Document:

Exhibit 10.1

 

FOURTH
AMENDMENT TO

CREDIT FACILITIES AGREEMENT

 

This FOURTH AMENDMENT TO
CREDIT FACILITIES AGREEMENT (this “Agreement”) is entered into and effective as
of April 28, 2005, by and among GTSI Corp., a Delaware corporation (“GTSI”),
Technology Logistics, Inc., a Delaware corporation (“TLI”; separately and
collectively with GTSI, “Borrower”), GE Commercial Distribution Finance
Corporation (“GECDF”), as Administrative Agent, and GECDF and the other
Lenders.

 

Recitals:

 

A.                                    GTSI, Administrative Agent and Lenders are
party to that certain Credit Facilities Agreement dated as of October 20,
2003, as amended by that certain First Amendment to Credit Facilities Agreement
dated as of March 12, 2004, as further amended by that certain Second
Amendment to Credit Facilities Agreement dated as of July 29, 2004, and as
further amended by that certain Third Amendment to Credit Facilities Agreement
dated as of November 22, 2004 (the “Original Credit Agreement”).

 

B.                                    Administrative Agent, Lenders and Borrowers
have agreed to the provisions set forth herein on the terms and conditions
contained herein

 

Agreement

 

Therefore, in consideration
of the mutual agreements herein and other sufficient consideration, the receipt
of which is hereby acknowledged, GTSI, TLI, Administrative Agent and the
Lenders hereby agree as follows:

 

1.              Definitions.  All
references to the “Agreement” or the “Credit Agreement” in the Original Credit
Agreement and in this Agreement shall be deemed to be references to the
Original Credit Agreement as it may be amended (by this Agreement and others),
restated, extended, renewed, replaced, or otherwise modified from time to
time.  Capitalized terms used and not
otherwise defined herein have the meanings given them in the Original Credit
Agreement.

 

2.              Effectiveness of
Agreement.  This Agreement shall become effective as of the date first written
above, but only if this Agreement has been executed by each of GTSI, TLI,
Administrative Agent and the Lenders, and only if all of the documents listed
on Exhibit A to this Agreement have been delivered and, as applicable,
executed, sealed, attested, acknowledged, certified, or authenticated, each in
form and substance satisfactory to Administrative Agent and the Lenders, by
each of GTSI, TLI, and/or GTSI Financial Services, Inc. (“GTSIFS”), as
applicable.  Each document, note,
certificate or agreement listed on Exhibit A and signed by GTSI, TLI, or
GTSIFS, as applicable, is and shall be deemed (together with all prior
documents, notes, certificates and other agreements defined as Loan Documents
in the Original Credit Agreement) to be a “Loan Document.”

 

3.              New Lenders.

 

3.1.  In
connection with this Agreement, and simultaneously with its effectiveness and
certain fundings as set forth herein, Wachovia Bank, National Association, and
Manufacturers and Traders Trust

 

 

Company (each a “New Lender”) will become a
Lender for all purposes under the Original Credit Agreement and Loan Documents
together with the existing Lenders (the “Existing Lenders”).

 

3.2.  Upon
the full and complete execution of this Agreement, the Administrative Agent
shall arrange, and each Lender (including each New Lender and the Existing
Lenders) shall fully cooperate, in making or receiving, as directed by the
Administrative Agent, wire transfers and fund transfers reasonably necessary to
effectuate the pro-rata shares set forth on Exhibit 3.  Upon such transfer of funds, this Agreement
shall be effective and such effectiveness shall relate back to 8:00 a.m.
St. Louis time on the date of this Agreement.

 

3.3.  Each
New Lender agrees that, to the extent it has purchased and assumed, or be found
to have purchased and assumed, from Existing Lenders any interest in any Loan,
it has purchased and assumed such interest without recourse and without representation
or warranty except as expressly set forth in Section 3.4.  Such purchase and assumption shall include
that portion of the Existing Lenders’ obligations to fund unfunded Approvals
equal to the percentage of the Floorplan Loans purchased by such New Lender.

 

3.4.  Each
Existing Lender represents and warrants that it is the legal and beneficial
owner of its Loans and that such interest is free and clear of any adverse
claim.

 

3.5.  Each
New Lender (i) confirms, covenants and agrees that it has received a copy
of the Original Credit Agreement and all prior amendments (if any), the Loan
Documents, together with copies of the Financial Statements referred to therein
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Agreement and become a
Lender, and confirms and covenants that it has entered into this Agreement and
agreed to become a Lender based on its own credit analysis and decision and
without reliance upon any information provided by, or statement made by,
Administrative Agent or any other Lender; (ii) agrees that it will,
independently and without reliance upon the Administrative Agent, any Existing
Lender or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Original Credit Agreement; (iii) confirms
that it is an Eligible Assignee (assuming the Administrative Agent approves of
such New Lender as contemplated in the definition of “Eligible Assignee”); (iv) appoints
and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers and discretion under the Original Credit
Agreement as are delegated to the Administrative Agent by the terms thereof; (v) agrees
that it will perform in accordance with their terms all of the obligations that
by the terms of the Original Credit Agreement and the other Loan Documents are
required to be performed by it as a Lender; and (vi) agrees that it will
promptly provide to Administrative Agent any U.S. Internal Revenue Service or
other forms required under the Original Credit Agreement.

