Exhibit 10 (a)
U.S. $40,000,000
AMENDED AND RESTATED LOAN AGREEMENT
Dated as of June 30, 1997
among
QUIXOTE CORPORATION
as Borrower
THE LENDERS NAMED HEREIN,
as Lenders
and
THE NORTHERN TRUST COMPANY
as Agent and Lender
TABLE OF CONTENTS
SECTION - Page
1. DEFINITIONS 1
2. AMOUNT AND TERMS OF CREDIT 13
2.1. Revolving Credit Advances 13
2.2. Term Loan 14
2.3. Letters of Credit 15
2.4. Optional Prepayment or Reduction of Commitments; Prepayment Fee 17
2.5. Extraordinary Prepayment 17
2.6. Use of Proceeds 17
2.7. Interest on the Revolving Credit Loan, and Term Loan 17
2.8. Availability of Deposits at a Determinable Rate 19
2.9. Prohibition of Making, Maintaining, or Repayment of Principal
at LIBOR 19
2.10. Payments of Principal and Interest to be Net of Any Taxes or Costs 19
2.11. Fees 20
2.12. Receipt and Application of Payments 21
2.13. Sharing of Payments, Etc 21
2.14. Accounting 22
2.15. Indemnity 22
2.16. Joint and Several Liability 23
2.17. Access 23
3. CONDITIONS PRECEDENT 24
3.1. Execution and Delivery of Agreement; Fees 24
3.2. Documents and Other Agreements 24
3.3. Absence of Material Adverse Change 24
3.4. Conditions to the Initial Revolving Credit Advance 25
3.5. Conditions to Each Revolving Credit Advance 25
3.6. Conditions to the Term Loan Conversion 25
4. REPRESENTATIONS AND WARRANTIES 26
4.1. Corporate Existence; Compliance with Law 26
4.2. Executive Offices 26
4.3. Subsidiaries 26
4.4. Corporate Power: Authorization; Enforceable Obligations 27
4.5. Solvency 27
4.6. Financial Statements 27
4.7. Ownership of Properties; Liens 28
4.8. No Default 28
4.9. Burdensome Restrictions 28
4.10. Labor Matters 29
4.11. Other Ventures 29
4.12. Investment Company Act 29
4.13. Margin Regulation 29
4.14. Taxes 29
4.15. ERISA 30
4.16. No Litigation 31
4.17. Outstanding Stock; Options; Warrants, Etc 31
4.18. Employment and Labor Agreements 32
4.19. Patents, Trademarks, Copyrights and Licenses 32
4.20. Full Disclosure 32
4.21. No Material Adverse Effect 32
4.22. Environmental Matters 32
5. FINANCIAL STATEMENTS AND INFORMATION 34
5.1. Reports and Notices 34
5.2. Communication with Accountants 36
6. AFFIRMATIVE COVENANTS 36
6.1. Maintenance of Existence and Conduct of Business 36
6.2. Payment of Obligations 36
6.3. Financial Covenants 37
6.4. Books and Records 38
6.5 Litigation 38
6.6. Insurance 38
6.7. Compliance with Law 39
6.8. Agreements 39
6.9. Supplemental Disclosure 39
6.10. Employee Plans 39
6.11. SEC Filings; Certain Other Notices 40
6.12. Compliance with Taxes 40
6.13. Leases; Real Estate 41
6.14. Environmental Matters 41
6.15. Book Entry System 42
7. NEGATIVE COVENANTS 42
7.1. Mergers, Acquisitions, Etc 42
7.2. Investments; Loans and Advances 43
7.3. Indebtedness 43
7.4. Employee Loans 44
7.5. Capital Structure 44
7.6. Transactions with Affiliates 44
7.7. Guaranteed Indebtedness 45
7.8. Liens 45
7.9. Capital Expenditures 45
7.10. Sales of Assets 45
7.11. Cancellation of Indebtedness; Prepayment 46
7.12. Events of Default 46
7.13. Hedging Transactions 46
7.14. Restricted Payments 46
7.15. ERISA 46
8. TERM AND TERMINATION 47
9. EVENTS OF DEFAULT; RIGHTS AND REMEDIES 47
9.1. Events of Default 47
9.2. Remedies 50
9.3. Waivers by Borrower 51
9.4. Right of Setoff 51
10. THE AGENT 51
10.1. Authorization and Action 51
10.2. Agent Reliance, Etc 52
10.3. Northern and Affiliates 52
10.4. Lender Credit Decision 52
10.5. Indemnification 53
10.6. Successor Agent 53
11. MISCELLANEOUS 53
11.1. Complete Agreement; Modification of Agreement; Sale of Interest 53
11.2. Fees and Expenses 54
11.3. No Waiver by Lender 55
11.4. Remedies 56
11.5. MUTUAL WAIVER OF JURY TRIAL 56
11.6. Severability 56
11.7. Parties 56
11.8. Conflict of Terms 56
11.9. Authorized Signatories11.8. Conflict of Terms 56
11.9. Authorized Signatories 56
11.10. GOVERN11.9. Authorized Signatories 56
11.10. GOVERNING LAW 56
11.11. Notices 57
11.12. Survival 58
