Document:

Exhibit
10.2

 

THIS
SUBORDINATED PROMISSORY NOTE AND ANY AND ALL PAYMENTS HEREUNDER ARE
SUBORDINATED PURSUANT TO THE TERMS OF THAT CERTAIN SUBORDINATION AGREEMENT,
DATED AS OF MAY 16, 2003, BETWEEN THE NORTHERN TRUST COMPANY, AS AGENT FOR
CERTAIN LENDERS, U.S. TRAFFIC CORPORATION AND MYERS/NUART ELECTRICAL PRODUCTS,
INC. (THE “SUBORDINATION AGREEMENT”). 
PAYMENT OF THIS SUBORDINATED PROMISSORY NOTE IS SUBORDINATED TO PAYMENT
OF THE SENIOR DEBT, AS DEFINED IN THE SUBORDINATION AGREEMENT, INCLUDING,
WITHOUT LIMITATION, ALL INDEBTEDNESS NOW OR HEREAFTER OWING BY THE COMPANY TO
THE NORTHERN TRUST COMPANY, AS AGENT (THE “AGENT”) FOR THE BENEFIT OF THE
LENDERS AS PARTIES TO THE CREDIT AGREEMENT, DATED MAY 16, 2003 AMONG QUIXOTE
CORPORATION, THE AGENT AND THE LENDERS PARTY THERETO.

 

GREEN LIGHT ACQUISITION COMPANY

SUBORDINATED PROMISSORY NOTE

 

	
  $5,000,000

  	
   

  	
  Chicago, Illinois

  
	
   

  	
   

  	
  May 16, 2003

  

 

GREEN LIGHT ACQUISITION COMPANY, a Delaware
corporation (the “Company”),
whose principal office is located at One East Wacker Drive, Chicago, Illinois,
60601 for value received hereby promises to pay to U.S. Traffic Corporation and
Myers/Nuart Electrical Products, Inc., whose principal office is located at
9603 John Street, Santa Fe Springs, California 90670 or its registered assigns
(together “Holder”),
the sum of Five Million Dollars ($5,000,000). 
This Note is issued pursuant to the terms of that certain Asset Purchase
Agreement between Holder, as seller, and the Company, as Purchaser, of even
date herewith (the “Asset Purchase Agreement”).  The following is a statement of the rights
of the Holder of this Note and the conditions to which this Note is subject,
and to which the Holder hereof, by the acceptance of this Note, agrees.

 

1.             Definitions.  As used in this Note, the following terms,
unless the context otherwise requires, have the following meanings:

 

“Agent” means The
Northern Trust Company, acting as agent for the Banks.

 

“Banks” means The
Northern Trust Company, LaSalle National Bank Association, Harris Trust and
Savings Bank and National City Banking Michigan/Illinois.

 

“Eurodollar Based Rate”
means the 6-month Eurodollar Rate quoted by the Agent for amounts equal to the
principal of the Note on the business day immediately preceding the date of
this Note.

 

 

“Subordination Agreement” means
that Subordination Agreement dated as of May 16, 2003 by and between the Holder
and Agent.

 

2.             Principal and
Interest.  Subject to Paragraph 5,
the principal amount of this Note shall be paid in full on
April 30, 2008.  Commencing on
October 31, 2003, and on each October 31 and April 30 thereafter until all
outstanding principal and interest on this Note shall have been paid in full,
the Company shall pay interest at the Applicable Rate per annum on the
outstanding principal of this Note.  For
purposes of this Note, the “Applicable Rate” means, until November 15,
2003, the Eurodollar Based Rate plus one percent (1%) per annum, and from and
after November 16, 2003, means five and one-quarter percent (51⁄4%) per annum;
provided that if the principal amount of this Note is not paid in full when
such amount becomes due and payable, interest at the rate of ten and one
quarter percent (10 1⁄4%) shall continue to accrue on the balance of any unpaid
principal until such balance is paid. 
Payment for all amounts due hereunder shall be made by mail to the
principal office of the Holder.  If the
due date of any payment falls on a Saturday, Sunday or any banking holiday,
then such payment shall be made on the next business day.