 

3.6.  Upon
the effectiveness of this Agreement and the funding by each New Lender of the
amounts directed to be funded by it by the Administrative Agent as set forth in
Section 3.2 hereof, such New Lender shall be a Lender for all purposes
under the Original Credit Agreement and the other Loan Documents.  From and after the effective date of this
Agreement, the Administrative Agent shall make all payments under the Original
Credit Agreement and the Notes consistent with the pro-rata shares of the
Lenders.

 

4.              Amendments to Credit
Agreement.  The Original Credit Agreement is hereby amended as follows:

 

4.1.                            Replacement
Exhibit 3.  Exhibit 3 of the Original Credit Agreement is hereby
deleted and replaced with a new Exhibit 3, attached hereto.

 

2

 

4.2.                            References
to Required Lenders; Minimum Exposure. 
Section 2.5 of the Original Credit Agreement is hereby deleted and replaced with
the following:

 

2.5.                            References
to Required Lenders; Minimum Exposure. 
Subject to the provisions of Section 7.8
with regards to a Defaulting Lender, the words “Required Lenders” means any one
or more Lenders whose shares of Lenders’ Exposure at the relevant time
aggregate at least 66.6667%; provided, however, while there is more than one
Lender, Required Lenders shall mean a minimum of two Lenders whose shares of
Lenders’ Exposure at such time aggregate at least such percentage.  GECDF, in its capacity as a Lender, shall
hold a pro-rata portion of the Aggregate Facilities at least equal to or
greater than the Aggregate Facility of each other Lender individually;
provided, however, that after an acceleration of the Loan Obligations or upon
the occurrence and during the continuance of an Event of Default, GECDF shall
be permitted to assign all or any portion of its Facilities and the foregoing
restriction shall not be applicable after any such assignment.

 

4.3.                            Floorplan
Loan Facility Generally.  The first sentence of Section 3.2.1 of the
Original Credit Agreement is deleted and replaced with the following:

 

“Each Lender may, subject to
the terms and conditions hereof, make available to Borrower such Lender’s
pro-rata share (as listed on Exhibit 3) of an “Aggregate Floorplan Loan
Facility” that is One Hundred Sixty-Five Million Dollars ($165,000,000) by
funding such Lender’s pro-rata share thereof as provided for herein.”

 

4.4.                            Floorplan
Loan Approvals.  The last sentence of Section 3.2.6 of the
Original Credit Agreements is deleted and replaced with the following:

 

“A request from a Vendor to
Administrative Agent to finance Borrower’s purchase of Inventory will be deemed
to be a request from Borrower for a Floorplan Loan Advance or an Interim
Floorplan Loan Advance, as the case may be.”

 

4.5.                            Prime
Increments and LIBOR Increments.  The penultimate sentence of Section 4.8 of
the Original Credit Agreements is deleted and replaced with the following:

 

“For the Floorplan Loan
Facility and Interim Floorplan Loan Facility, the Prime Increments and LIBOR
Increments set forth above are used only for determining that interest rate
payable by Administrative Agent to the Lenders pursuant to Section 4.5.”

 

4.6.                            Repayment
of Swingline Loan and Interim Floorplan Loan.  The last sentence of Section 7.4.1 of
the Original Credit Agreements is deleted and replaced with the following:

 

“Each such remittance by a
Lender shall be made in accordance with its pro-rata share of the Aggregate
Revolving Loan Facility or the Floorplan Loan Facility and shall be made
notwithstanding that (i) the amount of the aggregate of such remittances
by Lenders may not be in the minimum amount for Revolving Loan Advances
otherwise required hereunder, (ii) any conditions to Advances in Section 10
may not be then satisfied, (iii) an Event of Default has occurred and is
continuing, (iv) the aggregate amount of such remittances by Lenders would
result in the Aggregate Revolving Loan exceeding the Maximum Available Amount,
or (v) such remittances by Lenders may be made after the effective date of
termination of the Aggregate Revolving Loan Facility; provided, however, that
in no event shall any Lender be required to make any such remittance that

 

3

 

would result in (1) the
sum of (a) the Revolving Loan of such Lender, plus (b) such Lender’s
pro-rata share of the Letter of Credit Exposure exceeding such Lender’s Revolving
Loan Facility or (2) the Floorplan Loan of such Lender exceeding such
Lender’s Floorplan Loan Facility.”

