise, but only as, when and to the extent actually
received) received from such event, net of transaction costs (including, as
applicable, any underwriting, brokerage or other customary commissions and
legal, advisory, accounting, investment banking and other fees and expenses
associated therewith) received from any such event.

                    “Net Income” means, for any period, the net income (or loss)
after taxes of the Borrower and its Subsidiaries on a consolidated basis for
such period taken as a single accounting period determined in conformity with
GAAP.

                    “Net Recovery Event Proceeds” shall mean, with respect to
any Recovery Event, the cash proceeds (net of costs and taxes incurred in
connection with such Recovery Event) received by the respective Person in
connection with such Recovery Event.

                    “Net Sale Proceeds” shall mean for any sale of assets, the
gross cash proceeds (including any cash received by way of deferred payment
pursuant to a promissory note, receivable or otherwise, but only as, when and to
the extent actually received) received from any sale of assets, net of (i)
transaction costs (including, without limitation, any underwriting, brokerage or
other customary selling commissions and legal, advisory, accounting, investment
banking and other fees and expenses, including title and recording expenses,
associated therewith), (ii) payments of unassumed liabilities relating to the
assets sold at the time of, or

18

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 19

within 180 days after, the date of such sale, (iii) the amount of such gross
cash proceeds required to be used to repay any Indebtedness which is secured by
the respective assets which were sold, and (iv) the estimated marginal increase
in income taxes which will be payable by the Borrower’s consolidated group with
respect to the fiscal year (for U.S. federal income tax purposes) in which the
sale occurs as a result of such sale; but excluding any portion of any such
gross cash proceeds which the Borrower determines in good faith should be
reserved for post-closing adjustments (to the extent the Borrower delivers to
the Lenders a certificate signed by an Authorized Representative as to such
determination), it being understood and agreed that on the day that all such
post-closing adjustments have been determined (which shall not be later than one
year following the date of the respective asset sale), the amount (if any) by
which the reserved amount in respect of such sale or disposition exceeds the
actual post-closing adjustments paid by the Borrower or any of its Subsidiaries
shall constitute Net Sale Proceeds on such date received by the Borrower and/or
any of its Subsidiaries from such sale, lease, transfer or other disposition.

                    “New Subordinated Debt” shall mean the indebtedness
evidenced by the New Subordinated Notes.

                    “New Subordinated Notes” shall have the meaning assigned to
that term in Recital B of this Agreement.

                    “Non-ERISA Commitments” means:

 

 

 

                    (i)      each pension, medical, dental, life. accident
insurance, disability, group insurance, sick leave, profit sharing, deferred
compensation, bonus, stock option, stock purchase, retirement, savings,
severance, stock ownership, performance, incentive, hospitalization or other
insurance, or other welfare, benefit or fringe benefit plan, policy, trust,
understanding or arrangement of any kind; and

 

 

 

                    (ii)     each employee collective bargaining agreement and
each agreement, understanding or arrangement of any kind, with or for the
benefit of any present or prior officer, director, employee or consultant
(including, without limitation, each employment. compensation, deterred
compensation, severance or consulting agreement or arrangement and any agreement
or arrangement associated with a change in ownership of the Borrower or any
member of the Controlled Group);

to which the Borrower or any member of the Controlled Group is a party or with
respect to which the Borrower or any member of the Controlled Group is or will
be required to make any payment other than any Plans.

                    “Note” means the Revolving Loan Note.

                    “Obligations” means all Loans, L/C Obligations, advances,
debts, liabilities, obligations, covenants and duties owing by the Borrower or
any of its Subsidiaries to the Lender, or any Indemnitee, of any kind or nature,
present or future, arising under this Agreement, the L/C Documents, the
Subsidiary Guaranty, or any other Loan Document, whether or not evidenced by any
note, guaranty or other instrument, whether or not for the payment of money,
whether arising

19

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 20

by reason of an extension of credit, loan, guaranty, indemnification, or in any
other manner, whether direct or indirect (including those acquired by
assignment), absolute or contingent, due or to become due, now existing or
hereafter arising and however acquired. The term includes, without limitation,
all Hedging Obligations owing under Hedging Agreements to the Lender or any
Affiliate of the Lender, all interest, charges, expenses, fees, attorneys’ fees
and disbursements, paralegals’ fees (in each case whether or not allowed), and
any other sum chargeable to the Borrower or any of its Subsidiaries under this
Agreement or any other Loan Document.

                    “Off-Balance Sheet Liabilities” of a person means (a) any
repurchase obligations or liabilities of such Person or any of its Subsidiaries
with respect to Receivables or notes receivable sold by such Person or any of
its Subsidiaries, (b) any liabilities of such Person or any of its Subsidiaries
under any sale and leaseback transactions, (c) any liabilities of such Person or
any of its Subsidiaries under any financing lease or so-called “synthetic” lease
transaction, or (d) any obligations of such Person or any of its Subsidiaries
arising with respect to any other transaction which is the functional equivalent
of or takes the place of borrowing, but which, in each of the cases of the
foregoing clauses (a) through (d), does not constitute a liability on the
consolidated balance sheets of such Person and its Subsidiaries, provided that
operating leases and royalty agreements shall not be considered as an Off
Balance Sheet Liability.

                    “Other Taxes” is defined in Section 2.14(E)(ii) hereof.

                    “Participants” is defined in Section 13.2(A) hereof.

                    “Patent Expenditures” shall mean expenditures of a Person
relating to its obtaining, acquiring, maintaining and defending patents.

                    “Patent Security Agreement” shall mean the Patent Security
Agreement, dated as of September 10, 2004 between Energy Absorption Systems,
Inc. and the Administrative Agent.

                    “Payment Date” means the last Business Day of each March,
June, September and December and the Termination Date.

                    “PBGC” means the Pension Benefit Guaranty Corporation. or
any successor thereto.

                    “Pennsylvania Mortgage” shall mean the Open End Mortgage,
dated as of September 10, 2004, granted by Nu-Metrics, Inc. to the
Administrative Agent on the Pennsylvania Property and assigned to the Lender by
the Administrative Agent.

                    “Pennsylvania Property” shall mean that property as
described in and granted as collateral pursuant to the Pennsylvania Mortgage.

                    “Permitted Acquisition” is defined in Section 7.3(G) hereof.

                    “Permitted Existing Contingent Obligations” means the
Contingent Obligations of the Borrower and its Subsidiaries identified as such
on Schedule 1.1.4 to this Agreement.

20

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 21

                    “Permitted Existing Indebtedness” means the Indebtedness of
the Borrower and its Subsidiaries identified as such on Schedule 1.1.1 to this
Agreement.

                    “Permitted Existing Investments” means the Investments of
the Borrower and its Subsidiaries identified as such on Schedule 1.1.2 to this
Agreement.

                    “Permitted Existing Liens” means the Liens on assets of the
Borrower and its Subsidiaries identified as such on Schedule 1.1.3 to this
Agreement.

                    “Permitted Refinancing Indebtedness” means any replacement,
renewal, refinancing or extension of any Indebtedness permitted by this
Agreement that (i) does not exceed the aggregate principal amount (plus accrued
interest and any applicable premium and associated fees and expenses) of the
Indebtedness being replaced, renewed, refinanced or extended, (ii) does not have
a Weighted Average Life to Maturity at the time of such replacement, renewal,
refinancing or extension that is less than the Weighted Average Life to Maturity
of the Indebtedness being replaced, renewed, refinanced or extended, (iii) does
not rank at the time of such replacement, renewal, refinancing or extension
senior to the Indebtedness being replaced, renewed, refinanced or extended, and
(iv) does not contain terms (including, without limitation, terms relating to
security, amortization, interest rate, premiums, fees, covenants, subordination,
event of default and remedies) materially less favorable to the Borrower than
those applicable to the Indebtedness being replaced, renewed, refinanced or
extended.

                    “Person” means any individual, corporation, firm,
enterprise, partnership, trust. incorporated or unincorporated association,
joint venture, joint stock company, limited liability company or other entity of
any kind, or any government or political subdivision or any agency, department
or instrumentality thereof:

                    “Plan” means an employee benefit plan defined in
Section 3(3) of ERISA in respect of which the Borrower or any member of the
Controlled Group is, or within the immediately preceding six (6) years was, an
“employer” as defined in Section 3(5) of ERISA.

                    “Pledge Agreement” shall mean the Pledge Agreement, dated as
of June 30, 2004, between Borrower and the Administrative Agent.

                    “Prime Rate” means a rate per annum equal to the prime rate
of interest announced from time to time by the Lender or its parent (which is
not necessarily the lowest rate charged to any customer), changing when and as
said prime rate changes.

                    “Rate Option” means the Eurodollar Rate or the Floating
Rate, as applicable.

                    “Recovery Event” shall mean the receipt by Borrower or any
of its Subsidiaries of any insurance or condemnation proceeds in excess of
$2,000,000 payable (i) by reason of theft, physical destruction or damage or any
other similar event with respect to any properties or assets of Borrower or any
of its Subsidiaries (whether under any policy of insurance required to be
maintained under Section 7.2(E) or otherwise), and (ii) by reason of any
condemnation, taking

21

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 22

seizing or similar event with respect to any properties or assets of Borrower or
any of its Subsidiaries.

                    “Register” is defined in Section 13.3(D) hereof.

                    “Regulation T” means Regulation T of the Board of Governors
of the Federal Reserve System as from time to time in effect and any successor
or other regulation or official interpretation of said Board of Governors
relating to the extension of credit by and to brokers and dealers of securities
for the purpose of purchasing or carrying margin stock (as defined therein).

                    “Regulation U” means Regulation U of the Board of Governors
of the Federal Reserve System as from time to time in effect and any successor
or other regulation or official interpretation of said Board of Governors
relating to the extension of credit by banks, non-banks and non-broker lenders
for the purpose of purchasing or carrying Margin Stock applicable to member
banks of the Federal Reserve System.

                    “Regulation X” means Regulation X of the Board of Governors
of the Federal Reserve System as from time to time in effect and any successor
or other regulation or official interpretation of said Board of Governors
relating to the extension of credit by foreign lenders for the purpose of
purchasing or carrying margin stock (as defined therein).

                    “Reimbursement Obligation” is defined in Section 3.6 hereof.

                    “Release” means any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environment, including the movement of
Contaminants through or in the air, soil, surface water or groundwater.

                    “Release Covenants” shall mean, with respect to the Lender’s
release of its Liens against the Collateral, Borrower’s compliance with the
following covenants: (a) Lender shall have received Borrower’s audited fiscal
year 2006 financial statements which demonstrate net income of $1 or greater and
(b) Senior Leverage Ratio (defined in Section 7.4(A)) is less than or equal to
2.75:1.0 on a trailing twelve month basis for a minimum of 2 consecutive fiscal
quarters and (c) Fixed Charge Coverage Ratio (defined in Section 7.4(D)) is
greater than or equal to 1.2:1.0 on a trailing twelve month basis for a minimum
of 2 consecutive fiscal quarters and (d) Total Leverage Ratio (defined in
Section 7.4(E)) is less than or equal to 4.50:1.0 on a trailing twelve month
basis for a minimum of 2 consecutive fiscal quarters provided the first quarter
applicable for calculation of the Release Covenants shall be no earlier than the
fiscal quarter ending March 31, 2006.

                    “Reportable Event” means a reportable event as defined in
Section 4043 of ERISA and the regulations issued under such section, with
respect to a Plan, excluding, however, such events as to which the PBGC by
regulation waived the requirement of Section 4043(a) of ERISA that it be
notified within thirty (30) days after such event occurs.

                    “Request for Letter of Credit” is defined in Section 3.4(A)
hereof.

22

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 23

                    “Requirements of Law” means, as to any Person, the charter
and by-laws or other organizational or governing documents of such Person, and
any law, rule or regulation, or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject including, without limitation, the Securities Act, the Securities
Exchange Act of 1934, Regulations T, U and X, ERISA, the Fair Labor Standards
Act, the Worker Adjustment and Retraining Notification Act, Americans with
Disabilities Act of 1990, and any certificate of occupancy, zoning ordinance,
building, environmental or land use requirement or permit or environmental,
labor, employment, occupational safety or health law, rule or regulation,
including Environmental, Health or Safety Requirements of Law.

                    “Reserves” shall mean the maximum reserve requirement, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) with respect to “Eurocurrency liabilities” or in respect of any other
category of liabilities which includes deposits by reference to which the
interest rate on Eurodollar Rate Loans is determined or category of extensions
of credit or other assets which includes loans by a non-United States office of
any Lender to United States residents.

                    “Restricted Payment” means (i) any dividend or other
distribution, direct or indirect, on account of any Equity Interests of the
Borrower now or hereafter outstanding, except a dividend payable solely in the
Borrower’s Capital Stock (other than Disqualified Stock) or in options, warrants
or other rights to purchase such Capital Stock, (ii) any redemption, retirement,
purchase or other acquisition for value, direct or indirect, of any Equity
Interests of the Borrower or any of its Subsidiaries now or hereafter
outstanding, other than in exchange for, or out of the proceeds of, the
substantially concurrent sale (other than to a Subsidiary of the Borrower) of
other Equity Interests of the Borrower (other than Disqualified Stock),
(iii) any redemption, purchase, retirement, defeasance, prepayment or other
acquisition for value, direct or indirect, of any Indebtedness subordinated to
the Obligations, and (iv) any payment of a claim for the rescission of the
purchase or sale of, or for material damages arising from the purchase or sale
of, any Indebtedness (other than the Obligations) or any Equity Interests of the
Borrower, or any of its Subsidiaries, or of a claim for reimbursement,
indemnification or contribution arising out of or related to any such claim for
damages or rescission.

                    “Revolving Credit Obligations” means, at any particular
time, the sum of (i) the outstanding principal amount of the Revolving Loans at
such time and (ii) the amount of the outstanding L/C Obligations.

                    “Revolving Loan” is defined in Section 2.1 hereof.

                    “Revolving Loan Availability” shall mean at any time, the
lesser of (a) the Revolving Loan Commitment less the Revolving Credit
Obligations, or, prior to the Collateral Release Date, (b) the Borrowing Base
Amount less the Revolving Credit Obligations outstanding at such time, less
$8,000,000 through June 30, 2006, and, thereafter, less $5,000,000.00.

                    “Revolving Loan Commitment” means the obligation of the
Lender to make Revolving Loans and to issue Letters of Credit in an aggregate
amount not exceeding Thirty

23

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 24

Million Dollars and 00/100 ($30,000,000) as such amount may be modified from
time to time pursuant to the terms of this Agreement.

                    “Revolving Loan Note” means the Revolving Loan Note in the
form of Exhibit G attached hereto.

                    “Revolving Loan Termination Date” means February 1, 2008.

                    “Risk-Based Capital Guidelines” is defined in Section 4.2
hereof.

                    “S&P” means Standard and Poor’s Ratings Group, a division of
The McGraw-Hill Companies, together with its successors and assigns.

                    “Securities Act” means the Securities Act of 1933, as
amended from time to time.

                    “Security Agreement” shall mean the Security Agreement,
dated as of June 30, 2004, between the Borrower, each Subsidiary Guarantor and
the Administrative Agent as assigned to Lender by the Administrative Agent.

                    “Senior Leverage Ratio” shall have the meaning assigned to
such term in Section 7.4 A.

                    “Significant Domestic Incorporated Subsidiary” means any
Domestic Incorporated Subsidiary whose assets or sales represent more than 10%
of the Borrower’s and its Subsidiaries’ Consolidated Assets or consolidated
sales, with any determination of Consolidated Assets and consolidated sales
based upon amounts shown in the Borrower’s most recently delivered annual
consolidated financial statements.

                    “Significant Foreign Subsidiary” means a Subsidiary of the
Borrower that is not a Domestic Incorporated Subsidiary and whose assets
represent more than 3% of the Borrower’s and its Subsidiaries’ Consolidated
Assets, with such determination of Consolidated Assets based upon amounts shown
in the Borrower’s most recently delivered annual consolidated financial
statements.

                    “Single Employer Plan” means a Plan maintained by the
Borrower or any member of the Controlled Group for employees of the Borrower or
any member of the Controlled Group.

                    “Subordinated Debt” shall mean the (i) Subordinated Debt
(U.S. Traffic) and (ii) the New Subordinated Debt.

                    “Subordinated Debt(U.S. Traffic)” means the indebtedness
evidenced by Subordinated Promissory Note, dated May 16, 2003 of Green Light
Acquisition Company payable in the principal amount of $5,000,000 to the order
of U.S. Traffic Corporation and Myers/Nuart Electrical Products, Inc. delivered
pursuant to the terms of the Asset Purchase Agreement, dated as of May 16, 2003.

24

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 25

                    “Subsidiary” of a Person means (i) any corporation more than
fifty percent (50%) of the outstanding securities having ordinary voting power
of which shall at the time be owned or controlled, directly or indirectly, by
such Person or by one or more of its Subsidiaries or by such Person and one or
more of its Subsidiaries, or (ii) any partnership, limited liability company,
association, joint venture or similar business organization more than fifty
percent (50%) of the ownership interests having ordinary voting power of which
shall at the time be so owned or controlled. Unless otherwise expressly
provided, all references herein to a “Subsidiary” means a Subsidiary of the
Borrower.

                    “Subsidiary Guarantors” means (i) all of the Borrower’s
Significant Domestic Incorporated Subsidiaries as of the Closing Date; (ii) all
new Significant Domestic Incorporated Subsidiaries or other Subsidiaries
designated by Borrower which become Subsidiary Guarantors in accordance with
Section 7.2(K), together with their respective successors and assigns; and (iii)
Spin-Cast Plastics, Inc.

                    “Subsidiary Guaranty” means that certain Guaranty, dated as
of May 16, 2003, in form and substance substantially similar to Exhibit Z
hereto, executed by the Subsidiary Guarantors in favor of the Lender, for the
benefit of Lender as reaffirmed and amended under Section 7.1(L) of this
Agreement and by that Reaffirmation and Amendment of Subsidiary Guaranty, dated
as of the date hereof, (as it may be amended, modified, supplemented and/or
restated (including to add new Subsidiary Guarantors), and as in effect from
time to time), unconditionally guaranteeing all of the indebtedness, obligations
and liabilities of the Borrower arising under or in connection with the Loan
Documents.

                    “Subsidiary Stock Pledge Agreements” shall mean collectively
the Subsidiary Stock Pledge Agreement (Quixote); the Subsidiary Stock Pledge
Agreement (Quixote Transportation Safety, Inc.), the Subsidiary Stock Pledge
Agreement (Transafe Corporation); and the Subsidiary Stock Pledge Agreement
(Energy Absorption Systems, Inc.)

                    “Subsidiary Stock Pledge Agreement (Quixote)” shall mean the
Subsidiary Stock Pledge Agreement, dated as of September 10, 2004 between
Borrower and the Administrative Agent, as assigned to the Lender by
Administrative Agent.

                    “Subsidiary Stock Pledge Agreement (Quixote Transportation
Safety, Inc.)” shall mean the Subsidiary Stock Pledge Agreement, dated as of
September 10, 2004 between Quixote Transportation Safety, Inc. and the
Administrative Agent, as assigned to the Lender by Administrative Agent.

                    “Subsidiary Stock Pledge Agreement (Transafe Corporation)”
shall mean the Subsidiary Stock Pledge Agreement, dated as of September 10, 2004
between Transafe Corporation and the Administrative Agent, as assigned to the
Lender by Administrative Agent.

                    “Subsidiary Stock Pledge Agreement (Energy Absorption
Systems, Inc.)” shall mean the Subsidiary Stock Pledge Agreement, dated as of
September 10, 2004 between Energy Absorption Systems, Inc. and the
Administrative Agent, as assigned to the Lender by Administrative Agent.

25

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 26

                    “Taxes” is defined in Section 2.14(E)(i) hereof.

                    “Termination Date” means the earlier of (a) the Revolving
Loan Termination Date, (b) the date of termination in whole of the Revolving
Loan Commitment pursuant to Section 2.4 hereof or pursuant to Section 9.1
hereof.

                    “Termination Event” means (i) a Reportable Event with
respect to any Benefit Plan; (ii) the withdrawal of the Borrower or any member
of the Controlled Group from a Benefit Plan during a plan year in which the
Borrower or such Controlled Group member was a “substantial employer” as defined
in Section 4001(a)(2) of ERISA with respect to such Plan; (iii) the imposition
of an obligation under Section 4041 of ERISA to provide affected parties written
notice of intent to terminate a Benefit Plan in a distress termination described
in Section 4041(c) of ERISA; (iv) the institution by the PBGC of proceedings to
terminate or appoint a trustee to administer a Benefit Plan; (v) any event or
condition which would constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Benefit Plan;
or (vi) the partial or complete withdrawal of the Borrower or any member of the
Controlled Group from a Multiemployer Plan.

                    “Total Leverage Ratio” is defined in Section 7.4(E) hereof.

                    “Trademark Security Agreement” shall mean the Trademark
Security Agreement, dated as of September 10, 2004 between Energy Absorption
Systems, Inc. and the Administrative Agent, as assigned to the Lender by
Administrative Agent.

                    “Type” means, with respect to any Loan, its nature as a
Floating Rate Loan or a Fixed- Rate Loan.

                    “Unfunded Liabilities” means (i) in the case of Single
Employer Plans, the amount (if any) by which the present value of all vested
nonforfeitable benefits under all Single Employer Plans exceeds the fair market
value of all such Plan assets allocable to such benefits, all determined as of
the then most recent valuation date for such Plans, and (ii) in the case of
Multiemployer Plans, the withdrawal liability that would be incurred by the
Controlled Group if all members of the Controlled Group completely withdrew from
all Multiemployer Plans.

                    “Unmatured Default” means an event which, but for the lapse
of time or the giving of notice, or both. would constitute a Default.

                    “UCC” shall mean the Uniform Commercial Code in effect in
the State of Illinois from time to time.

                    “U.S. Traffic “ means Borrower’s indirect wholly-owned
Subsidiary, U.S. Traffic Corporation.

                    “Weighted Average Life to Maturity” means when applied to
any Indebtedness at any date, the number of years obtained by dividing (i) the
sum of the products obtained by multiplying (a) the amount of each then
remaining installment, sinking fund, serial maturity or

26

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 27

other required payments of principal, including payment at final maturity, in
respect thereof, by (b) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such payment,
by (ii) the then outstanding principal amount of such Indebtedness.

                    The foregoing definitions shall be equally applicable to
both the singular and plural forms of the defined terms. Any accounting terms
used in this Agreement which are not specifically defined herein shall have the
meanings customarily given them in accordance with generally accepted accounting
principles as in effect from time to time.

                    1.2     References. Any references to Subsidiaries of the
Borrower set forth herein with respect to representations and warranties which
deal with historical matters shall be deemed to include the Borrower and its
Subsidiaries and shall not in any way be construed as consent by the Lender or
any Lender to the establishment, maintenance or acquisition of any Subsidiary,
except as may otherwise be permitted hereunder.

                    1.3     Other Terms Defined in UCC. All other capitalized
words and phrases used herein and not otherwise specifically defined shall have
the respective meanings assigned to such terms in the UCC, as amended from time
to time, to the extent the same are used or defined herein.

     ARTICLE II: REVOLVING LOAN AND TERM LOAN FACILITIES

                    2.1     Revolving Loans.

                    (A)     Upon the satisfaction of the conditions precedent
set forth in Sections 5.1 and 5.2, from and including the Closing Date and prior
to the Termination Date, Lender agrees, on the terms and conditions set forth in
this Agreement, to make revolving loans to the Borrower from time to time, in
Dollars either as Floating Rate Loans or Fixed-Rate Loans in a Dollar Amount as
the Borrower may from time to time request, (each individually, a “Revolving
Loan” and, collectively, the “Revolving Loans”); provided, however, (i) at no
time shall the Dollar Amount of the Revolving Credit Obligations exceed the
Revolving Loan Availability, or (ii) shall the proceeds of any Revolving Loan
made by Lender be used to make any payment (other than for accrued interest)
redemption, repurchase, retirement, defeasance or other acquisition for value of
any Borrower Subordinated Debt. The Revolving Loans shall be used by the
Borrower for the purpose of refinancing existing debt and for working capital
and general corporate purposes. Subject to the terms of this Agreement, the
Borrower may borrow, repay and reborrow Revolving Loans at any time prior to the
Termination Date. The Revolving Loans made on the Closing Date or on or before
the third (3rd) Business Day thereafter shall initially be Floating Rate Loans
and thereafter may be continued as Floating Rate Loans or converted into
Eurodollar Rate Loans in the manner provided in Section 2.8 and subject to the
other conditions and existing limitations therein set forth and set forth in
this Article II and set forth in the definition of Interest Period. Revolving
Loans made after the third (3rd) Business Day after the Closing Date shall be,
at the option of the Borrower, selected in accordance with Section 2.8, either
Floating Rate Loans or Eurodollar Rate Loans. On the Revolving Loan Termination
Date, the Borrower shall repay in full the outstanding principal balance of the
Revolving Loans.

27

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 28

                    (B)     Borrowing/Election Notice. In accordance with
Section 2.12, the Borrower may telephonically request Advances hereunder. If a
telephonic request is not made with respect to any Advance in accordance with
Section 2.12, then the Borrower shall deliver to the Lender a Borrowing/Election
Notice, signed by it, in accordance with the terms of Section 2.6, in order to
request such Advance.

                    (C)     Making of Revolving Loans. Promptly after receipt of
the Borrowing/Election Notice under Section 2.6 or a telephonic request in
accordance with Section 2.12 in respect of Revolving Loans the Lender will
promptly make the funds available to the Borrower at the Lender’s office in
Chicago, Illinois or the Lender’s Eurodollar Payment Office on the applicable
Borrowing Date and shall disburse such proceeds in accordance with the
Borrower’s disbursement instructions set forth in such Borrowing/Election
Notice.

                    2.2     Rate Options for all Advances; Maximum Interest
Periods. The Revolving Loans may be Floating Rate Advances or Eurodollar Rate
Advances, or a combination thereof, selected by the Borrower in accordance with
Section 2.9. The Borrower may select, in accordance with Section 2.9, Rate
Options and Interest Periods applicable to portions of the Loans; provided that
there shall be no more than five (5) Interest Periods in effect with respect to
all of the Loans at any time.

                    2.3     Optional Payments; Mandatory Prepayments/Repayments.

                    (A)     Optional Payments. The Borrower may from time to
time and at any time upon at least one (1 ) Business Day’s prior written notice
repay or prepay, without penalty or premium all or any part of outstanding
Floating Rate Advances in an aggregate minimum amount of $250,000 and in
integral multiples of $100,000 in excess thereof. Eurodollar Rate Advances may
be voluntarily repaid or prepaid prior to the last day of the applicable
Interest Period, subject to the indemnification provisions contained in
Section 4.4 in an aggregate minimum amount of $250,000 and in integral multiples
of $100,000 in excess thereof, provided, that the Borrower may not so prepay
Eurodollar Rate Advances unless it shall have provided at least three (3)
Business Days’ prior written notice to the Lender of such prepayment.

                    (B)     Mandatory Prepayments of Revolving Loans.

 

 

 

                    (i)     If at any time and for any reason the Revolving
Credit Obligations are greater than the Revolving Loan Availability the Borrower
shall immediately make a mandatory prepayment of the respective Obligations in
an amount equal to such excess.

 

 

 

                    (ii)     In addition to any other mandatory repayments
pursuant to this Section 2.3, on each date after the date of this Agreement on
which borrower or any Subsidiary receives proceeds from the following
transactions, Borrower shall make the following mandatory prepayments, except as
otherwise provided below to repay the outstanding principal amount of Revolving
Loans (with no required reduction to the Total Revolving Loan Commitment).

28

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 29

 

 

 

                    (w)     an amount equal to 80% of the Net Sale Proceeds of
any Asset Sale shall be applied to repayment of the outstanding principal amount
of the Revolving Loans subject to an allowance for like-kind exchanges in an
aggregate amount not to exceed $1,000,000 in any fiscal year;

 

 

 

                    (x)     an amount equal to 100% of Net Recovery Event
Proceeds received from any Recovery Event, provided that so long as no Event of
Default then exists, such Net Recovery Event Proceeds shall not be required to
be so applied on such date to the extent that Borrower has delivered a
certificate to the Lender on or prior to such date stating that such proceeds
shall be used (or contractually committed to be used) within 180 days following
the date of receipt of such Net Recovery Event Proceeds from such Recovery Event
to replace or restore any properties or assets in respect of which such Net
Recovery Event Proceeds were paid (which certificate shall set forth the
estimates of the proceeds to be so expended), and provided further, that if all
or any portion of such Net Recovery Event Proceeds are not so used (or
contractually committed to be used) within such 180-day period, such remaining
portion shall be applied as a mandatory repayment as provided above (without
giving effect to the immediately preceding proviso);

 

 

 

                    (y)     an amount equal to 60% of the net proceeds received
from any issuance of capital stock or any equity interests by Borrower; and

 

 

 

                    (z)     an amount equal to 100% of the net proceeds received
from the incurrence of Indebtedness (other than Indebtedness permitted to be
incurred pursuant to Section 7.3(A) of this Agreement.

                    2.4     Reduction of Commitments. The Borrower may
permanently reduce the Revolving Loan Commitment in whole, or in part an
aggregate minimum amount of $5,000,000 with respect thereto and integral
multiples of $1,000,000 in excess of that amount with respect thereto (unless
the Revolving Loan Commitment is reduced in whole), upon at least three (3)
Business Day’s prior written notice to the Lender, which notice shall specify
the amount of any such reduction; provided, however, that the amount of the
Revolving Loan Commitment may not be reduced below the aggregate principal
Dollar Amount of the outstanding Revolving Credit Obligations. All accrued
facility fees shall be payable on the effective date of any termination of the
obligations of the Lender to make Loans hereunder.

                    2.5     Method of Borrowing. Not later than 3:00 p.m.
(Chicago time) on each Borrowing Date, Lender shall make available its Revolving
Loan in immediately available funds in Dollars to the Borrower at the Lender’s
address or its Eurodollar Payment Office.

                    2.6     Method of Selecting Types and Interest Periods for
Advances. The Borrower shall select the Type of Advance and, in the case of each
Eurodollar Rate Advance, the Interest Period applicable to each Advance from
time to time. The Borrower shall give the Lender irrevocable notice in
substantially the form of Exhibit A hereto (a “Borrowing Election Notice”) not
later than 12:00 noon (Chicago time) (a) on the Borrowing Date of each Floating
Rate Advance, and (b) three (3) Business Days before the Borrowing Date for each
Eurodollar

29

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 30

Rate Advance specifying: (i) the Borrowing Date (which shall be a Business Day)
of such Advance; (ii) the aggregate amount of such Advance; (iii) the Type of
Advance selected; and (iv) in the case of each Eurodollar Rate Advance, the
Interest Period applicable thereto. Each Floating Rate Advance and all
Obligations other than Loans shall bear interest from and including the date of
the making of such Advance, in the case of Loans, and the date such Obligation
is due and owing in the case of such other Obligations, to (but not including)
the date of repayment thereof at the Floating Rate changing when and as such
Floating Rate changes. Changes in the rate of interest on that portion of any
Advance maintained as a Floating Rate Loan will take effect simultaneously with
each change in the Alternate Base Rate. Each Eurodollar Rate Advance shall bear
interest from and including the first day of the Interest Period applicable
thereto to (but not including) the last day of such Interest Period at the
interest rate determined as applicable to such Eurodollar Rate Advance.

                    2.7     Minimum Amount of Each Advance. Each Advance (other
than an Advance to repay a Reimbursement Obligation) shall be in the minimum
amount of $250,000 and in multiples of $100,000 if in excess thereof; provided,
however, that any Floating Rate Advance may be in the amount of the unused
Revolving Loan Availability.

                    2.8     Method of Selecting Types, and Interest Periods for
Conversion and Continuation of Advances.

                    (A)     Right to Convert. The Borrower may elect from time
to time. subject to the provisions of Section 2.3 and this Section 2.9, to
convert all or any part of a Loan of any Type into any other Type or Types of
Loan; provided that any conversion of any Eurodollar Rate Advance shall be made
on, and only on, the last day of the Interest Period applicable thereto.

                    (B)     Automatic Conversion and Continuation. Floating Rate
Loans shall continue as Floating Rate Loans unless and until such Floating Rate
Loans are converted into Eurodollar Rate Loans. Eurodollar Rate Loans shall
continue as Eurodollar Rate Loans until the end of the then applicable Interest
Period therefor, at which time such Eurodollar Rate Loans shall be automatically
converted into Floating Rate Loans unless the Borrower shall have given the
Lender notice in accordance with Section 2.9(D) requesting that, at the end of
such Interest Period, such Eurodollar Rate Loans continue as a Eurodollar Rate
Loan.

                    (C)     No Conversion Post-Default; Limited Conversion
Post-Unmatured Default. Notwithstanding anything to the contrary contained in
Section 2.9(A) or Section 2.9(B), (x) no Loan may be converted into or continued
as a Eurodollar Rate Loan (except with the consent of the Lender) when any
Default has occurred and is continuing and (y) no Loan may be converted into or
continued as a Eurodollar Rate Loan with an Interest Period greater than one
month (except with the consent of the Lender) when any Unmatured Default has
occurred and is continuing.

                    (D)     Borrowing/Election Notice. The Borrower shall give
the Lender an irrevocable Borrowing/Election Notice of each conversion of a
Floating Rate Loan into a Eurodollar Rate Loan or continuation of a Eurodollar
Rate Loan not later than 12:00 noon (Chicago time) three (3) Business Days prior
to the date of the requested conversion or

30

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 31

continuation, with respect to any Loan to be converted or continued as a
Eurodollar Rate Loan specifying: (i) the requested date (which shall be a
Business Day) of such conversion or continuation; (ii) the amount and Type of
the Loan to be converted or continued; and (iii) the amount of Eurodollar Rate
Loan(s) into which such Loan is to be converted or continued, and the duration
of the Interest Period applicable thereto.

                    2.9     Default Rate. After the occurrence and during the
continuance of a Default, at the option of the Lender, the interest rate(s)
applicable to the Obligations shall be equal to the Floating Rate hereunder plus
two percent (2.0%) per annum, and the Letter of Credit fee described in
Section 3.8(A) shall be equal to the then Applicable LC Fee Percentage plus two
percent (2.0%) per annum.

                    2.10     Method of Payment. (a) All payments of principal,
interest, fees, commissions and L/C Obligations hereunder shall be made, without
setoff, deduction or counterclaim (unless indicated otherwise in
Section 2.14(E)), in immediately available funds to the Lender (i) at the
Lender’s address specified pursuant to Article XIV with respect to Advances or
other Obligations at any other Lending Installation of the Lender specified in
writing by the Lender to the Borrower, by 12:00 p.m. (Chicago time) on the date
when due. Each Advance shall be repaid or prepaid in the Dollar Amount borrowed
and interest payable thereon shall also be paid in such currency. Any payment
owing by the Borrower to Lender shall be deemed to have been paid to Lender by
the Borrower upon the Lender’s receipt of such payment from the Borrower. The
Borrower authorizes the Lender to charge the account of the Borrower maintained
with Lender for each payment of principal, interest, fees, commissions and L/C
Obligations as it becomes due hereunder.

                    2.11     Evidence of Debt.

                    (A)     Notes. All Loans by Lender shall be evidenced by a
single promissory note of the Borrower. On the Closing Date, the Borrower shall
deliver to the Lender a Revolving Note, dated such date (together with all other
promissory notes accepted in substitution, renewal, or replacement therefor
(including pursuant to Section 2.13), a “Note” ), in the form of Exhibit G
hereto, with appropriate insertions and payable on its face to the order of such
Lender on the Revolving Loan Termination Date in the principal sum of the
Revolving Loan Commitment, subject, however, to the limitation that the
principal amount payable thereunder shall not at any time exceed the then unpaid
principal amount of all Loans made by such Lender. The Borrower hereby
irrevocably authorizes Lender to make or cause to be made, at or about the time
of each Revolving Loan made by it, an appropriate notation on the grid attached
to the Revolving Note payable to the order of Lender, reflecting the unpaid
principal amount of all Loans made by Lender. Lender agrees to make or cause to
be made, at or about the time of receipt of any payment of any principal of a
Note payable to its order, an appropriate notation on the grid attached to such
Revolving Note reflecting such payment. The aggregate unpaid amount of Loans set
forth on the grid attached to the Note shall be conclusive evidence (absent
manifest error) of the principal amount owing and unpaid on such Note. The
failure so to record any such Loan or payment, or any error in so recording any
such Loan or repayment, shall not, however, limit or otherwise affect the
obligations of the Borrower hereunder or under the Note to repay the principal
amount of the Loans together with all interest accruing thereon.

31

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 32

                    (B)     Register. The Register maintained by the Lender
pursuant to Section 13.3(D) shall include a control account in which account
shall be recorded (i) the date and the amount of each Loan made hereunder, the
Type thereof and the Interest Period, if any, applicable thereto, (ii) the
amount of any principal or interest due and payable or to become due and payable
from the Borrower to Lender hereunder, (iii) the amount of any sum received by
the Lender hereunder and (iv) all other appropriate debits and credits as
provided in this Agreement, including, without limitation, all fees, charges,
expenses and interest.

                    (C)     Entries in Register. The entries made in the
Register maintained pursuant to subsections (B) of this Section shall be
conclusive and binding for all purposes, absent manifest error, gross negligence
or willful misconduct, unless the Borrower objects to information contained in
the Loan Accounts or the Register within forty-five (45) days of the Borrower’s
receipt of such information; provided that the failure of Lender to maintain
such accounts or any error therein shall not in any manner affect the obligation
of the Borrower to repay the Loans in accordance with the terms of this
Agreement.

                    2.12     Telephonic Notices. The Borrower authorizes the
Lender to extend Advances, effect selections of Types of Advances and to
transfer funds based on telephonic notices made by any person or persons the
Lender in good faith believes to be acting on behalf of the Borrower. The
Borrower agrees to deliver promptly to the Lender a written confirmation, signed
by an Authorized Officer (or such other officer designated in writing to the
Lender by an Authorized Officer so long as such other officer is also permitted
to make such delivery under the Borrower’s organizational documents), if such
confirmation is requested by the Lender of each telephonic notice. If the
written confirmation differs in any material respect from the action taken by
the Lender, the records of the Lender shall govern absent manifest error, gross
negligence or willful misconduct. In case of disagreement concerning such
notices, if the Lender has recorded telephonic borrowing notices, such
recordings will be made available to the Borrower upon the Borrower’s request
therefor.

                    2.13     Promise to Pay; Interest and Facility Fees;
Interest Payment Dates; Interest and Fee Basis; Taxes.

                    (A)     Promise to Pay. The Borrower unconditionally
promises to pay when due the principal amount of each Loan incurred by it and
all other Obligations incurred by it, and to pay all unpaid interest accrued
thereon, in accordance with the terms of this Agreement and the other Loan
Documents.

                    (B)     Interest Payment Dates. Interest accrued on each
Floating Rate Loan shall be payable on each Payment Date, commencing with the
first such date to occur after the date hereof, upon any prepayment whether by
acceleration or otherwise, and at the Revolving Loan Termination Date (whether
by acceleration or otherwise). Interest accrued on each Fixed-Rate Loan shall be
payable on the last day of its applicable Interest Period, on any date on which
such Fixed-Rate Loan is prepaid, whether by acceleration or otherwise, and at
maturity. Interest accrued on each Fixed-Rate Loan having an Interest Period
longer than three months shall also be payable on the last day of each
three-month interval during such Interest Period. Interest accrued on the
principal balance of all other Obligations shall be payable in arrears (i) on
each

32

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 33

Payment Date, commencing on the first such Payment Date following the incurrence
of such Obligations, (ii) upon repayment thereof in full or in part, and
(iii) if not theretofore paid in full, at the time such other Obligations become
due and payable (whether by acceleration or otherwise).

 

 

 

 

          (C)     Fees.

 

 

 

 

                    (i)     The Borrower shall pay to the Lender from and after
the date of this Agreement until the date on which the Revolving Loan Commitment
shall be terminated in whole, a commitment fee accruing at the rate of the then
Applicable Commitment Fee Percentage, on the amount of the unused Revolving Loan
Commitment in effect on the date of such payment. All such commitment fees
payable under this clause (C)(i) shall be payable quarterly in arrears on each
Payment Date occurring after the date of this Agreement, and, in addition, on
the date on which the Revolving Loan Commitment shall be terminated in whole.

 

 

 

 

                    (ii)     The Borrower agrees to pay, on the Closing Date, to
the Lender an upfront closing fee pursuant to the terms of the Lender’s
Commitment Letter, dated March 16, 2005.

                     (D)    Interest and Fee Basis; Applicable Eurodollar
Margin; Applicable ABR Margin; Applicable L/C Fee Percentage and Applicable
Commitment Fee Percentage.

 

 

 

                    (i)     Interest on all Eurodollar Rate Loans and on all
fees shall be calculated for actual days elapsed on the basis of a 360-day year.
Interest on all Floating Rate Loans shall be calculated for actual days elapsed
on the basis of a 365-day year, or when appropriate 366-day year. Interest shall
be payable for the day an Obligation is incurred but not for the day of any
payment on the amount paid if payment is received prior to 2:00 p.m. (local
time) at the place of payment. If any payment of principal of or interest on a
Loan or any payment of any other Obligations shall become due on a day which is
not a Business Day, such payment shall be made on the next succeeding Business
Day and, in the case of a principal payment, such extension of time shall be
included in computing interest, fees and commissions in connection with such
payment.

 

 

 

                    (ii)     The Applicable Eurodollar Margin, Applicable ABR
Margin, Applicable Commitment Fee Percentage and Applicable L/C Fee Percentage
shall be determined on the basis of the then applicable Senior Leverage Ratio as
described in this Section 2.13(D)(ii), from time to time by reference to the
following table:

33

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 34

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Applicable
Margin

 

 

Level I
Status

Senior
Leverage
Ratio is
less than or
equal to 1.5

 

 

Level II
Status

Senior
Leverage
Ratio is
greater than
1.5 to 1.0 and
less than or
equal to 2.0

 

 

Level III
Status

Senior
Leverage
Ratio
is greater than
2.0 to 1.0 and
less than or
equal to 2.50

 

 

Level IV
Status

Senior
Leverage
Ratio is
greater than
2.50 and less
than or equal
to 3.00

 

 

Level V
Status

Senior
Leverage
Ratio is
greater than
3.00

 

 

Eurodollar Margin and L/C Fee Percentage

 

 

1.50

%

 

 

1.75

%

 

 

2.00

%

 

 

2.25

%

 

 

2.50

%

 

 

ABR Margin

 

 

0

%

 

 

0

%

 

 

0

%

 

 

0

%

 

 

0

%

 

 

Commitment Fee Percentage

 

 

0.25

%

 

 

0.25

%

 

 

0.25

%

 

 

.375

%

 

 

.375

%

 

 

 

 

For purposes of this Section 2.13(D)(ii), the Senior Leverage Ratio shall be
calculated as provided in Section 7.4(A). Upon receipt of the financial
statements delivered pursuant to Sections 7.1(A)(i) and (ii), as applicable, the
Applicable Eurodollar Margin, the Applicable ABR Margin, the Applicable
Commitment Fee Percentage and Applicable L/C Fee Percentage shall be adjusted,
such adjustment being effective five (5) Business Days following the day such
financial statements and compliance certificates are delivered pursuant to
Section 7.1(A); provided, that if the Borrower shall not have timely delivered
its financial statements and compliance certificates in accordance with the
applicable provisions of Section 7.1(A), and such failure continues for five (5)
days after notice from the Lender to the Borrower, then, at the discretion of
the Lender, commencing on the date upon which such financial statements and
compliance certificates should have been delivered and continuing until five (5)
days after such financial statements and compliance certificates are actually
delivered, it shall be assumed for purposes of determining the Applicable
Eurodollar Margin, the Applicable ABR Margin, Applicable L/C Fee Percentage and
Applicable Commitment Fee Percentage that the Senior Leverage Ratio was greater
than 3.0 to 1.0 and Level V pricing shall be applicable.

 

 

 

                    (iii)   Notwithstanding anything herein to the contrary,
from the Closing Date through the fifth (5th) Business Day following the day
financial statements are delivered pursuant to Section 7.1(A) for the fiscal
year ending June 30, 2006, the Applicable Eurodollar Margin, the Applicable ABR
Margin, the Applicable L/C Percentage and the Applicable Commitment Fee
Percentage shall be determined based upon a Senior Leverage Ratio equal to
Level IV status.

 

 

 

          (E)     Taxes.

 

 

 

                    (i)     Any and all payments by the Borrower hereunder
(whether in respect of principal, interest, fees or otherwise) shall be made
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings or any interest, penalties
or liabilities with respect thereto imposed by any Governmental Authority
including those arising after the date hereof as a

34

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 35

 

 

 

result of the adoption of or any change in any law, treaty, rule, regulation,
guideline or determination of a Governmental Authority or any change in the
interpretation or application thereof by a Governmental Authority but excluding,
in the case of each Lender and the Lender, such taxes (including income taxes,
franchise taxes and branch profit taxes) as are imposed on or measured by
Lender’s net income or similar taxes imposed by the United States of America or
any Governmental Authority of the jurisdiction under the laws of which Lender is
organized or maintains a Lending Installation (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings, and liabilities which the
Lender or a Lender determines to be applicable to this Agreement, the other Loan
Documents, the Revolving Loan Commitments, the Loans or the Letters of Credit
being hereinafter referred to as “Taxes”). If the Borrower or the Lender shall
be required by law to deduct or withhold any Taxes from or in respect of any sum
payable hereunder or under the other Loan Documents to Lender (i) the sum
payable shall be increased as may be necessary so that after making all required
deductions or withholdings (including deductions or withholdings applicable to
additional sums payable under this Section 2.14(E)) Lender receives an amount
equal to the sum it would have received had no such deductions or withholdings
been made, (ii) the Borrower shall make such deductions or withholdings, and
(iii) the Borrower shall pay the full amount deducted or withheld to the
relevant taxation authority or other authority in accordance with applicable
law. If any Tax, including, without limitation, any withholding tax, of the
United States of America or any other Governmental Authority shall be or become
applicable (y) after the date of this Agreement, to such payments by the
Borrower made to the Lending Installation or any other office that Lender may
claim as its Lending Installation, or (z) after Lender’s selection and
designation of any other Lending Installation, such payments made to such other
Lending Installation, Lender shall use reasonable efforts to make, fund and
maintain its Loans through another Lending Installation of Lender in another
jurisdiction so as to reduce the Borrower’s liability hereunder, if the making,
tending or maintenance of such Loans through such other Lending Installation of
Lender does not, in the reasonable judgment of such Lender, otherwise adversely
and materially affect such Loans, or obligations under the Revolving Loan
Commitments of such Lender.

 

 

 

                    (ii)     In addition, the Borrower agrees to pay any present
or future stamp or documentary taxes or any other excise or property taxes,
charges, or similar levies which arise from any payment made hereunder, from the
issuance of Letters of Credit hereunder, or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement, the other Loan
Documents, the Revolving Loan Commitments, the Loans or the Letters of Credit
(hereinafter referred to as “Other Taxes”).

 

 

 

                    (iii)    The Borrower indemnifies Lender for the full amount
of Taxes and Other Taxes (including, without limitation, any Taxes or Other
Taxes imposed by any Governmental Authority on amounts payable under this
Section 2.14(E)) paid by Lender or the Lender and any liability (including
penalties, interest, and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
This indemnification shall be made within thirty (30) days

35

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 36

 

 

 

after the date Lender makes written demand therefor. A certificate as to any
additional amount payable to Lender under this Section 2.14(E) submitted to the
Borrower by Lender shall show in reasonable detail the amount payable and the
calculations used to determine such amount and shall, absent manifest error, be
final, conclusive and binding upon all parties hereto. With respect to such
deduction or withholding for or on account of any Taxes and to confirm that all
such Taxes have been paid to the appropriate Governmental Authorities, the
Borrower shall promptly (and in any event not later than thirty (30) days after
receipt) furnish to Lender certificates, receipts and other documents as may be
required (in the judgment of Lender to establish any tax credit to which Lender
may be entitled. In the event Lender receives any such tax credit, Lender shall
pay to the Borrower such amount (if any) not exceeding the increased amount paid
by the Borrower to, or on behalf of, Lender that is allocable to such increased
amount. Lender requesting compensation under this Section 2.14(E) shall use its
reasonable efforts to notify the Borrower in writing of the event giving rise to
such demand for compensation not more than ninety (90) days following the date
upon which the responsible account officer for the Lender knows of such event.
Such written demand shall be rebuttably presumed correct for all purposes. If
Lender demands compensation under this Section 2.14(E) more than ninety (90)
days following the date upon which a responsible account officer for Lender
knows that Taxes or Other Taxes have begun to accrue with respect to which
Lender is entitled to compensation under this Section 2.14(E), then any Taxes or
Other Taxes attributable to the period prior to the ninety (90) day period
immediately preceding the date on which Lender provided such notice and demand
for compensation shall be excluded from the indemnity obligations of the
Borrower under this Section 2.14(E).

 

 

 

                    (iv)     Within thirty (30) days after the date of any
payment of Taxes or Other Taxes by the Borrower, the Borrower shall furnish to
the Lender the original or a certified copy of a receipt evidencing payment
thereof.

 

 

 

                    (v)      Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 2.14(E) shall survive the payment in full of
all Obligations hereunder, the termination of the Letters of Credit and the
termination of this Agreement for a period of one year.

 

 

 

                    (vi)     Upon the request, and at the expense of the
Borrower, the Lender to which the Borrower is required to pay any additional
amount pursuant to this Section 2.14(E), shall reasonably afford the Borrower
the opportunity to contest, and shall reasonably cooperate with the Borrower in
contesting, the imposition of any Tax giving rise to such payment; provided,
that (i) Lender shall not be required to afford the Borrower the opportunity to
so contest unless the Borrower shall have confirmed in writing to Lender its
obligation to pay such amounts pursuant to this Agreement; and (ii) the Borrower
shall reimburse Lender for its attorneys’ and accountants’ fees and
disbursements incurred in so cooperating with the Borrower in contesting the
imposition of such Tax; provided, however, that notwithstanding the foregoing,
Lender shall not be

36

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 37

 

 

 

required to afford the Borrower the opportunity to contest, or cooperate with
the Borrower in contesting, the imposition of any Taxes, if Lender in good faith
determines that to do so would have an adverse effect on it.

                    2.14     Lending Installations. Lender may book its Loans or
Letters of Credit at any Lending Installation selected by Lender and may change
its Lending Installation from time to time upon reasonable written notice
thereof to the Borrower. All terms of this Agreement shall apply to any such
Lending Installation. Lender may, by written or facsimile notice to the
Borrower, designate a Lending Installation through which Loans will be made by
it and for whose account Loan payments and/or payments of L/C Obligations are to
be made.

                    2.15     Termination Date. This Agreement shall be effective
until the Termination Date. Notwithstanding the termination of this Agreement,
until (A) all of the Obligations (other than contingent indemnity obligations)
shall have been fully paid and satisfied in cash, (B) all financing arrangements
among the Borrower and the Lender pursuant to this Agreement shall have been
terminated and (C) all of the Letters of Credit shall have expired, been
canceled, terminated or cash collateralized in accordance with Section 3.11, all
of the rights and remedies under this Agreement and the other Loan Documents
shall survive.

                    2.16     Judgment Currency. If, for the purposes of
obtaining judgment in any court, it is necessary to convert a sum due from the
Borrower hereunder in the currency expressed to be payable herein (the
“specified currency”) into another currency, the parties hereto agree, to the
fullest extent that they may effectively do so, that the rate of exchange used
shall be that at which in accordance with normal banking procedures the Lender
could purchase the specified currency with such other currency at the Lender’s
main office in Chicago, Illinois on the Business Day preceding that on which the
final, non-appealable judgment is given. The obligations of the Borrower in
respect of any sum due to any Lender hereunder shall, notwithstanding any
judgment in a currency other than the specified currency, be discharged only to
the extent that on the Business Day following receipt by such Lender of any sum
adjudged to be so due in such other currency such Lender may in accordance with
normal, reasonable banking procedures purchase the specified currency with such
other currency. If the amount of the specified currency so purchased is less
than the sum originally due to Lender in the specified currency, the Borrower
agrees, to the fullest extent that it may effectively do so, as a separate
obligation and notwithstanding any such judgment, to indemnify Lender against
such loss, and if the amount of the specified currency so purchased exceeds the
sum originally due to Lender in the specified currency, Lender agrees to remit
such excess to the Borrower.

                    2.17     Security of Obligations. As security for the
payment of the Obligations, and each Guarantor’s Obligation under its Subsidiary
Guaranty, the Borrower and each Guarantor, pursuant to the terms of the Security
Agreement, Collateral Assignment, Alabama Leasehold Mortgage, the Subsidiary
Stock Pledge Agreements, Trademark Security Agreement, Patent Security
Agreement, Indiana Mortgage, Pennsylvania Mortgage and California Deed of Trust,
as applicable, do hereby reaffirm its pledge, assignment, transfer and delivery
to the Lender and grant to the Lender a continuing and unconditional security
interest in and to the Collateral as defined herein. The Lender and the Borrower
agree that the Lender shall release its security interest and liens in the
Collateral upon Borrower’s delivery and Lender’s

37

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 38

acceptance, of Borrower’s notice of its satisfaction of and compliance with the
Release Covenants, in the form required by Section 7.1(J).

     ARTICLE III: THE LETTER OF CREDIT FACILITY

                    3.1     Obligation to Issue Letters of Credit. Subject to
the terms and conditions of this Agreement and in reliance upon the
representations, warranties and covenants of the Borrower herein set forth,
Lender hereby agrees to issue for the account of the Borrower through such
Lender’s branches as it and the Borrower may jointly agree, one or more Letters
of Credit denominated in Dollars in accordance with this Article III, from time
to time during the period, commencing on the Closing Date and ending on the
Business Day prior to the Termination Date.

                    3.2     Transitional Letters of Credit. Schedule 3.2
contains a schedule of certain letters of credit issued for the account of the
Borrower prior to the Closing Date. Subject to the satisfaction of the
conditions contained in Sections 5.1 and 5.2, from and after the Closing Date
such letters of credit shall be deemed to be Letters of Credit issued pursuant
to this Article III.

                    3.3     Types and Amounts. Lender shall have no obligation
to and shall not:

                    (A)     issue (or amend) any Letter of Credit if on the date
of issuance (or amendment), before or after giving effect to the Letter of
Credit requested hereunder, (i) the Dollar Amount of the Revolving Credit
Obligations at such time would exceed the Revolving Loan Commitment at such
time, or (ii) the aggregate outstanding Dollar Amount of the L/C Obligations
would exceed the maximum Letter of Credit Obligation; or

                    (B)     issue (or amend) any Letter of Credit which has an
expiration date later than the date which is the earlier of (x) one (1) year
after the date of issuance thereof or (y) five (5) Business Days immediately
preceding the Revolving Credit Termination Date; provided, that any Letter of
Credit with a one-year term may provide for the renewal thereof for additional
one-year periods (which in no event shall extend beyond the date referred to in
clause (y) above.

                    3.4     Conditions. In addition to being subject to the
satisfaction of the conditions contained in Sections 5.1 and 5.2, the obligation
of the Lender to issue any Letter of Credit is subject to the satisfaction in
full of the following conditions:

                    (A)     the Borrower shall have delivered to the Lender at
such times and in such manner as Lender may reasonably prescribe, a request for
issuance of such Letter of Credit in substantially the form of Exhibit B hereto
(each such request a “Request For Letter of Credit”), duly executed applications
for such Letter of Credit and such letter of credit agreement as required by
Lender, and such other documents, instructions and agreements as may be required
pursuant to the terms thereof (all such applications, documents, instructions,
and agreements being referred to herein as the “L/C Documents”) to which L/C
Documents Borrower agrees to be bound, (provided in the event of any conflict in
terms between this Agreement and the L/C

38

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 39

Documents, this Agreement’s terms shall govern) and the proposed Letter of
Credit shall be reasonably satisfactory to Lender as to form and content; and

                    (B)     as of the date of issuance no order, judgment or
decree of any court, arbitrator or Governmental Authority shall purport by its
terms to enjoin or restrain the applicable Lender from issuing such Letter of
Credit and no law, rule or regulation applicable to such Lender and no request
or directive (whether or not having the force of law) from a Governmental
Authority with jurisdiction over Lender shall prohibit or request that Lender
refrain from the issuance of Letters of Credit generally or the issuance of that
Letter of Credit.

                    (C)     In the event of any conflict between the terms of
this Agreement and the terms of any application for a Letter of Credit, the
terms of this Agreement shall control.

                    3.5     Procedure for Issuance of Letters of Credit.

                    (A)     Subject to the terms and conditions of this
Article III and provided that the applicable conditions set forth in
Sections 5.1 and 5.2 hereof have been satisfied, the Lender shall, on the
requested date, issue a Letter of Credit on behalf of the Borrower in accordance
with Lender’s usual and customary business practices and, in this connection,
Lender may, assume that the applicable conditions set forth in Section 5.2
hereof have been satisfied unless Lender has knowledge that the applicable
conditions have not been met.

                    (B)     Lender shall not extend or amend any Letter of
Credit unless the requirements of this Section 3.5 are met as though a new
Letter of Credit was being requested and issued.

                    3.6     Reimbursement Obligation. The Borrower agrees
unconditionally, irrevocably and absolutely to pay immediately to the Lender,
the amount of each advance drawn under or pursuant to a Letter of Credit or an
L/C Draft related thereto (such obligation of the Borrower to reimburse the
Lender for an advance made under a Letter of Credit or L/C Draft being
hereinafter referred to as a “Reimbursement Obligation” with respect to such
Letter of Credit or L/C Draft), each such reimbursement to be made by the
Borrower no later than the Business Day on which the Lender makes payment of
each such L/C Draft or, if the Borrower shall have received notice of a
Reimbursement Obligation later than 11:00 a.m. (Chicago time), on any Business
Day or on a day which is not a Business Day, no later than 11:00 a.m. (Chicago
time), on the immediately following Business Day or, in the case of any other
draw on a Letter of Credit, the date specified in the demand of Lender. If the
Borrower at any time fails to repay a Reimbursement Obligation pursuant to this
Section 3.7, the Borrower shall be deemed to have elected to borrow a Revolving
Loan from the Lender, as of the date of the advance giving rise to the
Reimbursement Obligation, equal in amount to the Dollar Amount of the unpaid
Reimbursement Obligation. Such Revolving Loan shall be made as of the date of
the payment giving rise to such Reimbursement Obligation, automatically, without
notice and without any requirement to satisfy the conditions precedent otherwise
applicable to an Advance of Revolving Loans. Such Revolving Loans shall
constitute a Floating Rate Advance, the proceeds of which Advance shall be used
to repay such Reimbursement Obligation. If, for any reason, the Borrower fails
to repay a Reimbursement Obligation on the day such

39

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 40

Reimbursement Obligation arises and, for any reason, the Lender is unable to
make or has no obligation to make Revolving Loan, then such Reimbursement
Obligation shall bear interest from and after such day, until paid in full, at
the interest rate applicable to a Floating Rate Advance plus two percent (2.0%)
per annum.

                    3.7     Letter of Credit Fees. The Borrower agrees to pay:

                    (A)     quarterly, in arrears, to the Lender a letter of
credit fee at a rate per annum equal to the Applicable Eurodollar Margin in
effect on the average daily outstanding Dollar Amount available for drawing
under each standby Letter of Credit;

                    (B)     quarterly, in arrears, to the Lender, a letter of
credit fronting fee equal to 0.125% per annum on the average daily outstanding
face amount available for drawing under each standby Letter of Credit issued by
Lender; and

                    (C)     to the Lender, all customary fees and other
issuance, amendment. cancellation, document examination, negotiation, transfer
and presentment expenses and related charges in connection with the issuance,
amendment, cancellation, presentation of L/C Drafts, negotiation, transfer and
the like customarily charged by such Lender with respect to standby Letters of
Credit, payable at the time of invoice of such amounts.

                    3.8     Indemnification; Exoneration.

                    (A)     In addition to amounts payable as elsewhere provided
in this Article III, the Borrower hereby agrees to protect, indemnify, pay and
save harmless the Lender from and against any and all liabilities and costs
which the Lender may incur or be subject to as a consequence, direct or
indirect, of (i) the issuance of any Letter of Credit other than to the extent
resulting from its gross negligence or willful misconduct, as determined by the
final judgment of a court of competent jurisdiction, or (ii) the failure of the
Lender to honor a drawing under a Letter of Credit as a result of any act or
omission, whether rightful or wrongful, of any present or future de jure or de
facto Governmental Authority (all such acts or omissions herein called
“Governmental Acts”).

                    (B)     As among the Borrower and the Lender, the Borrower
assumes all risks of the acts and omissions of, or misuse of such Letter of
Credit by, the beneficiary of any Letter of Credit. In furtherance and not in
limitation of the foregoing, subject to the provisions of the Letter of Credit
applications and Letter of Credit reimbursement agreements executed by the
Borrower at the time of request for any Letter of Credit, the Lender shall not
be responsible (in the absence of gross negligence or willful misconduct in
connection therewith, as determined by the final judgment of a court of
competent jurisdiction): (i) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in connection
with the application for and issuance of a Letter of Credit, even if it should
in fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (ii) for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign a Letter of Credit
or the rights or benefits thereunder or proceeds thereof, in whole or in part,
which may prove to be invalid or ineffective for any reason; (iii) for failure
of the beneficiary of a Letter of

40

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 41

Credit to comply duly with conditions required in order to draw upon such Letter
of Credit; (iv) for errors, omissions, interruptions or delays in transmission
or delivery of any messages, by mail, cable, telegraph, telex, or other similar
form of teletransmission or otherwise; (v) for errors in interpretation of
technical trade terms; (vi) for any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any Letter
of Credit or of the proceeds thereof; (vii) for the misapplication by the
beneficiary of a Letter of Credit of the proceeds of any drawing under such
Letter of Credit; and (viii) for any consequences arising from causes beyond the
control of the Lender, including, without limitation, any Governmental Acts.
None of the above shall affect, impair, or prevent the vesting of any Lender’s
rights or powers under this Section 3.9.

                    (C)     In furtherance and extension and not in limitation
of the specific provisions hereinabove set forth, any action taken or omitted by
Lender under or in connection with the Letters of Credit or any related
certificates shall not, in the absence of gross negligence or willful
misconduct, as determined by the final judgment of a court of competent
jurisdiction, put the Lender under any resulting liability to the Borrower or
relieve the Borrower of any of its obligations hereunder to any such Person.

                    (D)     Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 3.9 shall survive the payment in full of
principal and interest hereunder, the termination of the Letters of Credit and
the termination of this Agreement.

                    (E)     Cash Collateral. Notwithstanding anything to the
contrary herein or in any application for a Letter of Credit, following the
occurrence and during the continuance of a Default or upon payout or termination
of this Agreement in full in cash, the Borrower shall, on the Business Day that
it receives Lender’s demand, deliver to the Lender, cash, or other collateral of
a type satisfactory to the Lender, having a value, as determined by Lender,
equal to one hundred five percent (105%) of the aggregate Dollar Amount of the
outstanding L/C Obligations. Any such collateral shall be held by the Lender in
a separate account appropriately designated as a cash collateral account in
relation to this Agreement and the Letters of Credit and retained by the Lender
as collateral security for the Borrower’s obligations in respect of this
Agreement and each of the Letters of Credit. Such amounts shall be applied to
reimburse the Lender for drawings or payments under or pursuant to Letters of
Credit, or if no such reimbursement is required, to payment of such of the other
Obligations as the Lender shall determine. Amounts remaining in any cash
collateral account established pursuant to this Section 3.9 which are not to be
applied to reimburse Lender for amounts actually paid or to be paid by Lender in
respect of a Letter of Credit. shall be returned to the Borrower within one (1)
Business Day (after deduction of the Lender’s expenses incurred in connection
with such cash collateral account).

     ARTICLE IV: CHANGE IN CIRCUMSTANCES

                    4.1     Yield Protection. If any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law) adopted after the date the Lender became a party to
this Agreement and having general applicability to all banks within the
jurisdiction in which Lender operates (excluding, for the avoidance of

41

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 42

doubt, the effect of and phasing in of capital requirements or other regulations
or guidelines passed prior to the date of this Agreement), or any interpretation
or application thereof by any Governmental Authority charged with the
interpretation or application thereof, or the compliance of any Lender
therewith,

 

 

 

          (A)     subjects Lender or any applicable Lending Installation to any
tax, duty, charge or withholding on or from payments due from the Borrower
(excluding taxation of the overall net income of Lender or taxation of a similar
basis, which are governed by Section 2.13(E), and excluding any other taxes for
which Lender has been reimbursed by the Borrower), or changes the basis of
taxation of payments to Lender in respect of its Revolving Loan Commitment,
Loans, the Letters of Credit or other amounts due it hereunder, or

 

 

 

          (B)     imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement against
assets of, deposits with or for the account of, or credit extended by, Lender or
any applicable Lending Installation (other than reserves and assessments taken
into account in determining the interest rate applicable to Eurodollar Rate
Loans) with respect to its Revolving Loan Commitment, the Loans, or the Letters
of Credit, or

 

 

 

          (C)     imposes any other condition the result of which is to increase
the cost to Lender or any applicable Lending Installation of making, funding or
maintaining its Revolving Loan Commitment, the Loans, or the Letters of Credit
or reduces any amount receivable by Lender or any applicable Lending
Installation in connection with Loans or Letters of Credit, or requires Lender
or any applicable Lending Installation to make any payment calculated by
reference to the amount of its Revolving Loan Commitment, the Loans or the L/C
Interests held or interest received by it or by reference to the Letters of
Credit, by an amount deemed material by Lender;

and the result of any of the foregoing is to increase the cost to Lender of
making, renewing or maintaining its Revolving Loan Commitment, Loans, L/C
Interests, or Letters of Credit or to reduce any amount received under this
Agreement, then, within fifteen (15) days after receipt by the Borrower of
written demand by Lender pursuant to Section 4.5, the Borrower shall pay Lender
that portion of such increased expense incurred or reduction in an amount
received which such Lender determines is attributable to making, funding and
maintaining its Loans, L/C Interests, Letters of Credit, and its Revolving Loan
Commitment; provided, however, that the Borrower shall not be required to pay
any additional amounts pursuant to this Section 4.1 incurred more than 90 days
prior to the date of the relevant Lender’s demand therefor.

                    4.2     Changes in Capital Adequacy Regulations. If Lender
determines (i) the amount of capital required to be maintained by Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a “Change” (as defined below), and (ii) such
increase in capital will result in an increase in the cost to Lender of
maintaining its Revolving Loan Commitment, the Loans, L/C Interests, the Letters
of Credit or its obligation to make Loans hereunder, then, within fifteen (15)
days after receipt by the Borrower of written demand by Lender pursuant to
Section 4.5, the Borrower shall pay Lender

42

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 43

the amount necessary to compensate for any shortfall in the rate of return on
the portion of such increased capital which Lender determines is attributable to
this Agreement, its Loans, its L/C Interests, the Letters of Credit or its
obligation to make Loans hereunder (after taking into account such Lender’s
policies as to capital adequacy); provided, however, that the Borrower shall not
be required to pay any additional amounts pursuant to this Section 4.2 incurred
more than 90 days prior to the date of Lender’s demand therefor. “Change” means
(i) any change after the date the Lender became a party to this Agreement in the
“Risk-Based Capital Guidelines” (as defined below) excluding, for the avoidance
of doubt, the effect of any phasing in of such Risk-Based Capital Guidelines or
any other capital requirements passed prior to the date hereof, or (ii) any
adoption of or change in any other law, governmental or quasi- governmental
rule, regulation, policy, guideline, interpretation, or directive (whether or
not having the force of law) after the date the Lender became a party to this
Agreement and having general applicability to all banks and financial
institutions within the jurisdiction in which Lender operates which affects the
amount of capital required or expected to be maintained by Lender or any Lending
Installation or any corporation controlling any Lender. “Risk- Based Capital
Guidelines” means (i) the risk-based capital guidelines in effect in the United
States on the date the Lender became a party to this Agreement, including
transition rules, and (ii) the corresponding capital regulations promulgated by
regulatory authorities outside the United States implementing the July 1988
report of the Basle Committee on Banking Regulation and Supervisory Practices
Entitled “International Convergence of Capital Measurements and Capital
Standards,” including transition rules, and any amendments to such regulations
adopted prior to the date the Lender became a party to this Agreement.

                    4.3     Availability of Types of Advances. If (i) Lender
determines, in the exercise of its business judgment, that maintenance of its
Fixed-Rate Rate Loans at a suitable Lending Installation would violate any
applicable law, rule, regulation or directive, whether or not having the force
of law, or (ii) the Lender determines that (x) deposits of a type, currency or
maturity appropriate to match fund Fixed-Rate Loans are not available or (y) the
interest rate applicable to Fixed-Rate Loans does not accurately reflect the
cost of making or maintaining such an Advance, then the Lender shall suspend the
availability of the affected Type of Advance and, in the case of any occurrence
set forth in clause (i), require any Advances of the affected Type to be repaid
or converted into another Type.

                    4.4     Funding Indemnification. Subject to Section 2.3(B),
if any payment of a Fixed-Rate Loan occurs on a date which is not the last day
of the applicable Interest Period, whether because of acceleration, prepayment,
or otherwise, or a Fixed-Rate Loan is not made on the date specified by the
Borrower for any reason other than default by the Lender, the Borrower shall
indemnify Lender for any loss or cost incurred by it resulting therefrom,
including, without limitation, any loss or cost in liquidating or employing
deposits acquired to fund or maintain the Fixed-Rate Loan.

                    4.5     Lender Statements; Survival of Indemnity. If
reasonably possible, Lender shall designate an alternate Lending Installation
with respect to its Fixed-Rate Loans to reduce any liability of the Borrower to
Lender under Section 2.14(E) or Sections 4.1 and 4.2 or to avoid the
unavailability of a Type of Advance under Section 4.3, so long as such
designation is not

43

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 44

materially disadvantageous, in the judgment of the Lender, to such Lender. Any
demand for compensation pursuant to Section 2.14(E) or this Article IV shall be
in writing and shall state the amount due, if any, under Section 2.14(E), 4.1,
4.2, or 4.4 and shall set forth in reasonable detail the calculations upon which
Lender determined such amount and shall be final, conclusive, and binding on the
Borrower in the absence of manifest error. Determination of amounts payable
under such Sections in connection with a Fixed-Rate Loan shall be calculated as
though Lender funded its Fixed-Rate Loan through the purchase of a deposit of
the type, currency and maturity corresponding to the deposit used as a reference
in determining the Eurodollar Rate applicable to such Loan, whether in fact that
is the case or not. The obligations of the Borrower under Sections 2.14(E), 4.1,
4.2, or 4.4 shall survive payment of the Obligations and termination of this
Agreement.

     ARTICLE V: CONDITIONS PRECEDENT

                    5.1     Initial Advances and Letters of Credit. The Lender
shall not be required to make the Loans as of the Closing Date or issue any
Letters of Credit unless the Borrower has furnished to the Lender each of the
following, all in form and substance satisfactory to the Lender:

 

 

 

                    (1)     The Amended and Restated Credit Agreement, duly
executed by Borrower, each Subsidiary Guarantor and Lender;

 

 

 

                    (2)     Revolving Loan Note, payable to Lender’s order in
the amount of the Revolving Loan Commitment;

 

 

 

                    (3)     Secretary’s Certificate of Borrower, in the form of
Exhibit E-2, together with (i) copies of the Certificate of Incorporation (or
other comparable constituent document) of Borrower, together with all
amendments, (ii) a certificate of good standing, both certified by the
appropriate governmental officer in its jurisdiction of organization, (iii)
copies, certified by the Secretary of Borrower, of its By-Laws (or other
comparable governing document) and of its Board of Directors’ resolutions (and
resolutions of other bodies, if any are deemed necessary by counsel for Lender)
authorizing the execution of the Loan Documents and (iv) an incumbency
certificate, executed by the Secretary, which shall identify by name and title
and bear the signature of the officers of the Borrower authorized to sign the
Loan Documents and to make borrowings hereunder, upon which certificate the
Lender shall be entitled to rely until informed of any change in writing by the
Borrower;

 

 

 

                    (4)     Secretary’s Certificate of each Subsidiary
Guarantor, in the form of Exhibit E-3, together with (i) copies of the
Certificate of Incorporation (or other comparable constituent document) of each
Subsidiary Guarantor, together with all amendments, (ii) a certificate of good
standing, both certified by the appropriate governmental officer in its
jurisdiction of organization, (iii) copies, certified by the Secretary of each
Subsidiary Guarantor, of its By-Laws (or other comparable governing document)
and of its Board of Directors’ resolutions

44

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 45

 

 

 

(and resolutions of other bodies, if any are deemed necessary by counsel for
Lender) authorizing the execution of the Loan Documents and (iv) an incumbency
certificate, executed by the Secretary, which shall identify by name and title
and bear the signature of the officers of such Subsidiary Guarantor authorized
to sign the Loan Documents and to make borrowings hereunder, upon which
certificate the Lenders shall be entitled to rely until informed of any change
in writing by such Subsidiary Guarantor;

 

 

 

                    (5)     An Officer’s Certificate of Borrower, in the form of
Exhibit H attached hereto, confirming the fact that the Subordination Agreement
executed by U.S. Traffic Corporation and Myers/Nuart Electrical Products, Inc.,
in favor of the Administrative Agent for the benefit of the Existing Lenders;
has not been amended, revised or terminated.

 

 

 

                    (6)     Reaffirmation of Subsidiary Guaranty evidenced by
Section 7.2(L) of this Agreement executed by each Significant Domestic
Incorporated Subsidiary, any Subsidiary designated as a Subsidiary Guarantor by
Borrower and the Lender including, without limitation, Spin-Cast Plastics, Inc.;

 

 

 

                    (7)     An Officer’s Certificate, in the form of Exhibit
E-1, signed by the chief financial officer of the Borrower, stating that on the
date of this Agreement all the representations in this Agreement are true and
correct in all material respects (unless such representation and warranty is
made as of a specific date, in which case, such representation and warranty
shall be true in all material respects as of such date), and no material adverse
change, or Default or Unmatured Default has occurred and is continuing;

 

 

 

                    (8)     Documentation, in form and substance reasonably
satisfactory to the Lender, evidenced by an Assignment Agreement of each
Existing Lender, including the Administrative Agent, under the Existing Credit
Agreement assigning to Lender of all of their rights and obligations thereunder;

 

 

 

                    (9)     Resignation letter of The Northern Trust Company, as
Administrative Agent under the Existing Credit Agreement;

 

 

 

                    (10)   Evidence, satisfactory to the Lender, that the
Borrower has paid to the Lender, the fees payable pursuant to Section 2.13 and
3.7 hereof;

 

 

 

                    (11)   The written opinions of Joan Riley, Borrower’s
General Counsel and Holland and Knight LLP, as Borrower’s counsel, addressed to
the Lender in form and substance acceptable to the Lender and its counsel, with
respect to (without limitation) the due authorization, execution and
enforceability of this Agreement and the other Loan Documents by Borrower and
each Subsidiary Guarantor, as applicable;

45

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 46

 

 

 

                    (12)     Assignment and Assumption Agreement (California
Deed of Trust), in the form of Exhibit I attached hereto.

 

 

 

                    (13)     Assignment and Assumption Agreement (Pennsylvania
Mortgage), in the form of Exhibit J attached hereto.

 

 

 

                    (14)     Assignment and Assumption Agreement (Alabama
Mortgage), in the form of Exhibit K attached hereto.

 

 

 

                    (15)     Assignment and Assumption Agreement (Patent
Security Agreement), in the form of Exhibit O attached hereto.

 

 

 

                    (16)     Assignment and Assumption Agreement (Trademark
Security Agreement), in the form of Exhibit N attached hereto.

 

 

 

                    (17)     Indiana Mortgage in the form of Exhibit L, attached
hereto.

 

 

 

                    (18)     Assignment and Assumption Agreement (Security
Agreement), in the form of Exhibit M attached hereto.

 

 

 

                    (19)     Assignment and Assumption Agreement for each of the
Subsidiary Stock Pledge Agreements, in the form of Exhibits P-1, P-2, P-3, and
P-4.

 

 

 

                    (20)     Indiana Flood Zone Determinations. Flood Zone
determinations for the Indiana Property, in form and substance acceptable to the
Lender.

 

 

 

                    (21)     Title Insurance. With respect to the Indiana
Property, a mortgagee title insurance policy, current ALTA loan policy form,
without survey exception, mechanics’ lien exception or exception for parties in
possession, issued by a title insurance company satisfactory to the Lender (the
“Title Insurance Company”), in amounts with respect to the Indiana Property
acceptable to the Lender and naming the Lender as the insured and insuring the
Indiana Mortgage to be a valid first, prior and paramount lien upon the Indiana
Property subject only to the permitted exceptions described therein and to
customary exceptions for pending disbursements and completion of improvements
(“Title Insurance Policy”). The Title Insurance Policy must specifically ensure
for claims and questions related to such matters as Lender may require to the
extent available in the State.

 

 

 

                    (22)     Searches. A report from the Title Insurance Company
or the appropriate filing officers of the state and county in which the Indiana
Property is located, indicating that no judgments, tax or other liens, security

46

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 47

 

 

 

interests, leases of personalty, financing statements or other encumbrances
(other than permitted exceptions and liens and security interests in favor of
Lender are of record or on file encumbering any portion of the Indiana Property,
and reports from the appropriate filing offices of the State in which the
Borrower or Subsidiary Guarantor resides, that there are no judgments, tax
liens, pending litigation or bankruptcy actions outstanding with respect to
Borrower or any Subsidiary Guarantor.

 

 

 

                    (23)     Appraisal. With respect to the Indiana Property an
appraisal of such Property, satisfactory to the Lender as to the methodology and
as to results.

 

 

 

                    (24)     Environmental Audit. An environmental audit report
relating to the Indiana Property satisfactory to the Lender as to the
methodology and results.

 

 

 

                    (25)     Reaffirmation and Amendment of California Deed of
Trust, in the form of Exhibit R attached hereto.

 

 

 

                    (26)     Reaffirmation and Amendment of Pennsylvania
Mortgage, in the form of Exhibit S attached hereto.

 

 

 

                    (27)     Reaffirmation and Amendment of Leasehold Mortgage,
in the form of Exhibit T attached hereto.

 

 

 

                    (28)     Reaffirmation and Amendment of Security Agreement,
in the form of Exhibit U attached hereto.

 

 

 

                    (29)     Reaffirmation and Amendment of Trademark Security
Agreement, in the from of Exhibit V attached hereto.

 

 

 

                    (30)     Reaffirmation and Amendment of Patent Security
Agreement, in the from of Exhibit W attached hereto.

 

 

 

                    (31)     Reaffirmation and Amendment of each Subsidiary
Stock Pledge Agreement, in the forms of ExhibitsX-1, X-2. X-3 and X-4 attached
hereto.

 

 

 

                    (32)     Reaffirmation and Amendment of Subsidiary Guaranty
in the form of Exhibit Z-1 attached hereto.

 

 

 

                    (33)     Such other documents as the Lender or any Lender or
its counsel may have reasonably requested, including, without limitation, each
other document reflected on the List of Closing Documents attached as Exhibit D
to this Agreement.

47

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 48

 

 

 

                    (34)     As a condition subsequent, within ninety (90) days
of the date of this Agreement, Collateral Assignment (Lease), in the form of
Exhibit Y attached hereto.

                    5.2     Each Advance and Letter of Credit. The Lender shall
not be required to make any Advance, or issue any Letter of Credit, unless on
the applicable Borrowing Date, or in the case of a Letter of Credit, the date on
which the Letter of Credit is to be issued:

                    (A)     There exists no Default or Unmatured Default;

                    (B)     The representations and warranties contained in
Article VI are true and correct in all material respects as of such Borrowing
Date (unless such representation and warranty is made as of a specific date, in
which case, such representation and warranty shall be true in all material
respects as of such date); and

                    (C)     The Revolving Credit Obligations do not, and after
making such proposed Advance or issuing such Letter of Credit would not, exceed
the Revolving Loan Commitment.

          Each Borrowing/Election Notice with respect to each such Advance and
Loan and the letter of credit application with respect to each Letter of Credit
shall constitute a representation and warranty by the Borrower that the
conditions contained in Sections 5.2(A), (B) and (C) have been satisfied.

     ARTICLE VI: REPRESENTATIONS AND WARRANTIES

                    In order to induce the Lender to enter into this Agreement
and to make the Loans and the other financial accommodations to the Borrower and
to issue the Letters of Credit described herein, the Borrower represents and
warrants as follows to Lender as of the Closing Date, giving effect to the
consummation of the transactions contemplated by the Loan Documents on the
Closing Date, and thereafter on each date as required by Section 5.2:

                    6.1     Organization; Corporate Powers. The Borrower (i) is
a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, (ii) is duly qualified to do
business as a foreign entity and is in good standing under the laws of each
jurisdiction in which failure to be so qualified and in good standing would
reasonably be expected to have a Material Adverse Effect, and (iii) has all
requisite power and authority to own, operate and encumber its property and to
conduct its business as presently conducted and as proposed to be conducted.

                    6.2     Authority; Enforceability.

                    (A)     Each of the Borrower and its Subsidiaries has the
requisite power and authority to execute, deliver and perform each of the Loan
Documents which have been executed by it as required by this Agreement and the
other Loan Documents.

48

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 49

                    (B)     The execution, delivery, and performance, of each of
the Loan Documents which have been executed as required by this Agreement, the
other Loan Documents or otherwise to which the Borrower or any of its
Subsidiaries is party, and the consummation of the transactions contemplated
thereby, have been duly authorized by all requisite corporate, acts (including
any required shareholder approval) of the Borrower or such Subsidiary, as
applicable.

                    (C)     Each of the Loan Documents to which the Borrower is
a party has been duly executed and delivered by it and constitutes its legal,
valid and binding obligation, enforceable against it in accordance with its
terms (except as enforceability may be limited by bankruptcy, insolvency, or
similar laws affecting the enforcement of creditors’ rights generally and
general equitable principles).

                    6.3     No Conflict; Governmental Consents. The execution,
delivery and performance of each of the Loan Documents to which the Borrower is
a party do not and will not (i) conflict with the certificate or articles of
incorporation (or other applicable constituent documents) of the Borrower,
(ii) conflict with, result in a breach of or constitute (with or without notice
or lapse of time or both) a default under any Requirement of Law (including,
without limitation, any Environmental Property Transfer Act) or Contractual
Obligation of the Borrower, or require termination of any Contractual
Obligation, except such breach, default or termination which individually or in
the aggregate could not reasonably be expected to have a Material Adverse
Effect, or (iii) result in or require the creation or imposition of any Lien
whatsoever upon any of the property or assets of the Borrower, other than Liens
permitted or created by the Loan Documents. Except as set forth on Schedule 6.3
to this Agreement, the execution, delivery and performance of each of the Loan
Documents to which the Borrower is a party do not and will not require any
registration with, consent or approval of or notice to, or other action to, with
or by any Governmental Authority, including under any Environmental Property
Transfer Act, except filings, consents or notices which have been made, obtained
or given, or which, if not made, obtained or given, individually or in the
aggregate could not reasonably be expected to have a Material Adverse Effect.

                    6.4     Financial Statements. The consolidated financial
statements of the Borrower and its Subsidiaries at and for the year ended June
30, 2004 and quarterly and monthly statements through February 28, 2005 have
been delivered to the Lender and were prepared in accordance with generally
accepted accounting principles in effect on the date such statements were
prepared and fairly present the consolidated financial condition and operation
of the Borrower and its Subsidiaries at June 30, 2004 or for the applicable date
or period and the consolidated results of their operations for the period then
ended.