 

3.             Events of
Default.  If any of the events
specified in this Section 3 shall occur (herein individually referred to as an “Event of Default”),
the Holder of the Note may, so long as such condition exists, declare the
entire principal and unpaid accrued interest hereon immediately due and
payable, by notice in writing to the Company:

 

(i)            Default in the
payment of the principal and unpaid accrued interest of this Note when due and
payable if such default is not cured by the Company within ten (10) business
days after the Holder has given the Company written notice of such default; or

 

(ii)           Any breach by the
Company of any material representation, warranty, or covenant in this Note or
the Asset Purchase Agreement; provided, that, in the event of any such breach,
to the extent such breach is susceptible to cure, such breach shall not have
been cured by the Company within 30 days after written notice to the Company of
such breach; provided, further, that this subparagraph (ii) shall not apply to
a monetary default under this Note which is subject to subparagraph (i); or

 

(iii)          The institution by
the Company of proceedings to be adjudicated as bankrupt or insolvent, or the
consent by it to institution of bankruptcy or insolvency proceedings against it
or the filing by it of a petition or answer or consent seeking reorganization
or release under the federal Bankruptcy Code, or any other similar and
applicable federal or state law, or the consent by it to the filing of any such
petition or the appointment of a receiver, liquidator, assignee, trustee or
other similar official of the Company, or of any substantial part of its
property, or the making by it of an assignment for the benefit of creditors, or
the taking of corporate action by the Company in furtherance of any such
action; or

 

(iv)          If, within sixty
(60) days after the commencement of an action against the Company (and service
of process in connection therewith on the Company) seeking any bankruptcy,
insolvency, reorganization, liquidation,

 

2

 

dissolution or similar relief under any present or
future statute, law or regulation, such action shall not have been resolved in
favor of the Company or all orders or proceedings thereunder affecting the
operations or the business of the Company stayed, or if the stay of any such
order or proceeding shall thereafter be set aside, or if, within sixty (60)
days after the appointment without the consent or acquiescence of the Company
of any trustee, receiver or liquidator of the Company or of all or any
substantial part of the properties of the Company, such appointment shall not
have been vacated.

 

4.             Subordination.  The rights of the Holder or Holders of this
Note, including without limitation, the rights to receive payment of the whole
or any part of the principal hereof or the interest hereon, are subordinated as
set forth in the Subordination Agreement.

 

5.             Prepayment.  If prior to the first anniversary
of the date hereof Quixote Corporation sells its common stock in a private
placement (other than as required by the Asset Purchase Agreement) or in a
public offering of common stock that results in net cash proceeds after all
expenses to the Quixote Corporation of at least $6,250,000, then the Company
agrees to make a principal payment equal to one-half the outstanding balance on
the Note within sixty (60) days of the date Quixote Corporation receives such
cash proceeds.

 

6.             Assignment.  Subject to the restrictions on transfer
described in Section 8 below, the rights and obligations of the Company and the
Holder of this Note shall be binding upon and benefit the successors, assigns,
heirs, administrators and transferees of the parties.

 

7.             Waiver and
Amendment.  Any provision of this
Note may be amended, waived or modified upon the written consent of the Company
and the Holder.

 

8.             Transfer of This
Note.  With respect to any offer,
sale or other disposition of this Note, the Holder will give written notice to
the Company prior thereto, describing briefly the manner thereof, together with
a written opinion of such Holder’s counsel, to the effect that such offer, sale
or other distribution may be effected without registration or qualification
under any federal or state securities law then in effect.  Promptly upon receiving such written notice
and reasonably satisfactory opinion, if so requested, the Company, as promptly
as practicable, shall notify such Holder that such Holder may sell or otherwise
dispose of this Note, all in accordance with the terms of the notice delivered
to the Company.  If a determination has
been made pursuant to this Section 8 that the opinion of counsel for the Holder
is not reasonably satisfactory to the Company, the Company shall so notify the
Holder promptly after such determination has been made.  Each Note transferred after satisfaction of
this Section 8 shall bear a legend as to the applicable restrictions on
transferability in order to ensure compliance with state or federal securities
law, unless in the opinion of counsel for the Company such legend is not
required.

 

9.             Notices.  All notices, requests, payments,
instructions, or other documents to be given hereunder shall be in writing or
by written telecommunication, and shall be deemed to have been duly given if
(i) delivered personally (effective upon delivery), 

 

3

 

(ii) mailed by registered or certified mail, return receipt requested,
postage prepaid (effective five business days after dispatch), (iii) sent by a
reputable, established courier service that guarantees next business day
delivery (effective the next business day), or (iv) sent by facsimile or
electronic mail, followed within 24 hours by confirmation by one of the
foregoing methods (effective upon the first business day after receipt of the
facsimile or electronic mail in complete, readable form).  Notices to each party shall be addressed as
set forth below (or to such other address as the recipient party may have
furnished to the sending party for the purpose pursuant to this Paragraph 9).

 

If to Company:

 

Green Light Acquisition Company

One East Wacker Drive

Chicago, Illinois  60601

Facsimile No.: (312) 467-0197

Attention:  Leslie J. Jezuit

 

With a copy to:

 

Holland & Knight LLC

131 S. Dearborn Street, 30th Floor

Chicago, Illinois 60603

Facsimile No.: (312) 578-6666

Attention:  Anne Hamblin Schiave

 

If to Holder:

 

U. S. Traffic Corporation and

Myers Power Products, Inc.