 

4.7.                            All
Fundings Ratable.  Section 7.7.3 of the Original Credit Agreement is deleted
and replaced with the following:

 

“7.7.3              All Fundings Ratable.  All
fundings of Advances (other than Swingline Advances and Interim Floorplan Loan
Advances) shall be made by Lenders as provided herein in accordance with their
pro-rata shares of the respective Aggregate Facilities, as applicable.  A Lender shall not be obligated to fund
Revolving Loan Advances that would result in such Lender’s Revolving Loan plus
such Lender’s pro-rata share of the Letter of Credit Exposure exceeding its
Revolving Loan Facility, fund Floorplan Loan Advances that would result in its
Floorplan Loan exceeding its Floorplan Loan Facility, or make available any
more than its pro-rata share of any Advance.”

 

4.8.                            Minimum
Tangible Net Worth.  Section 15.2 of the Original Credit Agreement is deleted
and replaced with the following:

 

“15.2                 Minimum Tangible
Net Worth.  Borrower covenants that consolidated Tangible Net Worth on the last day
of each fiscal month shall be not less than Sixty Million Dollars
($60,000,000).”

 

5.              Representations and
Warranties of Borrower.  Each Borrower hereby represents and warrants
to Administrative Agent and the Lenders that (i) Borrowers’ execution of
this Agreement has been duly authorized by all requisite action of each
Borrower; (ii) no consents are necessary from any third parties for
Borrowers’ execution, delivery or performance of this Agreement, (iii) this
Agreement, the Original Credit Agreement, and each of the other Loan Documents,
constitute the legal, valid and binding obligations of each Borrower
enforceable against each such Borrower in accordance with their terms, except
to the extent that the enforceability thereof against Borrowers may be limited
by bankruptcy, insolvency or other laws affecting the enforceability of
creditors rights generally or by equity principles of general application, (iv) except
as disclosed on the supplemental disclosure schedule attached hereto as Exhibit B
and the disclosure schedule attached to the Original Credit Agreement, all
of the representations and warranties contained in Section 11 of the
Credit Agreement are true and correct with the same force and effect as if made
on and as of the date of this Agreement, and (v) after giving effect to
this Agreement, there is no Default or no Event of Default Exists.

 

6.              Reaffirmation.  Each
Borrower hereby represents, warrants, acknowledges and confirms that (i) the
Original Credit Agreement and the other Loan Documents remain in full force and
effect as amended by this Agreement, (ii) no Borrower has a defense to its
obligations under the Original Credit Agreement and the other Loan Documents, (iii) the
Security Interests of the Administrative Agent (held for the ratable benefit of
the Lenders) under the Security Documents secure all the Loan Obligations under
the Original Credit Agreement, continue in full force and effect, and have the
same priority as before this Agreement, and (iv) no Borrower has a claim
against Administrative Agent or any Lender arising from or in connection with
the Original Credit Agreement or the other Loan Documents and any such claim is
hereby irrevocably waived and released and discharged forever.

 

7.              Governing Law.  This
Agreement shall be governed by and construed under the laws of the State of
Missouri without giving effect to choice or conflicts of law principles
thereunder.

 

4

 

8.              Fees and Expenses.  Borrowers
shall promptly pay to Administrative Agent an amount equal to all reasonable
and documented third party fees, costs and expenses incurred by the
Administrative Agent in connection with the preparation, negotiation, execution
and delivery of this Fourth Amendment to Credit Facilities Agreement.

 

9.              Section Titles.  The section titles
in this Agreement are for convenience of reference only and shall not be
construed so as to modify any provisions of this Agreement.

 

10.       Counterparts; Facsimile
Transmissions.  This Agreement may be executed in one or more
counterparts and on separate counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument.  Signatures to this Agreement may be given by
facsimile or other electronic transmission, and such signatures shall be fully
binding on the party sending the same.

 

11.       Incorporation By Reference.  Administrative
Agent, Lenders and Borrowers hereby agree that all of the terms of the Loan
Documents are incorporated in and made a part of this Agreement by this
reference (except to the extent amended hereby).

 

12.       Notice—Oral Commitments Not
Enforceable.  The following notice is given pursuant to Section 432.045 of the
Missouri Revised Statutes; nothing contained in such notice shall be deemed to
limit or modify the terms of the Loan Documents:

 

ORAL
AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM
ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT
ARE NOT ENFORCEABLE.  TO PROTECT YOU
(BORROWER) AND US (CREDITOR) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY
AGREEMENTS WE REACH COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH
IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS
WE MAY LATER AGREE IN WRITING TO MODIFY IT.