                    6.5     No Material Adverse Change. Since June 30, 2004,
except as disclosed (x) in any of the Borrower’s Form 10-Q, 10-K, or 8-K filings
with the Commission subsequent to June 30, 2004 but prior to the Closing Date,
or (y) in any letter or confidential offering memorandum delivered by the
Borrower to the Lender prior to the Closing Date, there has occurred no change
in the business, properties, financial condition, performance, or results of
operations of the Borrower, or the Borrower and its Subsidiaries taken as a
whole, or any other event which has had or would reasonably be expected to have
a Material Adverse Effect.

49

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 50

                    6.6     Taxes. Each of the Borrower and its Subsidiaries has
filed or caused to be filed all federal, state and local tax returns which are
required to be filed by it and, except for taxes and assessments being contested
in good faith and reserved for in accordance with generally accepted accounting
principles as in effect from time to time (if and to the extent so required),
have paid or caused to be paid all taxes as shown on said returns on any
assessment received by it, to the extent that such taxes have become due. The
Borrower has no knowledge of any proposed tax assessment against the Borrower or
any of its Subsidiaries that will have or could reasonably be expected to have a
Material Adverse Effect.

                    6.7     Litigation; Loss Contingencies and Violations.
Except as disclosed on Schedule 6.7, there is no action, suit, proceeding,
arbitration or, to the Borrower’s knowledge, investigation before or by any
Governmental Authority or private arbitrator pending or, to the Borrower’s
knowledge, threatened in writing against the Borrower, any of its Subsidiaries
or any property of any of them which could reasonably be expected to have a
Material Adverse Effect.

                    6.8     Subsidiaries. Schedule 6.8 to this Agreement (as
updated from time to time by the Borrower after the formation, acquisition or
dissolution of any Subsidiary (i) contains a description of the corporate
structure of the Borrower, its Subsidiaries and any other Person in which the
Borrower or any of its Subsidiaries holds an Equity Interest; and
(ii) accurately sets forth (A) the correct legal name and the jurisdiction of
organization, (B) a listing of all of the Borrower’s or any Domestic
Incorporated Subsidiary’s Significant Domestic Incorporated Subsidiaries,
(C) the authorized, issued and outstanding shares of each class of Capital Stock
of each of the Borrower’s Subsidiaries and the owners of such shares, and (D) a
summary of the direct and indirect partnership, joint venture, or other Equity
Interests, if any, which the Borrower and each Subsidiary of the Borrower holds
in any Person that is not a corporation. Except as disclosed on Schedule 6.8,
none of the issued and outstanding Capital Stock of the Borrower or any of the
Borrower’s Subsidiaries is subject to any vesting, redemption, or repurchase
agreement, and there are no warrants or options outstanding with respect to such
Capital Stock. The outstanding Capital Stock of each of the Borrower’s
Subsidiaries is duly authorized, validly issued, fully paid and nonassessable
and is not Margin Stock.

                    6.9     ERISA. Except as disclosed on Schedule 6.9, no
Benefit Plan has incurred any material accumulated funding deficiency (as
defined in Sections 302(a)(2) of ERISA and 412(a) of the Code) whether or not
waived. Neither the Borrower nor any member of the Controlled Group has incurred
any material liability to the PBGC which remains outstanding other than the
payment of premiums. As of the last day of the most recent prior plan year, the
market value of assets under each Benefit Plan, other than any Multiemployer
Plan, was not by a material amount less than the present value of benefit
liabilities thereunder (determined in accordance with the actuarial valuation
assumptions described therein). Neither the Borrower nor any member of the
Controlled Group has (i) failed to make a required contribution or payment to a
Multiemployer Plan of a material amount or (ii) incurred a material complete or
partial withdrawal under Section 4203 or Section 4205 of ERISA from a
Multiemployer Plan. Neither the Borrower nor any member of the Controlled Group
has failed

50

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 51

to make an installment or any other payment of a material amount required under
Section 412 of the Code on or before the due date for such installment or other
payment. There have been no and there is no prohibited transaction described in
Sections 406 of ERISA or 4975 of the Code with respect to any Plan for which a
statutory or administrative exemption does not exist which could reasonably be
expected to subject the Borrower or any of is Subsidiaries to material
liability. Neither the Borrower nor any member of the Controlled Group has taken
or failed to take any action which would constitute or result in a Termination
Event, which action or inaction could reasonably be expected to subject the
Borrower or any of its Subsidiaries to material liability. Neither the Borrower
nor any member of the Controlled Group is subject to any material liability
under, or has any potential material liability under, Section 4063, 4064, 4069,
4204 or 4212(c) of ERISA. For purposes of this Section 6.9, “material” means any
amount, noncompliance or other basis for liability which could reasonably be
expected to subject the Borrower or any of its Subsidiaries to liability,
individually or in the aggregate with each other basis for liability under this
Section 6.9, in excess of $3,000,000.

                    6.10     Accuracy of Information. The information, exhibits
and reports furnished by the Borrower and any of its Subsidiaries, or by the
Borrower on behalf of any of its Subsidiaries, to the Lender in connection with
the negotiation of, or compliance with, the Loan Documents, the representations
and warranties of the Borrower and its Subsidiaries contained in the Loan
Documents, and all certificates and documents delivered to the Lender pursuant
to the terms thereof (excluding any forecasts and projections of financial
information and results submitted to Lender as works in process or as materials
not otherwise required to be submitted to the Commission), taken as a whole, do
not contain as of the date thereof any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
contained herein or therein, in light of the circumstances under which they were
made, not misleading in any material respect.

                    6.11     Securities Activities. Neither the Borrower nor any
of its Subsidiaries is engaged in the business of extending credit for the
purpose of purchasing or carrying Margin Stock.

                    6.12     Material Agreements.

                    (a)        Neither the Borrower nor any Subsidiary is a
party to or subject to any Contractual Obligation, which, as of such date,
individually or in the aggregate could reasonably be expected to have a Material
Adverse Effect.

                    (b)        No member of the senior management of either the
Borrower or any of its Subsidiaries has received written notice that (i) it is
in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any Contractual Obligation to
which it is a party, or (ii) any condition exists which, with the giving of
notice or the lapse of time or both, would constitute a default with respect to
any such Contractual Obligation, in each case, which default has, or if not
remedied within any applicable grace period could reasonably be likely to have,
a Material Adverse Effect.

51

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 52

                    6.13     Compliance with Laws. The Borrower and its
Subsidiaries are in compliance with all Requirements of Law applicable to them
and their respective businesses, in each case where the failure to so comply
individually or in the aggregate would reasonably be expected to have a Material
Adverse Effect.

                    6.14     Assets and Properties. Each of the Borrower and its
Subsidiaries has good and sufficient title to all of its material real and
personal properties owned by it or a valid leasehold interest in all of its
leased assets (except insofar as marketability may be limited by any laws or
regulations of any Governmental Authority affecting such assets), and all such
assets and property are free and clear of all Liens, except Liens permitted
under Section 7.3(C), and except for those defects in title and Liens that,
individually or in the aggregate, would not have a Material Adverse Effect.

                    6.15     Statutory Indebtedness Restrictions. Neither the
Borrower nor any of its Subsidiaries is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, or the Investment
Company Act of 1940, or any other foreign, federal or state statute or
regulation which limits its ability to incur indebtedness or its ability to
consummate the transactions contemplated hereby.

                    6.16     Labor Matters. To the knowledge of the Borrower, no
attempt to organize the employees of the Borrower or any of its Subsidiaries,
and no labor disputes, strikes or walkouts affecting the operations of the
Borrower or any of its Subsidiaries, is pending, or, to the Borrower’s or such
Subsidiaries’ knowledge, threatened, planned or contemplated which would
reasonably be expected to have a Material Adverse Effect.

                    6.17     Environmental Matters.

                    (A)       Except as disclosed on Schedule 6.17 to this
Agreement:

 

 

 

                      (i)     the operations of the Borrower and its
Subsidiaries comply in all material respects with Environmental, Health or
Safety Requirements of Law;

 

 

 

                     (ii)     the Borrower and its Subsidiaries have all
permits, licenses or other authorizations required under Environmental, Health
or Safety Requirements of Law and are in material compliance with such permits;

 

 

 

                      (iii)   neither the Borrower, any of its Subsidiaries nor
any of their respective present property or operations, or, to the Borrower’s or
any of its Subsidiaries’ knowledge, any of their respective past property or
operations, are subject to or the subject of, any investigation known to the
Borrower or any of its Subsidiaries, any judicial or administrative proceeding,
order, judgment, decree, settlement or other agreement respecting: (A) any
material violation of Environmental, Health or Safety Requirements of Law;
(B) any remedial action; or (C) any material claims or liabilities arising from
the Release or threatened Release of a Contaminant into the environment;

52

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 53

 

 

 

                    (iv)     there is not now, nor to the Borrower’s or any of
its Subsidiaries’ knowledge has there ever been, on or in the property of the
Borrower or any of its Subsidiaries any landfill, waste pile, underground
storage tanks, aboveground storage tanks, surface impoundment or hazardous waste
storage facility of any kind, any polychlorinated biphenyls (PCBs) used in
hydraulic oils, electric transformers or other equipment, or any asbestos
containing material; and

 

 

 

                    (v)     to the knowledge of the Borrower or any of its
Subsidiaries, neither the Borrower nor any of its Subsidiaries has any material
Contingent Obligation in connection with any Release or threatened Release of a
Contaminant into the environment.

                    (B)     For purposes of this Section 6.17 “material” means
any noncompliance or basis for liability which could reasonably be likely to
subject the Borrower or any of its Subsidiaries to liability, individually or in
the aggregate, in excess of $3,000,000.

                    6.18     Insurance. The Borrower maintains, and has caused
each Subsidiary to maintain, with financially sound and reputable insurance
companies, insurance on all of its property in such amounts, subject to
deductibles and self-insurance retentions, and covering such properties and
risks, as is consistent with sound and customary business practices for
companies in lines of business similar to the Borrower and its Subsidiaries.

                    6.19     Use of Proceeds. All proceeds of the Revolving Loan
shall be used for working capital refinancing of existing indebtedness and
general corporate purposes.

                    6.20     Solvency. The Borrower (i) is currently, and after
giving effect to the transactions contemplated by this Agreement, the Notes and
the other Loan Documents, will be able to pay its debts as they come due and
will not incur debts beyond its ability to pay such debts as they mature or come
due, (ii) has capital sufficient to carry on its business and any business in
which it intends or is about to engage, and (iii) owns property and assets
having a value (as a going concern) in excess of its liabilities and debts. No
transfer of property is being made and no Obligation is being incurred in
connection with the transactions contemplated by this Agreement with the intent
to hinder, delay or defraud either present or future creditors of the Borrower
or any Affiliates of the Borrower.

     ARTICLE VII: COVENANTS

                    The Borrower covenants and agrees that so long as any
Commitment is outstanding and thereafter until payment in full of all of the
Obligations (other than contingent indemnity obligations) and termination of all
Letters of Credit (or cash collateralization thereof in accordance with Section
3.11), unless the Lender shall otherwise give prior written consent:

                    7.1     Reporting. The Borrower shall:

                    (A)     Financial Reporting. Furnish to the Lender:

53

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 54

 

 

 

                    (i)     Quarterly Reports. As soon as practicable, and in
any event no later than the earlier to occur of (x) the fifty second (52nd) day
after the end of each of the first three fiscal quarters of each fiscal year of
the Borrower, and (y) the tenth (10th) day after the date on which any of the
following items are required to be delivered to the Commission, the consolidated
and consolidating balance sheet of the Borrower and its Subsidiaries as at the
end of such period and the related statement of consolidated and consolidating
earnings of the Borrower and its Subsidiaries for such fiscal quarter and the
related statements of consolidated earnings and consolidated cash flows of the
Borrower and its Subsidiaries for the period from the beginning of the then
current fiscal year to the end of such fiscal quarter, certified by the chief
financial officer of the Borrower on behalf of the Borrower as fairly presenting
in all material respects the consolidated financial position of the Borrower and
its Subsidiaries as at the dates indicated and the results of their operations
and cash flows for the periods indicated in accordance with generally accepted
accounting principles as in effect from time to time, subject to normal year-end
audit adjustments and the absence of footnotes. With respect to any fiscal
quarter, if all of the foregoing information is fairly, accurately and
completely set forth in the Borrower’s Form 10-Q filing with the Commission for
such fiscal quarter, the Borrower may deliver such Form 10-Q filing in lieu of a
separate report setting forth such information: provided, however, that the
Borrower must comply with the foregoing timing requirements for such delivery
whether constituting a Form 10-Q filing or another report and must deliver any
corresponding compliance certificates hereunder when due.

 

 

 

                    (ii)     Annual Reports. As soon as practicable, and in any
event no later than the earlier to occur of (x) the ninetieth (90th) day after
the end of each fiscal year of the Borrower, and (y) the tenth (10th) day after
the date on which any of the following items are required to be delivered to the
Commission, (a) the audited consolidated and unaudited consolidating balance
sheet of the Borrower and its Subsidiaries as at the end of such fiscal year and
the related statements of consolidated earnings, consolidated shareholders’
equity and consolidated cash flows of the Borrower and its Subsidiaries for such
fiscal year, and in comparative form the corresponding figures for the previous
fiscal year in form and substance sufficient to calculate the financial
covenants set forth in Section 7.4, and (b) an audit report on the items listed
in clause (a) hereof (with the exception of the unaudited consolidating balance
sheet) of independent certified public accountants of recognized national
standing, which audit report shall be unqualified and shall state that such
financial statements fairly present the consolidated financial position of the
Borrower and its Subsidiaries as at the dates indicated and the results of their
operations and cash flows for the periods indicated in conformity with generally
accepted accounting principles as in effect from time to time and that the
examination by such accountants in connection with such consolidated financial
statements has been made in accordance with generally accepted auditing
standards. The deliveries made pursuant to this clause (ii) shall be accompanied
by a certificate of such accountants that, in the course of their examination
necessary for their certification of the foregoing, they have obtained no
knowledge of any Default or Unmatured Default under Section 7.4, or if, in the
opinion of such accountants, any Default or Unmatured Default shall exist under
Section 7.4, stating the nature and status thereof. With respect to any fiscal
year, if all of

54

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 55

 

 

 

the foregoing information is fairly, accurately and completely set forth in the
Borrower’s Form 10-K filing with the Commission for such fiscal year, the
Borrower may deliver such Form 10-K filing in lieu of a separate report setting
forth such information, together with the accountant’s certificate described in
the prior sentence (which is not part of the Form 10-K); provided, however, that
the Borrower must comply with the timing requirements for such delivery whether
constituting a Form 10-K filing or another report and must deliver any
corresponding compliance certificates hereunder when due.

 

 

 

                    (iii)     Monthly Reports. As soon as practicable, and in
any event, no later than the 30 calendar days after the end of each month, the
consolidated and consolidating financial statement of Borrower and its
Subsidiaries at the end of such period, including balance sheet, statement of
income and such other information (including non-financial information) as the
Lender may request, in reasonable detail, prepared by the Borrower.

 

 

 

                    (iv)     Officer’s Certificate. Together with each delivery
of any financial statement (a) pursuant to clauses (i) and (ii) of this Section
7.1(A), an Officer’s Certificate of the Borrower, substantially in the form of
Exhibit E-1 attached hereto and made a part hereof, stating that (x) the
representations and warranties of the Borrower contained in Article VI hereof
shall have been true and correct in all material respects (unless such
representation or warranty is made as of a specific date, in which case, such
representation and warranty shall be true in all material respects as of such
date) at all times during the period covered by such financial statements and as
of the date of such Officer’s Certificate, (y) as of the date of such Officer’s
Certificate no Default or Unmatured Default exists, or if any Default or
Unmatured Default exists, stating the nature and status thereof and (z) the
Borrower, the Borrower’s chief executive officer, and the Borrower’s chief
financial officer are in compliance with all requirements of Section 302 and
Section 906 of the Sarbanes-Oxley Act of 2002 and all rules and regulations
related thereto (or such other officers as may be required from time to time
thereunder), and (b) pursuant to clauses (i) and (ii) of this Section 7.1(A), a
compliance certificate, substantially in the form of, prior to the Collateral
Release Date Exhibit F-1 or Exhibit F-2, as applicable, attached hereto and made
a part hereof, signed by the Borrower’s chief financial officer, (1)
demonstrating compliance, when applicable, with the provisions of Sections
7.3(A) through (N) and Section 7.4, and (2) calculating the Senior Leverage
Ratio for purposes of determining the then Applicable Eurodollar Margin, the
Applicable ABR Margin, the Applicable L/C Fee Percentage and Applicable
Commitment Fee Percentage.

 

 

 

                    (v)     Borrowing Base Certificate. The Borrower shall,
within thirty (30) days after the end of each month, until the Collateral
Release Date, deliver to the Lender a Borrowing Base Certificate in the form of
Exhibit Q, attached hereto certified as accurate by the Borrower and acceptable
to the Lender in its sole and absolute discretion; provided that this
requirement shall expire upon Lender’s acceptance of Borrower’s Certificate of
Compliance with the Release Covenants delivered in accordance with Section
7.1(J).

55

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 56

 

 

 

                    (vi)       Aged Accounts Schedule. The Borrower shall,
within thirty(30) days after the end of each month, deliver to the Lender an
aged schedule of the Accounts of the Borrower, listing the name and amount due
from each Account Debtor and showing the aggregate amounts due from (a) 0-30
days, (b) 31-60 days, (c) 61-90 days and (d) more than 90 days, and certified as
accurate by the Borrower.

 

 

 

                    (vii)     Inventory Reports. The Borrower shall, within
thirty (30) days after the end of each month, deliver to the Lender an inventory
report, certified as accurate by the borrower, and within such time as the Bank
may specify, such other schedules and reports as the Bank may require.

 

 

 

                    (viii)     Covenant Compliance Report. Subject to the
requirements of Section 7.1(iii), the Borrower shall, within forty-five (45)
days after the end of each quarter and seventy-five (75) days after each fiscal
yearend, deliver to the Lender a computation in such detail as the Bank shall
specify, showing compliance by the Borrower with the financial covenants set
forth in Section 7.4, and certified as accurate by the Borrower, which report
shall be in the form of with Exhibit F-1 or Exhibit F-2, as applicable.

 

 

 

                    (ix)       Budget. No later than August 31 of each fiscal
year (or earlier if possible), a budget in the form satisfactory to the Lender
(including budgeted statements of income and sources and uses of cash) prepared
by the Borrower for that fiscal year, commencing as of July 1 of that year,
prepared in summary form, in each case, on a consolidated basis, for the
Borrower and its Subsidiaries.

 

 

 

                    (x)        Field Audits. The Borrower and its Subsidiaries
shall allow the Lender, at Borrower’s sole expense, once each year, or upon the
occurrence of an Event of Default, at any time to conduct a field examination,
and also to engage appraisers, on as frequent a basis, to conduct an appraisal
of the Collateral consisting of machinery, equipment and real property and
Borrower’s and its Subsidiaries’ business operations at such locations as Lender
deems appropriate, the result of which must be satisfactory to the Lender in its
sole and absolute discretion.

                    (B)     Notice of Default. Promptly upon any of the chief
executive officer, chief financial officer, or treasurer of the Borrower
obtaining knowledge (i) of any condition or event which constitutes a Default or
Unmatured Default, or becoming aware that Lender has given any written notice to
any Authorized Officer with respect to a claimed Default or Unmatured Default
under this Agreement, or (ii) that any Person has given any written notice to
any Authorized Officer of the Borrower or any Subsidiary of the Borrower or
taken any other action with respect to a claimed default or event or condition
of the type referred to in Section 8.1(E), the Borrower shall deliver to the
Lenders an Officer’s Certificate specifying (a) the nature and period of
existence of any such claimed default. Default, Unmatured Default, condition or
event, (b) the notice given or action taken by such Person in connection
therewith, and (c) what action the Borrower has taken, is taking and proposes to
take with respect thereto.

56

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 57

                    (C)     Lawsuits. (i) Promptly upon the Borrower’s chief
executive officer, chief financial officer, or treasurer obtaining knowledge of
the institution of, or written threat of, any action, suit, proceeding,
governmental investigation or arbitration, by or before any Governmental
Authority, against or affecting the Borrower or any of its Subsidiaries or any
property of the Borrower or any of its Subsidiaries not previously disclosed
pursuant to Section 6.7, which action, suit, proceeding, governmental
investigation or arbitration exposes, or in the case of multiple actions, suits,
proceedings, governmental investigations or arbitrations arising out of the same
general allegations or circumstances which expose, in the Borrower’s reasonable
judgment, the Borrower or any of its Subsidiaries to liability in an amount
aggregating $3,000,000 or more (exclusive of claims covered by insurance
policies of the Borrower or any of its Subsidiaries unless the insurers of such
claims have disclaimed coverage or reserved the right to disclaim coverage on
such claims and exclusive of claims covered by the indemnity of a financially
responsible indemnitor in favor of the Borrower or any of its Subsidiaries
unless the indemnitor has disclaimed or reserved the right to disclaim coverage
thereof), give written notice thereof to the Lender and in the case of any
litigation described in Section 8.1(E) a quarterly written status report of such
litigation, and provide such other information as may be reasonably available to
enable Lender to evaluate such matters; and (ii) in addition to the requirements
set forth in clause (i) of this Section 7.1(C), upon request of the Lender
(which request shall be made no more than once a quarter), promptly give written
notice of the status of any action, suit, proceeding, governmental investigation
or arbitration covered by a report delivered pursuant to clause (i) above and
provide such other information as may be reasonably available to it that would
not jeopardize any attorney-client privilege by disclosure to the Lender to
enable Lender and its counsel to evaluate such matters.

                    (D)     ERISA Notices. Deliver or cause to be delivered to
the Lender, at the Borrower’s expense, the following information and notices as
soon as reasonably possible, and in any event:

 

 

 

                    (i)     within ten (10) Business Days after any member of
the Controlled Group obtains knowledge that a Termination Event has occurred
which could reasonably be expected to subject the Borrower or its Subsidiaries
to liability individually or in the aggregate in excess of $3,000,000, a written
statement of the chief financial officer of the Borrower describing such
Termination Event and the action, if any, which the member of the Controlled
Group has taken, is taking or proposes to take with respect thereto, and when
known, any action taken or threatened by the IRS, DOL or PBGC with respect
thereto;

 

 

 

                    (ii)     within ten (10) Business Days after the filing of
any funding waiver request with the IRS, a copy of such funding waiver request
and thereafter all communications received by the Borrower or a member of the
Controlled Group with respect to such request within ten (10) Business Days such
communication is received;

 

 

 

                    (iii)     within ten (10) Business Days after the Borrower
or any member or the Controlled Group knows or has reason to know that (a) a
Multiemployer Plan has been terminated, (b) the administrator or plan sponsor of
a Multiemployer Plan intends to terminate a Multiemployer Plan, or (c) the PBGC
has instituted or will institute

57

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 58

 

 

 

proceedings under Section 4042 of ERISA to terminate a Multiemployer Plan, a
notice describing such matter; and

 

 

 

                    (iv)     within ten (10) Business Days after the Borrower or
any member of the Controlled Group fails to make a required installment or any
other required payment to a Benefit Plan which could result in the imposition of
a lien under Section 412(a) of the Code, a notice thereof.

For purposes of this Section 7.1 (D), the Borrower and any member of the
Controlled Group shall be deemed to know all facts known by the administrator of
any Plan of which the Borrower or any member of the Controlled Group is the plan
sponsor.

                    (E)     Labor Matters. Notify the Lender in writing,
promptly upon an Authorized Officer of the Borrower learning of (i) any material
labor dispute to which the Borrower or any of its Subsidiaries may become a
party, including, without limitation, any strikes, lockouts or other disputes
relating to such Persons’ plants and other facilities, which dispute would
reasonably be expected to have a Material Adverse Effect and (ii) any Worker
Adjustment and Retraining Notification Act liability incurred with respect to
the closing of any plant or other facility of the Borrower or any of its
Subsidiaries which would reasonably be expected to have a Material Adverse
Effect.

                    (F)     Other Indebtedness. Deliver to the Lender (i) a copy
of each regular report, notice or communication regarding potential or actual
defaults (including any accompanying officer’s certificate) delivered by or on
behalf of the Borrower to the holders of funded Indebtedness with an aggregate
outstanding principal amount in excess of $2,000,000 pursuant to the terms of
the agreements governing such Indebtedness, such delivery to be made at the same
time and by the same means as such notice of default is delivered to such
holders, and (ii) a copy of each notice or other communication received by the
Borrower from the holders of funded Indebtedness with an aggregate outstanding
principal amount in excess of $2,000,000 regarding potential or actual defaults
pursuant to the terms of such Indebtedness, such delivery to be made promptly
after such notice or other communication is received by the Borrower.

                    (G)     Other Reports. Deliver or cause to be delivered to
the Lender copies of (i) all financial statements, reports and notices, if any,
sent by the Borrower to its securities holders or filed with the Commission by
the Borrower, and (ii) all notifications received from the Commission by the
Borrower or its Subsidiaries pursuant to the Securities Exchange Act of 1934 and
the rules promulgated thereunder. The Borrower shall include the Lender on its
standard distribution lists for all press releases made available generally by
the Borrower to the public concerning material developments in the business of
the Borrower or any such Subsidiary.

                    (H)     Environmental Notices. As soon as possible and in
any event within twenty (20) days after receipt by the Borrower, deliver or
cause to be delivered a copy of (i) any notice or claim to the effect that the
Borrower or any of its Subsidiaries is or may be liable to any Person as a
result of the Release by the Borrower, any of its Subsidiaries, or any other
Person of any Contaminant into the environment, and (ii) any notice alleging any
violation of any Environmental, Health or Safety Requirements of Law by the
Borrower or any of its Subsidiaries

58

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 59

if, in either case, such notice or claim relates to an event which could
reasonably be expected to subject the Borrower and each of its Subsidiaries to
liability individually or in the aggregate in excess of $3,000,000.

                    (I)     Other Information. Promptly upon receiving a request
therefor from the Lender, prepare and deliver to Lender such other information
with respect to the Borrower, any of its Subsidiaries, as from time to time may
be reasonably requested by the Lender.

                    (J)     Notice of Satisfaction of and Compliance with
Release Covenants. If Borrower satisfies and is otherwise in compliance with the
Release Covenants, it shall furnish to Lender a compliance certificate in the
form of Exhibit F-1 or Exhibit F-2, as applicable, to the Credit Agreement
signed by the Borrower’s Chief Financial Officer demonstrating compliance with
the Release Covenants. The Lender shall promptly review such compliance
certificate for acceptability and notify Borrower of its acceptance or rejection
thereof, as applicable. In the event of Lender’s acceptance of such certificate,
Lender shall promptly deliver, at the request of Borrower, all documentation
reasonably necessary to release the security interest and liens of the
Collateral.

                    7.2      Affirmative Covenants.

                    (A)     Corporate Existence, Etc. Except as permitted
pursuant to Section 7.3(I), the Borrower shall, and shall cause each of its
Subsidiaries to, at all times maintain its valid existence and (to the extent
such concept applies to such entity) in good standing as a corporation,
partnership or limited liability company in its jurisdiction of incorporation or
organization, as the case may be, and preserve and keep, or cause to be
preserved and kept, in full force and effect its rights and franchises material
to its businesses, unless, in the good faith judgment of the Borrower, the
failure to preserve any such rights or franchises would not reasonably be
expected to have a Material Adverse Effect.

                    (B)     Corporate Powers; Conduct of Business. The Borrower
shall, and shall cause each of its Subsidiaries to, qualify and remain qualified
to do business in each jurisdiction in which the nature of its business requires
it to be so qualified and where the failure to be so qualified will have or
would reasonably be expected to have a Material Adverse Effect.

                    (C)     Compliance with Laws, Etc. The Borrower shall, and
shall cause its Subsidiaries to, (a) comply with all Requirements of Law
(including, without limitation, Section 302 and Section 906 of the
Sarbanes-Oxley Act of 2002) and all restrictive covenants affecting such Person
or the business, properties, assets or operations of such Person, and (b) obtain
as needed all permits necessary for its operations and maintain such permits in
good standing, unless failure to comply with such Requirements of Law or such
covenants or to obtain or maintain such permits would not reasonably be expected
to have a Material Adverse Effect.

                    (D)     Payment of Taxes and Claims; Tax Consolidation. The
Borrower shall pay, and cause each of its Subsidiaries to pay, (i) all material
taxes, assessments and other governmental charges imposed upon it or on any of
its properties or assets or in respect of any of its franchises, business,
income or property before any penalty accrues thereon, and (ii) all

59

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 60

claims (including, without limitation, claims for labor, services, materials and
supplies) for sums which have become due and payable and which by law have or
may become a Lien (other than a Lien permitted by Section 7.3(C)) upon any of
the Borrower’s or such Subsidiary’s property or assets, prior to the time when
any penalty or fine shall be incurred with respect thereto; provided, however,
that no such taxes, assessments and governmental charges referred to in clause
(i) above or claims referred to in clause (ii) above (and interest, penalties or
fines relating thereto) need be paid if (x) being contested in good faith by
appropriate proceedings diligently instituted and conducted and if such reserve
or other appropriate provision, if any, as shall be required in conformity with
generally accepted accounting principles as in effect from time to time shall
have been made therefor, or (y) the nonpayment of all such taxes, assessments
and other governmental charges would not reasonably be expected to have a
Material Adverse Effect.

                    (E)     Insurance. The Borrower shall maintain for itself
and its Subsidiaries, or shall cause each of its Subsidiaries to maintain in
full force and effect, such insurance policies and programs as reflect coverage
that is reasonably consistent with prudent industry practice for companies
operating in the same or similar locations.

                    (F)     Inspection of Property; Books and Records;
Discussions. The Borrower shall permit and cause each of the Borrower’s
Subsidiaries to permit, the Lender or any authorized representative(s)
designated by the Lender to visit and inspect any of the properties of the
Borrower or any of its Subsidiaries, to examine, audit, check and make copies of
their respective financial and accounting records, books, journals, orders,
receipts and any correspondence and other data relating to their respective
businesses or the transactions contemplated hereby (including, without
limitation, in connection with environmental compliance, hazard or liability),
and to discuss their affairs, finances and accounts with their officers, all
upon reasonable notice and at such reasonable times during normal business
hours, as often as may be reasonably requested. The Borrower shall keep and
maintain, in all material respects, proper books of record and account on a
consolidated basis in which entries in conformity with GAAP shall be made of all
dealings and transactions in relation to their respective businesses and
activities. The Borrower shall cause each of its Subsidiaries to keep and
maintain, in all material respects, proper books of record and account. If a
Default has occurred and is continuing, the Borrower, upon the Lender’s request,
shall provide copies of such records to the Lender or its representatives.

                    (G)     ERISA Compliance. The Borrower shall, and shall
cause each of its Subsidiaries to, maintain and operate all Plans to comply in
all material respects with the provisions of ERISA and shall operate all Plans
and Non-ERISA Commitments to comply in all material respects with the applicable
provisions of the Code, all other applicable laws, and the regulations and
interpretations thereunder and the respective requirements of the governing
documents for such Plans and Non-ERISA Commitments, unless the failure to
maintain, operate and comply with the foregoing, as applicable, would not
reasonably be expected to subject Borrower or its Subsidiaries to a liability in
excess of $3,000,000.

                    (H)     Maintenance of Property. The Borrower shall cause
all material property used in the conduct of its business or the business of any
Subsidiary to be maintained and kept in adequate condition, repair and working
order and supplied with all necessary equipment and

60

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 61

shall cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Borrower may
be necessary so that the business carried on in connection therewith may be
properly conducted at all times; provided, however, that nothing in this Section
7.2(H) shall prevent the Borrower from discontinuing the operation or
maintenance of any of such property if such discontinuance is, in the judgment
of the Borrower, desirable in the conduct of its business or the business of any
Subsidiary.

                    (I)     Environmental Compliance. The Borrower and its
Subsidiaries shall comply with all Environmental, Health or Safety Requirements
of Law, except where noncompliance will not have or is not reasonably likely to
subject the Borrower or any of its Subsidiaries to liability, individually or in
the aggregate, in excess of $3,000,000.

                    (J)     Use of Proceeds. The Borrower shall use the proceeds
of the Revolving Loans for the refinancing of existing debt and for working
capital and general corporate purposes of the Borrower and its Subsidiaries. The
Borrower will not, nor will it permit any Subsidiary to, use any of the proceeds
of the Loans to purchase or carry any Margin Stock.

                   (K)     Subsidiary Guarantees. The Borrower will, including
in connection with a Permitted Acquisition, (a) cause each Significant Domestic
Incorporated Subsidiary or Significant Foreign Incorporated Subsidiary to
execute the Subsidiary Guaranty (and from and after the Closing Date cause each
Significant Domestic Incorporated Subsidiary or Significant Foreign Incorporated
Subsidiary or any other Subsidiary designated a Subsidiary Guarantor by
Borrower, to execute and deliver to the Lender, as promptly as possible, but in
any event within sixty (60) days after becoming a Significant Domestic
Incorporated Subsidiary or Significant Foreign Incorporated Subsidiary of the
Borrower or being designated a Subsidiary Guarantor by Borrower, as applicable,
an executed Supplement to become a Subsidiary Guarantor under the Subsidiary
Guaranty in the form of Annex I to Exhibit Z attached hereto (whereupon such
Subsidiary shall become a “Subsidiary Guarantor” under this Agreement)), and (b)
deliver and cause each such Subsidiary to deliver corporate resolutions,
opinions of counsel, and such other corporate documentation as the Lender may
reasonably request, all in form and substance reasonably satisfactory to the
Lender; provided, however, that upon the Borrower’s written request of and
certification to the Lender that a Domestic Incorporated Subsidiary or
Significant Foreign Incorporated Subsidiary is no longer a Significant Domestic
Incorporated Subsidiary or Significant Foreign Incorporated Subsidiary or that a
designated Subsidiary Guarantor is no longer designated as a Subsidiary
Guarantor, the Lender shall release such Domestic Incorporated Subsidiary,
Significant Foreign Incorporated Subsidiary or designated Subsidiary from its
duties and obligations under the Subsidiary Guaranty; provided, further, that if
such Domestic Incorporated Subsidiary or Significant Foreign Incorporated
Subsidiary subsequently qualifies as a Significant Domestic Incorporated
Subsidiary or Significant Foreign Incorporated Subsidiary, it shall be required
to re-execute the Subsidiary Guaranty. Notwithstanding the above to the
contrary, with respect to a Significant Foreign Incorporated Subsidiary (or a
Subsidiary that is not a Domestic Incorporated Subsidiary but is designated as a
Subsidiary Guarantor), Borrower may deliver, in lieu of a Subsidiary Guaranty, a
pledge agreement, in form and substance acceptable to the Lender, pledging no
more than sixty-five percent (65%) of the voting stock of such Subsidiary to the
Lender.

61

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 62

                    (L)     Reaffirmation of Subsidiary Guaranty. Each of the
Guarantors including, without limitation, Spin-Cast Plastics, Inc. hereby
expressly (a) consents to the execution by the Borrower and the Lender of this
Agreement, (b) acknowledge that the “Guaranteed Obligations” (as defined in the
Subsidiary Guaranty) includes all of the obligations and liabilities owing from
the Borrower to the Lender under and pursuant to this Agreement, as amended from
time to time, including, but not limited to, the obligations of the Borrower to
Lender as evidenced by the Revolving Loan Notes, as modified, extended and/or
replaced from time to time, (c) reaffirms, assumes and binds itself in all
respects to all of the obligations, liabilities, duties, covenants, terms and
conditions that are contained in the Subsidiary Guaranty, (d) agrees that all
such obligations and liabilities under the Subsidiary Guaranty shall continue in
full force and effect and shall not be discharged, limited, impaired or affected
in any manner whatsoever, except as expressly provided in the Subsidiary
Guaranty, (e) represents and warrants that each of the representations and
warranties made by such Guarantor in any of the documents executed in connection
with the Loans remain true and correct as of the date hereof, in each case as
amended by the information provided in any report or notice delivered by the
Borrower to the Lender pursuant to Section 7.1 of the Credit Agreement, and (f)
represents and warrants that the organization documents, borrowing resolutions
and incumbency certificates of such Guarantor have not been changed or amended
since the most recent date that certified copies thereof were delivered to the
Lender. Spin-Cast Plastics, Inc. hereby agrees to become a party to and a
Subsidiary Guarantor under the Subsidiary Guaranty and a Debtor under the
Security Agreement and be bound by and obligated respectively as a Subsidiary
Guarantor and Debtor thereunder. This Reaffirmation and an Amendment to the
Subsidiary Guaranty shall be evidenced by the Reaffirmation and Amendment of
Subsidiary Guaranty in the form of Exhibit Z-1 attached hereto.

                     (M)     Pledge of Stock of Spin-Cast Plastics, Inc. Energy
Absorption Systems, Inc. agrees to pledge to the Lender the capital stock of
Spin-Cast Plastics, Inc., pursuant to the terms of the Subsidiary Stock Pledge
Agreement (Energy Absorption Systems, Inc.), as amended by the Reaffirmation and
Amendment thereof, dated as of the date hereof.

                    7.3      Negative Covenants.

                    (A)     Indebtedness. Neither the Borrower nor any of its
Subsidiaries shall directly or indirectly create, incur, assume or otherwise
become or remain directly or indirectly liable with respect to any Indebtedness,
except:

                              (i)       the Obligations;

                              (ii)      Permitted Existing Indebtedness and
Permitted Refinancing Indebtedness;

                              (iii)     Indebtedness in respect of obligations
secured by Customary Permitted Liens;

                              (iv)     Indebtedness constituting Contingent
Obligations permitted by Section 7.3(E);

62

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 63

 

 

 

                       (v)     Indebtedness arising from intercompany loans and
advances to any Subsidiary, other than to a Significant Domestic Incorporated
Subsidiary or to any Subsidiary which has executed and delivered to the Lender,
a Subsidiary Guaranty, in an aggregate principal amount not to exceed a Dollar
Amount equal to $3,000,000 at any time; provided, that such intercompany loans
and advances shall be subject to the subordination provisions of Section 10.14
of this Agreement and Section 6 of the Subsidiary Guaranty;

 

 

 

                     (vi)      Indebtedness in respect of Hedging Obligations
permitted under Section 7.3(M);

 

 

 

                     (vii)     Indebtedness with respect to surety, appeal and
performance bonds obtained by the Borrower or any of its Subsidiaries in the
ordinary course of business;

 

 

 

                     (viii)    Indebtedness consisting of the Subordinated Debt;
and

 

 

 

                    (ix)       secured or unsecured purchase money Indebtedness
(including Capitalized Leases) incurred by the Borrower or any of its
Subsidiaries to finance the acquisition of assets used in its business, if (1)
at the time of such incurrence no Default or Unmatured Default has occurred and
is continuing or would result from such incurrence, (2) such Indebtedness does
not exceed the lower of the fair market value or the cost of the applicable
assets on the date acquired, (3) such Indebtedness does not exceed $5,000,000 in
the aggregate outstanding at any time, and (4) any Lien securing such
Indebtedness is permitted under Section 7.3(C).

                    (B)     Sales of Assets. Neither the Borrower nor any of its
Subsidiaries shall consummate any Asset Sale, except:

 

 

 

                    (i)         transfers of assets between the Borrower and any
wholly-owned Subsidiary of the Borrower or between wholly-owned Subsidiaries of
the Borrower not otherwise prohibited by this Agreement;

 

 

 

                    (ii)        sales of inventory and licenses of intellectual
property, each in the ordinary course of business;

 

 

 

                    (iii)       the disposition in the ordinary course of
business of equipment that is obsolete, excess, or no longer used or useful in
the Borrower’s or any Subsidiary’s business;

 

 

 

                     (iv)       sales, assignments, transfers, leases,
conveyances or other dispositions of other assets if such transaction (a) is for
not less than fair market value (as determined in good faith by the Borrower’s
management or board of directors) and (b) when combined with all such other
transactions (each such transaction being valued at book value) during the then
current fiscal year, represents the disposition of assets with an aggregate book
value not greater than 10% of the aggregate book value of Consolidated Assets as
of the end of the immediately preceding fiscal year. If the

63

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 64

 

 

 

proceeds resulting from an Asset Sale are used by the Borrower or the applicable
Subsidiary within 180 days of the date on which such proceeds arose to acquire
property of a similar nature to be used in the Borrower’s or such Subsidiary’s
ordinary course of business, then, only for purposes of determining compliance
with this Section 7.3(B)(iv), such Asset Sale shall not be included in such
determination.

                    (C)     Liens. Neither the Borrower nor any of its
Subsidiaries shall directly or indirectly create, incur, assume or permit to
exist any Lien on or with respect to any of their respective property or assets
except:

 

 

 

                    (i)         Liens created by the Loan Documents or otherwise
securing the Obligations;

 

 

 

                    (ii)        Permitted Existing Liens;

 

 

 

                    (iii)      Customary Permitted Liens;

 

 

 

                    (iv)       purchase money Liens (including the interest of a
lessor under a Capitalized Lease and Liens to which any property is subject at
the time of the Borrower’s acquisition thereof) securing Indebtedness permitted
pursuant to Section 7.3(A)(ix); provided that such Liens shall not apply to any
property of the Borrower or its Subsidiaries other than that purchased or
subject to such Capitalized Lease;

 

 

 

                    (v)        Liens with respect to property acquired by the
Borrower or any of its Subsidiaries after the Closing Date (and not created in
contemplation of such acquisition) pursuant to a Permitted Acquisition;
provided, that such Liens shall extend only to the property so acquired;

 

 

 

                    (vi)       Liens securing the non-delinquent performance of
surety, appeal and performance bonds obtained by the Borrower or any Subsidiary
in the ordinary course of business; and

 

 

 

                    (vii)      other Liens securing Indebtedness not to exceed
$3,000,000 in the aggregate.

In addition, neither the Borrower nor any of its Subsidiaries shall become a
party to any agreement, note, indenture or other instrument, or take any other
action, which would prohibit the creation of a Lien on any of its properties or
other assets in favor of the Lender, as collateral for the Obligations.

                    (D)     Investments. Except to the extent permitted pursuant
to paragraph (G) below, neither the Borrower nor any of its Subsidiaries shall
directly or indirectly make or own any Investment except:

 

 

 

(i)       Investments in cash and Cash Equivalents;

 

 

 

(ii)      Permitted Existing Investments;

64

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 65

 

 

 

                     (iii)     Investments in trade receivables or received in
connection with the bankruptcy or reorganization of suppliers and customers and
in settlement of delinquent obligations of, and other disputes with, customers
and suppliers arising in the ordinary course of business;

 

 

 

                    (iv)       Investments consisting of deposit accounts
maintained by the Borrower and its Subsidiaries;

 

 

 

                    (v)        Investments in any Subsidiary Guarantor;

 

 

 

                    (vi)       Investments constituting Permitted Acquisitions;

 

 

 

                    (vii)      Investments constituting Indebtedness permitted
by Section 7.3(A), Contingent Obligations permitted by Section 7.3(E) or
Restricted Payments permitted by Section 7.3(F);

 

 

 

                    (viii)     Investments consisting of any right of the
Borrower or its wholly-owned Domestic Incorporated Subsidiaries to payment for
goods sold or for services rendered, whether or not it has been earned by
performance;

 

 

 

                    (ix)       Investments in addition to those referred to
elsewhere in this Section 7.3(D) in an aggregate amount not to exceed $3,000,000
at any time outstanding.

                    (E)     Contingent Obligations. Neither the Borrower nor any
of its Subsidiaries shall directly or indirectly create or become or be liable
with respect to any Contingent Obligation, except: (i) recourse obligations
resulting from endorsement of negotiable instruments for collection in the
ordinary course of business; (ii) Permitted Existing Contingent Obligations;
(iii) obligations, warranties, guarantees and indemnities, not relating to
Indebtedness of any Person, which have been or are undertaken or made in the
ordinary course of business and not for the benefit of or in favor of an
Affiliate of the Borrower or such Subsidiary; (iv) Contingent Obligations with
respect to surety, appeal and performance bonds obtained by the Borrower or any
Subsidiary in the ordinary course of business; (v) Contingent Obligations of the
Subsidiary Guarantors under the Subsidiary Guaranty; (vi) obligations arising
under or related to the Loan Documents; (vii) Contingent Obligations in respect
of representations and warranties customarily given in respect of Asset Sales
otherwise permitted hereunder; and (viii) Contingent Obligations, in an
aggregate amount not to exceed $3,000,000, arising as a result of the guaranty
of any Indebtedness not described in clauses (i) through (ix) hereof and
otherwise permitted under Section 7.3(A).

                    (F)     Restricted Payments. The Borrower shall not declare
or make any Restricted Payment if either a Default or an Unmatured Default shall
have occurred and be continuing at the date of declaration or payment thereof or
would result therefrom provided Borrower shall not make, without the prior
written consent of the Lender, any Restricted Payment with the proceeds of any
Revolving Loan to any Subordinated Debt of Borrower as defined under subsection
(iii) of the definition of “Restricted Payment” in Section 1.1 of the Agreement
(other than for accrued interest).

65

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 66

                    (G)    Conduct of Business; Subsidiaries; Acquisitions.
Neither the Borrower nor any of its Subsidiaries shall engage in any business
other than the businesses engaged in by the Borrower on the date hereof and any
business or activities which are reasonably similar, related or incidental
thereto or logical extensions thereof. The Borrower shall not create, acquire or
capitalize any Subsidiary after the date hereof unless (i) no Default or
Unmatured Default which is not being cured shall have occurred and be continuing
or would result therefrom; (ii) after such creation, acquisition or
capitalization, all of the representations and warranties contained herein shall
be true and correct in all material respects (unless such representation and
warranty is made as of a specific date, in which case, such representation or
warranty shall be true in all material respects as of such date); and (iii)
after such creation, acquisition or capitalization the Borrower shall be in
compliance with the terms of Section 7.2(K) and Section 7.3(L). The Borrower
shall not make any Acquisitions without approval by the Lender prior to the
Collateral Release Date provided thereafter, that Borrower shall not need the
approval of the Lender to make Permitted Acquisitions (as defined below) of up
to (x) $5,000,000 in aggregate purchase price in the first twelve month period
immediately following the Collateral Release Date, (ii) $10,000,000 in aggregate
purchase price thereafter. For purposes of this Agreement, Permitted
Acquisitions are Acquisitions meeting the following requirements or otherwise
approved by the Lenders:

 

 

 

                    (i)       no Default or Unmatured Default shall have
occurred and be continuing or would result from such Acquisition or the
incurrence of any Indebtedness in connection therewith;

 

 

 

                    (ii)      the purchase is consummated pursuant to a
negotiated acquisition agreement on a non-hostile basis;

 

 

 

                    (iii)     the Borrower shall deliver to the Lender a
certificate from one of the Authorized Officers, demonstrating to the reasonable
satisfaction of the Lender that after giving effect to such Acquisition and the
incurrence of any Indebtedness permitted by Section 7.3(A) in connection
therewith, on a pro forma basis using, for any Acquisition, historical financial
statements, as if the Acquisition and such incurrence of Indebtedness had
occurred on the first day of the twelve-month period ending on the last day of
the Borrower’s most recently completed fiscal quarter, the Borrower would have
been in compliance with the financial covenants in Section 7.4 applicable on
such date and not otherwise in Default;

 

 

 

                    (iv)     after giving effect to such Acquisition, Borrower
must demonstrate pro forma compliance with all financial covenants under Section
7.4 applicable on such date hereof; and

 

 

 

                    (v)      the businesses being acquired shall be reasonably
similar, related or incidental to, or a logical extension of, the businesses or
activities engaged in by the Borrower on the Closing Date.

                    (H)    Transactions with Affiliates. Neither the Borrower
nor any of its Subsidiaries shall directly or indirectly enter into or permit to
exist any transaction (including,

66

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 67

without limitation, the purchase, sale, lease or exchange of any property or the
rendering of any service) with any Affiliate of the Borrower, on terms that are
(a) not authorized by the Board of Directors or (b) less favorable to the
Borrower or any of its Subsidiaries, as applicable, than those that might be
obtained in an arm’s length transaction at the time from Persons who are not
such an Affiliate, except for (i) Restricted Payments permitted by Section
7.3(F), (ii) Investments permitted by Section 7.3(D), (iii) transactions in the
ordinary course of business and pursuant to the reasonable requirements of the
Borrower’s or such Subsidiary’s business and (iv) loans and advances to
employees in the ordinary course of business in an aggregate amount not to
exceed $500,000.

                    (I)     Restriction on Fundamental Changes. Neither the
Borrower nor any of its Subsidiaries shall enter into any merger or
consolidation, or liquidate, wind-up or dissolve (or suffer any liquidation or
dissolution), or convey, lease, sell, transfer or otherwise dispose of, in one
transaction or series of transactions, all or substantially all of the
Borrower’s consolidated business or property, whether now or hereafter acquired,
except (i) transactions permitted under Sections 7.3(B). 7.3(D) or 7.3(G) and,
(ii) a Subsidiary of the Borrower may be merged into or consolidated with the
Borrower (in which case the Borrower shall be the surviving corporation) or any
wholly-owned Domestic Incorporated Subsidiary of the Borrower, and (iii) any
liquidation of any Subsidiary of the Borrower into the Borrower or another
Subsidiary of the Borrower, as applicable.

                    (J)     Margin Regulations. Neither the Borrower nor any of
its Subsidiaries, shall use all or any portion of the proceeds of any credit
extended under this Agreement to purchase or carry Margin Stock.

                    (K)    ERISA. The Borrower shall not:

 

 

 

                    (i)       permit to exist any accumulated funding deficiency
(as defined in Sections 302 of ERISA and 412 of the Code), with respect to any
Benefit Plan, whether or not waived;

 

 

 

                    (ii)      terminate, or permit any Controlled Group member
to terminate, any Benefit Plan which would result in liability of the Borrower
or any Controlled Group member under Title IV of ERISA; or

 

 

 

                    (iii)     fail, or permit any Controlled Group member to
fail, to pay any required installment or any other payment required under
Section 412 of the Code on or before the due date for such installment or other
payment;

except where such transactions, events, circumstances, or failures are not,
individually or in the aggregate, reasonably expected to result in liability
individually or in the aggregate in excess of $3,000,000.

                    (L)     Domestic Incorporated Subsidiary Covenants. The
Borrower will not, and will not permit any Domestic Incorporated Subsidiary to,
create or otherwise cause to become effective any consensual encumbrance or
restriction of any kind on the ability of any Domestic

67

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 68

Incorporated Subsidiary to pay dividends or make any other distribution on its
stock, or make any other Restricted Payment, pay any Indebtedness or other
Obligation owed to the Borrower or any other Domestic Incorporated Subsidiary,
make loans or advances or other Investments in the Borrower or any other
Domestic Incorporated Subsidiary, or sell, transfer or otherwise convey any of
its property to the Borrower or any other Domestic Incorporated Subsidiary other
than pursuant to (i) applicable law, (ii) this Agreement or the other Loan
Documents or (iii) restrictions imposed by the holder of a Lien permitted by
Section 7.3(C).

                    (M)    Hedging Obligations. The Borrower shall not and shall
not permit any of its Subsidiaries to enter into any interest rate, commodity or
foreign currency exchange, swap, collar, cap or similar agreements evidencing
Hedging Obligations, other than interest rate, foreign currency or commodity
exchange, swap, collar, cap or similar agreements entered into by the Borrower
or such Subsidiary pursuant to which the Borrower or such Subsidiary has hedged
its reasonably estimated interest rate, foreign currency or commodity exposure,
which are non-speculative in nature. Such permitted hedging agreements shall be
entered into by the Borrower only with Lender or any affiliate of the Lender and
are herein referred to as “Hedging Agreements.”

                    (N)     Issuance of Disqualified Stock. From and after the
Closing Date, neither the Borrower, nor any of its Subsidiaries shall issue any
Disqualified Stock unless after giving effect to the next sentence, such
Disqualified Stock and Indebtedness is issued in accordance with the terms of
this Agreement. All issued and outstanding Disqualified Stock shall be treated
as Indebtedness for all purposes of this Agreement (and as funded Indebtedness
for purposes of Section 7.1(F)), and the amount of such deemed Indebtedness
shall be the aggregate amount of the liquidation preference of such Disqualified
Stock.

                    (O)     Banking Relationship. Borrower covenants and agrees
at all times during the term of this Agreement, to utilize the Lender as its
primary bank of account and depository for all financial services, including all
receipts, disbursements, cash management and related services except Borrower
may maintain operating accounts with financial institutions other than the
Lender with aggregate balances not to exceed $2,000,000.

                    7.4     Financial Covenants. The Borrower shall comply with
the following:

                    (A)     Maximum Senior Leverage Ratio. Prior to and after
the Collateral Release Date, the Borrower and its consolidated Subsidiaries
shall not permit the ratio (the “Senior Leverage Ratio”) of (i) total Senior
Indebtedness (including the Letters of Credit) of the Borrower and its
consolidated Subsidiaries to (ii) EBITDA to be greater than 2.75 to 1.00 on a
trailing twelve month basis, beginning with the Fiscal Quarter ending June 30,
2006, and for each fiscal quarter thereafter. The Senior Leverage Ratio shall be
calculated, in each case, determined as of the last day of each applicable
Fiscal Quarter of the Borrower based upon (a) for Indebtedness, Indebtedness as
of the last day of each such fiscal quarter; and (b) for EBITDA, the actual
amount for the Last Twelve-Month Period. “Senior Indebtedness” shall mean all
Indebtedness of Borrower and its Subsidiaries other than the Subordinated Debt.

68

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 69

                    (B)     Minimum Consolidated Net Worth. After the Collateral
Release Date, the Borrower shall not permit its Consolidated Net Worth at any
time to be less than the sum of 85% of its Base Net Worth as of the Collateral
Release Date, plus 50% of Borrower’s positive Consolidated Net Income for each
fiscal year thereafter. “Base Net Worth” shall mean Borrower’s book Net Worth as
of the Collateral Release Date. With Lender’s written approval, certain non cash
items may be excluded from this Net Worth Test computation.

                    (C)     Minimum Excess Collateral Availability. Prior to the
Collateral Release Date, the Borrower and its consolidated Subsidiaries shall
maintain at all times minimum excess availability under the Borrowing Base
Amount through June 30, 2006, of not less than $8,000,000, and thereafter of not
less than $5,000,000.

                    (D)     Fixed Charge Coverage Ratio. After the Collateral
Release Date, the Borrower and its consolidated Subsidiaries shall not permit
the ratio (“Fixed Charge Coverage Ratio”), for any period, of (i) EBITDA, minus
Capital Expenditures and Patent Expenditures to (ii) the sum of cash Interest
Expense, plus scheduled payments of the principal portion of all other
Indebtedness for borrowed money for such period (excluding payments on the
Revolving Loans), plus dividends and distributions paid for such period, and
taxes paid for such period, as measured on a trailing twelve month basis, of not
less than 1.20 to 1.00 for each of the fiscal quarters thereafter. For purposes
of this Agreement, “Patent Expenditures” shall mean expenditures of a Person
relating to its obtaining, acquiring and defending patents.

                    (E)     Maximum Total Leverage Ratio. At all times, after
the Collateral Release Date, the Borrower and its consolidated Subsidiaries
shall not permit the ratio (“Total Leverage Ratio”) of (i) total Indebtedness
(including Letters of Credit) to (ii) EBITDA, to be greater than 4.5 to 1.0 on a
trailing twelve month basis for each fiscal quarter thereafter.

     ARTICLE VIII: DEFAULTS

                    8.1     Defaults. Each of the following occurrences shall
constitute a Default under this Agreement:

                    (A)     Failure to Make Payments When Due. The Borrower
shall (i) fail to pay when due any of the Obligations consisting of principal
with respect to the Loans or Reimbursement Obligations and such failure shall
remain unremedied for a period of three (3) days or (ii) shall fail to pay
within five (5) Business Days of the date when due any of the other Obligations
under this Agreement or the other Loan Documents.

                    (B)     Breach of Certain Covenants. The Borrower shall fail
duly and punctually to perform or observe any agreement, covenant or obligation
binding on the Borrower under:

                              (i)       Sections 7.1 or 7.2 and such failure
shall continue unremedied for fifteen (15) days, or

                              (ii)      Sections 7.3 or 7.4.

69

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 70

                    (C)     Breach of Representation or Warranty. Any
representation or warranty made or deemed made by the Borrower to the Lender or
by the Borrower or any of its Subsidiaries in any of the other Loan Documents or
in any statement or certificate at any time given by any such Person pursuant to
any of the Loan Documents shall be false or misleading in any material respect
on the date as of which made (or deemed made).

                    (D)     Other Defaults. The Borrower shall default in the
performance of or compliance with any term contained in this Agreement (other
than as covered by paragraphs (A) or (B) of this Section 8.1), or the Borrower
or any of its Subsidiaries shall default in the performance of or compliance
with any term contained in any of the other Loan Documents, and such default
shall continue for thirty (30) days after the occurrence thereof.

                    (E)     Default as to Other Indebtedness. The Borrower or
any of its Subsidiaries shall fail to make any payment when due (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise) with
respect to any Indebtedness (other than Indebtedness hereunder, but including,
without limitation, Disqualified Stock), beyond any period of grace provided
with respect thereto, which individually or together with other such
Indebtedness as to which any such failure exists has an aggregate outstanding
principal amount in excess of [$2,000,000]; or any breach, default or event of
default shall occur, or any other condition shall exist under any instrument,
agreement or indenture pertaining to any such Indebtedness having such aggregate
outstanding principal amount, beyond any period of grace, if any, provided with
respect thereto, if the effect thereof is to cause an acceleration, mandatory
redemption, a requirement that the Borrower offer to purchase such Indebtedness
or other required repurchase of such Indebtedness, or permit the holder(s) of
such Indebtedness to accelerate the maturity of any such Indebtedness; or
require a redemption or other repurchase of such Indebtedness or any such
Indebtedness shall be otherwise declared to be due and payable (by, acceleration
or otherwise) or required to be prepaid, redeemed or otherwise repurchased by
the Borrower or any of its Subsidiaries (other than by a regularly scheduled
required prepayment) prior to the stated maturity thereof; provided however that
it shall not be a Default under this Section 8.1(E) with respect to any
Indebtedness the principal amount of which is $5,000,000 or less, if and so long
as the Borrower or its Subsidiary, as applicable, is in good faith contesting
(i) the occurrence of any asserted failure, breach, default, event of default,
or other acceleration, redemption, prepayment or repurchase event or (ii) its
obligations to pay such Indebtedness.

                    (F)     Involuntary Bankruptcy; Appointment of Receiver,
Etc.

 

 

 

                    (i)     An involuntary case shall be commenced against the
Borrower, any of the Borrower’s Domestic Incorporated Subsidiaries, or any of
the Borrower’s Significant Foreign Subsidiaries and the petition shall not be
dismissed, stayed, bonded or discharged within sixty (60) days after
commencement of the case: or a court having jurisdiction in the premises shall
enter a decree or order for relief in respect of the Borrower, any of the
Borrower’s Domestic Incorporated Subsidiaries, or any of the Borrower’s
Significant Foreign Subsidiaries in an involuntary case, under any applicable
bankruptcy, insolvency or other similar law now or hereinafter in effect: or any
other similar relief shall be granted under any applicable federal, state, local
or foreign law.

70

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 71

 

 

 

                    (ii)     A decree or order of a court having jurisdiction in
the premises for the appointment of a receiver, liquidator, sequestrator,
trustee, custodian or other officer having similar powers over the Borrower, any
of the Borrower’s Domestic Incorporated Subsidiaries or any of the Borrower’s
Significant Foreign Subsidiaries or over all or a substantial part of the
property of the Borrower, any of the Borrower’s Domestic Incorporated
Subsidiaries or any of the Borrower’s Significant Foreign Subsidiaries shall be
entered; or an interim receiver, trustee or other custodian of the Borrower, any
of the Borrower’s Domestic Incorporated Subsidiaries or any of the Borrower’s
Significant Foreign Subsidiaries or of all or a substantial part of the property
of the Borrower, any of the Borrower’s Domestic Incorporated Subsidiaries or any
of the Borrower’s Significant Foreign Subsidiaries shall be appointed or a
warrant of attachment, execution or similar process against any substantial part
of the property of the Borrower, any of the Borrower’s Domestic Incorporated
Subsidiaries or any of the Borrower’s Significant Foreign Subsidiaries shall be
issued and any such event shall not be stayed, dismissed, bonded or discharged
within sixty (60) days after entry, appointment or issuance.

                    (G)    Voluntary Bankruptcy: Appointment of Receiver, Etc.
The Borrower, any of the Borrower’s Domestic Incorporated Subsidiaries or any of
the Borrower’s Significant Foreign Subsidiaries shall (i) commence a voluntary
case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, (ii) consent to the entry of an order for relief in an
involuntary case, or to the conversion of an involuntary case to a voluntary
case, under any such law. (iii) consent to the appointment of or taking
possession by a receiver, trustee or other custodian for all or a substantial
part of its property, (iv) make any assignment for the benefit of creditors or
(v) take any corporate action to authorize any of the foregoing.

                    (H)     Judgments and Attachments. Any money judgment(s)
(other than a money judgment covered by insurance as to which the applicable
insurance company has not disclaimed or reserved the right to disclaim
coverage), writ or warrant of attachment, or similar process against the
Borrower or any of its Subsidiaries or any of their respective assets involving
in any single case or in the aggregate an amount in excess of $3,000,000 is or
are entered and shall remain undischarged, unvacated, unbonded or unstayed for a
period of sixty (60) days or in any event later than fifteen (15) days prior to
the date of any proposed sale thereunder.

                    (I)       Dissolution. Any order, judgment or decree shall
be entered against the Borrower decreeing its involuntary dissolution or split
up and such order shall remain undischarged and unstayed for a period in excess
of sixty (60) days or the Borrower shall otherwise dissolve or cease to exist
except as specifically permitted by this Agreement.

                    (J)      Loan Documents. At any time, for any,’ reason, any
Loan Document that materially affects the ability of the Administration Agent or
any of the Lenders to enforce the Obligations ceases to be in full force and
effect or the Borrower or any of the Borrower’s Subsidiaries party thereto seek
to repudiate their respective obligations thereunder.

                    (K)    Termination Event. Any Termination Event occurs which
is reasonably likely to subject either the Borrower or any member of its
Controlled Group to liability in excess of $3,000,000.

71

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 72

                    (L)     Waiver of Minimum Funding Standard. If the plan
administrator of any Plan applies under Section 412(d) of the Code for a waiver
of the minimum funding standards of Section 412(a) of the Code and any Lender
believes the substantial business hardship upon which the application for the
waiver is based could reasonably be expected to subject either the Borrower or
any’ Controlled Group member to liability in excess of $3,000,000.

                    (M)    Change of Control. A Change of Control shall occur.

                    (N)     Environmental Matters. The Borrower or any of its
Subsidiaries shall be the subject of any proceeding or investigation pertaining
to (i) the Release by the Borrower or any of its Subsidiaries of any Contaminant
into the environment, (ii) the liability of the Borrower or any of its
Subsidiaries arising from the Release by any other Person of any Contaminant
into the environment, or (iii) any violation of any Environmental, Health or
Safety, Requirements of Law which by” the Borrower or any of its Subsidiaries,
which, in any case, has or is reasonably likely to subject the Borrower to
liability (which is not covered by undenied indemnification by a creditworthy
indemnitor) in excess of $3,000,000.

                    (O)     Subsidiary Guarantors’ Revocation. Any Subsidiary
Guarantor of the Obligations shall terminate or revoke any of its obligations
under the Subsidiary Guaranty or breach any of the material terms of the
Subsidiary Guaranty.

A Default shall be deemed “continuing” until cured or until waived in writing in
accordance with Section 9.3.

     ARTICLE IX: ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES

                    9.1     Termination of Revolving Loan Commitments;
Acceleration. If any Default described in Section 8.1(F) or 8.1(G) occurs with
respect to the Borrower, the obligations of the Lender to make Loans hereunder
and to issue Letters of Credit hereunder shall automatically terminate and the
Obligations shall immediately become due and payable without any election or
action on the part of the Lender. If any other Default occurs, the Lender may
terminate or suspend its obligations to make Loans hereunder and to issue
Letters of Credit hereunder, or declare the Obligations to be due and payable,
or both, whereupon the Obligations shall become immediately due and payable,
without presentment, demand, protest or notice of any kind, all of which the
Borrower expressly waives.

                    9.2     Preservation of Rights. No delay or omission of the
Lender to exercise any right under the Loan Documents shall impair such right or
be construed to be a waiver of any Default or an acquiescence therein, and the
making of a Loan or the issuance of a Letter of Credit notwithstanding the
existence of a Default or the inability of the Borrower to satisfy the
conditions precedent to such Loan or issuance of such Letter of Credit shall not
constitute any waiver or acquiescence. Any single or partial exercise of any
such right shall not preclude other or further exercise thereof or the exercise
of any other right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents whatsoever shall be valid unless
in writing signed by the Lender and then only to the extent in such writing
specifically set forth. All remedies contained in the Loan Documents or by law
afforded shall be

72

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 73

cumulative and all shall be available to the Lender until the Obligations have
been paid in full in cash.

                    9.3      Amendments. No amendment, modification,
termination, discharge or waiver of any provision of this Agreement or of any of
the Loan Documents, or consent to any departure by the Borrower there from,
shall be in writing and signed by the Lender and then such waiver or consent
shall be effective only for the specific purpose for which given.

     ARTICLE X: GENERAL PROVISIONS

                    10.1     Survival of Representations. All representations
and warranties of the Borrower contained in this Agreement shall survive
delivery of this Agreement and the making of the Loans herein contemplated so
long as any principal, accrued interest, fees, or any other amount due and
payable under any Loan Document is outstanding and unpaid (other than contingent
reimbursement and indemnification obligations) and so long as the Commitments
have not been terminated.

                    10.2     Governmental Regulation. Anything contained in this
Agreement to the contrary notwithstanding, Lender shall not be obligated to
extend credit to the Borrower in violation of any limitation or prohibition
provided by any applicable statute or regulation.

                    10.3     Headings. Section headings in the Loan Documents
are for convenience of reference only. and shall not govern the interpretation
of any of the provisions of the Loan Documents.

                    10.4     Entire Agreement. The Loan Documents embody the
entire agreement and understanding among the Borrower and the Lender and
supersede all prior agreements and understandings among the Borrower and the
Lender relating to the subject matter thereof.

                    10.5     Benefits of this Agreement. This Agreement shall
not be construed so as to confer any right or benefit upon any Person other than
the parties to this Agreement and their respective successors and assigns.

                    10.6     Expenses; Indemnification.

                    (A)      Expenses. The Borrower shall reimburse the Lender
for any reasonable costs and out-of-pocket expenses (including reasonable
attorneys’ and paralegals’ fees and time charges of attorneys and paralegals for
the Lender which attorneys and paralegals may be employees of the Lender) paid
or incurred by the Lender in connection with the preparation, negotiation,
execution, delivery, syndication, review, amendment, modification, and
administration of the Loan Documents and in connection with the collection of
the Obligations and enforcement of the Loan Documents.

                    (B)      Indemnity. The Borrower further agrees to defend,
protect, indemnify, and hold harmless the Lender and each of its Affiliates, and
Lender’s and its Affiliate’s respective officers, directors, trustees,
investment advisors, employees, attorneys and agents (including,

73

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 74

without limitation, those retained in connection with the satisfaction or
attempted satisfaction of any of the conditions set forth in Article V)
(collectively, the “Indemnitees”), based upon its obligations, from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, expenses of any kind or nature whatsoever
(including, without limitation, the fees and disbursements of counsel for such
Indemnitees in connection with any investigative, administrative or judicial
proceeding, whether or not such Indemnitees shall be designated a party
thereto), imposed on. incurred by, or asserted against such Indemnitees in any
manner relating to or arising out of:

 

 

 

                    (i)      this Agreement or any of the other Loan Documents,
or any act. event or transaction related or attendant thereto or to the making
of the Loans, and the issuance of and participation in Letters of Credit
hereunder, the management of such Loans or Letters of Credit, the use or
intended use of the proceeds of the Loans or Letters of Credit hereunder, or any
of the other transactions contemplated by the Loan Documents; or

 

 

 

                    (ii)     any liabilities, obligations, responsibilities,
losses, damages, personal injury, death, punitive damages, economic damages,
consequential damages, treble damages, intentional, willful or wanton injury,
damage or threat to the environment, natural resources or public health or
welfare, costs and expenses (including, without limitation, attorney, expert and
consulting fees and costs of investigation, feasibility or remedial action
studies), fines, penalties and monetary sanctions, interest, direct or indirect,
known or unknown, absolute or contingent, past, present or future relating to
violation of any Environmental, Health or Safety Requirements of Law arising
from or in connection with the past, present or future operations of the
Borrower, its Subsidiaries or any of their respective predecessors in interest,
or, the past, present or future environmental, health or safety condition of any
respective property of the Borrower or its Subsidiaries, the presence of
asbestos-containing materials at any respective property of the Borrower or its
Subsidiaries or the Release or threatened Release of any Contaminant into the
environment (collectively, the “Indemnified Matters”);

provided, however, the Borrower shall have no obligation to an Indemnitee
hereunder with respect to Indemnified Matters to the extent caused by or
resulting from the willful misconduct or gross negligence of such Indemnitee
with respect to the Loan Documents, as determined by the final non-appealable
judgment of a court of competent jurisdiction. If the undertaking to indemnify,
pay and hold harmless set forth in the preceding sentence may be unenforceable
because it is violative of any law or public policy, the Borrower shall
contribute the maximum portion which it is permitted to pay and satisfy under
applicable law, to the payment and satisfaction of all Indemnified Matters
incurred by the Indemnitees.

                    (C)     Waiver of Certain Claims; Settlement of Claims. The
Borrower further agrees to assert no claim against any of the Indemnitees on any
theory of liability seeking consequential, special, indirect, exemplary or
punitive damages. No settlement shall be entered into by the Borrower or any of
its Subsidiaries with respect to any claim, litigation, arbitration or other
proceeding relating to or arising out of the transactions evidenced by this
Agreement, the

74

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 75

other Loan Documents unless such settlement releases all Indemnitees from any
and all liability with respect thereto.

                    (D)      Survival of Agreements. The obligations and
agreements of the Borrower under this Section 10.7 shall survive the termination
of this Agreement.

                    10.7     Numbers of Documents. The Borrower will provide the
Lender with such additional copies of statements, notices, closing documents,
and requests hereunder, as the Lender may reasonably request.

                    10.8     Confidentiality. Lender agrees to hold any
confidential information which it may receive from the Borrower pursuant to this
Agreement in confidence, except for disclosure (i) to its Affiliates who are
expected to be involved in the evaluation of such information and who are
advised of the confidential nature of the information, (ii) to legal counsel,
accountants, and other professional advisors to Lender, (iii) to regulatory
officials, (iv) to any Person as requested pursuant to or as required by law,
regulation, or legal process, (v) to any Person in connection with any legal
proceeding to which such Lender is a party, (vi) to such Lender’s direct or
indirect contractual counterparties in Hedging Agreements or to legal counsel,
accountants and other professional advisors to such counterparties, (vii)
permitted hereunder and (viii) to rating agencies if requested or required by
such agencies in connection with a rating relating to the Loans hereunder.

                    10.9     Severability of Provisions. Any provision in any
Loan Document that is held to be inoperative, unenforceable, or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or
invalid without affecting the remaining provisions in that .jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.

                    10.10    Nonliability of Lenders. The relationship between
the Borrower and the Lender shall be solely that of borrower and lender. The
Lender shall not have any fiduciary responsibilities to the Borrower. The Lender
does not undertake any responsibility to the Borrower to review or inform the
Borrower of any matter in connection with any phase of the Borrower’s business
or operations.

                    10.11    GOVERNING LAW. ANY DISPUTE BETWEEN THE BORROWER AND
THE LENDER ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THE BORROWER AND THE LENDER IN CONNECTION WITH,
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, AND WHETHER ARISING IN
CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE
INTERNAL LAWS (INCLUDING 735 ILCS SECTION 105/5-1 ET SEQ. BUT OTHERWISE WITHOUT
REGARD TO THE CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF ILLINOIS.

75

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 76

                    10.12    CONSENT TO JURISDICTION; SERVICE OF PROCESS: JURY
TRIAL.

                    (A)     NON-EXCLUSIVE JURISDICTION. THE BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER
HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES
ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE LENDER TO BRING
PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY
JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE LENDER OR ANY LENDER OR ANY
AFFILIATE OF THE LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY
ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT
ONLY IN A COURT IN CHICAGO, ILLINOIS.

                    (B)     SERVICE OF PROCESS. THE BORROWER WAIVES PERSONAL
SERVICE OF ANY PROCESS UPON IT AND IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OF ANY WRITS, PROCESS OR SUMMONSES IN ANY SUIT, ACTION OR PROCEEDING BY
THE MAILING THEREOF BY THE LENDER BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO THE BORROWER ADDRESSED AS PROVIDED HEREIN. NOTHING HEREIN SHALL IN
ANY WAY BE DEEMED TO LIMIT THE ABILITY OF THE LENDER TO SERVE ANY SUCH WRITS,
PROCESS OR SUMMONSES IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

                    (C)     WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY
DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF,
CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG
THEM IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH. EACH OF THE PARTIES
HERETO AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO
MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.

                    (D)     ADVICE OF COUNSEL. EACH OF THE PARTIES REPRESENTS TO
EACH OTHER PARTY HERETO THAT IT HAS DISCUSSED THIS AGREEMENT AND, SPECIFICALLY,
THE PROVISIONS OF SECTION 10.7 AND THIS SECTION 10.13, WITH ITS COUNSEL.

76

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 77

                    10.13     Subordination of Intercompany Indebtedness. The
Borrower agrees that any and all claims of the Borrower against any of its
Subsidiary Guarantors with respect to any indebtedness of any Subsidiary
Guarantor to the Borrower (“Intercompany Indebtedness”), any endorser, obligor
or any other Subsidiary Guarantor of all or any part of the Obligations, or
against any of its properties, including, without limitation, claims arising
from liens or security interests upon property, shall be subordinate and subject
in right of payment to the prior payment, in full and in cash, of all
Obligations: provided that, and not in contravention of the foregoing, so long
as no Default has occurred and is continuing the Borrower may make loans to and
receive payments in the ordinary course with respect to such Intercompany
Indebtedness from each such Subsidiary Guarantor to the extent permitted by the
terms of this Agreement and the other Loan Documents. Should any payment,
distribution, security or instrument or proceeds thereof be received by the
Borrower upon or with respect to the Intercompany Indebtedness in contravention
of this Agreement or the Loan Documents or after the occurrence of a Default,
including, without limitation, an event described in Section 8.1(F) or (G) prior
to the satisfaction of all of the Obligations (other than contingent indemnity
obligations) and the termination of all financing arrangements pursuant to any
Loan Document or Hedging Agreement among the Borrower and the Lender (and its
Affiliates), the Borrower shall receive and hold the same in trust, as trustee,
for the benefit of the holders of the Obligations and shall forthwith deliver
the same to the Lender, for the benefit of such Persons, in precisely the form
received (except for the endorsement or assignment of the Borrower where
necessary), for application to any of the Obligations, due or not due, and,
until so delivered, the same shall be held in trust by the Borrower as the
property of the holders of the Obligations. If the Borrower fails to make any
such endorsement or assignment to the Lender, the Lender or any of its officers
or employees are irrevocably authorized to make the same. The Borrower agrees
that until the Obligations involving the payment of monies (other than the
contingent indemnity obligations) have been paid in full (in cash) and satisfied
and all financing arrangements pursuant to any Loan Document or Hedging
Agreement among the Borrower and the Lenders (and its Affiliates) have been
terminated, the Borrower will not assign or transfer to any Person (other than
the Lender) any claim the Borrower has or may have against any Subsidiary
Guarantor.

                    10.14     Assignability. The Lender may at any time assign
the Lender rights in this Agreement, the Note, the Obligations, or any part
thereof and transfer the Lender’s rights in any or all of the Collateral, and
the Lender thereafter shall be relieved from all liability with respect to such
Collateral. In addition, the Lender may at any time sell one or more
participations in the Loans. The Borrower may not sell or assign this Agreement,
or any other agreement with the Lender or any portion thereof, either
voluntarily or by operation of law, without the prior written consent of the
Lender. This Agreement shall be binding upon the Lender and the Borrower and
their respective legal representatives and successors. All references herein to
the Borrower shall be deemed to include any successors, whether immediate or
remote.

                    10.15     Customer Identification-USA Patriot Act Notice.
The Lender hereby notifies the Borrower that pursuant to the requirements of the
USA Patriot Act (Title III of Pub. L. 107-56, signed into law October 26, 2001)
(the “Act”), and the Lender’s policies and practices, the Lender is required to
obtain, verify and record certain information and documentation that identifies
the Borrower, which information includes the name and address of the Borrower
and

77

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 78

such other information that will allow the Lender to identify the Borrower in
accordance with the Act.

     ARTICLE XI: SETOFF, RATABLE PAYMENTS

                    11.1    Setoff. In addition to, and without limitation of,
any rights of the Lender under applicable law, if any Default occurs and is
continuing, any Indebtedness from Lender to the Borrower (including all account
balances, whether provisional or final and whether or not collected or
available) may be offset and applied toward the payment of the Obligations owing
to Lender, whether or not the Obligations, or any part hereof, shall then be
due. Notwithstanding the foregoing, at any time that any Obligations are secured
by real property located in California, Lender shall not exercise a right of
setoff, banker’s lien or counterclaim or take any court or administrative action
or institute any proceeding to enforce any provision of this Agreement or any
Obligation that is not taken by the Lender if such setoff or action or
proceeding would or might (pursuant to the Collateral Documents or the
enforceability of the Obligations, and any attempted exercise by any Lender of
any such right shall be null and void. This Section shall be solely for the
benefit of each of the Lender hereunder.

                    11.2    Application of Payments. If the Borrower, prior to
the occurrence of a Default, has remitted a payment to the Lender without
indicating the Obligation to be reduced thereby, or at any time after the
occurrence of a Default, subject to the provisions of Section 9.2, the Lender
shall apply all payments and prepayments in respect of any Obligations in the
following order:

                    (A)     first, to pay Obligations in respect of any fees,
expenses, reimbursements or indemnities then due to the Lender;

                    (B)     second, to pay interest due in respect of Revolving
Loans and L/C Obligations;

                    (C)     third, to the payment or prepayment of principal
outstanding on Revolving Loans and Reimbursement Obligations in such order as
the Lender may determine in its sole discretion;

                    (D)     fourth, to provide required cash collateral, if
required pursuant to Section 3.11; and

                    (E)     fifth, to the payment of all other Obligations.

Unless otherwise designated (which designation shall only be applicable prior to
the occurrence of a Default) by the Borrower, all principal payments in respect
of Loans shall be applied first, to repay outstanding Floating Rate Loans, and
then to repay outstanding Eurodollar Rate Loans with those Eurodollar Rate Loans
which have earlier expiring Interest Periods being repaid prior to those which
have later expiring Interest Periods.

78

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 79

     ARTICLE XII: NOTICES

                    12.1     Giving Notice. Except as otherwise permitted by
Section 2.13 with respect to Borrowing/Election Notices, all notices and other
communications provided to any party hereto under this Agreement or any other
Loan Documents shall be in writing or by telex or by facsimile and addressed or
delivered to such party at its address set forth below its signature hereto or
at such other address as may be designated by such party in a notice to the
other parties. Any notice, if mailed and properly addressed with postage
prepaid, shall be deemed given when received; any notice, if transmitted by
telex or facsimile, shall be deemed given when transmitted (answer back
confirmed in the case of telexes).

                    12.2     Change of Address. Each of the Borrower and the
Lender may change the address for service of notice upon it by a notice in
writing to the other parties hereto, including, without limitation, Lender.
Lender may change the address for service of notice upon it by a notice in
writing to the Borrower and the Lender.

     ARTICLE XIII: COUNTERPARTS

          This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Borrower.

The remainder of this page is intentionally blank.

79

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 80

IN WITNESS WHEREOF, the Borrower and the Lender have executed this Agreement as
of the date first above written.

 

 

 

 

 

QUIXOTE CORPORATION,

 

as the Borrower

 

 

 

 

By:

/s/Daniel P. Gorey

 

 

Name:

Daniel P. Gorey

 

Title:

Vice President, Chief Financial Officer & Treasurer

 

 

 

 

Address:

Quixote Corporation

 

 

Thirty Five East Wacker Drive

 

 

Chicago, Illinois 60601

 

Attention:

Daniel P. Gorey

 

 

 

Telephone No.: (312) 467-6755

 

Facsimile No.:  (312) 467-0197

 

 

 

QUIXOTE TRANSPORTATION SAFETY, INC.

 

TRANSAFE CORPORATION

 

ENERGY ABSORPTION SYSTEMS, INC.

 

ENERGY ABSORPTION SYSTEMS (AL) LLC

 

SURFACE SYSTEMS, INC.

 

NU-METRICS, INC.

 

HIGHWAY INFORMATION SYSTEMS, INC.

 

U.S. TRAFFIC CORPORATION

 

(formerly known as Green Light Acquisition Corporation)

 

PEEK TRAFFIC CORPORATION, (formerly known as Vision Acquisition Corporation)

 

SPIN-CAST PLASTICS, INC., as Subsidiary Guarantors

 

 

 

 

 

By:

   /s/Daniel P. Gorey

 

 

Name:

Daniel P. Gorey

 

Title:

Vice President and Treasurer

 

 

 

 

LASALLE BANK NATIONAL ASSOCIATION, as Lender

 

 

 

 

 

By:

   /s/Stephanie Kline

 

 

Name:

Stephanie Kline

 

Title:

Vice President

 

 

 

 

Address:

LaSalle Bank National Association

 

 

135 South LaSalle Street

 

 

Chicago, Illinois 60603

 

Attention:

Stephanie Kline

 

Telephone No.: (312) 904-2771

Facsimile No.:          (312) 904-6546

80

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 81

EXHIBIT A

FORM OF BORROWING/ELECTION NOTICE

Date: _______________________

 

 

To:

LaSalle Bank National Association, as Lender (“LaSalle Bank”), under the Amended
and Restated Credit Agreement, dated as of April 20, 2005 (as amended, modified
or supplemented from time to time, the “Loan Agreement”), between QUIXOTE
CORPORATION, and LASALLE BANK, as Lender.

Ladies and Gentlemen:

          The undersigned hereby refers to the Loan Agreement, the terms defined
therein being used herein as therein defined, and hereby gives you notice
irrevocably of the Revolving Loan specified below:

 

 

 

 

 

1.

The date of the requested Revolving Loan is ________, ____.

 

 

 

 

 

2.

The aggregate amount of the requested Revolving Loan is $_________________.

 

 

 

 

 

3.

The requested Revolving Loan is a Floating Rate Advance.

 

 

 

 

 

4.

For Conversions/Continuations:

 

 

 

 

 

 

(i)

The Conversion/Continuation Date is ___________;

 

 

(ii)

Amount $_________ and Type [Floating Rate Loan/Eurodollar Rate Loan];

 

 

(iii)

Revolving Loan;

 

 

(iv)

Number of Eurodollar Rate Loans _______________; and

 

 

(v)

The duration of the Interest Period _______________.

 

 

 

 

 

5.

The duration of the Interest Period for the Eurodollar Rate Advance, if any,
included in the Revolving Loan shall be ___ months (1, 2, 3 or 6 months).

          The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the proposed Revolving
Loan before and after giving effect thereto and to the application of the
proceeds therefrom:

81

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 82

(a)      The representations and warranties of the Borrower contained in the
Loan Agreement are true and correct as though made on and as of such date (other
than representations and warranties made as of a specific date, which are true
and correct as of that date);

 

 

 

          (b)          No Default or Unmatured Default has occurred and is
continuing, or would result after giving effect to such proposed Revolving Loan;
and

 

 

 

          (c)          After giving effect to the requested Revolving Loan, the
aggregate principal amount of the Revolving Loans and all Letters of Credit
shall not exceed the Revolving Loan Commitment or Revolving Loan Availability.