2000 Highland Avenue

Bethlehem, Pennsylvania  18020

Facsimile No.: (610) 868-8686

Attention:  Walter Rogers

 

With a copy to:

 

Altheimer & Gray

Suite 4000

10 S. Wacker Dr.

Chicago, Illinois 600606

Facsimile No.: (312) 715-4987

Attention: David W. Schoenberg

 

or at
such other address as the party to be served with notice may have furnished in
writing to the party seeking or desiring to serve notice as a place for the
service of notice.

 

4

 

10.           Waivers.  The Company waives demand, presentment,
notice of dishonor, protest and all other notices and demands in connection
with the enforcement of the Holder’s rights hereunder.

 

11.           Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois, excluding that
body of law relating to conflict of laws. 
Any legal action, suit or proceeding arising out of or relating to this
Note or the transactions contemplated hereby shall be instituted exclusively in
the courts of the State of Illinois, located in the City of Chicago or,
provided subject matter jurisdiction exists, in the United States Federal Court
for the Northern District of Illinois, located in Chicago, Illinois, and Holder
and Company each agree not to assert as a defense in any such action, suit or
proceeding, any claim that it is not subject personally to the jurisdiction of
such courts, that its property is exempt or immune from attachment or
execution, that the action, suit or proceeding is brought in an inconvenient
forum, that the venue of the action, suit or proceeding is improper or that
this Agreement or the subject matter hereof may not be enforced in or by such
court.  Each party further irrevocably
submits to the exclusive jurisdiction of such courts in any such action, suit
or proceeding.

 

12.           Heading;
References.  All headings used
herein are used for convenience only and shall not be used to construe or
interpret this Note.  Except where
otherwise indicated, all references herein to Sections refer to Sections
hereof.

 

[Signature page to follow]

 

5

 

IN WITNESS WHEREOF, the Company has caused this Note
to be issued on the date set forth above.

 

	
   

  	
  GREEN LIGHT ACQUISITION COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Leslie J.
  Jezuit

  	
   

  
	
   

  	
   

  
	
   

  	
  Its

  	
  President

  	
   

  

 

6Exhibit

10.3

 

STOCKHOLDER

GUARANTY

 

THIS STOCKHOLDER GUARANTY (“Guaranty”) is made May 16, 2003, by Basil K. Vasiliou

(“Guarantor”), to and

for the benefit of Green Light Acquisition Company, a Delaware corporation (“Buyer”).

 

RECITALS

 

A.                                   Guarantor is a beneficiary of a Stockholder

of U.S. Traffic Corporation, a Delaware corporation, which with its wholly

owned subsidiary, Myers/Nuart Electrical Products, Inc., a Delaware

corporation  (together “Seller”) and Buyer

have entered into that certain Asset Purchase Agreement of even date herewith

(the “Asset Purchase Agreement”).

 

B.                                     Pursuant to the Asset Purchase Agreement,

Buyer has purchased certain assets of Seller relating to the business of

manufacturing, selling and servicing traffic control equipment, overhead and

portable traffic display signage, electronic display and message centers,

lighted signage, transit fixtures, power supply sources, electronic components,

and tunnel lighting.

 

C.                                     In the Asset Purchase Agreement, Seller has

agreed to certain payment, indemnification and reimbursement obligations in

favor of Buyer and  Seller has provided

to Buyer a series of representations and warranties and has made various other

agreements and covenants to induce Buyer to complete the transactions

contemplated by the Asset Purchase Agreement.

 

D.                                    In the Asset Purchase Agreement, Seller has

covenanted to secure its payment, indemnification and reimbursement obligations

to Buyer under the Asset Purchase Agreement by providing this Guaranty of

Guarantor, with respect to such obligations.

 

E.                                      Guarantor will derive benefit under the

Asset Purchase Agreement and Guarantor is willing to guarantee the obligations

of Seller under the Asset Purchase Agreement and those other agreements,

delivered by Seller to Buyer in accordance with the Asset Purchase

Agreement  (all such agreements,

including the Asset Purchase Agreement, being referred to hereinafter as the “Transaction Agreements”).

 

F.                                      The execution and delivery of this Guaranty

by Guarantor is required in connection with the Closing (as defined in the

Asset Purchase Agreement).