 

13.       Statutory Notice-Insurance.  The
following notice is given pursuant to Section 427.120 of the Missouri
Revised Statutes; nothing contained in such notice shall be deemed to limit or
modify the terms of the Loan Documents:

 

UNLESS YOU
PROVIDE EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY YOUR AGREEMENT WITH US,
WE MAY PURCHASE INSURANCE AT YOUR EXPENSE TO PROTECT OUR INTERESTS IN YOUR
COLLATERAL.  THIS INSURANCE MAY, BUT NEED
NOT, PROTECT YOUR INTERESTS.  THE
COVERAGE THAT WE PURCHASE MAY NOT PAY ANY CLAIM THAT YOU MAKE OR ANY CLAIM
THAT IS MADE AGAINST YOU IN CONNECTION WITH THE COLLATERAL.  YOU MAY LATER CANCEL ANY INSURANCE
PURCHASED BY US, BUT ONLY AFTER PROVIDING EVIDENCE THAT YOU HAVE OBTAINED
INSURANCE AS REQUIRED BY OUR AGREEMENT. 
IF WE PURCHASE INSURANCE FOR THE COLLATERAL, YOU WILL BE RESPONSIBLE FOR
THE COSTS OF THAT INSURANCE, INCLUDING THE INSURANCE PREMIUM, INTEREST AND ANY
OTHER CHARGES WE MAY IMPOSE IN CONNECTION WITH THE PLACEMENT OF THE
INSURANCE, UNTIL THE EFFECTIVE DATE OF THE CANCELLATION OR EXPIRATION OF THE
INSURANCE.  THE COSTS OF THE INSURANCE MAY BE
ADDED TO YOUR TOTAL OUTSTANDING BALANCE

 

5

 

OR
OBLIGATION.  THE COSTS OF THE INSURANCE MAY BE
MORE THAN THE COST OF INSURANCE YOU MAY BE ABLE TO OBTAIN ON YOUR OWN.

 

IN
WITNESS WHEREOF, this Agreement has been duly executed as of the date first
above written.

 

 

	
  GTSI
  CORP., as a Borrower

  
	
   

  
	
  By:

  	
  /s/
  Thomas A. Mutryn

  	
   

  
	
  Name: Thomas A. Mutryn

  
	
  Title: Senior Vice
  President and Chief Financial Officer

  
	
   

  
	
   

  
	
  TECHNOLOGY
  LOGISTICS, INC., as a Borrower

  
	
   

  
	
  By:

  	
  /s/
  Todd Leto

  	
   

  
	
  Name: Todd Leto

  
	
  Title: Vice President of
  Operations

  
	
   

  
	
   

  
	
  GE
  COMMERCIAL DISTRIBUTION FINANCE CORPORATION,

  
	
  as
  Administrative Agent and a Lender

  
	
   

  
	
  By:

  	
  /s/
  David Mintert

  	
   

  
	
  Name: David Mintert

  
	
  Title: Vice President of
  Operations

  
	
   

  
	
   

  
	
  SUNTRUST
  BANK, as a Lender

  
	
   

  
	
  By:

  	
  /s/
  R. Mark Swaak

  	
   

  
	
  Name: R. Mark Swaak

  
	
  Title: Vice President

  
	
   

  
	
   

  
	
  WACHOVIA
  BANK, NATIONAL ASSOCIATION, as a Lender

  
	
   

  
	
  By:

  	
  /s/
  John Carpenter

  	
   

  
	
  Name: John Carpenter

  
	
  Title: Director

  
	
   

  
	
   

  
	
  MANUFACTURERS
  AND TRADERS TRUST COMPANY, as a Lender

  
	
   

  
	
  By:

  	
  /s/
  Louis J. Noppenberger

  	
   

  
	
  Name: Louis J.
  Noppenberger

  
	
  Title: Vice President

  
						

 

6

 

ACKNOWLEDGEMENT,
CONSENT AND REAFFIRMATION OF GUARANTY

 

The undersigned, GTSI
Financial Services, Inc., acknowledges and consents to all changes in the
Original Credit Agreement set forth in this Fourth Amendment to Credit
Facilities Agreement, by and among Administrative Agent, Borrower and the
Lenders (“Fourth Amendment”) and agrees that all such changes are in the best
interests of Borrowers and the undersigned. 
In consideration of financial accommodations granted and which may
hereafter be granted to Borrowers by Administrative Agent and the Lenders, in
consideration of Administrative Agent’s and the Lenders’ reliance on that
certain Unlimited Guaranty, dated as of November 22, 2004, given by the
undersigned, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the undersigned, GTSI Financial
Services, Inc., irrevocably and unconditionally reaffirms pursuant to the
terms of the Unlimited Guaranty its continuing guarantee of the payment and
performance of all current and future Guarantied Obligations, including,
without limitation, all Loan Obligations. 
The undersigned, GTSI Financial Services, Inc., further agrees that
the validity and enforceability of the Unlimited Guaranty is not and shall not
be affected in any way or manner by any of the changes in the financing set
forth in the Fourth Amendment, that the Unlimited Guaranty is in full force and
effect, and the undersigned, GTSI Financial Services, Inc., has no
defenses of any kind or nature with respect to his obligations under the
Unlimited Guaranty.