 

 

 

 

 

 

 

QUIXOTE CORPORATION

 

 

 

By: 

 

 

Name: 

 

 

 

Title: 

 

82

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 83

EXHIBIT B

FORM OF REQUEST FOR LETTER OF CREDIT

Date: _______________________

 

 

To:

LaSalle Bank National Association, as Lender (“LaSalle Bank”), under the Amended
and Restated Credit Agreement, dated as of April 20, 2005 (as amended, modified
or supplemented from time to time, the “Loan Agreement”), between QUIXOTE
CORPORATION and LASALLE BANK, as Lender.

Ladies and Gentlemen:

          The undersigned hereby refers to the Loan Agreement, the terms defined
therein being used herein as therein defined, and hereby, requests and gives you
notice irrevocably to issue the Letter of Credit(s) specified below:

 

 

 

 

1.

The date of issuance of the requested Letter of Credit is ___, ____.

 

 

 

 

2.

The aggregate stated amount of the requested Letter of Credit is
$_________________.

 

 

 

 

3.

The expiration date of the Letter of Credit is _____________.

 

 

 

 

4.

The beneficiary of the Letter of Credit is ___________________.

          The undersigned, simultaneously with delivery of this request, is
delivering to the Lender a completed application and letter of credit agreement.

          The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the proposed Letter of
Credit, as applicable, before and after giving effect thereto and to the
application of the proceeds therefrom:

 

 

 

          (a)          The representations and warranties of the Borrower
contained in the Loan Agreement are true and correct as though made on and as of
such date (other than representations and warranties made as of a specific date,
which are true and correct as of that date);

(b)     No Default or Unmatured Default has occurred and is continuing, or would
result after giving effect to such proposed Letter of Credit, as applicable; and

83

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 84

 

 

 

          (c)        After giving effect to the requested Letter of Credit, the
aggregate principal amount of the Letters of Credit and Revolving Loans shall
not exceed the Aggregate Revolving Loan Commitment or Revolving Loan
Availability.

 

 

 

 

 

 

 

QUIXOTE CORPORATION

 

 

 

By: 

 

 

Name: 

 

 

 

Title: 

 

84

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 85

Exhibit C

April 20, 2005

LaSalle Bank National Association
135 South LaSalle Street
Chicago, Illinois 60603
Attention: Stephanie Kline, Vice President

                              Re:     Quixote Corporation

Ladies and Gentlemen:

                    I am counsel for Quixote Corporation, a Delaware corporation
(the “Borrower”) and each of those subsidiaries of the Borrower identified on
Schedule 1 to this opinion (each individually, a “Subsidiary Guarantor”, and
collectively, the “Subsidiary Guarantors”), in connection with the transactions
contemplated by that certain Amended and Restated Credit Agreement dated as of
April 20, 2005 (as amended, modified or supplemented, the “Credit Agreement”),
among Borrower and LaSalle Bank National Association, as Lender (“Lender”).
Unless otherwise indicated, capitalized terms used herein without definition
shall have the respective meanings set forth in the Credit Agreement.

                    In writing this opinion and delivering it to you, I am
acting in my capacity as Vice President and General Counsel of Borrower. In so
acting, I have participated in the negotiation of, and have examined the Credit
Agreement and the other documents identified on Schedule 2 to this Opinion (the
“Opinion Documents”).

                    I have also examined the originals, or copies certified or
otherwise identified to my satisfaction, of such records, documents,
certificates and other instruments as in my judgment are necessary or
appropriate to enable me to render the opinion expressed below. I have relied,
to the extent that I deem such reliance appropriate, upon certificates and other
statements of officers and employed counsel of Borrower, and of public officials
issued with respect to Borrower and the Subsidiary Guarantors, as well as upon
searches of public records provided to me, as specifically described below.

                    I have assumed the genuineness of all signatures. I have
also assumed the authority and legal capacity of all persons executing documents
on behalf of persons other than the Borrower or the Subsidiary Guarantors, and
the authenticity of all documents submitted to me as originals, and the
conformity to original documents of all documents submitted to me as certified
or photostatic copies.

85

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 86

                    Based upon the foregoing, I am of the opinion that:

                    1.          Borrower is a corporation duly organized and
existing and in good standing under the laws of the State of Delaware and has
the corporate power to own its properties and to carry on its business as
presently conducted by it, and is in good standing as a foreign corporation in
each jurisdiction where the failure to be so qualified would have a material
adverse effect on Borrower.

                    2.          Borrower has the requisite corporate power and
authority to execute and deliver the Credit Agreement, the Revolving Note and
the Security Document Assignments and Security Document Reaffirmations and
Amendments (as defined on Schedule 2) to which it is a party, and to perform the
obligations set forth in the Credit Agreement, the Revolving Note and each of
the Security Document Assignments and Security Document Reaffirmations and
Amendments executed by it, each of which has been duly authorized by all
necessary corporate action. The execution and performance by Borrower of the
Credit Agreement, the Revolving Note and each of the Security Document
Assignments and Security Document Reaffirmations and Amendments to which it is a
party will not violate Borrower’s Certificate of Incorporation or Bylaws, or
result in a material violation of any of the terms, conditions or provisions of
any applicable law or regulation or, to the best of my knowledge and belief, any
order, writ, injunction or decree of any court or governmental authority, or
result in a breach of any of the terms, conditions or provisions of any material
contract to which Borrower is a party or by which Borrower is bound.

                    3.          Each Subsidiary Guarantor is a corporation duly
organized and existing and in good standing under the laws of its jurisdiction
of organization identified in Schedule 1 to this opinion letter and has the
corporate power to own its properties and to carry on its business as presently
conducted by it, and is in good standing as a foreign corporation in each
jurisdiction where the failure to be so qualified would have a material adverse
effect on that Subsidiary Guarantor.

                    4.          Each Subsidiary Guarantor has the requisite
corporate power and authority to execute and deliver the Credit Agreement and
each of the Security Document Assignments and Security Document Amendments to
which it is a party and to perform the obligations set forth in the Credit
Agreement and each of the Security Document Assignments and Security Document
Reaffirmations and Amendments to which it is a party, which has been duly
authorized by all necessary corporate action. The execution and performance of
the Credit Agreement and each of the Security Document Assignments and Security
Document Reaffirmations and Amendments to which it is a party by each Subsidiary
Guarantor will not violate the respective Subsidiary Guarantor’s certificate of
incorporation or bylaws (or other equivalent organizational documents) or result
in a material violation of any of the terms, conditions or provisions of any
applicable law or regulation or, to the best of my knowledge and belief, any
order, writ, injunction or decree of any court or governmental authority, or
result in a breach of any of the terms, conditions or provisions of any material
contract to which the Subsidiary Guarantor is a party or by which the Subsidiary
Guarantor is bound.

                    5.          Spin-Cast Plastics, Inc. has the requisite
corporate power and authority to execute and deliver the Indiana Mortgage and to
perform the obligations set forth in the Indiana

86

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 87

Mortgage, which has been duly authorized by all necessary corporate action. The
execution and performance of the Indiana Mortgage by Spin-Cast Plastics, Inc.
will not violate Spin-Cast Plastics, Inc.’s certificate of incorporation or
bylaws (or other equivalent organizational documents) or result in a material
violation of any of the terms, conditions or provisions of any applicable law or
regulation or, to the best of my knowledge and belief, no order, writ,
injunction or decree of any court or governmental authority, or result in a
material breach of any of the terms, conditions or provisions of any material
contract to which Spin-Cast Plastics, Inc. is a party or by which Spin-Cast
Plastics, Inc. is bound.

                    6.          Based solely on: (i) a review of my litigation
files, (ii) a review of the litigation docket for the Borrower and its
Subsidiary Guarantors, and (iii) a docket search of the United States District
Court for the Northern District of Illinois, there are no judgments outstanding
against Borrower or any Subsidiary Guarantor nor is there now pending or, to my
knowledge, threatened, any material action, suit or proceeding before any court
of any governmental or regulatory authority, by, against or involving Borrower
or any Subsidiary Guarantor, except as disclosed in Schedule 6.7 to the Credit
Agreement, in each case as amended by the information provided in any report or
notice delivered by Borrower to the Lender pursuant to Section 7.1 of the Credit
Agreement. None of the Borrower or the Subsidiary Guarantors is in violation of
any order, writ, injunction or decree of any court, or in violation in any
material respect of any applicable law, order, regulation or demand or any
governmental agency or instrumentality, a default under which would
substantially and materially adversely affect the condition (financial or
otherwise) of Borrower, or its ability to perform its obligations under the
Credit Agreement, the Revolving Note and each of the Security Document
Assignments and Security Document Reaffirmations and Amendments to which it is a
party; or the condition (financial or otherwise) of any Subsidiary Guarantor or
its ability to perform its obligations under each of the Credit Agreement and
the Security Document Assignments and Security Document Reaffirmations and
Amendments to which it is a party; or the ability of Spin-Cast Plastics, Inc. to
perform its obligations under the Indiana Mortgage.

                    7.          There is no default by Borrower under any
material contract to which the Borrower is a party, which has, or would have, a
material and adverse effect upon the financial condition of Borrower. There is
no default by a Subsidiary Guarantor under any material contract to which that
Subsidiary Guarantor is a party, which has, or would have, a material and
adverse effect upon the financial condition of that Subsidiary Guarantor.

                    8.          The Credit Agreement, the Revolving Note and
each of the Security Document Assignments and Security Document Reaffirmations
and Amendments to which it is a party have been duly executed and delivered by a
duly authorized officer of Borrower and constitute the valid and binding
obligations of Borrower, enforceable in accordance with their respective terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or effecting the
enforcement of creditors’ rights, generally, and general principles of equity,
as applicable. The Credit Agreement and each of the Security Document
Assignments and Security Document Reaffirmations and Amendments have been duly
executed and delivered by a duly authorized officer of each Subsidiary Guarantor
which is a party to that agreement and it constitutes the valid and binding

87

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 88

obligations of each such Subsidiary Guarantor, enforceable in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or effecting the
enforcement of creditors’ rights generally, and general principles of equity, as
applicable. The Indiana Mortgage has been duly executed and delivered by a duly
authorized officer of Spin-Cast Plastics, Inc. and it constitutes the valid and
binding obligations of Spin-Cast Plastics, Inc. enforceable in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or effecting the
enforcement of creditors’ rights generally, and general principles of equity, as
applicable.

                    9.          No consent or approval of or, other action by,
any United States federal or state regulatory authority or other person or
entity, which has not been obtained or taken, is required for the execution,
delivery or performance of the Credit Agreement, the Revolving Note and each of
the Security Document Assignments and Security Document Reaffirmations and
Amendments by Borrower or any Subsidiary Guarantor, as applicable.

                    10.          Under choice of law principles applicable under
Illinois law, the provisions of the Credit Agreement (i) stating that Illinois
law shall govern the enforcement of the Credit Agreement, and (ii) stating that
the loans and advances made under the Credit Agreement, together with the
interest on such loans and advances, will be governed by the internal laws of
the State of Illinois, are each enforceable so long as the court finds that (i)
Illinois bears a reasonable relationship to the transaction contemplated by the
Credit Agreement, and (ii) the enforcement of the Credit Agreement in accordance
with Illinois law is not dangerous, inconvenient, immoral or contrary to public
policy.

                    I am a member of the bar of the State of Illinois and
therefore express no opinion with respect to any matter (and except as expressly
provided in Paragraph 10 above, including conflict of laws and choice of law
issues) which may be governed by the laws of any jurisdiction other than the
State of Illinois, the corporation laws of the State of Delaware and applicable
laws of the United States of America.

                    I have not reviewed and do not opine as to: (i) compliance
with applicable zoning, health, safety, building, environmental, land use or
subdivision laws, ordinances, codes, rules or regulations, (ii) ERISA laws,
rules and regulations, (iii) Federal or state taxation, banking, securities or
“blue sky” laws, rules or regulations, or (iv) local law, ordinances or
regulations.

                    This opinion letter is being furnished to the Lender for its
use and the use of its counsel in connection with the transactions contemplated
by the Credit Agreement. I understand and acknowledge that you are relying on
the opinion set forth herein in entering into the

88

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 89

transactions contemplated by the Credit Agreement. No other use or distribution
of this opinion may be made without my prior written consent and no other person
or entity may rely on same.

 

 

 

Very truly yours,

 

 

 

Joan R. Riley

 

Vice President and General Counsel

89

--------------------------------------------------------------------------------

Schedule 1

List of Subsidiary Guarantors

 

 

 

 

 

 

 

Name

 

 

Jurisdiction of Organization

 

 

 

 

 

 

 

 

 

Quixote Transportation Safety, Inc.

 

 

Delaware

TranSafe Corporation

 

 

Delaware

Energy Absorption Systems, Inc.

 

 

Delaware

Energy Absorption Systems (AL) LLC

 

 

Delaware

Surface Systems, Inc.

 

 

Missouri

Nu-Metrics, Inc.

 

 

Pennsylvania

Highway Information Systems, Inc.

 

 

Delaware

Peek Traffic Corporation

 

 

Delaware

U. S. Traffic Corporation

 

 

Delaware

Spin-Cast Plastics, Inc.

 

 

Indiana

--------------------------------------------------------------------------------

Schedule 2

Opinion Documents

 

 

 

 

1.

Credit Agreement;

 

 

 

 

2.

Revolving Note;

 

 

 

 

3.

Patent Security Agreement;

 

 

 

 

4.

Assignment of Patent Security Agreement dated April 20, 2005;

 

 

 

 

5.

Reaffirmation and Amendment of Patent Security Agreement dated April 20, 2005;

 

 

 

 

6.

Trademark Security Agreement;

 

 

 

 

7.

Assignment of Trademark Security Agreement dated April 20, 2005;

 

 

 

 

8.

Reaffirmation and Amendment of Trademark Security Agreement dated April 20,
2005;

 

 

 

 

9.

Subsidiary Stock Pledge Agreement (Quixote);

 

 

 

 

10.

Assignment of Subsidiary Stock Pledge Agreement (Quixote) dated as of April 20,
2005;

 

 

 

 

11.

Reaffirmation and Amendment of Subsidiary Stock Pledge Agreement (Quixote) dated
as of April 20, 2005;

 

 

 

 

12.

Subsidiary Stock Pledge Agreement (Quixote Transportation Safety, Inc.) dated as
of April 20, 2005;

 

 

 

 

13.

Assignment of Subsidiary Stock Pledge Agreement (Quixote Transportation Safety,
Inc.) dated as of April 20, 2005;

 

 

 

 

14.

Reaffirmation and Amendment of Subsidiary Stock Pledge Agreement (Quixote
Transportation Safety, Inc.) dated as of April 20, 2005;

 

 

 

 

15.

Subsidiary Stock Pledge Agreement (TranSafe Corporation) dated as of April 20,
2005;

 

 

 

 

16.

Assignment of Subsidiary Stock Pledge Agreement (TranSafe Corporation) dated as
of April 20, 2005;

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 2

 

 

 

 

17.

Reaffirmation and Amendment of Subsidiary Stock Pledge Agreement (TranSafe
Corporation) dated as of April 20, 2005;

 

 

 

 

18.

Subsidiary Stock Pledge Agreement (Energy Absorption Systems, Inc.) dated as of
April 20, 2005;

 

 

 

 

19.

Assignment of Subsidiary Stock Pledge Agreement (Energy Absorption Systems,
Inc.) dated as of April 20, 2005;

 

 

 

 

20.

Reaffirmation and Amendment of Subsidiary Stock Pledge Agreement (Energy
Absorption Systems, Inc.) dated as of April 20, 2005;

 

 

 

 

21.

California Mortgage;

 

 

 

 

22.

Assignment of California Mortgage dated as of April 20, 2005;

 

 

 

 

23.

Reaffirmation and Amendment of California Mortgage dated as of April 20, 2005;

 

 

 

 

24.

Alabama Leasehold Mortgage;

 

 

 

 

25.

Assignment of Alabama Leasehold Mortgage dated as of April 20, 2005;

 

 

 

 

26.

Reaffirmation and Amendment of Alabama Leasehold Mortgage dated as of April 20,
2005;

 

 

 

 

27.

Pennsylvania Mortgage;

 

 

 

 

28.

Assignment of Pennsylvania Mortgage dated as of April 20, 2005;

 

 

 

 

29.

Reaffirmation and Amendment of Pennsylvania Mortgage dated as of April 20, 2005;

 

 

 

 

30.

Indiana Mortgage, and

 

 

 

 

31.

Collateral Assignment of the Option to Purchase Rights under Lease Agreement.

          The documents identified above as items 4, 7, 10, 13, 16, 19, 22, 25,
28 and 31 are referred to as the “Security Documents Assignments”. The documents
identified above as items 5, 8, 11, 14, 17, 20, 23, 26 and 29 are referred to as
the “Security Documents Reaffirmations and Amendments”.

2

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 3

EXHIBIT D

PRELIMINARY CLOSING CHECKLIST

APRIL 20, 2005

AMENDED AND RESTATED CREDIT AGREEMENT, DATED AS OF
APRIL 20, 2005 (THE “CREDIT AGREEMENT”)
AMONG
LASALLE BANK NATIONAL ASSOCIATION AS LENDER (THE “LENDER”)
AND
QUIXOTE CORPORATION, AS BORROWER

$30,000,000 REVOLVING LOANS

 

 

 

PARTIES

 

 

 

 

 

 

 

LENDER:

LaSalle Bank National Association

 

135 South LaSalle Street

 

Chicago, Illinois 60603

 

Attn: Stephanie Kline

 

Telephone: 312-904-2771

 

Fax: 312-904-6546

 

 

LENDER’S COUNSEL:

Fischel & Kahn, Ltd.

 

190 S. LaSalle Street

 

Suite 2850

 

Chicago, Illinois 60603-3412

 

Attn: Edward F. Dobbins, Esq.

 

Telephone: 312-238-8779

 

Fax: 312-726-1448

 

 

BORROWER:

Quixote Corporation

 

 

BORROWER’S COUNSEL:

Joan Riley, General Counsel and

 

Holland and Knight

 

131 S. Dearborn

 

Suite 3000

 

Chicago, Illinois 60603

 

Attn: Michael Boland

 

Telephone: (312) 263-6300

 

Fax: (312) 578-6666

3

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 4

 

 

GUARANTORS:

Subsidiary Guarantors:

 

 

 

QUIXOTE TRANSPORTATION SAFETY, INC.

 

TRANSAFE CORPORATION

 

ENERGY ABSORPTION SYSTEMS, INC.

 

ENERGY ABSORPTION SYSTEMS (AL) LLC

 

SURFACE SYSTEMS, INC.

 

NU-METRICS, INC.

 

HIGHWAY INFORMATION SYSTEMS, INC.

 

U. S. TRAFFIC CORPORATION

 

(formerly known as Green Light

 

Acquisition Corporation)

 

PEEK TRAFFIC CORPORATION,

 

(formerly known as Vision Acquisition Corporation)

 

SPIN-CAST PLASTICS, INC.

4

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 5

 

 

 

 

 

 

Key:

L

-

Lender

 

 

LC

-

Lender’s Counsel

 

 

B

-

Borrower

 

 

BC

-

Borrower’s Counsel

 

 

RLC

-

Received by Lender’s Counsel

 

 

RL

-

Received by Lender

 

 

W

-

Waived

 

 

NA

-

Not applicable to transaction

 

 

PC

-

To be delivered post closing

5

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 6

 

 

 

 

 

 

 

Resp
Party

 

Status

 

 

 

 

 

 

 

 

 

I. LOAN DOCUMENTS
(EACH DATED AS OF APRIL 20, 2005)

 

 

 

 

 

 

LC

 

 

 

1.

Amended and Restated Credit Agreement, signed by Borrower, Lender and each
Subsidiary Guarantor

 

 

 

 

 

 

 

 

 

 

 

 

LC

 

 

 

2.

$30,000,000 Revolving Loan Note, signed by Borrower.

 

 

 

 

 

 

LC

 

 

 

3.

Assignment and Assumption Agreement (California Deed of Trust)

 

 

 

 

 

 

LC

 

 

 

4.

 Assignment and Assumption Agreement (Pennsylvania Mortgage)

 

 

 

 

 

 

LC

 

 

 

5.

 Assignment and Assumption Agreement (Alabama Mortgage)

 

 

 

 

 

 

LC

 

 

 

6.

 Assignment and Assumption Agreement (Patent Security Agreement)

 

 

 

 

 

 

LC

 

 

 

7.

 Assignment and Assumption Agreement (Trademark Security Agreement)

 

 

 

 

 

 

LC

 

 

 

8.

 A.

Assignment and Assumption Agreements
(Subsidiary Stock Pledge Agreement)

 

 

 

 

 

 

 

 

 

 

 

 

 B.

Assignment and Assumption Agreement
(Security Agreement)

 

 

 

 

 

 

 

LC

 

 

 

9.

Mortgage and Security Agreement

 

 

 

 

 

 

LC

 

 

 

10.

Resignation Letter of The Northern Trust Company, as Administrative Agent under
the Existing Credit Agreement

 

 

 

 

 

 

LC

 

 

 

11.

Assignment Agreements, between each Existing Lender and Lender, assigning to
Lender of all of their rights and obligations under the Existing Credit
Agreement

6

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 7

 

 

 

 

 

 

 

Resp
Party

 

Status

 

 

 

 

BC

 

 

 

12.

An Officer’s Certificate of Borrower, confirming the fact that the Subordination
Agreement executed by U.S. Traffic Corporation and Myers/Nuart Electrical
Products, Inc., in favor of Administrative Agent for the benefit of the Existing
Lenders; has not been amended, revised or terminated

 

 

 

 

 

 

LC

 

 

 

13.

Reaffirmation and Amendment of California Deed of Trust

 

 

 

 

 

 

LC

 

 

 

14.

Reaffirmation and Amendment of Pennsylvania Mortgage

 

 

 

 

 

 

LC

 

 

 

15.

Reaffirmation and Amendment of Leasehold Mortgage (Alabama)

 

 

 

 

 

 

LC

 

 

 

16.

Reaffirmation and Amendment of Security Agreement

 

 

 

 

 

 

LC

 

 

 

17.

Reaffirmation and Amendment of Trademark Security Agreement

 

 

 

 

 

 

LC

 

 

 

18.

Reaffirmation and Amendment of Patent Security Agreement

 

 

 

 

 

 

LC

 

 

 

19.

Reaffirmation and Amendment Of Subsidiary Stock Pledge Agreements

 

 

 

 

 

 

PC

 

 

 

20.

Collateral Assignment of the Option to Purchase Rights under Lease Agreement

 

 

 

 

 

 

 

 

 

 

21.

Reaffirmation and Amendment of Subsidiary Guaranty

 

 

 

 

 

 

LC

 

 

 

22.

Stock Certificate #8 evidencing 699.67 shares of Common Stock of Spin-Cast
Plastics, Inc., with stock powers

 

 

 

 

 

 

B/BC

 

 

 

23.

Legal Opinion of (i) Joan Riley (Quixote’s General Counsel and Counsel to
Subsidiary Guarantors and Energy Absorption Systems (AL) LLC) and (ii) Holland &
Knight (UCC Issues)

7

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 8

 

 

 

 

 

 

 

Resp
Party

 

Status

 

 

 

 

 

 

 

 

 

 

 

LC

 

 

 

24.

Financing Statements:

UCC-3-Amendments (Borrower and Subs) Secretaries of State of Delaware,
California, Pennsylvania, North Carolina and Missouri

 

 

 

 

 

 

 

 

 

 

 

UCC-1-Indiana (Spin-Cast Plastic, Inc.)

 

 

 

 

 

 

 

 

 

 

 

UCC-3- Amendments (i) St. Clair County, Alabama/(ii) Placer County,
California/and (iii) Fayette County, Pennsylvania Recorder’s Offices

 

 

 

 

 

 

II. ORGANIZATIONAL DOCUMENTS [AS APPLICABLE]

 

 

 

 

 

 

 

B/BC

 

 

 

25.

Borrower’s Secretary Certificate (Quixote) with Resolutions

 

 

 

 

 

 

B/BC

 

 

 

26.

Borrower’s Certificate of Good Standing

 

 

 

 

 

 

B/BC

 

 

 

27.

Officer’s Certificate (Quixote)

 

 

 

 

 

 

B/BC

 

 

 

28.

A. Certificate of each Subsidiary Guarantor secretary/manager (as applicable)
with Resolutions and Good Standing Certificate

 

 

 

 

 

 

 

 

 

 

 

B. Managing Member’s Certificate of Energy Absorption Systems (AL) LLC with
Resolutions and Good Standing Certificate

 

 

 

 

 

 

RL

 

 

 

29.

Appraisal (Indiana Property)

 

 

 

 

 

 

RL

 

 

 

30.

 Environmental Report (Indiana Property)

 

 

 

 

 

 

B/BC

 

 

 

31.

 Title Insurance Commitment/Pro Forma Markup (Indiana Property)

 

 

 

 

 

 

B/BC

 

PC

 

32.

Date Down Endorsements to Title Policy (California and Pennsylvania Properties)

 

 

 

 

 

 

B/BC

 

PC

 

33.

 Title Report (Alabama Property)

 

 

 

 

 

 

LC

 

PC

 

34.

Title Insurance Company-Title Insurance Policy (Indiana Property)

8

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 9

 

 

 

 

 

 

 

Resp
Party

 

Status

 

 

 

 

RLC/RL

 

 

 

35.

Federal and state tax lien, bankruptcy, pending suit and judgment searches and
evidence of blanket lien terminations/Spin-Cast Plastics, Inc. UCC Search

 

 

 

 

 

 

 

 

 

 

 

 

(a)

Borrower

 

 

 

 

 

(b)

Each Subsidiary Guarantor

 

 

 

 

 

 

 

 

 

PC

 

36.

UCC Searches

 

 

 

 

 

 

 

 

 

 

 

    (a)  Borrower

 

 

 

 

 

    (b)  Each Subsidiary Guarantor

 

 

 

 

 

 

 

B/BC

 

 

 

37.

 Completed Schedules to Credit Agreement

 

 

 

 

 

 

B/BC

 

 

 

38.

FEMA - Indiana Flood Zone Determination

 

 

 

 

 

 

 

 

 

 

 

IV. VALUATION DOCUMENTS

 

V. INSURANCE

 

B/BC

 

  39.

Copies of Insurance Certificate (or other satisfactory evidence of insurance),
evidence of property and liability insurance, together with loss
payee/additional insured endorsement in favor of LaSalle Bank.

 

 

 

 

VI. FEES

 

 

 

 

B

 

  40.

Payment of Fees

 

 

 

 

9

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 10

EXHIBIT E-1

FORM OF OFFICER’S CERTIFICATE

             I, the undersigned, hereby certify that I am the Chief Financial
Office of Quixote Corporation, a Delaware corporation (the “Company”).
Capitalized terms used herein and not otherwise defined herein are as defined in
that certain Amended and Restated Credit Agreement (the “Credit Agreement”)
dated as of April 20, 2005 among the Company and LaSalle Bank National
Association, as Lender.

             I further certify, solely in my capacity as Chief Financial Officer
of the Company, and not individually, that, pursuant to Section 5.1(7) of the
Credit Agreement, as of the date hereof:

     1.     No Default or Unmatured Default has occurred and is continuing.

     2.     The representations and warranties of the Company contained in the
Credit Agreement are true and correct (other than representations and warranties
made as of a specific date, which are true and correct as of that date).

     3.     There has been no material adverse change in the business condition
(financial or otherwise), operations, performance, properties or prospects of
the Company and its Subsidiaries, considered as a whole, from that reflected in
the financial statements referred to in Section 6.4 of the Credit Agreement.

     4.     The Borrower, the Borrower’s chief executive officer, and the
Borrower’s chief financial officer are in compliance with all requirements of
Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002 and all rules and
regulations related thereto.

             IN WITNESS WHEREOF, the undersigned has executed and delivered this
Certificate in the name and on behalf of the Company on and as of the date
hereof.

 

 

 

 

 

 

Name:

Daniel P. Gorey

 

Title:

Vice President, Chief Financial

 

 

Officer and Treasurer

10

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 11

Exhibit E-2

SECRETARY’S CERTIFICATE
(BORROWER)

April   , 2005

          The undersigned certifies that she is the Secretary of QUIXOTE
CORPORATION, a Delaware corporation (the “Company”), and that she is authorized
to execute and deliver this certificate in the name and on behalf of the
Company. The undersigned further certifies that:

          1.          This certificate is being delivered in connection with the
Amended and Restated Credit Agreement dated as of April   , 2005 (the “Credit
Agreement”), between the Company and LASALLE BANK NATIONAL ASSOCIATION, a
national banking association (the “Lender”).

          2.          The Company previously has certified and delivered to
Lender true and complete copies of the Certificate of Incorporation and the
By-Laws of the Company (the “Organizational Documents”; there has been no
amendment or modification of the Organizational Documents since the date of
delivery and the Organizational Documents continue in full force and effect.

                       3.          Attached hereto as Exhibit A is a true and
correct copy of a certificate issued by the appropriate governmental authorities
evidencing the good standing of the Company in the State of Delaware.

                       4.          Attached hereto as Exhibit B is a true and
correct copy of resolutions duly and unanimously adopted by the Company’s Board
of Directors in accordance with the Company’s Organizational Documents and all
applicable laws authorizing the execution, delivery and performance of the
Credit Agreement, which resolutions have not in any way been rescinded or
modified, but are in full force and effect.

                       5.          The persons named below now hold the office
of the Company set forth opposite his or her name, and the signature opposite
his or her respective name is a true and correct specimen of said signature:

 

 

 

 

 

 

 

NAME

 

OFFICE

 

SIGNATURE

 

 

 

 

 

Leslie J. Jezuit

 

President, Chief Executive Officer and Chairman

 

 

 

 

 

 

 

 

 

Daniel P. Gorey

 

Vice President, Chief Financial Officer and Treasurer

 

 

 

 

 

 

 

 

 

 

Joan R. Riley

 

Vice President and Secretary

 

 

 

 

 

 

 

 

11

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 12

          IN WITNESS WHEREOF, the undersigned has executed and delivered this
certificate in the name and on behalf of the Company on and as of the date
hereof.

 

 

 

 

 

By:

 

 

 

 

 

 

 

Name: Joan R. Riley

 

Title:   Vice President and Secretary

                    The undersigned, Daniel P. Gorey, hereby certifies that he
is the duly elected and qualified Vice President, Chief Financial Officer and
Treasurer of the Company and that, as such, he is authorized to execute this
certificate on behalf of the Company and further certifies that Joan R. Riley is
the duly elected, qualified and acting Vice President and Secretary of the
Company and that her signature appearing on this Certificate of Secretary is her
genuine signature.

                    IN WITNESS WHEREOF, the undersigned has executed and
delivered this certificate in the name and on behalf of the Company on and as of
the date hereof.

 

 

 

 

 

By:

 

 

 

 

 

 

 

Name: Daniel P. Gorey

 

Title: Vice President, Chief Financial

 

Officer and Treasurer

12

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 13

Exhibit E-3

SECRETARY’S CERTIFICATE
(SUBSIDIARY GUARANTY)

April   , 2005

          The undersigned certifies that she is the Secretary of ENERGY
ABSORPTION SYSTEMS, INC., the sole managing member (“Managing Member”) of ENERGY
ABSORPTION SYSYEMS, (AL) LLC, a Delaware Limited Liability Company (the
“Company”), and that she is authorized to execute and deliver this certificate
in the name and on behalf of the Company. The undersigned further certifies
that:

          1.          This certificate is being delivered in connection with the
Amended and Restated Credit Agreement dated as of April   , 2005 (the “Credit
Agreement”), between Quixote Corporation and LASALLE BANK NATIONAL ASSOCIATION,
a national banking association (the “Lender”).

          2.          The Company previously has certified and delivered to
Lender true and complete copies of the Certificate of Formation and the
Operating Agreement of the Company (the “Organizational Documents”); there has
been no amendment or modification of the Organizational Documents since the date
of delivery and the Organizational Documents continue in full force and effect.

                       3.          Attached hereto as Exhibit A is a true and
correct copy of a certificate issued by the appropriate governmental authorities
evidencing the good standing of the Company in the State of Delaware.

                       4.          Attached hereto as Exhibit B is a true and
correct copy of resolutions duly and unanimously adopted by the Managing Member
in accordance with the Company’s Organizational Documents and all applicable
laws authorizing the execution, delivery and performance of the Credit
Agreement, which resolutions have not in any way been rescinded or modified, but
are in full force and effect.

                       5.          The persons named below now hold the office
of the Managing Member set forth opposite his or her name, and the signature
opposite his or her respective name is a true and correct specimen of said
signature:

 

 

 

 

 

 

 

NAME

 

OFFICE

 

SIGNATURE

 

 

 

 

 

Leslie J. Jezuit

 

President, Chief Executive Officer and Chairman

 

 

 

 

 

 

 

 

 

Daniel P. Gorey

 

Vice President and Treasurer

 

 

 

 

 

 

 

 

 

 

Joan R. Riley

 

Secretary

 

 

 

 

 

 

 

 

13

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 14

          IN WITNESS WHEREOF, the undersigned has executed and delivered this
certificate in the name and on behalf of the Managing Member of the Company on
and as of the date hereof.

 

 

 

 

 

ENERGY ABSORPTION SYSTEMS, INC., the sole managing member of ENERGY ABSORPTION
SYSTEMS (AL) LLC

 

 

 

 

 

By:

 

 

 

 

 

 

 

Name: Joan R. Riley

 

Title:   Secretary

          The undersigned, Daniel P. Gorey, hereby certifies that he is the duly
elected and qualified Vice President and Treasurer of the Managing Member of the
Company and that, as such, he is authorized to execute this certificate on
behalf of the Managing Member of the Company and further certifies that Joan R.
Riley is the duly elected, qualified and acting Secretary of the Managing Member
of the Company and that her signature appearing on this Certificate of Secretary
is her genuine signature.

          IN WITNESS WHEREOF, the undersigned has executed and delivered this
certificate in the name and on behalf of the Managing Member Company on and as
of the date hereof.

 

 

 

 

 

ENERGY ABSORPTION SYSTEMS, INC.,
the sole managing member of
ENERGY ABSORPTION SYTEMS (AL) LLC

 

 

 

 

 

By:

 

 

 

 

 

 

 

Name: Daniel P. Gorey

 

Title: Vice President and Treasurer

14

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 15

EXHIBIT F-1

COMPLIANCE CERTIFICATE
(Pre-Collateral Release Date)

To:     LaSalle Bank National Association

                    This Compliance Certificate is furnished pursuant to that
certain Amended and Restated Credit Agreement, dated as of April 20, 2005 (as
amended or modified and in effect from time to time, the “Agreement”) between
Quixote Corporation (the “Borrower”) and LaSalle Bank National Association, as
Lender. Unless otherwise defined herein, capitalized terms used in this
Compliance Certificate have the meanings ascribed thereto in the Agreement.

                    THE UNDERSIGNED HEREBY CERTIFIES THAT:

                    1.          I am the duly elected ___________________ of the
Borrower;

                    2.          I have reviewed the terms of the Agreement and I
have made, or have caused to be made under my supervision, a detailed review of
the transactions and conditions of the Borrower and its Subsidiaries during the
accounting period covered by the attached financial statements;

                    3.          The examinations described in paragraph 2 did
not disclose, and I have no knowledge of, the existence of any condition or
event which constitutes a Default or Unmatured Default during or at the end of
the accounting period covered by the attached financial statements or as of the
date of this Certificate, except as set forth below; and

                    4.          Schedule I attached hereto sets forth financial
data and computations evidencing the Borrower’s compliance with Section 7.4 of
the Agreement, all of which data and computations are true, complete and
correct.

                    Described on the attached Annex I are the exceptions, if
any, to paragraph 3 by listing, in detail, the nature of the condition or event,
the period during which it has existed and the action which the Borrower has
taken, is taking, or proposes to take with respect to each such condition or
event.

                    The foregoing certifications, together with the computations
set forth in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this ___ day of _____,
___.

15

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 16

 

 

 

 

 

Very Truly Yours,

 

 

 

QUIXOTE CORPORATION

 

 

 

By:

 

 

 

 

 

 

 

 

 

 

 

Name:

 

 

 

 

 

 

Title:

 

 

 

 

 

16

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 17

EXHIBIT F-2

COMPLIANCE CERTIFICATE
(Post-Collateral Release Date)

To:     LaSalle Bank National Association

                    This Compliance Certificate is furnished pursuant to that
certain Amended and Restated Credit Agreement, dated as of April 20, 2005 (as
amended or modified and in effect from time to time, the “Agreement”) between
Quixote Corporation (the “Borrower”) and LaSalle Bank National Association, as
Lender. Unless otherwise defined herein, capitalized terms used in this
Compliance Certificate have the meanings ascribed thereto in the Agreement.

                    THE UNDERSIGNED HEREBY CERTIFIES THAT:

                    1.          I am the duly elected ___________________ of the
Borrower;

                    2.          I have reviewed the terms of the Agreement and I
have made, or have caused to be made under my supervision, a detailed review of
the transactions and conditions of the Borrower and its Subsidiaries during the
accounting period covered by the attached financial statements;

                    3.          The examinations described in paragraph 2 did
not disclose, and I have no knowledge of, the existence of any condition or
event which constitutes a Default or Unmatured Default during or at the end of
the accounting period covered by the attached financial statements or as of the
date of this Certificate, except as set forth below; and

                    4.          Schedule I attached hereto sets forth financial
data and computations evidencing the Borrower’s compliance with Section 7.4 of
the Agreement, all of which data and computations are true, complete and
correct.

                    Described on the attached Annex I are the exceptions, if
any, to paragraph 3 by listing, in detail, the nature of the condition or event,
the period during which it has existed and the action which the Borrower has
taken, is taking, or proposes to take with respect to each such condition or
event.

                    The foregoing certifications, together with the computations
set forth in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this ___ day of _____,
___.

17

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 18

 

 

 

 

Very Truly Yours,

 

 

 

QUIXOTE CORPORATION

 

 

 

By:

 

 

 

 

 

Name:

 

 

 

 

 

Title:

18

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 19

EXHIBIT G

REVOLVING LOAN NOTE

 

 

$30,000,000

Chicago, Illinois

 

April 20, 2005

                    FOR VALUE RECEIVED, the undersigned, QUIXOTE CORPORATION, a
Delaware corporation (the “Borrower”), promises to pay to the order of LaSalle
Bank National Association and its registered assigns (the “Lender”), on February
1, 2008, the principal sum of Thirty Million Dollars, or, if less, the aggregate
unpaid principal amount of all Loans made by the Lender to the Borrower from
time to time pursuant to that certain Amended and Restated Credit Agreement,
dated as of April 20, 2005, between the Borrower and Lender (amending and
restating the terms of that Credit Agreement, dated as of May 16, 2003, as
amended) (together with all amendments, if any, from time to time made thereto,
the “Credit Agreement”).

                    The Borrower agrees to pay interest on the principal hereof
remaining from time to time unpaid in accordance with Section 2.13 of the Credit
Agreement.

                    All payments of principal of and interest on this Note shall
be payable in lawful currency of the United States of America at the Agent’s
office at 135 South LaSalle Street, Chicago, Illinois 60603, in immediately
available funds.

                    This Note evidences indebtedness incurred under, and is
subject to the terms and provisions of, the Credit Agreement, to which reference
is made for a statement of those terms and provisions. Should the indebtedness
represented by this Note or any part hereof be collected at law or in equity or
in bankruptcy, receivership, or other court proceedings, or this Note be placed
in the hands of attorneys for collection after maturity (by declaration or
otherwise), the undersigned agrees to pay, in addition to principal and interest
due and payable hereon, reasonable attorneys’ and collection fees.

 

 

 

 

 

QUIXOTE CORPORATION

 

 

 

 

 

By:

 

 

 

Name: 

Daniel P. Gorey

 

 

Title:

Vice President, Chief Financial

 

 

 

Officer and Treasurer

 

19

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 20

Loans made by LASALLE BANK NATIONAL ASSOCIATION (the “Lender”) to QUIXOTE
CORPORATION (the “Borrower”) under the Amended and Restated Credit Agreement,
dated as of April 20, 2005, as amended, among the Borrower and LASALLE BANK
NATIONAL ASSOCIATION, and payments of principal received on the Note to which
this Grid is attached:

 

 

 

 

 

 

 

 

 

 

 

 

 

Date

 

 

Amount of Loan

 

 

Amount of
Principal Paid

 

 

Unpaid
Principal
Balance

 

 

Notation By

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

20

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 21

Exhibit H

OFFICER’S CERTIFICATE

                    I, the undersigned, hereby certify that I am the Chief
Financial Officer of Quixote Corporation, a Delaware corporation (the
“Company”). Capitalized terms used herein and not otherwise defined herein are
as defined in that certain Amended and Restated Credit Agreement (the “Credit
Agreement”) dated as of April ___, 2005 among the Company and LaSalle Bank
National Association.

                    I further certify and confirm, solely in my capacity as
Chief Financial Officer of the Company, and not individually, that,

 

 

 

          (i)          The Subordination Agreement has not been amended,
modified or changed in any manner since the date of its execution, and remains
in full force and effect in accordance with its original terms; and

 

 

 

          (ii)          The Company is not in default under, and to its
knowledge no other party to the Subordination Agreement is in default under, the
Subordination Agreement.

                    IN WITNESS WHEREOF, the undersigned has executed and
delivered this Certificate in the name and on behalf of the Company on and as of
the date hereof.

 

 

 

 

Name:

Daniel P. Gorey

 

Title:

   Vice President, Chief Financial

 

 

      Officer and Treasurer

21

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 22

EXHIBIT I

ASSIGNMENT AND ASSUMPTION AGREEMENT
(CALIFORNIA DEED OF TRUST)

                    This Assignment and Assumption Agreement is made and entered
into as of this 20th day of April, 2005 by and between The Northern Trust
Company, an Illinois banking corporation, as Agent for the benefit of Lenders
under that certain Existing Credit Agreement (as defined herein) (“Northern”)
and LaSalle Bank National Association, a national banking association
(“LaSalle”).

RECITALS:

          A.      Quixote Corporation (the “Borrower”), Northern, individually
and as Administrative Agent for certain Lenders, including without limitation,
LaSalle (“Existing Lenders”) entered into and are parties to that certain Credit
Agreement, dated as of May 16, 2003, as amended by a First Amendment, dated as
of December 9, 2003; by a Second Amendment, dated as of June 30, 2004; by a
Third Amendment, dated as of September 10, 2004 and a Fourth Amendment dated as
of February 9, 2005 (“Existing Credit Agreement”), pursuant to which the
Existing Lenders have made, (i) Revolving Loans to the Borrower evidenced by
certain Revolving Notes, dated as of September 10, 2004, in the maximum
aggregate principal amount of Thirty Eight Million Dollars and 00/100
($38,000,000), executed by the Borrower and made payable pro rata to the order
of the Existing Lenders (the “Revolving Notes”) and (ii) Term Loans to the
Borrower evidenced by certain Term Notes, dated as of May 16, 2003, in the
aggregate original principal amount of Twenty Million Dollars and 00/100
($20,000,000), executed by the Borrower and made payable pro rata to the order
of the Existing Lenders (the “Term Notes”).

          B.      The Borrower, as of February 9, 2005, issued $40,000,000
Convertible Senior Subordinated Notes, due February 15, 2025 (the “New
Subordinated Notes”), the proceeds of which New Subordinated Notes (i) repaid in
full Borrowers’ obligations on the Term Loans and Term Notes and terminated the
Existing Lender’s Term Loan Commitment as defined in the Existing Credit
Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

          C.      Northern has agreed to resign as Administrative Agent under
the Existing Credit Agreement and the Existing Lenders (including Northern) have
agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans

22

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 23

and to assign to LaSalle their rights and obligations under the Existing Credit
Agreement.

          D.      LaSalle and Borrower have agreed to amend and restate the
terms of the Existing Credit Agreement, as amended by an Amended and Restated
Credit Agreement, dated as of the date hereof (the “Amended and Restated Credit
Agreement”).

          E.      Northern, as Agent for the Existing Lenders to the Existing
Credit Agreement, effective upon its resignation as Agent and its assignment of
its pro rata share of the Revolving Loan Commitment and Revolving Loans under
the Existing Credit Agreement, shall assign all of its right title and interest
in certain Mortgaged Property, as defined, in and subject to the terms of that
certain Deed of Trust, Assignment of Rents, Security Agreement and Fixture
Filing, dated as of September 10, 2004, between Energy Absorption Systems, Inc.
(AL) LLC, as Grantor, Northern, as Beneficiary, and Chicago Title Insurance
Company, as Trustee recorded on October 6, 2004 with the County Recorder of
Placer County, California, as Document No. 2004-0132362 (the “ California Deed
of Trust”).

WITNESSETH:

                    NOW, THEREFORE, pursuant to the provisions of the Agreement,
and for good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged:

          1.      Assignment and Assumption. Northern hereby assigns and conveys
to LaSalle, its successors and assigns all right, title and interest of
Northern, as Agent for the Existing Lenders in and to the Mortgage and
collateral secured thereby. LaSalle hereby accepts the assignment and assumption
of the foregoing California Deed of Trust, and agrees that LaSalle or its
successors or assigns will assume and perform the unperformed and partially
performed obligations, liabilities and duties of Northern thereunder in
accordance with the terms hereof and thereof. Northern hereby covenants and
agrees, upon request of LaSalle or the successors or assigns of either of them,
to execute and deliver to LaSalle or the successors or assigns of either of them
such other and further assignment, documents or instruments of assignment and
transfer and to do such actions, supplemental or confirmatory, as may be
required by LaSalle or the successors or assigns of either of them in connection
with the transfer of Northern’s rights, title and interests pursuant to the
foregoing California Deed of Trust, and to otherwise fulfill and discharge the
obligations of assignment and transfer of the California Deed of Trust to
LaSalle under the terms of this Agreement.

23

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 24

                    2.         Miscellaneous.

                    (A)       This Assignment and Assumption Agreement shall be
governed by the internal laws of the State of Illinois.

                    (B)       This Assignment and Assumption Agreement shall be
effective when executed by the parties hereto and accepted by LaSalle.

                    IN WITNESS WHEREOF, the parties hereto have executed this
Assignment and Assumption Agreement this 20th day of April, 2005.

 

 

 

 

 

 

THE NORTHERN

 

TRUST COMPANY, as Agent

 

 

 

 

 

 

By:

 

 

 

 

Name:

Erin Sullivan

 

 

 

Title:

Vice President

 

Accepted and Agreed to this
_____ day of April, 2005.

LASALLE BANK NATIONAL
ASSOCIATION

 

 

 

 

 

By:

 

 

 

 

Name:

Stephanie Kline

 

 

 

Title:

Vice President

 

 

24

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 25

STATE OF _____________               )
                                                            :
_______________ COUNTY             )

          I, the undersigned authority, a Notary Public in and for said County
in said State, hereby certify that _________________________, whose name as
______________________________ of ______________________________, a/an
__________ corporation, is signed to the foregoing instrument and who is known
to me, acknowledged before me on this day that, being informed of the contents
of the said instrument, he/she as such officer and with full authority, executed
the same voluntarily for and as the act of said corporation.

          GIVEN under my hand and seal, this ______ day of _______________,
2005.

 

 

 

[ NOTARIAL SEAL ]

 

 

Notary Public

 

 

 

 

Print Name:

 

 

 

 

 

My Commission Expires:

 

25

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 26

STATE OF _____________               )
                                                            :
_______________ COUNTY             )

          I, the undersigned authority, a Notary Public in and for said County
in said State, hereby certify that _________________________, whose name as
______________________________ of ______________________________, a/an
__________ corporation, is signed to the foregoing instrument and who is known
to me, acknowledged before me on this day that, being informed of the contents
of the said instrument, he/she as such officer and with full authority, executed
the same voluntarily for and as the act of said corporation.

          GIVEN under my hand and seal, this ______ day of _______________,
2005.

 

 

 

[ NOTARIAL SEAL ]

 

 

Notary Public

 

 

 

 

Print Name:

 

 

 

 

 

My Commission Expires:

 

26

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 27

EXHIBIT J

ASSIGNMENT AND ASSUMPTION AGREEMENT
(PENNSYLVANIA MORTGAGE)

                    This Assignment and Assumption Agreement is made and entered
into as of this 20th day of April, 2005 by and between The Northern Trust
Company, an Illinois banking corporation, as Agent for the benefit of Lenders
under that certain Existing Credit Agreement (as defined herein) (“Northern”)
and LaSalle Bank National Association, a national banking association
(“LaSalle”).

RECITALS:

          A.      Quixote Corporation (the “Borrower”), Northern, individually
and as Administrative Agent for certain Lenders, including without limitation,
LaSalle (“Existing Lenders”) entered into and are parties to that certain Credit
Agreement, dated as of May 16, 2003, as amended by a First Amendment, dated as
of December 9, 2003; by a Second Amendment, dated as of June 30, 2004; by a
Third Amendment, dated as of September 10, 2004 and a Fourth Amendment dated as
of February 9, 2005 (“Existing Credit Agreement”), pursuant to which the
Existing Lenders have made, (i) Revolving Loans to the Borrower evidenced by
certain Revolving Notes, dated as of September 10, 2004, in the maximum
aggregate principal amount of Thirty Eight Million Dollars and 00/100
($38,000,000), executed by the Borrower and made payable pro rata to the order
of the Existing Lenders (the “Revolving Notes”) and (ii) Term Loans to the
Borrower evidenced by certain Term Notes, dated as of May 16, 2003, in the
aggregate original principal amount of Twenty Million Dollars and 00/100
($20,000,000), executed by the Borrower and made payable pro rata to the order
of the Existing Lenders (the “Term Notes”).

          B.      The Borrower, as of February 9, 2005, issued $40,000,000
Convertible Senior Subordinated Notes, due February 15, 2025 (the “New
Subordinated Notes”), the proceeds of which New Subordinated Notes (i) repaid in
full Borrowers’ obligations on the Term Loans and Term Notes and terminated the
Existing Lender’s Term Loan Commitment as defined in the Existing Credit
Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

          C.      Northern has agreed to resign as Administrative Agent under
the Existing Credit Agreement and the Existing Lenders (including Northern) have
agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans

27

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 28

and to assign to LaSalle their rights and obligations under the Existing Credit
Agreement.

          D.      LaSalle and Borrower have agreed to amend and restate the
terms of the Existing Credit Agreement, as amended by an Amended and Restated
Credit Agreement, dated as of the date hereof (the “Amended and Restated Credit
Agreement”).

          E.      Northern, as Agent for the Existing Lenders to the Existing
Credit Agreement, effective upon its resignation as Agent and its assignment of
its pro rata share of the Revolving Loan Commitment and Revolving Loans under
the Existing Credit Agreement, shall assign all of its right title and interest
in certain Mortgaged Property, as defined, in and subject to the terms of that
certain Open-End Mortgage, dated as of September 10, 2004, between Nu-Metrics,
Inc., as Mortgagor, and Northern, as the Bank, recorded on October 6, 2004 with
the Recorder of Deeds, Fayette County, Pennsylvania, as Document No.
2004-00017538 or Book 2921, Page 2411 (the “Pennsylvania Mortgage”).

WITNESSETH:

                    NOW, THEREFORE, pursuant to the provisions of the Agreement,
and for good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged:

                    1.          Assignment and Assumption. Northern hereby
assigns and conveys to LaSalle, its successors and assigns all right, title and
interest of Northern, as Agent for the Existing Lenders, in and to the
Pennsylvania Mortgage and collateral secured thereby. LaSalle hereby accepts the
assignment and assumption of the foregoing Pennsylvania Mortgage, and agrees
that LaSalle or its successors or assigns will assume and perform the
unperformed and partially performed obligations, liabilities and duties of
Northern thereunder in accordance with the terms hereof and thereof. Northern
hereby covenants and agrees, upon request of LaSalle or the successors or
assigns of either of them, to execute and deliver to LaSalle or the successors
or assigns of either of them such other and further assignment, documents or
instruments of assignment and transfer and to do such actions, supplemental or
confirmatory, as may be required by LaSalle or the successors or assigns of
either of them in connection with the transfer of Northern’s rights, title and
interests pursuant to the foregoing Pennsylvania Mortgage, and to otherwise
fulfill and discharge the obligations of assignment and transfer of the
Pennsylvania Mortgage to LaSalle under the terms of this Agreement.

                    2.          Miscellaneous.

28

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 29

                    (A)          This Assignment and Assumption Agreement shall
be governed by the internal laws of the State of Illinois.

                    (B)          This Assignment and Assumption Agreement shall
be effective when executed by the parties hereto and accepted by LaSalle.

                    IN WITNESS WHEREOF, the parties hereto have executed this
Assignment and Assumption Agreement this 20th day of April, 2005.

 

 

 

 

 

THE NORTHERN

 

TRUST COMPANY, as Agent

 

 

 

 

By:

 

 

 

Name:

Erin Sullivan

 

 

Title:

Vice President

 

Accepted and Agreed to this
20th day of April, 2005.

LASALLE BANK NATIONAL
ASSOCIATION

 

 

 

 

By:

 

 

 

Name:

Stephanie Kline

 

 

Title:

Vice President

 

 

29

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 30

 

 

STATE OF _______________

)

 

:

__________________ COUNTY

)

          I, the undersigned authority, a Notary Public in and for said County
in said State, hereby certify that _________________________, whose name as
_________________________ of _________________________, a/an __________
corporation, is signed to the foregoing instrument and who is known to me,
acknowledged before me on this day that, being informed of the contents of the
said instrument, he/she as such officer and with full authority, executed the
same voluntarily for and as the act of said corporation.

          GIVEN under my hand and seal, this ______ day of _______________,
2005.

 

 

 

 

[ NOTARIAL SEAL ]

 

 

 

Notary Public

 

 

Print Name:

 

 

 

My Commission Expires:

 

30

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 31

 

 

STATE OF _______________

)

 

:

__________________ COUNTY

)

          I, the undersigned authority, a Notary Public in and for said County
in said State, hereby certify that _________________________, whose name as
_________________________ of _________________________, a/an __________
corporation, is signed to the foregoing instrument and who is known to me,
acknowledged before me on this day that, being informed of the contents of the
said instrument, he/she as such officer and with full authority, executed the
same voluntarily for and as the act of said corporation.

          GIVEN under my hand and seal, this ______ day of _______________,
2005.

 

 

 

 

[ NOTARIAL SEAL ]

 

 

 

Notary Public

 

 

Print Name:

 

 

 

My Commission Expires:

 

31

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 32

EXHIBIT K

ASSIGNMENT AND ASSUMPTION AGREEMENT
(ALABAMA MORTGAGE)

                    This Assignment and Assumption Agreement is made and entered
into as of this 20th day of April, 2005 by and between The Northern Trust
Company, an Illinois banking corporation, as Agent for the benefit of Lenders
under that certain Existing Credit Agreement (as defined herein) (“Northern”)
and LaSalle Bank National Association, a national banking association
(“LaSalle”).

RECITALS:

          A.      Quixote Corporation (the “Borrower”), Northern, individually
and as Administrative Agent for certain Lenders, including without limitation,
LaSalle (“Existing Lenders”) entered into and are parties to that certain Credit
Agreement, dated as of May 16, 2003, as amended by a First Amendment, dated as
of December 9, 2003; by a Second Amendment, dated as of June 30, 2004; by a
Third Amendment, dated as of September 10, 2004 and a Fourth Amendment dated as
of February 9, 2005 (“Existing Credit Agreement”), pursuant to which the
Existing Lenders have made, (i) Revolving Loans to the Borrower evidenced by
certain Revolving Notes, dated as of September 10, 2004, in the maximum
aggregate principal amount of Thirty Eight Million Dollars and 00/100
($38,000,000), executed by the Borrower and made payable pro rata to the order
of the Existing Lenders (the “Revolving Notes”) and (ii) Term Loans to the
Borrower evidenced by certain Term Notes, dated as of May 16, 2003, in the
aggregate original principal amount of Twenty Million Dollars and 00/100
($20,000,000), executed by the Borrower and made payable pro rata to the order
of the Existing Lenders (the “Term Notes”).

          B.      The Borrower, as of February 9, 2005, issued $40,000,000
Covertible Senior Subordinated Notes, due February 15, 2025 (the “New
Subordinated Notes”), the proceeds of which New Subordinated Notes (i) repaid in
full Borrowers’ obligations on the Term Loans and Term Notes and terminated the
Existing Lender’s Term Loan Commitment as defined in the Existing Credit
Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

          C.      Northern has agreed to resign as Administrative Agent under
the Existing Credit Agreement and the Existing Lenders (including Northern) have
agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans

32

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 33

and to assign to LaSalle their rights and obligations under the Existing Credit
Agreement.

          D.      LaSalle and Borrower have agreed to amend and restate the
terms of the Existing Credit Agreement, as amended by an Amended and Restated
Credit Agreement, dated as of the date hereof (the “Amended and Restated Credit
Agreement”).

          E.      Northern, as Agent for the Existing Lenders to the Existing
Credit Agreement, effective upon its resignation as Agent and its assignment of
its pro rata share of the Revolving Loan Commitment and Revolving Loans under
the Existing Credit Agreement, shall assign all of its right title and interest
in (i) certain Mortgaged Property, as defined, in and subject to the terms of
that certain Leasehold Mortgage and Security Agreement, dated as of June 30,
2004, between Energy Absorption Systems (AL) LLC (“EAS LLC”), as Mortgagor, and
Northern, as Agent, recorded on September 3, 2004 with the Recorder of St. Clair
County, Alabama, as Document No. 2004-49642 (the “Alabama Mortgage”) and (ii)
that Collateral Assignment of the Option to Purchase Rights under Lease
Agreement, dated December 31, 2004, between EAS LLC, as Assignor, and Northern,
as Assignee (the “Collateral Assignment”).

WITNESSETH:

                    NOW, THEREFORE, pursuant to the provisions of this
Agreement, and for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged:

                    1.          Assignment and Assumption. Northern hereby
assigns and conveys to LaSalle, its successors and assigns all right, title and
interest of Northern, as Agent for the Existing Lenders, in and to the Alabama
Mortgage, the Collateral Assignment and collateral secured thereby. LaSalle
hereby accepts the assignment and assumption of the foregoing Alabama Mortgage
and Collateral Assignment, and agrees that LaSalle or its successors or assigns
will assume and perform the unperformed and partially performed obligations,
liabilities and duties of Northern thereunder in accordance with the terms
hereof and thereof. Northern hereby covenants and agrees, upon request of
LaSalle or the successors or assigns of either of them, to execute and deliver
to LaSalle or the successors or assigns of either of them such other and further
assignment, documents or instruments of assignment and transfer and to do such
actions, supplemental or confirmatory, as may be required by LaSalle or the
successors or assigns of either of them in connection with the transfer of
Northern’s rights, title and interests pursuant to the foregoing Alabama
Mortgage and Collateral Assignment, and to otherwise fulfill and discharge the
obligations of assignment

33

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 34

and transfer of the Alabama Mortgage and Collateral Assignment to LaSalle under
the terms of this Agreement.

                    2.          Miscellaneous.

                    (A)          This Assignment and Assumption Agreement shall
be governed by the internal laws of the State of Illinois.

                    (B)          This Assignment and Assumption Agreement shall
be effective when executed by the parties hereto and accepted by LaSalle.

                    IN WITNESS WHEREOF, the parties hereto have executed this
Assignment and Assumption Agreement this 20th day of April, 2005.

 

 

 

 

 

THE NORTHERN

 

TRUST COMPANY, as Agent

 

 

 

 

By:

 

 

 

Name:

Erin Sullivan

 

 

Title:

Vice President

 

Accepted and Agreed to this
20th day of April, 2005.

LASALLE BANK NATIONAL
ASSOCIATION

 

 

 

 

By:

 

 

 

Name:

Stephanie Kline

 

 

Title:

Vice President

 

 

34

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 35

 

 

STATE OF _______________

)

 

:

__________________ COUNTY

)

          I, the undersigned authority, a Notary Public in and for said County
in said State, hereby certify that _________________________, whose name as
_________________________ of _________________________, a/an __________
corporation, is signed to the foregoing instrument and who is known to me,
acknowledged before me on this day that, being informed of the contents of the
said instrument, he/she as such officer and with full authority, executed the
same voluntarily for and as the act of said corporation.

          GIVEN under my hand and seal, this ______ day of _______________,
2005.

 

 

 

 

[ NOTARIAL SEAL ]

 

 

 

Notary Public

 

 

Print Name:

 

 

 

My Commission Expires:

 

35

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 36

 

 

STATE OF _______________

)

 

:

__________________ COUNTY

)

          I, the undersigned authority, a Notary Public in and for said County
in said State, hereby certify that _________________________, whose name as
_________________________ of _________________________, a/an __________
corporation, is signed to the foregoing instrument and who is known to me,
acknowledged before me on this day that, being informed of the contents of the
said instrument, he/she as such officer and with full authority, executed the
same voluntarily for and as the act of said corporation.

          GIVEN under my hand and seal, this ______ day of _______________,
2005.

 

 

 

 

[ NOTARIAL SEAL ]

 

 

 

Notary Public

 

 

Print Name:

 

 

 

My Commission Expires:

 

36

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 37

THIS INSTRUMENT PREPARED BY
AND AFTER RECORDING RETURN TO:

Edward F. Dobbins
FISCHEL & KAHN, LTD.
190 S. LaSalle Street
Suite 2850
Chicago, Illinois 60603
(312) 726-0440

EXHIBIT L

MORTGAGE AND SECURITY AGREEMENT

                    THIS MORTGAGE AND SECURITY AGREEMENT (“Mortgage”), made as
of April 20, 2005, is made and executed by Spin-Cast Plastics, Inc., an Indiana
corporation, having its principal offices at 3300 North Kenmore Street, South
Bend, Indiana 46628 (“Mortgagor”), in favor of LASALLE BANK NATIONAL
ASSOCIATION, a national banking association having an office at 135 South
LaSalle Street, Chicago, Illinois 60603 (“Lender”).

RECITALS

                              I.     Lender has agreed to make loans to Quixote
Corporation, a Delaware corporation (“Borrower”) and extend other financial
accommodations to Borrower in an aggregate principal amount of $30,000,000
(collectively, the “Loans”). The Loans consist of one or more revolving loans
(the “Revolving Loan”), the outstanding principal balance of which may increase
or decrease from time to time, but at no time shall the outstanding principal
balance of such Revolving Loan exceed $30,000,000. Certain repayment obligations
of Borrower with respect to the Revolving Loan are evidenced by a certain
Revolving Note, in the principal amount of $30,000,000 (said note, together with
all allonges, amendments, supplements, modifications and replacements thereof,
being referred to in this Mortgage as the “Revolving Note”). The Revolving Note
is sometimes referred to herein as the “Note.” The terms of the Loans are
governed by a certain Amended and Restated Credit and Security Agreement, of
even date herewith (amending and restating the terms of the Credit Agreement
dated, as of May 16, 2003, as amended) by and between Borrower and Lender (said
Credit Agreement, together with all amendments, supplements, modifications and
replacements thereof, being referred to in this Mortgage as the “Loan
Agreement”). The terms and provisions of the Note and the Loan Agreement are
hereby incorporated by reference in this Mortgage. Capitalized terms not
otherwise defined in this Mortgage shall have the meaning ascribed to them in
the Loan Agreement. As an inducement to Lender to make the Loan, Mortgagor has
executed and delivered to Lender the Loan

37

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 38

Agreement, as a Subsidiary Guarantor thereunder, to evidence its becoming a
Subsidiary Guarantor, as defined in the Loan Agreement, under that certain
Subsidiary Guaranty (the “Guaranty”) of even date herewith, pursuant to which
Mortgagor has agreed to guaranty all of the indebtedness and obligations of
Borrower owed to Lender, including without limitation the obligations of
Borrower with respect to the Loan.

                              II.     This Mortgage is given to secure a
guaranty of one or more revolving loans and secures not only present
indebtedness but also future advances, whether such future advances are
obligatory or are to be made at the option of Lender, or otherwise as are to be
made within five (5) years of the date hereof. The amount of indebtedness
secured hereby may increase or decrease from time to time; however the principal
amount of such indebtedness shall not at one time exceed the amount of
$30,000,000 plus interest thereon, and other costs, amounts and disbursements as
provided herein and in the other Loan Instruments (hereinafter defined).

GRANTING CLAUSES

                    To secure the obligations of Mortgagor under the Guaranty
and the payment of all amounts due under and the performance and observance of
all covenants and conditions contained in this Mortgage, the Guaranty, the Loan
Agreement, the Notes, any and all other mortgages, security agreements,
assignments of leases and rents, guaranties, letters of credit and any other
documents and instruments now or hereafter executed by Mortgagor, Borrower or
any party related thereto or affiliated therewith to evidence, secure or
guarantee the payment of all or any portion of the indebtedness under the Notes
or the Guaranty and any and all renewals, extensions, amendments and
replacements of this Mortgage, the Guaranty, the Loan Agreement, the Notes and
any such other documents and instruments (the Guaranty, the Loan Agreement, the
Notes, this Mortgage, such other mortgages, security agreements, assignments of
leases and rents, guaranties, letters of credit, and any other documents and
instruments now or hereafter executed and delivered in connection with the Loan,
and any and all amendments, renewals, extensions and replacements hereof and
thereof, being sometimes referred to collectively as the “Loan Instruments” and
individually as a “Loan Instrument”) and to secure payment of any and all other
indebtedness and obligations of Mortgagor or Borrower or any party related
thereto or affiliated therewith to Lender, whether now existing or hereafter
created, absolute or contingent, direct or indirect, liquidated or unliquidated,
or otherwise (all indebtedness and liabilities secured hereby being hereinafter
sometimes referred to as “Mortgagor’s Liabilities,” provided that Mortgagor’s
Liabilities shall, in no event, exceed $30,000,000), Mortgagor does hereby
convey, mortgage, warrant, assign, transfer, pledge and deliver to Lender the
following described property subject to the terms and conditions herein:

                              (A)     The land located at 3300 N. Kenmore
Street, South Bend, St. Joseph County, Indiana, legally described in attached
Exhibit A (“Land”);

38

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 39

                              (B)     All the buildings, structures,
improvements and fixtures of every kind or nature now or hereafter situated on
the Land; and, to the extent not owned by tenants of the Mortgaged Property, all
machinery, appliances, equipment, furniture and all other personal property of
every kind or nature located in or on, or attached to, or used or intended to be
used in connection with, or with the operation of, the Land, buildings,
structures, improvements or fixtures now or hereafter located or to be located
on the Land, or in connection with any construction being conducted or which may
be conducted thereon, and all extensions, additions, improvements, substitutions
and replacements to any of the foregoing (“Improvements”);

                              (C)     All building materials and goods which are
procured or to be procured for use on or in connection with the Improvements or
the construction of additional Improvements, whether or not such materials and
goods have been delivered to the Land (“Materials”);

                              (D)     All plans, specifications, architectural
renderings, drawings, licenses, permits, soil test reports, other reports of
examinations or analyses of the Land or the Improvements, contracts for services
to be rendered to Mortgagor or otherwise in connection with the Improvements and
all other property, contracts, reports, proposals and other materials now or
hereafter existing in any way relating to the Land or the Improvements or the
construction of additional Improvements;

                              (E)     All easements, tenements, rights-of-way,
vaults, gores of land, streets, ways, alleys, passages, sewer rights, water
courses, water rights and powers and appurtenances in any way belonging,
relating or appertaining to any of the Land or Improvements, or which hereafter
shall in any way belong, relate or be appurtenant thereto, whether now owned or
hereafter acquired (“Appurtenances”);

                              (F)     (i)     All judgments, insurance proceeds,
awards of damages and settlements which may result from any damage to all or any
portion of the Land, Improvements or Appurtenances or any part thereof or to any
rights appurtenant thereto;

                              (ii)     All compensation, awards, damages,
claims, rights of action and proceeds of or on account of (a) any damage or
taking, pursuant to the power of eminent domain, of the Land, Improvements,
Appurtenances or Materials or any part thereof, (b) damage to all or any portion
of the Land, Improvements or Appurtenances by reason of the taking, pursuant to
the power of eminent domain, of all or any portion of the Land, Improvements,
Appurtenances, Materials or of other property, or (c) the alteration of the
grade of any street or highway on or about the Land, Improvements,
Appurtenances, Materials or any part thereof; and, except as otherwise provided
herein, Lender is hereby authorized to collect and receive said awards and
proceeds and to give proper receipts and acquittances therefor and, except as
otherwise provided herein, to apply the same toward the payment of the
indebtedness and other sums secured hereby;

39

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 40

                              (iii)     All contract rights, general
intangibles, actions and rights in action, including, without limitation, all
rights to insurance proceeds and unearned premiums arising from or relating to
damage to the Land, Improvements, Appurtenances or Materials; and

                              (iv)     All proceeds, products, replacements,
additions, substitutions, renewals and accessions of and to the Land,
Improvements, Appurtenances or Materials;

                              (G)     All rents issues, profits, income and
other benefits now or hereafter arising from or in respect of the Land,
Improvements or Appurtenances (the “Rents”); it being intended that this
Granting Clause shall constitute an absolute and present assignment of the
Rents, subject, however, to the conditional permission given to Mortgagor to
collect and use the Rents as provided in this Mortgage;

                              (H)     Any and all leases, licenses and other
occupancy agreements now or hereafter affecting the Land, Improvements,
Appurtenances or Materials, together with all security therefor and guaranties
thereof and all monies payable thereunder, and all books and records owned by
Mortgagor which contain evidence of payments made under the leases and all
security given therefor (collectively, the “Leases”), subject, however, to the
conditional permission given in this Mortgage to Mortgagor to collect the Rents
arising under the Leases as provided in this Mortgage;

                              (I)      Any and all escrow accounts held by
Lender or Lender’s agent pursuant to any provision of this Mortgage;

                              (J)      Any and all after-acquired right, title
or interest of Mortgagor in and to any of the property described in the
preceding Granting Clauses; and

                              (K)     The proceeds from the sale, transfer,
pledge or other disposition of any or all of the property described in the
preceding Granting Clauses;

                    All of the mortgaged property described in the Granting
Clauses, together with all real and personal, tangible and intangible property
pledged in, or to which a security interest attaches pursuant to, any of the
Loan Instruments is sometimes referred to collectively as the “Mortgaged
Property.” The Rents and Leases are pledged on a parity with the Land and
Improvements and not secondarily.

40

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 41

ARTICLE ONE
COVENANTS OF MORTGAGOR

                    Mortgagor covenants and agrees with Lender as follows:

                    1.1.     Performance under Guaranty, Mortgage and Other Loan
Instruments. Mortgagor shall perform, observe and comply with or cause to be
performed, observed and complied with in a complete and timely manner all
provisions hereof and of the Guaranty, every other Loan Instrument and every
instrument evidencing or securing Mortgagor’s Liabilities and will promptly pay
or cause to be paid to Lender when due the principal with interest thereon and
all other sums required to be paid by Mortgagor pursuant to the Guaranty, this
Mortgage, every other Loan Instrument and every other instrument evidencing or
securing Mortgagor’s Liabilities.

                    1.2.     General Covenants and Representations. Mortgagor
covenants, represents and warrants that as of the date hereof and at all times
thereafter during the term hereof: (a) Mortgagor is a corporation, duly
organized, validly existing and in good standing under the laws of the State of
Indiana [and is in good standing under the laws of the State of Illinois;] (b)
Mortgagor is seized of an indefeasible estate in fee simple in that portion of
the Mortgaged Property which is real property, and has good and absolute title
to it and the balance of the Mortgaged Property free and clear of all liens,
security interests, charges and encumbrances whatsoever except those expressly
permitted in writing by Lender, if any (such liens, security interests, charges
and encumbrances expressly permitted in writing being hereinafter referred to as
the “Permitted Encumbrances”); (c) Mortgagor has good right, full power and
lawful authority to mortgage and pledge the Mortgaged Property as provided
herein; (d) upon the occurrence of an Event of Default, Lender may at all times
peaceably and quietly enter upon, hold, occupy and enjoy the Mortgaged Property
in accordance with the terms hereof; and (e) Mortgagor will maintain and
preserve the lien of this Mortgage as a first and paramount lien on the
Mortgaged Property subject only to the Permitted Encumbrances until Mortgagor’s
Liabilities have been paid in full.

                    1.3.     Compliance with Laws and Other Restrictions.
Mortgagor covenants, represents and warrants that the Land and the Improvements
and the use thereof presently comply in all material respects with, and will
during the full term of this Mortgage continue to comply in all material
respects with, all applicable restrictive covenants, zoning and subdivision
ordinances and building codes, licenses, health and environmental laws and
regulations and all other applicable laws, ordinances, rules and regulations. If
any federal, state or other governmental body or any court issues any notice or
order to the effect that the Mortgaged Property or any part thereof is not in
compliance with any such covenant, ordinance, code, law or regulation, Mortgagor
will promptly provide Lender with a copy of such notice or order and will
immediately commence and diligently perform all such actions as are necessary to
comply therewith or otherwise correct such non-compliance. Mortgagor shall not,
without the prior written consent of Lender, petition for or otherwise seek any
change in the zoning ordinances or other public or private restrictions
applicable to the Mortgaged Property on the date hereof.

41

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 42

                    1.4.     Taxes and Other Charges.

                    1.4.1.  Taxes and Assessments. Mortgagor shall pay promptly
when due all taxes, assessments, rates, dues, charges, fees, levies, fines,
impositions, liabilities, obligations, liens and encumbrances of every kind and
nature whatsoever now or hereafter imposed, levied or assessed upon or against
the Mortgaged Property or any part thereof, or upon or against this Mortgage or
Mortgagor’s Liabilities or upon or against the interest of Lender in the
Mortgaged Property, as well as all taxes, assessments and other governmental
charges levied and imposed by the United States of America or any state, county,
municipality or other taxing authority upon or in respect of the Mortgaged
Property or any part thereof; provided, however, that unless compliance with
applicable laws requires that taxes, assessments or other charges must be paid
as a condition to protesting or contesting the amount thereof, Mortgagor may in
good faith, by appropriate proceedings commenced within ninety (90) days of the
due date of such amounts and thereafter diligently pursued, contest the
validity, applicability or amount of any asserted tax, assessment or other
charge and pending such contest Mortgagor shall not be deemed in default
hereunder if on or before the due date of the asserted tax or assessment,
Mortgagor shall first either (i) deposit with Lender a bond or other security
satisfactory to Lender in the amount of 150% of the amount of such tax or
assessment or (ii) obtain an endorsement, in form and substance satisfactory to
Lender, to the loan policy of title insurance issued to Lender insuring the lien
of this Mortgage, insuring over such tax or assessment. Mortgagor shall pay the
disputed or contested tax, assessment or other charge and all interest and
penalties due in respect thereof on or before the date any adjudication of the
validity or amount thereof becomes final and in any event no less than thirty
(30) days prior to any forfeiture or sale of the Mortgaged Property by reason of
such non-payment. Upon Lender’s request, Mortgagor will promptly file, if it has
not theretofore filed, such petition, application or other instrument as is
necessary to cause the Land and Improvements to be taxed as a separate parcel or
parcels which include no property not a part of the Mortgaged Property.

                    1.4.2.  Taxes Affecting Lender’s Interest. If any state,
federal, municipal or other governmental law, order, rule or regulation, which
becomes effective subsequent to the date hereof, in any manner changes or
modifies existing laws governing the taxation of mortgages or debts secured by
mortgages, or the manner of collecting taxes, so as to impose on Lender a tax by
reason of its ownership of any or all of the Loan Instruments or measured by the
principal amount of the Notes, requires or has the practical effect of requiring
Lender to pay any portion of the real estate taxes levied in respect of the
Mortgaged Property to pay any tax levied in whole or in part in substitution for
real estate taxes or otherwise affects materially and adversely the rights of
Lender in respect of the Notes, this Mortgage or the other Loan Instruments,
Mortgagor’s Liabilities and all interest accrued thereon shall, upon thirty (30)
days’ notice, become due and payable forthwith at the option of Lender, whether

42

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 43

or not there shall have occurred an Event of Default, provided, however, that,
if Mortgagor may, without violating or causing a violation of such law, order,
rule or regulation, pay such taxes or other sums as are necessary to eliminate
such adverse effect upon the rights of Lender and does pay such taxes or other
sums when due, Lender may not elect to declare due Mortgagor’s Liabilities by
reason of the provisions of this Section 1.4.2.

                    1.4.3.  Tax Escrow. If directed by Lender in writing,
Mortgagor shall, in order to secure the performance and discharge of Mortgagor’s
obligations under this Section 1.4, but not in lieu of such obligations, deposit
with Lender on the first day of each calendar month throughout the term of the
Loan, deposits, in amounts set by Lender from time to time by written notice to
Mortgagor, in order to accumulate funds sufficient to permit Lender to pay all
annual ad valorem taxes, assessments and charges of the nature described in
Section 1.4.1 at least thirty (30) days prior to the date or dates on which they
shall become delinquent. Mortgagor hereby pledges to Lender, and grants to
Lender a security interest in, any and all such deposits as security for the
Loan. The taxes, assessments and charges for purposes of this Section 1.4.3
shall, if Lender so elects, include, without limitation, water and sewer rents.
Mortgagor shall procure and deliver to Lender when issued all statements or
bills for such obligations. Upon demand by Lender, Mortgagor shall deliver to
Lender such additional monies as are required to satisfy any deficiencies in the
amounts necessary to enable Lender to pay such taxes, assessments and similar
charges thirty (30) days prior to the date they become delinquent. Lender shall
pay such taxes, assessments and other charges as they become due to the extent
of the funds on deposit with Lender from time to time and provided Mortgagor has
delivered to Lender the statements or bills therefor. In making any such
payments, Lender shall be entitled to rely on any bill issued in respect of any
such taxes, assessments or charges without inquiry into the validity, propriety
or amount thereof and whether delivered to Lender by Mortgagor or otherwise
obtained by Lender. Any deposits received pursuant to this Section 1.4.3 shall
not be, nor be deemed to be, trust funds, but may be commingled with the general
funds of Lender and Lender shall have no obligation to pay interest on amounts
deposited with Lender pursuant to this Section 1.4.3. If any Event of Default
occurs, any part or all of the amounts then on deposit or thereafter deposited
with Lender under this Section 1.4.3 may at Lender’s option be applied to
payment of Mortgagor’s Liabilities in such order as Lender may determine.

                    1.4.4.  No Credit Against the Indebtedness Secured Hereby.
Mortgagor shall not claim, demand or be entitled to receive any credit against
the amounts payable under the terms of the Guaranty or on any of Mortgagor’s
Liabilities for any of the taxes, assessments or similar impositions assessed
against the Mortgaged Property or any part thereof or that are applicable to
Mortgagor’s Liabilities or to Lender’s interest in the Mortgaged Property.

43

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 44

                    1.5      Mechanic’s and Other Liens. Mortgagor shall not
permit or suffer any mechanic’s, laborer’s, materialman’s, statutory or other
lien or encumbrance (other than any lien for taxes and assessments not yet due)
to be created upon or against the Mortgaged Property, provided, however, that
Mortgagor may in good faith, by appropriate proceeding, contest the validity,
applicability or amount of any asserted lien and, pending such contest,
Mortgagor shall not be deemed to be in default hereunder if Mortgagor shall
first obtain an endorsement, in form and substance satisfactory to Lender, to
the loan policy of title insurance issued to Lender insuring over such lien, or,
if no such loan policy shall have been issued, then Mortgagor shall deposit with
Lender a bond or other security satisfactory to Lender in the amount of 150% of
the amount of such lien. Mortgagor shall pay the disputed amount and all
interest and penalties due in respect thereof on or before the date any
adjudication of the validity or amount thereof becomes final and, in any event,
no less than thirty (30) days prior to any foreclosure sale of the Mortgaged
Property or the exercise of any other remedy by such claimant against the
Mortgaged Property.

                    1.6      Insurance and Condemnation.

                    1.6.1.  Hazard Insurance. Mortgagor shall, at its sole cost
and expense, obtain for, deliver to, assign to and maintain for the benefit of
Lender, until Mortgagor’s Liabilities are paid in full, policies of hazard
insurance, in an amount which shall be not less than 100% of the full insurable
replacement cost of the Mortgaged Property (except the Land), insuring on a
replacement cost basis the Mortgaged Property with “causes of loss-special form”
coverage and insuring against such other hazards, casualties and contingencies
as Lender may require, including without limitation, if requested by Lender,
earthquake, and, if all or any part of the Mortgaged Property shall at any time
be located within an area identified by the government of the United States or
any agency thereof as having special flood hazards and for which flood insurance
is available, flood. If any such policy shall contain a co-insurance clause it
shall also contain an agreed amount or stipulated value endorsement. All
policies of hazard insurance shall contain a “lender’s loss payable” endorsement
and shall provide that no losses shall be payable to any other parties without
Lender’s prior written consent. The form of such policies, the amounts and the
companies issuing them shall be acceptable to Lender. Originals or certified
copies of all policies shall be delivered to and retained by Lender. Mortgagor
shall pay on or before the due dates thereof premiums on all insurance policies
and on any renewals thereof. In the event of loss, Mortgagor will give immediate
written notice to Lender and Lender may make proof of loss if not made promptly
by Mortgagor (for which purpose Mortgagor hereby irrevocably appoints Lender as
its attorney-in-fact). In the event of the foreclosure of this Mortgage or any
other transfer of title to the Mortgaged Property in full or partial
satisfaction of Mortgagor’s Liabilities, all right, title and interest of
Mortgagor in and to all insurance policies and renewals thereof then in force
shall pass to the purchaser

44

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 45

or grantee. All such policies shall provide that they shall not be modified,
cancelled or terminated without at least thirty (30) days’ prior written notice
to Lender from the insurer.

                    1.6.2.   Other Insurance. Mortgagor shall, at its sole cost
and expense, obtain for, deliver to, assign to and maintain for the benefit of,
Lender, until Mortgagor’s Liabilities are paid for in full, (i) commercial
general liability insurance in such amounts as Lender may specify, together with
workers compensation and employer’s liability insurance, naming Lender as
additional insured, [(ii) a business interruption insurance policy covering loss
of rents [loss of income] at a limit of 100%, in an amount not less than all
rent and other charges payable by the tenants of the Mortgaged Property [gross
income] (based on a fully leased [fully operational] building) for a period of
one (1) year, together with such assignments of the proceeds of such policy as
Lender may require,] (iii) boiler and machinery insurance, if requested by
Lender, and (iv) such other policies of insurance relating to the Mortgaged
Property and the use and operation thereof as Lender may require, including
dramshop, all in form and amounts, and issued by such companies as are
acceptable to Lender.

                    1.6.3.   Adjustment of Loss. Lender is hereby authorized and
empowered, at its option, to adjust or compromise any loss of more than $250,000
under any insurance policies covering or relating to the Mortgaged Property and
to collect and receive the proceeds from any such policy or policies (and
deposit such proceeds as provided in Section 1.6.5). Mortgagor hereby
irrevocably appoints Lender as its attorney-in-fact for the purposes set forth
in the preceding sentence. Each insurance company is hereby authorized and
directed to make payment (i) of 100% of all such losses of more than said amount
directly to Lender alone and (ii) of 100% of all such losses of said amount or
less directly to Mortgagor alone, and in no case to Mortgagor and Lender
jointly. After deducting from such insurance proceeds any expenses incurred by
Lender in the collection and settlement thereof, including without limitation
attorneys’ and adjusters’ fees and charges, Lender shall apply the net proceeds
as provided in Section 1.6.5. Lender shall not be responsible for any failure to
collect any insurance proceeds due under the terms of any policy regardless of
the cause of such failure.

                    1.6.4.   Condemnation Awards. Lender shall be entitled to
all compensation, awards, damages, claims, rights of action and proceeds of, or
on account of, (i) any damage or taking, pursuant to the power of eminent
domain, of the Mortgaged Property or any part thereof, (ii) damage to the
Mortgaged Property by reason of the taking, pursuant to the power of eminent
domain, of other property, or (iii) the alteration of the grade of any street or
highway on or about the Mortgaged Property. Lender is hereby authorized, at its
option, to commence, appear in and prosecute in its own or Mortgagor’s name any
action or proceeding relating to any such compensation, awards, damages, claims,
rights of action and proceeds and to settle or compromise any claim in
connection therewith. Mortgagor hereby irrevocably appoints Lender as its
attorney-in-fact for the purposes set forth in the preceding sentence. Lender
after deducting from such compensation, awards, damages, claims,

45

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 46

rights of action and proceeds all its expenses, including attorneys’ fees, may
apply such net proceeds (except as otherwise provided in Section 1.6.5 of this
Mortgage) to payment of Mortgagor’s Liabilities in such order and manner as
Lender may elect. Mortgagor agrees to execute such further assignments of any
compensation awards, damages, claims, rights of action and proceeds as Lender
may require.