 

 

AGREEMENTS

 

NOW, THEREFORE, Guarantor, in consideration of the matters described in

the foregoing Recitals, which Recitals are incorporated herein and made a part

hereof, and for other good and valuable consideration, the receipt and

sufficiency of which are acknowledged, hereby covenants and agrees for the

benefit of Buyer and its affiliates, successors and assigns as follows:

 

1.                                       Guarantor absolutely, unconditionally, and

irrevocably guarantees to Buyer:

 

(a)                                  the prompt and timely

performance by Seller of each and all of its covenants to Buyer arising under

or created by the terms of the Asset Purchase Agreement, including, without

limitation, Seller’s timely payment and/or discharge of the Excluded

Liabilities (as defined in the Asset Purchase Agreement) and Seller’s timely

performance of its covenants to Buyer under each of the other Transaction

Agreements; and

 

(b)                                 the timely

satisfaction of Seller’s obligations under the indemnification provisions of

the Asset Purchase Agreement;

 

in all cases subject to the terms of the Asset

Purchase Agreement  (collectively, the “Obligations”);

provided however, Guarantor’s obligation to pay Buyer shall under no

circumstances exceed fifteen percent (15%) of the Obligations.  This Guaranty, and the covenants and waivers

contained herein, will remain in effect until all Obligations have been

satisfied.

 

2.                                       In the event of any default by Seller in

performance of the Obligations, as aforesaid, Guarantor agrees, on demand by

Buyer in the manner provided below in Section 3, to perform all the Obligations

as are then or thereafter to be performed under the terms of the Transaction

Agreements.  The parties agree that (a) Guarantor’s

obligations under this Guaranty shall be subject to the limitations, exclusions

and exculpations of liability set forth in the Transaction Agreements, (b)

except as provided Section 6, below, Guarantor may assert any and all defenses,

set-offs, or counterclaims of any kind available to Seller so as to deny

payment related to this Guaranty including, without limitation, any such rights

acquired by Guarantor through subrogation, assignment, or otherwise and (c) the

obligations of Guarantor hereunder are dependent upon Buyer’s performance of

its obligations under the Transaction Agreements.

 

3.                                       Buyer shall make its demand for payment

hereunder by delivering to Guarantor a written notice which: (i) states that it

is a demand required under this Guaranty for payment of one or more of the Obligations,

(ii) sets forth the amount and the basis for such demand, and (iii) is signed

by an authorized officer of Buyer. 

Subject to the assertion of any rights it has as referenced in Section

2, Guarantor shall make payment to Buyer of the amount specified in the written

demand referenced in the preceding sentence

 

2

 

in immediately available funds not later than thirty (30) days after

the delivery of that written demand.

 

4.                                       Guarantor does hereby (a) waive notice

of acceptance of this Guaranty by Seller; (b) waive any notices or demands

that are not required by this Guaranty or the Transaction Agreements; (c) agree

not to assert any defense, right of set off or other claim which Guarantor may

have against Seller, to the extent such assertion will affect or delay the

payment in full of all amounts due Buyer under this Guaranty; and

(d) waive presentment for payment, demand for payment, notice of

nonpayment or dishonor, protest and notice of protest, diligence in collection

and any and all formalities which otherwise might be legally required to charge

Guarantor with liability.  Buyer shall

have no obligation to disclose or discuss with Guarantor its assessment of the

financial condition of Seller.  Guarantor

authorizes Buyer, without notice

to, demand of, or consent from Guarantor, and without affecting its liability

to Buyer hereunder, from

time to time to renew, extend, accelerate or otherwise change the time or place

for payment of, or otherwise change the terms of all, or any part of, the

Obligations.  No modification or waiver of any of the

provisions of this Guaranty shall be binding upon Buyer, except as expressly

set forth in a writing duly signed and delivered by Buyer.

 

5.                                       This Guaranty is a present and continuing

guaranty of performance and payment and not of collection.  This Guaranty is, except as expressly set

forth in Section 2, absolute and unconditional.  Guarantor agrees that this Guaranty may be enforced by Buyer

without the necessity at any time of resorting to or exhausting any other

security or collateral given in connection herewith or with the Transaction

Agreements.  Guarantor hereby waives any

right to require Buyer to join Seller in any action brought hereunder or to

commence any action against or obtain any judgment against Seller.  Guarantor further agrees that, subject to

Section 2, nothing contained herein or otherwise shall prevent Buyer from

pursuing concurrently or successively all rights and remedies available to it

at law and/or in equity or under the Transaction Agreements, and the exercise

of any of its rights or the completion of any of its remedies shall not

constitute a discharge of Guarantor’s obligations as required pursuant to this

Guaranty, except to the extent such remedies constitute a discharge of Seller’s

obligations under the Transaction Agreements.

 

6.                                       None of Guarantor’s obligations under this

Guaranty or any remedy for the enforcement thereof shall be impaired, modified,

changed or released in any manner whatsoever by any impairment, modification,

change, release or limitation of the liability of Seller by reason of the

bankruptcy of Seller or by reason of any creditor or bankruptcy proceeding

instituted by or against Seller.