 

The undersigned, GTSI Financial Services, Inc.,
has reviewed the attached Fourth Amendment and all other documents and
financial statements the undersigned deems necessary relating to the Borrowers
and the Guarantied Obligations, including, without limitation, the Loan
Obligations.

 

	
   

  	
   

  	
  GTSI
  Financial Services, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Jack Helmly

  	
   

  
	
   

  	
   

  	
  Name: Jack Helmly

  
	
   

  	
   

  	
  Title: President

  

 

7

 

Exhibit A

Documents and Requirements

 

1.               Fourth Amendment to Credit
Facilities Agreement.

 

2.               Third Amended and Restated
Revolving Note in the amount of $49,090,909.23 to GE Commercial Distribution Finance
Corporation.

 

3.               Second Amended and Restated
Revolving Note in the amount of $13,636,363.59 to SunTrust Bank.

 

4.               Revolving Note in the amount
of $16,363,636.29 to Wachovia Bank, National Association.

 

5.               Revolving Note in the amount
of $10,909,090.89 to Manufacturers and Traders Trust Company.

 

6.               Master Assignment and
Acceptance Agreement among GE Commercial Distribution Finance Corporation,
SunTrust Bank, Wachovia Bank, National Association, and Manufacturers and
Traders Trust Company.

 

7.               Ratification of Unlimited
Guaranty of Loan Obligations executed by GTSI Financial Services, Inc.

 

8.               Secretary’s Certificate of
GTSI (certifying no modification to Articles of Organization or By-laws since
the Effective Date, no modification to the incumbency certificate last
delivered and authorizing resolutions). 
Such resolutions shall specifically authorize the execution and delivery
of the Fourth Amendment to Credit Facilities Agreement, and the execution of
the Amended and Restated Revolving Notes and the Revolving Notes listed herein.

 

9.               Good Standing Certificate of
GTSI from the Secretary of State of Delaware.

 

10.         Secretary’s Certificate of
TLI (certifying no modification to Articles of Organization or By-laws since
the Effective Date, no modification to the incumbency certificate last
delivered and authorizing resolutions). 
Such resolutions shall specifically authorize the execution and delivery
of the Fourth Amendment to Credit Facilities Agreement, and the execution of
the Amended and Restated Revolving Notes and the Revolving Notes listed herein.

 

11.         Good Standing Certificate of
TLI from the Secretary of State of Delaware.

 

 

Exhibit 3

LENDERS’ FACILITIES AND PRO-RATA SHARES

 

	
  LENDER

  	
   

  	
  TOTALS(1)

  	
   

  	
  REVOLVING

  LOAN

  FACILITY

  	
   

  	
  FLOORPLAN

  LOAN

  FACILITY

  	
   

  	
  PRO-RATA

  SHARES

  	
   

  
	
  GE
  Commercial Distribution Finance

  	
   

  	
  $

  	
  90,000,000.00

  	
   

  	
  $

  	
  49,090,909.23

  	
   

  	
  $

  	
  90,000,000.00

  	
   

  	
  54.54

  	
  %

  
	
  SunTrust
  Bank

  	
   

  	
  $

  	
  25,000,000.00

  	
   

  	
  $

  	
  13,636,363.59

  	
   

  	
  $

  	
  25,000,000.00

  	
   

  	
  15.15

  	
  %

  
	
  Wachovia
  Bank, National Association

  	
   

  	
  $

  	
  30,000,000.00

  	
   

  	
  $

  	
  16,363,636.29

  	
   

  	
  $

  	
  30,000,000.00

  	
   

  	
  18.18

  	
  %

  
	
  Manufacturers
  and Traders Trust Company

  	
   

  	
  $

  	
  20,000,000.00

  	
   

  	
  $

  	
  10,909,090.89

  	
   

  	
  $

  	
  20,000,000.00

  	
   

  	
  12.12

  	
  %

  
	
  AGGREGATES

  	
   

  	
  $

  	
  165,000,000.00

  	
   

  	
  $

  	
  90,000,000.00

  	
   

  	
  $

  	
  165,000,000.00

  	
   

  	
  100.00

  	
  %

  

 

(1) 
Subject to the Total Aggregate Credit Facility Limit of $165,000,000 - which
can be composed in any combination of Aggregate Revolving Loans (subject to the
$90,000,000 Aggregate Revolving Loan Facility) and Aggregate Floorplan Loans
(subject to the $165,000,000 Aggregate Floorplan Loan Facility).