                    1.6.5.   Repair; Proceeds of Casualty Insurance and Eminent
Domain. If all or any part of the Mortgaged Property shall be damaged or
destroyed by fire or other casualty or shall be damaged or taken through the
exercise of the power of eminent domain or other cause described in Section
1.6.4, Mortgagor shall promptly and with all due diligence restore and repair
the Mortgaged Property whether or not the proceeds, award or other compensation
are sufficient to pay the cost of such restoration or repair. At Lender’s
election, to be exercised by written notice to Mortgagor within thirty (30) days
following Lender’s unrestricted receipt in cash or the equivalent thereof of
said proceeds, award or other compensation, the entire amount of said proceeds,
award or compensation shall either (i) be applied to Mortgagor’s Liabilities in
such order and manner as Lender may elect or (ii) be made available to Mortgagor
on such terms and conditions as Lender may impose, including without limitation
the terms and conditions set forth in this Section 1.6.5, for the purpose of
financing the cost of restoration or repair with any excess to be applied to
Mortgagor’s Liabilities. Notwithstanding any other provision of this Section
1.6.5, if an Event of Default shall be existing at the time of such casualty,
taking or other event or if an Event of Default occurs thereafter, Lender shall
have the right to immediately apply all insurance proceeds, awards or
compensation to the payment of Mortgagor’s Liabilities in such order and manner
as Lender may determine. Lender shall have the right at all times to apply such
net proceeds to the cure of any Event of Default or the performance of any
obligations of Mortgagor under the Loan Instruments.

                    1.6.6.   [Proceeds of Business Interruption and Rental
Insurance. The net proceeds of business interruption and rental insurance shall
be paid to Lender for application first to Mortgagor’s Liabilities in such order
and manner as Lender may elect and then to the creation of reserves for future
payments of Mortgagor’s Liabilities in such amounts as Lender deems necessary
with the balance to be remitted to Mortgagor subject to such controls as Lender
may deem necessary to assure that said balance is used to discharge accrued and
to be accrued expenses of operation and maintenance of the Mortgaged Property.]

46

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 47

                    1.6.7.   Renewal of Policies. At least thirty (30) days
prior to the expiration date of any policy evidencing insurance required under
this Section 1.6.7, a renewal thereof satisfactory to Lender shall be delivered
to Lender or substitution therefor, together with receipts or other evidence of
the payment of any premiums then due on such renewal policy or substitute
policy.

                    1.6.8.   Insurance Escrow. If directed by Lender in writing,
Mortgagor shall, in order to secure the performance and discharge of Mortgagor’s
obligations under this Section 1.6, but not in lieu of such obligations, deposit
with Lender on the first day of each calendar month throughout the term of the
Loan, a sum in an amount determined by Lender from time to time by written
notice to Mortgagor, in order to accumulate funds sufficient to permit Lender to
pay all premiums payable in connection with the insurance required hereunder at
least thirty (30) days prior to the date or dates on which they shall become
due. Mortgagor hereby pledges to Lender, and grants to Lender a security
interest in, any and all such deposits as security for the Loan. Upon demand by
Lender, Mortgagor shall deliver to Lender such additional monies as are required
to satisfy any deficiencies in the amounts necessary to enable Lender to pay
such premiums thirty (30) days prior to the date they shall become due. Any
deposits received pursuant to this Section 1.6.8 shall not be, nor be deemed to
be, trust funds, but may be commingled with the general funds of Lender and
Lender shall have no obligation to pay interest on amounts deposited with Lender
pursuant to this Section 1.6.8. If any Event of Default occurs, any part or all
of the amounts then on deposit or thereafter deposited with Lender under this
Section 1.6.8 may at Lender’s option be applied to payment of Mortgagor’s
Liabilities in such order as Lender may determine.

                    1.7.     Non-Impairment of Lender’s Rights. Nothing
contained in this Mortgage shall be deemed to limit or otherwise affect any
right or remedy of Lender under any provision of this Mortgage or of any statute
or rule of law to pay and, upon Mortgagor’s failure to pay the same, Lender may
pay any amount required to be paid by Mortgagor under Sections 1.4, 1.5 and 1.6
and the amount so paid by Lender shall bear interest at the Default Rate (as
defined in the Notes), and, together with interest, shall be added to
Mortgagor’s Liabilities. Mortgagor shall pay to Lender on demand the amount so
paid by Lender, together with all accrued and unpaid interest thereon. The
provisions of Section 1.4.3 are solely for the added protection of Lender and
entail no responsibility on Lender’s part beyond the allowing of due credit as
specifically provided therein. Upon assignment of this Mortgage, any funds on
hand shall be turned over to the assignee and any responsibility of Lender with
respect to such funds shall terminate.

                    1.8.     Care of the Mortgaged Property. Mortgagor shall
preserve and maintain the Mortgaged Property in good and first class condition
and repair. Mortgagor shall not, without the prior written consent of Lender,
permit, commit or suffer any waste, impairment or deterioration of the Mortgaged
Property or of any part thereof, and will not take any action which will
increase the risk of fire or other hazard to the Mortgaged

47

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 48

Property or to any part thereof. Except as otherwise provided in this Mortgage,
no new improvements shall be constructed on the Mortgaged Property and no part
of the Mortgaged Property shall be removed, demolished or altered in any
material manner without the prior written consent of Lender.

                    1.9.     Transfer or Encumbrance of the Mortgaged Property.
Mortgagor shall not permit or suffer to occur any sale, assignment, conveyance,
transfer, mortgage, lease (other than leases made in accordance with the
provisions of this Mortgage) or encumbrance of, or any contract for any of the
foregoing on an installment basis or otherwise pertaining to, the Mortgaged
Property, any part thereof, any interest therein, the beneficial interest in
Mortgagor or in any trust holding title to the Mortgaged Property or any
interest in a corporation, partnership or other entity which owns all or part of
the Mortgaged Property, whether by operation of law or otherwise, without the
prior written consent of Lender having been obtained (i) to the sale,
assignment, conveyance, mortgage, lease, option, encumbrance or other transfer
and (ii) to the form and substance of any instrument evidencing or contracting
for any such sale, assignment, conveyance, mortgage, lease, option, encumbrance
or other transfer. Mortgagor shall not, without the prior written consent of
Lender, further assign or permit to be assigned the rents from the Mortgaged
Property, and any such assignment without the prior express written consent of
Lender shall be null and void. Mortgagor shall not permit any interest in any
lease of the Mortgaged Property to be subordinated to any encumbrance on the
Mortgaged Property other than the Loan Instruments and any such subordination
shall be null and void. Mortgagor agrees that in the event the ownership of the
Mortgaged Property, any interest therein or any part thereof becomes vested in a
person other than Mortgagor, Lender may, without notice to Mortgagor, deal in
any way with such successor or successors in interest with reference to this
Mortgage, the Notes, the Loan Instruments and Mortgagor’s Liabilities without in
any way vitiating or discharging Mortgagor’s liability hereunder or Mortgagor’s
Liabilities. No sale of the Mortgaged Property, no forbearance to any person
with respect to this Mortgage, and no extension to any person of the time for
payment of the Notes or any other Mortgagor’s Liabilities given by Lender shall
operate to release, discharge, modify, change or affect the original liability
of Mortgagor, either in whole or in part, except to the extent specifically
agreed in writing by Lender.

                    1.10.    Further Assurances. At any time and from time to
time, upon Lender’s request, Mortgagor shall make, execute and deliver, or cause
to be made, executed and delivered, to Lender, and where appropriate shall cause
to be recorded, registered or filed, and from time to time thereafter to be
re-recorded, re-registered and refiled at such time and in such offices and
places as shall be deemed desirable by Lender, any and all such further
mortgages, security agreements, financing statements, instruments of further
assurance, certificates and other documents as Lender may consider necessary or
desirable in order to effectuate or perfect, or to continue and preserve the
obligations under, the Guaranty, this Mortgage, any other Loan Instrument and
any instrument evidencing or securing Mortgagor’s Liabilities, and the lien of
this Mortgage as a lien upon all of the Mortgaged Property, whether now owned or
hereafter

48

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 49

acquired by Mortgagor, and unto all and every person or persons deriving any
estate, right, title or interest under this Mortgage. Upon any failure by
Mortgagor to do so, Lender may make, execute, record, register, file, re-record,
re-register or re-file any and all such mortgages, instruments, certificates and
documents for and in the name of Mortgagor, and Mortgagor hereby irrevocably
appoints Lender the agent and attorney-in-fact of Mortgagor to do so.

                   1.11.  Security Agreement and Financing Statements.

 

 

 

 

(a)       Mortgagor (as debtor) hereby grants to Lender (as creditor and secured
party) a security interest under the Uniform Commercial Code in all fixtures,
machinery, appliances, equipment, furniture and personal property of every
nature whatsoever constituting part of the Mortgaged Property. Mortgagor shall
execute any and all documents, including without limitation financing statements
pursuant to the Uniform Commercial Code, as Lender may request to preserve,
maintain and perfect the priority of the first lien and security interest
created hereby on property which may be deemed personal property or fixtures,
and shall pay to Lender on demand any expenses incurred by Lender in connection
with the preparation, execution and filing of any such documents. Mortgagor
hereby authorizes and empowers Lender and irrevocably appoints Lender the agent
and attorney-in-fact of Mortgagor to execute and file, on Mortgagor’s behalf,
all financing statements and refilings and continuations thereof as Lender deems
necessary or advisable to create, preserve and protect such lien. When and if
Mortgagor and Lender shall respectively become the debtor and secured party in
any Uniform Commercial Code financing statement affecting the Mortgaged Property
(or Lender takes possession of personal property delivered by Mortgagor where
possession is the means of perfection of the security interest), then, at
Lender’s sole election, this Mortgage shall be deemed a security agreement as
defined in such Uniform Commercial Code, and the remedies for any violation of
the covenants, terms and conditions of the agreements herein contained shall be
as prescribed herein or by general law, or, as to such part of the security
which is also reflected in such financing statement, by the specific statutory
consequences now or hereafter enacted and specified in the Uniform Commercial
Code.

 

 

 

 

 

(b)       Without limitation of the foregoing, if an Event of Default occurs,
Lender shall be entitled immediately to exercise all remedies available to it
under the Uniform Commercial Code and this Section 1.11. Mortgagor shall, in
such event and if Lender so requests, assemble the tangible personal property at
Mortgagor’s

 

49

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 50

 

 

 

 

expense, at a convenient place designated by Lender. Lender may publicly or
privately sell or otherwise dispose of such fixtures, machinery, appliances,
equipment, furniture and personal property upon such terms and in such manner as
Lender may require. Mortgagor shall pay all expenses incurred by Lender in the
collection of such indebtedness, including attorneys’ fees and legal expenses,
and in the repair of any real estate or other property to which any of the
tangible personal property may be affixed. If any notification of intended
disposition of any of the personal property is required by law, such
notification shall be deemed reasonable and proper if given at least ten (10)
days before such disposition. Any proceeds of the disposition of any of the
personal property may be applied by Lender to the payment of the reasonable
expenses of retaking, holding, preparing for sale and selling the personal
property, including attorneys’ fees and legal expenses, and any balance of such
proceeds may be applied by Lender toward the payment of such of Mortgagor’s
Liabilities, and in such order of application, as Lender may from time to time
elect. If an Event of Default occurs, Lender shall have the right to exercise
and shall automatically succeed to all rights of Mortgagor with respect to
intangible personal property subject to the security interest granted herein.
Any party to any contract subject to the security interest granted herein shall
be entitled to rely on the rights of Lender without the necessity of any further
notice or action by Mortgagor. Lender shall not by reason of this Mortgage or
the exercise of any right granted hereby be obligated to perform any obligation
of Mortgagor with respect to any portion of the personal property nor shall
Lender be responsible for any act committed by Mortgagor, or any breach or
failure to perform by Mortgagor with respect to any portion of the personal
property.

 

 

 

 

 

(c)       Mortgagor and Lender agree that the filing of a financing statement in
the records normally having to do with personal property shall never be
construed as in any way derogating from or impairing the express declaration and
intention of the parties hereto, hereinabove stated, that everything used in
connection with the production of income from the Mortgaged Property and/or
adapted for use therein and/or which is described or reflected in this Mortgage
is, and at all times and for all purposes and in all proceedings, legal or
equitable, shall be regarded as part of the real estate encumbered by this
Mortgage irrespective of whether (i) any such item is physically attached to the
Land or Improvements, (ii) serial numbers are used for the better identification
of certain equipment items capable of being thus identified in a recital

 

50

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 51

 

 

 

 

contained herein or in any list filed with Lender, or (iii) any such item is
referred to or reflected in any such financing statement so filed at any time.
Similarly, the mention in any such financing statement of (1) rights in or to
the proceeds of any fire and/or hazard insurance policy, or (2) any award in
eminent domain proceedings for a taking or for loss of value, or (3) Mortgagor’s
interest as lessor in any present or future lease or rights to income growing
out of the use and/or occupancy of the Mortgaged Property, whether pursuant to
lease or otherwise, shall never be construed as in any way altering any of the
rights of Lender as determined by this instrument or adversely affecting the
priority of Lender’s lien granted hereby or by any other recorded document. Any
such mention in any such financing statement is declared to be for the
protection of Lender in the event any court or judge shall at any time hold with
respect to clauses (1), (2) or (3) above, that notice of Lender’s priority of
interest, to be effective against a particular class of persons, including, but
not limited to, the federal government and any subdivisions or entity of the
federal government, must be filed in the Uniform Commercial Code records.

 

 

 

 

 

1.12.     Assignment of Rents.

 

 

 

 

 

(a)        The assignment of rents, income and other benefits contained in
Section (G) of the Granting Clauses of this Mortgage shall be fully operative
without any further action on the part of either party, and, specifically,
Lender shall be entitled, at its option, upon the occurrence of an Event of
Default hereunder, to all rents, income and other benefits from the Mortgaged
Property, whether or not Lender takes possession of such property. Mortgagor
hereby further grants to Lender the right effective upon the occurrence of an
Event of Default to do any or all of the following, at Lender’s option: (i)
enter upon and take possession of the Mortgaged Property for the purpose of
collecting the rents, income and other benefits; (ii) dispossess by the usual
summary proceedings any tenant defaulting in the payment thereof to Lender;
(iii) lease the Mortgaged Property or any part thereof; (iv) repair, restore and
improve the Mortgaged Property; and (v) apply the rents, income and other
benefits, after payment of certain expenses and capital expenditures relating to
the Mortgaged Property, on account of Mortgagor’s Liabilities in such order and
manner as Lender may elect. Such assignment and grant shall continue in effect
until Mortgagor’s Liabilities are paid in full, the execution of this Mortgage
constituting and evidencing the irrevocable consent of

 

51

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 52

 

 

 

 

Mortgagor to the entry upon and taking possession of the Mortgaged Property by
Lender pursuant to such grant, whether or not foreclosure proceedings have been
instituted. Neither the exercise of any rights under this section by Lender nor
the application of any such rents, income or other benefits to payment of
Mortgagor’s Liabilities shall cure or waive any Event of Default or notice
provided for hereunder, or invalidate any act done pursuant hereto or pursuant
to any such notice, but shall be cumulative of all other rights and remedies.
Notwithstanding the foregoing, so long as no Event of Default has occurred or is
continuing, Mortgagor shall have the right and authority to continue to collect
the rents, income and other benefits from the Mortgaged Property as they become
due and payable but not more than thirty (30) days prior to the due date
thereof. The existence or exercise of such right of Mortgagor to collect said
rents, income and other benefits shall not operate to subordinate this
assignment to any subsequent assignment of said rents, income or other benefits,
in whole or in part, by Mortgagor, and any such subsequent assignment by
Mortgagor shall be subject to the rights of Lender hereunder.

 

 

 

 

 

(b)        Mortgagor shall not permit any rent under any lease of the Mortgaged
Property to be collected more than thirty (30) days in advance of the due date
thereof and, upon any receiver, Lender, anyone claiming by, through or under
Lender or any purchaser at a foreclosure sale coming into possession of the
Mortgaged Property, no tenant shall be given credit for any rent paid more than
thirty (30) days in advance of the due date thereof. Mortgagor shall act
promptly to enforce all available remedies against any delinquent lessee so as
to protect the interest of the lessor under the leases and to preserve the value
of the Mortgaged Property.

 

                    1.13.     After-Acquired Property. To the extent permitted
by, and subject to, applicable law, the lien of this Mortgage, including without
limitation the security interest created under Section 1.11, shall automatically
attach, without further act, to all property hereafter acquired by Mortgagor
located in or on, or attached to, or used or intended to be used in connection
with, or with the operation of, the Mortgaged Property or any part thereof.

                    1.14.     Leases Affecting Mortgaged Property.

 

 

 

 

(a)        Mortgagor shall comply with and perform in a complete and timely
manner all of its obligations as landlord under all leases affecting the
Mortgaged Property or any part thereof. Mortgagor shall give notice to Lender of
any default by the landlord under any lease affecting the Mortgaged Property
promptly upon the

 

52

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 53

 

 

 

 

occurrence of such default, but, in any event, in such time to afford Lender an
opportunity to cure any such default prior to the tenant having any right to
terminate the lease. Each of the leases shall contain a provision requiring the
tenant to notify Lender of any default by landlord and granting an opportunity
for a reasonable time after such notice to cure such default prior to any right
accruing to the tenant to terminate such lease. Mortgagor, if requested by
Lender, shall furnish promptly to Lender (i) original or certified copies of all
such leases now existing or hereafter created, as amended from time to time, and
(ii) a current rent roll in form satisfactory to Lender. Lender shall have the
right to notify at any time and from time to time any tenant of the Mortgaged
Property of any provision of this Mortgage.

 

 

 

 

 

(b)        The assignment contained in Section (H) of the Granting Clauses shall
not be deemed to impose upon Lender any of the obligations or duties of the
landlord or Mortgagor provided in any lease.

 

                    1.15.     Management of Mortgaged Property. Mortgagor shall
cause the Mortgaged Property to be managed at all times in accordance with sound
business practice.

                    1.16.     Execution of Leases. Mortgagor shall not permit
any leases to be made of the Mortgaged Property or existing leases to be
modified, terminated, extended or renewed without the prior written consent of
Lender.

                    1.17     Expenses. Mortgagor shall pay when due and payable,
and otherwise on demand made by Lender, all appraisal fees, recording fees,
taxes, brokerage fees and commissions, abstract fees, title insurance fees,
escrow fees, attorneys’ fees, court costs, documentary and expert evidence, fees
of inspecting architects and engineers, and all other costs and expenses of
every character which have been incurred or which may hereafter be incurred by
Lender in connection with any of the following:

 

 

 

 

(a)        Any court or administrative proceeding involving Mortgagor, the
Mortgaged Property or the Loan Instruments to which Lender is made a party or is
subject to subpoena by reason of its being a holder of any of the Loan
Instruments, including without limitation bankruptcy, insolvency,
reorganization, probate, eminent domain, condemnation, building code and zoning
proceedings;

 

 

 

 

 

(b)        Any court or administrative proceeding or other action undertaken by
Lender to enforce any remedy or to collect any indebtedness due under this
Mortgage or any of the other Loan

 

53

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 54

 

 

 

 

Instruments following a default thereunder, including without limitation a
foreclosure of this mortgage or a public or private sale under the Uniform
Commercial Code;

 

 

 

 

 

(c)        Any remedy exercised by Lender following an Event of Default
including foreclosure of this Mortgage and actions in connection with taking
possession of the Mortgaged Property or collecting rents assigned hereby;

 

 

 

 

 

(d)        Any activity in connection with any request by Mortgagor or anyone
acting on behalf of Mortgagor that Lender consent to a proposed action which,
pursuant to this Mortgage or any of the other Loan Instruments may be undertaken
or consummated only with the prior consent of Lender, whether or not such
consent is granted; or

 

 

 

 

 

(e)        Any negotiation undertaken between Lender and Mortgagor or anyone
acting on behalf of Mortgagor pertaining to the existence or cure of any default
under or the modification or extension of any of the Loan Instruments.

 

          If Mortgagor fails to pay said costs and expenses as above provided,
Lender may elect, but shall not be obligated, to pay the costs and expenses
described in this Section 1.17, and if Lender does so elect, then the amounts
paid by Lender shall bear interest at the Default Rate and, together with
interest, shall be added to Mortgagor’s Liabilities. Mortgagor will, upon demand
by Lender, reimburse Lender for all such expenses, together with all accrued and
unpaid interest thereon. In the event of foreclosure hereof, Lender shall be
entitled to add to the indebtedness found to be due by the court a reasonable
estimate of such expenses to be incurred after entry of the decree of
foreclosure. To the extent permitted by law, Mortgagor agrees to hold harmless
Lender against and from, and reimburse it for, all claims, demands, liabilities,
losses, damages, judgments, penalties, costs and expenses, including without
limitation attorneys’ fees, which may be imposed upon, asserted against, or
incurred or paid by it by reason of or in connection with any bodily injury or
death or property damage occurring in or upon or in the vicinity of the
Mortgaged Property through any cause whatsoever, or asserted against it on
account of any act performed or omitted to be performed hereunder, or on account
of any transaction arising out of or in any way connected with the Mortgaged
Property, this Mortgage, the other Loan Instruments or any of Mortgagor’s
Liabilities.

 

 

 

 

1.18     Lender’s Performance of Mortgagor’s Obligations.

 

 

 

 

 

(a)        If Mortgagor fails to pay any tax, assessment, encumbrance or other
imposition, or to furnish insurance hereunder, or to perform any other covenant,
condition or term in this Mortgage, the Guaranty or any other Loan Instrument,
Lender may, but shall not

 

54

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 55

 

 

 

 

be obligated to, pay, obtain or perform the same. All payments made, whether
such payments are regular or accelerated payments, and costs and expenses
incurred or paid by Lender in connection therewith shall be due and payable
immediately. The amounts so incurred or paid by Lender shall bear interest at
the Default Rate and, together with interest, shall be added to Mortgagor’s
Liabilities. Lender is hereby empowered to enter and to authorize others to
enter upon the Mortgaged Property or any part thereof for the purpose of
performing or observing any covenant, condition or term that Mortgagor has
failed to perform or observe, without thereby becoming liable to Mortgagor or
any person in possession holding under Mortgagor. Performance or payment by
Lender of any obligation of Mortgagor shall not relieve Mortgagor of such
obligation or of the consequences of having failed to perform or pay the same
and shall not effect the cure of any Event of Default.

 

 

 

 

 

(b)        Without limitation of the foregoing, unless Mortgagor provides Lender
with evidence of the insurance coverage required by this Mortgage, Lender may
purchase insurance at Mortgagors’ expense to protect Lender’s interests in the
Mortgaged Property. This insurance may, but need not, protect Mortgagor’s
interest. The coverage that Lender purchases may not pay any claim that
Mortgagor may make or any claim that is made against Mortgagor in connection
with the Mortgaged Property. Mortgagor may later cancel any insurance purchased
by Lender, but only after providing Lender with evidence that Mortgagor has
obtained insurance as required by this Mortgage. If Lender purchases insurance
for the Mortgaged Property, Mortgagor will be responsible for the costs of such
insurance, including interest and any other charges that may be imposed in
connection with the placement of such insurance, until the effective date of the
cancellation or expiration of such insurance. Without limitation of any other
provision of this Mortgage, the cost of such insurance shall be added to the
indebtedness secured hereby. The cost of the insurance may be more than the cost
of insurance Mortgagor may be able to obtain on its own.

 

                    1.19.     Payment of Superior Liens. To the extent that
Lender, after the date hereof, pays any sum due under any provision of law or
instrument or document creating any lien superior or equal in priority in whole
or in part to the lien of this Mortgage, Lender shall have and be entitled to a
lien on the premises equal in parity with that discharged, and Lender shall be
subrogated to and receive and enjoy all rights and liens possessed, held or
enjoyed by, the holder of such lien, which shall remain in existence and

55

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 56

benefit Lender to secure the Guaranty, and all obligations and liabilities
secured hereby. Lender shall be subrogated, notwithstanding their release of
record, to mortgages, trust deeds, superior titles, vendors’ liens, mechanics’
and materialmen’s liens, charges, encumbrances, rights and equities on the
Mortgaged Property to the extent that any obligation under any thereof is paid
or discharged with proceeds of disbursements or advances subject to the Guaranty
or other indebtedness secured hereby.

                    1.20.     Use of the Mortgaged Property. Mortgagor shall not
suffer or permit the Mortgaged Property, or any portion thereof, to be used for
any purpose other than for the purposes for which it is currently being used
and, without limitation of the foregoing, Mortgagor shall not use or permit the
use of the Mortgaged Property or any portion thereof for any unlawful purpose.

                    1.21.     Litigation Involving Mortgaged Property. Mortgagor
shall promptly notify Lender of any litigation, administrative procedure or
proposed legislative action initiated against Mortgagor or the Mortgaged
Property or in which the Mortgaged Property is directly or indirectly affected
including any proceedings which seek to (i) enforce any lien against the
Mortgaged Property, (ii) correct, change or prohibit any existing condition,
feature or use of the Mortgaged Property, (iii) condemn or demolish the
Mortgaged Property, (iv) take, by the power of eminent domain, any portion of
the Mortgaged Property or any property which would damage the Mortgaged
Property, (v) modify the zoning applicable to the Mortgaged Property, or (vi)
otherwise adversely affect the Mortgaged Property. Mortgagor shall initiate or
appear in any legal action or other appropriate proceedings when necessary to
protect the Mortgaged Property from damage. Mortgagor shall, upon written
request of Lender, represent and defend the interests of Lender in any
proceedings described in this Section 1.21 or, at Lender’s election, pay the
fees and expenses of any counsel retained by Lender to represent the interest of
Lender in any such proceedings, in which event such fees and expenses shall be
added to Mortgagor’s Liabilities and shall bear interest at the Default Rate.

                    1.22.     Environmental Matters.

 

 

 

 

(a)        Mortgagor represents and warrants that Mortgagor has not generated,
used, stored, treated, transported, manufactured, handled, produced or disposed
of any Hazardous Materials (as defined in the Loan Agreement), on or off the
Mortgaged Property in any manner which at any time violates any Environmental
Law (as defined in the Loan Agreement) or any license, permit, certificate,
approval or similar authorization thereunder and the operations of the Mortgagor
comply in all material respects with all Environmental Laws and all licenses,
permits, certificates, approvals and similar authorizations thereunder; (ii)
there has been no investigation, proceeding, complaint, order, directive, claim,
citation or notice by any governmental authority or any other Person, nor is any
pending or to the best of the Mortgagor’s knowledge threatened, and Mortgagor
shall immediately notify

 

56

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 57

 

 

 

 

Lender upon becoming aware of any such investigation, proceeding, complaint,
order, directive, claim, citation or notice and take prompt and appropriate
actions to respond thereto, with respect to any non-compliance with or violation
of the requirements of any Environmental Law by Mortgagor or the release, spill
or discharge, threatened or actual, of any Hazardous Materials or the
generation, use, storage, treatment, transportation, manufacture, handling,
production or disposal of any Hazardous Materials or any other environmental,
health or safety matter, which affects Mortgagor or its business, operations or
assets or any properties at which Mortgagor has transported, stored or disposed
of any Hazardous Materials; (iii) Mortgagor has no material liability
(contingent or otherwise) in connection with a release, spill or discharge,
threatened or actual, of any Hazardous Materials or the generation, use,
storage, treatment, transportation, manufacture, handling, production or
disposal of any Hazardous Materials; and (iv) without limiting the generality of
the foregoing, Mortgagor shall, following the determination by Lender that there
is non-compliance, or any condition which requires any action by or on behalf of
Mortgagor in order to avoid any non-compliance, with any Environmental Law, at
Mortgagor’s expense, cause an independent environmental engineer acceptable to
Lender to conduct such tests of the relevant site(s) as are appropriate and
prepare and deliver a report setting forth the result of such tests, a proposed
plan for remediation and an estimate of the costs thereof; and

 

 

 

 

 

(b)     Mortgagor agrees to defend (with counsel satisfactory to Lender),
protect, indemnify and hold harmless Lender, each affiliate or subsidiary of
Lender, and each of their respective officers, directors, employees, attorneys
and agents (each an “Indemnified Party”) from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature (including,
without limitation, the disbursements and the reasonable fees of counsel for
each Indemnified Party in connection with any investigative, administrative or
judicial proceeding, whether or not the Indemnified Party shall be designated a
party thereto), which may be imposed on, incurred by, or asserted against, any
Indemnified Party (whether direct, indirect or consequential and whether based
on any federal, state or local laws or regulations, including, without
limitation, securities laws and regulations, Environmental Laws and commercial
laws and regulations, under common law or in equity, or based on contract or
otherwise) in any manner relating to or arising out of this Mortgage or any
other Loan

 

57

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 58

 

 

 

 

Instrument, or any act, event or transaction related or attendant thereto, the
making or issuance and the management of the Loans or the use or intended use of
the proceeds of the Loans; provided, however, that Mortgagor shall not have any
obligation hereunder to any Indemnified Party with respect to matters caused by
or resulting from the willful misconduct or gross negligence of such Indemnified
Party, further provided, that with respect to matters asserted by the Mortgagor,
Mortgagor shall not have any obligations hereunder to any Indemnified Party in
the event the Mortgagor has obtained a final nonappealable judgment in its
favor. To the extent that the undertaking to indemnify set forth in the
preceding sentence may be unenforceable because it is violative of any law or
public policy, Mortgagor shall satisfy such undertaking to the maximum extent
permitted by applicable law. Any liability, obligation, loss, damage, penalty,
cost or expense covered by this indemnity shall be paid to each Indemnified
Party on demand, and, failing prompt payment, shall, together with interest
thereon at the highest rate then applicable to Loans hereunder from the date
incurred by each Indemnified Party until paid by Mortgagor, be added to the
Mortgagor’s Liabilities and be secured by the Mortgaged Property. The provisions
of this paragraph shall survive the satisfaction and payment of the other
Mortgagor’s Liabilities and the release of this Mortgage.

 

ARTICLE TWO

DEFAULTS

                    2.1.     Event of Default. The term “Event of Default,”
wherever used in this Mortgage, shall mean any one or more of the following
events:

 

 

 

 

(a)     The failure by Mortgagor: (i) to pay or deposit when due any deposit for
taxes and assessments due hereunder or any other sums to be paid by Mortgagor
hereunder or under the Guaranty; or (ii) to keep, perform, or observe any
covenant, condition or agreement contained in Sections 1.4.1, 1.6.1, 1.6.2, 1.9
or 1.20 hereof; or (iii) to keep, perform or observe any other covenant,
condition or agreement on the part of Mortgagor in this Mortgage.

 

 

 

 

 

(b)     The occurrence of an “Event of Default” under and as defined in the
Guaranty, the Loan Agreement or any of the other Loan Instruments.

 

58

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 59

 

 

 

 

(c)     The untruth of any warranty or representation made herein.

 

 

 

 

 

(d)     An uninsured loss, damage, destruction or taking by eminent domain or
other condemnation proceedings of any part of the Mortgaged Property.

 

ARTICLE THREE
REMEDIES

                    3.1.     Acceleration of Maturity. If an Event of Default
shall have occurred, Lender may declare Mortgagor’s Liabilities to be
immediately due and payable, and upon such declaration Mortgagor’s Liabilities
shall immediately become and be due and payable without further demand or
notice. The foregoing shall not be in limitation of any provision contained in
any other Loan Instrument, including without limitation any such provision
pursuant to which Mortgagor’s Liabilities become immediately due and payable
without action or election by Lender.

                    3.2.     Lender’s Power of Enforcement. If an Event of
Default shall have occurred, Lender may, either with or without entry or taking
possession as provided in this Mortgage or otherwise, and without regard to
whether or not Mortgagor’s Liabilities shall have been accelerated, and without
prejudice to the right of Lender thereafter to bring an action of foreclosure or
any other action for any default existing at the time such earlier action was
commenced or arising thereafter, proceed by any appropriate action or
proceeding: (a) to enforce satisfaction of the Guaranty and/or any other of
Mortgagor’s Liabilities or the performance of any term hereof or any of the
other Loan Instruments; (b) to foreclose this Mortgage and to have sold, as an
entirety or in separate lots or parcels, the Mortgaged Property; and (c) to
pursue any other remedy available to it. Lender may take action either by such
proceedings or by the exercise of its powers with respect to entry or taking
possession, or both, as Lender may determine. Without limitation of the
foregoing, if an Event of Default shall have occurred, as an alternative to the
right of foreclosure for the full indebtedness evidenced by the Guaranty and the
interest accrued thereon and any other Mortgagor’s Liabilities, after
acceleration thereof, Lender shall have the right to institute partial
foreclosure proceedings with respect to the portion of Mortgagor’s Liabilities
so in default, as if under a full foreclosure, and without declaring all of
Mortgagor’s Liabilities to be immediately due and payable (such proceedings
being referred to herein as “partial foreclosure”), and provided that, if Lender
has not elected to accelerate all of Mortgagor’s Liabilities and a foreclosure
sale is made because of default in payment of only a part of Mortgagor’s
Liabilities, such sale may be made subject to the continuing lien of this
Mortgage for the unmatured part of Mortgagor’s Liabilities. Any sale pursuant to
a partial foreclosure, if so made, shall not in any manner affect the unmatured
portion of Mortgagor’s Liabilities, but as to such unmatured portion, this
Mortgage and the lien thereof shall remain in full force and effect just as
though no

59

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 60

foreclosure sale had been made. Notwithstanding the filing of any partial
foreclosure or entry of a decree of sale therein, Lender may elect, at any time
prior to a foreclosure sale pursuant to such decree, to discontinue such partial
foreclosure and to accelerate Mortgagor’s Liabilities by reason of any Event of
Default upon which such partial foreclosure was predicated or by reason of any
other defaults, and proceed with full foreclosure proceedings. Lender may
proceed with one or more partial foreclosures without exhausting its right to
proceed with a full or partial foreclosure sale for any unmatured portion of
Mortgagor’s Liabilities, it being the purpose to permit, from time to time a
partial foreclosure sale for any matured portion of Mortgagor’s Liabilities
without exhausting the power to foreclose and to sell the Mortgaged Property
pursuant to any partial foreclosure in respect of any other portion of
Mortgagor’s Liabilities, whether matured at the time or subsequently maturing,
and without exhausting at any time the right of acceleration and the right to
proceed with a full foreclosure.

                    3.3.      Lender’s Right to Enter and Take Possession,
Operate and Apply Income.

 

 

 

 

(a)        If an Event of Default shall have occurred, (i) Mortgagor, upon
demand of Lender, shall forthwith surrender to Lender the actual possession of
the Mortgaged Property, and to the extent permitted by law, Lender itself, or by
such officers or agents as it may appoint, is hereby expressly authorized to
enter and take possession of all or any portion of the Mortgaged Property and
may exclude Mortgagor and the agents and employees of Mortgagor wholly therefrom
and shall have joint access with Mortgagor to the books, papers and accounts of
Mortgagor; and (ii) notwithstanding the provisions of any lease or other
agreement to the contrary, Mortgagor shall pay monthly in advance to Lender, on
Lender’s entry into possession, or to any receiver appointed to collect the
rents, income and other benefits of the Mortgaged Property, the fair and
reasonable rental value for the use and occupation of such part of the Mortgaged
Property as may be in possession of Mortgagor, or any entity affiliated with or
controlled by Mortgagor, and upon default in any such payment Mortgagor shall
vacate and surrender possession of such part of the Mortgaged Property to Lender
or to such receiver, and in default thereof Mortgagor may be evicted by summary
proceedings or otherwise.

 

 

 

 

 

(b)        If Mortgagor shall for any reason fail to surrender or deliver the
Mortgaged Property or any part thereof after Lender’s demand, Lender may obtain
a judgment or decree conferring on Lender the right to immediate possession or
requiring Mortgagor to deliver immediate possession of all or part of the
Mortgaged Property to Lender, to the entry of which judgment or decree Mortgagor
hereby specifically consents. Mortgagor shall pay to Lender, upon

 

60

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 61

 

 

 

 

demand, all costs and expenses of obtaining such judgment or decree and
reasonable compensation to Lender, its attorneys and agents, and all such costs,
expenses and compensation shall, until paid, be secured by the lien of this
Mortgage.

 

 

 

 

 

(c)     Upon every such entering upon or taking of possession, Lender, to the
extent permitted by law, may hold, store, use, operate, manage and control the
Mortgaged Property and conduct the business thereof, and, from time to time:

 

 

 

 

 

(i)     perform such construction, make all necessary and proper maintenance,
repairs, renewals, replacements, additions and improvements thereto and thereon,
and purchase or otherwise acquire additional fixtures and personal property;

 

 

 

 

 

(ii)     insure or keep the Mortgaged Property insured;

 

 

 

 

 

(ii)     manage and operate the Mortgaged Property and exercise all the rights
and powers of Mortgagor, on its behalf or otherwise, with respect to the same;

 

 

 

 

 

(iv)     enter into agreements with others to exercise the powers herein granted
Lender, all as Lender from time to time may determine; and Lender may collect
and receive all the rents, income and other benefits of the Mortgaged Property,
including those past due as well as those accruing thereafter; and shall apply
the monies so received by Lender, in such order and manner as Lender may
determine, to (1) the payment of amounts due under the Guaranty or pursuant to
this Mortgage or to any other Mortgagor’s Liabilities, (2) deposits for taxes
and assessments, (3) the payment or creation of reserves for payment of
insurance, taxes, assessments and other proper charges or liens or encumbrances
upon the Mortgaged Property or any part thereof, and (4) the compensation,
expenses and disbursements of the agents, attorneys and other representatives of
Lender; and

 

 

 

 

 

(v)     exercise such remedies as are available to Lender under the Loan
Instruments or at law or in equity.

 

Lender shall surrender possession of the Mortgaged Property to Mortgagor only
when all Mortgagor’s Liabilities shall have been paid in full and all other
defaults have been cured. However, the same right to take possession shall exist
if any subsequent Event of Default shall occur.

61

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 62

                    3.4.     Leases. Lender is authorized to foreclose this
Mortgage subject to the rights, if any, of any or all tenants of the Mortgaged
Property, even if the rights of any such tenants are or would be subordinate to
the lien of this Mortgage. Lender may elect to foreclose the rights of some
subordinate tenants while foreclosing subject to the rights of other subordinate
tenants.

                    3.5.     Purchase by Lender. Upon any foreclosure sale,
Lender may bid for and purchase all or any portion of the Mortgaged Property
and, upon compliance with the terms of the sale, may hold, retain and possess
and dispose of such property in its own absolute right without further
accountability.

                    3.6.     Application of Foreclosure Sale Proceeds. The
proceeds of any foreclosure sale of the Mortgaged Property or any part thereof
received by Lender shall be applied by Lender to the indebtedness secured hereby
in such order and manner as Lender may elect.

                    3.7.     Application of Indebtedness Toward Purchase Price.
Upon any foreclosure sale, Lender may apply any or all of the indebtedness and
other sums due to Lender under the Guaranty, this Mortgage or any other Loan
Instrument to the price paid by Lender at the foreclosure sale.

                    3.8.     Waiver of Appraisement, Valuation, Stay, Extension
and Redemption Laws. Mortgagor hereby waives any and all rights of redemption.
Mortgagor further agrees, to the full extent permitted by law, that in case of
an Event of Default, neither Mortgagor nor anyone claiming through or under it
will set up, claim or seek to take advantage of any reinstatement, appraisement,
valuation, stay or extension laws now or hereafter in force, or take any other
action which would prevent or hinder the enforcement or foreclosure of this
Mortgage or the absolute sale of the Mortgaged Property or the final and
absolute putting into possession thereof, immediately after such sale, of the
purchaser thereat. Mortgagor, for itself and all who may at any time claim
through or under it, hereby waives, to the full extent that it may lawfully so
do, the benefit of all such laws, and any and all right to have the assets
comprising the Mortgaged Property marshalled upon any foreclosure of the lien
hereof and agrees that Lender or any court having jurisdiction to foreclose such
lien may sell the Mortgaged Property in part or as an entirety.

                    3.9.     Receiver - Lender in Possession. If an Event of
Default shall have occurred, Lender, to the extent permitted by law and without
regard to the value of the Mortgaged Property or the adequacy of the security
for the indebtedness and other sums secured hereby, shall be entitled as a
matter of right and without any additional showing or proof, at Lender’s
election, to either the appointment by the court of a receiver (without the
necessity of Lender posting a bond) to enter upon and take possession of the
Mortgaged Property and to collect all rents, income and other benefits thereof
and apply the same as the court may direct or to be placed by the court into
possession of the Mortgaged Property as mortgagee in possession with the same
power herein granted to a receiver

62

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 63

and with all other rights and privileges of a mortgagee in possession under law.
The right to enter and take possession of and to manage and operate the
Mortgaged Property, and to collect all rents, income and other benefits thereof,
whether by a receiver or otherwise, shall be cumulative to any other right or
remedy hereunder or afforded by law and may be exercised concurrently therewith
or independently thereof. Lender shall be liable to account only for such rents,
income and other benefits actually received by Lender, whether received pursuant
to this Section 3.9 or Section 3.3. Notwithstanding the appointment of any
receiver or other custodian, Lender shall be entitled as pledgee to the
possession and control of any cash, deposits or instruments at the time held by,
or payable or deliverable under the terms of this Mortgage to Lender.

                    3.10.     Mortgagor to Pay Mortgagor’s Liabilities in Event
of Default; Application of Monies by Lender.

 

 

 

 

(a)        Upon occurrence of an Event of Default, Lender shall be entitled to
sue for and to recover judgment against Mortgagor for Mortgagor’s Liabilities
due and unpaid together with costs and expenses, including, without limitation,
the reasonable compensation, expenses and disbursements of Lender’s agents,
attorneys and other representatives, either before, after or during the pendency
of any proceedings for the enforcement of this Mortgage; and the right of Lender
to recover such judgment shall not be affected by any taking of possession or
foreclosure sale hereunder, or by the exercise of any other right, power or
remedy for the enforcement of the terms of this Mortgage, or the foreclosure of
the lien hereof.

 

 

 

 

 

(b)        In case of a foreclosure sale of all or any part of the Mortgaged
Property and of the application of the proceeds of sale to the payment of
Mortgagor’s Liabilities, Lender shall be entitled to enforce all other rights
and remedies under the Loan Instruments.

 

 

 

 

 

(c)        Mortgagor hereby agrees, to the extent permitted by law, that no
recovery of any judgment by Lender under any of the Loan Instruments, and no
attachment or levy of execution upon any of the Mortgaged Property or any other
property of Mortgagor, shall (except as otherwise provided by law) in any way
affect the lien of this Mortgage upon the Mortgaged Property or any part thereof
or any lien, rights, powers or remedies of Lender hereunder, but such lien,
rights, powers and remedies shall continue unimpaired as before until
Mortgagor’s Liabilities are paid in full.

 

 

 

 

 

(d)        Any monies collected or received by Lender under this Section 3.12
shall be applied to the payment of compensation, expenses and disbursements of
the agents, attorneys and other

 

63

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 64

 

 

 

 

representatives of Lender, and the balance remaining shall be applied to the
payment of Mortgagor’s Liabilities, in such order and manner as Lender may
elect, and any surplus, after payment of all Mortgagor’s Liabilities, shall be
paid to Mortgagor.

 

                    3.11.     Delay or Omission. No delay or omission of Lender
in the exercise of any right, power or remedy accruing upon any Event of Default
shall exhaust or impair any such right, power or remedy, or be construed to
waive any such Event of Default or to constitute acquiescence therein. Every
right, power and remedy given to Lender may be exercised from time to time and
as often as may be deemed expedient by Lender.

                    3.12.     Waiver of Default. No waiver of any Event of
Default hereunder shall extend to or affect any subsequent or any other Event of
Default then existing, or impair any rights, powers or remedies in respect
thereof.

                    3.13.     Remedies Cumulative. No right, power or remedy
conferred upon or reserved to Lender by the Guaranty, this Mortgage or any other
Loan Instrument or any instrument evidencing or securing Mortgagor’s Liabilities
is exclusive of any other right, power or remedy, but each and every such right,
power and remedy shall be cumulative and concurrent and shall be in addition to
any other right, power and remedy given hereunder or under the Guaranty or any
other Loan Instrument or any instrument evidencing or securing Mortgagor’s
Liabilities, or now or hereafter existing at law, in equity or by statute.

ARTICLE FOUR

MISCELLANEOUS PROVISIONS

                    4.1     Heirs, Successors and Assigns Included in Parties.
Whenever Mortgagor or Lender is named or referred to herein, heirs and
successors and assigns of such person or entity shall be included, and all
covenants and agreements contained in this Mortgage shall bind the successors
and assigns of Mortgagor, including any subsequent owner of all or any part of
the Mortgaged Property and inure to the benefit of the successors and assigns of
Lender. This Section 4.1 shall not be construed to permit an assignment,
transfer, conveyance, encumbrance or other disposition otherwise prohibited by
this Mortgage.

                    4.2.     Notices. All notices, requests, reports, demands or
other instruments required or contemplated to be given or furnished under this
Mortgage to Mortgagor or Lender shall be directed to Mortgagor or Lender as the
case may be at the following addresses:

64

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 65

 

 

 

 

 

 

If to Lender:

LaSalle Bank National Association

 

 

 

135 South LaSalle Street

 

 

 

Chicago, Illinois 60603-4105

 

 

 

Attention: Stephanie Kline

 

 

 

 

 

 

If to Mortgagor:

3300 N. Kenmore Street

 

 

 

South Bend, Indiana 46628

 

 

 

 

 

 

 

 

 

 

 

Attention: 

 

 

Any such notices, requests, reports, demands or other instruments shall be (i)
personally delivered to the offices set forth above, in which case they shall be
deemed delivered on the date of delivery to said offices, (ii) sent by certified
mail, return receipt requested, in which case they shall be deemed delivered
three (3) business days after deposit in the U.S. mail, postage prepaid, or
(iii) sent by air courier (Federal Express or like service), in which case they
shall be deemed delivered on the date of actual delivery. Either party may
change the address to which any such notice, report, demand or other instrument
is to be delivered by furnishing written notice of such change to the other
party in compliance with the foregoing provisions.

                    4.3.     Headings. The headings of the articles, sections,
paragraphs and subdivisions of this Mortgage are for convenience only, are not
to be considered a part hereof, and shall not limit, expand or otherwise affect
any of the terms hereof.

                    4.4.     Invalid Provisions. In the event that any of the
covenants, agreements, terms or provisions contained in the Guaranty, the Notes,
this Mortgage or in any other Loan Instrument shall be invalid, illegal or
unenforceable in any respect, the validity of the remaining covenants,
agreements, terms or provisions contained herein or in the Guaranty, the Notes
or in any other Loan Instrument (or the application of the covenant, agreement,
term held to be invalid, illegal or unenforceable, to persons or circumstances
other than those in respect of which it is invalid, illegal or unenforceable)
shall be in no way affected, prejudiced or disturbed thereby.

                    4.5.     Changes. Neither this Mortgage nor any term hereof
may be released, changed, waived, discharged or terminated orally, or by any
action or inaction, but only by an instrument in writing signed by the party
against which enforcement of the release, change, waiver, discharge or
termination is sought. To the extent permitted by law, any agreement hereafter
made by Mortgagor and Lender relating to this Mortgage shall be superior to the
rights of the holder of any intervening lien or encumbrance. Any holder of a
lien or encumbrance junior to the lien of this Mortgage shall take its lien
subject to the right of Lender to amend, modify or supplement this Mortgage, the
Guaranty or any of the other Loan Instruments, to extend the maturity of
Mortgagor’s Liabilities or any portion thereof, to vary the rate of interest
chargeable under the Notes and to increase the amount of the indebtedness
secured hereby, in each and every case without obtaining the

65

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 66

consent of the holder of such junior lien and without the lien of this Mortgage
losing its priority over the rights of any such junior lien.

                    4.6.     Governing Law. This Mortgage shall be construed,
interpreted, enforced and governed by and in accordance with the laws of the
State of Illinois except that the internal laws of the State where the Mortgaged
Property is located shall govern with respect to the validity, creation,
perfection, priority and enforcement of the liens and security interests created
hereby.

                    4.7.     Required Notices. Mortgagor shall notify Lender
promptly of the occurrence of any of the following: (i) receipt of notice from
any governmental authority relating to the violation of any rule, regulation,
law or ordinance, the enforcement of which would materially and adversely affect
the Mortgaged Property; (ii) material default by any tenant in the performance
of its obligations under any lease of all or any portion of the Mortgaged
Property or receipt of any notice from any such tenant claiming that a default
by landlord in the performance of its obligations under any such lease has
occurred; or (iii) commencement of any judicial or administrative proceedings by
or against or otherwise adversely affecting Mortgagor or the Mortgaged Property.

                    4.8.     Future Advances. This Mortgage is given to secure a
guaranty of not only existing indebtedness, but also future advances (whether
such advances are obligatory or are to be made at the option of Lender, or
otherwise) made by Lender under the Notes, to the same extent as if such future
advances were made on the date of the execution of this Mortgage. The total
amount of principal indebtedness that may be so secured may decrease or increase
from time to time, but all principal indebtedness secured hereby shall, in no
event, exceed $ 30,000,000.

                    4.9.     Release. Upon full payment and satisfaction of
Mortgagor’s Liabilities, Lender shall issue to Mortgagor an appropriate release
deed in recordable form.

                    4.10.     Attorneys’ Fees. Whenever reference is made herein
to the payment or reimbursement of attorneys’ fees, such fees shall be deemed to
include compensation to staff counsel, if any, of Lender in addition to the fees
of any other attorneys engaged by Lender. All attorneys’ fees incurred by Lender
in connection with the foreclosure of this Mortgage shall be recoverable in
foreclosure.

                    4.11.     Compliance with Mortgage Foreclosure Law. In the
event that any provision in this Mortgage shall be inconsistent with any
applicable statutory provision governing the creation, perfection or enforcement
of mortgages, such provisions shall take precedence over the provisions of this
Mortgage, but shall not invalidate or render unenforceable any other provision
of this Mortgage that can be construed in a manner consistent with such
provisions. If any provision of this Mortgage shall grant to Lender any rights
or remedies upon default of Mortgagor which are more limited than the rights
that would otherwise be vested in Lender under applicable law in the absence of
said

66

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 67

provision, Lender shall be vested with such rights applicable law to the full
extent permitted by law.

                    4.12.     WAIVER OF TRIAL BY JURY. TO INDUCE LENDER TO MAKE
THE LOAN, MORTGAGOR HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY
WAIVES ANY AND ALL RIGHTS WHICH MORTGAGOR MAY HAVE TO TRIAL BY JURY IN RESPECT
OF ANY LEGAL PROCEEDINGS IN WHICH MORTGAGOR AND LENDER ARE ADVERSE PARTIES, IN
CONNECTION WITH THE NOTES, THIS MORTGAGE OR ANY OF THE OTHER LOAN INSTRUMENTS.

                    4.13.     CONSENT TO JURISDICTION, SERVICE OF PROCESS. TO
INDUCE LENDER TO MAKE THE LOAN, MORTGAGOR HEREBY KNOWINGLY, VOLUNTARILY,
INTENTIONALLY AND IRREVOCABLY AGREES THAT ALL ACTIONS ARISING DIRECTLY OR
INDIRECTLY AS A RESULT OF THE NOTES, THIS MORTGAGE OR ANY OF THE OTHER LOAN
INSTRUMENTS SHALL BE INSTITUTED AND LITIGATED ONLY IN COURTS HAVING SITUS IN THE
CITY OF CHICAGO, ILLINOIS, AND MORTGAGOR HEREBY CONSENTS TO THE EXCLUSIVE
JURISDICTION AND VENUE OF ANY STATE OR FEDERAL COURT LOCATED AND HAVING SITUS IN
SAID CITY OF CHICAGO, AND WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS.
MORTGAGOR HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS, AND CONSENTS THAT, AT LENDER’S OPTION,
ALL SUCH SERVICE OF PROCESS MAY BE MADE BY CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, DIRECTED TO MORTGAGOR AT THE ADDRESS FOR MORTGAGOR INDICATED IN
SECTION 4.2 ABOVE.

                    IN WITNESS WHEREOF, Mortgagor has caused this instrument to
be executed by its duly authorized officers as of the day and year first above
written.

 

 

 

 

 

MORTGAGOR:

 

 

 

SPIN-CAST PLASTICS, INC.,

 

a______________ corporation

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

LENDER:

 

 

 

LASALLE BANK NATIONAL

ATTEST:

ASSOCIATION

 

 

 

By:

 

 

67

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 68

 

 

 

 

 

By

 

 

Name:

Stephanie Kline

Its

 

 

Title:

Vice President

 

 

 

 

 

 

 

 

 

 

68

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 69

ACKNOWLEDGMENT

STATE OF INDIANA           )
                                                ) SS
COUNTY OF               )

          I, __________________________, a Notary Public in and for and residing
in
said          County          and          State,          DO          HEREBY          CERTIFY          THAT
________________________________     and     ___________________________,     the ________________  and  _________________________
of SPIN-CAST PLASTICS, INC., a___ __________________ corporation, personally
known to me to be the same persons whose names are subscribed to the foregoing
instrument appeared before me this day in person and acknowledged that they
signed and delivered said instrument as their own free and voluntary act and as
the free and voluntary act of said corporation for the uses and purposes therein
set forth.

          GIVEN under my hand and notarial seal this ______ day of ___________,
200__.

 

 

 

Notary Public

 

 

 

My Commission Expires:

 

 

 

 

69

--------------------------------------------------------------------------------

EXHIBIT A - LEGAL DESCRIPTION

A tract of land in part of Township 38 North, Range 2 County, Indiana, described
the Northeast Quarter of Section 28, East, City of South Bend, St. Joseph as
follows:

COMMENCING at the Northeast corner of Section 28; thence South 89º 48’ O5” West,
966.00 feet along the North line of said Section 28; thence South 00º 00’ 23”
West 40.00 feet to the South boundary of Cleveland Road; thence South 89º 48’
05” West, 289.00 feet along said South boundary; thence South 44º 54’ 14” West,
14.17 feet to the East boundary of Kenmore Street; thence South 00º 00’ 23”
West, 146.76 feet along said East boundary; thence along said East boundary,
Southeasterly 294.37 feet along an arc to the left, having a radius of 1869.86
feet, subtended by a long chord, having a bearing of South 04º 30’ 13” East, and
a length of 294,07 feet to the point of beginning of this description; thence
North 89º 48’ 05” East 581.88 feet; thence South 00º 00’ 23” West, 472.86 feet;
thence South 89º 58’ 56” West, 498.99 feet to said East boundary of Kenmore
Street; thence North 09º 59’ 37” West, 445.88 feet along said East boundary;
thence Northwesterly 31.98 feet along an arc to the right, having a radius of
1869.86 feet and subtended by a long chord, having a bearing of North 09º 30’15”
West, and a length of 31.98 feet to the place of beginning.

Subject to legal highways.

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 2

EXHIBIT M

ASSIGNMENT AND ASSUMPTION AGREEMENT
(SECURITY AGREEMENT)

                    This Assignment and Assumption Agreement is made and entered
into as of this 20th day of April, 2005 by and between The Northern Trust
Company, an Illinois banking corporation, as Agent for the benefit of Lenders
under that certain Existing Credit Agreement (as defined herein) (“Northern”)
and LaSalle Bank National Association, a national banking association
(“LaSalle”).

RECITALS:

          A.     Quixote Corporation (the “Borrower”), Northern, individually
and as Administrative Agent for certain Lenders, including without limitation,
LaSalle (“Existing Lenders”) entered into and are parties to that certain Credit
Agreement, dated as of May 16, 2003, as amended by a First Amendment, dated as
of December 9, 2003; by a Second Amendment, dated as of June 30, 2004; by a
Third Amendment, dated as of September 10, 2004 and a Fourth Amendment dated as
of February 9, 2005 (“Existing Credit Agreement”), pursuant to which the
Existing Lenders have made, (i) Revolving Loans to the Borrower evidenced by
certain Revolving Notes, dated as of September 10, 2004, in the maximum
aggregate principal amount of Thirty Eight Million Dollars and 00/100
($38,000,000), executed by the Borrower and made payable pro rata to the order
of the Existing Lenders (the “Revolving Notes”) and (ii) Term Loans to the
Borrower evidenced by certain Term Notes, dated as of May 16, 2003, in the
aggregate original principal amount of Twenty Million Dollars and 00/100
($20,000,000), executed by the Borrower and made payable pro rata to the order
of the Existing Lenders (the “Term Notes”).

          B.     The Borrower, as of February 9, 2005, issued $40,000,000
Convertible Senior Subordinated Notes, due February 15, 2025 (the “New
Subordinated Notes”), the proceeds of which New Subordinated Notes (i) repaid in
full Borrowers’ obligations on the Term Loans and Term Notes and terminated the
Existing Lender’s Term Loan Commitment as defined in the Existing Credit
Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

          C.     Northern has agreed to resign as Administrative Agent under the
Existing Credit Agreement and the Existing Lenders (including Northern) have
agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans

2

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 3

and to assign to LaSalle their rights and obligations under the Existing Credit
Agreement.

          D.     LaSalle and Borrower have agreed to amend and restate the terms
of the Existing Credit Agreement, as amended by that Amended and Restated Credit
Agreement, dated as of the date hereof (the “Amended and Restated Credit
Agreement”).

          E.     Northern, as Agent for the Existing Lenders to the Existing
Credit Agreement, effective upon its resignation as Agent and its assignment of
its pro rata share of the Revolving Loan Commitment and Revolving Loans under
the Existing Credit Agreement, shall assign all of its right title and interest
in certain Collateral, as defined, in and subject to the terms of that certain
Security Agreement, dated as of June 30, 2004, between the Borrower and the
Subsidiary Guarantors, as Debtor, and Northern, as the secured party, as defined
in the Existing Credit Agreement (the “ Security Agreement”).

WITNESSETH:

                    NOW, THEREFORE, pursuant to the provisions of the Agreement,
and for good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged:

                    1.     Assignment and Assumption. Northern hereby assigns
and conveys to LaSalle, its successors and assigns all right, title and interest
of Northern, as Agent for the Existing Lenders, in and to the Security Agreement
and collateral secured thereby. LaSalle hereby accepts the assignment and
assumption of the foregoing Agreement, and agrees that LaSalle or its successors
or assigns will assume and perform the unperformed and partially performed
obligations, liabilities and duties of Northern thereunder in accordance with
the terms hereof and thereof. Northern hereby covenants and agrees, upon request
of LaSalle or the successors or assigns of either of them, to execute and
deliver to Northern or LaSalle or their successors or assigns such other and
further assignment, documents or instruments of assignment and transfer and to
do such actions, supplemental or confirmatory, as may be required by LaSalle or
the successors or assigns of either of them in connection with the transfer of
Northern’s rights, title and interests pursuant to the foregoing Security
Agreement, and to otherwise fulfill and discharge the obligations of assignment
and transfer of the Security Agreement to LaSalle under the terms of this
Agreement.

3

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 4

                    2.     Miscellaneous.

                    (A)     This Assignment and Assumption Agreement shall be
governed by the internal laws of the State of Illinois.

                    (B)     This Assignment and Assumption Agreement shall be
effective when executed by the parties hereto and accepted by LaSalle.

                    IN WITNESS WHEREOF, the parties hereto have executed this
Assignment and Assumption Agreement this 20th day of April, 2005.

 

 

 

 

THE NORTHERN
TRUST COMPANY, as Agent

 

 

 

By:

 

 

Name: 

Erin Sullivan

 

Title:

Vice President

 

 

 

Accepted and Agreed to this

20th day of April, 2005.

 

LASALLE BANK NATIONAL
ASSOCIATION

 

By:

 

 

Name: 

Stephanie Kline

 

Title:

Vice President

 

4

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 5

EXHIBIT N

ASSIGNMENT AND ASSUMPTION AGREEMENT
(TRADEMARK SECURITY AGREEMENT)

                    This Assignment and Assumption Agreement is made and entered
into as of this 20th day of April, 2005 by and between The Northern Trust
Company, an Illinois banking corporation, as Agent for the benefit of Lenders
under that certain Existing Credit Agreement (as defined herein) (“Northern”)
and LaSalle Bank National Association, a national banking association
(“LaSalle”).

RECITALS:

          A.     Quixote Corporation (the “Borrower”), Northern, individually
and as Administrative Agent for certain Lenders, including without limitation,
LaSalle (“Existing Lenders”) entered into and are parties to that certain Credit
Agreement, dated as of May 16, 2003, as amended by a First Amendment, dated as
of December 9, 2003; by a Second Amendment, dated as of June 30, 2004; by a
Third Amendment, dated as of September 10, 2004 and a Fourth Amendment dated as
of February 9, 2005 (“Existing Credit Agreement”), pursuant to which the
Existing Lenders have made, (i) Revolving Loans to the Borrower evidenced by
certain Revolving Notes, dated as of September 10, 2004, in the maximum
aggregate principal amount of Thirty Eight Million Dollars and 00/100
($38,000,000), executed by the Borrower and made payable pro rata to the order
of the Existing Lenders (the “Revolving Notes”) and (ii) Term Loans to the
Borrower evidenced by certain Term Notes, dated as of May 16, 2003, in the
aggregate original principal amount of Twenty Million Dollars and 00/100
($20,000,000), executed by the Borrower and made payable pro rata to the order
of the Existing Lenders (the “Term Notes”).

          B.     The Borrower, as of February 9, 2005, issued $40,000,000
Convertible Senior Subordinated Notes, due February 15, 2025 (the “New
Subordinated Notes”), the proceeds of which New Subordinated Notes (i) repaid in
full Borrowers’ obligations on the Term Loans and Term Notes and terminated the
Existing Lender’s Term Loan Commitment as defined in the Existing Credit
Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

          C.     Northern has agreed to resign as Administrative Agent under the
Existing Credit Agreement and the Existing Lenders (including Northern) have
agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans

5

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 6

and to assign to LaSalle their rights and obligations under the Existing Credit
Agreement.

          D.     LaSalle and Borrower have agreed to amend and restate the terms
of the Existing Credit Agreement as amended by the Amended and Restated Credit
Agreement, dated as of the date hereof (the “Amended and Restated Credit
Agreement”).

          E.     Northern, as Agent for the Existing Lenders to the Existing
Credit Agreement, effective upon its resignation as Agent and its assignment of
its pro rata share of the Revolving Loan Commitment and Revolving Loans under
the Existing Credit Agreement, shall assign all of its right title and interest
in certain Trademarks pledged as collateral, as defined, in and subject to the
terms of that certain Trademark Security Agreement, dated as of September 10,
2004, between Energy Absorption Systems, Inc., as Pledgor, and Northern, as the
Pledgee, as defined therein, (the “ Trademark Security Agreement”).

WITNESSETH:

                    NOW, THEREFORE, pursuant to the provisions of the Agreement,
and for good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged:

                    1.     Assignment and Assumption. Northern hereby assigns
and conveys to LaSalle, its successors and assigns all right, title and interest
of Northern, as Agent for the Existing Lenders, in and to the Trademark Security
Agreement and collateral secured thereby. LaSalle hereby accepts the assignment
and assumption of the foregoing Trademark Security Agreement, and agrees that
LaSalle or its successors or assigns will assume and perform the unperformed and
partially performed obligations, liabilities and duties of Northern thereunder
in accordance with the terms hereof and thereof. Northern hereby covenants and
agrees, upon request of LaSalle or the successors or assigns of either of them,
to execute and deliver to LaSalle or the successors or assigns of either of them
such other and further assignment, documents or instruments of assignment and
transfer and to do such actions, supplemental or confirmatory, as may be
required by LaSalle or the successors or assigns of either of them in connection
with the transfer of Northern’s rights, title and interests pursuant to the
foregoing Trademark Security Agreement, and to otherwise fulfill and discharge
the obligations of assignment and transfer of the Trademark Security Agreement
to LaSalle under the terms of this Agreement.

6

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 7

                    2.     Miscellaneous.

                    (A)     This Assignment and Assumption Agreement shall be
governed by the internal laws of the State of Illinois.

                    (B)     This Assignment and Assumption Agreement shall be
effective when executed by the parties hereto and accepted by LaSalle.

                    IN WITNESS WHEREOF, the parties hereto have executed this
Assignment and Assumption Agreement this 20th day of April, 2005.

 

 

 

 

THE NORTHERN
TRUST COMPANY, as Agent

 

 

 

By:

 

 

Name: 

Erin Sullivan

 

Title:

Vice President

 

 

 

Accepted and Agreed to this

20th day of April, 2005.

 

LASALLE BANK NATIONAL
ASSOCIATION

 

By:

 

 

Name: 

Stephanie Kline

 

Title:

Vice President

 

7

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 8

 

 

 

STATE OF_______________

 

)

 

 

:

________________COUNTY

 

)

          I, the undersigned authority, a Notary Public in and for said County
in said State, hereby certify that _________________________, whose name as
______________________________ of ______________________________, a/an
__________ corporation, is signed to the foregoing instrument and who is known
to me, acknowledged before me on this day that, being informed of the contents
of the said instrument, he/she as such officer and with full authority, executed
the same voluntarily for and as the act of said corporation.

          GIVEN under my hand and seal, this ______ day of _______________,
2005.

 

 

 

 

[ NOTARIAL SEAL ]

 

 

Notary Public

 

 

 

Print Name:

 

 

 

 

My Commission Expires:

 

8

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 9

 

 

 

STATE OF_______________

 

)

 

 

:

________________COUNTY

 

)

          I, the undersigned authority, a Notary Public in and for said County
in said State, hereby certify that _________________________, whose name as
______________________________ of ______________________________, a/an
__________ corporation, is signed to the foregoing instrument and who is known
to me, acknowledged before me on this day that, being informed of the contents
of the said instrument, he/she as such officer and with full authority, executed
the same voluntarily for and as the act of said corporation.

          GIVEN under my hand and seal, this ______ day of _______________,
2005.

 

 

 

 

[ NOTARIAL SEAL ]

 

 

Notary Public

 

 

 

Print Name:

 

 

 

 

My Commission Expires:

 

9

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 10

EXHIBIT O

ASSIGNMENT AND ASSUMPTION AGREEMENT
(PATENT SECURITY AGREEMENT)

                    This Assignment and Assumption Agreement is made and entered
into as of this 20th day of April, 2005 by and between The Northern Trust
Company, an Illinois banking corporation, as Agent for the benefit of Lenders
under that certain Existing Credit Agreement (as defined herein) (“Northern”)
and LaSalle Bank National Association, a national banking association
(“LaSalle”).

RECITALS:

          A.     Quixote Corporation (the “Borrower”), Northern, individually
and as Administrative Agent for certain Lenders, including without limitation,
LaSalle (“Existing Lenders”) entered into and are parties to that certain Credit
Agreement, dated as of May 16, 2003, as amended by a First Amendment, dated as
of December 9, 2003; by a Second Amendment, dated as of June 30, 2004; by a
Third Amendment, dated as of September 10, 2004 and a Fourth Amendment dated as
of February 9, 2005 (“Existing Credit Agreement”), pursuant to which the
Existing Lenders have made, (i) Revolving Loans to the Borrower evidenced by
certain Revolving Notes, dated as of September 10, 2004, in the maximum
aggregate principal amount of Thirty Eight Million Dollars and 00/100
($38,000,000), executed by the Borrower and made payable pro rata to the order
of the Existing Lenders (the “Revolving Notes”) and (ii) Term Loans to the
Borrower evidenced by certain Term Notes, dated as of May 16, 2003, in the
aggregate original principal amount of Twenty Million Dollars and 00/100
($20,000,000), executed by the Borrower and made payable pro rata to the order
of the Existing Lenders (the “Term Notes”).

          B.     The Borrower, as of February 9, 2005, issued $40,000,000
Convertible Senior Subordinated Notes, due February 15, 2025 (the “New
Subordinated Notes”), the proceeds of which New Subordinated Notes (i) repaid in
full Borrowers’ obligations on the Term Loans and Term Notes and terminated the
Existing Lender’s Term Loan Commitment as defined in the Existing Credit
Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

          C.     Northern has agreed to resign as Administrative Agent under the
Existing Credit Agreement and the Existing Lenders (including Northern) have
agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans

10

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 11

and to assign to LaSalle their rights and obligations under the Existing Credit
Agreement.

          D.     LaSalle and Borrower have agreed to amend and restate the terms
of the Existing Credit Agreement as amended by an Amended and Restated Credit
Agreement, dated as of the date hereof (the “Amended and Restated Credit
Agreement”).

          E.     Northern, as Agent for the Existing Lenders to the Existing
Credit Agreement, effective upon its resignation as Agent and its assignment of
its pro rata share of the Revolving Loan Commitment and Revolving Loans under
the Existing Credit Agreement, shall assign all of its right title and interest
in certain Patents pledged as collateral, as defined, in and subject to the
terms of that certain Patent Security Agreement, dated as of September 10, 2004,
between Energy Absorption Systems, Inc, as Pledgor, and Northern, as Pledgee, as
defined therein (the “ Patent Security Agreement”).

WITNESSETH:

                    NOW, THEREFORE, pursuant to the provisions of this Agreement
and the Patent Security Agreement, and for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged:

                    1.     Assignment and Assumption. Northern hereby assigns
and conveys to LaSalle, its successors and assigns all right, title and interest
of Northern, as Agent for the Existing Lenders, in and to the Patent Security
Agreement and collateral secured thereby. LaSalle hereby accepts the assignment
and assumption of the foregoing Patent Security Agreement, and agrees that
LaSalle or its successors or assigns will assume and perform the unperformed and
partially performed obligations, liabilities and duties of Northern thereunder
in accordance with the terms hereof and thereof. Northern hereby covenants and
agrees, upon request of LaSalle or the successors or assigns of either of them,
to execute and deliver to LaSalle or the successors or assigns of either of them
such other and further assignment, documents or instruments of assignment and
transfer and to do such actions, supplemental or confirmatory, as may be
required by LaSalle or the successors or assigns of either of them in connection
with the transfer of Northern’s rights, title and interests pursuant to the
foregoing Patent Security Agreement, and to otherwise fulfill and discharge the
obligations of assignment and transfer of the Patent Security Agreement to
LaSalle under the terms of this Agreement.

11

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 12

                    2.     Miscellaneous.

                    (A)     This Assignment and Assumption Agreement shall be
governed by the internal laws of the State of Illinois.

                    (B)     This Assignment and Assumption Agreement shall be
effective when executed by the parties hereto and accepted by LaSalle.

                    IN WITNESS WHEREOF, the parties hereto have executed this
Assignment and Assumption Agreement this 20th day of April, 2005.

 

 

 

 

THE NORTHERN
TRUST COMPANY, as Agent

 

 

 

By:

 

 

Name: 

Erin Sullivan

 

Title:

Vice President

 

 

 

Accepted and Agreed to this

20th day of April, 2005.

 

LASALLE BANK NATIONAL
ASSOCIATION

 

By:

 

 

Name: 

Stephanie Kline

 

Title:

Vice President

 

12

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 13

 

 

 

STATE OF_______________

 

)

 

 

:

________________ COUNTY

 

)

          I, the undersigned authority, a Notary Public in and for said County
in said State, hereby certify that _________________________, whose name as
______________________________ of ______________________________, a/an
__________ corporation, is signed to the foregoing instrument and who is known
to me, acknowledged before me on this day that, being informed of the contents
of the said instrument, he/she as such officer and with full authority, executed
the same voluntarily for and as the act of said corporation.

          GIVEN under my hand and seal, this ______ day of _______________,
2005.

 

 

 

 

[ NOTARIAL SEAL ]

 

 

Notary Public

 

 

 

Print Name:

 

 

 

 

My Commission Expires:

 

13

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 14

 

 

 

STATE OF_______________

 

)

 

 

:

________________ COUNTY

 

)

          I, the undersigned authority, a Notary Public in and for said County
in said State, hereby certify that _________________________, whose name as
______________________________ of ______________________________, a/an
__________ corporation, is signed to the foregoing instrument and who is known
to me, acknowledged before me on this day that, being informed of the contents
of the said instrument, he/she as such officer and with full authority, executed
the same voluntarily for and as the act of said corporation.

          GIVEN under my hand and seal, this ______ day of _______________,
2005.

 

 

 

 

[ NOTARIAL SEAL ]

 

 

Notary Public

 

 

 

Print Name:

 

 

 

 

My Commission Expires:

 

14

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 15

EXHIBIT P-1

ASSIGNMENT AND ASSUMPTION AGREEMENT
(SUBSIDIARY STOCK PLEDGE)
(QUIXOTE)

                    This Assignment and Assumption Agreement is made and entered
into as of this 20th day of April, 2005 by and between The Northern Trust
Company, an Illinois banking corporation, as Agent for the benefit of Lenders
under that certain Existing Credit Agreement (as defined herein) (“Northern”)
and LaSalle Bank National Association, a national banking association
(“LaSalle”).

RECITALS:

          A.     Quixote Corporation (the “Borrower”), Northern, individually
and as Administrative Agent for certain Lenders, including without limitation,
LaSalle (“Existing Lenders”) entered into and are parties to that certain Credit
Agreement, dated as of May 16, 2003, as amended by a First Amendment, dated as
of December 9, 2003; by a Second Amendment, dated as of June 30, 2004; by a
Third Amendment, dated as of September 10, 2004 and a Fourth Amendment dated as
of February 9, 2005 (“Existing Credit Agreement”), pursuant to which the
Existing Lenders have made, (i) Revolving Loans to the Borrower evidenced by
certain Revolving Notes, dated as of September 10, 2004, in the maximum
aggregate principal amount of Thirty Eight Million Dollars and 00/100
($38,000,000), executed by the Borrower and made payable pro rata to the order
of the Existing Lenders (the “Revolving Notes”) and (ii) Term Loans to the
Borrower evidenced by certain Term Notes, dated as of May 16, 2003, in the
aggregate original principal amount of Twenty Million Dollars and 00/100
($20,000,000), executed by the Borrower and made payable pro rata to the order
of the Existing Lenders (the “Term Notes”).

          B.     The Borrower, as of February 9, 2005, issued $40,000,000
Convertible Senior Subordinated Notes, due February 15, 2025 (the “New
Subordinated Notes”), the proceeds of which New Subordinated Notes (i) repaid in
full Borrowers’ obligations on the Term Loans and Term Notes and terminated the
Existing Lender’s Term Loan Commitment as defined in the Existing Credit
Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

          C.     Northern has agreed to resign as Administrative Agent under the
Existing Credit Agreement and the Existing Lenders (including Northern) have
agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans

15

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 16

and to assign to LaSalle their rights and obligations under the Existing Credit
Agreement.

          D.     LaSalle and Borrower have agreed to amend and restate the terms
of the Existing Credit Agreement as amended by the Amended and Restated Credit
Agreement, dated as of the date hereof (the “Amended and Restated Credit
Agreement”).

          E.     Northern, as Agent for the Existing Lenders to the Existing
Credit Agreement, effective upon its resignation as Agent and its assignment of
its pro rata share of the Revolving Loan Commitment and Revolving Loans under
the Existing Credit Agreement, shall assign all of its right title and interest
in certain Collateral, as defined, in and subject to the terms of that certain
Subsidiary Stock Pledge Agreement, dated as of September 10, 2004, between the
Borrower, as Debtor, and Northern, as the Secured Party, as defined in the
Existing Credit Agreement (the “ Stock Pledge Agreement”).

WITNESSETH:

                    NOW, THEREFORE, pursuant to the provisions of this
Agreement, and for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged:

                    1.     Assignment and Assumption. Northern hereby assigns
and conveys to LaSalle, its successors and assigns all right, title and interest
of Northern, as Agent for the Existing Lenders in and to the Stock Pledge
Agreement and the collateral secured thereby. LaSalle hereby accepts the
assignment and assumption of the foregoing Stock Pledge Agreement, and agrees
that LaSalle or its successors or assigns will assume and perform the
unperformed and partially performed obligations, liabilities and duties of
Northern thereunder in accordance with the terms hereof and thereof. Northern
hereby covenants and agrees, upon request of LaSalle or the successors or
assigns of either of them, to execute and deliver to LaSalle or the successors
or assigns of either of them such other and further assignment, documents or
instruments of assignment and transfer and to do such actions, supplemental or
confirmatory, as may be required by LaSalle or the successors or assigns of
either of them in connection with the transfer of Northern’s rights, title and
interests pursuant to the foregoing Stock Pledge Agreement, and to otherwise
fulfill and discharge the obligations of assignment and transfer of the Stock
Pledge Agreement to LaSalle under the terms of this Agreement.

16

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 17

                    2.     Miscellaneous.

                    (A)     This Assignment and Assumption Agreement shall be
governed by the internal laws of the State of Illinois.

                    (B)     This Assignment and Assumption Agreement shall be
effective when executed by the parties hereto and accepted by LaSalle.

                    IN WITNESS WHEREOF, the parties hereto have executed this
Assignment, Assumption and Amendment Agreement this 20th day of April, 2005.

 

 

 

 

THE NORTHERN
TRUST COMPANY, as Agent

 

 

 

By:

 

 

Name: 

Erin Sullivan

 

Title:

Vice President

 

 

 

Accepted and Agreed to this

20th day of April, 2005.

 

LASALLE BANK NATIONAL
ASSOCIATION

 

By:

 

 

Name: 

Stephanie Kline

 

Title:

Vice President

 

17

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 18

EXHIBIT P-2

ASSIGNMENT AND ASSUMPTION AGREEMENT
(SUBSIDIARY STOCK PLEDGE)
(QUIXOTE TRANSPORTATION SAFETY, INC.)

                    This Assignment and Assumption Agreement is made and entered
into as of this 20th day of April, 2005 by and between The Northern Trust
Company, an Illinois banking corporation, as Agent for the benefit of Lenders
under that certain Existing Credit Agreement (as defined herein) (“Northern”)
and LaSalle Bank National Association, a national banking association
(“LaSalle”).

RECITALS:

          A.     Quixote Corporation (the “Borrower”), Northern, individually
and as Administrative Agent for certain Lenders, including without limitation,
LaSalle (“Existing Lenders”) entered into and are parties to that certain Credit
Agreement, dated as of May 16, 2003, as amended by a First Amendment, dated as
of December 9, 2003; by a Second Amendment, dated as of June 30, 2004; by a
Third Amendment, dated as of September 10, 2004 and a Fourth Amendment dated as
of February 9, 2005 (“Existing Credit Agreement”), pursuant to which the
Existing Lenders have made, (i) Revolving Loans to the Borrower evidenced by
certain Revolving Notes, dated as of September 10, 2004, in the maximum
aggregate principal amount of Thirty Eight Million Dollars and 00/100
($38,000,000), executed by the Borrower and made payable pro rata to the order
of the Existing Lenders (the “Revolving Notes”) and (ii) Term Loans to the
Borrower evidenced by certain Term Notes, dated as of May 16, 2003, in the
aggregate original principal amount of Twenty Million Dollars and 00/100
($20,000,000), executed by the Borrower and made payable pro rata to the order
of the Existing Lenders (the “Term Notes”).

          B.     The Borrower, as of February 9, 2005, issued $40,000,000
Convertible Senior Subordinated Notes, due February 15, 2025 (the “New
Subordinated Notes”), the proceeds of which New Subordinated Notes (i) repaid in
full Borrowers’ obligations on the Term Loans and Term Notes and terminated the
Existing Lender’s Term Loan Commitment as defined in the Existing Credit
Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

          C.     Northern has agreed to resign as Administrative Agent under the
Existing Credit Agreement and the Existing Lenders (including Northern) have
agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans

18

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 19

and to assign to LaSalle their rights and obligations under the Existing Credit
Agreement.

          D.     LaSalle and Borrower have agreed to amend and restate the terms
of the Existing Credit Agreement as amended by the Amended and Restated Credit
Agreement, dated as of the date hereof (the “Amended and Restated Credit
Agreement”)dated as of the date hereof (the “Amended and Restated Credit
Agreement”).

          E.     Northern, as Agent for the Existing Lenders to the Existing
Credit Agreement, effective upon its resignation as Agent and its assignment of
its pro rata share of the Revolving Loan Commitment and Revolving Loans under
the Existing Credit Agreement, shall assign all of its right title and interest
in certain Collateral, as defined, in and subject to the terms of that certain
Subsidiary Stock Pledge Agreement, dated as of September 10, 2004, between the
Quixote Transportation Safety, Inc., as Debtor, and Northern, as the Secured
Party, as defined in the Existing Credit Agreement (the “ Stock Pledge
Agreement”).

WITNESSETH:

                    NOW, THEREFORE, pursuant to the provisions of this
Agreement, and for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged:

                    1.     Assignment and Assumption. Northern hereby assigns
and conveys to LaSalle, its successors and assigns all right, title and interest
of Northern, as Agent for the Existing Lenders in and to the Stock Pledge
Agreement and the collateral secured thereby. LaSalle hereby accepts the
assignment and assumption of the foregoing Stock Pledge Agreement, and agrees
that LaSalle or its successors or assigns will assume and perform the
unperformed and partially performed obligations, liabilities and duties of
Northern thereunder in accordance with the terms hereof and thereof. Northern
hereby covenants and agrees, upon request of LaSalle or the successors or
assigns of either of them, to execute and deliver to LaSalle or the successors
or assigns of either of them such other and further assignment, documents or
instruments of assignment and transfer and to do such actions, supplemental or
confirmatory, as may be required by LaSalle or the successors or assigns of
either of them in connection with the transfer of Northern’s rights, title and
interests pursuant to the foregoing Stock Pledge Agreement, and to otherwise
fulfill and discharge the obligations of assignment and transfer of the Stock
Pledge Agreement to LaSalle under the terms of this Agreement.

19

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 20

                    2.     Miscellaneous.

                    (A)     This Assignment and Assumption Agreement shall be
governed by the internal laws of the State of Illinois.

                    (B)     This Assignment and Assumption Agreement shall be
effective when executed by the parties hereto and accepted by LaSalle.

                    IN WITNESS WHEREOF, the parties hereto have executed this
Assignment, Assumption and Amendment Agreement this 20th day of April, 2005.

 

 

 

 

THE NORTHERN
TRUST COMPANY, as Agent

 

 

 

By:

 

 

Name: 

Erin Sullivan

 

Title:

Vice President

 

 

 

Accepted and Agreed to this

20th day of April, 2005.

 

LASALLE BANK NATIONAL
ASSOCIATION

 

By:

 

 

Name: 

Stephanie Kline

 

Title:

Vice President

 

20

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 21

EXHIBIT P-3

ASSIGNMENT AND ASSUMPTION AGREEMENT
(SUBSIDIARY STOCK PLEDGE)
(TRANSAFE CORPORATION)

                    This Assignment and Assumption Agreement is made and entered
into as of this 20th day of April, 2005 by and between The Northern Trust
Company, an Illinois banking corporation, as Agent for the benefit of Lenders
under that certain Existing Credit Agreement (as defined herein) (“Northern”)
and LaSalle Bank National Association, a national banking association
(“LaSalle”).