11.13. Section Titles 58
11.14. Counterparts 59
INDEX OF EXHIBITS AND SCHEDULES
Exhibit A- Form of Notice of Revolving Credit Advance
Exhibit B- Form of Amended and Restated Revolving Credit Note
Exhibit C- Form of Term Note
Exhibit D- Form of Opinion of ▇▇▇▇ ▇▇▇▇▇, General Counsel of the Borrower
Exhibit E- Form of Compliance Certificate
Schedule 1- Liens
Schedule 4.2- Offices and Other Locations
Schedule 4.3- Subsidiaries
Schedule 4.6- Obligations on Long-Term Leases
Schedule 4.7(a)- Owned Real Estate
Schedule 4.7(b)- Leased Real Estate
Schedule 4.11- Other Ventures
Schedule 4.14- Tax Matters
Schedule 4.15- ERISA Matters
Schedule 4.16- Litigation
Schedule 4.17- Stock Ownership
Schedule 4.18- Employment Matters
Schedule 4.19- Patents, Trademarks, Copyrights and Licenses
Schedule 4.22- Environmental Matters
Schedule 6.6- Insurance
Schedule 7.3- Existing Indebtedness
Schedule 11.9- Authorized Signatories
AMENDED AND RESTATED LOAN AGREEMENT, dated as of June 30, 1997, among
QUIXOTE CORPORATION, a Delaware corporation ("Quixote"), ENERGY
ABSORPTION SYSTEMS, INC., a Delaware corporation ("EAS"), QUIXOTE LASER
CORPORATION (f/k/a Disc Manufacturing, Inc.), a Delaware corporation ("DMI"),
QUIXOTE STENO CORPORATION (f/k/a Stenograph Corporation), a Delaware
corporation ("Stenograph"), LEGAL TECHNOLOGIES, INC., a Delaware corporation
("LTI"), TRANSAFE CORPORATION, a Delaware corporation ("Transafe"), LITIGATION
COMMUNICATIONS, INC., a Delaware corporation ("LCI") SPIN-CAST PLASTICS,
INC., an Indiana corporation ("Spin-Cast"), QUIXOTE LSI CORPORATION (f/k/a
Litigation Services, Inc.), a Delaware corporation ("LSI"), E-TECH TESTING
SERVICES,INC., a Delaware corporation ("E-Tech"), ROADWAY SAFETY SERVICE, INC.,
a Delaware corporation ("Roadway"), and SAFE-HIT CORPORATION, a Nevada
corporation ("Safe-Hit"), the lenders ("Lenders") named herein, and THE
NORTHERN TRUST COMPANY, an Illinois banking corporation having an office at
Fifty South LaSalle Street, Chicago, Illinois 60675 ("Northern"), as agent for
the lenders hereunder (Northern, in such capacity, being "Agent"). Quixote,
EAS, DMI, LTI, Stenograph, Transafe, LCI, Spin-Cast, LSI, E-Tech, Roadway and
Safe-Hit are individually and collectively referred to herein as "Borrower."
RECITALS
A. Agent and the Lenders are parties to that certain Loan Agreement dated as
of June 26, 1992 (as amended, the "Existing Loan Agreement").
B. The Agent, the Lenders, and the Borrower have agreed to amend and restate
the Existing Loan Agreement to continue to make available to the Borrower
credit facilities in an aggregate amount up to $40,000,000 for the working
capital and other financial needs of Borrower, such financing to be comprised
of the revolving credit and term loan facility as set forth in this Agreement.
1. DEFINITIONS
In addition to the defined terms appearing above, capitalized terms used in
this Agreement shall have (unless otherwise provided elsewhere in this
Agreement) the following respective meanings when used herein:
"Adjusted Capitalization" shall mean, at any date of determination thereof,
the sum of (a) Consolidated Funded Debt, plus (b) Consolidated Net Worth.
"Affiliate" shall mean with respect to any Person (i) each Person that,
directly or indirectly, owns or controls, whether beneficially, or as a
trustee, guardian or other fiduciary, 10% or more of the Stock having ordinary
voting power in the election of directors of such Person, (ii) each Person that
controls, is controlled by or is under common control with such Person or any
Affiliate of such Person, or (iii) each of such Person's officers, directors,
joint venturers and partners. For the purpose of this definition, "control"
of a Person shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of its management or policies, whether
through the ownership of voting securities, by contract or otherwise.