 

7.                                       In the event Buyer shall assign its rights

under the Transaction Agreements (if permitted pursuant to the terms thereof)

or this Guaranty to any third party, Guarantor will accord full recognition

thereto and agree that all rights and remedies of Buyer or such assignee shall

be enforceable against Guarantor by such assignee with the same force and

effect and to the same extent as would have been enforceable by Buyer but for

such assignment.

 

3

 

8.                                       If Guarantor is determined by a court of competent

jurisdiction to have breached the terms of this Guaranty, then Guarantor shall

pay to Buyer upon demand all reasonable attorneys’ fees, costs and expenses

including, without limitation, court costs, filing fees, recording costs,

expenses of collection, and all other costs and expenses incurred by Buyer in

connection with its enforcement of this Guaranty.

 

9.                                       If any provision of this Guaranty is

determined to be invalid or not fully enforceable, such invalidity or

unenforceability shall not affect the other provisions of this Guaranty which

shall be enforceable to the maximum extent permitted at law.

 

10.                                 All notices, requests, payments,

instructions, or other documents to be given hereunder shall be in writing or

by written telecommunication, and shall be deemed to have been duly given if

(i) delivered personally (effective upon delivery), (ii) mailed by registered

or certified mail, return receipt requested, postage prepaid (effective five

business days after dispatch), (iii) sent by a reputable, established courier

service that guarantees next business day delivery (effective the next business

day), or (iv) sent by facsimile or electronic mail, followed within 24 hours by

confirmation by one of the foregoing methods (effective upon the first business

day after receipt of the facsimile or electronic mail in complete, readable

form).  Notices to each party shall be

addressed as set forth below (or to such other address as the recipient party

may have furnished to the sending party for the purpose pursuant to this

Paragraph 10).

If to Guarantor:

 

Basil

K. Vasiliou

230 Park Avenue

New York, New York  10126

Facsimile No.: (212) 486-4144

With a copy to:

 

Altheimer

& Gray

Suite 4000

10 S. Wacker Dr.

Chicago, Illinois 600606

Facsimile No.: (312) 715-4987

Attention: David W. Schoenberg

 

If to Buyer:

 

Green Light Acquisition

Company

One East Wacker Drive

Chicago, Illinois  60601

Facsimile No.: (312) 467-0197

Attention:  Leslie J. Jezuit

 

4

 

With copy to:

 

Holland

& Knight LLC

131 S. Dearborn Street, 30th Floor

Chicago, Illinois 60603

Facsimile No.: (312) 578-6666

Attention:  Anne Hamblin Schiave

 

or at such other address as the party to be served

with notice may have furnished in writing to the party seeking or desiring to

serve notice as a place for the service of notice.

 

11.                                 In order to induce Buyer to execute and

deliver the Transaction Agreements, Guarantor makes the following

representations and warranties and covenants:

 

(a)                        Guarantor has full power and authority to

execute, deliver and perform its covenants, agreements, and obligations under

this Guaranty, and such execution, delivery and performance has been duly

authorized by all requisite action on the part of Guarantor.

 

(b)                       The execution, delivery, and performance by

Guarantor of this Guaranty does not and will not contravene or conflict with

(i)  any law, order, rule, regulation, writ, injunction, or decree now in

effect of any government, governmental instrumentality or court having

jurisdiction over Guarantor, or (ii) any material contractual restriction

binding on or affecting Guarantor or Guarantor’s property or assets which may

adversely affect Guarantor’s ability to fulfill its obligations under this

Guaranty.

 

(c)                        This Guaranty creates legal, valid, and

binding obligations of Guarantor enforceable in accordance with its terms.

 

12.                                 This Guaranty shall be binding upon the

successors and assigns of Guarantor and shall not be discharged or affected, in

whole or in part, by the dissolution of Guarantor.

 

13.                                 This Guaranty

shall be governed by, construed and enforced under the internal laws (without

regard to principles of conflicts of laws) of the State of Illinois.  Any legal action, suit or proceeding arising

out of or relating to this Guaranty or the transactions contemplated hereby

shall be instituted exclusively in the courts of the State of Illinois, located

in the City of Chicago or, provided subject matter jurisdiction exists, in the

United States Federal Court for the Northern District of Illinois, located in

Chicago, Illinois, and each party hereto agrees not to assert as a defense in

any such action, suit or proceeding, any claim that it is not subject

personally to the jurisdiction of such courts, that its property is exempt or

immune from attachment or execution, that the action, suit or proceeding is

brought in an inconvenient forum, that the venue of the action, suit or

 

5

 

proceeding is improper or that this Agreement or the subject matter

hereof may not be enforced in or by such court.  Each party further irrevocably submits to the exclusive

jurisdiction of such courts in any such action, suit or proceeding.