RECITALS:

          A.     Quixote Corporation (the “Borrower”), Northern, individually
and as Administrative Agent for certain Lenders, including without limitation,
LaSalle (“Existing Lenders”) entered into and are parties to that certain Credit
Agreement, dated as of May 16, 2003, as amended by a First Amendment, dated as
of December 9, 2003; by a Second Amendment, dated as of June 30, 2004; by a
Third Amendment, dated as of September 10, 2004 and a Fourth Amendment dated as
of February 9, 2005 (“Existing Credit Agreement”), pursuant to which the
Existing Lenders have made, (i) Revolving Loans to the Borrower evidenced by
certain Revolving Notes, dated as of September 10, 2004, in the maximum
aggregate principal amount of Thirty Eight Million Dollars and 00/100
($38,000,000), executed by the Borrower and made payable pro rata to the order
of the Existing Lenders (the “Revolving Notes”) and (ii) Term Loans to the
Borrower evidenced by certain Term Notes, dated as of May 16, 2003, in the
aggregate original principal amount of Twenty Million Dollars and 00/100
($20,000,000), executed by the Borrower and made payable pro rata to the order
of the Existing Lenders (the “Term Notes”).

          B.     The Borrower, as of February 9, 2005, issued $40,000,000
Convertible Senior Subordinated Notes, due February 15, 2025 (the “New
Subordinated Notes”), the proceeds of which New Subordinated Notes (i) repaid in
full Borrowers’ obligations on the Term Loans and Term Notes and terminated the
Existing Lender’s Term Loan Commitment as defined in the Existing Credit
Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

          C.     Northern has agreed to resign as Administrative Agent under the
Existing Credit Agreement and the Existing Lenders (including Northern) have
agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans

21

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 22

and to assign to LaSalle their rights and obligations under the Existing Credit
Agreement.

          D.     LaSalle and Borrower have agreed to amend and restate the terms
of the Existing Credit Agreement as amended by the Amended and Restated Credit
Agreement dated as of the date hereof (the “Amended and Restated Credit
Agreement”).

          E.     Northern, as Agent for the Existing Lenders to the Existing
Credit Agreement, effective upon its resignation as Agent and its assignment of
its pro rata share of the Revolving Loan Commitment and Revolving Loans under
the Existing Credit Agreement, shall assign all of its right title and interest
in certain Collateral, as defined, in and subject to the terms of that certain
Subsidiary Stock Pledge Agreement, dated as of September 10, 2004, between the
Transafe Corporation, as Debtor, and Northern, as the Secured Party, as defined
in the Existing Credit Agreement (the “ Stock Pledge Agreement”).

WITNESSETH:

                    NOW, THEREFORE, pursuant to the provisions of this
Agreement, and for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged:

                    1.     Assignment and Assumption. Northern hereby assigns
and conveys to LaSalle, its successors and assigns all right, title and interest
of Northern, as Agent for the Existing Lenders in and to the Stock Pledge
Agreement and the collateral secured thereby. LaSalle hereby accepts the
assignment and assumption of the foregoing Stock Pledge Agreement, and agrees
that LaSalle or its successors or assigns will assume and perform the
unperformed and partially performed obligations, liabilities and duties of
Northern thereunder in accordance with the terms hereof and thereof. Northern
hereby covenants and agrees, upon request of LaSalle or the successors or
assigns of either of them, to execute and deliver to LaSalle or the successors
or assigns of either of them such other and further assignment, documents or
instruments of assignment and transfer and to do such actions, supplemental or
confirmatory, as may be required by LaSalle or the successors or assigns of
either of them in connection with the transfer of Northern’s rights, title and
interests pursuant to the foregoing Stock Pledge Agreement, and to otherwise
fulfill and discharge the obligations of assignment and transfer of the Stock
Pledge Agreement to LaSalle under the terms of this Agreement.

22

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 23

                    2.     Miscellaneous.

                    (A)     This Assignment and Assumption Agreement shall be
governed by the internal laws of the State of Illinois.

                    (B)     This Assignment and Assumption Agreement shall be
effective when executed by the parties hereto and accepted by LaSalle.

                    IN WITNESS WHEREOF, the parties hereto have executed this
Assignment, Assumption and Amendment Agreement this 20th day of April, 2005.

 

 

 

 

THE NORTHERN
TRUST COMPANY, as Agent

 

 

 

By:

 

 

Name: 

Erin Sullivan

 

Title:

Vice President

 

 

 

Accepted and Agreed to this

20th day of April, 2005.

 

LASALLE BANK NATIONAL
ASSOCIATION

 

By:

 

 

Name: 

Stephanie Kline

 

Title:

Vice President

 

23

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 24

EXHIBIT P-4

ASSIGNMENT AND ASSUMPTION AGREEMENT
(SUBSIDIARY STOCK PLEDGE)
(ENERGY ABSORPTION SYSTEMS, INC.)

                    This Assignment and Assumption Agreement is made and entered
into as of this 20th day of April, 2005 by and between The Northern Trust
Company, an Illinois banking corporation, as Agent for the benefit of Lenders
under that certain Existing Credit Agreement (as defined herein) (“Northern”)
and LaSalle Bank National Association, a national banking association
(“LaSalle”).

RECITALS:

          A.     Quixote Corporation (the “Borrower”), Northern, individually
and as Administrative Agent for certain Lenders, including without limitation,
LaSalle (“Existing Lenders”) entered into and are parties to that certain Credit
Agreement, dated as of May 16, 2003, as amended by a First Amendment, dated as
of December 9, 2003; by a Second Amendment, dated as of June 30, 2004; by a
Third Amendment, dated as of September 10, 2004 and a Fourth Amendment dated as
of February 9, 2005 (“Existing Credit Agreement”), pursuant to which the
Existing Lenders have made, (i) Revolving Loans to the Borrower evidenced by
certain Revolving Notes, dated as of September 10, 2004, in the maximum
aggregate principal amount of Thirty Eight Million Dollars and 00/100
($38,000,000), executed by the Borrower and made payable pro rata to the order
of the Existing Lenders (the “Revolving Notes”) and (ii) Term Loans to the
Borrower evidenced by certain Term Notes, dated as of May 16, 2003, in the
aggregate original principal amount of Twenty Million Dollars and 00/100
($20,000,000), executed by the Borrower and made payable pro rata to the order
of the Existing Lenders (the “Term Notes”).

          B.     The Borrower, as of February 9, 2005, issued $40,000,000
Convertible Senior Subordinated Notes, due February 15, 2025 (the “New
Subordinated Notes”), the proceeds of which New Subordinated Notes (i) repaid in
full Borrowers’ obligations on the Term Loans and Term Notes and terminated the
Existing Lender’s Term Loan Commitment as defined in the Existing Credit
Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

          C.     Northern has agreed to resign as Administrative Agent under the
Existing Credit Agreement and the Existing Lenders (including Northern) have
agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans

24

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 25

and to assign to LaSalle their rights and obligations under the Existing Credit
Agreement.

          D.     LaSalle and Borrower have agreed to amend and restate the terms
of the Existing Credit Agreement as amended by the Amended and Restated Credit
Agreement dated as of the date hereof (the “Amended and Restated Credit
Agreement”).

          E.     Northern, as Agent for the Existing Lenders to the Existing
Credit Agreement, effective upon its resignation as Agent and its assignment of
its pro rata share of the Revolving Loan Commitment and Revolving Loans under
the Existing Credit Agreement, shall assign all of its right title and interest
in certain Collateral, as defined, in and subject to the terms of that certain
Subsidiary Stock Pledge Agreement, dated as of September 10, 2004, between the
Energy Absorption Systems, Inc., as Debtor, and Northern, as the Secured Party,
as defined in the Existing Credit Agreement (the “ Stock Pledge Agreement”).

WITNESSETH:

                    NOW, THEREFORE, pursuant to the provisions of this
Agreement, and for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged:

                    1.     Assignment and Assumption. Northern hereby assigns
and conveys to LaSalle, its successors and assigns all right, title and interest
of Northern, as Agent for the Existing Lenders in and to the Stock Pledge
Agreement and the collateral secured thereby. LaSalle hereby accepts the
assignment and assumption of the foregoing Stock Pledge Agreement, and agrees
that LaSalle or its successors or assigns will assume and perform the
unperformed and partially performed obligations, liabilities and duties of
Northern thereunder in accordance with the terms hereof and thereof. Northern
hereby covenants and agrees, upon request of LaSalle or the successors or
assigns of either of them, to execute and deliver to LaSalle or the successors
or assigns of either of them such other and further assignment, documents or
instruments of assignment and transfer and to do such actions, supplemental or
confirmatory, as may be required by LaSalle or the successors or assigns of
either of them in connection with the transfer of Northern’s rights, title and
interests pursuant to the foregoing Stock Pledge Agreement, and to otherwise
fulfill and discharge the obligations of assignment and transfer of the Stock
Pledge Agreement to LaSalle under the terms of this Agreement.

25

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 26

                    2.       Miscellaneous.

                    (A)     This Assignment and Assumption Agreement shall be
governed by the internal laws of the State of Illinois.

                    (B)     This Assignment and Assumption Agreement shall be
effective when executed by the parties hereto and accepted by LaSalle.

                    IN WITNESS WHEREOF, the parties hereto have executed this
Assignment, Assumption and Amendment Agreement this 20th day of April, 2005.

 

 

 

 

THE NORTHERN

 

TRUST COMPANY, as Agent

 

 

 

 

By:

 

 

Name: 

Erin Sullivan

 

Title:

Vice President

Accepted and Agreed to this
20th day of April, 2005.

LASALLE BANK NATIONAL
ASSOCIATION

 

 

By:

 

Name: 

Stephanie Kline

Title:

Vice President

26

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 27

[Company Letterhead]

Ms. Stephanie Kline
Vice President
LaSalle Bank National Association
135 S. LaSalle Street
Suite 1126
Chicago, IL 60603

EXHIBIT Q

BORROWING BASE CERTIFICATE

This Borrowing Base Certificate (the “Certificate”) is furnished pursuant to
that certain Amended and Restated Credit Agreement dated as of April 20, 2005
(as amended or modified and in effect from time to time, the “Credit Agreement”)
among Quixote Corporation (the “Borrower”) and LaSalle Bank National Association
(the “Lender”). This certificate, together with supporting calculations attached
hereto, is delivered to you pursuant to the terms of the Credit Agreement.
Capitalized terms used but not otherwise defined herein shall have the same
meanings herein as in the Credit Agreement.

The undersigned on behalf of the Company hereby certifies to the Lender that at
the close of business on _______, 200_, the Schedule to Borrowing Base
Certificate attached hereto sets forth financial data and computations, all of
which are true, complete and correct.

In witness whereof, the undersigned has executed and delivered this Certificate
in the name and on behalf of the Borrower this ___ day of ____, 200_.

 

 

 

 

 

QUIXOTE CORPORATION,
as the Borrower

 

 

 

 

 

By:

 

 

 

Name: 

 

 

Title:

 

27

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 28

EXHIBIT R

REAFFIRMATION AND AMENDMENT OF CALIFORNIA DEED OF TRUST

                    This Reaffirmation and Amendment of California Deed of Trust
(this “Reaffirmation”), dated and effective as of April 20, 2005, (the
“Reaffirmation”) is executed between Energy Absorption Systems, Inc., as
Grantor, (the “Grantor”) in favor of LaSalle Bank National Association
(“LaSalle”), and has reference to the following facts and circumstances:

RECITALS

                    A.     Quixote Corporation (the “Borrower”), The Northern
Trust Company, individually and as Administrative Agent for certain Lenders
(“Northern”), including without limitation, LaSalle (“Existing Lenders”) entered
into and are parties to that certain Credit Agreement, dated as of May 16, 2003,
as amended by a First Amendment, dated as of December 9, 2003; by a Second
Amendment, dated as of June 30, 2004; by a Third Amendment, dated as of
September 10, 2004 and a Fourth Amendment dated as of February 9, 2005
(“Existing Credit Agreement”), pursuant to which the Existing Lenders have made,
(i) Revolving Loans to the Borrower evidenced by certain Revolving Notes, dated
as of September 10, 2004, in the maximum aggregate principal amount of Thirty
Eight Million Dollars and 00/100 ($38,000,000), executed by the Borrower and
made payable pro rata to the order of the Existing Lenders (the “Revolving
Notes”) and (ii) Term Loans to the Borrower evidenced by certain Term Notes,
dated as of May 16, 2003, in the aggregate original principal amount of Twenty
Million Dollars and 00/100 ($20,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Term Notes”).

                    B.     The Borrower, as of February 9, 2005, issued
$40,000,000 Convertible Senior Subordinated Notes, due February 15, 2025 (the
“New Subordinated Notes”), the proceeds of which New Subordinated Notes (i)
repaid in full Borrowers’ obligations on the Term Loans and Term Notes and
terminated the Existing Lender’s Term Loan Commitment as defined in the Existing
Credit Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

                    C.     Northern has agreed to resign as Administrative Agent
under the Existing Credit Agreement and the Existing Lenders (including
Northern)

28

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 29

have agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans and to assign to LaSalle their rights and obligations under the Existing
Credit Agreement.

                    D.        LaSalle and Borrower have agreed to amend and
restate the terms of the Existing Credit Agreement, as amended by that Amended
and Restated Credit Agreement, dated as of the date hereof (the “Amended and
Restated Credit Agreement”).

                    E.        Northern, as Agent for the Existing Lenders to the
Existing Credit Agreement, effective upon its resignation as Agent and its
assignment of its pro rata share of the Revolving Loan Commitment and Revolving
Loans under the Existing Credit Agreement, shall assign to LaSalle all of its
right title and interest in certain Mortgaged Property, as defined, in and
subject to the terms of that certain Deed of Trust, Assignment of Rents,
Security Agreement and Fixture Filing Agreement, dated as of September 10, 2004,
between the Energy Absorption Systems, Inc., as Grantor, Chicago Title Insurance
Company, as Trustee and Northern, as the Beneficiary, as defined in the Existing
Credit Agreement (the “ California Deed of Trust”).

                    F.        LaSalle is willing to enter into this
Reaffirmation only upon the condition that Grantor execute and deliver this
Reaffirmation in favor of LaSalle.

                    NOW, THEREFORE, in consideration of the foregoing, Grantor,
Trustee and Beneficiary hereby agree as follows:

                    1.        The Recitals to this Reaffirmation are hereby
incorporated herein by this reference thereto.

                    2.        Amendment to California Deed of Trust. The
California Deed of Trust is hereby amended as follows:

                    (A)     The “Recitals” Section of the California Deed of
Trust is hereby amended and restated in its entirety to read as follows:

         “A.      Quixote Corporation (the “Borrower”), The Northern Trust
Company (“Northern”), individually and as Administrative Agent for certain
Lenders, including without limitation, LaSalle Bank National Association
(“LaSalle”) (“Existing Lenders”), entered into and are parties to that certain
Credit Agreement, dated as of May 16, 2003, as amended by a First Amendment,
dated as of December 9, 2003; by a Second Amendment, dated as of June 30, 2004;
by a Third Amendment, dated as of September 10, 2004 and a Fourth Amendment
dated as of February 9, 2005 (“Existing Credit Agreement”),

29

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 30

pursuant to which existing Credit Agreement the Existing Lenders have made, (i)
Revolving Loans to the Borrower evidenced by certain Revolving Notes, dated as
of September 10, 2004, in the maximum aggregate principal amount of Thirty Eight
Million Dollars and 00/100 ($38,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Revolving Notes”)
and (ii) Term Loans to the Borrower evidenced by certain Term Notes, dated as of
May 16, 2003, in the aggregate original principal amount of Twenty Million
Dollars and 00/100 ($20,000,000), executed by the Borrower and made payable pro
rata to the order of the Existing Lenders (the “Term Notes”).

          B.     The Borrower, as of February 9, 2005, issued $40,000,000
Convertible Senior Subordinated Notes, due February 15, 2025 (the “New
Subordinated Notes”), the proceeds of which New Subordinated Notes (i) repaid in
full Borrowers’ obligations on the Term Loans and Term Notes and terminated the
Existing Lender’s Term Loan Commitment as defined in the Existing Credit
Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

          C.     Grantor, as Subsidiary Guarantor executed that Subsidiary
Guaranty, dated as of May 16, 2003, as amended (the “Subsidiary Guaranty”), in
favor of Northern for the benefit of the Existing Lenders and secured its
obligations under that Subsidiary Guaranty by granting a Mortgage on the
California Property, pursuant to that certain California Deed of Trust, dated as
of September 10, 2004, between Grantor and Northern, as Secured Party.

          D.     Northern has agreed to resign as Administrative Agent under the
Existing Credit Agreement and the Existing Lenders (including Northern) have
agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans and to assign to LaSalle their rights and obligations under the Existing
Credit Agreement.

          E.     LaSalle and Borrower have agreed to amend and restate the terms
of the Existing Credit Agreement, and the Borrower has requested and LaSalle,
has agreed that LaSalle, individually on its own, continue the Revolving Loan
Commitment under the Existing Credit Agreement, as amended by an Amended and
Restated Credit Agreement, dated as of the date hereof (the “Amended and
Restated Credit Agreement”), consisting of LaSalle’s Revolving Credit Commitment
in the amount of $30,000,000 with a sublimit for the issuance of Letters of
Credit in the amount of $10,000,000.

          F.     Northern, subject to the conditions described in Recitals D and
E hereof, has agreed to assign to LaSalle its interest in the California Deed of
Trust and the Collateral pledged thereunder.”

30

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 31

                    (B)    All references in the California Deed of Trust (i) to
the “Credit Agreement” shall hereinafter be deemed to refer to the Amended and
Restated Credit Agreement and (ii) to the “Beneficiary” shall hereinafter be
deemed to refer to LaSalle.

                    (C)    All references in the California Deed of Trust to the
“Notes” shall hereinafter refer to the “Revolving Note” in the Amended and
Restated Credit Agreement.

                    3.      Reaffirmation of California Deed of Trust. Grantor
hereby expressly reaffirms and assumes (on the same basis as set forth in the
California Deed of Trust, as hereby amended), all of Grantor’s obligations and
liabilities to LaSalle, as Beneficiary as set forth in the California Deed of
Trust, and Grantor, agrees to be bound by and abide by and operate and perform
under and pursuant to and comply fully with all of the terms, conditions,
provisions, agreements, representations, undertakings, warranties, guarantees,
indemnities and covenants contained in the California Deed of Trust, in so far
as such obligations and liabilities may be modified by this Reaffirmation.

                    4.      This Reaffirmation shall inure to the benefit of
Bank, its successors and assigns and be binding upon Grantor, LaSalle, and their
individual successors and assigns.

31

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 32

                    IN WITNESS WHEREOF, this instrument has been executed and
delivered as of the day and year first written above.

ENERGY ABSORPTION SYSTEMS, INC.,
as Grantor

 

 

By:

 

Name: 

Daniel P. Gorey

Title:

Vice President and Treasurer

LASALLE BANK NATIONAL
ASSOCIATION, as Beneficiary

 

 

By:

 

Name: 

Stephanie Kline

Title:

Vice President

CHICAGO TITLE INSURANCE COMPANY,
as Trustee

 

 

By:

 

Name: 

 

Title:

 

32

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 33

 

 

STATE OF _____________

)

 

:

_____________ COUNTY

)

          I, the undersigned authority, a Notary Public in and for said County
in said State, hereby certify that _________________________, whose name as
______________________________ of ______________________________, a/an
__________ corporation, is signed to the foregoing instrument and who is known
to me, acknowledged before me on this day that, being informed of the contents
of the said instrument, he/she as such officer and with full authority, executed
the same voluntarily for and as the act of said corporation.

          GIVEN under my hand and seal, this ______ day of _______________,
2005.

 

 

 

 

[ NOTARIAL SEAL ]

 

 

Notary Public

 

 

 

Print Name: 

 

 

 

My Commission Expires:

 

33

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 34

 

 

STATE OF _____________

)

 

:

_____________ COUNTY

)

          I, the undersigned authority, a Notary Public in and for said County
in said State, hereby certify that _________________________, whose name as
______________________________ of ______________________________, a/an
__________ corporation, is signed to the foregoing instrument and who is known
to me, acknowledged before me on this day that, being informed of the contents
of the said instrument, he/she as such officer and with full authority, executed
the same voluntarily for and as the act of said corporation.

          GIVEN under my hand and seal, this ______ day of _______________,
2005.

 

 

 

 

[ NOTARIAL SEAL ]

 

 

Notary Public

 

 

 

Print Name: 

 

 

 

My Commission Expires: 

 

34

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 35

EXHIBIT S

REAFFIRMATION AND AMENDMENT OF PENNSYLVANIA MORTGAGE

                    This Reaffirmation and Amendment of Pennsylvania Mortgage
(this “Reaffirmation”), dated and effective as of April 20, 2005, (the
“Reaffirmation”) is executed between Nu-Metrics, Inc. (the “Mortgagor”), in
favor of LaSalle Bank National Association (“LaSalle”), and has reference to the
following facts and circumstances:

RECITALS

                    A.     Quixote Corporation (the “Borrower”), The Northern
Trust Company, individually and as Administrative Agent for certain Lenders
(“Northern”), including without limitation, LaSalle (“Existing Lenders”) entered
into and are parties to that certain Credit Agreement, dated as of May 16, 2003,
as amended by a First Amendment, dated as of December 9, 2003; by a Second
Amendment, dated as of June 30, 2004; by a Third Amendment, dated as of
September 10, 2004 and a Fourth Amendment dated as of February 9, 2005
(“Existing Credit Agreement”), pursuant to which the Existing Lenders have made,
(i) Revolving Loans to the Borrower evidenced by certain Revolving Notes, dated
as of September 10, 2004, in the maximum aggregate principal amount of Thirty
Eight Million Dollars and 00/100 ($38,000,000), executed by the Borrower and
made payable pro rata to the order of the Existing Lenders (the “Revolving
Notes”) and (ii) Term Loans to the Borrower evidenced by certain Term Notes,
dated as of May 16, 2003, in the aggregate original principal amount of Twenty
Million Dollars and 00/100 ($20,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Term Notes”).

                    B.     The Borrower, as of February 9, 2005, issued
$40,000,000 Convertible Senior Subordinated Notes, due February 15, 2025 (the
“New Subordinated Notes”), the proceeds of which New Subordinated Notes (i)
repaid in full Borrowers’ obligations on the Term Loans and Term Notes and
terminated the Existing Lender’s Term Loan Commitment as defined in the Existing
Credit Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

                    C.     Northern has agreed to resign as Administrative Agent
under the Existing Credit Agreement and the Existing Lenders (including
Northern) have agreed to sell to LaSalle their outstanding pro rata share of the
Revolving

35

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 36

Loans and to assign to LaSalle their rights and obligations under the Existing
Credit Agreement.

                    D.       LaSalle and Borrower have agreed to amend and
restate the terms of the Existing Credit Agreement, as amended by that Amended
and Restated Credit Agreement, dated as of the date hereof (the “Amended and
Restated Credit Agreement”).

                    E.       Northern, as Agent for the Existing Lenders to the
Existing Credit Agreement, effective upon its resignation as Agent and its
assignment of its pro rata share of the Revolving Loan Commitment and Revolving
Loans under the Existing Credit Agreement, shall assign to LaSalle all of its
right title and interest in certain Mortgaged Property, as defined, in and
subject to the terms of that certain Open-End Mortgage, dated as of September
10, 2004, between the Mortgagor, and Northern, as the Bank, as defined in the
Existing Credit Agreement (the “ Pennsylvania Mortgage”).

                    F.       LaSalle is willing to enter into this Reaffirmation
only upon the condition that Debtors execute and deliver this Reaffirmation in
favor of LaSalle.

                    NOW, THEREFORE, in consideration of the foregoing, Mortgagor
and LaSalle hereby agree as follows:

                    1.        The Recitals to this Reaffirmation are hereby
incorporated herein by this reference thereto.

                    2.        Amendment to Pennsylvania Mortgage. The
Pennsylvania Mortgage is hereby amended as follows:

                    (A)     The “Recitals” Section of the Pennsylvania Mortgage
is hereby amended and restated in its entirety to read as follows:

           “A.   Quixote Corporation (the “Borrower”), The Northern Trust
Company (“Northern”), individually and as Administrative Agent for certain
Lenders, including without limitation, LaSalle Bank National Association
(“LaSalle”) (“Existing Lenders”), entered into and are parties to that certain
Credit Agreement, dated as of May 16, 2003, as amended by a First Amendment,
dated as of December 9, 2003; by a Second Amendment, dated as of June 30, 2004;
by a Third Amendment, dated as of September 10, 2004 and a Fourth Amendment
dated as of February 9, 2005 (“Existing Credit Agreement”), pursuant to which
existing Credit Agreement the Existing Lenders have made, (i) Revolving Loans to
the Borrower evidenced by certain Revolving Notes, dated as of September 10,
2004, in the maximum aggregate principal amount of Thirty

36

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 37

Eight Million Dollars and 00/100 ($38,000,000), executed by the Borrower and
made payable pro rata to the order of the Existing Lenders (the “Revolving
Notes”) and (ii) Term Loans to the Borrower evidenced by certain Term Notes,
dated as of May 16, 2003, in the aggregate original principal amount of Twenty
Million Dollars and 00/100 ($20,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Term Notes”).

          B.     The Borrower, as of February 9, 2005, issued $40,000,000
Convertible Senior Subordinated Notes, due February 15, 2025 (the “New
Subordinated Notes”), the proceeds of which New Subordinated Notes (i) repaid in
full Borrowers’ obligations on the Term Loans and Term Notes and terminated the
Existing Lender’s Term Loan Commitment as defined in the Existing Credit
Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

          C.     Nu-Metrics, Inc., as Subsidiary Guarantor, executed that
Subsidiary Guaranty, dated as of May 16, 2003, as amended (the “Subsidiary
Guaranty”), in favor of Northern for the benefit of the Existing Lenders and
secured their obligations under that Subsidiary Guaranty by pledging certain
Mortgaged Property, pursuant to that certain Pennsylvania Mortgage, dated as of
September 10, 2004, between Mortgagor and Northern, as Secured Party.

          D.     Northern has agreed to resign as Administrative Agent under the
Existing Credit Agreement and the Existing Lenders (including Northern) have
agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans and to assign to LaSalle their rights and obligations under the Existing
Credit Agreement.

          E.     LaSalle and Borrower have agreed to amend and restate the terms
of the Existing Credit Agreement, and the Borrower has requested and LaSalle,
has agreed that LaSalle, individually on its own, continue the Revolving Loan
Commitment under the Existing Credit Agreement, as amended by an Amended and
Restated Credit Agreement, dated as of the date hereof (the “Amended and
Restated Credit Agreement”), consisting of LaSalle’s Revolving Credit Commitment
in the amount of $30,000,000 with a sublimit for the issuance of Letters of
Credit in the amount of $10,000,000.

          F.     Northern, subject to the conditions described in Recitals D and
E hereof, has agreed to assign to LaSalle its interest in the Pennsylvania
Mortgage and the Collateral pledged thereunder.”

                   (B)     All references in the Pennsylvania Mortgage (i) to
the “Credit Agreement” shall hereinafter be deemed to refer to the Amended and
Restated

37

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 38

Credit Agreement and (ii) to the “Bank” shall hereinafter be deemed to refer to
LaSalle.

                    (C)     All references in the Pennsylvania Mortgage to the
“Loan Documents” shall hereinafter be deemed to refer to the definition of such
term in the Amended and Restated Credit Agreement.

                    (D)     The reference to “$58,000,000” in the “Granting
Clause” is hereby deleted and “$30,000,000” is substituted in lieu thereof.

                    3.       Reaffirmation of Pennsylvania Mortgage. Mortgagor
hereby expressly reaffirms and assumes (on the same basis as set forth in the
Pennsylvania Mortgage, as hereby amended), all of Mortgagor’s obligations and
liabilities to LaSalle, as Bank as set forth in the Pennsylvania Mortgage, and
the Mortgagor agrees to be bound by and abide by and operate and perform under
and pursuant to and comply fully with all of the terms, conditions, provisions,
agreements, representations, undertakings, warranties, guarantees, indemnities
and covenants contained in the Pennsylvania Mortgage, in so far as such
obligations and liabilities may be modified by this Reaffirmation.

                    4.       This Reaffirmation shall inure to the benefit of
Bank, Mortgagor, its successors and assigns and be binding upon Mortgagor,
LaSalle, and their individual successors and assigns.

38

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 39

                    IN WITNESS WHEREOF, this instrument has been executed and
delivered as of the day and year first written above.

NU-METRICS, INC., as Mortgagor

 

 

By:

 

Name: 

Daniel P. Gorey

Title:

Vice President and Treasurer

LASALLE BANK NATIONAL
ASSOCIATION, as Bank

 

 

By:

 

Name: 

Stephanie Kline

Title:

Vice President

39

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 40

 

 

STATE OF _____________

)

 

:

_____________ COUNTY

)

          I, the undersigned authority, a Notary Public in and for said County
in said State, hereby certify that _________________________, whose name as
______________________________ of ______________________________, a/an
__________ corporation, is signed to the foregoing instrument and who is known
to me, acknowledged before me on this day that, being informed of the contents
of the said instrument, he/she as such officer and with full authority, executed
the same voluntarily for and as the act of said corporation.

          GIVEN under my hand and seal, this ______ day of _______________,
2005.

 

 

 

 

[ NOTARIAL SEAL ]

 

 

Notary Public

 

 

 

Print Name: 

 

 

My Commission Expires:

 

40

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 41

 

 

STATE OF _____________

)

 

:

_____________ COUNTY

)

          I, the undersigned authority, a Notary Public in and for said County
in said State, hereby certify that _________________________, whose name as
______________________________ of ______________________________, a/an
__________ corporation, is signed to the foregoing instrument and who is known
to me, acknowledged before me on this day that, being informed of the contents
of the said instrument, he/she as such officer and with full authority, executed
the same voluntarily for and as the act of said corporation.

          GIVEN under my hand and seal, this ______ day of _______________,
2005.

 

 

 

 

[ NOTARIAL SEAL ]

 

 

Notary Public

 

 

 

Print Name: 

 

 

My Commission Expires: 

 

41

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 42

EXHIBIT T

REAFFIRMATION AND AMENDMENT OF ALABAMA MORTGAGE

                    This Reaffirmation and Amendment of Alabama Mortgage (this
“Reaffirmation”), dated and effective as of April 20, 2005, (the
“Reaffirmation”) is executed between Energy Absorption Systems (AL) LLC, (the
“Mortgagor”), in favor of LaSalle Bank National Association (“LaSalle”), and has
reference to the following facts and circumstances:

RECITALS

                    A.     Quixote Corporation (the “Borrower”), The Northern
Trust Company, individually and as Administrative Agent for certain Lenders
(“Northern”), including without limitation, LaSalle (the “Existing Lenders”)
entered into and are parties to that certain Credit Agreement, dated as of May
16, 2003, as amended by a First Amendment, dated as of December 9, 2003; by a
Second Amendment, dated as of June 30, 2004; by a Third Amendment, dated as of
September 10, 2004 and a Fourth Amendment dated as of February 9, 2005
(“Existing Credit Agreement”), pursuant to which the Existing Lenders have made,
(i) Revolving Loans to the Borrower evidenced by certain Revolving Notes, dated
as of September 10, 2004, in the maximum aggregate principal amount of Thirty
Eight Million Dollars and 00/100 ($38,000,000), executed by the Borrower and
made payable pro rata to the order of the Existing Lenders (the “Revolving
Notes”) and (ii) Term Loans to the Borrower evidenced by certain Term Notes,
dated as of May 16, 2003, in the aggregate original principal amount of Twenty
Million Dollars and 00/100 ($20,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Term Notes”).

                    B.     The Borrower, as of February 9, 2005, issued
$40,000,000 Convertible Senior Subordinated Notes, due February 15, 2025 (the
“New Subordinated Notes”), the proceeds of which New Subordinated Notes (i)
repaid in full Borrowers’ obligations on the Term Loans and Term Notes and
terminated the Existing Lender’s Term Loan Commitment as defined in the Existing
Credit Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

                    C.     Northern has agreed to resign as Administrative Agent
under the Existing Credit Agreement and the Existing Lenders (including
Northern) have agreed to sell to LaSalle their outstanding pro rata share of the
Revolving

42

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 43

Loans and to assign to LaSalle their rights and obligations under the Existing
Credit Agreement.

                    D.       LaSalle and Borrower have agreed to amend and
restate the terms of the Existing Credit Agreement, as amended by that Amended
and Restated Credit Agreement, dated as of the date hereof (the “Amended and
Restated Credit Agreement”).

                    E.       Northern, as Agent for the Existing Lenders to the
Existing Credit Agreement, effective upon its resignation as Agent and its
assignment of its pro rata share of the Revolving Loan Commitment and Revolving
Loans under the Existing Credit Agreement, shall assign to LaSalle all of its
right title and interest in certain Mortgaged Property, as defined, in and
subject to the terms of that certain Leasehold Mortgage and Security Agreement,
dated as of September 10, 2004, between Mortgagor and Northern, as Agent, as
defined in the Existing Credit Agreement (the “ Alabama Mortgage”).

                    F.       LaSalle is willing to enter into this Reaffirmation
only upon the condition that Debtors execute and deliver this Reaffirmation in
favor of LaSalle.

                    NOW, THEREFORE, in consideration of the foregoing, Mortgagor
and LaSalle hereby agree as follows:

                    1.        The Recitals to this Reaffirmation are hereby
incorporated herein by this reference thereto.

                    2.        Amendment to Alabama Mortgage. The Alabama
Mortgage is hereby amended as follows:

                    (A)     The “Recitals” Section of the Alabama Mortgage is
hereby amended and restated in their entirety to read as follows:

            “A.            Quixote Corporation (the “Borrower”), The Northern
Trust Company (“Northern”), individually and as Administrative Agent for certain
Lenders, including without limitation, LaSalle Bank National Association
(“LaSalle”) (“Existing Lenders”), entered into and are parties to that certain
Credit Agreement, dated as of May 16, 2003, as amended by a First Amendment,
dated as of December 9, 2003; by a Second Amendment, dated as of June 30, 2004;
by a Third Amendment, dated as of September 10, 2004 and a Fourth Amendment
dated as of February 9, 2005 (“Existing Credit Agreement”), pursuant to which
existing Credit Agreement the Existing Lenders have made, (i) Revolving Loans to
the Borrower evidenced by certain Revolving Notes, dated as of September 10,
2004, in the maximum aggregate principal amount of Thirty

43

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 44

Eight Million Dollars and 00/100 ($38,000,000), executed by the Borrower and
made payable pro rata to the order of the Existing Lenders (the “Revolving
Notes”) and (ii) Term Loans to the Borrower evidenced by certain Term Notes,
dated as of May 16, 2003, in the aggregate original principal amount of Twenty
Million Dollars and 00/100 ($20,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Term Notes”).

          B.     The Borrower, as of February 9, 2005, issued $40,000,000
Convertible Senior Subordinated Notes, due February 15, 2025 (the “New
Subordinated Notes”), the proceeds of which New Subordinated Notes (i) repaid in
full Borrowers’ obligations on the Term Loans and Term Notes and terminated the
Existing Lender’s Term Loan Commitment as defined in the Existing Credit
Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

          C.     Mortgagor, as Subsidiary Guarantor executed that Subsidiary
Guaranty, dated as of May 16, 2003, as amended (the “Subsidiary Guaranty”), in
favor of Northern for the benefit of the Existing Lenders and secured its
obligations under that Subsidiary Guaranty by pledging certain Mortgaged
Property, pursuant to that certain Alabama Mortgage, dated as of June 30, 2004,
between Mortgagor and Northern, as Agent.

          D.     Northern has agreed to resign as Administrative Agent under the
Existing Credit Agreement and the Existing Lenders (including Northern) have
agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans and to assign to LaSalle their rights and obligations under the Existing
Credit Agreement.

          E.     LaSalle and Borrower have agreed to amend and restate the terms
of the Existing Credit Agreement, and the Borrower has requested and LaSalle,
has agreed that LaSalle, individually on its own, continue the Revolving Loan
Commitment under the Existing Credit Agreement, as amended by an Amended and
Restated Credit Agreement, dated as of the date hereof (the “Amended and
Restated Credit Agreement”), consisting of LaSalle’s Revolving Credit Commitment
in the amount of $30,000,000 with a sublimit for the issuance of Letters of
Credit in the amount of $10,000,000.

          F.     Northern, subject to the conditions described in Recitals D and
E hereof, has agreed to assign to LaSalle its interest in the Alabama Mortgage
and the Collateral pledged thereunder.”

                    (B)     All references in the Alabama Mortgage (i) to the
“Credit Agreement” shall hereinafter be deemed to refer to the Amended and
Restated

44

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 45

Credit Agreement and (ii) to the “Agent” shall hereinafter be deemed to refer to
LaSalle.

                    (C)     All references in the Alabama Mortgage to the “Loan
Documents” shall hereinafter be deemed to refer to the definition of “Loan
Documents” in the Amended and Restated Credit Agreement.

                    3.       Reaffirmation of Alabama Mortgage. The Mortgagor
hereby expressly reaffirms and assumes (on the same basis as set forth in the
Alabama Mortgage, as hereby amended), all of Mortgagor’s obligations and
liabilities to LaSalle as set forth in the Alabama Mortgage, and Mortgagor
agrees to be bound by and abide by and operate and perform under and pursuant to
and comply fully with all of the terms, conditions, provisions, agreements,
representations, undertakings, warranties, guarantees, indemnities and covenants
contained in the Alabama Mortgage, in so far as such obligations and liabilities
may be modified by this Reaffirmation.

                    4.       This Reaffirmation shall inure to the benefit of
Bank, its successors and assigns and be binding upon the Mortgagor, LaSalle, and
their individual successors and assigns.

45

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 46

                    IN WITNESS WHEREOF, this instrument has been executed and
delivered as of the day and year first written above.

ENERGY ABSORPTION SYSTEMS (AL) LLC,
As Mortgagor

ENERGY ABSORPTION SYSTEMS, INC., As Sole
Managing Member

 

 

By:

 

Name: 

Daniel P. Gorey

Title:

Vice President and Treasurer

LASALLE BANK NATIONAL
ASSOCIATION

 

 

By:

 

Name: 

Stephanie Kline

Title:

Vice President

46

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 47

 

 

STATE OF _____________

)

 

:

_____________ COUNTY

)

          I, the undersigned authority, a Notary Public in and for said County
in said State, hereby certify that _________________________, whose name as
________________________________ of ________________________________, a/an
__________ corporation, is signed to the foregoing instrument and who is known
to me, acknowledged before me on this day that, being informed of the contents
of the said instrument, he/she as such officer and with full authority, executed
the same voluntarily for and as the act of said corporation.

          GIVEN under my hand and seal, this ______ day of _______________,
2005.

 

 

 

 

[ NOTARIAL SEAL ]

 

 

Notary Public

 

 

 

Print Name: 

 

 

My Commission Expires:

 

47

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 48

 

 

STATE OF _____________

)

 

:

_____________ COUNTY

)

          I, the undersigned authority, a Notary Public in and for said County
in said State, hereby certify that _________________________, whose name as
________________________________ of ________________________________, a/an
__________ corporation, is signed to the foregoing instrument and who is known
to me, acknowledged before me on this day that, being informed of the contents
of the said instrument, he/she as such officer and with full authority, executed
the same voluntarily for and as the act of said corporation.

          GIVEN under my hand and seal, this ______ day of _______________,
2005.

 

 

 

 

[ NOTARIAL SEAL ]

 

 

Notary Public

 

 

 

Print Name: 

 

 

My Commission Expires: 

 

48

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 49

EXHIBIT U

REAFFIRMATION AND AMENDMENT OF SECURITY AGREEMENT

                    This Reaffirmation and Amendment of Security Agreement (this
“Reaffirmation”), dated and effective as of April 20, 2005, (the
“Reaffirmation”) is executed between Quixote Corporation, Quixote Transportation
Safety, Inc., Transafe Corporation, Energy Absorption Systems, Inc., Energy
Absorption Systems (AL) LLC, Surface Systems, Inc., Nu-Metrics, Inc., Highway
Information Systems, Inc., U.S. Traffic Corporation (formerly known as Green
Light Acquisition Corporation), Peek Traffic Corporation, (formerly known as
Vision Acquisition Corporation) Spin-Cast Plastics, Inc., as Debtors (each
“Debtor” and collectively the “Debtor”) in favor of LaSalle Bank National
Association (“LaSalle”), and has reference to the following facts and
circumstances:

RECITALS

                    A.     Quixote Corporation (the “Borrower”), The Northern
Trust Company, individually and as Administrative Agent for certain Lenders
(“Northern”), including without limitation, LaSalle (“Existing Lenders”) entered
into and are parties to that certain Credit Agreement, dated as of May 16, 2003,
as amended by a First Amendment, dated as of December 9, 2003; by a Second
Amendment, dated as of June 30, 2004; by a Third Amendment, dated as of
September 10, 2004 and a Fourth Amendment dated as of February 9, 2005
(“Existing Credit Agreement”), pursuant to which the Existing Lenders have made,
(i) Revolving Loans to the Borrower evidenced by certain Revolving Notes, dated
as of September 10, 2004, in the maximum aggregate principal amount of Thirty
Eight Million Dollars and 00/100 ($38,000,000), executed by the Borrower and
made payable pro rata to the order of the Existing Lenders (the “Revolving
Notes”) and (ii) Term Loans to the Borrower evidenced by certain Term Notes,
dated as of May 16, 2003, in the aggregate original principal amount of Twenty
Million Dollars and 00/100 ($20,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Term Notes”).

                    B.     The Borrower, as of February 9, 2005, issued
$40,000,000 Convertible Senior Subordinated Notes, due February 15, 2025 (the
“New Subordinated Notes”), the proceeds of which New Subordinated Notes (i)
repaid in full Borrowers’ obligations on the Term Loans and Term Notes and
terminated the Existing Lender’s Term Loan Commitment as defined in the Existing
Credit Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

49

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 50

                    C.       Northern has agreed to resign as Administrative
Agent under the Existing Credit Agreement and the Existing Lenders (including
Northern) have agreed to sell to LaSalle their outstanding pro rata share of the
Revolving Loans and to assign to LaSalle their rights and obligations under the
Existing Credit Agreement.

                    D.       LaSalle and Borrower have agreed to amend and
restate the terms of the Existing Credit Agreement, as amended by that Amended
and Restated Credit Agreement, dated as of the date hereof (the “Amended and
Restated Credit Agreement”).

                    E.       Northern, as Agent for the Existing Lenders to the
Existing Credit Agreement, effective upon its resignation as Agent and its
assignment of its pro rata share of the Revolving Loan Commitment and Revolving
Loans under the Existing Credit Agreement, shall assign to LaSalle all of its
right title and interest in certain Collateral, as defined, in and subject to
the terms of that certain Security Agreement, dated as of June 30, 2004, between
the Borrower and the Subsidiary Guarantors, as Debtor, and Northern, as the
secured party, as defined in the Existing Credit Agreement; (the “ Security
Agreement”).

                    F.        LaSalle is willing to enter into this
Reaffirmation only upon the condition that Debtors execute and deliver this
Reaffirmation in favor of LaSalle.

                    NOW, THEREFORE, in consideration of the foregoing, each
Debtor hereby agrees as follows:

                    1.        The Recitals to this Reaffirmation are hereby
incorporated herein by this reference thereto.

                    2.        Amendment to Security Agreement. The Security
Agreement is hereby amended as follows:

                    (A)     The “Whereas” sections of the Security Agreement are
hereby amended and restated in their entirety to read as follows:

           “A.   Quixote Corporation (the “Borrower”), The Northern Trust
Company (“Northern”), individually and as Administrative Agent for certain
Lenders, including without limitation, LaSalle Bank National Association
(“LaSalle”) (“Existing Lenders”), entered into and are parties to that certain
Credit Agreement, dated as of May 16, 2003, as amended by a First Amendment,
dated as of December 9, 2003; by a Second Amendment, dated as of June 30, 2004;
by a Third Amendment, dated as of September 10, 2004 and a Fourth

50

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 51

Amendment dated as of February 9, 2005 (“Existing Credit Agreement”), pursuant
to which existing Credit Agreement the Existing Lenders have made, (i) Revolving
Loans to the Borrower evidenced by certain Revolving Notes, dated as of
September 10, 2004, in the maximum aggregate principal amount of Thirty Eight
Million Dollars and 00/100 ($38,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the Revolving Notes”) and
(ii) Term Loans to the Borrower evidenced by certain Term Notes, dated as of May
16, 2003, in the aggregate original principal amount of Twenty Million Dollars
and 00/100 ($20,000,000), executed by the Borrower and made payable pro rata to
the order of the Existing Lenders (the “Term Notes”).

          B.     The Borrower, as of February 9, 2005, issued $40,000,000
Convertible Senior Subordinated Notes, due February 15, 2025 (the “New
Subordinated Notes”), the proceeds of which New Subordinated Notes (i) repaid in
full Borrowers’ obligations on the Term Loans and Term Notes and terminated the
Existing Lender’s Term Loan Commitment as defined in the Existing Credit
Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

          C.     The Debtors, as Subsidiary Guarantors executed that Subsidiary
Guaranty, dated as of May 16, 2003, as amended, (the “Subsidiary Guaranty”) in
favor of Northern for the benefit of the Existing Lenders and secured their
obligations under that Subsidiary Guaranty Borrower secured its obligations
under the Existing Credit Agreement by pledging certain Collateral, pursuant to
that certain Security Agreement dated as of June 30, 2004, between Borrower,
Debtors and Northern, as Secured Party.

          D.     Northern has agreed to resign as Administrative Agent under the
Existing Credit Agreement and the Existing Lenders (including Northern) have
agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans and to assign to LaSalle their rights and obligations under the Existing
Credit Agreement.

          E.     LaSalle and Borrower have agreed to amend and restate the terms
of the Existing Credit Agreement, and the Borrower has requested and LaSalle,
has agreed that LaSalle, individually on its own, continue the Revolving Loan
Commitment under the Existing Credit Agreement, as amended by an Amended and
Restated Credit Agreement, dated as of the date hereof, (the “Amended and
Restated Credit Agreement”) consisting of LaSalle’s Revolving Credit Commitment
in the amount of $30,000,000 with a sublimit for the issuance of Letters of
Credit in the amount of $10,000,000.

51

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 52

          F.       Northern, subject to the conditions described in Recitals D
and E hereof, has agreed to assign to LaSalle its interest in the Security
Agreement and the Collateral pledged thereunder.”

                    (B)     All references in the Security Agreement to the
“Credit Agreement” shall hereinafter be deemed to refer to the Amended and
Restated Credit Agreement.

                    (C)     All references in the Security Agreement to the
“Related Documents” shall hereinafter have the meaning assigned to the
definition of “Loan Documents” in the Amended and Restated Credit Agreement.

                    3.       The Borrower and each Debtor hereby expressly
reaffirms and assumes and Spin-Cast Plastics, Inc. grants a security interest to
LaSalle in the Collateral as defined in the Security Agreement, and assumes (on
the same basis as set forth in the Security Agreement, as hereby amended), all
of Debtors’ obligations and liabilities to Bank as set forth in the Security
Agreement, and the Borrower, each Debtor, including Spin-Cast Plastics, Inc.,
agrees to be bound by and abide by and operate and perform under and pursuant to
and comply fully with all of the terms, conditions, provisions, agreements,
representations, undertakings, warranties, guarantees, indemnities and covenants
contained in the Security Agreement, in so far as such obligations and
liabilities may be modified by this Reaffirmation.

                    4.       This Reaffirmation shall inure to the benefit of
Bank, its successors and assigns and be binding upon each Junior Creditor, and
their individual successors and assigns.

52

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 53

                    IN WITNESS WHEREOF, this instrument has been executed and
delivered as of the day and year first written above.

QUIXOTE CORPORATION
QUIXOTE TRANSPORTATION SAFETY, INC.
TRANSAFE CORPORATION
ENERGY ABSORPTION SYSTEMS, INC.
ENERGY ABSORPTION SYSTEMS (AL) LLC
SURFACE SYSTEMS, INC.
NU-METRICS, INC.
HIGHWAY INFORMATION SYSTEMS, INC.
U.S. TRAFFIC CORPORATION (formerly known as
Green Light Acquisition Corporation)
PEEK TRAFFIC CORPORATION, (formerly known as
Vision Acquisition Corporation)
SPIN-CAST PLASTICS, INC., as Subsidiary Guarantors and Debtors

 

 

By:

 

Name: 

Daniel P. Gorey

Title:

Vice President and Treasurer

LASALLE BANK NATIONAL
ASSOCIATION

 

 

By:

 

Name: 

Stephanie Kline

Title:

Vice President

53

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 54

EXHIBIT V

REAFFIRMATION AND AMENDMENT OF TRADEMARK SECURITY AGREEMENT

                    This Reaffirmation and Amendment of Trademark Security
Agreement (this “Reaffirmation”), dated and effective as of April 20, 2005, (the
“Reaffirmation”) is executed between Energy Absorption Systems, Inc., as Pledgor
(the “Pledgor”) in favor of LaSalle Bank National Association (“LaSalle”), and
has reference to the following facts and circumstances:

RECITALS

                    A.     Quixote Corporation (the “Borrower”), The Northern
Trust Company, individually and as Administrative Agent for certain Lenders
(“Northern”), including without limitation, LaSalle (“Existing Lenders”) entered
into and are parties to that certain Credit Agreement, dated as of May 16, 2003,
as amended by a First Amendment, dated as of December 9, 2003; by a Second
Amendment, dated as of June 30, 2004; by a Third Amendment, dated as of
September 10, 2004 and a Fourth Amendment dated as of February 9, 2005
(“Existing Credit Agreement”), pursuant to which the Existing Lenders have made,
(i) Revolving Loans to the Borrower evidenced by certain Revolving Notes, dated
as of September 10, 2004, in the maximum aggregate principal amount of Thirty
Eight Million Dollars and 00/100 ($38,000,000), executed by the Borrower and
made payable pro rata to the order of the Existing Lenders (the “Revolving
Notes”) and (ii) Term Loans to the Borrower evidenced by certain Term Notes,
dated as of May 16, 2003, in the aggregate original principal amount of Twenty
Million Dollars and 00/100 ($20,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Term Notes”).

                    B.     The Borrower, as of February 9, 2005, issued
$40,000,000 Convertible Senior Subordinated Notes, due February 15, 2025 (the
“New Subordinated Notes”), the proceeds of which New Subordinated Notes (i)
repaid in full Borrowers’ obligations on the Term Loans and Term Notes and
terminated the Existing Lender’s Term Loan Commitment as defined in the Existing
Credit Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

54

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 55

                    C.       Northern has agreed to resign as Administrative
Agent under the Existing Credit Agreement and the Existing Lenders (including
Northern) have agreed to sell to LaSalle their outstanding pro rata share of the
Revolving Loans and to assign to LaSalle their rights and obligations under the
Existing Credit Agreement.

                    D.       LaSalle and Borrower have agreed to amend and
restate the terms of the Existing Credit Agreement, as amended by that Amended
and Restated Credit Agreement, dated as of the date hereof (the “Amended and
Restated Credit Agreement”).

                    E.       Northern, as Agent for the Existing Lenders to the
Existing Credit Agreement, effective upon its resignation as Agent and its
assignment of its pro rata share of the Revolving Loan Commitment and Revolving
Loans under the Existing Credit Agreement, shall assign to LaSalle all of its
right title and interest in certain Trademarks, as defined, in and subject to
the terms of that certain Trademark Security Agreement, dated as of September
10, 2004, between the Pledgor and Northern, as the Pledgee, as defined in the
Existing Credit Agreement (the “ Trademark Security Agreement”).

                    F.       LaSalle is willing to enter into this Reaffirmation
only upon the condition that Debtors execute and deliver this Reaffirmation in
favor of LaSalle.

                    NOW, THEREFORE, in consideration of the foregoing, Pledgor
and LaSalle hereby agree as follows:

                    1.        The Recitals to this Reaffirmation are hereby
incorporated herein by this reference thereto.

                    2.        Amendment to Trademark Security Agreement. The
Trademark Security Agreement is hereby amended as follows:

                    (A)     The “Whereas” sections of the Trademark Security
Agreement are hereby amended and restated in their entirety to read as follows:

            “A.   Quixote Corporation (the “Borrower”), The Northern Trust
Company (“Northern”), individually and as Administrative Agent for certain
Lenders, including without limitation, LaSalle Bank National Association
(“LaSalle”) (“Existing Lenders”), entered into and are parties to that certain
Credit Agreement, dated as of May 16, 2003, as amended by a First Amendment,
dated as of December 9, 2003; by a Second Amendment, dated as of June 30, 2004;
by a Third Amendment, dated as of September 10, 2004 and a Fourth Amendment
dated as of February 9, 2005 (“Existing Credit Agreement”),

55

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 56

pursuant to which existing Credit Agreement the Existing Lenders have made, (i)
Revolving Loans to the Borrower evidenced by certain Revolving Notes, dated as
of September 10, 2004, in the maximum aggregate principal amount of Thirty Eight
Million Dollars and 00/100 ($38,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Revolving Notes”)
and (ii) Term Loans to the Borrower evidenced by certain Term Notes, dated as of
May 16, 2003, in the aggregate original principal amount of Twenty Million
Dollars and 00/100 ($20,000,000), executed by the Borrower and made payable pro
rata to the order of the Existing Lenders (the “Term Notes”).

          B.     The Borrower, as of February 9, 2005, issued $40,000,000
Convertible Senior Subordinated Notes, due February 15, 2025 (the “New
Subordinated Notes”), the proceeds of which New Subordinated Notes (i) repaid in
full Borrowers’ obligations on the Term Loans and Term Notes and terminated the
Existing Lender’s Term Loan Commitment as defined in the Existing Credit
Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

          C.     Pledgor, as Subsidiary Guarantor, executed that Subsidiary
Guaranty, dated as of May 16, 2003, as amended (the “Subsidiary Guaranty”), in
favor of Northern for the benefit of the Existing Lenders and secured its
obligations under that Subsidiary Guaranty by pledging certain Trademarks,
pursuant to that certain Trademark Security Agreement dated as of September 10,
2004, between Debtors and Northern, as Secured Party.

          D.     Northern has agreed to resign as Administrative Agent under the
Existing Credit Agreement and the Existing Lenders (including Northern) have
agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans and to assign to LaSalle their rights and obligations under the Existing
Credit Agreement.

          E.     LaSalle and Borrower have agreed to amend and restate the terms
of the Existing Credit Agreement, and the Borrower has requested and LaSalle,
has agreed that LaSalle, individually on its own, continue the Revolving Loan
Commitment under the Existing Credit Agreement, as amended by an Amended and
Restated Credit Agreement, dated as of the date hereof (the “Amended and
Restated Credit Agreement”), consisting of LaSalle’s Revolving Credit Commitment
in the amount of $30,000,000 with a sublimit for the issuance of Letters of
Credit in the amount of $10,000,000.

          F.     Northern, subject to the conditions described in Recitals D and
E hereof, has agreed to assign to LaSalle its interest in the Trademark Security
Agreement and the Collateral pledged thereunder.”

56

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 57

                    (B)     All references in the Trademark Security Agreement
(i) to the “Credit Agreement” shall hereinafter be deemed to refer to the
Amended and Restated Credit Agreement and (ii) to the “Pledgee” shall
hereinafter be deemed to refer to LaSalle.

                    (C)     All references in the Trademark Security Agreement
to the “Loan Documents” shall hereinafter be deemed to refer to the definition
of “Loan Documents” in the Amended and Restated Credit Agreement.

                    3.       Reaffirmation of Trademark Security Agreement.
Pledgor hereby expressly reaffirms and assumes (on the same basis as set forth
in the Trademark Security Agreement, as hereby amended), all of Pledgor’s
obligations and liabilities to LaSalle, as Pledgee, as set forth in the
Trademark Security Agreement, and the Pledgor agrees to be bound by and abide by
and operate and perform under and pursuant to and comply fully with all of the
terms, conditions, provisions, agreements, representations, undertakings,
warranties, guarantees, indemnities and covenants contained in the Trademark
Security Agreement, in so far as such obligations and liabilities may be
modified by this Reaffirmation.

                    4.       This Reaffirmation shall inure to the benefit of
Bank, its successors and assigns and be binding upon Pledgor, LaSalle, and their
individual successors and assigns.

57

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 58

                    IN WITNESS WHEREOF, this instrument has been executed and
delivered as of the day and year first written above.

ENERGY ABSORPTION SYSTEMS, INC.,
as Pledgor

 

 

By:

 

Name: 

Daniel P. Gorey

Title:

Vice President and Treasurer

LASALLE BANK NATIONAL
ASSOCIATION, as Pledgee

 

 

By:

 

Name: 

Stephanie Kline

Title:

Vice President

58

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 59

EXHIBIT W

REAFFIRMATION AND AMENDMENT OF PATENT SECURITY AGREEMENT

                    This Reaffirmation and Amendment of Patent Security
Agreement (this “Reaffirmation”), dated and effective as of April 20, 2005, (the
“Reaffirmation”) is executed between Energy Absorption Systems Inc., as the
Pledgor (the Pledgor”), in favor of LaSalle Bank National Association
(“LaSalle”), and has reference to the following facts and circumstances:

RECITALS

                    A.     Quixote Corporation (the “Borrower”), The Northern
Trust Company, individually and as Administrative Agent for certain Lenders
(“Northern”), including without limitation, LaSalle (“Existing Lenders”) entered
into and are parties to that certain Credit Agreement, dated as of May 16, 2003,
as amended by a First Amendment, dated as of December 9, 2003; by a Second
Amendment, dated as of June 30, 2004; by a Third Amendment, dated as of
September 10, 2004 and a Fourth Amendment dated as of February 9, 2005
(“Existing Credit Agreement”), pursuant to which the Existing Lenders have made,
(i) Revolving Loans to the Borrower evidenced by certain Revolving Notes, dated
as of September 10, 2004, in the maximum aggregate principal amount of Thirty
Eight Million Dollars and 00/100 ($38,000,000), executed by the Borrower and
made payable pro rata to the order of the Existing Lenders (the “Revolving
Notes”) and (ii) Term Loans to the Borrower evidenced by certain Term Notes,
dated as of May 16, 2003, in the aggregate original principal amount of Twenty
Million Dollars and 00/100 ($20,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Term Notes”).

                    B.     The Borrower, as of February 9, 2005, issued
$40,000,000 Convertible Senior Subordinated Notes, due February 15, 2025 (the
“New Subordinated Notes”), the proceeds of which New Subordinated Notes (i)
repaid in full Borrowers’ obligations on the Term Loans and Term Notes and
terminated the Existing Lender’s Term Loan Commitment as defined in the Existing
Credit Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

                    C.     Northern has agreed to resign as Administrative Agent
under the Existing Credit Agreement and the Existing Lenders (including
Northern) have agreed to sell to LaSalle their outstanding pro rata share of the
Revolving

59

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 60

Loans and to assign to LaSalle their rights and obligations under the Existing
Credit Agreement.

                    D.     LaSalle and Borrower have agreed to amend and restate
the terms of the Existing Credit Agreement, as amended by that Amended and
Restated Credit Agreement, dated as of the date hereof (the “Amended and
Restated Credit Agreement”).

                    E.     Northern, as Agent for the Existing Lenders to the
Existing Credit Agreement, effective upon its resignation as Agent and its
assignment of its pro rata share of the Revolving Loan Commitment and Revolving
Loans under the Existing Credit Agreement, shall assign to LaSalle all of its
right, title and interest as Pledgee in certain Patents, as defined, in and
subject to the terms of that certain Patent Security Agreement, dated as of
September 10, 2004, between the Pledgor and Northern, as the secured party, as
defined in the Existing Credit Agreement (the “Patent Security Agreement”).

                    F.     LaSalle is willing to enter into this Reaffirmation
only upon the condition that Debtors execute and deliver this Reaffirmation in
favor of LaSalle.

                    NOW, THEREFORE, in consideration of the foregoing, Pledgor
and LaSalle hereby agree as follows:

 

 

 

          1.     The Recitals to this Reaffirmation are hereby incorporated
herein by this reference thereto.

                   2.        Amendment to Patent Security Agreement. The Patent
Security Agreement is hereby amended as follows:

                   (A)     The “Whereas” sections of the Patent Security
Agreement are hereby amended and restated in their entirety to read as follows:

          “A.     Quixote Corporation (the “Borrower”), The Northern Trust
Company (“Northern”), individually and as Administrative Agent for certain
Lenders, including without limitation, LaSalle Bank National Association
(“LaSalle”) (“Existing Lenders”), entered into and are parties to that certain
Credit Agreement, dated as of May 16, 2003, as amended by a First Amendment,
dated as of December 9, 2003; by a Second Amendment, dated as of June 30, 2004;
by a Third Amendment, dated as of September 10, 2004 and a Fourth Amendment
dated as of February 9, 2005 (“Existing Credit Agreement”), pursuant to which
existing Credit Agreement the Existing Lenders have made, (i) Revolving Loans to
the Borrower evidenced by certain Revolving Notes, dated as of September 10,
2004, in the maximum aggregate principal amount of Thirty

60

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 61

Eight Million Dollars and 00/100 ($38,000,000), executed by the Borrower and
made payable pro rata to the order of the Existing Lenders (the “Revolving
Notes”) and (ii) Term Loans to the Borrower evidenced by certain Term Notes,
dated as of May 16, 2003, in the aggregate original principal amount of Twenty
Million Dollars and 00/100 ($20,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Term Notes”).

          B.     The Borrower, as of February 9, 2005, issued $40,000,000
Convertible Senior Subordinated Notes, due February 15, 2025 (the “New
Subordinated Notes”), the proceeds of which New Subordinated Notes (i) repaid in
full Borrowers’ obligations on the Term Loans and Term Notes and terminated the
Existing Lender’s Term Loan Commitment as defined in the Existing Credit
Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

          C.     Pledgor, as Subsidiary Guarantor, executed that Subsidiary
Guaranty, dated as of May 16, 2003, as amended (the “Subsidiary Guaranty”), in
favor of Northern for the benefit of the Existing Lenders and secured its
obligations under that Subsidiary Guaranty by pledging certain Patents, pursuant
to that certain Patent Security Agreement dated as of September 10, 2004,
between Pledgors and Northern, as Pledgee.

          D.     Northern has agreed to resign as Administrative Agent under the
Existing Credit Agreement and the Existing Lenders (including Northern) have
agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans and to assign to LaSalle their rights and obligations under the Existing
Credit Agreement.

          E.     LaSalle and Borrower have agreed to amend and restate the terms
of the Existing Credit Agreement, and the Borrower has requested and LaSalle,
has agreed that LaSalle, individually on its own, continue the Revolving Loan
Commitment under the Existing Credit Agreement, as amended by an Amended and
Restated Credit Agreement, dated as of the date hereof (the “Amended and
Restated Credit Agreement”), consisting of LaSalle’s Revolving Credit Commitment
in the amount of $30,000,000 with a sublimit for the issuance of Letters of
Credit in the amount of $10,000,000.

          F.     Northern, subject to the conditions described in Recitals D and
E hereof, has agreed to assign to LaSalle its interest in the Patent Security
Agreement and the Collateral pledged thereunder.”

                   (B)     All references in the Patent Security Agreement to
the “Credit Agreement” shall hereinafter be deemed to refer to the Amended and
Restated Credit Agreement.

61

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 62

                    (C)     All references in the Patent Security Agreement to
the “Loan Documents” shall hereinafter be deemed to refer to the definition of
“Loan Documents” in the Amended and Restated Credit Agreement.

                     3.     Reaffirmation of Patent Security Agreement. Pledgor
hereby expressly reaffirms and assumes (on the same basis as set forth in the
Patent Security Agreement, as hereby amended), all of Pledgor’s obligations and
liabilities to LaSalle, as Pledgee, as set forth in the Patent Security
Agreement, and the Pledgor agrees to be bound by and abide by and operate and
perform under and pursuant to and comply fully with all of the terms,
conditions, provisions, agreements, representations, undertakings, warranties,
guarantees, indemnities and covenants contained in the Patent Security
Agreement, in so far as such obligations and liabilities may be modified by this
Reaffirmation.

                    4.     This Reaffirmation shall inure to the benefit of
Bank, its successors and assigns and be binding upon Pledgor, LaSalle, and their
individual successors and assigns.

62

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 63

                    IN WITNESS WHEREOF, this instrument has been executed and
delivered as of the day and year first written above.

 

 

 

ENERGY ABSORPTION SYSTEMS, INC.,
as Pledgor

 

 

 

By:

 

 

Name:

Daniel P. Gorey

 

Title:

Vice President and Treasurer

 

 

 

 

LASALLE BANK NATIONAL
ASSOCIATION, as Pledgee

 

 

 

By:

 

 

Name:

Stephanie Kline

 

Title:

Vice President

 

63

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 64

EXHIBIT X-1

REAFFIRMATION AND AMENDMENT OF SUBSIDIARY
STOCK PLEDGE AGREEMENT
(QUIXOTE CORPORATION)

                    This Reaffirmation and Amendment of Subsidiary Stock Pledge
Agreement (this “Reaffirmation”), dated and effective as of April 20, 2005, (the
“Reaffirmation”) is executed between Quixote Corporation (the “Borrower”) in
favor of LaSalle Bank National Association (“LaSalle”), and has reference to the
following facts and circumstances:

RECITALS

                    A.     Quixote Corporation (the “Borrower”), The Northern
Trust Company, individually and as Administrative Agent for certain Lenders
(“Northern”), including without limitation, LaSalle (“Existing Lenders”) entered
into and are parties to that certain Credit Agreement, dated as of May 16, 2003,
as amended by a First Amendment, dated as of December 9, 2003; by a Second
Amendment, dated as of June 30, 2004; by a Third Amendment, dated as of
September 10, 2004 and a Fourth Amendment dated as of February 9, 2005
(“Existing Credit Agreement”), pursuant to which the Existing Lenders have made,
(i) Revolving Loans to the Borrower evidenced by certain Revolving Notes, dated
as of September 10, 2004, in the maximum aggregate principal amount of Thirty
Eight Million Dollars and 00/100 ($38,000,000), executed by the Borrower and
made payable pro rata to the order of the Existing Lenders (the “Revolving
Notes”) and (ii) Term Loans to the Borrower evidenced by certain Term Notes,
dated as of May 16, 2003, in the aggregate original principal amount of Twenty
Million Dollars and 00/100 ($20,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Term Notes”).

                    B.     The Borrower, as of February 9, 2005, issued
$40,000,000 Convertible Senior Subordinated Notes, due February 15, 2025 (the
“New Subordinated Notes”), the proceeds of which New Subordinated Notes (i)
repaid in full Borrowers’ obligations on the Term Loans and Term Notes and
terminated the Existing Lender’s Term Loan Commitment as defined in the Existing
Credit Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

                    C.     Northern has agreed to resign as Administrative Agent
under the Existing Credit Agreement and the Existing Lenders (including
Northern)

64

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 65

have agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans and to assign to LaSalle their rights and obligations under the Existing
Credit Agreement.

                    D.     LaSalle and Borrower have agreed to amend and restate
the terms of the Existing Credit Agreement, as amended by that Amended and
Restated Credit Agreement, dated as of the date hereof (the “Amended and
Restated Credit Agreement”).

                    E.     Northern, as Agent for the Existing Lenders to the
Existing Credit Agreement, effective upon its resignation as Agent and its
assignment of its pro rata share of the Revolving Loan Commitment and Revolving
Loans under the Existing Credit Agreement, shall assign to LaSalle all of its
right title and interest in certain Collateral, as defined, in and subject to
the terms of that certain Subsidiary Stock Pledge Agreement, dated as of
September 10, 2004, between the Borrower, as Debtor, and Northern, as the
secured party, as defined in the Existing Credit Agreement; (the “ Subsidiary
Stock Pledge Agreement”).

                    F.      LaSalle is willing to enter into this Reaffirmation
only upon the condition that Debtors execute and deliver this Reaffirmation in
favor of LaSalle.

                    NOW, THEREFORE, in consideration of the foregoing, the
Borrower and LaSalle hereby agrees as follows:

 

 

 

          1.      The Recitals to this Reaffirmation are hereby incorporated
herein by this reference thereto.

                    2.      Amendment to Subsidiary Stock Pledge Agreement. The
Subsidiary Stock Pledge Agreement is hereby amended as follows:

                    (A)     The “Whereas” sections of the Subsidiary Stock
Pledge Agreement is hereby amended and restated in their entirety to read as
follows:

          “A.     Quixote Corporation (the “Borrower”), The Northern Trust
Company (“Northern”), individually and as Administrative Agent for certain
Lenders, including without limitation, LaSalle Bank National Association
(“LaSalle”) (“Existing Lenders”), entered into and are parties to that certain
Credit Agreement, dated as of May 16, 2003, as amended by a First Amendment,
dated as of December 9, 2003; by a Second Amendment, dated as of June 30, 2004;
by a Third Amendment, dated as of September 10, 2004 and a Fourth Amendment
dated as of February 9, 2005 (“Existing Credit Agreement”), pursuant to which
existing Credit Agreement the Existing Lenders have made, (i)

65

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 66

Revolving Loans to the Borrower evidenced by certain Revolving Notes, dated as
of September 10, 2004, in the maximum aggregate principal amount of Thirty Eight
Million Dollars and 00/100 ($38,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Revolving Notes”)
and (ii) Term Loans to the Borrower evidenced by certain Term Notes, dated as of
May 16, 2003, in the aggregate original principal amount of Twenty Million
Dollars and 00/100 ($20,000,000), executed by the Borrower and made payable pro
rata to the order of the Existing Lenders (the “Term Notes”).

          B.     The Borrower, as of February 9, 2005, issued $40,000,000
Convertible Senior Subordinated Notes, due February 15, 2025 (the “New
Subordinated Notes”), the proceeds of which New Subordinated Notes (i) repaid in
full Borrowers’ obligations on the Term Loans and Term Notes and terminated the
Existing Lender’s Term Loan Commitment as defined in the Existing Credit
Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

          C.     The Borrower secured its obligations under the Existing Credit
Agreement by pledging certain Collateral, pursuant to this Subsidiary Stock
Pledge Agreement dated as of September 10, 2004, between Borrower and Northern,
as Secured Party.

          D.     Northern has agreed to resign as Administrative Agent under the
Existing Credit Agreement and the Existing Lenders (including Northern) have
agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans and to assign to LaSalle their rights and obligations under the Existing
Credit Agreement.

          E.     LaSalle and Borrower have agreed to amend and restate the terms
of the Existing Credit Agreement, and the Borrower has requested and LaSalle,
has agreed that LaSalle, individually on its own, continue the Revolving Loan
Commitment under the Existing Credit Agreement, as amended by an Amended and
Restated Credit Agreement, dated as of the date hereof (the “Amended and
Restated Credit Agreement”), consisting of LaSalle’s Revolving Credit Commitment
in the amount of $30,000,000 with a sublimit for the issuance of Letters of
Credit in the amount of $10,000,000.

          F.     Northern, subject to the conditions described in Recitals D and
E hereof, has agreed to assign to LaSalle its interest in the Subsidiary Stock
Pledge Agreement and the Collateral pledged thereunder.”

                  (B)   All references in the Subsidiary Stock Pledge Agreement
(i) to the “Credit Agreement” shall hereinafter be deemed to refer to the
Amended and

66

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 67

Restated Credit Agreement and (ii) to the “Secured Party” shall hereinafter be
deemed to refer to LaSalle.

                    (C)     All references in the Subsidiary Stock Pledge
Agreement to the “Related Documents” shall hereinafter have the meaning assigned
to the definition of “Loan Documents” in the Amended and Restated Credit
Agreement.

                    3.     The Borrower hereby expressly reaffirms and assumes
(on the same basis as set forth in the Subsidiary Stock Pledge Agreement, as
hereby amended), all of Debtors’ obligations and liabilities to Secured Party as
set forth in the Subsidiary Stock Pledge Agreement, and the Borrower agrees to
be bound by and abide by and operate and perform under and pursuant to and
comply fully with all of the terms, conditions, provisions, agreements,
representations, undertakings, warranties, guarantees, indemnities and covenants
contained in the Subsidiary Stock Pledge Agreement, in so far as such
obligations and liabilities may be modified by this Reaffirmation.

                    4.     This Reaffirmation shall inure to the benefit of
Bank, its successors and assigns and be binding upon Borrower, LaSalle, and
their individual successors and assigns.     

67

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 68

                    IN WITNESS WHEREOF, this instrument has been executed and
delivered as of the day and year first written above.

QUIXOTE CORPORATION, as Debtor

 

 

 

By:

 

 

Name:

Daniel P. Gorey

 

Title:

Vice President and Treasurer

 

LASALLE BANK NATIONAL
  ASSOCIATION, as Secured Party

 

 

 

By:

 

 

Name:

Stephanie Kline

 

Title:

Vice President

 

68

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 69

EXHIBIT X-2

REAFFIRMATION AND AMENDMENT OF SUBSIDIARY
STOCK PLEDGE AGREEMENT
(QUIXOTE TRANSPORTATION SAFETY, INC.)

                    This Reaffirmation and Amendment of Subsidiary Stock Pledge
Agreement (this “Reaffirmation”), dated and effective as of April 20, 2005 (the
“Reaffirmation”), is executed between Quixote Transportation Safety, Inc.
(“QTS”) in favor of LaSalle Bank National Association (“LaSalle”), and has
reference to the following facts and circumstances:

RECITALS

                    A.     Quixote Corporation (the “Borrower”), The Northern
Trust Company, individually and as Administrative Agent for certain Lenders
(“Northern”), including without limitation, LaSalle (“Existing Lenders”) entered
into and are parties to that certain Credit Agreement, dated as of May 16, 2003,
as amended by a First Amendment, dated as of December 9, 2003; by a Second
Amendment, dated as of June 30, 2004; by a Third Amendment, dated as of
September 10, 2004 and a Fourth Amendment dated as of February 9, 2005
(“Existing Credit Agreement”), pursuant to which the Existing Lenders have made,
(i) Revolving Loans to the Borrower evidenced by certain Revolving Notes, dated
as of September 10, 2004, in the maximum aggregate principal amount of Thirty
Eight Million Dollars and 00/100 ($38,000,000), executed by the Borrower and
made payable pro rata to the order of the Existing Lenders (the “Revolving
Notes”) and (ii) Term Loans to the Borrower evidenced by certain Term Notes,
dated as of May 16, 2003, in the aggregate original principal amount of Twenty
Million Dollars and 00/100 ($20,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Term Notes”).

                    B.     The Borrower, as of February 9, 2005, issued
$40,000,000 Convertible Senior Subordinated Notes, due February 15, 2025 (the
“New Subordinated Notes”), the proceeds of which New Subordinated Notes (i)
repaid in full Borrowers’ obligations on the Term Loans and Term Notes and
terminated the Existing Lender’s Term Loan Commitment as defined in the Existing
Credit Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

69

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 70

                    C.     Northern has agreed to resign as Administrative Agent
under the Existing Credit Agreement and the Existing Lenders (including
Northern) have agreed to sell to LaSalle their outstanding pro rata share of the
Revolving Loans and to assign to LaSalle their rights and obligations under the
Existing Credit Agreement.

                    D.     LaSalle and Borrower have agreed to amend and restate
the terms of the Existing Credit Agreement, as amended by that Amended and
Restated Credit Agreement, dated as of the date hereof (the “Amended and
Restated Credit Agreement”).

                    E.     Northern, as Agent for the Existing Lenders to the
Existing Credit Agreement, effective upon its resignation as Agent and its
assignment of its pro rata share of the Revolving Loan Commitment and Revolving
Loans under the Existing Credit Agreement, shall assign to LaSalle all of its
right title and interest in certain Collateral, as defined, in and subject to
the terms of that certain Subsidiary Stock Pledge Agreement, dated as of
September 10, 2004, between QTS, as Debtor, and Northern, as the secured party,
as defined in the Existing Credit Agreement (the “ Subsidiary Stock Pledge
Agreement”).

                    F.      LaSalle is willing to enter into this Reaffirmation
only upon the condition that Debtors execute and deliver this Reaffirmation in
favor of LaSalle.

                    NOW, THEREFORE, in consideration of the foregoing, QTS and
LaSalle hereby agree as follows:

 

 

 

          1.     The Recitals to this Reaffirmation are hereby incorporated
herein by this reference thereto.

                    2.     Amendment to Subsidiary Stock Pledge Agreement. The
Subsidiary Stock Pledge Agreement is hereby amended as follows:

                    (A)    The “Whereas” Section of the Subsidiary Stock Pledge
Agreement is hereby amended and restated in their entirety to read as follows:

          “A.     Quixote Corporation (the “Borrower”), The Northern Trust
Company (“Northern”), individually and as Administrative Agent for certain
Lenders, including without limitation, LaSalle Bank National Association
(“LaSalle”) (“Existing Lenders”), entered into and are parties to that certain
Credit Agreement, dated as of May 16, 2003, as amended by a First Amendment,
dated as of December 9, 2003; by a Second Amendment, dated as of June 30, 2004;
by a Third Amendment, dated as of September 10, 2004 and a Fourth Amendment
dated as of February 9, 2005 (“Existing Credit Agreement”),

70

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 71

pursuant to which existing Credit Agreement the Existing Lenders have made, (i)
Revolving Loans to the Borrower evidenced by certain Revolving Notes, dated as
of September 10, 2004, in the maximum aggregate principal amount of Thirty Eight
Million Dollars and 00/100 ($38,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Revolving Notes”)
and (ii) Term Loans to the Borrower evidenced by certain Term Notes, dated as of
May 16, 2003, in the aggregate original principal amount of Twenty Million
Dollars and 00/100 ($20,000,000), executed by the Borrower and made payable pro
rata to the order of the Existing Lenders (the “Term Notes”).

          B.     The Borrower, as of February 9, 2005, issued $40,000,000
Convertible Senior Subordinated Notes, due February 15, 2025 (the “New
Subordinated Notes”), the proceeds of which New Subordinated Notes (i) repaid in
full Borrowers’ obligations on the Term Loans and Term Notes and terminated the
Existing Lender’s Term Loan Commitment as defined in the Existing Credit
Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

          C.     QTS, as Subsidiary Guarantor executed that Subsidiary Guaranty,
dated as of May 16, 2003, as amended, (the “Subsidiary Guaranty”) in favor of
Northern for the benefit of the Existing Lenders and secured its obligations
under that Subsidiary Guaranty by pledging certain Collateral, pursuant to this
Subsidiary Stock Pledge Agreement dated as of September, 10 2004, between QTS
and Northern, as Secured Party.

          D.     Northern has agreed to resign as Administrative Agent under the
Existing Credit Agreement and the Existing Lenders (including Northern) have
agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans and to assign to LaSalle their rights and obligations under the Existing
Credit Agreement.

          E.     LaSalle and Borrower have agreed to amend and restate the terms
of the Existing Credit Agreement, and the Borrower has requested and LaSalle,
has agreed that LaSalle, individually on its own, continue the Revolving Loan
Commitment under the Existing Credit Agreement, as amended by an Amended and
Restated Credit Agreement, dated as of the date hereof (the “Amended and
Restated Credit Agreement”), consisting of LaSalle’s Revolving Credit Commitment
in the amount of $30,000,000 with a sublimit for the issuance of Letters of
Credit in the amount of $10,000,000.

          F.     Northern, subject to the conditions described in Recitals D and
E hereof, has agreed to assign to LaSalle its interest in the Subsidiary Stock
Pledge Agreement and the Collateral pledged thereunder.”

71

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 72

                    (B)     All references in the Subsidiary Stock Pledge
Agreement (i) to the “Credit Agreement” shall hereinafter be deemed to refer to
the Amended and Restated Credit Agreement and (ii) to the “Secured Party” shall
hereinafter be deemed to refer to LaSalle.

                    (C)     All references in the Subsidiary Stock Pledge
Agreement to the “Related Documents” shall hereinafter have the meaning assigned
to the definition of “Loan Documents” in the Amended and Restated Credit
Agreement.

                    3.       QTS hereby expressly reaffirms and assumes (on the
same basis as set forth in the Subsidiary Stock Pledge Agreement, as hereby
amended), all of Debtors’ obligations and liabilities to Secured Party as set
forth in the Subsidiary Stock Pledge Agreement, and QTS agrees to be bound by
and abide by and operate and perform under and pursuant to and comply fully with
all of the terms, conditions, provisions, agreements, representations,
undertakings, warranties, guarantees, indemnities and covenants contained in the
Subsidiary Stock Pledge Agreement, in so far as such obligations and liabilities
may be modified by this Reaffirmation.

                    4.       This Reaffirmation shall inure to the benefit of
Bank, its successors and assigns and be binding upon QTS, LaSalle, and their
individual successors and assigns.     

72

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 73

                    IN WITNESS WHEREOF, this instrument has been executed and
delivered as of the day and year first written above.

QUIXOTE TRANSPORATION SAFETY, INC.,
as Debtor

 

 

 

By:

 

 

Name:

Daniel P. Gorey

 

Title:

Vice President and Treasurer

 

 

 

 

LASALLE BANK NATIONAL

 

  ASSOCIATION, as Secured Party

 

 

 

By:

 

 

Name:

Stephanie Kline

 

Title:

Vice President

 

73

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 74

EXHIBIT X-3

REAFFIRMATION AND AMENDMENT OF SUBSIDIARY
STOCK PLEDGE AGREEMENT
(TRANSAFE CORPORATION)

                    This Reaffirmation and Amendment of Subsidiary Stock Pledge
Agreement (this “Reaffirmation”), dated and effective as of April 20, 2005 (the
“Reaffirmation”), is executed between Transafe Corporation (“Transafe”) in favor
of LaSalle Bank National Association (“LaSalle”), and has reference to the
following facts and circumstances:

RECITALS

                    A.     Quixote Corporation (the “Borrower”), The Northern
Trust Company, individually and as Administrative Agent for certain Lenders
(“Northern”), including without limitation, LaSalle (“Existing Lenders”) entered
into and are parties to that certain Credit Agreement, dated as of May 16, 2003,
as amended by a First Amendment, dated as of December 9, 2003; by a Second
Amendment, dated as of June 30, 2004; by a Third Amendment, dated as of
September 10, 2004 and a Fourth Amendment dated as of February 9, 2005
(“Existing Credit Agreement”), pursuant to which the Existing Lenders have made,
(i) Revolving Loans to the Borrower evidenced by certain Revolving Notes, dated
as of September 10, 2004, in the maximum aggregate principal amount of Thirty
Eight Million Dollars and 00/100 ($38,000,000), executed by the Borrower and
made payable pro rata to the order of the Existing Lenders (the “Revolving
Notes”) and (ii) Term Loans to the Borrower evidenced by certain Term Notes,
dated as of May 16, 2003, in the aggregate original principal amount of Twenty
Million Dollars and 00/100 ($20,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Term Notes”).

                    B.     The Borrower, as of February 9, 2005, issued
$40,000,000 Convertible Senior Subordinated Notes, due February 15, 2025 (the
“New Subordinated Notes”), the proceeds of which New Subordinated Notes (i)
repaid in full Borrowers’ obligations on the Term Loans and Term Notes and
terminated the Existing Lender’s Term Loan Commitment as defined in the Existing
Credit Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

                    C.     Northern has agreed to resign as Administrative Agent
under the Existing Credit Agreement and the Existing Lenders (including
Northern)

74

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 75

have agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans and to assign to LaSalle their rights and obligations under the Existing
Credit Agreement.

                    D.     LaSalle and Borrower have agreed to amend and restate
the terms of the Existing Credit Agreement, as amended by that Amended and
Restated Credit Agreement, dated as of the date hereof (the “Amended and
Restated Credit Agreement”).

                    E.     Northern, as Agent for the Existing Lenders to the
Existing Credit Agreement, effective upon its resignation as Agent and its
assignment of its pro rata share of the Revolving Loan Commitment and Revolving
Loans under the Existing Credit Agreement, shall assign to LaSalle all of its
right title and interest in certain Collateral, as defined, in and subject to
the terms of that certain Subsidiary Stock Pledge Agreement, dated as of
September 10, 2004, between Transafe, as Debtor; and Northern, as the secured
party, as defined in the Existing Credit Agreement (the “ Subsidiary Stock
Pledge Agreement”).

                    F.     LaSalle is willing to enter into this Reaffirmation
only upon the condition that Debtors execute and deliver this Reaffirmation in
favor of LaSalle.