 

9Exhibit 10(a)

 

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

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I:

  	
  DEFINITIONS

  	
   

  
	
  1.1

  	
  Certain Defined Terms

  	
   

  
	
  1.2

  	
  References

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II:

  	
  REVOLVING LOAN AND TERM LOAN FACILITIES

  	
   

  
	
  2.1

  	
  Revolving Loans.

  	
   

  
	
  2.2

  	
  Rate Options for all Advances; Maximum
  Interest Periods

  	
   

  
	
  2.3

  	
  Optional Payments; Mandatory
  Prepayments/Repayments.

  	
   

  
	
  2.4

  	
  Reduction of Commitments

  	
   

  
	
  2.5

  	
  Method of Borrowing

  	
   

  
	
  2.6

  	
  Method of Selecting Types and Interest
  Periods for Advances

  	
   

  
	
  2.7

  	
  Minimum Amount of Each Advance

  	
   

  
	
  2.8

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

  	
   

  
	
  2.9

  	
  Default
  Rate

  	
   

  
	
  2.10

  	
  Method of Payment

  	
   

  
	
  2.11

  	
  Evidence of Debt.

  	
   

  
	
  2.12

  	
  Telephonic Notices

  	
   

  
	
  2.13

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

  	
   

  
	
  2.14

  	
  Lending Installation

  	
   

  
	
  2.15

  	
  Termination Date

  	
   

  
	
  2.16

  	
  Judgment Currency

  	
   

  
	
  2.17

  	
  Security of Obligations

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III:

  	
  THE LETTER OF CREDIT FACILITY

  	
   

  
	
  3.1

  	
  Obligation to Issue Letters of Credit

  	
   

  
	
  3.2

  	
  Transitional Letters of Credit

  	
   

  
	
  3.3

  	
  Types and Amounts

  	
   

  
	
  3.4

  	
  Conditions

  	
   

  
	
  3.5

  	
  Procedure for Issuance of Letters of
  Credit.

  	
   

  
	
  3.6

  	
  Reimbursement Obligation

  	
   

  
	
  3.7

  	
  Letter of Credit Fees

  	
   

  
	
  3.8

  	
  Indemnification; Exoneration.

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV:

  	
  CHANGE IN CIRCUMSTANCES

  	
   

  
	
  4.1

  	
  Yield Protection

  	
   

  
	
  4.2

  	
  Changes in Capital Adequacy Regulations

  	
   

  
	
  4.3

  	
  Availability of Types of Advances

  	
   

  
	
  4.4

  	
  Funding Indemnification

  	
   

  
	
  4.5

  	
  Lender Statements; Survival of Indemnity

  	
   

  

 

ii

 

	
  ARTICLE V:

  	
  CONDITIONS
  PRECEDENT

  	
   

  
	
  5.1

  	
  Initial Advances and Letters of Credit

  	
   

  
	
  5.2

  	
  Each Advance and Letter of Credit

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI:

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  
	
  6.1

  	
  Organization; Corporate Powers

  	
   

  
	
  6.2

  	
  Authority; Enforceability.

  	
   

  
	
  6.3

  	
  No Conflict; Governmental Consents

  	
   

  
	
  6.4

  	
  Financial Statements

  	
   

  
	
  6.5

  	
  No Material Adverse Change

  	
   

  
	
  6.6

  	
  Taxes

  	
   

  
	
  6.7

  	
  Litigation; Loss Contingencies and
  Violations

  	
   

  
	
  6.8

  	
  Subsidiaries

  	
   

  
	
  6.9

  	
  ERISA

  	
   

  
	
  6.10

  	
  Accuracy of Information

  	
   

  
	
  6.11

  	
  Securities Activities

  	
   

  
	
  6.12

  	
  Material Agreements.

  	
   

  
	
  6.13

  	
  Compliance with Laws

  	
   

  
	
  6.14

  	
  Assets and Properties

  	
   

  
	
  6.15

  	
  Statutory Indebtedness Restrictions

  	
   

  
	
  6.16

  	
  Labor Matters

  	
   

  
	
  6.17

  	
  Environmental Matters.

  	
   

  
	
  6.18

  	
  Insurance

  	
   

  
	
  6.19

  	
  Use of Proceeds

  	
   

  
	
  6.20

  	
  Solvency

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII:

  	
  COVENANTS

  	
   

  
	
  7.1

  	
  Reporting

  	
   

  
	
  7.2

  	
  Affirmative Covenants.

  	
   

  
	
  7.3

  	
  Negative Covenants.