 

[Signature

page to follow]

 

6

 

IN WITNESS WHEREOF, Guarantor has delivered this Guaranty in the State

of Illinois as of the date first written above.

 

	

   

  	

  GUARANTOR:

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  /s/ Basil K. Vasiliou

  	

   

  
	

   

  	

  Basil K. Vasiliou

  

 

7

 

Exhibit

10.3

 

STOCKHOLDER

GUARANTY

 

THIS STOCKHOLDER GUARANTY (“Guaranty”) is made May 16, 2003, by Raymond

International W.L.L. and Raymond Overseas Holding Limited (together “Guarantor”), to and

for the benefit of Green Light Acquisition Company, a Delaware corporation (“Buyer”).

 

RECITALS

 

A.                                   Guarantor is a direct and indirect

stockholder of U.S. Traffic Corporation, a Delaware corporation, which with its

wholly owned subsidiary, Myers/Nuart Electrical Products, Inc., a Delaware

corporation  (together “Seller”) and Buyer

have entered into that certain Asset Purchase Agreement of even date herewith

(the “Asset Purchase Agreement”).

 

B.                                     Pursuant to the Asset Purchase Agreement,

Buyer has purchased certain assets of Seller relating to the business of

manufacturing, selling and servicing traffic control equipment, overhead and

portable traffic display signage, electronic display and message centers,

lighted signage, transit fixtures, power supply sources, electronic components,

and tunnel lighting.

 

C.                                     In the Asset Purchase Agreement, Seller has

agreed to certain payment, indemnification and reimbursement obligations in

favor of Buyer and  Seller has provided

to Buyer a series of representations and warranties and has made various other

agreements and covenants to induce Buyer to complete the transactions

contemplated by the Asset Purchase Agreement.

 

D.                                    In the Asset Purchase Agreement, Seller has

covenanted to secure its payment, indemnification and reimbursement obligations

to Buyer under the Asset Purchase Agreement by providing this Guaranty of

Guarantor, with respect to such obligations.

 

E.                                      Guarantor will derive substantial benefit

under the Asset Purchase Agreement and Guarantor is willing to guarantee the

obligations of Seller under the Asset Purchase Agreement and those other agreements,

delivered by Seller to Buyer in accordance with the Asset Purchase

Agreement  (all such agreements,

including the Asset Purchase Agreement, being referred to hereinafter as the “Transaction Agreements”).

 

F.                                      The execution and delivery of this Guaranty

by Guarantor is required in connection with the Closing (as defined in the

Asset Purchase Agreement).

 

AGREEMENTS

 

NOW, THEREFORE, Guarantor, in consideration of the matters described in

the foregoing Recitals, which Recitals are incorporated herein and made a part

hereof, and

 

 

for other good and valuable consideration, the receipt and sufficiency

of which are acknowledged, hereby covenants and agrees for the benefit of Buyer

and its affiliates, successors and assigns as follows:

 

1.                                       Guarantor absolutely, unconditionally, and

irrevocably guarantees to Buyer:

 

(a)                                  the prompt and timely

performance by Seller of each and all of its covenants to Buyer arising under

or created by the terms of the Asset Purchase Agreement, including, without

limitation, Seller’s timely payment and/or discharge of the Excluded

Liabilities (as defined in the Asset Purchase Agreement and Seller’s timely

performance of its covenants to Buyer under each of the other Transaction

Agreements; and

 

(b)                                 the timely

satisfaction of Seller’s obligations under the indemnification provisions of

the Asset Purchase Agreement;

 

in all cases subject to the terms of the Asset Purchase Agreement  (collectively, the “Obligations”); provided however, Guarantor’s

obligations to pay Buyer shall under no circumstances exceed eighty-five

percent (85%) of the Obligations.  This

Guaranty, and the covenants and waivers contained herein, will remain in effect

until all Obligations have been satisfied.

 

2.                                       In the event of any default by Seller in

performance of the Obligations, as aforesaid, Guarantor agrees, on demand by

Buyer in the manner provided below in Section 3, to perform all the Obligations

as are then or thereafter to be performed under the terms of the Transaction

Agreements.  The parties agree that

(a) Guarantor’s obligations under this Guaranty shall be subject to the

limitations, exclusions and exculpations of liability set forth in the

Transaction Agreements, (b) except as provided Section 6, below, Guarantor may

assert any and all defenses, set-offs, or counterclaims of any kind available

to Seller so as to deny payment related to this Guaranty including, without

limitation, any such rights acquired by Guarantor through subrogation,

assignment, or otherwise and (c) the obligations of Guarantor hereunder are

dependent upon Buyer’s performance of its obligations under the Transaction

Agreements.