                    NOW, THEREFORE, in consideration of the foregoing, Transafe
and LaSalle hereby agree as follows:

 

 

 

          1.       The Recitals to this Reaffirmation are hereby incorporated
herein by this reference thereto.

                    2.       Amendment to Subsidiary Stock Pledge Agreement. The
Subsidiary Stock Pledge Agreement is hereby amended as follows:

                    (A)   The “Whereas” Section of the Subsidiary Stock Pledge
Agreement is hereby amended and restated in their entirety to read as follows:

          “A.     Quixote Corporation (the “Borrower”), The Northern Trust
Company (“Northern”), individually and as Administrative Agent for certain
Lenders, including without limitation, LaSalle Bank National Association
(“LaSalle”) (“Existing Lenders”), entered into and are parties to that certain
Credit Agreement, dated as of May 16, 2003, as amended by a First Amendment,
dated as of December 9, 2003; by a Second Amendment, dated as of June 30, 2004;
by a Third Amendment, dated as of September 10, 2004 and a Fourth Amendment
dated as of February 9, 2005 (“Existing Credit Agreement”), pursuant to which
existing Credit Agreement the Existing Lenders have made, (i)

75

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 76

Revolving Loans to the Borrower evidenced by certain Revolving Notes, dated as
of September 10, 2004, in the maximum aggregate principal amount of Thirty Eight
Million Dollars and 00/100 ($38,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Revolving Notes”)
and (ii) Term Loans to the Borrower evidenced by certain Term Notes, dated as of
May 16, 2003, in the aggregate original principal amount of Twenty Million
Dollars and 00/100 ($20,000,000), executed by the Borrower and made payable pro
rata to the order of the Existing Lenders (the “Term Notes”).

          B.     The Borrower, as of February 9, 2005, issued $40,000,000
Convertible Senior Subordinated Notes, due February 15, 2025 (the “New
Subordinated Notes”), the proceeds of which New Subordinated Notes (i) repaid in
full Borrowers’ obligations on the Term Loans and Term Notes and terminated the
Existing Lender’s Term Loan Commitment as defined in the Existing Credit
Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

          C.     Transafe, as Subsidiary Guarantor executed that Subsidiary
Guaranty, dated as of May 16, 2003, as amended (the “Subsidiary Guaranty”), in
favor of Northern for the benefit of the Existing Lenders and secured its
obligations under that Subsidiary Guaranty by pledging certain Collateral,
pursuant to this Subsidiary Stock Pledge Agreement dated as of September 10,
2004, between Transafe and Northern, as Secured Party.

          D.     Northern has agreed to resign as Administrative Agent under the
Existing Credit Agreement and the Existing Lenders (including Northern) have
agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans and to assign to LaSalle their rights and obligations under the Existing
Credit Agreement.

          E.     LaSalle and Borrower have agreed to amend and restate the terms
of the Existing Credit Agreement, and the Borrower has requested and LaSalle,
has agreed that LaSalle, individually on its own, continue the Revolving Loan
Commitment under the Existing Credit Agreement, as amended by an Amended and
Restated Credit Agreement, dated as of the date hereof (the “Amended and
Restated Credit Agreement”), consisting of LaSalle’s Revolving Credit Commitment
in the amount of $30,000,000 with a sublimit for the issuance of Letters of
Credit in the amount of $10,000,000.

          F.     Northern, subject to the conditions described in Recitals D and
E hereof, has agreed to assign to LaSalle its interest in the Subsidiary Stock
Pledge Agreement and the Collateral pledged thereunder.”

76

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 77

                    (B)    All references in the Subsidiary Stock Pledge
Agreement (i) to the “Credit Agreement” shall hereinafter be deemed to refer to
the Amended and Restated Credit Agreement and (ii) to the “Secured Party” shall
hereinafter be deemed to refer to LaSalle.

                    (C)    All references in the Subsidiary Stock Pledge
Agreement to the “Related Documents” shall hereinafter have the meaning assigned
to the definition of “Loan Documents” in the Amended and Restated Credit
Agreement.

                    3.       Transafe hereby expressly reaffirms and assumes (on
the same basis as set forth in the Subsidiary Stock Pledge Agreement, as hereby
amended), all of Debtors’ obligations and liabilities to Secured Party as set
forth in the Subsidiary Stock Pledge Agreement, and Transafe agrees to be bound
by and abide by and operate and perform under and pursuant to and comply fully
with all of the terms, conditions, provisions, agreements, representations,
undertakings, warranties, guarantees, indemnities and covenants contained in the
Subsidiary Stock Pledge Agreement, in so far as such obligations and liabilities
may be modified by this Reaffirmation.

                    4.       This Reaffirmation shall inure to the benefit of
Bank, its successors and assigns and be binding upon Transafe, LaSalle, and
their individual successors and assigns.     

77

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 78

                    IN WITNESS WHEREOF, this instrument has been executed and
delivered as of the day and year first written above.

TRANSAFE CORPORATION, as Debtor

 

 

 

By:

 

 

Name:

Daniel P. Gorey

 

Title:

Vice President and Treasurer

 

 

 

 

LASALLE BANK NATIONAL

 

   ASSOCIATION, as Secured Party

 

 

 

 

By:

 

 

Name:

Stephanie Kline

 

Title:

Vice President

 

78

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 79

EXHIBIT X-4

REAFFIRMATION AND AMENDMENT OF SUBSIDIARY
STOCK PLEDGE AGREEMENT
(ENERGY ABSORPTION SYSTEMS, INC.)

                    This Reaffirmation and Amendment of Subsidiary Stock Pledge
Agreement (this “Reaffirmation”), dated and effective as of April 20, 2005 (the
“Reaffirmation”), is executed between Energy Absorption Systems, Inc. (“EAS”) in
favor of LaSalle Bank National Association (“LaSalle”), and has reference to the
following facts and circumstances:

RECITALS

                    A.     Quixote Corporation (the “Borrower”), The Northern
Trust Company, individually and as Administrative Agent for certain Lenders
(“Northern”), including without limitation, LaSalle (“Existing Lenders”) entered
into and are parties to that certain Credit Agreement, dated as of May 16, 2003,
as amended by a First Amendment, dated as of December 9, 2003; by a Second
Amendment, dated as of June 30, 2004; by a Third Amendment, dated as of
September 10, 2004 and a Fourth Amendment dated as of February 9, 2005
(“Existing Credit Agreement”), pursuant to which the Existing Lenders have made,
(i) Revolving Loans to the Borrower evidenced by certain Revolving Notes, dated
as of September 10, 2004, in the maximum aggregate principal amount of Thirty
Eight Million Dollars and 00/100 ($38,000,000), executed by the Borrower and
made payable pro rata to the order of the Existing Lenders (the “Revolving
Notes”) and (ii) Term Loans to the Borrower evidenced by certain Term Notes,
dated as of May 16, 2003, in the aggregate original principal amount of Twenty
Million Dollars and 00/100 ($20,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Term Notes”).

                    B.     The Borrower, as of February 9, 2005, issued
$40,000,000 Convertible Senior Subordinated Notes, due February 15, 2025 (the
“New Subordinated Notes”), the proceeds of which New Subordinated Notes (i)
repaid in full Borrowers’ obligations on the Term Loans and Term Notes and
terminated the Existing Lender’s Term Loan Commitment as defined in the Existing
Credit Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

                    C.     Northern has agreed to resign as Administrative Agent
under the Existing Credit Agreement and the Existing Lenders (including
Northern)

79

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 80

have agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans and to assign to LaSalle their rights and obligations under the Existing
Credit Agreement.

                    D.     LaSalle and Borrower have agreed to amend and restate
the terms of the Existing Credit Agreement, as amended by that Amended and
Restated Credit Agreement, dated as of the date hereof (the “Amended and
Restated Credit Agreement”).

                    E.     Northern, as Agent for the Existing Lenders to the
Existing Credit Agreement, effective upon its resignation as Agent and its
assignment of its pro rata share of the Revolving Loan Commitment and Revolving
Loans under the Existing Credit Agreement, shall assign to LaSalle all of its
right title and interest in certain Collateral, as defined, in and subject to
the terms of that certain Subsidiary Stock Pledge Agreement, dated as of
September 10, 2004, between EAS, as Debtor, and Northern, as the secured party,
as defined in the Existing Credit Agreement (the “ Subsidiary Stock Pledge
Agreement”).

                    F.     LaSalle is willing to enter into this Reaffirmation
only upon the condition that Debtors execute and deliver this Reaffirmation in
favor of LaSalle.

                    NOW, THEREFORE, in consideration of the foregoing, EAS and
LaSalle hereby agree as follows:

                    1.     The Recitals to this Reaffirmation are hereby
incorporated herein by this reference thereto.

                    2.     Amendment to Subsidiary Stock Pledge Agreement. The
Subsidiary Stock Pledge Agreement is hereby amended as follows:

                    (A)     The “Whereas” Section of the Subsidiary Stock Pledge
Agreement is hereby amended and restated in their entirety to read as follows:

          “A.     Quixote Corporation (the “Borrower”), The Northern Trust
Company (“Northern”), individually and as Administrative Agent for certain
Lenders, including without limitation, LaSalle Bank National Association
(“LaSalle”) (“Existing Lenders”), entered into and are parties to that certain
Credit Agreement, dated as of May 16, 2003, as amended by a First Amendment,
dated as of December 9, 2003; by a Second Amendment, dated as of June 30, 2004;
by a Third Amendment, dated as of September 10, 2004 and a Fourth Amendment
dated as of February 9, 2005 (“Existing Credit Agreement”), pursuant to which
existing Credit Agreement the Existing Lenders have made, (i) Revolving Loans to
the Borrower evidenced by certain Revolving Notes, dated

80

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 81

as of September 10, 2004, in the maximum aggregate principal amount of Thirty
Eight Million Dollars and 00/100 ($38,000,000), executed by the Borrower and
made payable pro rata to the order of the Existing Lenders (the “Revolving
Notes”) and (ii) Term Loans to the Borrower evidenced by certain Term Notes,
dated as of May 16, 2003, in the aggregate original principal amount of Twenty
Million Dollars and 00/100 ($20,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Term Notes”).

          B.     The Borrower, as of February 9, 2005, issued $40,000,000
Convertible Senior Subordinated Notes, due February 15, 2025 (the “New
Subordinated Notes”), the proceeds of which New Subordinated Notes (i) repaid in
full Borrowers’ obligations on the Term Loans and Term Notes and terminated the
Existing Lender’s Term Loan Commitment as defined in the Existing Credit
Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

         C.     EAS, as Subsidiary Guarantor executed that Subsidiary Guaranty,
dated as of May 16, 2003, as amended, (the “Subsidiary Guaranty”) in favor of
Northern for the benefit of the Existing Lenders and secured its obligations
under that Subsidiary Guaranty by pledging certain Collateral, pursuant to this
Subsidiary Stock Pledge Agreement dated as of September 10, 2004, between EAS
and Northern, as Secured Party.

          D.     Northern has agreed to resign as Administrative Agent under the
Existing Credit Agreement and the Existing Lenders (including Northern) have
agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans and to assign to LaSalle their rights and obligations under the Existing
Credit Agreement.

          E.     LaSalle and Borrower have agreed to amend and restate the terms
of the Existing Credit Agreement, and the Borrower has requested and LaSalle,
has agreed that LaSalle, individually on its own, continue the Revolving Loan
Commitment under the Existing Credit Agreement, as amended by an Amended and
Restated Credit Agreement, dated as of the date hereof, (the “Amended and
Restated Credit Agreement”) consisting of LaSalle’s Revolving Credit Commitment
in the amount of $30,000,000 with a sublimit for the issuance of Letters of
Credit in the amount of $10,000,000.

          F.     Northern, subject to the conditions described in Recitals D and
E hereof, has agreed to assign to LaSalle its interest in the Subsidiary Stock
Pledge Agreement and the Collateral pledged thereunder.”

                    (B)     EAS hereby grants a continuing security interest in
all of the outstanding common stock of Spin-Cast Plastics, Inc., as described in
Exhibit A

81

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 82

attached hereto, which stock shall constitute “Collateral” for purposes of and
be entitled to the benefits of this Agreement. Exhibit A attached hereto shall
replace and be substituted for Exhibit A to the Subsidiary Stock Pledge
Agreement, and all references therein to Exhibit A shall be deemed references to
the Exhibit A in the form attached hereto.

                    (C)     All references in the Subsidiary Stock Pledge
Agreement (i) to the “Credit Agreement” shall hereinafter be deemed to refer to
the Amended and Restated Credit Agreement and (ii) to the “Secured Party” shall
hereinafter be deemed to refer to LaSalle.

                    (D)     All references in the Subsidiary Stock Pledge
Agreement to the “Related Documents” shall hereinafter have the meaning assigned
to the definition of “Loan Documents” in the Amended and Restated Credit
Agreement.

                    3.     EAS hereby expressly reaffirms and assumes (on the
same basis as set forth in the Subsidiary Stock Pledge Agreement, as hereby
amended), all of Debtors’ obligations and liabilities to Secured Party as set
forth in the Subsidiary Stock Pledge Agreement, and EAS agrees to be bound by
and abide by and operate and perform under and pursuant to and comply fully with
all of the terms, conditions, provisions, agreements, representations,
undertakings, warranties, guarantees, indemnities and covenants contained in the
Subsidiary Stock Pledge Agreement, in so far as such obligations and liabilities
may be modified by this Reaffirmation.

                    4.     This Reaffirmation shall inure to the benefit of
Bank, its successors and assigns and be binding upon EAS, LaSalle, and their
individual successors and assigns.

82

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 83

                    IN WITNESS WHEREOF, this instrument has been executed and
delivered as of the day and year first written above.

 

 

 

ENERGY ABSORPTION SYSTEMS, INC.,
as Debtor

 

 

 

By:

 

 

Name:

Daniel P. Gorey

 

Title:

Vice President and Treasurer

 

 

 

 

LASALLE BANK NATIONAL
ASSOCIATION, as Secured Party

 

 

 

By:

 

 

Name:

Stephanie Kline

 

Title:

Vice President

 

83

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 84

EXHIBIT A TO
SUBSIDIARY STOCK PLEDGE AGREEMENT EXECUTED
BY ENERGY ABSORPTION SYSTEMS, INC. (“Pledgor”)
IN FAVOR OF THE NORTHERN TRUST COMPANY,
AS AGENT FOR THE LENDERS (“Secured Party”)
13.1     THIS EXHIBIT A CONSISTS OF 1 PAGE
LISTING OF PLEDGED SECURITIES

 

 

 

 

 

OWNER

ISSUER

STOCK CERTIFICATE
NO./SHARES OF COMMON
STOCK

AUTHORIZED SHARES/OUTSTANDING

  1.

Energy Absorption Systems, Inc. (sole managing member)

Energy Absorption Systems LLC

#1/100% Membership Interest

N/A

  2.

Energy Absorption Systems, Inc.

Spin-Cast Plastics, Inc.

#8 1/699.67 Shares

1000/699.67

84

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 85

EXHIBIT Y

COLLATERAL ASSIGNMENT OF THE OPTION TO
PURCHASE RIGHTS UNDER LEASE AGREEMENT

                    THIS COLLATERAL ASSIGNMENT OF THE OPTION TO PURCHASE RIGHTS
UNDER LEASE AGREEMENT, dated as of April 20, 2005, is made by ENERGY ABSORPTION
SYSTEMS (AL) L.L.C., a Delaware limited liability company, with its chief
executive office at 35 East Wacker Drive, Chicago, Illinois 60601 (“Assignor”),
in favor of LASALLE BANK NATIONAL ASSOCIATION, as Lender as defined herein,
having an office at 50 South LaSalle Street, Chicago, Illinois 60675
(“Assignee”) (this Collateral Assignment is herein called the “Assignment”).

RECITALS:

                    A.     Quixote Corporation (the “Borrower”), Northern,
individually and as Administrative Agent for certain Lenders, including without
limitation, LaSalle (“Existing Lenders”) entered into and are parties to that
certain Credit Agreement, dated as of May 16, 2003, as amended by a First
Amendment, dated as of December 9, 2003; by a Second Amendment, dated as of June
30, 2004; by a Third Amendment, dated as of September 10, 2004 and a Fourth
Amendment dated as of February 9, 2005 (“Existing Credit Agreement”), pursuant
to which the Existing Lenders have made, (i) Revolving Loans to the Borrower
evidenced by certain Revolving Notes, dated as of September 10, 2004, in the
maximum aggregate principal amount of Thirty Eight Million Dollars and 00/100
($38,000,000), executed by the Borrower and made payable pro rata to the order
of the Existing Lenders (the Revolving Notes”) and (ii) Term Loans to the
Borrower evidenced by certain Term Notes, dated as of May 16, 2003, in the
aggregate original principal amount of Twenty Million Dollars and 00/100
($20,000,000), executed by the Borrower and made payable pro rata to the order
of the Existing Lenders (the “Term Notes”).

                    B.     The Borrower, as of February 9, 2005, issued
$40,000,000 Convertible Senior Subordinated Notes, due February 15, 2025 (the
“New Subordinated Notes”), the proceeds of which New Subordinated Notes (i)
repaid in full Borrowers’ obligations on the Term Loans and Term Notes and
terminated the Existing Lender’s Term Loan Commitment as defined in the Existing
Credit Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

                    C.     Northern has agreed to resign as Administrative Agent
under the Existing Credit Agreement and the Existing Lenders (including
Northern) have agreed to sell to LaSalle their outstanding pro rata share of the
Revolving

85

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 86

Loans and to assign to LaSalle their rights and obligations under the Existing
Credit Agreement.

                    D.     LaSalle and Borrower have agreed to amend and restate
the terms of the Existing Credit Agreement, as amended by that Amended and
Restated Credit Agreement, dated as of the date hereof (the “Amended and
Restated Credit Agreement”).

                    E.     In connection with the Existing Credit Agreement,
Assignor executed and delivered a Subsidiary Guaranty, dated as of May 16, 2003,
as amended (the “Subsidiary Guaranty”) and, to secure its obligations
thereunder, executed and delivered a Leasehold Mortgage, dated as of June 30,
2004 in favor of Northern, as Agent for the Existing Lenders, which Mortgage was
thereafter assigned to Assignee pursuant to an Assignment and Assumption
Agreement, dated as of April 20, 2005, between Northern and Assignee, and
amended by a Reaffirmation and Amendment Agreement, dated as of April 20, 2005
between Assignor and Assignee (“the Leasehold Mortgage”) pursuant to which
Assignor granted a leasehold interest in the Alabama Property, as defined in the
Credit Agreement, in favor of Assignee.

                    F.     Assignor is a party to that Assignment and Assumption
of Lease Agreement, dated December 31, 2002, between Energy Absorption Systems,
Inc. and the Assignor (the “Assignment”) and pursuant to the terms of that
Assignment, Energy Absorption LLC thereby became a party to and lessee under
that certain Supplemental Lease Agreement, dated March 1, 1995 between the
Industrial Development Board of the City of Pell City (“Board”) and Assignor
(the “Lease”).

                    G.     Under the terms of Section 6.1 of the Lease and
Section 11.4 of the Original Lease, as defined in the Lease, Assignor has the
right to purchase the Alabama Property (the “Purchase Option”), upon
satisfaction of certain conditions, specifically (i) Assignor’s payment of $100
to the Board; and (ii) Assignor’s giving thirty (30) days notice of its
intention to exercise the Purchase Option.

                    H.     Pursuant to the Leasehold Mortgage, Assignor has
granted to Assignee, a security interest in the Lease and Assignor’s rights
under the Lease, including, without limitation, the Purchase Option.

                    NOW, THEREFORE, in consideration of the premises set forth
herein and for other good and valuable consideration, receipt and sufficiency of
which are hereby acknowledged, Assignor agrees as follows:

 

 

 

                    1.     Assignment. To secure Borrower’s Liabilities under
and as defined in the Amended and Restated Credit Agreement, and any other
obligations of Assignor under the Subsidiary Guaranty and this Assignment
(collectively, the “Liabilities”), Assignor hereby assigns to Assignee
Assignor’s

86

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 87

 

 

 

rights under the Lease to exercise the Purchase Option. Assignor grants to
Assignee exclusive and full power and authority, from and during the period when
a Default (as defined in the Subsidiary Guaranty) has occurred and is
continuing, to act in Assignor’s name, place and stead under the Lease and with
respect to the exercise of the Purchase Option, and to perform all acts, and
exercise all rights and remedies, which Assignor could perform and exercise
thereunder, and hereby irrevocably appoints Assignee as Assignor’s true and
lawful attorney, with full power of substitution, for the sole use and benefit
of Assignee, to exercise such Purchase Option and perform such acts and exercise
such rights and remedies. All rights and remedies referred to above shall be
cumulative and non-exclusive.

 

 

 

                    2.     Representations and Warranties. Assignor hereby
represents and warrants to Assignee that:

 

 

 

                (a)     The Lease is in full force and effect and is enforceable
in accordance with its terms and all applicable laws;

 

 

 

                (b)     Assignor has not received notice of, and is not
otherwise aware of, any default under the Lease and Other Agreements;

 

 

 

                (c)     Except as provided pursuant to this Assignment, Assignor
has not assigned or pledged the Lease or any interest therein;

 

 

 

                (d)     The Series 1995 Bonds, as defined in the Lease, have
been redeemed and have been paid in full;

 

 

 

                (e)     Under the Lease, Assignor has the right to exercise the
Purchase Option subject to (i) giving thirty (30) days notice (except as hereby
reduced) of its intention to exercise the Purchase Option, and (ii) payment of
$100 to the Board.

 

 

 

                    3.     Duties. Assignor agrees that it will not (i) assign
or pledge any interest in the Lease, (ii) agree to any amendment, modification
or termination to the Lease or (iii) exercise the Purchase Option thereunder,
without the prior written consent of Assignee. Assignor hereby covenants and
agrees to promptly send to Assignee copies of all notices and communications
which it receives with respect to the Lease. Assignor further agrees to promptly
perform its obligations under the Lease. In the event Assignor fails to pay or
perform any obligation arising under the Lease, Assignee may, but need not, pay
or perform such obligations at the expense and for the account of Assignor and
all reasonable funds expended for such purposes shall be secured hereby and
Assignor shall reimburse Assignee therefor within 10 business days of written
demand for reimbursement. Amounts unpaid by Assignor after such 10 business

87

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 88

 

 

 

day period shall bear interest thereon at a rate per year equal to two percent
(2%) in addition to the Prime Rate (as defined in the Credit Agreement) until
paid.

 

 

 

                    4.     Notices. All notices under this Assignment shall be
in writing and shall be delivered pursuant to the terms of the Agreement. Any
requirement of the applicable Uniform Commercial Code for reasonable
notification shall be met by the giving of such notice at least five (5) days
prior to the event for which such notification is required.

 

 

 

                    5.     Disclaimer. This Assignment constitutes an assignment
of the rights of Assignor with respect to the Lease only and not an assignment
or delegation of any duties or obligations of Assignor with respect thereto and
by its acceptance hereof Assignee does not undertake to perform or discharge and
shall not be responsible or liable for the performance or discharge of any such
duties or responsibilities. Assignor does hereby agree to indemnify and hold
Assignee harmless from and against any and all liabilities, costs, damages and
expenses incurred by Assignee in connection with this Assignment unless such
liability, cost, damage or expense results from the gross negligence or willful
misconduct of Assignee.

 

 

 

                    6.     Remedies. Assignee shall have all the rights and
remedies of a secured party under the applicable Uniform Commercial Code in
addition to any other rights or remedies it may have hereunder or under the
Agreement. Without limiting Assignee’s rights and remedies, Assignor hereby
irrevocably authorizes and empowers Assignee, at any time, in Assignor’s name or
in Assignee’s name, to demand, collect, receive, setoff against, sue for and
give acquittance for any and all monies and claims for monies hereby assigned
and to exercise any and all rights and privileges and receive all benefits
accorded the Lease and to execute and endorse the Lease or other required
instruments or to take any action deemed necessary or appropriate to protect
Assignee’s rights hereunder. All rights and remedies referred to herein shall be
cumulative and non-exclusive.

 

 

 

                    7.     Binding Effect. The satisfaction or discharge of any
part of the Liabilities shall not in any way satisfy or discharge this
Assignment, but this Assignment shall remain in full force and effect until the
date upon which the Liabilities are paid and satisfied in full. This Assignment
shall be binding upon Assignor and its successors and assigns and shall inure to
the benefit of Assignee and its successors and assigns.

 

 

 

                    8.     Severability. All provisions hereof are severable and
the invalidity or unenforceability of any of such provisions shall in no manner
affect or impair the validity and enforceability of the remaining provisions
hereof.

88

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 89

 

 

 

                    9.     Headings. The headings of these paragraphs and
subdivisions of this Assignment are for convenience only, are not considered a
part hereof, and shall not limit, expand or otherwise affect any of the terms
hereof.

 

 

 

                    10.     GOVERNING LAW. THIS ASSIGNMENT SHALL BE CONSTRUED
AND DETERMINED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
ILLINOIS.

 

 

 

                    11.     VENUE. ALL ACTIONS OR PROCEEDINGS IN ANY WAY, MANNER
OR RESPECT, ARISING OUT OF OR FROM OR RELATED TO THIS AGREEMENT OR THE
COLLATERAL SHALL BE LITIGATED IN COURTS HAVING SITUS WITHIN THE CITY OF CHICAGO,
STATE OF ILLINOIS. THE ASSIGNOR HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION
OF ANY LOCAL, STATE OR FEDERAL COURTS LOCATED WITHIN SAID CITY AND STATE.

 

 

 

                    12.     Survival of Representations. All of the
representations and warranties of Assignor contained in this Assignment shall
survive the execution and delivery of this Assignment and shall be remade on the
date of each borrowing by Assignor from Assignee.

 

 

 

                    13.     Waiver of Acceptance. Assignor hereby waives
acceptance of this Assignment by Assignee.

89

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 90

                    IN WITNESS HEREOF, Assignor has executed this Collateral
Assignment as of the date first written above.

 

 

 

 

 

 

ENERGY ABSORPTION SYSTEMS (AL), LLC

 

 

 

ENERGY ABSORPTION SYSTEMS, INC.,
As Sole Managing Member

 

By:

 

 

 

Name: 

Daniel P. Gorey

 

 

Title:

Vice President and Treasurer

 

 

 

 

LASALLE BANK NATIONAL ASSOCIATION,
as Lender

 

 

 

By:

 

 

 

Name: 

Stephanie Kline

 

 

Title:

Vice President

 

90

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 91

Exhibit Z

SUBSIDIARY GUARANTY

                    GUARANTY, dated as of May 16, 2003 (as amended, modified,
restated and/or supplemented from time to time, this “ Guaranty ”), made by each
of the undersigned Subsidiary Guarantors (each, a “ Subsidiary Guarantor ” and,
together with any other entity that becomes a Subsidiary Guarantor hereunder
pursuant to Section 21 hereof, the “ Subsidiary Guarantors ” ). Except as
otherwise defined herein, capitalized terms used herein and defined in the
Credit Agreement (as defined below) shall be used herein as therein defined.

WITNESSETH:

          WHEREAS, Quixote Corporation (the “Borrower”), the lenders from time
to time party thereto (the “ Lenders ”), The Northern Trust Corporation, as
Administrative Agent (the “Agent”) and Lender, and LaSalle Bank National
Association, as Co-Agent, have entered into a Credit Agreement, dated as of May
16, 2003 (as amended, modified, restated and/or supplemented from time to time,
the “ Credit Agreement ”), providing for the making of Loans to, and the
issuance of, and participation in, Letters of Credit for the account of, the
Borrower, all as contemplated therein (the Lenders, each Issuing Lender, the
Agent, the Co-Agent, each other agent, herein collectively called the “ Lenders
”);

                    WHEREAS, each Subsidiary Guarantor is a direct or indirect
Subsidiary of the Borrower;

                    WHEREAS, it is a condition precedent to the making of Loans
to, and the issuance of, and participation in, Letters of Credit for the account
of the Borrower under the Credit Agreement that each Subsidiary Guarantor shall
have executed and delivered this Guaranty; and

                    WHEREAS, each Subsidiary Guarantor will obtain benefits from
the incurrence of Loans by, and the issuance of, and participation in, Letters
of Credit for the account of, the Borrower under the Credit Agreement and,
accordingly, desires to execute this Guaranty in order to satisfy the condition
described in the preceding paragraph and to induce the Lenders to make Loans to
the Borrower and issue, and/or participate in, Letters of Credit for the account
of the Borrower;

                    NOW, THEREFORE, in consideration of the foregoing and other
benefits accruing to each Subsidiary Guarantor, the receipt and sufficiency of
which are hereby acknowledged, each Subsidiary Guarantor hereby makes the
following representations and warranties to the Agent and Lenders and hereby
covenants and agrees with the Agent and each Lender as follows:

91

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 92

                              1.          Each Subsidiary Guarantor, jointly and
severally, irrevocably, absolutely and unconditionally guarantees: (i) to the
Agent, for the benefit of the Lenders, the full and

92

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 93

prompt payment when due (whether at the stated maturity, by acceleration or
otherwise) of (x) the principal of, premium, if any, and interest on the Notes
issued by, and the Loans made to, the Borrower under the Credit Agreement, and
all reimbursement obligations and unpaid drawings with respect to Letters of
Credit and (y) all other obligations (including obligations which, but for the
automatic stay under Section 362(a) of the Bankruptcy Code or other applicable
bankruptcy or insolvency laws, would become due), liabilities and indebtedness
owing by the Borrower to the Lenders under the Credit Agreement and each other
Loan Document to which the Borrower is a party (including, without limitation,
indemnities, fees and interest thereon (including, in each case, any interest
accruing after the commencement of any bankruptcy, insolvency, receivership or
similar proceeding at the rate provided for in the Credit Agreement, whether or
not such interest is an allowed claim in any such proceeding), whether now
existing or hereafter incurred under, arising out of or in connection with the
Credit Agreement and any such other Credit Document and the due performance and
compliance by the Borrower with all of the terms, conditions and agreements
contained in all such Loan Documents (all such principal, premium, interest,
liabilities, indebtedness and obligations being herein collectively called the “
Guaranteed Obligations ”). Each Subsidiary Guarantor understands, agrees and
confirms that the Agent, for the benefit of the Lenders, may enforce this
Guaranty up to the full amount of the Guaranteed Obligations against such
Subsidiary Guarantor without proceeding against any other Subsidiary Guarantor,
the Borrower, or under any other guaranty covering all or a portion of the
Guaranteed Obligations. This Guaranty shall constitute a guaranty of payment and
not of collection.

                              2.          The liability of each Subsidiary
Guarantor hereunder is primary, absolute, joint and several, and unconditional
and is exclusive and independent of any security for or other guaranty of the
indebtedness of the Borrower whether executed by such Subsidiary Guarantor, any
other Subsidiary Guarantor or by any other party, and the liability of each
Subsidiary Guarantor hereunder shall not be affected or impaired by any
circumstance or occurrence whatsoever, including, without limitation: (i) any
direction as to application of payment by Borrower or by any other party other
than the Agent, (ii) any other continuing or other guaranty, undertaking or
maximum liability of a Subsidiary Guarantor or of any other party as to the
Guaranteed Obligations, (iii) any payment on or in reduction of any such other
guaranty or undertaking, (iv) any dissolution, termination or increase, decrease
or change in personnel by Borrower, (v) any payment made to any Lender on the
indebtedness which any Lender repays to the Borrower pursuant to court order in
any bankruptcy, reorganization, arrangement, moratorium or other debtor relief
proceeding, and each Subsidiary Guarantor waives any right to the deferral or
modification of its obligations hereunder by reason of any such proceeding, (vi)
any action or inaction by the Agent or any Lender as contemplated in Section 5
hereof, (vii) any invalidity, irregularity or unenforceability of all or any
part of the Guaranteed Obligations or of any security therefor or (viii) to the
extent permitted by applicable law, any other circumstances which might
otherwise constitute a defense available to, or a discharge of, the Borrower in
respect of the Guaranteed Obligations or of any Subsidiary Guarantor in respect
of this Guaranty.

93

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 94

                              3.          The obligations of each Subsidiary
Guarantor hereunder are independent of the obligations of any other Subsidiary
Guarantor, any other Subsidiary Guarantor, the Borrower and a separate action or
actions may be brought and prosecuted against each Subsidiary Guarantor whether
or not action is brought against any other Subsidiary Guarantor,

94

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 95

any other Subsidiary Guarantor, the Borrower and whether or not any other
Subsidiary Guarantor, any other Subsidiary Guarantor, the Borrower be joined in
any such action or actions. Each Subsidiary Guarantor waives, to the fullest
extent permitted by law, the benefits of any statute of limitations affecting
its liability hereunder or the enforcement thereof. Any payment by the Borrower
or other circumstance which operates to toll any statute of limitations as to
the Borrower shall operate to toll the statute of limitations as to each
Subsidiary Guarantor to the fullest extent permitted by law.

                              4.          Each Subsidiary Guarantor hereby
waives to the fullest extent permitted by applicable law, notice of acceptance
of this Guaranty and notice of any liability to which it may apply, and waives
promptness, diligence, presentment, demand of payment, protest, notice of
dishonor or nonpayment of any such liabilities, suit or taking of other action
by the Agent or any other Lender against, and any other notice to, any party
liable thereon (including such Subsidiary Guarantor and the Borrower).

                              5.          The Agent, on behalf of the Lenders,
or the Lenders may at any time and from time to time without the consent of, or
notice to, any Subsidiary Guarantor, without incurring responsibility to such
Subsidiary Guarantor, without impairing or releasing the obligations of such
Subsidiary Guarantor hereunder, upon or without any terms or conditions and in
whole or in part:

 

 

 

                                 (i)          change the manner, place or terms
of payment of, and/or change or extend the time of payment of, renew, increase,
accelerate or alter, any of the Guaranteed Obligations (including any increase
or decrease in the rate of interest thereon), any security therefor, or any
liability incurred directly or indirectly in respect thereof, and the guaranty
herein made shall apply to the Guaranteed Obligations as so changed, extended,
renewed, increased or altered;

 

 

 

                                 (ii)         take and hold security for the
payment of the Guaranteed Obligations and/or sell, exchange, release, surrender,
impair, realize upon or otherwise deal with in any manner and in any order any
property by whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any of those
hereunder) incurred directly or indirectly in respect thereof or hereof, and/or
any offset thereagainst;

 

 

 

                                 (iii)        exercise or refrain from
exercising any rights against the Borrower or any Subsidiary thereof or
otherwise act or refrain from acting;

 

 

 

                                 (iv)        settle or compromise any of the
Guaranteed Obligations, any security therefor or any liability (including any of
those hereunder) incurred directly or indirectly in respect thereof or hereof,
and may subordinate the payment of

95

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 96

 

 

 

all or any part thereof to the payment of any liability (whether due or not) of
the Borrower to creditors of Borrower other than the Lenders;

96

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 97

 

 

 

                                  (v)        apply any sums by whomsoever paid
or howsoever realized to any liability or liabilities of the Borrower to the
Lenders regardless of what liabilities of the Borrower remain unpaid;

 

 

 

                                  (vi)       release or substitute any one or
more endorsers, other Subsidiary Guarantor, the Borrower or other obligors;

 

 

 

                                  (vii)      consent to or waive any breach of,
or any act, omission or default under, any of the Loan Documents or any of the
instruments or agreements referred to therein, or otherwise amend, modify or
supplement any of the Loan Documents or any of such other instruments or
agreements;

 

 

 

                                  (viii)     act or fail to act in any manner
referred to in this Guaranty which may deprive such Subsidiary Guarantor of its
right to subrogation against the Borrower to recover full indemnity for any
payments made pursuant to this Guaranty; and/or

 

 

 

                                  (ix)       take any other action which could,
under otherwise applicable principles of common law, give rise to a legal or
equitable discharge of any Subsidiary Guarantor from its liabilities under this
Guaranty.

                               6.          No invalidity, irregularity or
unenforceability of all or any part of the Guaranteed Obligations or of any
security therefor shall affect, impair or be a defense to this Guaranty, and
this Guaranty shall be primary, absolute and unconditional notwithstanding the
occurrence of any event or the existence of any other circumstances which might
constitute a legal or equitable discharge of a surety or Subsidiary Guarantor
except payment in full of the Guaranteed Obligations.

                              7.          This Guaranty is a continuing one and
all liabilities to which it applies or may apply under the terms hereof shall be
conclusively presumed to have been created in reliance hereon. No failure or
delay on the part of the Agent, on behalf of the Lenders, or any Lender in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
expressly specified are cumulative and not exclusive of any rights or remedies
which any Lender would otherwise have. No notice to or demand on any Subsidiary
Guarantor in any case shall entitle such Subsidiary Guarantor to any other
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of any Lender to any other or further action in any
circumstances without notice or demand. It is not necessary for the Agent or any
Lender to inquire into the capacity or powers of the Borrower or the officers,
directors, partners or agents acting or purporting to act on its or their
behalf, and any

97

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 98

indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.

                              8.          (a) Each Subsidiary Guarantor waives
any right (except as shall be required by applicable law and cannot be waived)
to require the Agent or any Lender to: (i) proceed against the Borrower, of the
Guaranteed Obligations or any other party; (ii) proceed

98

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 99

 

 

against or exhaust any security held from the Borrower of the Guaranteed
Obligations or any other party; or (iii) pursue any other remedy in the Agent’s
or any Lender’s power whatsoever. Each Subsidiary Guarantor waives any defense
based on or arising out of any defense of the Borrower of the Guaranteed
Obligations or any other party other than payment in full of the Guaranteed
Obligations, including, without limitation, any defense based on or arising out
of the disability of the Borrower of the Guaranteed Obligations or any other
party, or the unenforceability of the Guaranteed Obligations or any part thereof
from any cause, or the cessation from any cause of the liability of the Borrower
other than payment in full of the Guaranteed Obligations in cash.

 

 

 

                                (b)          Each Subsidiary Guarantor assumes
all responsibility for being and keeping itself informed of the Borrower’s
financial condition and assets, and of all other circumstances bearing upon the
risk of nonpayment of the Guaranteed Obligations and the nature, scope and
extent of the risks which such Subsidiary Guarantor assumes and incurs
hereunder, and agrees that the Agent or any Lender shall have no duty to advise
any Subsidiary Guarantor of information known to them regarding such
circumstances or risks.

 

 

 

                                (c)          Until such time as the Guaranteed
Obligations have been paid in full in cash, each Subsidiary Guarantor hereby
waives all contractual, statutory, common law or other rights of reimbursement,
contribution or indemnity from the Borrower, which it may at any time otherwise
have as a result of this Guaranty.

 

 

                              9.          In order to induce the Lenders to make
Loans to, and issue Letters of Credit for the account of, the Borrower pursuant
to the Credit Agreement, Subsidiary Guarantor represents, warrants and covenants
that:

 

 

 

                                (a)          such Subsidiary Guarantor (i) is a
duly organized and validly existing corporation, partnership or limited
liability company, as the case may be, in good standing under the laws of the
jurisdiction of its organization, (ii) has the power and authority to own its
property and assets and to transact the business in which it is engaged and
presently proposes to engage and (iii) is duly qualified and is authorized to do
business and is in good standing in all jurisdictions where it is required to be
so qualified except for failures to be so qualified which, individually or in
the aggregate, would not reasonably be expected to have a Material Adverse
Effect;

 

 

 

                                (b)          such Subsidiary Guarantor has the
power and authority to execute, deliver and perform this Guaranty and each other
Loan Document (such term, for purposes of this Guaranty, to mean each Loan
Document (as defined in the Credit Agreement) to which it is a party) and has
taken all necessary action to authorize the execution, delivery and performance
by it of each such Loan Document;

99

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 100

 

 

 

                                (c)          such Subsidiary Guarantor has duly
executed and delivered this Guaranty and each other Loan Document to which it is
a party, and each such Loan Document constitutes the legal, valid and binding
obligation of such Subsidiary Guarantor enforceable against such Subsidiary
Guarantor in accordance with its terms,

100

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 101

 

 

 

except to the extent that the enforceability hereof or thereof may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws generally affecting creditors’ rights and by
equitable principles (regardless of whether enforcement is sought in equity or
at law);

 

 

 

                                (d)          neither the execution, delivery or
performance by such Subsidiary Guarantor of this Guaranty or any other Loan
Document to which it is a party, nor compliance by it with the terms and
provisions hereof and thereof nor the consummation of the transactions
contemplated therein: (i) will contravene any material provision of any
applicable law, statute, rule or regulation, or any applicable order, writ,
injunction or decree of any court or governmental instrumentality applicable to
the Subsidiary Guarantors, (ii) will conflict or be inconsistent with or result
in any breach of, any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien upon any of the material properties or
assets of such Subsidiary Guarantor or any of its Subsidiaries pursuant to the
terms of any indenture, mortgage, deed of trust, credit agreement or loan
agreement or any other material agreement, contract or other instrument to which
such Subsidiary Guarantor or any of its Subsidiaries is a party or by which it
or any of its material properties or assets is bound or to which it may be
subject except any conflict, inconsistency or breach which individually or in
the aggregate could not reasonably be expected to have a Material Adverse Effect
or (iii) will violate any provision of the certificate or articles of
incorporation, by-laws, certificate of partnership, partnership agreement,
certificate of formation or limited liability company agreement (or equivalent
organizational documents), as the case may be, of such Subsidiary Guarantor or
any of its Subsidiaries;

 

 

 

                                (e)          no order, consent, approval,
license, authorization or validation of, or filing, recording or registration
with (except as have been obtained or made prior to the date when required and
which remain in full force and effect), or exemption by, any governmental or
public body or authority, or any subdivision thereof, is required with respect
to such Subsidiary Guarantor to authorize, or is required by such Subsidiary
Guarantor in connection with, (i) the execution, delivery and performance of
this Guaranty or any other Loan Document to which such Subsidiary Guarantor is a
party, or (ii) the legality, validity, binding effect or enforceability of this
Guaranty or any other Loan Document to which such Subsidiary Guarantor is a
party; and

 

 

 

                                (f)          there are no actions, suits or
proceedings pending or, to the knowledge of such Subsidiary Guarantor,
threatened (i) with respect to this Guaranty or any other Loan Document to which
such Subsidiary Guarantor is a party, or (ii) which is, or could reasonably be
expected to have, a Material Adverse Effect.

101

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 102

                              10.          Each Subsidiary Guarantor covenants
and agrees that on and after the date hereof and until the termination of the
Credit Agreement, no Note or Letter of Credit remains outstanding and all other
Guaranteed Obligations have been paid in full, such Subsidiary Guarantor shall
use all reasonable efforts to take, or will use all reasonable efforts in the
exercise of its business judgment to refrain from taking, as the case may be,
all actions that are necessary

102

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 103

to be taken or not taken so that no violation of any provision, covenant or
agreement contained in Section VII of the Credit Agreement, and so that no Event
of Default, is caused by the actions of such Subsidiary Guarantor or any of its
Subsidiaries.

                              11.          The Subsidiary Guarantors hereby
jointly and severally agree to pay all out-of-pocket costs and expenses of the
Agent and each Lender in connection with the enforcement of this Guaranty and
the protection of such Agent or any Lender’s rights hereunder, and in connection
with any amendment, waiver or consent relating hereto (including, without
limitation, the reasonable fees and disbursements of counsel employed by the
Agents or any of the Lenders).

                              12.          This Guaranty shall be binding upon
each Subsidiary Guarantor and its successors and assigns and shall inure to the
benefit of the Agent and each Lender and their successors and assigns.

                              13.          Neither this Guaranty nor any
provision hereof may be changed, waived, discharged or terminated in any manner
whatsoever unless in writing duly signed by the Agent (with the consent of the
Required Lenders (or, to the extent required by Section 9.3 of the Credit
Agreement, all of the Lenders) at all times prior to the time at which all
Guaranteed Obligations have been paid in full, and each Subsidiary Guarantor
directly affected thereby (it being understood that the addition or release of
any Subsidiary Guarantor hereunder shall not constitute a change, waiver,
discharge or termination affecting any Subsidiary Guarantor other than the
Subsidiary Guarantors so added or released).

                              14.          Each Subsidiary Guarantor
acknowledges that an executed (or conformed) copy of each of the Loan Documents
has been made available to its principal executive officers and such officers
are satisfied with the contents thereof.

                              15.          In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, upon the occurrence and during the continuance of an Default (such term
to mean and include any “ Unmatured Default ” as defined in the Credit Agreement
and shall in any event, include, without limitation, any payment default on any
of the Guaranteed Obligations continuing after any applicable grace period), the
Agent and each Lender is hereby authorized at any time or from time to time,
without notice to any Subsidiary Guarantor or to any other Person, any such
notice being expressly waived, to set off and to appropriate and apply any and
all deposits (general or special) and any other indebtedness at any time held or
owing by such Lender to or for the credit or the account of such Subsidiary
Guarantor, against and on account of the obligations and liabilities of such
Subsidiary Guarantor to such Agent or Lender under this Guaranty, irrespective
of whether or not such Agent or Lender shall have made any demand hereunder and
although said obligations, liabilities, deposits or claims, or any of them,
shall be contingent or unmatured.

103

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 104

                              16.          All notices, requests, demands or
other communications pursuant hereto shall be sent or delivered by mail,
telegraph, telex, telecopy, cable or courier service and all such notices and
communications shall, when mailed, telegraphed, telexed, telecopied, or cabled
or sent by overnight courier, be effective when deposited in the mails,
delivered to the telegraph

104

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 105

company, cable company or overnight courier, as the case may be, or sent by
telex or telecopier, except that notices and communications to the Agent or any
Subsidiary Guarantor shall not be effective until received by the Agent or such
Subsidiary Guarantor, as the case may be. All notices and other communications
shall be in writing and addressed to such party at (i) in the case of the Agent
or any Lender, as provided in the Credit Agreement, and (ii) in the case of any
Subsidiary Guarantor, at its address or facsimile number set forth opposite its
signature below or in any case at such other address or telefax number as any of
the Persons listed above may hereafter notify the others in writing.

                              17.          If claim is ever made upon any Agent
or Lender for repayment or recovery of any amount or amounts received in payment
or on account of any of the Guaranteed Obligations and any of the aforesaid
payees repays all or part of said amount by reason of (i) any judgment, decree
or order of any court or administrative body having jurisdiction over such Agent
or Lender or any of its property or (ii) any settlement or compromise of any
such claim effected by such Lender with any such claimant (including the
Borrower), then and in such event each Subsidiary Guarantor agrees that any such
judgment, decree, order, settlement or compromise shall be binding upon such
Subsidiary Guarantor, notwithstanding any revocation hereof or the cancellation
of any Note or other instrument evidencing any liability of any Borrower, and
such Subsidiary Guarantor shall be and remain liable to such Agent and Lender
hereunder for the amount so repaid or recovered to the same extent as if such
amount had never originally been received by any such Agent and Lender.

                              18.          (a) THIS GUARANTY AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAW OF THE STATE OF ILLINOIS, IN EACH CASE WHICH ARE LOCATED
IN THE COUNTY OF COOK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF ILLINOIS OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS, IN
EACH CASE WHICH ARE LOCATED IN THE COUNTY OF COOK AND, BY EXECUTION AND DELIVERY
OF THIS GUARANTY, EACH SUBSIDIARY GUARANTOR HEREBY IRREVOCABLY ACCEPTS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFOREMENTIONED COURTS. EACH SUBSIDIARY GUARANTOR HEREBY
IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS THE BORROWER AS ITS DESIGNEE,
APPOINTEE AND AGENT TO RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF,
AND IN RESPECT OF THE PROPERTY OF EACH SUBSIDIARY GUARANTOR, SERVICE OF ANY AND
ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN ANY
SUCH ACTION OR PROCEEDING, AND THE BORROWER HEREBY ACCEPTS SUCH DESIGNATION,
APPOINTMENT AND EMPOWERMENT FOR ITSELF AND EACH

105

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 106

SUBSIDIARY GUARANTOR. EACH SUBSIDIARY GUARANTOR HEREBY FURTHER IRREVOCABLY
WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL

106

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 107

JURISDICTION OVER SUCH SUBSIDIARY GUARANTOR, AND AGREES NOT TO PLEAD OR CLAIM IN
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR ANY OTHER CREDIT
DOCUMENT BROUGHT IN ANY OF THE AFOREMENTIONED COURTS THAT SUCH COURTS LACK
PERSONAL JURISDICTION OVER SUCH SUBSIDIARY GUARANTOR. EACH SUBSIDIARY GUARANTOR
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ANY SUCH SUBSIDIARY
GUARANTOR AT ITS ADDRESS FOR NOTICES AS PROVIDED IN SECTION 18 ABOVE, SUCH
SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH SUBSIDIARY
GUARANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR
PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT THAT SUCH
SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE IF IN CONFORMITY WITH
THE FOREGOING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT UNDER THIS
GUARANTY, OR ANY LENDER, TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY SUBSIDIARY
GUARANTOR IN ANY OTHER JURISDICTION.

                              (b)          EACH SUBSIDIARY GUARANTOR HEREBY
IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY OF THE AFOREMENTIONED ACTIONS OR PROCEEDINGS ARISING OUT
OF OR IN CONNECTION WITH THIS GUARANTY OR ANY OTHER CREDIT DOCUMENT BROUGHT IN
THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES
AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

                              (c)          EACH OF THE PARTIES TO THIS GUARANTY
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS GUARANTY, THE OTHER LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

                              19.          All payments made by any Subsidiary
Guarantor hereunder will be made without setoff, counterclaim or other defense
and on the same basis as payments are made by the Borrower under Section 2 of
the Credit Agreement.

107

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 108

                              20.          This Guaranty may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument. A set of
counterparts executed by all the parties hereto shall be lodged with the Agent.

                              21.          It is understood and agreed that any
Subsidiary that is required to execute a counterpart of this Guaranty after the
date hereof pursuant to the terms of the Credit Agreement shall become a
Subsidiary Guarantor hereunder by executing a counterpart hereof and delivering
the same to the Agent.

108

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 109

                              22.          Notwithstanding anything else to the
contrary in this Guaranty, Agent, on behalf of the Lenders, agrees that this
Guaranty may be enforced only by the action of the Agent acting upon the
instructions of the Required Lenders (or, after the date on which all Guaranteed
Obligations have been paid in full) and that no other Lender shall have any
right individually to seek to enforce or to enforce this Guaranty, it being
understood and agreed that such rights and remedies may be exercised by the
Agent, for the benefit of the Lenders upon the terms of this Guaranty and the
Loan Documents. The Agent on behalf of the Lenders further agrees that this
Guaranty may not be enforced against any director, manager, member, trustee,
officer, employee, partner, stockholder or other holder of equity interests of
any Subsidiary Guarantor (except to the extent such holder of equity interests
is also a Subsidiary Guarantor hereunder). It is understood that the agreement
in this Section 22 is among and solely for the benefit of the Lenders and that
if the Required Lenders so direct (without requiring the consent of any
Subsidiary Guarantor), this Guaranty may be directly enforced by any Lender.

                              23.          This Guaranty and any obligations of
any Guaranty hereunder shall terminate on the termination of the Revolving Loan
Commitment and Term Loan Commitment and payment in full of all Guaranteed
Obligations; provided that all indemnities set forth herein shall survive any
such termination.

*     *     *

109

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 110

                              IN WITNESS WHEREOF, each Subsidiary Guarantor has
caused this Guaranty to be executed and delivered as of the date first above
written.

 

 

 

 

 

 

QUIXOTE TRANSPORTATION SAFETY, INC

 

 

 

 

 

By:

  /s/ Leslie J. Jezuit

 

 

 

Name:

Leslie J. Jezuit

 

Title:

President, Chief Executive Officer & Chairman

 

 

 

 

 

 

Address:

c/o Quixote Corporation
One East Wacker Drive
Chicago, Illinois 60601

 

Telephone No.:           (312) 467-6755

 

Facsimile No.:            (312) 467-0197

 

Attention:     President

 

 

 

 

 

 

TRANSAFE CORPORATION

 

 

 

 

 

 

By:

  /s/ Leslie J. Jezuit

 

 

 

Name:

Leslie J. Jezuit

 

Title:

President, Chief Executive Officer & Chairman

 

 

 

 

 

 

Address:

c/o Quixote Corporation
One East Wacker Drive
Chicago, Illinois 60601

 

Telephone No.:           (312) 467-6755

 

Facsimile No.:            (312) 467-0197

 

Attention:     President

 

 

 

ENERGY ABSORPTION SYSTEMS, INC.

 

 

 

 

 

 

By:

  /s/ Leslie J. Jezuit

 

 

 

Name:

Leslie J. Jezuit

 

Title:

President, Chief Executive Officer & Chairman

 

 

 

 

 

 

Address:

c/o Quixote Corporation
One East Wacker Drive
Chicago, Illinois 60601

 

Telephone No.:           (312) 467-6755

 

Facsimile No.:            (312) 467-0197

 

Attention:     President

110

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 111

 

 

 

 

 

 

ENERGY ABSORPTION SYSTEMS (AL) LLC

 

By: Energy Absorption Systems, Inc., Its sole Managing Member

 

 

 

By:

  /s/ Leslie J. Jezuit

 

 

 

Name:

Leslie J. Jezuit

 

Title:

President, Chief Executive Officer & Chairman

 

 

 

 

 

 

Address:

c/o Quixote Corporation
One East Wacker Drive
Chicago, Illinois 60601

 

Telephone No.:           (312) 467-6755

 

Facsimile No.:            (312) 467-0197

 

Attention:     President

 

 

 

SURFACE SYSTEMS, INC.

 

 

 

By:

  /s/ Leslie J. Jezuit

 

 

 

Name:

Leslie J. Jezuit

 

Title:

President, Chief Executive Officer & Chairman

 

 

 

 

 

 

Address:

c/o Quixote Corporation
One East Wacker Drive
Chicago, Illinois 60601

 

Telephone No.:          (312) 467-6755

 

Facsimile No.:           (312) 467-0197

 

Attention:      President

 

 

 

 

NU-METRICS, INC.

 

 

 

 

 

 

By:

  /s/ Leslie J. Jezuit

 

 

 

Name:

Leslie J. Jezuit

 

Title:

President, Chief Executive Officer & Chairman

 

 

 

 

 

 

Address:

c/o Quixote Corporation
One East Wacker Drive
Chicago, Illinois 60601

 

Telephone No.:            (312) 467-6755

 

Facsimile No.:             (312) 467-0197

 

Attention:      President

111

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 112

 

 

 

 

 

 

HIGHWAY INFORMATION SYSTEMS, INC.

 

 

 

 

 

 

By:

  /s/ Leslie J. Jezuit

 

 

 

Name:

Leslie J. Jezuit

 

Title:

President, Chief Executive Officer & Chairman

 

 

 

 

 

 

Address:

c/o Quixote Corporation
One East Wacker Drive
Chicago, Illinois 60601

 

Telephone No.:            (312) 467-6755

 

Facsimile No.:             (312) 467-0197

 

Attention:      President

 

 

 

 

 

 

GREEN LIGHT ACQUISITION CORPORATION

 

 

 

 

 

 

By:

  /s/ Leslie J. Jezuit

 

 

 

Name:

Leslie J. Jezuit

 

Title:

President, Chief Executive Officer & Chairman

 

 

 

 

 

 

Address:

c/o Quixote Corporation
One East Wacker Drive
Chicago, Illinois 60601

 

Telephone No.:            (312) 467-6755

 

Facsimile No.:             (312) 467-0197

 

Attention: President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accepted and Agreed to:

 

 

 

 

 

THE NORTHERN TRUST CORPORATION,
as Administrative Agent for the Lenders

 

 

 

 

 

By:

/s/ Erin G. Sullivan

 

 

 

Name:

Erin G. Sullivan

 

Title:

Second Vice President

 

112

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 113

EXHIBIT Z-1

REAFFIRMATION AND AMENDMENT OF SUBSIDIARY GUARANTY

                    This Reaffirmation and Amendment of Subsidiary Guaranty
(this “Reaffirmation”), dated and effective as of April 20, 2005, (the
“Reaffirmation”) is executed between Quixote Transportation Safety, Inc.,
Transafe Corporation, Energy Absorption Systems, Inc., Energy Absorption Systems
(AL) LLC, Surface Systems, Inc., Nu-Metrics, Inc., Highway Information Systems,
Inc., U.S. Traffic Corporation (formerly known as Green Light Acquisition
Corporation), Peek Traffic Corporation, (formerly known as Vision Acquisition
Corporation) Spin-Cast Plastics, Inc., as Debtors (each “Debtor” and
collectively the “Debtor”) in favor of LaSalle Bank National Association
(“LaSalle”), and has reference to the following facts and circumstances:

RECITALS

                    A.          Quixote Corporation (the “Borrower”), The
Northern Trust Company, individually and as Administrative Agent for certain
Lenders (“Northern”), including without limitation, LaSalle (“Existing Lenders”)
entered into and are parties to that certain Credit Agreement, dated as of May
16, 2003, as amended by a First Amendment, dated as of December 9, 2003; by a
Second Amendment, dated as of June 30, 2004; by a Third Amendment, dated as of
September 10, 2004 and a Fourth Amendment dated as of February 9, 2005
(“Existing Credit Agreement”), pursuant to which the Existing Lenders have made,
(i) Revolving Loans to the Borrower evidenced by certain Revolving Notes, dated
as of September 10, 2004, in the maximum aggregate principal amount of Thirty
Eight Million Dollars and 00/100 ($38,000,000), executed by the Borrower and
made payable pro rata to the order of the Existing Lenders (the “Revolving
Notes”) and (ii) Term Loans to the Borrower evidenced by certain Term Notes,
dated as of May 16, 2003, in the aggregate original principal amount of Twenty
Million Dollars and 00/100 ($20,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Term Notes”).

                    B.          The Borrower, as of February 9, 2005, issued
$40,000,000 Convertible Senior Subordinated Notes, due February 15, 2025 (the
“New Subordinated Notes”), the proceeds of which New Subordinated Notes (i)
repaid in full Borrowers’ obligations on the Term Loans and Term Notes and
terminated the Existing Lender’s Term Loan Commitment as defined in the Existing
Credit Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

113

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 114

                    C.          Northern has agreed to resign as Administrative
Agent under the Existing Credit Agreement and the Existing Lenders (including
Northern) have agreed to sell to LaSalle their outstanding pro rata share of the
Revolving Loans and to assign to LaSalle their rights and obligations under the
Existing Credit Agreement.

                    D.          LaSalle and Borrower have agreed to amend and
restate the terms of the Existing Credit Agreement, as amended by that Amended
and Restated Credit Agreement, dated as of the date hereof (the “Amended and
Restated Credit Agreement”).

                    E.          Northern, as Agent for the Existing Lenders to
the Existing Credit Agreement, effective upon its resignation as Agent and its
assignment of its pro rata share of the Revolving Loan Commitment and Revolving
Loans under the Existing Credit Agreement, shall assign to LaSalle all of its
right title and interest in that certain Subsidiary Guaranty, dated as of May
16, 2003, between the Subsidiary Guarantors and Northern, as the Agent, as
defined in the Existing Credit Agreement; (the “ Security Agreement”).

                    F.           LaSalle is willing to enter into this
Reaffirmation only upon the condition that Debtors execute and deliver this
Reaffirmation in favor of LaSalle.

                    NOW, THEREFORE, in consideration of the foregoing, each
Debtor hereby agrees as follows:

                    1.           The Recitals to this Reaffirmation are hereby
incorporated herein by this reference thereto.

                    2.           Amendment to Subsidiary Guaranty. The
Subsidiary Guaranty is hereby amended as follows:

                    (A)        The first “Whereas” section of the Subsidiary
Guaranty is hereby amended and restated in its entirety and hereby replaced with
the following “Whereas” clauses to read as follows:

          “Whereas, Quixote Corporation (the “Borrower”), The Northern Trust
Company (“Northern”), individually and as Administrative Agent for certain
Lenders, including without limitation, LaSalle Bank National Association
(“LaSalle”) (“Existing Lenders”), entered into and are parties to that certain
Credit Agreement, dated as of May 16, 2003, as amended by a First Amendment,
dated as of December 9, 2003; by a Second Amendment, dated as of June 30, 2004;
by a Third Amendment, dated as of September 10, 2004 and a

114

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 115

Fourth Amendment dated as of February 9, 2005 (“Existing Credit Agreement”),
pursuant to which existing Credit Agreement the Existing Lenders have made, (i)
Revolving Loans to the Borrower evidenced by certain Revolving Notes, dated as
of September 10, 2004, in the maximum aggregate principal amount of Thirty Eight
Million Dollars and 00/100 ($38,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the Revolving Notes”) and
(ii) Term Loans to the Borrower evidenced by certain Term Notes, dated as of May
16, 2003, in the aggregate original principal amount of Twenty Million Dollars
and 00/100 ($20,000,000), executed by the Borrower and made payable pro rata to
the order of the Existing Lenders (the “Term Notes”).

          “Whereas, the Borrower, as of February 9, 2005, issued $40,000,000
Convertible Senior Subordinated Notes, due February 15, 2025 (the “New
Subordinated Notes”), the proceeds of which New Subordinated Notes (i) repaid in
full Borrowers’ obligations on the Term Loans and Term Notes and terminated the
Existing Lender’s Term Loan Commitment as defined in the Existing Credit
Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

          “Whereas, the Subsidiary Guarantors executed that Subsidiary Guaranty,
dated as of May 16, 2003, as amended, (the “Subsidiary Guaranty”) in favor of
Northern for the benefit of the Existing Lenders;

          “Whereas, Northern has agreed to resign as Administrative Agent under
the Existing Credit Agreement and the Existing Lenders (including Northern) have
agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans and to assign to LaSalle their rights and obligations under the Existing
Credit Agreement.

          “Whereas, LaSalle and Borrower have agreed to amend and restate the
terms of the Existing Credit Agreement, and the Borrower has requested and
LaSalle, has agreed that LaSalle, individually on its own, continue the
Revolving Loan Commitment under the Existing Credit Agreement, as amended by an
Amended and Restated Credit Agreement, dated as of the date hereof, (the
“Amended and Restated Credit Agreement”) consisting of LaSalle’s Revolving
Credit Commitment in the amount of $30,000,000 with a sublimit for the issuance
of Letters of Credit in the amount of $10,000,000.

          “Whereas, Northern, subject to the conditions described in Recitals D
and E hereof, has agreed to assign to LaSalle its interest in the Subsidiary
Guaranty.

                    (B)          All references in the Subsidiary Guaranty to
the “Credit Agreement” shall hereinafter be deemed to refer to the Amended and
Restated Credit Agreement and all obligations of Borrower under the Amended and

115

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 116

Restated Credit Agreement shall constitute “Guaranteed Obligations” under the
Subsidiary Guaranty.

                    (C)      All references in the Subsidiary Guaranty to the
“Loan Documents” shall hereinafter have the meaning assigned to the definition
of “Loan Documents” in the Amended and Restated Credit Agreement.

                    (D)      All references to the “Agent,” “Lender” or “for the
benefit of Lenders” shall hereinafter be deemed to refer to “LaSalle” or be
deemed “for the benefit of LaSalle.”

                    3.           Each Subsidiary Guarantor hereby expressly
reaffirms and assumes, and Spin-Cast Plastics, Inc. hereby agrees to become a
party to and a Subsidiary Guarantor under the Subsidiary Guaranty, and assumes
(on the same basis as set forth in the Subsidiary Guaranty, as hereby amended),
each Subsidiary Guarantors’ obligations and liabilities to Bank as set forth in
the Subsidiary Guaranty, and each Subsidiary Guarantor, including Spin-Cast
Plastics, Inc., agrees to be bound by and abide by and operate and perform under
and pursuant to and comply fully with all of the terms, conditions, provisions,
agreements, representations, undertakings, warranties, guarantees, indemnities
and covenants contained in the Subsidiary Guaranty, in so far as such
obligations and liabilities may be modified by this Reaffirmation.

                    4.           This Reaffirmation shall inure to the benefit
of Bank, its successors and assigns and be binding upon each Subsidiary
Guarantor, and their individual successors and assigns.

116

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 117

                    IN WITNESS WHEREOF, this instrument has been executed and
delivered as of the day and year first written above.

QUIXOTE CORPORATION
QUIXOTE TRANSPORTATION SAFETY, INC.
TRANSAFE CORPORATION
ENERGY ABSORPTION SYSTEMS, INC.
ENERGY ABSORPTION SYSTEMS (AL) LLC
SURFACE SYSTEMS, INC.
NU-METRICS, INC.
HIGHWAY INFORMATION SYSTEMS, INC.
U.S. TRAFFIC CORPORATION (formerly known as
Green Light Acquisition Corporation)
PEEK TRAFFIC CORPORATION, (formerly known as
Vision Acquisition Corporation)
SPIN-CAST PLASTICS, INC., as Subsidiary Guarantors

 

 

 

By:

 

 

Name:

Daniel P. Gorey

 

Title:

Vice President and Treasurer

 

LASALLE BANK NATIONAL
  ASSOCIATION

 

 

 

By:

 

 

Name:

Stephanie Kline

 

Title:

Vice President

 

117

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 118

ACKNOWLEDGMENT AND CONSENT:

The Board hereby consents to (i) the Assignor’s assignment of the Purchase
Option to Assignee and (ii) Assignee’s giving ten (10) (in lieu of thirty (30))
days notice of its intention to exercise the Purchase Option pursuant to Section
11.4 of the Lease.

 

 

 

 

 

THE INDUSTRIAL DEVELOPMENT BOARD
OF THE CITY OF PELL CITY

 

 

By:

 

 

 

Name: 

 

 

 

Title:

Chairman of the Board of Directors

 

118

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 119

Schedule 1.1.1
Permitted Existing Indebtedness

A.          The following indebtedness was incurred with respect to the
acquisition of Roadway Safety Service and is reported on the February 28, 2005
balance sheet at $1,214,703.

              Promissory Note dated October 1, 1997 in the original principal
amount of $5,000,000 by Roadway (now Energy Absorption Systems, Inc.) in favor
of J. Scott Walter.

B.          The following indebtedness was incurred with the issuance of
convertible debt and is reported on the February 28, 2005 balance sheet at
$40,000,000.

              Convertible senior subordinated notes paying 7% due February 15,
2025 totalling $40,000,000 initially issued to eight investment funds.

C.          The following indebtedness of Subsidiaries to Borrower, eliminated
in consolidation:

              1.          Note from Highway Information Systems, Inc. to
Borrower of $2,800,000.

              2.          Note from Nu-Metrics, Inc. to borrower of $12,000,000.

D.          The intercompany liabilities existing as of February 28, 2005 as
follows:

 

 

 

 

 

Energy Absorption Systems AL

 

$

15,021,111

 

Energy Absorption Systems (Europe), Inc

 

$

130,847

 

Quixote Transportation Safety (Asia Pacific) Pty Limited

 

$

182,092

 

Highway Information Systems, Inc.

 

$

61,318

 

Surface Systems, Inc.

 

$

1,551,712

 

U.S. Traffic, Inc.

 

$

18,569,278

 

Peek Traffic, Inc.

 

$

2,771,511

 

E.          The following indebtedness was incurred with respect to the
acquisition of U.S. Traffic and is reported on the February 28, 2005 balance
sheet at $5,000,000.

 

 

 

The subordinated promissory note dated May 16, 2003 in the principal amount of
$5,000,000 in favor of U.S. Traffic Corporation and Myers/Nuart Electrical
Products, Inc.

F.          Permitted Existing Contingent Obligations.

119

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 120

 

 

G.

Obligations secured by Permitted Existing Liens.

 

 

H.

Obligations assumed under capital leases of manufacturing equipment acquired in
the U.S. Traffic acquisition totaling $12,339 as detailed below.

 

 

 

Lease Agreement between Concord Commercial and U.S. Traffic Corporation (May 17,
1999) (Centrum 3000 Turret Punch Press).

120

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 121

Schedule 1.1.4
Permitted Existing Contingent Obligations

 

 

 

A.

The following standby letters of credit were established with the lender for
business insurance purposes:

 

 

1.

$1,143,500 letter of credit in favor of Federal Insurance Company relating to
worker’s compensation claims.

 

 

 

 

2.

$22,000 letter of credit in favor of Fireman’s Fund Insurance Company relating
to worker’s compensation claims.

 

 

 

B.

The obligations to pay contingent consideration in connection with the U.S.
Traffic acquisition.

 

 

 

 

As part of the purchase price of UST, the Company agreed to pay the sellers
contingent consideration based on a percentage of the revenues for sales of
certain products between May 1, 2003 and December 31, 2008, up to a maximum of
$5,250,000.

 

 

 

C.

The three guaranties provided by Borrower in connection with the U.S. Traffic
acquisition. One is to the seller and guarantees the prompt payment of the note,
prompt and timely performance of each and all of the covenants created under the
asset purchase agreement delivered in connection with the U.S. Traffic
acquisition, and the timely satisfaction of obligations under the
indemnification provisions of the asset purchase agreement delivered in
connection with the U.S. Traffic acquisition The other two guarantees are to two
lessors and guarantee the prompt and timely performance of the covenants arising
under the terms of the respective lease.

121

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 122

Schedule 3.2

Transitional Letters of Credit

 

 

 

 

 

 

 

Amount

 

LaSalle Bank LC#

 

Expiration

 

Beneficiary

 

 

 

 

 

 

 

 

$1,143,500

 

S541139

 

6/30/05

 

Federal Insurance Company

$     22,000

 

S533665

 

7/1/05

 

Fireman’s Fund Insurance Company

 

 

 

 

 

 

 

122

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 123

Exhibit 6.3
Conflicts; Governmental Consents

None

123

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 124

Schedule 6.7

Litigation

 

 

 

 

A.

Bedlinger v. The Mills Corporation, Gaylor Entertainment and Safe-Hit
Corporation, State of Tennessee Circuit Court of Davidson County, No. 02C2832.

 

 

 

 

 

In October 2002, EAS was served in this matter that alleges that the plaintiff
was injured when she tripped over a surface mount twist-lock and post in a
parking lot. Plaintiff seeks judgment for $1,000,000 in damages. The case has
been tendered to the Company’s insurance carrier. Discovery to date indicates
that plaintiff is a 77 year-old woman who broke her hip and wrist after tripping
over a Safe-Hit post.

 

 

 

B.

Dunn v. Quixote, Energy Absorption Systems, Inc., Safe-Hit, Inc., Department of
Transportation et al., Circuit Court of Hawaii, No. 04-1-1330-07 SSM

 

 

 

 

In March 2005 and late December 2004 the Company and EAS were served in this
matter that alleges a bicyclist hit a Safe-Hit surface mount post and suffered
head injuries when his helmet broke. The case has been tendered to the Company’s
insurance carrier. The amount of damages is not alleged and discovery has not
begun so a risk assessment cannot be made at this time.

124

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 125

Schedule 6.8

Subsidiaries

 

 

6.8(i)   See attached chart of corporate structure

6.8(ii)  Note:

(1) Significant Domestic Incorporated Subsidiary

 

(2) Subsidiary Guarantor

 

 

 

 

 

 

 

 

 

 

 

 

Legal
Corporate
Name

 

Jurisdiction of
Organization

 

Authorizes shares/
Issues &
Outstanding

 

Owner
of Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quixote Transportation
Safety, Inc. (1)(2)

 

Delaware

 

1,000 Common,
$1.00 p.v.,
1,000 shares outstanding

 

Quixote
Corporation

 

 

 

 

 

 

 

 

 

Quixote Foreign
Sales Corporation

 

Virgin Islands

 

1,000 Common,
$1.00 p.v.,
1,000 shares outstanding

 

Quixote
Corporation

 

 

 

 

 

 

 

 

 

Quixote Traffic
Corporation

 

Delaware

 

1,000 Common,
$1.00 p.v.,
1,000 shares outstanding

 

Quixote
Corporation

 

 

 

 

 

 

 

 

 

TranSafe Corporation (1)(2)

 

Delaware

 

1,000 Common,
$1.00 p.v.,
1,000 shares outstanding

 

Quixote
Transportation
Safety, Inc.

 

 

 

 

 

 

 

 

 

U.S. Traffic Corporation
(f/k/a Green Light
Acquisition Company)(1)(2)

 

Delaware

 

1,000 Common,
$1.00 p.v.,
1,000 shares outstanding

 

Quixote
Transportation
Safety, Inc.

 

 

 

 

 

 

 

 

 

Energy Absorption
Absorption Systems, Inc.
(1)(2)

 

Delaware

 

1,500 Common,
$.01 p.v., 100,000 Series A
Preferred, n.p.v.,
1,000 common shares
Outstanding

 

Quixote
Transportation
Safety, Inc.

 

 

 

 

 

 

 

 

 

Surface Systems, Inc. (2)

 

Missouri

 

1,000 Common,
$.025 p.v.,
456,900 shares outstanding

 

Quixote
Transportation
Safety, Inc.

 

125

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 126

 

 

 

 

 

 

 

 

 

 

 

 

Legal
Corporate
Name

 

Jurisdiction of
Organization

 

Authorizes shares/
Issues &
Outstanding

 

Owner
of Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Highway Information
Safety, Inc. (1)(2)

 

Delaware

 

1,000 Common,
$1.00 p.v.,
1,000 shares outstanding

 

TranSafe
Corporation

 

 

 

 

 

 

 

 

 

Nu-Metrics, Inc. (2)

 

Pennsylvania

 

2,000,000 Common,
$1.00 p.v.,
366,233 shares outstanding

 

TranSafe
Corporation

 

 

 

 

 

 

 

 

 

Spin-Cast Plastics, Inc. (2)

 

Indiana

 

1,000 Common,
n.p.v.,
699.67 shares outstanding

 

Energy
Absorption
Systems, Inc.

 

 

 

 

 

 

 

 

 

Quixote Transportation
Safety (Asia Pacific), Inc.

 

Delaware

 

1,000 Common,
$1.00 p.v.,
1,000 shares outstanding

 

Energy
Absorption
Systems, Inc.

 

 

 

 

 

 

 

 

 

E-Tech Testing

 

Delaware

 

1,000 Common,
$1.00 p.v.,
1,000 shares outstanding

 

Energy
Absorption
Systems, Inc.

 

 

 

 

 

 

 

 

 

Energy Absorption
Systems (Europe), Inc.

 

Delaware

 

1,000 Common,
$1.00 p.v.,
1,000 shares outstanding

 

Energy
Absorption
Systems, Inc.

 

 

 

 

 

 

 

 

 

Quixote Transportation
Safety (Asia Pacific)
Pty Limited

 

Australia

 

The Company has no actual
authorized capital but has
capital comprised of classes
of ordinary shares and
redeemable preferences,
one share outstanding

 

Energy
Absorption
Systems, Inc.

 

 

 

 

 

 

 

 

 

Quixote Transportation
Safety (Europe), Inc.

 

Delaware

 

1,000 Common,
$1.00 p.v.,
1,000 shares outstanding

 

Energy
Absorption
Systems, Inc.

 

 

 

 

 

 

 

 

 

Energy Absorption
Systems (AL) LLC (1)(2)

 

Delaware
limited liability
Corporation

 

N/A

 

Energy
Absorption
Systems, Inc.
is the sole and
managing
member

 

126

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 127

 

 

 

 

 

 

 

 

 

 

 

 

Legal
Corporate
Name

 

Jurisdiction of
Organization

 

Authorizes shares/
Issues &
Outstanding

 

Owner
of Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Peek Traffic Corporation
(1)(2) (f/k/a Vision
Acquisition Corporation)

 

Delaware

 

1,000 Common
$1.00 p.v.,
1,000 shares outstanding

 

Quixote
Transportation
Safety, Inc.

 

 

 

 

 

 

 

 

 

Quixote Transportation
Technologies, Inc.

 

Delaware

 

1,000 Common
$1.00 p.v.,
1,000 shares outstanding

 

Quixote
Corporation

 

 

 

 

 

 

 

 

 

TIS, Inc.

 

North Carolina

 

100,000 Common,
$1.00 p.v.,
100 shares outstanding

 

Highway
Information
Systems, Inc.

 

 

 

 

 

 

 

 

 

Quixote Transportation
Safety Mexico,
S. de R.L. de C.V.

 

Mexico

 

N/A

 

U.S. Traffic
Corporation
(n/k/a Green
Light
Acquisition
Company –
1 membership
interest;
Quixote
Transportation
Safety, Inc. –
1 membership
Interest

 

 

 

 

 

 

 

 

 

Sensing Systems
Limited

 

United
Kingdom

 

1,000 shares,
1 British Pound each

 

Surface
Systems,
Inc. –
204 shares,
Terence
Barnett –
5 shares,
Joe Kelly –
1 share

 

127

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 128

Schedule 6.9
ERISA

None

128

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 129

REVOLVING LOAN NOTE

 

 

$30,000,000

Chicago, Illinois
April 20, 2005

                    FOR VALUE RECEIVED, the undersigned, QUIXOTE CORPORATION, a
Delaware corporation (the “Borrower”), promises to pay to the order of LaSalle
Bank National Association and its registered assigns (the “Lender”), on February
1, 2008, the principal sum of Thirty Million Dollars, or, if less, the aggregate
unpaid principal amount of all Loans made by the Lender to the Borrower from
time to time pursuant to that certain Amended and Restated Credit Agreement,
dated as of April 20, 2005, between the Borrower and Lender (amending and
restating the terms of that Credit Agreement, dated as of May 16, 2003, as
amended) (together with all amendments, if any, from time to time made thereto,
the “Credit Agreement”).

                    The Borrower agrees to pay interest on the principal hereof
remaining from time to time unpaid in accordance with Section 2.13 of the Credit
Agreement.

                    All payments of principal of and interest on this Note shall
be payable in lawful currency of the United States of America at the Agent’s
office at 135 South LaSalle Street, Chicago, Illinois 60603, in immediately
available funds.

                    This Note evidences indebtedness incurred under, and is
subject to the terms and provisions of, the Credit Agreement, to which reference
is made for a statement of those terms and provisions. Should the indebtedness
represented by this Note or any part hereof be collected at law or in equity or
in bankruptcy, receivership, or other court proceedings, or this Note be placed
in the hands of attorneys for collection after maturity (by declaration or
otherwise), the undersigned agrees to pay, in addition to principal and interest
due and payable hereon, reasonable attorneys’ and collection fees.

 

 

 

 

 

QUIXOTE CORPORATION

 

 

 

 

 

By:

  /s/Daniel P. Gorey

 

 

 

 

 

 

Name:

Daniel P. Gorey

 

 

 

 

 

 

Title:

Vice President, Chief Financial

 

 

 

 

 

 

Officer and Treasurer

 

 

 

 

 

129

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 130

Loans made by LASALLE BANK NATIONAL ASSOCIATION (the “Lender”) to QUIXOTE
CORPORATION (the “Borrower”) under the Amended and Restated Credit Agreement,
dated as of April 20, 2005, as amended, among the Borrower and LASALLE BANK
NATIONAL ASSOCIATION, and payments of principal received on the Note to which
this Grid is attached:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Date

 

Amount of Loan

 

Amount of
Principal Paid

 

Unpaid
Principal
Balance

 

Notation By

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

130

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 131

REAFFIRMATION AND AMENDMENT OF CALIFORNIA DEED OF TRUST

                    This Reaffirmation and Amendment of California Deed of Trust
(this “Reaffirmation”), dated and effective as of April 20, 2005, (the
“Reaffirmation”) is executed between Energy Absorption Systems, Inc., as
Grantor, (the “Grantor”) in favor of LaSalle Bank National Association
(“LaSalle”), and has reference to the following facts and circumstances:

RECITALS

                    A.      Quixote Corporation (the “Borrower”), The Northern
Trust Company, individually and as Administrative Agent for certain Lenders
(“Northern”), including without limitation, LaSalle (“Existing Lenders”) entered
into and are parties to that certain Credit Agreement, dated as of May 16, 2003,
as amended by a First Amendment, dated as of December 9, 2003; by a Second
Amendment, dated as of June 30, 2004; by a Third Amendment, dated as of
September 10, 2004 and a Fourth Amendment dated as of February 9, 2005
(“Existing Credit Agreement”), pursuant to which the Existing Lenders have made,
(i) Revolving Loans to the Borrower evidenced by certain Revolving Notes, dated
as of September 10, 2004, in the maximum aggregate principal amount of Thirty
Eight Million Dollars and 00/100 ($38,000,000), executed by the Borrower and
made payable pro rata to the order of the Existing Lenders (the “Revolving
Notes”) and (ii) Term Loans to the Borrower evidenced by certain Term Notes,
dated as of May 16, 2003, in the aggregate original principal amount of Twenty
Million Dollars and 00/100 ($20,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Term Notes”).

                    B.      The Borrower, as of February 9, 2005, issued
$40,000,000 Convertible Senior Subordinated Notes, due February 15, 2025 (the
“New Subordinated Notes”), the proceeds of which New Subordinated Notes (i)
repaid in full Borrowers’ obligations on the Term Loans and Term Notes and
terminated the Existing Lender’s Term Loan Commitment as defined in the Existing
Credit Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

                    C.      Northern has agreed to resign as Administrative
Agent under the Existing Credit Agreement and the Existing Lenders (including
Northern) have agreed to sell to LaSalle their outstanding pro rata share of the
Revolving

131

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 132

Loans and to assign to LaSalle their rights and obligations under the Existing
Credit Agreement.

                    D.      LaSalle and Borrower have agreed to amend and
restate the terms of the Existing Credit Agreement, as amended by that Amended
and Restated Credit Agreement, dated as of the date hereof (the “Amended and
Restated Credit Agreement”).

                    E.      Northern, as Agent for the Existing Lenders to the
Existing Credit Agreement, effective upon its resignation as Agent and its
assignment of its pro rata share of the Revolving Loan Commitment and Revolving
Loans under the Existing Credit Agreement, shall assign to LaSalle all of its
right title and interest in certain Mortgaged Property, as defined, in and
subject to the terms of that certain Deed of Trust, Assignment of Rents,
Security Agreement and Fixture Filing Agreement, dated as of September 10, 2004,
between the Energy Absorption Systems, Inc., as Grantor, Chicago Title Insurance
Company, as Trustee and Northern, as the Beneficiary, as defined in the Existing
Credit Agreement (the “ California Deed of Trust”).

                    F.      LaSalle is willing to enter into this Reaffirmation
only upon the condition that Grantor execute and deliver this Reaffirmation in
favor of LaSalle.

                    NOW, THEREFORE, in consideration of the foregoing, Grantor,
Trustee and Beneficiary hereby agree as follows:

                    1.       The Recitals to this Reaffirmation are hereby
incorporated herein by this reference thereto.

                    2.       Amendment to California Deed of Trust. The
California Deed of Trust is hereby amended as follows:

                    (A)    The “Recitals” Section of the California Deed of
Trust is hereby amended and restated in its entirety to read as follows:

          “A.     Quixote Corporation (the “Borrower”), The Northern Trust
Company (“Northern”), individually and as Administrative Agent for certain
Lenders, including without limitation, LaSalle Bank National Association
(“LaSalle”) (“Existing Lenders”), entered into and are parties to that certain
Credit Agreement, dated as of May 16, 2003, as amended by a First Amendment,
dated as of December 9, 2003; by a Second Amendment, dated as of June 30, 2004;
by a Third Amendment, dated as of September 10, 2004 and a Fourth Amendment
dated as of February 9, 2005 (“Existing Credit Agreement”), pursuant to which
existing Credit Agreement the Existing Lenders have made, (i)

132

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 133

Revolving Loans to the Borrower evidenced by certain Revolving Notes, dated as
of September 10, 2004, in the maximum aggregate principal amount of Thirty Eight
Million Dollars and 00/100 ($38,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Revolving Notes”)
and (ii) Term Loans to the Borrower evidenced by certain Term Notes, dated as of
May 16, 2003, in the aggregate original principal amount of Twenty Million
Dollars and 00/100 ($20,000,000), executed by the Borrower and made payable pro
rata to the order of the Existing Lenders (the “Term Notes”).