"Agent" shall mean Northern, as agent for itself and the other Lenders
hereunder, and any successor agent appointed pursuant to Section 10.6.
"Agreement" shall mean this Amended and Restated Loan Agreement, including all
amendments, modifications and supplements hereto and any appendices, exhibits or
schedules to any of the foregoing, and shall refer to this Agreement as the
same may be in effect at the time such reference becomes operative.
"Applicable Interest Rate" shall mean as to any portion of the Revolving Credit
Loan or the Term Loan the Rate Option applicable thereto.
"Applicable Margin" shall mean the percentage as set forth below then
applicable to, respectively, the Revolving Credit Loan, the Term Loan and
the Unused Revolving Credit Loan Charge as determined by using the following
performance based grid after determining which of the pricing levels (being
I through IV) specified thereon is then in effect:
Pricing Pricing Pricing Pricing
Net Consolidated Level I Level II Level III Level IV
Funded Debt to <1.50 x >/=1.50 >/=2.25 >/=3.0
EBITDA
Revolving Credit 1.0 1.25 1.50 1.625
Loan
Term Loan 1.125 1.375 1.625 1.750
Unused Revolving .15 .15 .25 .25
Credit Loan Charge
"Base Rate" shall mean that rate of interest per year announced from time to
time by Agent called its prime rate, which rate may not at any time be the
lowest rate charged by Agent plus the Applicable Margin. Changes in the rate
of interest on the Revolving Credit Loan or the Term Loan resulting from a
change in the Base Rate shall take effect on the date set forth in each
announcement for a change in the Base Rate.
"Base Rate Period" shall mean any period during which the Base Rate is in effect
commencing on a Business Day selected by Borrower pursuant to Section 2.7(a).
"Borrowing Notice" shall have the meaning assigned to it in Section 2.7(a)
hereof.
"Business Day" shall mean (i) with respect to any borrowing, payment or
interest rate selection, a day other than a Saturday or Sunday on which banks
are open for business in the State of Illinois and on which dealings in U.S.
dollars are carried on in the London Interbank market and (ii) for all other
purposes, any day that is not a Saturday, a Sunday or a day on which banks
are required or permitted to be closed in the State of Illinois.
"Capital Expenditures" shall mean all payments, including, without limitation,
payments for Capital Lease Obligations, for any fixed assets or improvements,
or replacements, substitutions or additions thereto, that have a useful life
of more than one year and which are required to be capitalized under GAAP.
"Capital Lease" shamixed) by such Person as lessee that, in
accordance with GAAP, either would be required to be classified and accounted
for as a capital lease on a balance sheet of such Person or otherwise be
disclosed as such in a note to such balance sheet, other than, in the case
of Borrower or a Subsidiary of Borrower, any such lease under which Borrower or
such Subsidiary is the lessor.
"Capital Lease Obligation" shall mean, with respect to any Capital Lease, the
amount of the obligation of the lessee thereunder that, in accordance with
GAAP, would appear on a balance sheet of such lessee in respect of such
Capital Lease or otherwise be disclosed in a note to such balance sheet.
"Cash Equivalents" shall mean for purposes of Section 2.3, cash equivalents of
the type described in clauses (i), (ii), (iii) and (iv) of the proviso in
Section 7.2 hereof.
"CERCLA" shall mean the Federal Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
"Charges" shall mean all Federal, state, county, city, municipal, local,
foreign or other governmental (including, without limitation, PBGC) taxes at
the time due and payable, levies, assessments or charges upon or relating to
(i) any Borrower's assets, (ii) the Obligations, (iii) Borrower's or any of
its Subsidiaries' employees (other than taxes not required to be withheld),
payroll, income or gross receipts, (iv) Borrower's or any of its
Subsidiaries' ownership or use of any of its assets, or (v) any other aspect of
Borrower's or any of its Subsidiaries' business.
"Closing" shall mean the making of the initial Revolving Credit Advance, the
making of each subsequent Revolving Credit Advance and any Loan Conversion.
"Closing Date" shall mean the date on which a Closing takes place.
"Code" shall mean the Uniform Commercial Code of the jurisdiction with respect
to which such term is used, as in effect from time to time.
"Commission" shall mean the Securities and Exchange Commission or any other
federal agency then administering the Securities Act and other federal
securities laws.
"Commitment Termination Date" shall mean the later of (i) October 31, 2000, the
date of termination of the commitment to make further Revolving Credit Advances
pursuant to Section 8, (ii) the date of termination of the commitment to
make further Revolving Credit Advances pursuant to Section 9.2, and (iii)
October 31, 2004, the stated maturity date of the Term Loan.