 

3.                                       Buyer shall make its demand for payment

hereunder by delivering to Guarantor a written notice which: (i) states that it

is a demand required under this Guaranty for payment of one or more of the

Obligations, (ii) sets forth the amount and the basis for such demand, and

(iii) is signed by an authorized officer of Buyer.  Subject to the assertion of any rights it has as referenced in

Section 2, Guarantor shall make payment to Buyer of the amount specified in the

written demand referenced in the preceding sentence in immediately available

funds not later than thirty (30) days after the delivery of that written

demand.

 

4.                                       Guarantor does hereby (a) waive notice

of acceptance of this Guaranty by Seller; (b) waive any notices or demands

that are not required by this Guaranty or the Transaction Agreements; (c) agree

not to assert any defense, right of set off or other

 

2

 

claim which Guarantor may have against Seller, to the extent such

assertion will affect or delay the payment in full of all amounts due Buyer

under this Guaranty; and (d) waive presentment for payment, demand for

payment, notice of nonpayment or dishonor, protest and notice of protest,

diligence in collection and any and all formalities which otherwise might be

legally required to charge Guarantor with liability.  Buyer shall have no obligation to disclose or discuss with

Guarantor its assessment of the financial condition of Seller.  Guarantor authorizes Buyer,

without notice to, demand of, or consent from Guarantor, and without affecting

its liability to Buyer

hereunder, from time to time to renew, extend, accelerate or otherwise change

the time or place for payment of, or otherwise change the terms of all, or any

part of, the Obligations.  No

modification or waiver of any of the provisions of this Guaranty shall be

binding upon Buyer, except as expressly set forth in a writing duly signed and

delivered by Buyer.

 

5.                                       This Guaranty is a present and continuing

guaranty of performance and payment and not of collection.  This Guaranty is, except as expressly set

forth in Section 2, absolute and unconditional.  Guarantor agrees that this Guaranty may be enforced by Buyer

without the necessity at any time of resorting to or exhausting any other

security or collateral given in connection herewith or with the Transaction

Agreements.  Guarantor hereby waives any

right to require Buyer to join Seller in any action brought hereunder or to

commence any action against or obtain any judgment against Seller.  Guarantor further agrees that, subject to

Section 2, nothing contained herein or otherwise shall prevent Buyer from

pursuing concurrently or successively all rights and remedies available to it

at law and/or in equity or under the Transaction Agreements, and the exercise

of any of its rights or the completion of any of its remedies shall not

constitute a discharge of Guarantor’s obligations as required pursuant to this

Guaranty, except to the extent such remedies constitute a discharge of Seller’s

obligations under the Transaction Agreements.

 

6.                                       None of Guarantor’s obligations under this

Guaranty or any remedy for the enforcement thereof shall be impaired, modified,

changed or released in any manner whatsoever by any impairment, modification,

change, release or limitation of the liability of Seller by reason of the

bankruptcy of Seller or by reason of any creditor or bankruptcy proceeding

instituted by or against Seller.

 

7.                                       In the event Buyer shall assign its rights

under the Transaction Agreements (if permitted pursuant to the terms thereof)

or this Guaranty to any third party, Guarantor will accord full recognition

thereto and agree that all rights and remedies of Buyer or such assignee shall

be enforceable against Guarantor by such assignee with the same force and

effect and to the same extent as would have been enforceable by Buyer but for

such assignment.

 

8.                                       If Guarantor is determined by a court of competent

jurisdiction to have breached the terms of this Guaranty, then Guarantor shall

pay to Buyer upon demand all reasonable attorneys’ fees, costs and expenses

including, without limitation, court costs, filing fees, recording costs,

expenses of collection, and all other costs and expenses incurred by Buyer in

connection with its enforcement of this Guaranty.

 

3

 

9.                                       If any provision of this Guaranty is

determined to be invalid or not fully enforceable, such invalidity or

unenforceability shall not affect the other provisions of this Guaranty which

shall be enforceable to the maximum extent permitted at law.

 

10.                                 All notices, requests, payments,

instructions, or other documents to be given hereunder shall be in writing or

by written telecommunication, and shall be deemed to have been duly given if

(i) delivered personally (effective upon delivery), (ii) mailed by registered

or certified mail, return receipt requested, postage prepaid (effective five

business days after dispatch), (iii) sent by a reputable, established courier

service that guarantees next business day delivery (effective the next business

day), or (iv) sent by facsimile or electronic mail, followed within 24 hours by

confirmation by one of the foregoing methods (effective upon the first business

day after receipt of the facsimile or electronic mail in complete, readable

form).  Notices to each party shall be

addressed as set forth below (or to such other address as the recipient party

may have furnished to the sending party for the purpose pursuant to this

Paragraph 10).