          B.      The Borrower, as of February 9, 2005, issued $40,000,000
Convertible Senior Subordinated Notes, due February 15, 2025 (the “New
Subordinated Notes”), the proceeds of which New Subordinated Notes (i) repaid in
full Borrowers’ obligations on the Term Loans and Term Notes and terminated the
Existing Lender’s Term Loan Commitment as defined in the Existing Credit
Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

          C.      Grantor, as Subsidiary Guarantor executed that Subsidiary
Guaranty, dated as of May 16, 2003, as amended (the “Subsidiary Guaranty”), in
favor of Northern for the benefit of the Existing Lenders and secured its
obligations under that Subsidiary Guaranty by granting a Mortgage on the
California Property, pursuant to that certain California Deed of Trust, dated as
of September 10, 2004, between Grantor and Northern, as Secured Party.

          D.      Northern has agreed to resign as Administrative Agent under
the Existing Credit Agreement and the Existing Lenders (including Northern) have
agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans and to assign to LaSalle their rights and obligations under the Existing
Credit Agreement.

          E.      LaSalle and Borrower have agreed to amend and restate the
terms of the Existing Credit Agreement, and the Borrower has requested and
LaSalle, has agreed that LaSalle, individually on its own, continue the
Revolving Loan Commitment under the Existing Credit Agreement, as amended by an
Amended and Restated Credit Agreement, dated as of the date hereof (the “Amended
and Restated Credit Agreement”), consisting of LaSalle’s Revolving Credit
Commitment in the amount of $30,000,000 with a sublimit for the issuance of
Letters of Credit in the amount of $10,000,000.

          F.      Northern, subject to the conditions described in Recitals D
and E hereof, has agreed to assign to LaSalle its interest in the California
Deed of Trust and the Collateral pledged thereunder.”

133

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 134

                    (B)    All references in the California Deed of Trust (i) to
the “Credit Agreement” shall hereinafter be deemed to refer to the Amended and
Restated Credit Agreement and (ii) to the “Beneficiary” shall hereinafter be
deemed to refer to LaSalle.

                    (C)    All references in the California Deed of Trust to the
“Notes” shall hereinafter refer to the “Revolving Note” in the Amended and
Restated Credit Agreement.

                    3.      Reaffirmation of California Deed of Trust. Grantor
hereby expressly reaffirms and assumes (on the same basis as set forth in the
California Deed of Trust, as hereby amended), all of Grantor’s obligations and
liabilities to LaSalle, as Beneficiary as set forth in the California Deed of
Trust, and Grantor, agrees to be bound by and abide by and operate and perform
under and pursuant to and comply fully with all of the terms, conditions,
provisions, agreements, representations, undertakings, warranties, guarantees,
indemnities and covenants contained in the California Deed of Trust, in so far
as such obligations and liabilities may be modified by this Reaffirmation.

                    4.      This Reaffirmation shall inure to the benefit of
Bank, its successors and assigns and be binding upon Grantor, LaSalle, and their
individual successors and assigns.

134

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 135

                    IN WITNESS WHEREOF, this instrument has been executed and
delivered as of the day and year first written above.

 

 

 

ENERGY ABSORPTION SYSTEMS, INC.,
as Grantor

 

 

 

 

 

By:

  /s/Daniel P. Gorey

 

 

 

 

Name:

Daniel P. Gorey

 

 

 

 

Title:

Vice President and Treasurer

 

 

 

 

 

LASALLE BANK NATIONAL

   ASSOCIATION, as Beneficiary

 

 

By:

  /s/Stephanie Kline

 

 

 

Name:

Stephanie Kline

 

 

 

Title:

Vice President

 

 

 

 

 

CHICAGO TITLE INSURANCE COMPANY,
as Trustee

 

 

By:

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

135

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 136

 

 

STATE OF ILLINOIS

)

 

:

COOK COUNTY

)

          I, the undersigned authority, a Notary Public in and for said County
in said State, hereby certify that Daniel P. Gorey, whose name as Vice President
and Treasurer of Energy Absorption Systems, Inc., a Delaware corporation, is
signed to the foregoing instrument and who is known to me, acknowledged before
me on this day that, being informed of the contents of the said instrument,
he/she as such officer and with full authority, executed the same voluntarily
for and as the act of said corporation.

          GIVEN under my hand and seal, this 20th day of April, 2005.

 

 

 

 

[ NOTARIAL SEAL ]

  /s/Charlotte M. Castine

 

 

 

Notary Public

 

 

 

 

Print Name:

  Charlotte M. Castine

 

 

 

 

 

My Commission Expires:

01/05/09

 

 

 

 

 

 

 

 

136

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 137

 

 

STATE OF ILLINOIS

)

 

:

COOK COUNTY

)

          I, the undersigned authority, a Notary Public in and for said County
in said State, hereby certify that Stephanie Kline, whose name as Vice President
of LaSalle Bank National Association, an Illinois banking corporation, is signed
to the foregoing instrument and who is known to me, acknowledged before me on
this day that, being informed of the contents of the said instrument, he/she as
such officer and with full authority, executed the same voluntarily for and as
the act of said corporation.

          GIVEN under my hand and seal, this 20th day of April, 2005.

 

 

 

 

[ NOTARIAL SEAL ]

  /s/Christina M. Canham

 

 

 

Notary Public

 

 

 

 

Print Name:

  Christina M. Canham

 

 

 

 

 

My Commission Expires:

01/05/09

 

 

 

 

 

 

 

 

137

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 138

REAFFIRMATION AND AMENDMENT OF PENNSYLVANIA MORTGAGE

                    This Reaffirmation and Amendment of Pennsylvania Mortgage
(this “Reaffirmation”), dated and effective as of April 20, 2005, (the
“Reaffirmation”) is executed between Nu-Metrics, Inc. (the “Mortgagor”), in
favor of LaSalle Bank National Association (“LaSalle”), and has reference to the
following facts and circumstances:

RECITALS

                    A.          Quixote Corporation (the “Borrower”), The
Northern Trust Company, individually and as Administrative Agent for certain
Lenders (“Northern”), including without limitation, LaSalle (“Existing Lenders”)
entered into and are parties to that certain Credit Agreement, dated as of May
16, 2003, as amended by a First Amendment, dated as of December 9, 2003; by a
Second Amendment, dated as of June 30, 2004; by a Third Amendment, dated as of
September 10, 2004 and a Fourth Amendment dated as of February 9, 2005
(“Existing Credit Agreement”), pursuant to which the Existing Lenders have made,
(i) Revolving Loans to the Borrower evidenced by certain Revolving Notes, dated
as of September 10, 2004, in the maximum aggregate principal amount of Thirty
Eight Million Dollars and 00/100 ($38,000,000), executed by the Borrower and
made payable pro rata to the order of the Existing Lenders (the “Revolving
Notes”) and (ii) Term Loans to the Borrower evidenced by certain Term Notes,
dated as of May 16, 2003, in the aggregate original principal amount of Twenty
Million Dollars and 00/100 ($20,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Term Notes”).

                    B.          The Borrower, as of February 9, 2005, issued
$40,000,000 Convertible Senior Subordinated Notes, due February 15, 2025 (the
“New Subordinated Notes”), the proceeds of which New Subordinated Notes (i)
repaid in full Borrowers’ obligations on the Term Loans and Term Notes and
terminated the Existing Lender’s Term Loan Commitment as defined in the Existing
Credit Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

                    C.          Northern has agreed to resign as Administrative
Agent under the Existing Credit Agreement and the Existing Lenders (including
Northern) have agreed to sell to LaSalle their outstanding pro rata share of the
Revolving Loans and to assign to LaSalle their rights and obligations under the
Existing Credit Agreement.

138

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 139

                    D.          LaSalle and Borrower have agreed to amend and
restate the terms of the Existing Credit Agreement, as amended by that Amended
and Restated Credit Agreement, dated as of the date hereof (the “Amended and
Restated Credit Agreement”).

                    E.          Northern, as Agent for the Existing Lenders to
the Existing Credit Agreement, effective upon its resignation as Agent and its
assignment of its pro rata share of the Revolving Loan Commitment and Revolving
Loans under the Existing Credit Agreement, shall assign to LaSalle all of its
right title and interest in certain Mortgaged Property, as defined, in and
subject to the terms of that certain Open-End Mortgage, dated as of September
10, 2004, between the Mortgagor, and Northern, as the Bank, as defined in the
Existing Credit Agreement (the “ Pennsylvania Mortgage”).

                    F.           LaSalle is willing to enter into this
Reaffirmation only upon the condition that Debtors execute and deliver this
Reaffirmation in favor of LaSalle.

                    NOW, THEREFORE, in consideration of the foregoing, Mortgagor
and LaSalle hereby agree as follows:

 

 

 

 

1.

The Recitals to this Reaffirmation are hereby incorporated herein by this
reference thereto.

 

 

 

 

2.

Amendment to Pennsylvania Mortgage. The Pennsylvania Mortgage is hereby amended
as follows:

 

 

 

                    (A)     The “Recitals” Section of the Pennsylvania Mortgage
is hereby amended and restated in its entirety to read as follows:

          “A.    Quixote Corporation (the “Borrower”), The Northern Trust
Company (“Northern”), individually and as Administrative Agent for certain
Lenders, including without limitation, LaSalle Bank National Association
(“LaSalle”) (“Existing Lenders”), entered into and are parties to that certain
Credit Agreement, dated as of May 16, 2003, as amended by a First Amendment,
dated as of December 9, 2003; by a Second Amendment, dated as of June 30, 2004;
by a Third Amendment, dated as of September 10, 2004 and a Fourth Amendment
dated as of February 9, 2005 (“Existing Credit Agreement”), pursuant to which
existing Credit Agreement the Existing Lenders have made, (i) Revolving Loans to
the Borrower evidenced by certain Revolving Notes, dated as of September 10,
2004, in the maximum aggregate principal amount of Thirty Eight Million Dollars
and 00/100 ($38,000,000), executed by the Borrower and made payable pro rata to
the order of the Existing Lenders (the “Revolving

139

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 140

Notes”) and (ii) Term Loans to the Borrower evidenced by certain Term Notes,
dated as of May 16, 2003, in the aggregate original principal amount of Twenty
Million Dollars and 00/100 ($20,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Term Notes”).

          B.          The Borrower, as of February 9, 2005, issued $40,000,000
Convertible Senior Subordinated Notes, due February 15, 2025 (the “New
Subordinated Notes”), the proceeds of which New Subordinated Notes (i) repaid in
full Borrowers’ obligations on the Term Loans and Term Notes and terminated the
Existing Lender’s Term Loan Commitment as defined in the Existing Credit
Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

          C.          Nu-Metrics, Inc., as Subsidiary Guarantor, executed that
Subsidiary Guaranty, dated as of May 16, 2003, as amended (the “Subsidiary
Guaranty”), in favor of Northern for the benefit of the Existing Lenders and
secured their obligations under that Subsidiary Guaranty by pledging certain
Mortgaged Property, pursuant to that certain Pennsylvania Mortgage, dated as of
September 10, 2004, between Mortgagor and Northern, as Secured Party.

          D.          Northern has agreed to resign as Administrative Agent
under the Existing Credit Agreement and the Existing Lenders (including
Northern) have agreed to sell to LaSalle their outstanding pro rata share of the
Revolving Loans and to assign to LaSalle their rights and obligations under the
Existing Credit Agreement.

          E.          LaSalle and Borrower have agreed to amend and restate the
terms of the Existing Credit Agreement, and the Borrower has requested and
LaSalle, has agreed that LaSalle, individually on its own, continue the
Revolving Loan Commitment under the Existing Credit Agreement, as amended by an
Amended and Restated Credit Agreement, dated as of the date hereof (the “Amended
and Restated Credit Agreement”), consisting of LaSalle’s Revolving Credit
Commitment in the amount of $30,000,000 with a sublimit for the issuance of
Letters of Credit in the amount of $10,000,000.

          F.          Northern, subject to the conditions described in Recitals
D and E hereof, has agreed to assign to LaSalle its interest in the Pennsylvania
Mortgage and the Collateral pledged thereunder.”

                    (B)          All references in the Pennsylvania Mortgage (i)
to the “Credit Agreement” shall hereinafter be deemed to refer to the Amended
and Restated Credit Agreement and (ii) to the “Bank” shall hereinafter be deemed
to refer to LaSalle.

140

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 141

                 (C)      All references in the Pennsylvania Mortgage to the
“Loan Documents” shall hereinafter be deemed to refer to the definition of such
term in the Amended and Restated Credit Agreement.

                 (D)      The reference to “$58,000,000” in the “Granting
Clause” is hereby deleted and “$30,000,000” is substituted in lieu thereof.

                    3.          Reaffirmation of Pennsylvania Mortgage.
Mortgagor hereby expressly reaffirms and assumes (on the same basis as set forth
in the Pennsylvania Mortgage, as hereby amended), all of Mortgagor’s obligations
and liabilities to LaSalle, as Bank as set forth in the Pennsylvania Mortgage,
and the Mortgagor agrees to be bound by and abide by and operate and perform
under and pursuant to and comply fully with all of the terms, conditions,
provisions, agreements, representations, undertakings, warranties, guarantees,
indemnities and covenants contained in the Pennsylvania Mortgage, in so far as
such obligations and liabilities may be modified by this Reaffirmation.

                    4.           This Reaffirmation shall inure to the benefit
of Bank, Mortgagor, its successors and assigns and be binding upon Mortgagor,
LaSalle, and their individual successors and assigns.

141

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 142

                    IN WITNESS WHEREOF, this instrument has been executed and
delivered as of the day and year first written above.

 

 

 

 

NU-METRICS, INC., as Mortgagor

 

 

 

 

 

By:

  /s/Daniel P. Gorey

 

 

Name: 

Daniel P. Gorey

 

 

Title:

Vice President and Treasurer

 

 

 

 

 

LASALLE BANK NATIONAL

 

 

  ASSOCIATION, as Bank

 

 

 

 

 

 

By:

  /s/Stephanie Kline

 

 

Name:

Stephanie Kline

 

 

Title:

Vice President

 

 

142

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 143

 

 

STATE OF ILLINOIS

)

 

:

COOK COUNTY

)

          I, the undersigned authority, a Notary Public in and for said County
in said State, hereby certify that Daniel P. Gorey, whose name as Vice President
of Nu-Metrics, Inc., a Pennsylvania corporation, is signed to the foregoing
instrument and who is known to me, acknowledged before me on this day that,
being informed of the contents of the said instrument, he/she as such officer
and with full authority, executed the same voluntarily for and as the act of
said corporation.

          GIVEN under my hand and seal, this 20th day of April, 2005.

 

 

 

 

[ NOTARIAL SEAL ]

     /s/Charlotte M. Castine

 

Notary Public

 

 

 

 

 

Print Name:

   Charlotte M. Castine

 

 

 

 

My Commission Expires:

  01/05/09

143

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 144

 

 

STATE OF ILLINOIS

)

 

:

COOK COUNTY

)

          I, the undersigned authority, a Notary Public in and for said County
in said State, hereby certify that Stephanie Kline, whose name as Vice President
of LaSalle Bank National Association, an Illinois banking corporation, is signed
to the foregoing instrument and who is known to me, acknowledged before me on
this day that, being informed of the contents of the said instrument, he/she as
such officer and with full authority, executed the same voluntarily for and as
the act of said corporation.

          GIVEN under my hand and seal, this 20th day of April, 2005.

 

 

 

 

[ NOTARIAL SEAL ]

     /s/Christina M. Canham

 

Notary Public

 

 

 

 

 

Print Name:

   Christina M. Canham

 

 

 

 

My Commission Expires:

  01/05/09

144

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 145

REAFFIRMATION AND AMENDMENT OF ALABAMA MORTGAGE

                    This Reaffirmation and Amendment of Alabama Mortgage (this
“Reaffirmation”), dated and effective as of April 20, 2005, (the
“Reaffirmation”) is executed between Energy Absorption Systems (AL) LLC, (the
“Mortgagor”), in favor of LaSalle Bank National Association (“LaSalle”), and has
reference to the following facts and circumstances:

RECITALS

                    A.          Quixote Corporation (the “Borrower”), The
Northern Trust Company, individually and as Administrative Agent for certain
Lenders (“Northern”), including without limitation, LaSalle (the “Existing
Lenders”) entered into and are parties to that certain Credit Agreement, dated
as of May 16, 2003, as amended by a First Amendment, dated as of December 9,
2003; by a Second Amendment, dated as of June 30, 2004; by a Third Amendment,
dated as of September 10, 2004 and a Fourth Amendment dated as of February 9,
2005 (“Existing Credit Agreement”), pursuant to which the Existing Lenders have
made, (i) Revolving Loans to the Borrower evidenced by certain Revolving Notes,
dated as of September 10, 2004, in the maximum aggregate principal amount of
Thirty Eight Million Dollars and 00/100 ($38,000,000), executed by the Borrower
and made payable pro rata to the order of the Existing Lenders (the “Revolving
Notes”) and (ii) Term Loans to the Borrower evidenced by certain Term Notes,
dated as of May 16, 2003, in the aggregate original principal amount of Twenty
Million Dollars and 00/100 ($20,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Term Notes”).

                    B.          The Borrower, as of February 9, 2005, issued
$40,000,000 Convertible Senior Subordinated Notes, due February 15, 2025 (the
“New Subordinated Notes”), the proceeds of which New Subordinated Notes (i)
repaid in full Borrowers’ obligations on the Term Loans and Term Notes and
terminated the Existing Lender’s Term Loan Commitment as defined in the Existing
Credit Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

                    C.          Northern has agreed to resign as Administrative
Agent under the Existing Credit Agreement and the Existing Lenders (including
Northern) have agreed to sell to LaSalle their outstanding pro rata share of the
Revolving Loans and to assign to LaSalle their rights and obligations under the
Existing Credit Agreement.

145

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 146

                    D.          LaSalle and Borrower have agreed to amend and
restate the terms of the Existing Credit Agreement, as amended by that Amended
and Restated Credit Agreement, dated as of the date hereof (the “Amended and
Restated Credit Agreement”).

                    E.          Northern, as Agent for the Existing Lenders to
the Existing Credit Agreement, effective upon its resignation as Agent and its
assignment of its pro rata share of the Revolving Loan Commitment and Revolving
Loans under the Existing Credit Agreement, shall assign to LaSalle all of its
right title and interest in certain Mortgaged Property, as defined, in and
subject to the terms of that certain Leasehold Mortgage and Security Agreement,
dated as of September 10, 2004, between Mortgagor and Northern, as Agent, as
defined in the Existing Credit Agreement (the “ Alabama Mortgage”).

                    F.          LaSalle is willing to enter into this
Reaffirmation only upon the condition that Debtors execute and deliver this
Reaffirmation in favor of LaSalle.

                    NOW, THEREFORE, in consideration of the foregoing, Mortgagor
and LaSalle hereby agree as follows:

 

 

 

          1.          The Recitals to this Reaffirmation are hereby incorporated
herein by this reference thereto.

                    2.           Amendment to Alabama Mortgage. The Alabama
Mortgage is hereby amended as follows:

                    (A)        The “Recitals” Section of the Alabama Mortgage is
hereby amended and restated in their entirety to read as follows:

          “A.     Quixote Corporation (the “Borrower”), The Northern Trust
Company (“Northern”), individually and as Administrative Agent for certain
Lenders, including without limitation, LaSalle Bank National Association
(“LaSalle”) (“Existing Lenders”), entered into and are parties to that certain
Credit Agreement, dated as of May 16, 2003, as amended by a First Amendment,
dated as of December 9, 2003; by a Second Amendment, dated as of June 30, 2004;
by a Third Amendment, dated as of September 10, 2004 and a Fourth Amendment
dated as of February 9, 2005 (“Existing Credit Agreement”), pursuant to which
existing Credit Agreement the Existing Lenders have made, (i) Revolving Loans to
the Borrower evidenced by certain Revolving Notes, dated as of September 10,
2004, in the maximum aggregate principal amount of Thirty Eight Million Dollars
and 00/100 ($38,000,000), executed by the Borrower and made payable pro rata to
the order of the Existing Lenders (the “Revolving

146

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 147

Notes”) and (ii) Term Loans to the Borrower evidenced by certain Term Notes,
dated as of May 16, 2003, in the aggregate original principal amount of Twenty
Million Dollars and 00/100 ($20,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Term Notes”).

          B.       The Borrower, as of February 9, 2005, issued $40,000,000
Convertible Senior Subordinated Notes, due February 15, 2025 (the “New
Subordinated Notes”), the proceeds of which New Subordinated Notes (i) repaid in
full Borrowers’ obligations on the Term Loans and Term Notes and terminated the
Existing Lender’s Term Loan Commitment as defined in the Existing Credit
Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

          C.       Mortgagor, as Subsidiary Guarantor executed that Subsidiary
Guaranty, dated as of May 16, 2003, as amended (the “Subsidiary Guaranty”), in
favor of Northern for the benefit of the Existing Lenders and secured its
obligations under that Subsidiary Guaranty by pledging certain Mortgaged
Property, pursuant to that certain Alabama Mortgage, dated as of June 30, 2004,
between Mortgagor and Northern, as Agent.

          D.       Northern has agreed to resign as Administrative Agent under
the Existing Credit Agreement and the Existing Lenders (including Northern) have
agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans and to assign to LaSalle their rights and obligations under the Existing
Credit Agreement.

          E.       LaSalle and Borrower have agreed to amend and restate the
terms of the Existing Credit Agreement, and the Borrower has requested and
LaSalle, has agreed that LaSalle, individually on its own, continue the
Revolving Loan Commitment under the Existing Credit Agreement, as amended by an
Amended and Restated Credit Agreement, dated as of the date hereof (the “Amended
and Restated Credit Agreement”), consisting of LaSalle’s Revolving Credit
Commitment in the amount of $30,000,000 with a sublimit for the issuance of
Letters of Credit in the amount of $10,000,000.

          F.       Northern, subject to the conditions described in Recitals D
and E hereof, has agreed to assign to LaSalle its interest in the Alabama
Mortgage and the Collateral pledged thereunder.”

                    (B)          All references in the Alabama Mortgage (i) to
the “Credit Agreement” shall hereinafter be deemed to refer to the Amended and
Restated Credit Agreement and (ii) to the “Agent” shall hereinafter be deemed to
refer to LaSalle.

147

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 148

                    (C)        All references in the Alabama Mortgage to the
“Loan Documents” shall hereinafter be deemed to refer to the definition of “Loan
Documents” in the Amended and Restated Credit Agreement.

                    3.          Reaffirmation of Alabama Mortgage. The Mortgagor
hereby expressly reaffirms and assumes (on the same basis as set forth in the
Alabama Mortgage, as hereby amended), all of Mortgagor’s obligations and
liabilities to LaSalle as set forth in the Alabama Mortgage, and Mortgagor
agrees to be bound by and abide by and operate and perform under and pursuant to
and comply fully with all of the terms, conditions, provisions, agreements,
representations, undertakings, warranties, guarantees, indemnities and covenants
contained in the Alabama Mortgage, in so far as such obligations and liabilities
may be modified by this Reaffirmation.

                    4.          This Reaffirmation shall inure to the benefit of
Bank, its successors and assigns and be binding upon the Mortgagor, LaSalle, and
their individual successors and assigns.

148

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 149

                    IN WITNESS WHEREOF, this instrument has been executed and
delivered as of the day and year first written above.

ENERGY ABSORPTION SYSTEMS (AL) LLC,
As Mortgagor

ENERGY ABSORPTION SYSTEMS, INC., As Sole
Managing Member

 

 

 

By:

   /s/Daniel P. Gorey

 

Name:

Daniel P. Gorey

 

Title:

Vice President and Treasurer

 

LASALLE BANK NATIONAL
ASSOCIATION

 

 

 

By:

   /s/Stephanie Kline

 

Name:

Stephanie Kline

 

Title:

Vice President

 

149

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 150

 

 

STATE OF ILLINOIS

)

 

:

COOK COUNTY

)

          I, the undersigned authority, a Notary Public in and for said County
in said State, hereby certify that Daniel P. Gorey, whose name as Vice President
and Treasurer of Energy Absorption Systems, Inc., a Delaware corporation, is
signed to the foregoing instrument and who is known to me, acknowledged before
me on this day that, being informed of the contents of the said instrument,
he/she as such officer and with full authority, executed the same voluntarily
for and as the act of said corporation.

          GIVEN under my hand and seal, this 20th day of April, 2005.

 

 

 

 

[ NOTARIAL SEAL ]

     /s/Charlotte M. Castine

 

Notary Public

 

 

 

 

 

Print Name:

   Charlotte M. Castine

 

 

 

 

My Commission Expires:

  01/05/09

150

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 151

 

 

STATE OF ILLINOIS

)

 

:

COOK COUNTY

)

          I, the undersigned authority, a Notary Public in and for said County
in said State, hereby certify that Stephanie Kline, whose name as Vice President
of LaSalle Bank National Association, an Illinois banking corporation, is signed
to the foregoing instrument and who is known to me, acknowledged before me on
this day that, being informed of the contents of the said instrument, he/she as
such officer and with full authority, executed the same voluntarily for and as
the act of said corporation.

          GIVEN under my hand and seal, this 20th day of April, 2005.

 

 

 

 

[ NOTARIAL SEAL ]

     /s/ Christina M. Canham

 

Notary Public

 

 

 

 

 

Print Name:

   Christina M. Canham

 

 

 

 

My Commission Expires:

  1/05/09

151

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 152

THIS INSTRUMENT PREPARED BY
AND AFTER RECORDING RETURN TO:

Edward F. Dobbins
FISCHEL & KAHN, LTD.
190 S. LaSalle Street
Suite 2850
Chicago, Illinois 60603
(312) 726-0440

MORTGAGE AND SECURITY AGREEMENT

          THIS MORTGAGE AND SECURITY AGREEMENT (“Mortgage”), made as of April
20, 2005, is made and executed by Spin-Cast Plastics, Inc., an Indiana
corporation, having its principal offices at 3300 North Kenmore Street, South
Bend, Indiana 46628 (“Mortgagor”), in favor of LASALLE BANK NATIONAL
ASSOCIATION, a national banking association having an office at 135 South
LaSalle Street, Chicago, Illinois 60603 (“Lender”).

RECITALS

                    I.     Lender has agreed to make loans to Quixote
Corporation, a Delaware corporation (“Borrower”) and extend other financial
accommodations to Borrower in an aggregate principal amount of $30,000,000
(collectively, the “Loans”). The Loans consist of one or more revolving loans
(the “Revolving Loan”), the outstanding principal balance of which may increase
or decrease from time to time, but at no time shall the outstanding principal
balance of such Revolving Loan exceed $30,000,000. Certain repayment obligations
of Borrower with respect to the Revolving Loan are evidenced by a certain
Revolving Note, in the principal amount of $30,000,000 (said note, together with
all allonges, amendments, supplements, modifications and replacements thereof,
being referred to in this Mortgage as the “Revolving Note”). The Revolving Note
is sometimes referred to herein as the “Note.” The terms of the Loans are
governed by a certain Amended and Restated Credit and Security Agreement, of
even date herewith (amending and restating the terms of the Credit Agreement
dated, as of May 16, 2003, as amended) by and between Borrower and Lender (said
Credit Agreement, together with all amendments, supplements, modifications and
replacements thereof, being referred to in this Mortgage as the “Loan
Agreement”). The terms and provisions of the Note and the Loan Agreement are
hereby incorporated by reference in this Mortgage. Capitalized terms not
otherwise defined in this Mortgage shall have the meaning ascribed to them in
the Loan Agreement. As an inducement to Lender to make the Loan, Mortgagor has
executed and delivered to Lender the Loan

152

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 153

Agreement, as a Subsidiary Guarantor thereunder, to evidence its becoming a
Subsidiary Guarantor, as defined in the Loan Agreement, under that certain
Subsidiary Guaranty (the “Guaranty”) of even date herewith, pursuant to which
Mortgagor has agreed to guaranty all of the indebtedness and obligations of
Borrower owed to Lender, including without limitation the obligations of
Borrower with respect to the Loan.

                    II.     This Mortgage is given to secure a guaranty of one
or more revolving loans and secures not only present indebtedness but also
future advances, whether such future advances are obligatory or are to be made
at the option of Lender, or otherwise as are to be made within five (5) years of
the date hereof. The amount of indebtedness secured hereby may increase or
decrease from time to time; however the principal amount of such indebtedness
shall not at one time exceed the amount of $30,000,000 plus interest thereon,
and other costs, amounts and disburse­ments as provided herein and in the other
Loan Instruments (hereinafter defined).

GRANTING CLAUSES

          To secure the obligations of Mortgagor under the Guaranty and the
payment of all amounts due under and the performance and observance of all
covenants and conditions contained in this Mortgage, the Guaranty, the Loan
Agreement, the Notes, any and all other mortgages, security agreements,
assignments of leases and rents, guaranties, letters of credit and any other
documents and instruments now or hereafter executed by Mortgagor, Borrower or
any party related thereto or affiliated therewith to evidence, secure or
guarantee the payment of all or any portion of the indebtedness under the Notes
or the Guaranty and any and all renewals, exten­sions, amendments and
replacements of this Mortgage, the Guaranty, the Loan Agreement, the Notes and
any such other documents and instruments (the Guaranty, the Loan Agreement, the
Notes, this Mortgage, such other mortgages, security agreements, assignments of
leases and rents, guaranties, letters of credit, and any other documents and
instruments now or hereafter executed and delivered in connection with the Loan,
and any and all amendments, renewals, extensions and replacements hereof and
thereof, being sometimes referred to collectively as the “Loan Instruments” and
individually as a “Loan Instrument”) and to secure payment of any and all other
indebtedness and obligations of Mortgagor or Borrower or any party related
thereto or affiliated therewith to Lender, whether now existing or hereafter
created, absolute or contingent, direct or indirect, liquidated or unliquidated,
or otherwise (all indebtedness and liabilities secured hereby being hereinafter
sometimes referred to as “Mortgagor’s Liabilities,” provided that Mortgagor’s
Liabilities shall, in no event, exceed $30,000,000), Mortgagor does hereby
convey, mortgage, warrant, assign, transfer, pledge and deliver to Lender the
following described property subject to the terms and conditions herein:

                  (A)     The land located at 3300 N. Kenmore Street, South
Bend, St. Joseph County, Indiana, legally described in attached Exhibit A
(“Land”);

153

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 154

                    (B)     All the buildings, structures, improvements and
fixtures of every kind or nature now or hereafter situated on the Land; and, to
the extent not owned by tenants of the Mortgaged Property, all machinery,
appliances, equipment, furniture and all other personal property of every kind
or nature located in or on, or attached to, or used or intended to be used in
connection with, or with the operation of, the Land, buildings, structures,
improvements or fixtures now or hereafter located or to be located on the Land,
or in connection with any construction being conducted or which may be conducted
thereon, and all extensions, additions, improvements, substitutions and
replacements to any of the foregoing (“Improvements”);

                    (C)     All building materials and goods which are procured
or to be procured for use on or in connection with the Improvements or the
construction of additional Improvements, whether or not such materials and goods
have been delivered to the Land (“Materials”);

                    (D)     All plans, specifications, architectural renderings,
drawings, licenses, permits, soil test reports, other reports of examinations or
analyses of the Land or the Improvements, contracts for services to be rendered
to Mortgagor or otherwise in connection with the Improvements and all other
property, contracts, reports, proposals and other materials now or hereafter
existing in any way relating to the Land or the Improvements or the construction
of additional Improvements;

                    (E)     All easements, tenements, rights-of-way, vaults,
gores of land, streets, ways, alleys, passages, sewer rights, water courses,
water rights and powers and appurtenances in any way belonging, relating or
appertaining to any of the Land or Improvements, or which hereafter shall in any
way belong, relate or be appurtenant thereto, whether now owned or hereafter
acquired (“Appurtenances”);

                    (F)     (i)     All judgments, insurance proceeds, awards of
damages and settlements which may result from any damage to all or any portion
of the Land, Improvements or Appurtenances or any part thereof or to any rights
appurtenant thereto;

                    (ii)     All compensation, awards, damages, claims, rights
of action and proceeds of or on account of (a) any damage or taking, pursuant to
the power of eminent domain, of the Land, Improvements, Appurtenances or
Materials or any part thereof, (b) damage to all or any portion of the Land,
Improvements or Appurtenances by reason of the taking, pursuant to the power of
eminent domain, of all or any portion of the Land, Improvements, Appurtenances,
Materials or of other property, or (c) the alteration of the grade of any street
or highway on or about the Land, Improvements, Appurtenances, Materials or any
part thereof; and, except as otherwise provided herein, Lender is hereby
authorized to collect and receive said awards and proceeds and to give proper
receipts and acquittances therefor and, except as otherwise provided herein, to
apply the same toward the payment of the indebtedness and other sums secured
hereby;

154

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 155

                    (iii)     All contract rights, general intangibles, actions
and rights in action, including, without limitation, all rights to insurance
proceeds and unearned premiums arising from or relating to damage to the Land,
Improvements, Appurtenances or Materials; and

                    (iv)     All proceeds, products, replacements, additions,
substitutions, renewals and accessions of and to the Land, Improvements,
Appurtenances or Materials;

                    (G)     All rents issues, profits, income and other benefits
now or hereafter arising from or in respect of the Land, Improvements or
Appurtenances (the “Rents”); it being intended that this Granting Clause shall
constitute an absolute and present assignment of the Rents, subject, however, to
the conditional permission given to Mortgagor to collect and use the Rents as
provided in this Mortgage;

                    (H)     Any and all leases, licenses and other occupancy
agreements now or hereafter affecting the Land, Improvements, Appurtenances or
Materials, together with all security therefor and guaranties thereof and all
monies payable thereunder, and all books and records owned by Mortgagor which
contain evidence of payments made under the leases and all security given
therefor (collectively, the “Leases”), subject, however, to the conditional
permission given in this Mortgage to Mortgagor to collect the Rents arising
under the Leases as provided in this Mortgage;

                    (I)     Any and all escrow accounts held by Lender or
Lender’s agent pursuant to any provision of this Mortgage;

                    (J)     Any and all after-acquired right, title or interest
of Mortgagor in and to any of the property described in the preceding Granting
Clauses; and

                    (K)     The proceeds from the sale, transfer, pledge or
other disposition of any or all of the property described in the preceding
Granting Clauses;

          All of the mortgaged property described in the Granting Clauses,
together with all real and personal, tangible and intangible property pledged
in, or to which a security interest attaches pursuant to, any of the Loan
Instruments is sometimes referred to collectively as the “Mortgaged Property.”
The Rents and Leases are pledged on a parity with the Land and Improvements and
not secondarily.

155

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 2

ARTICLE ONE
COVENANTS OF MORTGAGOR

Mortgagor covenants and agrees with Lender as follows:

                    1.1.     Performance under Guaranty, Mortgage and Other Loan
Instruments. Mortgagor shall perform, observe and comply with or cause to be
performed, observed and complied with in a complete and timely manner all
provisions hereof and of the Guaranty, every other Loan Instrument and every
instrument evidencing or securing Mortgagor’s Liabilities and will promptly pay
or cause to be paid to Lender when due the principal with interest thereon and
all other sums required to be paid by Mortgagor pursuant to the Guaranty, this
Mortgage, every other Loan Instrument and every other instrument evidencing or
securing Mortgagor’s Liabilities.

                    1.2.     General Covenants and Representations. Mortgagor
covenants, represents and warrants that as of the date hereof and at all times
thereafter during the term hereof: (a) Mortgagor is a corporation, duly
organized, validly existing and in good standing under the laws of the State of
Indiana [and is in good standing under the laws of the State of Illinois;] (b)
Mortgagor is seized of an indefeasible estate in fee simple in that portion of
the Mortgaged Property which is real property, and has good and absolute title
to it and the balance of the Mortgaged Property free and clear of all liens,
security interests, charges and encumbrances whatsoever except those expressly
permitted in writing by Lender, if any (such liens, security interests, charges
and encumbrances expressly permitted in writing being hereinafter referred to as
the “Permitted Encumbrances”); (c) Mortgagor has good right, full power and
lawful authority to mortgage and pledge the Mortgaged Property as provided
herein; (d) upon the occurrence of an Event of Default, Lender may at all times
peaceably and quietly enter upon, hold, occupy and enjoy the Mortgaged Property
in accordance with the terms hereof; and (e) Mortgagor will maintain and
preserve the lien of this Mortgage as a first and paramount lien on the
Mortgaged Property subject only to the Permitted Encumbrances until Mortgagor’s
Liabilities have been paid in full.

                    1.3.     Compliance with Laws and Other Restrictions.
Mortgagor covenants, represents and warrants that the Land and the Improvements
and the use thereof presently comply in all material respects with, and will
during the full term of this Mortgage continue to comply in all material
respects with, all applicable restrictive covenants, zoning and subdivision
ordinances and building codes, licenses, health and environmental laws and
regulations and all other applicable laws, ordinances, rules and regulations. If
any federal, state or other governmental body or any court issues any notice or
order to the effect that the Mortgaged Property or any part thereof is not in
compliance with any such covenant, ordinance, code, law or regulation, Mortgagor
will promptly provide Lender with a copy of such notice or order and will
immediately commence and diligently perform all such actions as are necessary to
comply therewith or otherwise correct such non-compliance. Mortgagor shall not,
without the prior written consent of Lender, petition for or otherwise seek any
change in the zoning ordinances or other public or private restrictions
applicable to the Mortgaged Property on the date hereof.

2

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 3

                    1.4.     Taxes and Other Charges.

                    1.4.1.     Taxes and Assessments. Mortgagor shall pay
promptly when due all taxes, assessments, rates, dues, charges, fees, levies,
fines, impositions, liabilities, obligations, liens and encumbrances of every
kind and nature whatsoever now or hereafter imposed, levied or assessed upon or
against the Mortgaged Property or any part thereof, or upon or against this
Mortgage or Mortgagor’s Liabilities or upon or against the interest of Lender in
the Mortgaged Property, as well as all taxes, assessments and other governmental
charges levied and imposed by the United States of America or any state, county,
municipality or other taxing authority upon or in respect of the Mortgaged
Property or any part thereof; provided, however, that unless compliance with
applicable laws requires that taxes, assessments or other charges must be paid
as a condition to protesting or contesting the amount thereof, Mortgagor may in
good faith, by appropriate proceedings commenced within ninety (90) days of the
due date of such amounts and thereafter diligently pursued, contest the
validity, applicability or amount of any asserted tax, assessment or other
charge and pending such contest Mortgagor shall not be deemed in default
hereunder if on or before the due date of the asserted tax or assessment,
Mortgagor shall first either (i) deposit with Lender a bond or other security
satisfactory to Lender in the amount of 150% of the amount of such tax or
assessment or (ii) obtain an endorsement, in form and substance satisfactory to
Lender, to the loan policy of title insurance issued to Lender insuring the lien
of this Mortgage, insuring over such tax or assessment. Mortgagor shall pay the
disputed or contested tax, assessment or other charge and all interest and
penalties due in respect thereof on or before the date any adjudication of the
validity or amount thereof becomes final and in any event no less than thirty
(30) days prior to any forfeiture or sale of the Mortgaged Property by reason of
such non-payment. Upon Lender’s request, Mortgagor will promptly file, if it has
not theretofore filed, such petition, application or other instrument as is
necessary to cause the Land and Improvements to be taxed as a separate parcel or
parcels which include no property not a part of the Mortgaged Property.

                    1.4.2.     Taxes Affecting Lender’s Interest. If any state,
federal, municipal or other governmental law, order, rule or regulation, which
becomes effective subsequent to the date hereof, in any manner changes or
modifies existing laws governing the taxation of mortgages or debts secured by
mortgages, or the manner of collecting taxes, so as to impose on Lender a tax by
reason of its ownership of any or all of the Loan Instruments or measured by the
principal amount of the Notes, requires or has the practical effect of requiring
Lender to pay any portion of the real estate taxes levied in respect of the
Mortgaged Property to pay any tax levied in whole or in part in substitution for
real estate taxes or otherwise affects materially and adversely the rights of
Lender in respect of the Notes, this Mortgage or the other Loan Instruments,
Mortgagor’s Liabilities and all interest accrued thereon shall, upon thirty (30)
days’ notice, become due and payable forthwith at the option of Lender, whether

3

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 4

or not there shall have occurred an Event of Default, provided, however, that,
if Mortgagor may, without violating or causing a violation of such law, order,
rule or regulation, pay such taxes or other sums as are necessary to eliminate
such adverse effect upon the rights of Lender and does pay such taxes or other
sums when due, Lender may not elect to declare due Mortgagor’s Liabilities by
reason of the provisions of this Section 1.4.2.

                    1.4.3.     Tax Escrow. If directed by Lender in writing,
Mortgagor shall, in order to secure the performance and discharge of Mortgagor’s
obligations under this Section 1.4, but not in lieu of such obligations, deposit
with Lender on the first day of each calendar month throughout the term of the
Loan, deposits, in amounts set by Lender from time to time by written notice to
Mortgagor, in order to accumulate funds sufficient to permit Lender to pay all
annual ad valorem taxes, assessments and charges of the nature described in
Section 1.4.1 at least thirty (30) days prior to the date or dates on which they
shall become delinquent. Mortgagor hereby pledges to Lender, and grants to
Lender a security interest in, any and all such deposits as security for the
Loan. The taxes, assessments and charges for purposes of this Section 1.4.3
shall, if Lender so elects, include, without limitation, water and sewer rents.
Mortgagor shall procure and deliver to Lender when issued all statements or
bills for such obligations. Upon demand by Lender, Mortgagor shall deliver to
Lender such additional monies as are required to satisfy any deficiencies in the
amounts necessary to enable Lender to pay such taxes, assessments and similar
charges thirty (30) days prior to the date they become delinquent. Lender shall
pay such taxes, assessments and other charges as they become due to the extent
of the funds on deposit with Lender from time to time and provided Mortgagor has
delivered to Lender the statements or bills therefor. In making any such
payments, Lender shall be entitled to rely on any bill issued in respect of any
such taxes, assessments or charges without inquiry into the validity, propriety
or amount thereof and whether delivered to Lender by Mortgagor or otherwise
obtained by Lender. Any deposits received pursuant to this Section 1.4.3 shall
not be, nor be deemed to be, trust funds, but may be commingled with the general
funds of Lender and Lender shall have no obligation to pay interest on amounts
deposited with Lender pursuant to this Section 1.4.3. If any Event of Default
occurs, any part or all of the amounts then on deposit or thereafter deposited
with Lender under this Section 1.4.3 may at Lender’s option be applied to
payment of Mortgagor’s Liabilities in such order as Lender may determine.

                    1.4.4.     No Credit Against the Indebtedness Secured
Hereby. Mortgagor shall not claim, demand or be entitled to receive any credit
against the amounts payable under the terms of the Guaranty or on any of
Mortgagor’s Liabilities for any of the taxes, assessments or similar impositions
assessed against the Mortgaged Property or any part thereof or that are
applicable to Mortgagor’s Liabilities or to Lender’s interest in the Mortgaged
Property.

4

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 5

                    1.5        Mechanic’s and Other Liens. Mortgagor shall not
permit or suffer any mechanic’s, laborer’s, materialman’s, statutory or other
lien or encumbrance (other than any lien for taxes and assessments not yet due)
to be created upon or against the Mortgaged Property, provided, however, that
Mortgagor may in good faith, by appropriate proceeding, contest the validity,
applicability or amount of any asserted lien and, pending such contest,
Mortgagor shall not be deemed to be in default hereunder if Mortgagor shall
first obtain an endorsement, in form and substance satisfactory to Lender, to
the loan policy of title insurance issued to Lender insuring over such lien, or,
if no such loan policy shall have been issued, then Mortgagor shall deposit with
Lender a bond or other security satisfactory to Lender in the amount of 150% of
the amount of such lien. Mortgagor shall pay the disputed amount and all
interest and penalties due in respect thereof on or before the date any
adjudication of the validity or amount thereof becomes final and, in any event,
no less than thirty (30) days prior to any foreclosure sale of the Mortgaged
Property or the exercise of any other remedy by such claimant against the
Mortgaged Property.

                    1.6         Insurance and Condemnation.

 

 

                    1.6.1.     Hazard Insurance. Mortgagor shall, at its sole
cost and expense, obtain for, deliver to, assign to and maintain for the benefit
of Lender, until Mortgagor’s Liabilities are paid in full, policies of hazard
insurance, in an amount which shall be not less than 100% of the full insurable
replacement cost of the Mortgaged Property (except the Land), insuring on a
replacement cost basis the Mortgaged Property with “causes of loss-special form”
coverage and insuring against such other hazards, casualties and contingencies
as Lender may require, including without limitation, if requested by Lender,
earthquake, and, if all or any part of the Mortgaged Property shall at any time
be located within an area identified by the government of the United States or
any agency thereof as having special flood hazards and for which flood insurance
is available, flood. If any such policy shall contain a co-insurance clause it
shall also contain an agreed amount or stipulated value endorsement. All
policies of hazard insurance shall contain a “lender’s loss payable” endorsement
and shall provide that no losses shall be payable to any other parties without
Lender’s prior written consent. The form of such policies, the amounts and the
companies issuing them shall be acceptable to Lender. Originals or certified
copies of all policies shall be delivered to and retained by Lender. Mortgagor
shall pay on or before the due dates thereof premiums on all insurance policies
and on any renewals thereof. In the event of loss, Mortgagor will give immediate
written notice to Lender and Lender may make proof of loss if not made promptly
by Mortgagor (for which purpose Mortgagor hereby irrevocably appoints Lender as
its attorney-in-fact). In the event of the foreclosure of this Mortgage or any
other transfer of title to the Mortgaged Property in full or partial
satisfaction of Mortgagor’s Liabilities, all right, title and interest of
Mortgagor in and to all insurance policies and renewals thereof then in force
shall pass to the purchaser

 

5

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 6

 

 

or grantee. All such policies shall provide that they shall not be modified,
cancelled or terminated without at least thirty (30) days’ prior written notice
to Lender from the insurer.

 

 

 

                    1.6.2.     Other Insurance. Mortgagor shall, at its sole
cost and expense, obtain for, deliver to, assign to and maintain for the benefit
of, Lender, until Mortgagor’s Liabilities are paid for in full, (i) commercial
general liability insurance in such amounts as Lender may specify, together with
workers compensation and employer’s liability insurance, naming Lender as
additional insured, [(ii) a business interruption insurance policy covering loss
of rents [loss of income] at a limit of 100%, in an amount not less than all
rent and other charges payable by the tenants of the Mortgaged Property [gross
income] (based on a fully leased [fully operational] building) for a period of
one (1) year, together with such assignments of the proceeds of such policy as
Lender may require,] (iii) boiler and machinery insurance, if requested by
Lender, and (iv) such other policies of insurance relating to the Mortgaged
Property and the use and operation thereof as Lender may require, including
dramshop, all in form and amounts, and issued by such companies as are
acceptable to Lender.

 

 

 

                    1.6.3.     Adjustment of Loss. Lender is hereby authorized
and empowered, at its option, to adjust or compromise any loss of more than
$250,000 under any insurance policies covering or relating to the Mortgaged
Property and to collect and receive the proceeds from any such policy or
policies (and deposit such proceeds as provided in Section 1.6.5). Mortgagor
hereby irrevocably appoints Lender as its attorney-in-fact for the purposes set
forth in the preceding sentence. Each insurance company is hereby authorized and
directed to make payment (i) of 100% of all such losses of more than said amount
directly to Lender alone and (ii) of 100% of all such losses of said amount or
less directly to Mortgagor alone, and in no case to Mortgagor and Lender
jointly. After deducting from such insurance proceeds any expenses incurred by
Lender in the collection and settlement thereof, including without limitation
attorneys’ and adjusters’ fees and charges, Lender shall apply the net proceeds
as provided in Section 1.6.5. Lender shall not be responsible for any failure to
collect any insurance proceeds due under the terms of any policy regardless of
the cause of such failure.

 

 

 

                    1.6.4.     Condemnation Awards. Lender shall be entitled to
all compensation, awards, damages, claims, rights of action and proceeds of, or
on account of, (i) any damage or taking, pursuant to the power of eminent
domain, of the Mortgaged Property or any part thereof, (ii) damage to the
Mortgaged Property by reason of the taking, pursuant to the power of eminent
domain, of other property, or (iii) the alteration of the grade of any street or
highway on or about the Mortgaged Property. Lender is hereby authorized, at its
option, to commence, appear in and prosecute in its own or Mortgagor’s name any
action or proceeding relating to any such compensation, awards, damages, claims,

 

6

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 7

 

 

rights of action and proceeds and to settle or compromise any claim in
connection therewith. Mortgagor hereby irrevocably appoints Lender as its
attorney-in-fact for the purposes set forth in the preceding sentence. Lender
after deducting from such compensation, awards, damages, claims, rights of
action and proceeds all its expenses, including attorneys’ fees, may apply such
net proceeds (except as otherwise provided in Section 1.6.5 of this Mortgage) to
payment of Mortgagor’s Liabilities in such order and manner as Lender may elect.
Mortgagor agrees to execute such further assignments of any compensation awards,
damages, claims, rights of action and proceeds as Lender may require.

 

 

 

                    1.6.5.     Repair; Proceeds of Casualty Insurance and
Eminent Domain. If all or any part of the Mortgaged Property shall be damaged or
destroyed by fire or other casualty or shall be damaged or taken through the
exercise of the power of eminent domain or other cause described in Section
1.6.4, Mortgagor shall promptly and with all due diligence restore and repair
the Mortgaged Property whether or not the proceeds, award or other compensation
are sufficient to pay the cost of such restoration or repair. At Lender’s
election, to be exercised by written notice to Mortgagor within thirty (30) days
following Lender’s unrestricted receipt in cash or the equivalent thereof of
said proceeds, award or other compensation, the entire amount of said proceeds,
award or compensation shall either (i) be applied to Mortgagor’s Liabilities in
such order and manner as Lender may elect or (ii) be made available to Mortgagor
on such terms and conditions as Lender may impose, including without limitation
the terms and conditions set forth in this Section 1.6.5, for the purpose of
financing the cost of restoration or repair with any excess to be applied to
Mortgagor’s Liabilities. Notwithstanding any other provision of this Section
1.6.5, if an Event of Default shall be existing at the time of such casualty,
taking or other event or if an Event of Default occurs thereafter, Lender shall
have the right to immediately apply all insurance proceeds, awards or
compensation to the payment of Mortgagor’s Liabilities in such order and manner
as Lender may determine. Lender shall have the right at all times to apply such
net proceeds to the cure of any Event of Default or the performance of any
obligations of Mortgagor under the Loan Instruments.

 

 

 

                    1.6.6.     [Proceeds of Business Interruption and Rental
Insurance. The net proceeds of business interruption and rental insurance shall
be paid to Lender for application first to Mortgagor’s Liabilities in such order
and manner as Lender may elect and then to the creation of reserves for future
payments of Mortgagor’s Liabilities in such amounts as Lender deems necessary
with the balance to be remitted to Mortgagor subject to such controls as Lender
may deem necessary to assure that said balance is used to discharge accrued and
to be accrued expenses of operation and maintenance of the Mortgaged Property.]

 

7

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 8

 

 

                    1.6.7.     Renewal of Policies. At least thirty (30) days
prior to the expiration date of any policy evidencing insurance required under
this Section 1.6.7, a renewal thereof satisfactory to Lender shall be delivered
to Lender or substitution therefor, together with receipts or other evidence of
the payment of any premiums then due on such renewal policy or substitute
policy.

 

 

 

                    1.6.8.     Insurance Escrow. If directed by Lender in
writing, Mortgagor shall, in order to secure the performance and discharge of
Mortgagor’s obligations under this Section 1.6, but not in lieu of such
obligations, deposit with Lender on the first day of each calendar month
throughout the term of the Loan, a sum in an amount determined by Lender from
time to time by written notice to Mortgagor, in order to accumulate funds
sufficient to permit Lender to pay all premiums payable in connection with the
insurance required hereunder at least thirty (30) days prior to the date or
dates on which they shall become due. Mortgagor hereby pledges to Lender, and
grants to Lender a security interest in, any and all such deposits as security
for the Loan. Upon demand by Lender, Mortgagor shall deliver to Lender such
additional monies as are required to satisfy any deficiencies in the amounts
necessary to enable Lender to pay such premiums thirty (30) days prior to the
date they shall become due. Any deposits received pursuant to this Section 1.6.8
shall not be, nor be deemed to be, trust funds, but may be commingled with the
general funds of Lender and Lender shall have no obligation to pay interest on
amounts deposited with Lender pursuant to this Section 1.6.8. If any Event of
Default occurs, any part or all of the amounts then on deposit or thereafter
deposited with Lender under this Section 1.6.8 may at Lender’s option be applied
to payment of Mortgagor’s Liabilities in such order as Lender may determine.

 

                    1.7.       Non-Impairment of Lender’s Rights. Nothing
contained in this Mortgage shall be deemed to limit or otherwise affect any
right or remedy of Lender under any provision of this Mortgage or of any statute
or rule of law to pay and, upon Mortgagor’s failure to pay the same, Lender may
pay any amount required to be paid by Mortgagor under Sections 1.4, 1.5 and 1.6
and the amount so paid by Lender shall bear interest at the Default Rate (as
defined in the Notes), and, together with interest, shall be added to
Mortgagor’s Liabilities. Mortgagor shall pay to Lender on demand the amount so
paid by Lender, together with all accrued and unpaid interest thereon. The
provisions of Section 1.4.3 are solely for the added protection of Lender and
entail no responsibility on Lender’s part beyond the allowing of due credit as
specifically provided therein. Upon assignment of this Mortgage, any funds on
hand shall be turned over to the assignee and any responsibility of Lender with
respect to such funds shall terminate.

                    1.8.       Care of the Mortgaged Property. Mortgagor shall
preserve and maintain the Mortgaged Property in good and first class condition
and repair. Mortgagor shall not, without the prior written consent of Lender,
permit, commit or suffer any waste, impairment or deterioration of the Mortgaged
Property or of any part thereof, and will not take any action which will
increase the risk of fire or other hazard to the Mortgaged

8

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 9

Property or to any part thereof. Except as otherwise provided in this Mortgage,
no new improvements shall be constructed on the Mortgaged Property and no part
of the Mortgaged Property shall be removed, demolished or altered in any
material manner without the prior written consent of Lender.

                    1.9.       Transfer or Encumbrance of the Mortgaged
Property. Mortgagor shall not permit or suffer to occur any sale, assignment,
conveyance, transfer, mortgage, lease (other than leases made in accordance with
the provisions of this Mortgage) or encumbrance of, or any contract for any of
the foregoing on an installment basis or otherwise pertaining to, the Mortgaged
Property, any part thereof, any interest therein, the beneficial interest in
Mortgagor or in any trust holding title to the Mortgaged Property or any
interest in a corporation, partnership or other entity which owns all or part of
the Mortgaged Property, whether by operation of law or otherwise, without the
prior written consent of Lender having been obtained (i) to the sale,
assignment, conveyance, mortgage, lease, option, encumbrance or other transfer
and (ii) to the form and substance of any instrument evidencing or contracting
for any such sale, assignment, conveyance, mortgage, lease, option, encumbrance
or other transfer. Mortgagor shall not, without the prior written consent of
Lender, further assign or permit to be assigned the rents from the Mortgaged
Property, and any such assignment without the prior express written consent of
Lender shall be null and void. Mortgagor shall not permit any interest in any
lease of the Mortgaged Property to be subordinated to any encumbrance on the
Mortgaged Property other than the Loan Instruments and any such subordination
shall be null and void. Mortgagor agrees that in the event the ownership of the
Mortgaged Property, any interest therein or any part thereof becomes vested in a
person other than Mortgagor, Lender may, without notice to Mortgagor, deal in
any way with such successor or successors in interest with reference to this
Mortgage, the Notes, the Loan Instruments and Mortgagor’s Liabilities without in
any way vitiating or discharging Mortgagor’s liability hereunder or Mortgagor’s
Liabilities. No sale of the Mortgaged Property, no forbearance to any person
with respect to this Mortgage, and no extension to any person of the time for
payment of the Notes or any other Mortgagor’s Liabilities given by Lender shall
operate to release, discharge, modify, change or affect the original liability
of Mortgagor, either in whole or in part, except to the extent specifically
agreed in writing by Lender.

                    1.10.     Further Assurances. At any time and from time to
time, upon Lender’s request, Mortgagor shall make, execute and deliver, or cause
to be made, executed and delivered, to Lender, and where appropriate shall cause
to be recorded, registered or filed, and from time to time thereafter to be
re-recorded, re-registered and refiled at such time and in such offices and
places as shall be deemed desirable by Lender, any and all such further
mortgages, security agreements, financing statements, instruments of further
assurance, certificates and other documents as Lender may consider necessary or
desirable in order to effectuate or perfect, or to continue and preserve the
obligations under, the Guaranty, this Mortgage, any other Loan Instrument and
any instrument evidencing or securing Mortgagor’s Liabilities, and the lien of
this Mortgage as a lien upon all of the Mortgaged Property, whether now owned or
hereafter

9

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 10

acquired by Mortgagor, and unto all and every person or persons deriving any
estate, right, title or interest under this Mortgage. Upon any failure by
Mortgagor to do so, Lender may make, execute, record, register, file, re-record,
re-register or re-file any and all such mortgages, instruments, certificates and
documents for and in the name of Mortgagor, and Mortgagor hereby irrevocably
appoints Lender the agent and attorney-in-fact of Mortgagor to do so.

 

 

 

 

1.11.     Security Agreement and Financing Statements.

 

 

 

 

 

(a)         Mortgagor (as debtor) hereby grants to Lender (as creditor and
secured party) a security interest under the Uniform Commercial Code in all
fixtures, machinery, appliances, equipment, furniture and personal property of
every nature whatsoever constituting part of the Mortgaged Property. Mortgagor
shall execute any and all documents, including without limitation financing
statements pursuant to the Uniform Commercial Code, as Lender may request to
preserve, maintain and perfect the priority of the first lien and security
interest created hereby on property which may be deemed personal property or
fixtures, and shall pay to Lender on demand any expenses incurred by Lender in
connection with the preparation, execution and filing of any such documents.
Mortgagor hereby authorizes and empowers Lender and irrevocably appoints Lender
the agent and attorney-in-fact of Mortgagor to execute and file, on Mortgagor’s
behalf, all financing statements and refilings and continuations thereof as
Lender deems necessary or advisable to create, preserve and protect such lien.
When and if Mortgagor and Lender shall respectively become the debtor and
secured party in any Uniform Commercial Code financing statement affecting the
Mortgaged Property (or Lender takes possession of personal property delivered by
Mortgagor where possession is the means of perfection of the security interest),
then, at Lender’s sole election, this Mortgage shall be deemed a security
agreement as defined in such Uniform Commercial Code, and the remedies for any
violation of the covenants, terms and conditions of the agreements herein
contained shall be as prescribed herein or by general law, or, as to such part
of the security which is also reflected in such financing statement, by the
specific statutory consequences now or hereafter enacted and specified in the
Uniform Commercial Code.

 

 

 

 

 

(b)         Without limitation of the foregoing, if an Event of Default occurs,
Lender shall be entitled immediately to exercise all remedies available to it
under the Uniform Commercial Code and this Section 1.11. Mortgagor shall, in
such event and if Lender so requests, assemble the tangible personal property at
Mortgagor’s

 

10

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 11

 

 

 

 

expense, at a convenient place designated by Lender. Lender may publicly or
privately sell or otherwise dispose of such fixtures, machinery, appliances,
equipment, furniture and personal property upon such terms and in such manner as
Lender may require. Mortgagor shall pay all expenses incurred by Lender in the
collection of such indebtedness, including attorneys’ fees and legal expenses,
and in the repair of any real estate or other property to which any of the
tangible personal property may be affixed. If any notification of intended
disposition of any of the personal property is required by law, such
notification shall be deemed reasonable and proper if given at least ten (10)
days before such disposition. Any proceeds of the disposition of any of the
personal property may be applied by Lender to the payment of the reasonable
expenses of retaking, holding, preparing for sale and selling the personal
property, including attorneys’ fees and legal expenses, and any balance of such
proceeds may be applied by Lender toward the payment of such of Mortgagor’s
Liabilities, and in such order of application, as Lender may from time to time
elect. If an Event of Default occurs, Lender shall have the right to exercise
and shall automatically succeed to all rights of Mortgagor with respect to
intangible personal property subject to the security interest granted herein.
Any party to any contract subject to the security interest granted herein shall
be entitled to rely on the rights of Lender without the necessity of any further
notice or action by Mortgagor. Lender shall not by reason of this Mortgage or
the exercise of any right granted hereby be obligated to perform any obligation
of Mortgagor with respect to any portion of the personal property nor shall
Lender be responsible for any act committed by Mortgagor, or any breach or
failure to perform by Mortgagor with respect to any portion of the personal
property.

 

 

 

 

 

(c)         Mortgagor and Lender agree that the filing of a financing statement
in the records normally having to do with personal property shall never be
construed as in any way derogating from or impairing the express declaration and
intention of the parties hereto, hereinabove stated, that everything used in
connection with the production of income from the Mortgaged Property and/or
adapted for use therein and/or which is described or reflected in this Mortgage
is, and at all times and for all purposes and in all proceedings, legal or
equitable, shall be regarded as part of the real estate encumbered by this
Mortgage irrespective of whether (i) any such item is physically attached to the
Land or Improvements, (ii) serial numbers are used for the better identification
of certain equipment items capable of being thus identified in a recital

 

11

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 12

 

 

 

 

contained herein or in any list filed with Lender, or (iii) any such item is
referred to or reflected in any such financing statement so filed at any time.
Similarly, the mention in any such financing statement of (1) rights in or to
the proceeds of any fire and/or hazard insurance policy, or (2) any award in
eminent domain proceedings for a taking or for loss of value, or (3) Mortgagor’s
interest as lessor in any present or future lease or rights to income growing
out of the use and/or occupancy of the Mortgaged Property, whether pursuant to
lease or otherwise, shall never be construed as in any way altering any of the
rights of Lender as determined by this instrument or adversely affecting the
priority of Lender’s lien granted hereby or by any other recorded document. Any
such mention in any such financing statement is declared to be for the
protection of Lender in the event any court or judge shall at any time hold with
respect to clauses (1), (2) or (3) above, that notice of Lender’s priority of
interest, to be effective against a particular class of persons, including, but
not limited to, the federal government and any subdivisions or entity of the
federal government, must be filed in the Uniform Commercial Code records.

 

 

 

 

 

1.12.     Assignment of Rents.

 

 

 

 

 

(a)         The assignment of rents, income and other benefits contained in
Section (G) of the Granting Clauses of this Mortgage shall be fully operative
without any further action on the part of either party, and, specifically,
Lender shall be entitled, at its option, upon the occurrence of an Event of
Default hereunder, to all rents, income and other benefits from the Mortgaged
Property, whether or not Lender takes possession of such property. Mortgagor
hereby further grants to Lender the right effective upon the occurrence of an
Event of Default to do any or all of the following, at Lender’s option: (i)
enter upon and take possession of the Mortgaged Property for the purpose of
collecting the rents, income and other benefits; (ii) dispossess by the usual
summary proceedings any tenant defaulting in the payment thereof to Lender;
(iii) lease the Mortgaged Property or any part thereof; (iv) repair, restore and
improve the Mortgaged Property; and (v) apply the rents, income and other
benefits, after payment of certain expenses and capital expenditures relating to
the Mortgaged Property, on account of Mortgagor’s Liabilities in such order and
manner as Lender may elect. Such assignment and grant shall continue in effect
until Mortgagor’s Liabilities are paid in full, the execution of this Mortgage
constituting and evidencing the irrevocable consent of

 

12

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 13

 

 

 

 

Mortgagor to the entry upon and taking possession of the Mortgaged Property by
Lender pursuant to such grant, whether or not foreclosure proceedings have been
instituted. Neither the exercise of any rights under this section by Lender nor
the application of any such rents, income or other benefits to payment of
Mortgagor’s Liabilities shall cure or waive any Event of Default or notice
provided for hereunder, or invalidate any act done pursuant hereto or pursuant
to any such notice, but shall be cumulative of all other rights and remedies.
Notwithstanding the foregoing, so long as no Event of Default has occurred or is
continuing, Mortgagor shall have the right and authority to continue to collect
the rents, income and other benefits from the Mortgaged Property as they become
due and payable but not more than thirty (30) days prior to the due date
thereof. The existence or exercise of such right of Mortgagor to collect said
rents, income and other benefits shall not operate to subordinate this
assignment to any subsequent assignment of said rents, income or other benefits,
in whole or in part, by Mortgagor, and any such subsequent assignment by
Mortgagor shall be subject to the rights of Lender hereunder.

 

 

 

 

 

(b)        Mortgagor shall not permit any rent under any lease of the Mortgaged
Property to be collected more than thirty (30) days in advance of the due date
thereof and, upon any receiver, Lender, anyone claiming by, through or under
Lender or any purchaser at a foreclosure sale coming into possession of the
Mortgaged Property, no tenant shall be given credit for any rent paid more than
thirty (30) days in advance of the due date thereof. Mortgagor shall act
promptly to enforce all available remedies against any delinquent lessee so as
to protect the interest of the lessor under the leases and to preserve the value
of the Mortgaged Property.

 

                    1.13.     After-Acquired Property. To the extent permitted
by, and subject to, applicable law, the lien of this Mortgage, including without
limitation the security interest created under Section 1.11, shall automatically
attach, without further act, to all property hereafter acquired by Mortgagor
located in or on, or attached to, or used or intended to be used in connection
with, or with the operation of, the Mortgaged Property or any part thereof.

                    1.14.     Leases Affecting Mortgaged Property.

 

 

 

 

(a)        Mortgagor shall comply with and perform in a complete and timely
manner all of its obligations as landlord under all leases affecting the
Mortgaged Property or any part thereof. Mortgagor shall give notice to Lender of
any default by the landlord under any lease affecting the Mortgaged Property
promptly upon the

 

13

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 14

 

 

 

 

occurrence of such default, but, in any event, in such time to afford Lender an
opportunity to cure any such default prior to the tenant having any right to
terminate the lease. Each of the leases shall contain a provision requiring the
tenant to notify Lender of any default by landlord and granting an opportunity
for a reasonable time after such notice to cure such default prior to any right
accruing to the tenant to terminate such lease. Mortgagor, if requested by
Lender, shall furnish promptly to Lender (i) original or certified copies of all
such leases now existing or hereafter created, as amended from time to time, and
(ii) a current rent roll in form satisfactory to Lender. Lender shall have the
right to notify at any time and from time to time any tenant of the Mortgaged
Property of any provision of this Mortgage.

 

 

 

 

 

(b)       The assignment contained in Section (H) of the Granting Clauses shall
not be deemed to impose upon Lender any of the obligations or duties of the
landlord or Mortgagor provided in any lease.

 

                    1.15.     Management of Mortgaged Property. Mortgagor shall
cause the Mortgaged Property to be managed at all times in accordance with sound
business practice.

                    1.16.     Execution of Leases. Mortgagor shall not permit
any leases to be made of the Mortgaged Property or existing leases to be
modified, terminated, extended or renewed without the prior written consent of
Lender.

                    1.17      Expenses. Mortgagor shall pay when due and
payable, and otherwise on demand made by Lender, all appraisal fees, recording
fees, taxes, brokerage fees and commissions, abstract fees, title insurance
fees, escrow fees, attorneys’ fees, court costs, documentary and expert
evidence, fees of inspecting architects and engineers, and all other costs and
expenses of every character which have been incurred or which may hereafter be
incurred by Lender in connection with any of the following:

 

 

 

 

(a)       Any court or administrative proceeding involving Mortgagor, the
Mortgaged Property or the Loan Instruments to which Lender is made a party or is
subject to subpoena by reason of its being a holder of any of the Loan
Instruments, including without limitation bankruptcy, insolvency,
reorganization, probate, eminent domain, condemnation, building code and zoning
proceedings;

 

 

 

 

 

(b)       Any court or administrative proceeding or other action undertaken by
Lender to enforce any remedy or to collect any indebtedness due under this
Mortgage or any of the other Loan

 

14

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 15

 

 

 

 

Instruments following a default thereunder, including without limitation a
foreclosure of this mortgage or a public or private sale under the Uniform
Commercial Code;

 

 

 

 

 

(c)     Any remedy exercised by Lender following an Event of Default including
foreclosure of this Mortgage and actions in connection with taking possession of
the Mortgaged Property or collecting rents assigned hereby;

 

 

 

 

 

(d)     Any activity in connection with any request by Mortgagor or anyone
acting on behalf of Mortgagor that Lender consent to a proposed action which,
pursuant to this Mortgage or any of the other Loan Instruments may be undertaken
or consummated only with the prior consent of Lender, whether or not such
consent is granted; or

 

 

 

 

 

(e)     Any negotiation undertaken between Lender and Mortgagor or anyone acting
on behalf of Mortgagor pertaining to the existence or cure of any default under
or the modification or extension of any of the Loan Instruments.

 

 

 

 

          If Mortgagor fails to pay said costs and expenses as above provided,
Lender may elect, but shall not be obligated, to pay the costs and expenses
described in this Section 1.17, and if Lender does so elect, then the amounts
paid by Lender shall bear interest at the Default Rate and, together with
interest, shall be added to Mortgagor’s Liabilities. Mortgagor will, upon demand
by Lender, reimburse Lender for all such expenses, together with all accrued and
unpaid interest thereon. In the event of foreclosure hereof, Lender shall be
entitled to add to the indebtedness found to be due by the court a reasonable
estimate of such expenses to be incurred after entry of the decree of
foreclosure. To the extent permitted by law, Mortgagor agrees to hold harmless
Lender against and from, and reimburse it for, all claims, demands, liabilities,
losses, damages, judgments, penalties, costs and expenses, including without
limitation attorneys’ fees, which may be imposed upon, asserted against, or
incurred or paid by it by reason of or in connection with any bodily injury or
death or property damage occurring in or upon or in the vicinity of the
Mortgaged Property through any cause whatsoever, or asserted against it on
account of any act performed or omitted to be performed hereunder, or on account
of any transaction arising out of or in any way connected with the Mortgaged
Property, this Mortgage, the other Loan Instruments or any of Mortgagor’s
Liabilities.

                    1.18     Lender’s Performance of Mortgagor’s Obligations.

 

 

 

 

(a)      If Mortgagor fails to pay any tax, assessment, encumbrance or other
imposition, or to furnish insurance hereunder, or to perform any other covenant,
condition or term in this Mortgage, the Guaranty or any other Loan Instrument,
Lender may, but shall not

 

15

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 16

 

 

 

 

be obligated to, pay, obtain or perform the same. All payments made, whether
such payments are regular or accelerated payments, and costs and expenses
incurred or paid by Lender in connection therewith shall be due and payable
immediately. The amounts so incurred or paid by Lender shall bear interest at
the Default Rate and, together with interest, shall be added to Mortgagor’s
Liabilities. Lender is hereby empowered to enter and to authorize others to
enter upon the Mortgaged Property or any part thereof for the purpose of
performing or observing any covenant, condition or term that Mortgagor has
failed to perform or observe, without thereby becoming liable to Mortgagor or
any person in possession holding under Mortgagor. Performance or payment by
Lender of any obligation of Mortgagor shall not relieve Mortgagor of such
obligation or of the consequences of having failed to perform or pay the same
and shall not effect the cure of any Event of Default.

 

 

 

 

 

(b)       Without limitation of the foregoing, unless Mortgagor provides Lender
with evidence of the insurance coverage required by this Mortgage, Lender may
purchase insurance at Mortgagors’ expense to protect Lender’s interests in the
Mortgaged Property. This insurance may, but need not, protect Mortgagor’s
interest. The coverage that Lender purchases may not pay any claim that
Mortgagor may make or any claim that is made against Mortgagor in connection
with the Mortgaged Property. Mortgagor may later cancel any insurance purchased
by Lender, but only after providing Lender with evidence that Mortgagor has
obtained insurance as required by this Mortgage. If Lender purchases insurance
for the Mortgaged Property, Mortgagor will be responsible for the costs of such
insurance, including interest and any other charges that may be imposed in
connection with the placement of such insurance, until the effective date of the
cancellation or expiration of such insurance. Without limitation of any other
provision of this Mortgage, the cost of such insurance shall be added to the
indebtedness secured hereby. The cost of the insurance may be more than the cost
of insurance Mortgagor may be able to obtain on its own.

 

                    1.19.     Payment of Superior Liens. To the extent that
Lender, after the date hereof, pays any sum due under any provision of law or
instrument or document creating any lien superior or equal in priority in whole
or in part to the lien of this Mortgage, Lender shall have and be entitled to a
lien on the premises equal in parity with that discharged, and Lender shall be
subrogated to and receive and enjoy all rights and liens possessed, held or
enjoyed by, the holder of such lien, which shall remain in existence and

16

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 17

benefit Lender to secure the Guaranty, and all obligations and liabilities
secured hereby. Lender shall be subrogated, notwithstanding their release of
record, to mortgages, trust deeds, superior titles, vendors’ liens, mechanics’
and materialmen’s liens, charges, encumbrances, rights and equities on the
Mortgaged Property to the extent that any obligation under any thereof is paid
or discharged with proceeds of disbursements or advances subject to the Guaranty
or other indebtedness secured hereby.

                    1.20.     Use of the Mortgaged Property. Mortgagor shall not
suffer or permit the Mortgaged Property, or any portion thereof, to be used for
any purpose other than for the purposes for which it is currently being used
and, without limitation of the foregoing, Mortgagor shall not use or permit the
use of the Mortgaged Property or any portion thereof for any unlawful purpose.

                    1.21.     Litigation Involving Mortgaged Property. Mortgagor
shall promptly notify Lender of any litigation, administrative procedure or
proposed legislative action initiated against Mortgagor or the Mortgaged
Property or in which the Mortgaged Property is directly or indirectly affected
including any proceedings which seek to (i) enforce any lien against the
Mortgaged Property, (ii) correct, change or prohibit any existing condition,
feature or use of the Mortgaged Property, (iii) condemn or demolish the
Mortgaged Property, (iv) take, by the power of eminent domain, any portion of
the Mortgaged Property or any property which would damage the Mortgaged
Property, (v) modify the zoning applicable to the Mortgaged Property, or (vi)
otherwise adversely affect the Mortgaged Property. Mortgagor shall initiate or
appear in any legal action or other appropriate proceedings when necessary to
protect the Mortgaged Property from damage. Mortgagor shall, upon written
request of Lender, represent and defend the interests of Lender in any
proceedings described in this Section 1.21 or, at Lender’s election, pay the
fees and expenses of any counsel retained by Lender to represent the interest of
Lender in any such proceedings, in which event such fees and expenses shall be
added to Mortgagor’s Liabilities and shall bear interest at the Default Rate.

                    1.22.     Environmental Matters.

 

 

 

 

(a)       Mortgagor represents and warrants that Mortgagor has not generated,
used, stored, treated, transported, manufactured, handled, produced or disposed
of any Hazardous Materials (as defined in the Loan Agreement), on or off the
Mortgaged Property in any manner which at any time violates any Environmental
Law (as defined in the Loan Agreement) or any license, permit, certificate,
approval or similar authorization thereunder and the operations of the Mortgagor
comply in all material respects with all Environmental Laws and all licenses,
permits, certificates, approvals and similar authorizations thereunder; (ii)
there has been no investigation, proceeding, complaint, order, directive, claim,
citation or notice by any governmental authority or any other Person, nor is any
pending or to the best of the Mortgagor’s knowledge threatened, and Mortgagor
shall immediately notify

 

17

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 18

 

 

 

 

Lender upon becoming aware of any such investigation, proceeding, complaint,
order, directive, claim, citation or notice and take prompt and appropriate
actions to respond thereto, with respect to any non-compliance with or violation
of the requirements of any Environmental Law by Mortgagor or the release, spill
or discharge, threatened or actual, of any Hazardous Materials or the
generation, use, storage, treatment, transportation, manufacture, handling,
production or disposal of any Hazardous Materials or any other environmental,
health or safety matter, which affects Mortgagor or its business, operations or
assets or any properties at which Mortgagor has transported, stored or disposed
of any Hazardous Materials; (iii) Mortgagor has no material liability
(contingent or otherwise) in connection with a release, spill or discharge,
threatened or actual, of any Hazardous Materials or the generation, use,
storage, treatment, transportation, manufacture, handling, production or
disposal of any Hazardous Materials; and (iv) without limiting the generality of
the foregoing, Mortgagor shall, following the determination by Lender that there
is non-compliance, or any condition which requires any action by or on behalf of
Mortgagor in order to avoid any non-compliance, with any Environmental Law, at
Mortgagor’s expense, cause an independent environmental engineer acceptable to
Lender to conduct such tests of the relevant site(s) as are appropriate and
prepare and deliver a report setting forth the result of such tests, a proposed
plan for remediation and an estimate of the costs thereof; and

 

 

 

 

 

(b)       Mortgagor agrees to defend (with counsel satisfactory to Lender),
protect, indemnify and hold harmless Lender, each affiliate or subsidiary of
Lender, and each of their respective officers, directors, employees, attorneys
and agents (each an “Indemnified Party”) from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature (including,
without limitation, the disbursements and the reasonable fees of counsel for
each Indemnified Party in connection with any investigative, administrative or
judicial proceeding, whether or not the Indemnified Party shall be designated a
party thereto), which may be imposed on, incurred by, or asserted against, any
Indemnified Party (whether direct, indirect or consequential and whether based
on any federal, state or local laws or regulations, including, without
limitation, securities laws and regulations, Environmental Laws and commercial
laws and regulations, under common law or in equity, or based on contract or
otherwise) in any manner relating to or arising out of this Mortgage or any
other Loan

 

18

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 19

 

 

 

 

Instrument, or any act, event or transaction related or attendant thereto, the
making or issuance and the management of the Loans or the use or intended use of
the proceeds of the Loans; provided, however, that Mortgagor shall not have any
obligation hereunder to any Indemnified Party with respect to matters caused by
or resulting from the willful misconduct or gross negligence of such Indemnified
Party, further provided, that with respect to matters asserted by the Mortgagor,
Mortgagor shall not have any obligations hereunder to any Indemnified Party in
the event the Mortgagor has obtained a final nonappealable judgment in its
favor. To the extent that the undertaking to indemnify set forth in the
preceding sentence may be unenforceable because it is violative of any law or
public policy, Mortgagor shall satisfy such undertaking to the maximum extent
permitted by applicable law. Any liability, obligation, loss, damage, penalty,
cost or expense covered by this indemnity shall be paid to each Indemnified
Party on demand, and, failing prompt payment, shall, together with interest
thereon at the highest rate then applicable to Loans hereunder from the date
incurred by each Indemnified Party until paid by Mortgagor, be added to the
Mortgagor’s Liabilities and be secured by the Mortgaged Property. The provisions
of this paragraph shall survive the satisfaction and payment of the other
Mortgagor’s Liabilities and the release of this Mortgage.

 

ARTICLE TWO

DEFAULTS

                    2.1.     Event of Default. The term “Event of Default,”
wherever used in this Mortgage, shall mean any one or more of the following
events:

 

 

 

 

(a)     The failure by Mortgagor: (i) to pay or deposit when due any deposit for
taxes and assessments due hereunder or any other sums to be paid by Mortgagor
hereunder or under the Guaranty; or (ii) to keep, perform, or observe any
covenant, condition or agreement contained in Sections 1.4.1, 1.6.1, 1.6.2, 1.9
or 1.20 hereof; or (iii) to keep, perform or observe any other covenant,
condition or agreement on the part of Mortgagor in this Mortgage.

 

 

 

 

 

(b)     The occurrence of an “Event of Default” under and as defined in the
Guaranty, the Loan Agreement or any of the other Loan Instruments.

 

19

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 20

 

 

 

 

(c)     The untruth of any warranty or representation made herein.

 

 

 

 

 

(d)     An uninsured loss, damage, destruction or taking by eminent domain or
other condemnation proceedings of any part of the Mortgaged Property.

 

ARTICLE THREE
REMEDIES

                    3.1.     Acceleration of Maturity. If an Event of Default
shall have occurred, Lender may declare Mortgagor’s Liabilities to be
immediately due and payable, and upon such declaration Mortgagor’s Liabilities
shall immediately become and be due and payable without further demand or
notice. The foregoing shall not be in limitation of any provision contained in
any other Loan Instrument, including without limitation any such provision
pursuant to which Mortgagor’s Liabilities become immediately due and payable
without action or election by Lender.

                    3.2.     Lender’s Power of Enforcement. If an Event of
Default shall have occurred, Lender may, either with or without entry or taking
possession as provided in this Mortgage or otherwise, and without regard to
whether or not Mortgagor’s Liabilities shall have been accelerated, and without
prejudice to the right of Lender thereafter to bring an action of foreclosure or
any other action for any default existing at the time such earlier action was
commenced or arising thereafter, proceed by any appropriate action or
proceeding: (a) to enforce satisfaction of the Guaranty and/or any other of
Mortgagor’s Liabilities or the performance of any term hereof or any of the
other Loan Instruments; (b) to foreclose this Mortgage and to have sold, as an
entirety or in separate lots or parcels, the Mortgaged Property; and (c) to
pursue any other remedy available to it. Lender may take action either by such
proceedings or by the exercise of its powers with respect to entry or taking
possession, or both, as Lender may determine. Without limitation of the
foregoing, if an Event of Default shall have occurred, as an alternative to the
right of foreclosure for the full indebtedness evidenced by the Guaranty and the
interest accrued thereon and any other Mortgagor’s Liabilities, after
acceleration thereof, Lender shall have the right to institute partial
foreclosure proceedings with respect to the portion of Mortgagor’s Liabilities
so in default, as if under a full foreclosure, and without declaring all of
Mortgagor’s Liabilities to be immediately due and payable (such proceedings
being referred to herein as “partial foreclosure”), and provided that, if Lender
has not elected to accelerate all of Mortgagor’s Liabilities and a foreclosure
sale is made because of default in payment of only a part of Mortgagor’s
Liabilities, such sale may be made subject to the continuing lien of this
Mortgage for the unmatured part of Mortgagor’s Liabilities. Any sale pursuant to
a partial foreclosure, if so made, shall not in any manner affect the unmatured
portion of Mortgagor’s Liabilities, but as to such unmatured portion, this
Mortgage and the lien thereof shall remain in full force and effect just as
though no

20

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 21

foreclosure sale had been made. Notwithstanding the filing of any partial
foreclosure or entry of a decree of sale therein, Lender may elect, at any time
prior to a foreclosure sale pursuant to such decree, to discontinue such partial
foreclosure and to accelerate Mortgagor’s Liabilities by reason of any Event of
Default upon which such partial foreclosure was predicated or by reason of any
other defaults, and proceed with full foreclosure proceedings. Lender may
proceed with one or more partial foreclosures without exhausting its right to
proceed with a full or partial foreclosure sale for any unmatured portion of
Mortgagor’s Liabilities, it being the purpose to permit, from time to time a
partial foreclosure sale for any matured portion of Mortgagor’s Liabilities
without exhausting the power to foreclose and to sell the Mortgaged Property
pursuant to any partial foreclosure in respect of any other portion of
Mortgagor’s Liabilities, whether matured at the time or subsequently maturing,
and without exhausting at any time the right of acceleration and the right to
proceed with a full foreclosure.

                    3.3.     Lender’s Right to Enter and Take Possession,
Operate and Apply Income.

 

 

 

(a)     If an Event of Default shall have occurred, (i) Mortgagor, upon demand
of Lender, shall forthwith surrender to Lender the actual possession of the
Mortgaged Property, and to the extent permitted by law, Lender itself, or by
such officers or agents as it may appoint, is hereby expressly authorized to
enter and take possession of all or any portion of the Mortgaged Property and
may exclude Mortgagor and the agents and employees of Mortgagor wholly therefrom
and shall have joint access with Mortgagor to the books, papers and accounts of
Mortgagor; and (ii) notwithstanding the provisions of any lease or other
agreement to the contrary, Mortgagor shall pay monthly in advance to Lender, on
Lender’s entry into possession, or to any receiver appointed to collect the
rents, income and other benefits of the Mortgaged Property, the fair and
reasonable rental value for the use and occupation of such part of the Mortgaged
Property as may be in possession of Mortgagor, or any entity affiliated with or
controlled by Mortgagor, and upon default in any such payment Mortgagor shall
vacate and surrender possession of such part of the Mortgaged Property to Lender
or to such receiver, and in default thereof Mortgagor may be evicted by summary
proceedings or otherwise.