  	
   

  
	
  7.4

  	
  Financial Covenants

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII:

  	
  DEFAULTS

  	
   

  
	
  8.1

  	
  Defaults

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX:

  	
  ACCELERATION, DEFAULTING LENDERS; WAIVERS,
  AMENDMENTS AND REMEDIES

  	
   

  
	
  9.1

  	
  Termination of Revolving Loan Commitments;
  Acceleration

  	
   

  
	
  9.2

  	
  Preservation of Rights

  	
   

  
	
  9.3

  	
  Amendments

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICE X:

  	
  GENERAL PROVISIONS

  	
   

  
	
  10.1

  	
  Survival
  of Representations

  	
   

  
	
  10.2

  	
  Governmental
  Regulation

  	
   

  
	
  10.3

  	
  Headings

  	
   

  
	
  10.4

  	
  Entire Agreement

  	
   

  

 

iii

 

	
  10.5

  	
  Several Obligations; Benefits of this
  Agreement

  	
   

  
	
  10.6

  	
  Expenses; Indemnification.

  	
   

  
	
  10.7

  	
  Numbers of Documents

  	
   

  
	
  10.8

  	
  Confidentiality

  	
   

  
	
  10.9

  	
  Severability of Provisions

  	
   

  
	
  10.10

  	
  Nonliability of Lenders

  	
   

  
	
  10.11

  	
  GOVERNING LAW

  	
   

  
	
  10.12

  	
  CONSENT TO JURISDICTION; SERVICE OF PROCESS: JURY TRIAL.

  	
   

  
	
  10.13

  	
  Subordination of Intercompany Indebtedness

  	
   

  
	
  10.14

  	
  Assignability

  	
   

  
	
  10.15

  	
  Customer Identification-U.S. Patriot Act
  Notice

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI:

  	
  SETOFF, RATABLE PAYMENTS

  	
   

  
	
  11.1

  	
  Setoff

  	
   

  
	
  11.2

  	
  Application of Payments

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII:

  	
  NOTICES

  	
   

  
	
  12.1

  	
  Giving Notice

  	
   

  
	
  12.2

  	
  Change of
  Address

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII:

  	
  COUNTERPARTS

  	
   

  

 

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

  	
   

  	
  —

  	
   

  	
  Forms of
  Compliance Certificate (Pre and Post Collateral

  
	
   F-2

  	
   

  	
   

  	
   

  	
  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, P-3, P-4

  	
   

  	
  —

  	
   

  	
  Assignment
  and Assumption Agreement (Subsidiary Stock Pledge Agreement)

  

 

v

 

	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  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

  	
   

  	
  —

  	
   

  	
  Subsidiary
  Guaranty

  
	
   Z-1

  	
   

  	
   

  	
   

  	
  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.

 

 

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.

 

“Alabama Leasehold
Mortgage” shall mean the Leasehold Mortgage and Security Agreement, dated
as of June 30, 2004 between Energy Absorption Systems LLC and the

 

2

 

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.

 

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

 

3

 

“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.

 

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

 

4

 

“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:

 

(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

 

5

 

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.

 

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

 

6

 

“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.

 

“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

 

7

 

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 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;

 

8

 

(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 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

 

9

 

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;

 

(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,

 

10

 

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

 

(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.

 

11

 

“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

 

(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,

 

12

 

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 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.

 

13

 

“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.

 

“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.

 

14

 

“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
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.

 

15

 

“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 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

 

16

 

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.

 

“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.

 

17

 

“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 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.

 

18

 

“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 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.

 

19

 

“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.

 

“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.

 

20

 

“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 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,

 

21

 

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.

 

“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

 

22

 

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
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.

 

23

 

“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.

 

“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.)

 

24

 

“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.

 

“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,

 

25

 

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 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)

 

26

 

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.

 

(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.

 

27

 

(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).

 

(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.

 

28

 

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 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

 

29

 

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 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

 

30

 

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.

 

(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.

 

31

 

(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 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: 

 

32

 

	
  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.

 

33

 

(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 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

 

34

 

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 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

 

35

 

of such Tax; provided,
however, that notwithstanding the foregoing, Lender shall not be
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

 

36

 

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 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

 

37

 

(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 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.

 

38

 

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 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

 

39

 

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 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

 

40

 

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 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

 

41

 

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 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

 

42

 

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
(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

 

43

 

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;

 

(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.

 

44

 

(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
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.

 

45

 

(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.

 

(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

 

46

 

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.

 

(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

 

47

 

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.

 

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.

 

48

 

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 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

 

49

 

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.

 

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

 

50

 

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;

 

(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.

 

51

 

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:

 

(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

 

52

 

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
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

 

53

 

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).

 

(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,

 

54

 

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.

 

(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

 

55

 

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 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.

 

56

 

(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 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.

 

57

 

(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
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.

 

58

 

(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 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 

 

59

 

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.

 

(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;

 

60

 

(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);

 

(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;

 

61

 

(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 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.

 

62

 

(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;

 

(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).

 

63

 

(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).

 

(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

 

64

 

(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, 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.

 

65

 

(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 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

 

66

 

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.

 

(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.

 

67

 

(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.

 

68

 

(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.