 

If to Guarantor:

 

Raymond International

W.L.L.

Raymond Overseas Holding Limited

95 Park Street

London, Great Britain  W1Y 3HA

Facsimile No.: 44-207-495-6733

Attention:  Walter Rogers

 

With a copy to:

 

Altheimer & Gray

Suite 4000

10 S. Wacker Dr.

Chicago, Illinois 600606

Facsimile No.: (312) 715-4987

Attention: David W. Schoenberg

 

And:

 

U.S. Traffic

Corporation/Myers Power Products, Inc.

2000 Highland Avenue

Bethlehem, Pennsylvania 18020

Facsimile: (610) 868-8686

Attention:  Walter Rogers

 

4

 

If to Buyer:

 

Green Light Acquisition

Company

One East Wacker Drive

Chicago, Illinois  60601

Facsimile No.: (312) 467-0197

Attention:  Leslie J. Jezuit

 

With copy to:

 

Holland & Knight LLC

131 S. Dearborn Street, 30th Floor

Chicago, Illinois 60603

Facsimile No.: (312) 578-6666

Attention:  Anne Hamblin Schiave

 

or at such other address as the party to be served

with notice may have furnished in writing to the party seeking or desiring to

serve notice as a place for the service of notice.

 

11.                                 In order to induce Buyer to execute and

deliver the Transaction Agreements, Guarantor makes the following

representations and warranties and covenants:

 

(a)                                  Raymond International W.L.L. is a

corporation duly organized and validly existing under the laws of Bahrain, and

Raymond Overseas Holding Limited is a corporation organized under the laws of

Jersey, Channel Islands.  Each Guarantor

has full power and authority to execute, deliver and perform its covenants,

agreements, and obligations under this Guaranty, and such execution, delivery

and performance has been duly authorized by all requisite action on the part of

Guarantor.

 

(b)                                 The

execution, delivery, and performance by Guarantor of this Guaranty does not and

will not contravene or conflict with (i) the organizational documents of

Guarantor, (ii) any law, order, rule, regulation, writ, injunction, or

decree now in effect of any government, governmental instrumentality or court

having jurisdiction over Guarantor, or (iii) any material contractual

restriction binding on or affecting Guarantor or Guarantor’s property or assets

which may adversely affect Guarantor’s ability to fulfill its obligations under

this Guaranty.

 

(c)                                  This Guaranty creates legal, valid, and

binding obligations of Guarantor enforceable in accordance with its terms.

 

(d)                                 The evidence of financial net worth of

Guarantor attached hereto as Schedule 1 is true, correct and complete.

 

5

 

(e)                                  On or before each December 1, Guarantor will

provide Buyer with written evidence of its financial net worth in a form at

least as detailed as Schedule 1.

 

12.                                 This Guaranty shall be binding upon the

successors and assigns of Guarantor and shall not be discharged or affected, in

whole or in part, by the dissolution of Guarantor.

 

13.                                 This Guaranty

shall be governed by, construed and enforced under the internal laws (without

regard to principles of conflicts of laws) of the State of Illinois.  Any legal action, suit or proceeding arising

out of or relating to this Guaranty or the transactions contemplated hereby

shall be instituted exclusively in the courts of the State of Illinois, located

in the City of Chicago or, provided subject matter jurisdiction exists, in the

United States Federal Court for the Northern District of Illinois, located in

Chicago, Illinois, and each party hereto agrees not to assert as a defense in

any such action, suit or proceeding, any claim that it is not subject

personally to the jurisdiction of such courts, that its property is exempt or

immune from attachment or execution, that the action, suit or proceeding is

brought in an inconvenient forum, that the venue of the action, suit or proceeding

is improper or that this Agreement or the subject matter hereof may not be

enforced in or by such court.  Each

party further irrevocably submits to the exclusive jurisdiction of such courts

in any such action, suit or proceeding.

 

[Signature page to follow]

 

6

IN WITNESS WHEREOF, Guarantor has delivered this Guaranty in the State

of Illinois as of the date first written above.

 

	

   

  	

  RAYMOND INTERNATIONAL W.L.L.

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Leslie W. Rogers

  	

   

  
	

   

  	

  Name:

  	

  Leslie W. Rogers

  	

   

  
	

   

  	

   

  	

  Director

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  RAYMOND OVERSEAS HOLDING LIMITED

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

  /s/ Walter L. Rogers

  	

   

  
	

   

  	

  Name:

  	

  Walter L. Rogers

  	

   

  
	

   

  	

   

  	

  Director

  
					

 

7

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