 

 

 

(b)     If Mortgagor shall for any reason fail to surrender or deliver the
Mortgaged Property or any part thereof after Lender’s demand, Lender may obtain
a judgment or decree conferring on Lender the right to immediate possession or
requiring Mortgagor to deliver immediate possession of all or part of the
Mortgaged Property to Lender, to the entry of which judgment or decree Mortgagor
hereby specifically consents. Mortgagor shall pay to Lender, upon

21

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 22

 

 

 

demand, all costs and expenses of obtaining such judgment or decree and
reasonable compensation to Lender, its attorneys and agents, and all such costs,
expenses and compensation shall, until paid, be secured by the lien of this
Mortgage.

 

 

 

(c)     Upon every such entering upon or taking of possession, Lender, to the
extent permitted by law, may hold, store, use, operate, manage and control the
Mortgaged Property and conduct the business thereof, and, from time to time:

 

 

 

(i)      perform such construction, make all necessary and proper maintenance,
repairs, renewals, replacements, additions and improvements thereto and thereon,
and purchase or otherwise acquire additional fixtures and personal property;

 

 

 

(ii)      insure or keep the Mortgaged Property insured;

 

 

 

(ii)      manage and operate the Mortgaged Property and exercise all the rights
and powers of Mortgagor, on its behalf or otherwise, with respect to the same;

 

 

 

(iv)     enter into agreements with others to exercise the powers herein granted
Lender, all as Lender from time to time may determine; and Lender may collect
and receive all the rents, income and other benefits of the Mortgaged Property,
including those past due as well as those accruing thereafter; and shall apply
the monies so received by Lender, in such order and manner as Lender may
determine, to (1) the payment of amounts due under the Guaranty or pursuant to
this Mortgage or to any other Mortgagor’s Liabilities, (2) deposits for taxes
and assessments, (3) the payment or creation of reserves for payment of
insurance, taxes, assessments and other proper charges or liens or encumbrances
upon the Mortgaged Property or any part thereof, and (4) the compensation,
expenses and disbursements of the agents, attorneys and other representatives of
Lender; and

 

 

 

(v)     exercise such remedies as are available to Lender under the Loan
Instruments or at law or in equity.

Lender shall surrender possession of the Mortgaged Property to Mortgagor only
when all Mortgagor’s Liabilities shall have been paid in full and all other
defaults have been cured. However, the same right to take possession shall exist
if any subsequent Event of Default shall occur.

22

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 23

                    3.4.     Leases. Lender is authorized to foreclose this
Mortgage subject to the rights, if any, of any or all tenants of the Mortgaged
Property, even if the rights of any such tenants are or would be subordinate to
the lien of this Mortgage. Lender may elect to foreclose the rights of some
subordinate tenants while foreclosing subject to the rights of other subordinate
tenants.

                    3.5.     Purchase by Lender. Upon any foreclosure sale,
Lender may bid for and purchase all or any portion of the Mortgaged Property
and, upon compliance with the terms of the sale, may hold, retain and possess
and dispose of such property in its own absolute right without further
accountability.

                    3.6.     Application of Foreclosure Sale Proceeds. The
proceeds of any foreclosure sale of the Mortgaged Property or any part thereof
received by Lender shall be applied by Lender to the indebtedness secured hereby
in such order and manner as Lender may elect.

                    3.7.     Application of Indebtedness Toward Purchase Price.
Upon any foreclosure sale, Lender may apply any or all of the indebtedness and
other sums due to Lender under the Guaranty, this Mortgage or any other Loan
Instrument to the price paid by Lender at the foreclosure sale.

                    3.8.     Waiver of Appraisement, Valuation, Stay, Extension
and Redemption Laws. Mortgagor hereby waives any and all rights of redemption.
Mortgagor further agrees, to the full extent permitted by law, that in case of
an Event of Default, neither Mortgagor nor anyone claiming through or under it
will set up, claim or seek to take advantage of any reinstatement, appraisement,
valuation, stay or extension laws now or hereafter in force, or take any other
action which would prevent or hinder the enforcement or foreclosure of this
Mortgage or the absolute sale of the Mortgaged Property or the final and
absolute putting into possession thereof, immediately after such sale, of the
purchaser thereat. Mortgagor, for itself and all who may at any time claim
through or under it, hereby waives, to the full extent that it may lawfully so
do, the benefit of all such laws, and any and all right to have the assets
comprising the Mortgaged Property marshalled upon any foreclosure of the lien
hereof and agrees that Lender or any court having jurisdiction to foreclose such
lien may sell the Mortgaged Property in part or as an entirety.

                    3.9.     Receiver - Lender in Possession. If an Event of
Default shall have occurred, Lender, to the extent permitted by law and without
regard to the value of the Mortgaged Property or the adequacy of the security
for the indebtedness and other sums secured hereby, shall be entitled as a
matter of right and without any additional showing or proof, at Lender’s
election, to either the appointment by the court of a receiver (without the
necessity of Lender posting a bond) to enter upon and take possession of the
Mortgaged Property and to collect all rents, income and other benefits thereof
and apply the same as the court may direct or to be placed by the court into
possession of the Mortgaged Property as mortgagee in possession with the same
power herein granted to a receiver

23

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 24

and with all other rights and privileges of a mortgagee in possession under law.
The right to enter and take possession of and to manage and operate the
Mortgaged Property, and to collect all rents, income and other benefits thereof,
whether by a receiver or otherwise, shall be cumulative to any other right or
remedy hereunder or afforded by law and may be exercised concurrently therewith
or independently thereof. Lender shall be liable to account only for such rents,
income and other benefits actually received by Lender, whether received pursuant
to this Section 3.9 or Section 3.3. Notwithstanding the appointment of any
receiver or other custodian, Lender shall be entitled as pledgee to the
possession and control of any cash, deposits or instruments at the time held by,
or payable or deliverable under the terms of this Mortgage to Lender.

                    3.10.     Mortgagor to Pay Mortgagor’s Liabilities in Event
of Default; Application of Monies by Lender.

 

 

 

(a)     Upon occurrence of an Event of Default, Lender shall be entitled to sue
for and to recover judgment against Mortgagor for Mortgagor’s Liabilities due
and unpaid together with costs and expenses, including, without limitation, the
reasonable compensation, expenses and disbursements of Lender’s agents,
attorneys and other representatives, either before, after or during the pendency
of any proceedings for the enforcement of this Mortgage; and the right of Lender
to recover such judgment shall not be affected by any taking of possession or
foreclosure sale hereunder, or by the exercise of any other right, power or
remedy for the enforcement of the terms of this Mortgage, or the foreclosure of
the lien hereof.

 

 

 

(b)     In case of a foreclosure sale of all or any part of the Mortgaged
Property and of the application of the proceeds of sale to the payment of
Mortgagor’s Liabilities, Lender shall be entitled to enforce all other rights
and remedies under the Loan Instruments.

 

 

 

(c)     Mortgagor hereby agrees, to the extent permitted by law, that no
recovery of any judgment by Lender under any of the Loan Instruments, and no
attachment or levy of execution upon any of the Mortgaged Property or any other
property of Mortgagor, shall (except as otherwise provided by law) in any way
affect the lien of this Mortgage upon the Mortgaged Property or any part thereof
or any lien, rights, powers or remedies of Lender hereunder, but such lien,
rights, powers and remedies shall continue unimpaired as before until
Mortgagor’s Liabilities are paid in full.

 

 

 

(d)     Any monies collected or received by Lender under this Section 3.12 shall
be applied to the payment of compensation, expenses and disbursements of the
agents, attorneys and other

24

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 25

 

 

 

representatives of Lender, and the balance remaining shall be applied to the
payment of Mortgagor’s Liabilities, in such order and manner as Lender may
elect, and any surplus, after payment of all Mortgagor’s Liabilities, shall be
paid to Mortgagor.

 

 

                    3.11.     Delay or Omission. No delay or omission of Lender
in the exercise of any right, power or remedy accruing upon any Event of Default
shall exhaust or impair any such right, power or remedy, or be construed to
waive any such Event of Default or to constitute acquiescence therein. Every
right, power and remedy given to Lender may be exercised from time to time and
as often as may be deemed expedient by Lender.

                    3.12.     Waiver of Default. No waiver of any Event of
Default hereunder shall extend to or affect any subsequent or any other Event of
Default then existing, or impair any rights, powers or remedies in respect
thereof.

                    3.13.     Remedies Cumulative. No right, power or remedy
conferred upon or reserved to Lender by the Guaranty, this Mortgage or any other
Loan Instrument or any instrument evidencing or securing Mortgagor’s Liabilities
is exclusive of any other right, power or remedy, but each and every such right,
power and remedy shall be cumulative and concurrent and shall be in addition to
any other right, power and remedy given hereunder or under the Guaranty or any
other Loan Instrument or any instrument evidencing or securing Mortgagor’s
Liabilities, or now or hereafter existing at law, in equity or by statute.

ARTICLE FOUR

MISCELLANEOUS PROVISIONS

                    4.1     Heirs, Successors and Assigns Included in Parties.
Whenever Mortgagor or Lender is named or referred to herein, heirs and
successors and assigns of such person or entity shall be included, and all
covenants and agreements contained in this Mortgage shall bind the successors
and assigns of Mortgagor, including any subsequent owner of all or any part of
the Mortgaged Property and inure to the benefit of the successors and assigns of
Lender. This Section 4.1 shall not be construed to permit an assignment,
transfer, conveyance, encumbrance or other disposition otherwise prohibited by
this Mortgage.

                    4.2.     Notices. All notices, requests, reports, demands or
other instruments required or contemplated to be given or furnished under this
Mortgage to Mortgagor or Lender shall be directed to Mortgagor or Lender as the
case may be at the following addresses:

25

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 26

 

 

 

 

 

 

If to Lender:

LaSalle Bank National Association

 

 

 

135 South LaSalle Street

 

 

 

Chicago, Illinois 60603-4105

 

 

 

Attention: Stephanie Kline

 

 

 

 

 

 

If to Mortgagor:

3300 N. Kenmore Street

 

 

 

South Bend, Indiana 46628

 

 

 

 

 

 

 

 

Attention:

 

 

Any such notices, requests, reports, demands or other instruments shall be (i)
personally delivered to the offices set forth above, in which case they shall be
deemed delivered on the date of delivery to said offices, (ii) sent by certified
mail, return receipt requested, in which case they shall be deemed delivered
three (3) business days after deposit in the U.S. mail, postage prepaid, or
(iii) sent by air courier (Federal Express or like service), in which case they
shall be deemed delivered on the date of actual delivery. Either party may
change the address to which any such notice, report, demand or other instrument
is to be delivered by furnishing written notice of such change to the other
party in compliance with the foregoing provisions.

                    4.3.     Headings. The headings of the articles, sections,
paragraphs and subdivisions of this Mortgage are for convenience only, are not
to be considered a part hereof, and shall not limit, expand or otherwise affect
any of the terms hereof.

                    4.4.     Invalid Provisions. In the event that any of the
covenants, agreements, terms or provisions contained in the Guaranty, the Notes,
this Mortgage or in any other Loan Instrument shall be invalid, illegal or
unenforceable in any respect, the validity of the remaining covenants,
agreements, terms or provisions contained herein or in the Guaranty, the Notes
or in any other Loan Instrument (or the application of the covenant, agreement,
term held to be invalid, illegal or unenforceable, to persons or circumstances
other than those in respect of which it is invalid, illegal or unenforceable)
shall be in no way affected, prejudiced or disturbed thereby.

                    4.5.     Changes. Neither this Mortgage nor any term hereof
may be released, changed, waived, discharged or terminated orally, or by any
action or inaction, but only by an instrument in writing signed by the party
against which enforcement of the release, change, waiver, discharge or
termination is sought. To the extent permitted by law, any agreement hereafter
made by Mortgagor and Lender relating to this Mortgage shall be superior to the
rights of the holder of any intervening lien or encumbrance. Any holder of a
lien or encumbrance junior to the lien of this Mortgage shall take its lien
subject to the right of Lender to amend, modify or supplement this Mortgage, the
Guaranty or any of the other Loan Instruments, to extend the maturity of
Mortgagor’s Liabilities or any portion thereof, to vary the rate of interest
chargeable under the Notes and to increase the amount of the indebtedness
secured hereby, in each and every case without obtaining the

26

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 27

consent of the holder of such junior lien and without the lien of this Mortgage
losing its priority over the rights of any such junior lien.

                    4.6.       Governing Law. This Mortgage shall be construed,
interpreted, enforced and governed by and in accordance with the laws of the
State of Illinois except that the internal laws of the State where the Mortgaged
Property is located shall govern with respect to the validity, creation,
perfection, priority and enforcement of the liens and security interests created
hereby.

                    4.7.       Required Notices. Mortgagor shall notify Lender
promptly of the occurrence of any of the following: (i) receipt of notice from
any governmental authority relating to the violation of any rule, regulation,
law or ordinance, the enforcement of which would materially and adversely affect
the Mortgaged Property; (ii) material default by any tenant in the performance
of its obligations under any lease of all or any portion of the Mortgaged
Property or receipt of any notice from any such tenant claiming that a default
by landlord in the performance of its obligations under any such lease has
occurred; or (iii) commencement of any judicial or administrative proceedings by
or against or otherwise adversely affecting Mortgagor or the Mortgaged Property.

                    4.8.       Future Advances. This Mortgage is given to secure
a guaranty of not only existing indebtedness, but also future advances (whether
such advances are obligatory or are to be made at the option of Lender, or
otherwise) made by Lender under the Notes, to the same extent as if such future
advances were made on the date of the execution of this Mortgage. The total
amount of principal indebtedness that may be so secured may decrease or increase
from time to time, but all principal indebtedness secured hereby shall, in no
event, exceed $ 30,000,000.

                    4.9.       Release. Upon full payment and satisfaction of
Mortgagor’s Liabilities, Lender shall issue to Mortgagor an appropriate release
deed in recordable form.

                    4.10.     Attorneys’ Fees. Whenever reference is made herein
to the payment or reimbursement of attorneys’ fees, such fees shall be deemed to
include compensation to staff counsel, if any, of Lender in addition to the fees
of any other attorneys engaged by Lender. All attorneys’ fees incurred by Lender
in connection with the foreclosure of this Mortgage shall be recoverable in
foreclosure.

                    4.11.     Compliance with Mortgage Foreclosure Law. In the
event that any provision in this Mortgage shall be inconsistent with any
applicable statutory provision governing the creation, perfection or enforcement
of mortgages, such provisions shall take precedence over the provisions of this
Mortgage, but shall not invalidate or render unenforceable any other provision
of this Mortgage that can be construed in a manner consistent with such
provisions. If any provision of this Mortgage shall grant to Lender any rights
or remedies upon default of Mortgagor which are more limited than the rights
that would otherwise be vested in Lender under applicable law in the absence of
said

27

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 28

provision, Lender shall be vested with such rights applicable law to the full
extent permitted by law.

                    4.12.     WAIVER OF TRIAL BY JURY. TO INDUCE LENDER TO MAKE
THE LOAN, MORTGAGOR HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY
WAIVES ANY AND ALL RIGHTS WHICH MORTGAGOR MAY HAVE TO TRIAL BY JURY IN RESPECT
OF ANY LEGAL PROCEEDINGS IN WHICH MORTGAGOR AND LENDER ARE ADVERSE PARTIES, IN
CONNECTION WITH THE NOTES, THIS MORTGAGE OR ANY OF THE OTHER LOAN INSTRUMENTS.

                    4.13.     CONSENT TO JURISDICTION, SERVICE OF PROCESS. TO
INDUCE LENDER TO MAKE THE LOAN, MORTGAGOR HEREBY KNOWINGLY, VOLUNTARILY,
INTENTIONALLY AND IRREVOCABLY AGREES THAT ALL ACTIONS ARISING DIRECTLY OR
INDIRECTLY AS A RESULT OF THE NOTES, THIS MORTGAGE OR ANY OF THE OTHER LOAN
INSTRUMENTS SHALL BE INSTITUTED AND LITIGATED ONLY IN COURTS HAVING SITUS IN THE
CITY OF CHICAGO, ILLINOIS, AND MORTGAGOR HEREBY CONSENTS TO THE EXCLUSIVE
JURISDICTION AND VENUE OF ANY STATE OR FEDERAL COURT LOCATED AND HAVING SITUS IN
SAID CITY OF CHICAGO, AND WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS.
MORTGAGOR HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS, AND CONSENTS THAT, AT LENDER’S OPTION,
ALL SUCH SERVICE OF PROCESS MAY BE MADE BY CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, DIRECTED TO MORTGAGOR AT THE ADDRESS FOR MORTGAGOR INDICATED IN
SECTION 4.2 ABOVE.

                    IN WITNESS WHEREOF, Mortgagor has caused this instrument to
be executed by its duly authorized officers as of the day and year first above
written.

 

 

 

 

MORTGAGOR:

 

 

 

 

SPIN-CAST PLASTICS, INC., an Indiana

 

corporation

 

 

 

 

By:

 /s/Daniel P. Gorey

 

Name:

 Daniel P. Gorey

 

Title:

 Vice President and Treasurer

 

 

 

 

LENDER:

 

 

 

 

LASALLE BANK NATIONAL

ATTEST:

ASSOCIATION

 

 

 

 

By:

 /s/Stephanie Kline

 

 

 

 

 

 

By

   /s/Edward F. Dobbins

 

Name:

Stephanie Kline

 

Its

   Attorney

 

Title:

Vice President

 

28

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 29

ACKNOWLEDGMENT

 

 

STATE OF ILLINOIS

)

 

) SS

COUNTY OF COOK

)

                    I, the undersigned, a Notary Public in and for and residing
in said County and State, DO HEREBY CERTIFY THAT Daniel P. Gorey, Vice President
and Treasurer of SPIN-CAST PLASTICS, INC., an Indiana corporation, personally
known to me to be the same persons whose names are subscribed to the foregoing
instrument appeared before me this day in person and acknowledged that they
signed and delivered said instrument as their own free and voluntary act and as
the free and voluntary act of said corporation for the uses and purposes therein
set forth.

                    GIVEN under my hand and notarial seal this 20th day of
April, 2005.

 

 

 

 

[ NOTARIAL SEAL ]

  /s/Charlotte M. Castine

 

Notary Public

 

 

 

Print Name:

  Charlotte M. Castine

 

 

 

 

My Commission Expires:

  01/05/09

29

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 30

 

 

STATE OF ILLINOIS

)

 

:

COOK COUNTY

)

          I, the undersigned authority, a Notary Public in and for said County
in said State, hereby certify that Stephanie Kline, whose name as Vice President
of LaSalle Bank National Association, an Illinois banking corporation, is signed
to the foregoing instrument and who is known to me, acknowledged before me on
this day that, being informed of the contents of the said instrument, he/she as
such officer and with full authority, executed the same voluntarily for and as
the act of said corporation.

          GIVEN under my hand and seal, this 20th day of April, 2005.

 

 

 

 

[ NOTARIAL SEAL ]

  /s/Christina M. Canham

 

Notary Public

 

 

 

Print Name:

  Christina M. Canham

 

 

 

 

My Commission Expires:

  01/05/09

30

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 31

EXHIBIT A - LEGAL DESCRIPTION

 

 

 

A tract of land in part of Township 38 North, Range 2 County, Indiana, described
the Northeast Quarter of Section 28, East, City of South Bend, St. Joseph as
follows:

 

 

 

COMMENCING at the Northeast corner of Section 28; thence South 89° 48’ O5” West,
966.00 feet along the North line of said Section 28; thence South 00° 00’ 23”
West 40.00 feet to the South boundary of Cleveland Road; thence South 89° 48’
05” West, 289.00 feet along said South boundary; thence South 44° 54’ 14” West,
14.17 feet to the East boundary of Kenmore Street; thence South 00° 00’ 23”
West, 146.76 feet along said East boundary; thence along said East boundary,
Southeasterly 294.37 feet along an arc to the left, having a radius of 1869.86
feet, subtended by a long chord, having a bearing of South 04° 30’ 13” East, and
a length of 294,07 feet to the point of beginning of this description; thence
North 89° 48’ 05” East 581.88 feet; thence South 00° 00’ 23” West, 472.86 feet;
thence South 89° 58’ 56” West, 498.99 feet to said East boundary of Kenmore
Street; thence North 09° 59’ 37” West, 445.88 feet along said East boundary;
thence Northwesterly 31.98 feet along an arc to the right, having a radius of
1869.86 feet and subtended by a long chord, having a bearing of North 09° 30’15”
West, and a length of 31.98 feet to the place of beginning.

 

 

 

Subject to legal highways.

31

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 32

REAFFIRMATION AND AMENDMENT OF SECURITY AGREEMENT

                    This Reaffirmation and Amendment of Security Agreement (this
“Reaffirmation”), dated and effective as of April 20, 2005, (the
“Reaffirmation”) is executed between Quixote Corporation, Quixote Transportation
Safety, Inc., Transafe Corporation, Energy Absorption Systems, Inc., Energy
Absorption Systems (AL) LLC, Surface Systems, Inc., Nu-Metrics, Inc., Highway
Information Systems, Inc., U.S. Traffic Corporation (formerly known as Green
Light Acquisition Corporation), Peek Traffic Corporation, (formerly known as
Vision Acquisition Corporation) Spin-Cast Plastics, Inc., as Debtors (each
“Debtor” and collectively the “Debtor”) in favor of LaSalle Bank National
Association (“LaSalle”), and has reference to the following facts and
circumstances:

RECITALS

                    A.     Quixote Corporation (the “Borrower”), The Northern
Trust Company, individually and as Administrative Agent for certain Lenders
(“Northern”), including without limitation, LaSalle (“Existing Lenders”) entered
into and are parties to that certain Credit Agreement, dated as of May 16, 2003,
as amended by a First Amendment, dated as of December 9, 2003; by a Second
Amendment, dated as of June 30, 2004; by a Third Amendment, dated as of
September 10, 2004 and a Fourth Amendment dated as of February 9, 2005
(“Existing Credit Agreement”), pursuant to which the Existing Lenders have made,
(i) Revolving Loans to the Borrower evidenced by certain Revolving Notes, dated
as of September 10, 2004, in the maximum aggregate principal amount of Thirty
Eight Million Dollars and 00/100 ($38,000,000), executed by the Borrower and
made payable pro rata to the order of the Existing Lenders (the “Revolving
Notes”) and (ii) Term Loans to the Borrower evidenced by certain Term Notes,
dated as of May 16, 2003, in the aggregate original principal amount of Twenty
Million Dollars and 00/100 ($20,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Term Notes”).

                    B.     The Borrower, as of February 9, 2005, issued
$40,000,000 Convertible Senior Subordinated Notes, due February 15, 2025 (the
“New Subordinated Notes”), the proceeds of which New Subordinated Notes (i)
repaid in full Borrowers’ obligations on the Term Loans and Term Notes and
terminated the Existing Lender’s Term Loan Commitment as defined in the Existing
Credit Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

32

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 33

                    C.     Northern has agreed to resign as Administrative Agent
under the Existing Credit Agreement and the Existing Lenders (including
Northern) have agreed to sell to LaSalle their outstanding pro rata share of the
Revolving Loans and to assign to LaSalle their rights and obligations under the
Existing Credit Agreement.

                    D.     LaSalle and Borrower have agreed to amend and restate
the terms of the Existing Credit Agreement, as amended by that Amended and
Restated Credit Agreement, dated as of the date hereof (the “Amended and
Restated Credit Agreement”).

                    E.     Northern, as Agent for the Existing Lenders to the
Existing Credit Agreement, effective upon its resignation as Agent and its
assignment of its pro rata share of the Revolving Loan Commitment and Revolving
Loans under the Existing Credit Agreement, shall assign to LaSalle all of its
right title and interest in certain Collateral, as defined, in and subject to
the terms of that certain Security Agreement, dated as of June 30, 2004, between
the Borrower and the Subsidiary Guarantors, as Debtor, and Northern, as the
secured party, as defined in the Existing Credit Agreement; (the “ Security
Agreement”).

                    F.     LaSalle is willing to enter into this Reaffirmation
only upon the condition that Debtors execute and deliver this Reaffirmation in
favor of LaSalle.

                    NOW, THEREFORE, in consideration of the foregoing, each
Debtor hereby agrees as follows:

                    1.     The Recitals to this Reaffirmation are hereby
incorporated herein by this reference thereto.

                    2.     Amendment to Security Agreement. The Security
Agreement is hereby amended as follows:

                    (A)   The “Whereas” sections of the Security Agreement are
hereby amended and restated in their entirety to read as follows:

          “A.     Quixote Corporation (the “Borrower”), The Northern Trust
Company (“Northern”), individually and as Administrative Agent for certain
Lenders, including without limitation, LaSalle Bank National Association
(“LaSalle”) (“Existing Lenders”), entered into and are parties to that certain
Credit Agreement, dated as of May 16, 2003, as amended by a First Amendment,
dated as of December 9, 2003; by a Second Amendment, dated as of June 30, 2004;
by a Third Amendment, dated as of September 10, 2004 and a Fourth Amendment
dated as of February 9, 2005 (“Existing Credit Agreement”),

33

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 34

pursuant to which existing Credit Agreement the Existing Lenders have made, (i)
Revolving Loans to the Borrower evidenced by certain Revolving Notes, dated as
of September 10, 2004, in the maximum aggregate principal amount of Thirty Eight
Million Dollars and 00/100 ($38,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the Revolving Notes”) and
(ii) Term Loans to the Borrower evidenced by certain Term Notes, dated as of May
16, 2003, in the aggregate original principal amount of Twenty Million Dollars
and 00/100 ($20,000,000), executed by the Borrower and made payable pro rata to
the order of the Existing Lenders (the “Term Notes”).

          B.     The Borrower, as of February 9, 2005, issued $40,000,000
Convertible Senior Subordinated Notes, due February 15, 2025 (the “New
Subordinated Notes”), the proceeds of which New Subordinated Notes (i) repaid in
full Borrowers’ obligations on the Term Loans and Term Notes and terminated the
Existing Lender’s Term Loan Commitment as defined in the Existing Credit
Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

          C.     The Debtors, as Subsidiary Guarantors executed that Subsidiary
Guaranty, dated as of May 16, 2003, as amended, (the “Subsidiary Guaranty”) in
favor of Northern for the benefit of the Existing Lenders and secured their
obligations under that Subsidiary Guaranty Borrower secured its obligations
under the Existing Credit Agreement by pledging certain Collateral, pursuant to
that certain Security Agreement dated as of June 30, 2004, between Borrower,
Debtors and Northern, as Secured Party.

          D.     Northern has agreed to resign as Administrative Agent under the
Existing Credit Agreement and the Existing Lenders (including Northern) have
agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans and to assign to LaSalle their rights and obligations under the Existing
Credit Agreement.

          E.     LaSalle and Borrower have agreed to amend and restate the terms
of the Existing Credit Agreement, and the Borrower has requested and LaSalle,
has agreed that LaSalle, individually on its own, continue the Revolving Loan
Commitment under the Existing Credit Agreement, as amended by an Amended and
Restated Credit Agreement, dated as of the date hereof, (the “Amended and
Restated Credit Agreement”) consisting of LaSalle’s Revolving Credit Commitment
in the amount of $30,000,000 with a sublimit for the issuance of Letters of
Credit in the amount of $10,000,000.

          F.     Northern, subject to the conditions described in Recitals D and
E hereof, has agreed to assign to LaSalle its interest in the Security Agreement
and the Collateral pledged thereunder.”

34

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 35

                    (B)     All references in the Security Agreement to the
“Credit Agreement” shall hereinafter be deemed to refer to the Amended and
Restated Credit Agreement.

                    (C)     All references in the Security Agreement to the
“Related Documents” shall hereinafter have the meaning assigned to the
definition of “Loan Documents” in the Amended and Restated Credit Agreement.

                    3.     The Borrower and each Debtor hereby expressly
reaffirms and assumes and Spin-Cast Plastics, Inc. grants a security interest to
LaSalle in the Collateral as defined in the Security Agreement, and assumes (on
the same basis as set forth in the Security Agreement, as hereby amended), all
of Debtors’ obligations and liabilities to Bank as set forth in the Security
Agreement, and the Borrower, each Debtor, including Spin-Cast Plastics, Inc.,
agrees to be bound by and abide by and operate and perform under and pursuant to
and comply fully with all of the terms, conditions, provisions, agreements,
representations, undertakings, warranties, guarantees, indemnities and covenants
contained in the Security Agreement, in so far as such obligations and
liabilities may be modified by this Reaffirmation.

                    4.     This Reaffirmation shall inure to the benefit of
Bank, its successors and assigns and be binding upon each Junior Creditor, and
their individual successors and assigns.

35

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 36

                    IN WITNESS WHEREOF, this instrument has been executed and
delivered as of the day and year first written above.

 

QUIXOTE CORPORATION

QUIXOTE TRANSPORTATION SAFETY, INC.

TRANSAFE CORPORATION

ENERGY ABSORPTION SYSTEMS, INC.

ENERGY ABSORPTION SYSTEMS (AL) LLC

SURFACE SYSTEMS, INC.

NU-METRICS, INC.

HIGHWAY INFORMATION SYSTEMS, INC.

U.S. TRAFFIC CORPORATION (formerly known as

Green Light Acquisition Corporation)

PEEK TRAFFIC CORPORATION, (formerly known as

Vision Acquisition Corporation)

SPIN-CAST PLASTICS, INC., as Subsidiary Guarantors and Debtors

 

 

 

By:

   /s/Daniel P. Gorey

 

Name: 

Daniel P. Gorey

 

Title:

Vice President and Treasurer

 

 

 

 

LASALLE BANK NATIONAL
ASSOCIATION

 

 

 

By:

   /s/Stephanie Kline

 

Name:

Stephanie Kline

 

Title:

Vice President

 

36

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 37

REAFFIRMATION AND AMENDMENT OF TRADEMARK SECURITY AGREEMENT

                    This Reaffirmation and Amendment of Trademark Security
Agreement (this “Reaffirmation”), dated and effective as of April 20, 2005, (the
“Reaffirmation”) is executed between Energy Absorption Systems, Inc., as Pledgor
(the “Pledgor”) in favor of LaSalle Bank National Association (“LaSalle”), and
has reference to the following facts and circumstances:

RECITALS

                    A.     Quixote Corporation (the “Borrower”), The Northern
Trust Company, individually and as Administrative Agent for certain Lenders
(“Northern”), including without limitation, LaSalle (“Existing Lenders”) entered
into and are parties to that certain Credit Agreement, dated as of May 16, 2003,
as amended by a First Amendment, dated as of December 9, 2003; by a Second
Amendment, dated as of June 30, 2004; by a Third Amendment, dated as of
September 10, 2004 and a Fourth Amendment dated as of February 9, 2005
(“Existing Credit Agreement”), pursuant to which the Existing Lenders have made,
(i) Revolving Loans to the Borrower evidenced by certain Revolving Notes, dated
as of September 10, 2004, in the maximum aggregate principal amount of Thirty
Eight Million Dollars and 00/100 ($38,000,000), executed by the Borrower and
made payable pro rata to the order of the Existing Lenders (the “Revolving
Notes”) and (ii) Term Loans to the Borrower evidenced by certain Term Notes,
dated as of May 16, 2003, in the aggregate original principal amount of Twenty
Million Dollars and 00/100 ($20,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Term Notes”).

                    B.     The Borrower, as of February 9, 2005, issued
$40,000,000 Convertible Senior Subordinated Notes, due February 15, 2025 (the
“New Subordinated Notes”), the proceeds of which New Subordinated Notes (i)
repaid in full Borrowers’ obligations on the Term Loans and Term Notes and
terminated the Existing Lender’s Term Loan Commitment as defined in the Existing
Credit Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

                    C.     Northern has agreed to resign as Administrative Agent
under the Existing Credit Agreement and the Existing Lenders (including
Northern)

37

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 38

have agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans and to assign to LaSalle their rights and obligations under the Existing
Credit Agreement.

                    D.     LaSalle and Borrower have agreed to amend and restate
the terms of the Existing Credit Agreement, as amended by that Amended and
Restated Credit Agreement, dated as of the date hereof (the “Amended and
Restated Credit Agreement”).

                    E.     Northern, as Agent for the Existing Lenders to the
Existing Credit Agreement, effective upon its resignation as Agent and its
assignment of its pro rata share of the Revolving Loan Commitment and Revolving
Loans under the Existing Credit Agreement, shall assign to LaSalle all of its
right title and interest in certain Trademarks, as defined, in and subject to
the terms of that certain Trademark Security Agreement, dated as of September
10, 2004, between the Pledgor and Northern, as the Pledgee, as defined in the
Existing Credit Agreement (the “ Trademark Security Agreement”).

                    F.     LaSalle is willing to enter into this Reaffirmation
only upon the condition that Debtors execute and deliver this Reaffirmation in
favor of LaSalle.

                    NOW, THEREFORE, in consideration of the foregoing, Pledgor
and LaSalle hereby agree as follows:

                    1.     The Recitals to this Reaffirmation are hereby
incorporated herein by this reference thereto.

                    2.     Amendment to Trademark Security Agreement. The
Trademark Security Agreement is hereby amended as follows:

                    (A)   The “Whereas” sections of the Trademark Security
Agreement are hereby amended and restated in their entirety to read as follows:

          “A.     Quixote Corporation (the “Borrower”), The Northern Trust
Company (“Northern”), individually and as Administrative Agent for certain
Lenders, including without limitation, LaSalle Bank National Association
(“LaSalle”) (“Existing Lenders”), entered into and are parties to that certain
Credit Agreement, dated as of May 16, 2003, as amended by a First Amendment,
dated as of December 9, 2003; by a Second Amendment, dated as of June 30, 2004;
by a Third Amendment, dated as of September 10, 2004 and a Fourth Amendment
dated as of February 9, 2005 (“Existing Credit Agreement”), pursuant to which
existing Credit Agreement the Existing Lenders have made, (i) Revolving Loans to
the Borrower evidenced by certain Revolving Notes, dated

38

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 39

as of September 10, 2004, in the maximum aggregate principal amount of Thirty
Eight Million Dollars and 00/100 ($38,000,000), executed by the Borrower and
made payable pro rata to the order of the Existing Lenders (the “Revolving
Notes”) and (ii) Term Loans to the Borrower evidenced by certain Term Notes,
dated as of May 16, 2003, in the aggregate original principal amount of Twenty
Million Dollars and 00/100 ($20,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Term Notes”).

          B.     The Borrower, as of February 9, 2005, issued $40,000,000
Convertible Senior Subordinated Notes, due February 15, 2025 (the “New
Subordinated Notes”), the proceeds of which New Subordinated Notes (i) repaid in
full Borrowers’ obligations on the Term Loans and Term Notes and terminated the
Existing Lender’s Term Loan Commitment as defined in the Existing Credit
Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

          C.     Pledgor, as Subsidiary Guarantor, executed that Subsidiary
Guaranty, dated as of May 16, 2003, as amended (the “Subsidiary Guaranty”), in
favor of Northern for the benefit of the Existing Lenders and secured its
obligations under that Subsidiary Guaranty by pledging certain Trademarks,
pursuant to that certain Trademark Security Agreement dated as of September 10,
2004, between Debtors and Northern, as Secured Party.

          D.     Northern has agreed to resign as Administrative Agent under the
Existing Credit Agreement and the Existing Lenders (including Northern) have
agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans and to assign to LaSalle their rights and obligations under the Existing
Credit Agreement.

          E.     LaSalle and Borrower have agreed to amend and restate the terms
of the Existing Credit Agreement, and the Borrower has requested and LaSalle,
has agreed that LaSalle, individually on its own, continue the Revolving Loan
Commitment under the Existing Credit Agreement, as amended by an Amended and
Restated Credit Agreement, dated as of the date hereof (the “Amended and
Restated Credit Agreement”), consisting of LaSalle’s Revolving Credit Commitment
in the amount of $30,000,000 with a sublimit for the issuance of Letters of
Credit in the amount of $10,000,000.

          F.     Northern, subject to the conditions described in Recitals D and
E hereof, has agreed to assign to LaSalle its interest in the Trademark Security
Agreement and the Collateral pledged thereunder.”

                    (B)     All references in the Trademark Security Agreement
(i) to the “Credit Agreement” shall hereinafter be deemed to refer to the
Amended and

39

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 40

Restated Credit Agreement and (ii) to the “Pledgee” shall hereinafter be deemed
to refer to LaSalle.

                    (C)     All references in the Trademark Security Agreement
to the “Loan Documents” shall hereinafter be deemed to refer to the definition
of “Loan Documents” in the Amended and Restated Credit Agreement.

                    3.     Reaffirmation of Trademark Security Agreement.
Pledgor hereby expressly reaffirms and assumes (on the same basis as set forth
in the Trademark Security Agreement, as hereby amended), all of Pledgor’s
obligations and liabilities to LaSalle, as Pledgee, as set forth in the
Trademark Security Agreement, and the Pledgor agrees to be bound by and abide by
and operate and perform under and pursuant to and comply fully with all of the
terms, conditions, provisions, agreements, representations, undertakings,
warranties, guarantees, indemnities and covenants contained in the Trademark
Security Agreement, in so far as such obligations and liabilities may be
modified by this Reaffirmation.

                    4.     This Reaffirmation shall inure to the benefit of
Bank, its successors and assigns and be binding upon Pledgor, LaSalle, and their
individual successors and assigns.

40

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 41

                    IN WITNESS WHEREOF, this instrument has been executed and
delivered as of the day and year first written above.

ENERGY ABSORPTION SYSTEMS, INC.,
as Pledgor

 

 

 

By:

   /s/Daniel P. Gorey

 

Name:

Daniel P. Gorey

 

Title:

Vice President and Treasurer

 

 

LASALLE BANK NATIONAL
ASSOCIATION, as Pledgee

 

By:

   /s/Stephanie Kline

 

Name:

Stephanie Kline

 

Title:

Vice President

 

41

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 42

 

 

STATE OF ILLINOIS

)

 

:

COOK COUNTY

)

                    I, the undersigned authority, a Notary Public in and for
said County in said State, hereby certify that Daniel P. Gorey, whose name as
Vice President and Treasurer of Energy Absorption Systems, Inc., a Delaware
corporation, is signed to the foregoing instrument and who is known to me,
acknowledged before me on this day that, being informed of the contents of the
said instrument, he/she as such officer and with full authority, executed the
same voluntarily for and as the act of said corporation.

                    GIVEN under my hand and seal, this 20th day of April, 2005.

 

 

 

 

[ NOTARIAL SEAL ]

/s/Charlotte M. Castine

 

Notary Public

 

 

 

Print Name: 

   Charlotte M. Castine

 

 

 

My Commission Expires:

01/05/09

42

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 43

 

 

STATE OF ILLINOIS

)

 

:

COOK COUNTY

)

                    I, the undersigned authority, a Notary Public in and for
said County in said State, hereby certify that Stephanie Kline, whose name as
Vice President of LaSalle Bank National Association, an Illinois banking
corporation, is signed to the foregoing instrument and who is known to me,
acknowledged before me on this day that, being informed of the contents of the
said instrument, he/she as such officer and with full authority, executed the
same voluntarily for and as the act of said corporation.

                    GIVEN under my hand and seal, this 20th day of April, 2005.

 

 

 

 

[ NOTARIAL SEAL ]

  /s/Christina M. Canham

 

Notary Public

 

 

 

Print Name: 

   Christina M. Canham

 

 

 

My Commission Expires:

 01/05/09

43

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 44

REAFFIRMATION AND AMENDMENT OF PATENT SECURITY AGREEMENT

                    This Reaffirmation and Amendment of Patent Security
Agreement (this “Reaffirmation”), dated and effective as of April 20, 2005, (the
“Reaffirmation”) is executed between Energy Absorption Systems Inc., as the
Pledgor (the Pledgor”), in favor of LaSalle Bank National Association
(“LaSalle”), and has reference to the following facts and circumstances:

RECITALS

                    A.     Quixote Corporation (the “Borrower”), The Northern
Trust Company, individually and as Administrative Agent for certain Lenders
(“Northern”), including without limitation, LaSalle (“Existing Lenders”) entered
into and are parties to that certain Credit Agreement, dated as of May 16, 2003,
as amended by a First Amendment, dated as of December 9, 2003; by a Second
Amendment, dated as of June 30, 2004; by a Third Amendment, dated as of
September 10, 2004 and a Fourth Amendment dated as of February 9, 2005
(“Existing Credit Agreement”), pursuant to which the Existing Lenders have made,
(i) Revolving Loans to the Borrower evidenced by certain Revolving Notes, dated
as of September 10, 2004, in the maximum aggregate principal amount of Thirty
Eight Million Dollars and 00/100 ($38,000,000), executed by the Borrower and
made payable pro rata to the order of the Existing Lenders (the “Revolving
Notes”) and (ii) Term Loans to the Borrower evidenced by certain Term Notes,
dated as of May 16, 2003, in the aggregate original principal amount of Twenty
Million Dollars and 00/100 ($20,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Term Notes”).

                    B.     The Borrower, as of February 9, 2005, issued
$40,000,000 Convertible Senior Subordinated Notes, due February 15, 2025 (the
“New Subordinated Notes”), the proceeds of which New Subordinated Notes (i)
repaid in full Borrowers’ obligations on the Term Loans and Term Notes and
terminated the Existing Lender’s Term Loan Commitment as defined in the Existing
Credit Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

                    C.     Northern has agreed to resign as Administrative Agent
under the Existing Credit Agreement and the Existing Lenders (including
Northern) have agreed to sell to LaSalle their outstanding pro rata share of the
Revolving Loans and to assign to LaSalle their rights and obligations under the
Existing Credit Agreement.

44

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 45

                    D.     LaSalle and Borrower have agreed to amend and restate
the terms of the Existing Credit Agreement, as amended by that Amended and
Restated Credit Agreement, dated as of the date hereof (the “Amended and
Restated Credit Agreement”).

                    E.     Northern, as Agent for the Existing Lenders to the
Existing Credit Agreement, effective upon its resignation as Agent and its
assignment of its pro rata share of the Revolving Loan Commitment and Revolving
Loans under the Existing Credit Agreement, shall assign to LaSalle all of its
right, title and interest as Pledgee in certain Patents, as defined, in and
subject to the terms of that certain Patent Security Agreement, dated as of
September 10, 2004, between the Pledgor and Northern, as the secured party, as
defined in the Existing Credit Agreement (the “Patent Security Agreement”).

                    F.      LaSalle is willing to enter into this Reaffirmation
only upon the condition that Debtors execute and deliver this Reaffirmation in
favor of LaSalle.

                    NOW, THEREFORE, in consideration of the foregoing, Pledgor
and LaSalle hereby agree as follows:

                    1.     The Recitals to this Reaffirmation are hereby
incorporated herein by this reference thereto.

                    2.     Amendment to Patent Security Agreement. The Patent
Security Agreement is hereby amended as follows:

                    (A)   The “Whereas” sections of the Patent Security
Agreement are hereby amended and restated in their entirety to read as follows:

          “A.    Quixote Corporation (the “Borrower”), The Northern Trust
Company (“Northern”), individually and as Administrative Agent for certain
Lenders, including without limitation, LaSalle Bank National Association
(“LaSalle”) (“Existing Lenders”), entered into and are parties to that certain
Credit Agreement, dated as of May 16, 2003, as amended by a First Amendment,
dated as of December 9, 2003; by a Second Amendment, dated as of June 30, 2004;
by a Third Amendment, dated as of September 10, 2004 and a Fourth Amendment
dated as of February 9, 2005 (“Existing Credit Agreement”), pursuant to which
existing Credit Agreement the Existing Lenders have made, (i) Revolving Loans to
the Borrower evidenced by certain Revolving Notes, dated as of September 10,
2004, in the maximum aggregate principal amount of Thirty Eight Million Dollars
and 00/100 ($38,000,000), executed by the Borrower and made payable pro rata to
the order of the Existing Lenders (the “Revolving

45

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 46

Notes”) and (ii) Term Loans to the Borrower evidenced by certain Term Notes,
dated as of May 16, 2003, in the aggregate original principal amount of Twenty
Million Dollars and 00/100 ($20,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Term Notes”).

          B.        The Borrower, as of February 9, 2005, issued $40,000,000
Convertible Senior Subordinated Notes, due February 15, 2025 (the “New
Subordinated Notes”), the proceeds of which New Subordinated Notes (i) repaid in
full Borrowers’ obligations on the Term Loans and Term Notes and terminated the
Existing Lender’s Term Loan Commitment as defined in the Existing Credit
Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

          C.        Pledgor, as Subsidiary Guarantor, executed that Subsidiary
Guaranty, dated as of May 16, 2003, as amended (the “Subsidiary Guaranty”), in
favor of Northern for the benefit of the Existing Lenders and secured its
obligations under that Subsidiary Guaranty by pledging certain Patents, pursuant
to that certain Patent Security Agreement dated as of September 10, 2004,
between Pledgors and Northern, as Pledgee.

          D.        Northern has agreed to resign as Administrative Agent under
the Existing Credit Agreement and the Existing Lenders (including Northern) have
agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans and to assign to LaSalle their rights and obligations under the Existing
Credit Agreement.

          E.        LaSalle and Borrower have agreed to amend and restate the
terms of the Existing Credit Agreement, and the Borrower has requested and
LaSalle, has agreed that LaSalle, individually on its own, continue the
Revolving Loan Commitment under the Existing Credit Agreement, as amended by an
Amended and Restated Credit Agreement, dated as of the date hereof (the “Amended
and Restated Credit Agreement”), consisting of LaSalle’s Revolving Credit
Commitment in the amount of $30,000,000 with a sublimit for the issuance of
Letters of Credit in the amount of $10,000,000.

          F.       Northern, subject to the conditions described in Recitals D
and E hereof, has agreed to assign to LaSalle its interest in the Patent
Security Agreement and the Collateral pledged thereunder.”

                    (B) All references in the Patent Security Agreement to the
“Credit Agreement” shall hereinafter be deemed to refer to the Amended and
Restated Credit Agreement.

46

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 47

                    (C) All references in the Patent Security Agreement to the
“Loan Documents” shall hereinafter be deemed to refer to the definition of “Loan
Documents” in the Amended and Restated Credit Agreement.

                    3.     Reaffirmation of Patent Security Agreement. Pledgor
hereby expressly reaffirms and assumes (on the same basis as set forth in the
Patent Security Agreement, as hereby amended), all of Pledgor’s obligations and
liabilities to LaSalle, as Pledgee, as set forth in the Patent Security
Agreement, and the Pledgor agrees to be bound by and abide by and operate and
perform under and pursuant to and comply fully with all of the terms,
conditions, provisions, agreements, representations, undertakings, warranties,
guarantees, indemnities and covenants contained in the Patent Security
Agreement, in so far as such obligations and liabilities may be modified by this
Reaffirmation.

                    4.     This Reaffirmation shall inure to the benefit of
Bank, its successors and assigns and be binding upon Pledgor, LaSalle, and their
individual successors and assigns.

47

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 48

                    IN WITNESS WHEREOF, this instrument has been executed and
delivered as of the day and year first written above.

 

ENERGY ABSORPTION SYSTEMS, INC.,

as Pledgor

 

 

 

By:

   /s/Daniel P. Gorey

 

Name:

Daniel P. Gorey

 

Title:

Vice President and Treasurer

 

 

 

 

LASALLE BANK NATIONAL
ASSOCIATION, as Pledgee

 

 

 

By:

   /s/Stephanie Kline

 

Name:

Stephanie Kline

 

Title:

Vice President

 

48

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 49

 

 

STATE OF ILLINOIS

)

 

:

COOK COUNTY

)

          I, the undersigned authority, a Notary Public in and for said County
in said State, hereby certify that Daniel P. Gorey, whose name as Vice President
and Treasurer of Energy Absorption Systems, Inc., a Delaware corporation, is
signed to the foregoing instrument and who is known to me, acknowledged before
me on this day that, being informed of the contents of the said instrument,
he/she as such officer and with full authority, executed the same voluntarily
for and as the act of said corporation.

          GIVEN under my hand and seal, this 20th day of April, 2005.

 

 

 

 

 

[ NOTARIAL SEAL ]

 

  /s/Charlotte M. Castine

 

 

Notary Public

 

 

 

 

 

 

Print Name:

  Charlotte M. Castine

 

 

 

 

 

 

 

My Commission Expires:

  01/05/09

49

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 50

 

 

STATE OF ILLINOIS

)

 

:

COOK COUNTY

)

          I, the undersigned authority, a Notary Public in and for said County
in said State, hereby certify that Stephanie Kline, whose name as Vice President
of LaSalle Bank National Association, an Illinois banking corporation, is signed
to the foregoing instrument and who is known to me, acknowledged before me on
this day that, being informed of the contents of the said instrument, he/she as
such officer and with full authority, executed the same voluntarily for and as
the act of said corporation.

          GIVEN under my hand and seal, this 20th day of April, 2005.

 

 

 

 

 

[ NOTARIAL SEAL ]

 

  /s/Christina M. Canham

 

 

Notary Public

 

 

 

 

 

 

Print Name:

  Christina M. Canham

 

 

 

 

 

 

My Commission Expires:

  01/05/09

50

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 51

REAFFIRMATION AND AMENDMENT OF SUBSIDIARY
STOCK PLEDGE AGREEMENT
(QUIXOTE CORPORATION)

                    This Reaffirmation and Amendment of Subsidiary Stock Pledge
Agreement (this “Reaffirmation”), dated and effective as of April 20, 2005, (the
“Reaffirmation”) is executed between Quixote Corporation (the “Borrower”) in
favor of LaSalle Bank National Association (“LaSalle”), and has reference to the
following facts and circumstances:

RECITALS

                    A.     Quixote Corporation (the “Borrower”), The Northern
Trust Company, individually and as Administrative Agent for certain Lenders
(“Northern”), including without limitation, LaSalle (“Existing Lenders”) entered
into and are parties to that certain Credit Agreement, dated as of May 16, 2003,
as amended by a First Amendment, dated as of December 9, 2003; by a Second
Amendment, dated as of June 30, 2004; by a Third Amendment, dated as of
September 10, 2004 and a Fourth Amendment dated as of February 9, 2005
(“Existing Credit Agreement”), pursuant to which the Existing Lenders have made,
(i) Revolving Loans to the Borrower evidenced by certain Revolving Notes, dated
as of September 10, 2004, in the maximum aggregate principal amount of Thirty
Eight Million Dollars and 00/100 ($38,000,000), executed by the Borrower and
made payable pro rata to the order of the Existing Lenders (the “Revolving
Notes”) and (ii) Term Loans to the Borrower evidenced by certain Term Notes,
dated as of May 16, 2003, in the aggregate original principal amount of Twenty
Million Dollars and 00/100 ($20,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Term Notes”).

                    B.     The Borrower, as of February 9, 2005, issued
$40,000,000 Convertible Senior Subordinated Notes, due February 15, 2025 (the
“New Subordinated Notes”), the proceeds of which New Subordinated Notes (i)
repaid in full Borrowers’ obligations on the Term Loans and Term Notes and
terminated the Existing Lender’s Term Loan Commitment as defined in the Existing
Credit Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

                    C.     Northern has agreed to resign as Administrative Agent
under the Existing Credit Agreement and the Existing Lenders (including
Northern) have agreed to sell to LaSalle their outstanding pro rata share of the
Revolving

51

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 52

Loans and to assign to LaSalle their rights and obligations under the Existing
Credit Agreement.

                    D.     LaSalle and Borrower have agreed to amend and restate
the terms of the Existing Credit Agreement, as amended by that Amended and
Restated Credit Agreement, dated as of the date hereof (the “Amended and
Restated Credit Agreement”).

                    E.     Northern, as Agent for the Existing Lenders to the
Existing Credit Agreement, effective upon its resignation as Agent and its
assignment of its pro rata share of the Revolving Loan Commitment and Revolving
Loans under the Existing Credit Agreement, shall assign to LaSalle all of its
right title and interest in certain Collateral, as defined, in and subject to
the terms of that certain Subsidiary Stock Pledge Agreement, dated as of
September 10, 2004, between the Borrower, as Debtor, and Northern, as the
secured party, as defined in the Existing Credit Agreement; (the “ Subsidiary
Stock Pledge Agreement”).

                    F.      LaSalle is willing to enter into this Reaffirmation
only upon the condition that Debtors execute and deliver this Reaffirmation in
favor of LaSalle.

                    NOW, THEREFORE, in consideration of the foregoing, the
Borrower and LaSalle hereby agrees as follows:

                    1.      The Recitals to this Reaffirmation are hereby
incorporated herein by this reference thereto.

                    2.     Amendment to Subsidiary Stock Pledge Agreement. The
Subsidiary Stock Pledge Agreement is hereby amended as follows:

                    (A)  The “Whereas” sections of the Subsidiary Stock Pledge
Agreement is hereby amended and restated in their entirety to read as follows:

          “A.    Quixote Corporation (the “Borrower”), The Northern Trust
Company (“Northern”), individually and as Administrative Agent for certain
Lenders, including without limitation, LaSalle Bank National Association
(“LaSalle”) (“Existing Lenders”), entered into and are parties to that certain
Credit Agreement, dated as of May 16, 2003, as amended by a First Amendment,
dated as of December 9, 2003; by a Second Amendment, dated as of June 30, 2004;
by a Third Amendment, dated as of September 10, 2004 and a Fourth Amendment
dated as of February 9, 2005 (“Existing Credit Agreement”), pursuant to which
existing Credit Agreement the Existing Lenders have made, (i) Revolving Loans to
the Borrower evidenced by certain Revolving Notes, dated

52

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 53

as of September 10, 2004, in the maximum aggregate principal amount of Thirty
Eight Million Dollars and 00/100 ($38,000,000), executed by the Borrower and
made payable pro rata to the order of the Existing Lenders (the “Revolving
Notes”) and (ii) Term Loans to the Borrower evidenced by certain Term Notes,
dated as of May 16, 2003, in the aggregate original principal amount of Twenty
Million Dollars and 00/100 ($20,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Term Notes”).

          B.     The Borrower, as of February 9, 2005, issued $40,000,000
Convertible Senior Subordinated Notes, due February 15, 2025 (the “New
Subordinated Notes”), the proceeds of which New Subordinated Notes (i) repaid in
full Borrowers’ obligations on the Term Loans and Term Notes and terminated the
Existing Lender’s Term Loan Commitment as defined in the Existing Credit
Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

          C.     The Borrower secured its obligations under the Existing Credit
Agreement by pledging certain Collateral, pursuant to this Subsidiary Stock
Pledge Agreement dated as of September 10, 2004, between Borrower and Northern,
as Secured Party.

          D.     Northern has agreed to resign as Administrative Agent under the
Existing Credit Agreement and the Existing Lenders (including Northern) have
agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans and to assign to LaSalle their rights and obligations under the Existing
Credit Agreement.

          E.     LaSalle and Borrower have agreed to amend and restate the terms
of the Existing Credit Agreement, and the Borrower has requested and LaSalle,
has agreed that LaSalle, individually on its own, continue the Revolving Loan
Commitment under the Existing Credit Agreement, as amended by an Amended and
Restated Credit Agreement, dated as of the date hereof (the “Amended and
Restated Credit Agreement”), consisting of LaSalle’s Revolving Credit Commitment
in the amount of $30,000,000 with a sublimit for the issuance of Letters of
Credit in the amount of $10,000,000.

          F.     Northern, subject to the conditions described in Recitals D and
E hereof, has agreed to assign to LaSalle its interest in the Subsidiary Stock
Pledge Agreement and the Collateral pledged thereunder.”

                   (B)     All references in the Subsidiary Stock Pledge
Agreement (i) to the “Credit Agreement” shall hereinafter be deemed to refer to
the Amended and Restated Credit Agreement and (ii) to the “Secured Party” shall
hereinafter be deemed to refer to LaSalle.

53

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 54

                    (C)   All references in the Subsidiary Stock Pledge
Agreement to the “Related Documents” shall hereinafter have the meaning assigned
to the definition of “Loan Documents” in the Amended and Restated Credit
Agreement.

                    3.     The Borrower hereby expressly reaffirms and assumes
(on the same basis as set forth in the Subsidiary Stock Pledge Agreement, as
hereby amended), all of Debtors’ obligations and liabilities to Secured Party as
set forth in the Subsidiary Stock Pledge Agreement, and the Borrower agrees to
be bound by and abide by and operate and perform under and pursuant to and
comply fully with all of the terms, conditions, provisions, agreements,
representations, undertakings, warranties, guarantees, indemnities and covenants
contained in the Subsidiary Stock Pledge Agreement, in so far as such
obligations and liabilities may be modified by this Reaffirmation.

                    4.     This Reaffirmation shall inure to the benefit of
Bank, its successors and assigns and be binding upon Borrower, LaSalle, and
their individual successors and assigns.

54

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 55

                    IN WITNESS WHEREOF, this instrument has been executed and
delivered as of the day and year first written above.

QUIXOTE CORPORATION, as Debtor

 

 

 

By:

   /s/Daniel P. Gorey

 

Name:

Daniel P. Gorey

 

Title:

Vice President and Treasurer

 

 

 

 

LASALLE BANK NATIONAL
ASSOCIATION, as Secured Party

 

 

 

By:

   /s/Stephanie Kline

 

Name:

Stephanie Kline

 

Title:

Vice President

 

55

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 56

REAFFIRMATION AND AMENDMENT OF SUBSIDIARY
STOCK PLEDGE AGREEMENT
(QUIXOTE TRANSPORTATION SAFETY, INC.)

                    This Reaffirmation and Amendment of Subsidiary Stock Pledge
Agreement (this “Reaffirmation”), dated and effective as of April 20, 2005 (the
“Reaffirmation”), is executed between Quixote Transportation Safety, Inc.
(“QTS”) in favor of LaSalle Bank National Association (“LaSalle”), and has
reference to the following facts and circumstances:

RECITALS

                    A.     Quixote Corporation (the “Borrower”), The Northern
Trust Company, individually and as Administrative Agent for certain Lenders
(“Northern”), including without limitation, LaSalle (“Existing Lenders”) entered
into and are parties to that certain Credit Agreement, dated as of May 16, 2003,
as amended by a First Amendment, dated as of December 9, 2003; by a Second
Amendment, dated as of June 30, 2004; by a Third Amendment, dated as of
September 10, 2004 and a Fourth Amendment dated as of February 9, 2005
(“Existing Credit Agreement”), pursuant to which the Existing Lenders have made,
(i) Revolving Loans to the Borrower evidenced by certain Revolving Notes, dated
as of September 10, 2004, in the maximum aggregate principal amount of Thirty
Eight Million Dollars and 00/100 ($38,000,000), executed by the Borrower and
made payable pro rata to the order of the Existing Lenders (the “Revolving
Notes”) and (ii) Term Loans to the Borrower evidenced by certain Term Notes,
dated as of May 16, 2003, in the aggregate original principal amount of Twenty
Million Dollars and 00/100 ($20,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Term Notes”).

                    B.     The Borrower, as of February 9, 2005, issued
$40,000,000 Convertible Senior Subordinated Notes, due February 15, 2025 (the
“New Subordinated Notes”), the proceeds of which New Subordinated Notes (i)
repaid in full Borrowers’ obligations on the Term Loans and Term Notes and
terminated the Existing Lender’s Term Loan Commitment as defined in the Existing
Credit Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

                    C.     Northern has agreed to resign as Administrative Agent
under the Existing Credit Agreement and the Existing Lenders (including
Northern)

56

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 57

have agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans and to assign to LaSalle their rights and obligations under the Existing
Credit Agreement.

                    D.     LaSalle and Borrower have agreed to amend and restate
the terms of the Existing Credit Agreement, as amended by that Amended and
Restated Credit Agreement, dated as of the date hereof (the “Amended and
Restated Credit Agreement”).

                    E.     Northern, as Agent for the Existing Lenders to the
Existing Credit Agreement, effective upon its resignation as Agent and its
assignment of its pro rata share of the Revolving Loan Commitment and Revolving
Loans under the Existing Credit Agreement, shall assign to LaSalle all of its
right title and interest in certain Collateral, as defined, in and subject to
the terms of that certain Subsidiary Stock Pledge Agreement, dated as of
September 10, 2004, between QTS, as Debtor, and Northern, as the secured party,
as defined in the Existing Credit Agreement (the “ Subsidiary Stock Pledge
Agreement”).

                    F.     LaSalle is willing to enter into this Reaffirmation
only upon the condition that Debtors execute and deliver this Reaffirmation in
favor of LaSalle.

                    NOW, THEREFORE, in consideration of the foregoing, QTS and
LaSalle hereby agree as follows:

                    1.     The Recitals to this Reaffirmation are hereby
incorporated herein by this reference thereto.

                    2.     Amendment to Subsidiary Stock Pledge Agreement. The
Subsidiary Stock Pledge Agreement is hereby amended as follows:

                    (A)   The “Whereas” Section of the Subsidiary Stock Pledge
Agreement is hereby amended and restated in their entirety to read as follows:

          “A.     Quixote Corporation (the “Borrower”), The Northern Trust
Company (“Northern”), individually and as Administrative Agent for certain
Lenders, including without limitation, LaSalle Bank National Association
(“LaSalle”) (“Existing Lenders”), entered into and are parties to that certain
Credit Agreement, dated as of May 16, 2003, as amended by a First Amendment,
dated as of December 9, 2003; by a Second Amendment, dated as of June 30, 2004;
by a Third Amendment, dated as of September 10, 2004 and a Fourth Amendment
dated as of February 9, 2005 (“Existing Credit Agreement”), pursuant to which
existing Credit Agreement the Existing Lenders have made, (i) Revolving Loans to
the Borrower evidenced by certain Revolving Notes, dated

57

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 58

as of September 10, 2004, in the maximum aggregate principal amount of Thirty
Eight Million Dollars and 00/100 ($38,000,000), executed by the Borrower and
made payable pro rata to the order of the Existing Lenders (the “Revolving
Notes”) and (ii) Term Loans to the Borrower evidenced by certain Term Notes,
dated as of May 16, 2003, in the aggregate original principal amount of Twenty
Million Dollars and 00/100 ($20,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Term Notes”).

          B.     The Borrower, as of February 9, 2005, issued $40,000,000
Convertible Senior Subordinated Notes, due February 15, 2025 (the “New
Subordinated Notes”), the proceeds of which New Subordinated Notes (i) repaid in
full Borrowers’ obligations on the Term Loans and Term Notes and terminated the
Existing Lender’s Term Loan Commitment as defined in the Existing Credit
Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

          C.     QTS, as Subsidiary Guarantor executed that Subsidiary Guaranty,
dated as of May 16, 2003, as amended, (the “Subsidiary Guaranty”) in favor of
Northern for the benefit of the Existing Lenders and secured its obligations
under that Subsidiary Guaranty by pledging certain Collateral, pursuant to this
Subsidiary Stock Pledge Agreement dated as of September, 10 2004, between QTS
and Northern, as Secured Party.

          D.     Northern has agreed to resign as Administrative Agent under the
Existing Credit Agreement and the Existing Lenders (including Northern) have
agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans and to assign to LaSalle their rights and obligations under the Existing
Credit Agreement.

          E.     LaSalle and Borrower have agreed to amend and restate the terms
of the Existing Credit Agreement, and the Borrower has requested and LaSalle,
has agreed that LaSalle, individually on its own, continue the Revolving Loan
Commitment under the Existing Credit Agreement, as amended by an Amended and
Restated Credit Agreement, dated as of the date hereof (the “Amended and
Restated Credit Agreement”), consisting of LaSalle’s Revolving Credit Commitment
in the amount of $30,000,000 with a sublimit for the issuance of Letters of
Credit in the amount of $10,000,000.

          F.     Northern, subject to the conditions described in Recitals D and
E hereof, has agreed to assign to LaSalle its interest in the Subsidiary Stock
Pledge Agreement and the Collateral pledged thereunder.”

                  (B)     All references in the Subsidiary Stock Pledge
Agreement (i) to the “Credit Agreement” shall hereinafter be deemed to refer to
the Amended and

58

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 59

Restated Credit Agreement and (ii) to the “Secured Party” shall hereinafter be
deemed to refer to LaSalle.

                    (C)     All references in the Subsidiary Stock Pledge
Agreement to the “Related Documents” shall hereinafter have the meaning assigned
to the definition of “Loan Documents” in the Amended and Restated Credit
Agreement.

                    3.      QTS hereby expressly reaffirms and assumes (on the
same basis as set forth in the Subsidiary Stock Pledge Agreement, as hereby
amended), all of Debtors’ obligations and liabilities to Secured Party as set
forth in the Subsidiary Stock Pledge Agreement, and QTS agrees to be bound by
and abide by and operate and perform under and pursuant to and comply fully with
all of the terms, conditions, provisions, agreements, representations,
undertakings, warranties, guarantees, indemnities and covenants contained in the
Subsidiary Stock Pledge Agreement, in so far as such obligations and liabilities
may be modified by this Reaffirmation.

                    4.     This Reaffirmation shall inure to the benefit of
Bank, its successors and assigns and be binding upon QTS, LaSalle, and their
individual successors and assigns.

59

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 60

                    IN WITNESS WHEREOF, this instrument has been executed and
delivered as of the day and year first written above.

QUIXOTE TRANSPORATION SAFETY, INC.,
as Debtor

 

 

 

By:

   /s/Daniel P. Gorey

 

Name:

Daniel P. Gorey

 

Title:

Vice President and Treasurer

 

 

 

 

LASALLE BANK NATIONAL
ASSOCIATION, as Secured Party

 

 

 

By:

   /s/Stephanie Kline

 

Name:

Stephanie Kline

 

Title:

Vice President

 

60

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 61

REAFFIRMATION AND AMENDMENT OF SUBSIDIARY
STOCK PLEDGE AGREEMENT
(TRANSAFE CORPORATION)

                    This Reaffirmation and Amendment of Subsidiary Stock Pledge
Agreement (this “Reaffirmation”), dated and effective as of April 20, 2005 (the
“Reaffirmation”), is executed between Transafe Corporation (“Transafe”) in favor
of LaSalle Bank National Association (“LaSalle”), and has reference to the
following facts and circumstances:

RECITALS

                    A.     Quixote Corporation (the “Borrower”), The Northern
Trust Company, individually and as Administrative Agent for certain Lenders
(“Northern”), including without limitation, LaSalle (“Existing Lenders”) entered
into and are parties to that certain Credit Agreement, dated as of May 16, 2003,
as amended by a First Amendment, dated as of December 9, 2003; by a Second
Amendment, dated as of June 30, 2004; by a Third Amendment, dated as of
September 10, 2004 and a Fourth Amendment dated as of February 9, 2005
(“Existing Credit Agreement”), pursuant to which the Existing Lenders have made,
(i) Revolving Loans to the Borrower evidenced by certain Revolving Notes, dated
as of September 10, 2004, in the maximum aggregate principal amount of Thirty
Eight Million Dollars and 00/100 ($38,000,000), executed by the Borrower and
made payable pro rata to the order of the Existing Lenders (the “Revolving
Notes”) and (ii) Term Loans to the Borrower evidenced by certain Term Notes,
dated as of May 16, 2003, in the aggregate original principal amount of Twenty
Million Dollars and 00/100 ($20,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Term Notes”).

                    B.     The Borrower, as of February 9, 2005, issued
$40,000,000 Convertible Senior Subordinated Notes, due February 15, 2025 (the
“New Subordinated Notes”), the proceeds of which New Subordinated Notes (i)
repaid in full Borrowers’ obligations on the Term Loans and Term Notes and
terminated the Existing Lender’s Term Loan Commitment as defined in the Existing
Credit Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

                    C.     Northern has agreed to resign as Administrative Agent
under the Existing Credit Agreement and the Existing Lenders (including
Northern) have agreed to sell to LaSalle their outstanding pro rata share of the
Revolving

61

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 62

Loans and to assign to LaSalle their rights and obligations under the Existing
Credit Agreement.

                    D.     LaSalle and Borrower have agreed to amend and restate
the terms of the Existing Credit Agreement, as amended by that Amended and
Restated Credit Agreement, dated as of the date hereof (the “Amended and
Restated Credit Agreement”).

                    E.     Northern, as Agent for the Existing Lenders to the
Existing Credit Agreement, effective upon its resignation as Agent and its
assignment of its pro rata share of the Revolving Loan Commitment and Revolving
Loans under the Existing Credit Agreement, shall assign to LaSalle all of its
right title and interest in certain Collateral, as defined, in and subject to
the terms of that certain Subsidiary Stock Pledge Agreement, dated as of
September 10, 2004, between Transafe, as Debtor; and Northern, as the secured
party, as defined in the Existing Credit Agreement (the “ Subsidiary Stock
Pledge Agreement”).

                    F.     LaSalle is willing to enter into this Reaffirmation
only upon the condition that Debtors execute and deliver this Reaffirmation in
favor of LaSalle.

                    NOW, THEREFORE, in consideration of the foregoing, Transafe
and LaSalle hereby agree as follows:

                    1.     The Recitals to this Reaffirmation are hereby
incorporated herein by this reference thereto.

                    2.     Amendment to Subsidiary Stock Pledge Agreement. The
Subsidiary Stock Pledge Agreement is hereby amended as follows:

                    (A)   The “Whereas” Section of the Subsidiary Stock Pledge
Agreement is hereby amended and restated in their entirety to read as follows:

          “A.     Quixote Corporation (the “Borrower”), The Northern Trust
Company (“Northern”), individually and as Administrative Agent for certain
Lenders, including without limitation, LaSalle Bank National Association
(“LaSalle”) (“Existing Lenders”), entered into and are parties to that certain
Credit Agreement, dated as of May 16, 2003, as amended by a First Amendment,
dated as of December 9, 2003; by a Second Amendment, dated as of June 30, 2004;
by a Third Amendment, dated as of September 10, 2004 and a Fourth Amendment
dated as of February 9, 2005 (“Existing Credit Agreement”), pursuant to which
existing Credit Agreement the Existing Lenders have made, (i) Revolving Loans to
the Borrower evidenced by certain Revolving Notes, dated

62

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 63

as of September 10, 2004, in the maximum aggregate principal amount of Thirty
Eight Million Dollars and 00/100 ($38,000,000), executed by the Borrower and
made payable pro rata to the order of the Existing Lenders (the “Revolving
Notes”) and (ii) Term Loans to the Borrower evidenced by certain Term Notes,
dated as of May 16, 2003, in the aggregate original principal amount of Twenty
Million Dollars and 00/100 ($20,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Term Notes”).

          B.     The Borrower, as of February 9, 2005, issued $40,000,000
Convertible Senior Subordinated Notes, due February 15, 2025 (the “New
Subordinated Notes”), the proceeds of which New Subordinated Notes (i) repaid in
full Borrowers’ obligations on the Term Loans and Term Notes and terminated the
Existing Lender’s Term Loan Commitment as defined in the Existing Credit
Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

          C.     Transafe, as Subsidiary Guarantor executed that Subsidiary
Guaranty, dated as of May 16, 2003, as amended (the “Subsidiary Guaranty”), in
favor of Northern for the benefit of the Existing Lenders and secured its
obligations under that Subsidiary Guaranty by pledging certain Collateral,
pursuant to this Subsidiary Stock Pledge Agreement dated as of September 10,
2004, between Transafe and Northern, as Secured Party.

          D.     Northern has agreed to resign as Administrative Agent under the
Existing Credit Agreement and the Existing Lenders (including Northern) have
agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans and to assign to LaSalle their rights and obligations under the Existing
Credit Agreement.

          E.     LaSalle and Borrower have agreed to amend and restate the terms
of the Existing Credit Agreement, and the Borrower has requested and LaSalle,
has agreed that LaSalle, individually on its own, continue the Revolving Loan
Commitment under the Existing Credit Agreement, as amended by an Amended and
Restated Credit Agreement, dated as of the date hereof (the “Amended and
Restated Credit Agreement”), consisting of LaSalle’s Revolving Credit Commitment
in the amount of $30,000,000 with a sublimit for the issuance of Letters of
Credit in the amount of $10,000,000.

          F.     Northern, subject to the conditions described in Recitals D and
E hereof, has agreed to assign to LaSalle its interest in the Subsidiary Stock
Pledge Agreement and the Collateral pledged thereunder.”

                  (B)     All references in the Subsidiary Stock Pledge
Agreement (i) to the “Credit Agreement” shall hereinafter be deemed to refer to
the Amended and

63

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 64

Restated Credit Agreement and (ii) to the “Secured Party” shall hereinafter be
deemed to refer to LaSalle.

                  (C)    All references in the Subsidiary Stock Pledge Agreement
to the “Related Documents” shall hereinafter have the meaning assigned to the
definition of “Loan Documents” in the Amended and Restated Credit Agreement.

                  3.      Transafe hereby expressly reaffirms and assumes (on
the same basis as set forth in the Subsidiary Stock Pledge Agreement, as hereby
amended), all of Debtors’ obligations and liabilities to Secured Party as set
forth in the Subsidiary Stock Pledge Agreement, and Transafe agrees to be bound
by and abide by and operate and perform under and pursuant to and comply fully
with all of the terms, conditions, provisions, agreements, representations,
undertakings, warranties, guarantees, indemnities and covenants contained in the
Subsidiary Stock Pledge Agreement, in so far as such obligations and liabilities
may be modified by this Reaffirmation.

                  4.      This Reaffirmation shall inure to the benefit of Bank,
its successors and assigns and be binding upon Transafe, LaSalle, and their
individual successors and assigns.          

64

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 65

                    IN WITNESS WHEREOF, this instrument has been executed and
delivered as of the day and year first written above.

 

 

 

TRANSAFE CORPORATION, as Debtor

 

 

 

By:

  /s/Daniel P. Gorey

 

Name: 

Daniel P. Gorey

 

Title:

Vice President and Treasurer

 

 

 

 

LASALLE BANK NATIONAL

   ASSOCIATION, as Secured Party

 

By:

  /s/Stephanie Kline

 

Name:

Stephanie Kline

 

Title:

Vice President

 

65

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 66

REAFFIRMATION AND AMENDMENT OF SUBSIDIARY
STOCK PLEDGE AGREEMENT
(ENERGY ABSORPTION SYSTEMS, INC.)

                    This Reaffirmation and Amendment of Subsidiary Stock Pledge
Agreement (this “Reaffirmation”), dated and effective as of April 20, 2005 (the
“Reaffirmation”), is executed between Energy Absorption Systems, Inc. (“EAS”) in
favor of LaSalle Bank National Association (“LaSalle”), and has reference to the
following facts and circumstances:

RECITALS

                    A.     Quixote Corporation (the “Borrower”), The Northern
Trust Company, individually and as Administrative Agent for certain Lenders
(“Northern”), including without limitation, LaSalle (“Existing Lenders”) entered
into and are parties to that certain Credit Agreement, dated as of May 16, 2003,
as amended by a First Amendment, dated as of December 9, 2003; by a Second
Amendment, dated as of June 30, 2004; by a Third Amendment, dated as of
September 10, 2004 and a Fourth Amendment dated as of February 9, 2005
(“Existing Credit Agreement”), pursuant to which the Existing Lenders have made,
(i) Revolving Loans to the Borrower evidenced by certain Revolving Notes, dated
as of September 10, 2004, in the maximum aggregate principal amount of Thirty
Eight Million Dollars and 00/100 ($38,000,000), executed by the Borrower and
made payable pro rata to the order of the Existing Lenders (the “Revolving
Notes”) and (ii) Term Loans to the Borrower evidenced by certain Term Notes,
dated as of May 16, 2003, in the aggregate original principal amount of Twenty
Million Dollars and 00/100 ($20,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Term Notes”).

                    B.     The Borrower, as of February 9, 2005, issued
$40,000,000 Convertible Senior Subordinated Notes, due February 15, 2025 (the
“New Subordinated Notes”), the proceeds of which New Subordinated Notes (i)
repaid in full Borrowers’ obligations on the Term Loans and Term Notes and
terminated the Existing Lender’s Term Loan Commitment as defined in the Existing
Credit Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

                    C.     Northern has agreed to resign as Administrative Agent
under the Existing Credit Agreement and the Existing Lenders (including
Northern) have agreed to sell to LaSalle their outstanding pro rata share of the
Revolving

66

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 67

Loans and to assign to LaSalle their rights and obligations under the Existing
Credit Agreement.

                    D.     LaSalle and Borrower have agreed to amend and restate
the terms of the Existing Credit Agreement, as amended by that Amended and
Restated Credit Agreement, dated as of the date hereof (the “Amended and
Restated Credit Agreement”).

                    E.     Northern, as Agent for the Existing Lenders to the
Existing Credit Agreement, effective upon its resignation as Agent and its
assignment of its pro rata share of the Revolving Loan Commitment and Revolving
Loans under the Existing Credit Agreement, shall assign to LaSalle all of its
right title and interest in certain Collateral, as defined, in and subject to
the terms of that certain Subsidiary Stock Pledge Agreement, dated as of
September 10, 2004, between EAS, as Debtor, and Northern, as the secured party,
as defined in the Existing Credit Agreement (the “ Subsidiary Stock Pledge
Agreement”).

                    F.     LaSalle is willing to enter into this Reaffirmation
only upon the condition that Debtors execute and deliver this Reaffirmation in
favor of LaSalle.

                    NOW, THEREFORE, in consideration of the foregoing, EAS and
LaSalle hereby agree as follows:

                    1.     The Recitals to this Reaffirmation are hereby
incorporated herein by this reference thereto.

                    2.     Amendment to Subsidiary Stock Pledge Agreement. The
Subsidiary Stock Pledge Agreement is hereby amended as follows:

                    (A)   The “Whereas” Section of the Subsidiary Stock Pledge
Agreement is hereby amended and restated in their entirety to read as follows:

          “A.     Quixote Corporation (the “Borrower”), The Northern Trust
Company (“Northern”), individually and as Administrative Agent for certain
Lenders, including without limitation, LaSalle Bank National Association
(“LaSalle”) (“Existing Lenders”), entered into and are parties to that certain
Credit Agreement, dated as of May 16, 2003, as amended by a First Amendment,
dated as of December 9, 2003; by a Second Amendment, dated as of June 30, 2004;
by a Third Amendment, dated as of September 10, 2004 and a Fourth Amendment
dated as of February 9, 2005 (“Existing Credit Agreement”), pursuant to which
existing Credit Agreement the Existing Lenders have made, (i) Revolving Loans to
the Borrower evidenced by certain Revolving Notes, dated as of September 10,
2004, in the maximum aggregate principal amount of Thirty

67

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 68

Eight Million Dollars and 00/100 ($38,000,000), executed by the Borrower and
made payable pro rata to the order of the Existing Lenders (the “Revolving
Notes”) and (ii) Term Loans to the Borrower evidenced by certain Term Notes,
dated as of May 16, 2003, in the aggregate original principal amount of Twenty
Million Dollars and 00/100 ($20,000,000), executed by the Borrower and made
payable pro rata to the order of the Existing Lenders (the “Term Notes”).

          B.     The Borrower, as of February 9, 2005, issued $40,000,000
Convertible Senior Subordinated Notes, due February 15, 2025 (the “New
Subordinated Notes”), the proceeds of which New Subordinated Notes (i) repaid in
full Borrowers’ obligations on the Term Loans and Term Notes and terminated the
Existing Lender’s Term Loan Commitment as defined in the Existing Credit
Agreement and (ii) repaid a portion of the outstanding Revolving Loans
thereunder.

          C.     EAS, as Subsidiary Guarantor executed that Subsidiary Guaranty,
dated as of May 16, 2003, as amended, (the “Subsidiary Guaranty”) in favor of
Northern for the benefit of the Existing Lenders and secured its obligations
under that Subsidiary Guaranty by pledging certain Collateral, pursuant to this
Subsidiary Stock Pledge Agreement dated as of September 10, 2004, between EAS
and Northern, as Secured Party.

          D.     Northern has agreed to resign as Administrative Agent under the
Existing Credit Agreement and the Existing Lenders (including Northern) have
agreed to sell to LaSalle their outstanding pro rata share of the Revolving
Loans and to assign to LaSalle their rights and obligations under the Existing
Credit Agreement.

          E.     LaSalle and Borrower have agreed to amend and restate the terms
of the Existing Credit Agreement, and the Borrower has requested and LaSalle,
has agreed that LaSalle, individually on its own, continue the Revolving Loan
Commitment under the Existing Credit Agreement, as amended by an Amended and
Restated Credit Agreement, dated as of the date hereof, (the “Amended and
Restated Credit Agreement”) consisting of LaSalle’s Revolving Credit Commitment
in the amount of $30,000,000 with a sublimit for the issuance of Letters of
Credit in the amount of $10,000,000.

          F.     Northern, subject to the conditions described in Recitals D and
E hereof, has agreed to assign to LaSalle its interest in the Subsidiary Stock
Pledge Agreement and the Collateral pledged thereunder.”

                  (B)   EAS hereby grants a continuing security interest in all
of the outstanding common stock of Spin-Cast Plastics, Inc., as described in
Exhibit A attached hereto, which stock shall constitute “Collateral” for
purposes of and be

68

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 69

entitled to the benefits of this Agreement. Exhibit A attached hereto shall
replace and be substituted for Exhibit A to the Subsidiary Stock Pledge
Agreement, and all references therein to Exhibit A shall be deemed references to
the Exhibit A in the form attached hereto.

                  (C)   All references in the Subsidiary Stock Pledge Agreement
(i) to the “Credit Agreement” shall hereinafter be deemed to refer to the
Amended and Restated Credit Agreement and (ii) to the “Secured Party” shall
hereinafter be deemed to refer to LaSalle.

                  (D)   All references in the Subsidiary Stock Pledge Agreement
to the “Related Documents” shall hereinafter have the meaning assigned to the
definition of “Loan Documents” in the Amended and Restated Credit Agreement.

                  3.     EAS hereby expressly reaffirms and assumes (on the same
basis as set forth in the Subsidiary Stock Pledge Agreement, as hereby amended),
all of Debtors’ obligations and liabilities to Secured Party as set forth in the
Subsidiary Stock Pledge Agreement, and EAS agrees to be bound by and abide by
and operate and perform under and pursuant to and comply fully with all of the
terms, conditions, provisions, agreements, representations, undertakings,
warranties, guarantees, indemnities and covenants contained in the Subsidiary
Stock Pledge Agreement, in so far as such obligations and liabilities may be
modified by this Reaffirmation.

                  4.     This Reaffirmation shall inure to the benefit of Bank,
its successors and assigns and be binding upon EAS, LaSalle, and their
individual successors and assigns.

69

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 70

                    IN WITNESS WHEREOF, this instrument has been executed and
delivered as of the day and year first written above.

 

 

 

ENERGY ABSORPTION SYSTEMS, INC.,
as Debtor

 

 

 

By:

  /s/Daniel P. Gorey

 

Name:

Daniel P. Gorey

 

Title:

Vice President and Treasurer

 

 

 

 

LASALLE BANK NATIONAL

   ASSOCIATION, as Secured Party

 

By:

  /s/Stephanie Kline

 

Name: 

Stephanie Kline

 

Title: 

Vice President

 

70

--------------------------------------------------------------------------------

LaSalle Bank National Association
April 20, 2005
Page 71

EXHIBIT A TO
SUBSIDIARY STOCK PLEDGE AGREEMENT EXECUTED
BY ENERGY ABSORPTION SYSTEMS, INC. (“ Pledgor”)
IN FAVOR OF THE NORTHERN TRUST COMPANY,
AS AGENT FOR THE LENDERS (“Secured Party”)
13.2     THIS EXHIBIT A CONSISTS OF 1 PAGE
LISTING OF PLEDGED SECURITIES

 

 

 

 

 

OWNER

ISSUER

STOCK CERTIFICATE
NO./SHARES OF COMMON
STOCK

AUTHORIZED
SHARES/OUTSTANDING

       

  1.

Energy Absorption Systems, Inc. (sole managing member)

Energy Absorption Systems LLC

#1/100% Membership Interest

N/A

         

  2.

Energy Absorption Systems, Inc.

Spin-Cast Plastics, Inc.

#8 1/699.67 Shares

1000/699.67

71

--------------------------------------------------------------------------------