 

69

 

(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

 

70

 

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, 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

 

71

 

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

 

72

 

(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.

 

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

 

73

 

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.

 

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 

 

74

 

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

 

75

 

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.

 

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

 

76

 

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.

 

77

 

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

  
						

 

78

 

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

  	
   

  

 

1

 

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

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

2

 

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 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

 

1

 

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) 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”).

 

2

 

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.”

 

(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,

 

3

 

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.

 

4

 

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:

  	
   

  	
   

  	
   

  

 

5

 

	
  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

  
				

 

6

 

	
  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

  
				

 

7

 

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.

 

D.                                    LaSalle and
Borrower have agreed to amend and restate the terms of the Existing Credit
Agreement, as amended by that Amended and

 

1

 

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 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”).

 

2

 

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.

 

(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

 

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.

 

4

 

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

  	
   

  	
   

  

 

5

 

	
  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

  
				

 

6

 

	
  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

  
				

 

7

 

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.

 

D.                                    LaSalle and
Borrower have agreed to amend and restate the terms of the Existing Credit
Agreement, as amended by that Amended and

 

1

 

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 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”).

 

2

 

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.

 

(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

 

3

 

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.

 

4

 

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

  	
   

  	
   

  

 

5

 

	
  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

  
				

 

6

 

	
  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

  
				

 

7

 

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
Agreement, as a Subsidiary Guarantor thereunder, to evidence its becoming a
Subsidiary Guarantor, as defined in the Loan Agreement, under that certain
Subsidiary

 

1

 

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”);

 

(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,

 

2

 

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;

 

(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

 

3

 

(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.

 

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 

 

4

 

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.

 

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,

 

5

 

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 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,

 

6

 

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.

 

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

 

7

 

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 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

 

8

 

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, 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

 

9

 

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.]

 

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

 

10

 

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 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.

 

11

 

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 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

 

12

 

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 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

 

13

 

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 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

 

14

 

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 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

 

15

 

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 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:

 

16

 

(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
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

 

17

 

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 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.

 

18

 

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 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

 

19

 

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 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

 

20

 

manner
relating to or arising out of this Mortgage or any other Loan 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.

 

(c)           The untruth of any warranty or
representation made herein.

 

21

 

(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 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

 

22

 

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 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,

 

23

 

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.

 

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.

 

24

 

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 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.

 

25

 

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 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.

 

26

 

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:

 

	
  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.

 

27

 

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 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

 

28

 

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 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.

 

29

 

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:

  
	
   

  	
   

  
	
  ATTEST:

  	
  LASALLE BANK NATIONAL

  ASSOCIATION

  
	
   

  	
   

  
	
   

  	
  By: 

  	
    /s/Stephanie Kline

  	
   

  
	
  By 

  	
    /s/Edward F. Dobbins

  	
   

  	
  Name: 

  	
  Stephanie Kline

  	
   

  
	
  Its 

  	
  Attorney

  	
   

  	
  Title: 

  	
  Vice President

  	
   

  
								

 

30

 

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

  	
   

  
					

 

31

 

	
  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

  	
   

  
					

 

32

 

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.

 

33

 

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.

 

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

 

1

 

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”), 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,

 

2

 

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.”

 

(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

 

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.

 

4

 

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

  	
   

  

 

5

 

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) 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

 

1

 

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 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”).

 

2

 

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 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

 

3

 

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.

 

4

 

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

  	
   

  

 

5

 

	
  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

  	
   

  
					

 

6

 

	
  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

  	
   

  
					

 

7

 

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.

 

D.                                    LaSalle and
Borrower have agreed to amend and restate the terms of the Existing Credit
Agreement, as amended by that Amended and 

 

1

 

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 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”).

 

2

 

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.

 

(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 

 

3

 

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.

 

4

 

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 

  	
   

  	
   

  

 

5

 

	
  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

  	
   

  
						

 

6

 

	
  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

  	
   

  
					

 

7

 

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 Loans and to assign to
LaSalle their rights and obligations under the Existing Credit Agreement.

 

1

 

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 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 

 

2

 

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.

 

(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 

 

3

 

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.

 

4

 

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 

  	
   

  	
   

  

 

5

 

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) 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.

 

1

 

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 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 

 

2

 

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 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

 

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.

 

4

 

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 

  	
   

  	
   

  

 

5

 

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 Loans and to assign to
LaSalle their rights and obligations under the Existing Credit Agreement.

 

1

 

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 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 

 

2

 

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 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

 

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.

 

4

 

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 

  	
   

  	
   

  

 

5

 

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 Loans and to assign to
LaSalle their rights and obligations under the Existing Credit Agreement.

 

1

 

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 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”).

 

2

 

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 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 

 

3

 

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.

 

4

 

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 

  	
   

  	
   

  

 

5

 

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

  

 

6

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