"Consolidated Funded Debt" shall mean, at any date of determination thereof,
the total of all Funded Debt of Quixote and its Subsidiaries outstanding on
such date determined in accordance with GAAP, after eliminating (i)
Indebtedness incurred pursuant to the IDB Program provided that as of the
date of determination thereof Borrower is the registered owner of the bonds
issued in connection therewith, and (ii) any other Indebtedness under which
both the obligor(s) and the obligee(s) thereof are one or more Borrowers
and/or Subsidiaries of Borrowers.
"Consolidated Funded Debt to Adjusted Capitalization Percentage" shall mean, at
any date of determination thereof, the percentage that (a) Consolidated Funded
Debt outstanding on such date represents of (b) Adjusted Capitalization.
"Consolidated Net Income" shall mean, for each applicable period, the net
income of Quixote and its Subsidiaries for such period, determined in
accordance with GAAP on a consolidated basis.
"Consolidated Net Worth" shall mean, at any date of determination thereof, (i)
the aggregate amount of all assets of Quixote and its Subsidiaries as may be
properly classified as such, less (ii) the aggregate amount of all liabilities
of Quixote and its Subsidiaries, all as determined in accordance with GAAP,
excluding discounts on Indebtedness.
"Conversion Date" shall mean November 1, 2000.
"Default" shall mean any event which, with the passage of time or notice or
both, would, unless cured or waived, become an Event of Default.
"Defined Contribution Plan" shall mean, with respect to Borrower or any
Subsidiary of Borrower, at any time, an employee pension benefit plan as
defined in Section 3(2) of ERISA that is not covered by Title IV of ERISA,
that is not subject to the minimum funding standards under Section 412 of
the IRC and that is maintained for the employees of Borrower or any
Subsidiary of Borrower.
"DOL" shall mean the United States Department of Labor.
"EBITDA" shall mean for any fiscal period (i) Consolidated Net Income plus (ii)
to the extent deducted in determining Consolidated Net Income, Interest Expense
and taxes (as stated in Quixote and its Subsidiaries' consolidated statement of
income) plus (iii) to the extent deducted in determining Consolidated Net
Income, depreciation, amortization and other similar non-cash charges.
"Environmental Laws" shall mean all federal, state and local laws, including
statutes, regulations, ordinances, codes, rules, applicable policies and other
governmental restrictions and requirements, permits, orders, common law rule
(including, without limitation, the common law respecting nuisance and
tortious liability) decree, injunction or other requirement having the force
and effect of law, at any time in force or effect relating to (i) the
emission, discharge, spill, release or threatened release of Hazardous
Substances; (ii) the use, treatment, storage, disposal, handling,
manufacturing, transportation or shipment of Hazardous Substances; (iii)
the regulation of storage tanks; or (iv) otherwise relating to pollution or
the protection of human health or the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any regulations promulgated thereunder.
"ERISA Affiliate" shall mean, with respect to Borrower, all trades or
businesses (whether or not incorporated) which, together with Borrower, are
treated as a single employer under the applicable provisions of ERISA or the
IRC including, but not limited to, Sections 414(b), (c), (m) or (o) of the
IRC.
"ERISA Event" shall mean, with respect to Borrower or any ERISA Affiliate,
(a) a Reportable Event, (b) the withdrawal of Borrower or any ERISA Affiliate
from a Plan during a plan year in which it was a "substantial employer" as
defined in Section 4001(a)(2) of ERISA, (c) the filing or other distribution
of a notice of intent to terminate a Plan or the treatment of a Plan amendment
as a termination under Section 4041 of ERISA, (d) the institution of
proceedings to terminate a Plan by the PBGC under Section 4042(a) of ERISA,
or (e) any other event or condition which might reasonably be expected to
constitute groundsunder Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan or to cause the imposition
of any liability in excess of $50,000 under Title IV of ERISA.
"Event of Default" shall have the meaning assigned to it in Section 9.1 hereof.
"Excess Revolving Credit Loan Availability" shall mean the positive difference,
if any, between (i) the Maximum Revolving Credit Loan and (ii) the aggregate
amounts outstanding in respect of the Revolving Credit Loan.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, or
any similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Financials" shall mean the financial statements referred to in Section 4.6(a)
hereof.
"Fiscal Quarter" shall mean each of the quarterly periods ending September 30,
December 31, March 31 and June 30 during each Fiscal Year.
"Fiscal Year" shall mean the twelve-month period that ends on June 30.
Subsequent changes of the fiscal year of Borrower shall not change the term
"Fiscal Year," unless the Required Lenders shall consent in writing to such
changes.
"Funded Debt" shall mean, with respect to any Person, all Indebtedness of such
Person which by the terms of the agreement governing, or instrument evidencing,
such Indebtedness matures more than one year from, or is directly or indirectly
renewable or extendible at the option of the debtor under a revolving credit or
similar agreement obligating the lender or lenders to extend credit over a
period of more than one year from, the date of creation thereof, including
current maturities of long-term debt, revolving credit and short-term debt
extendible beyond one year at the option of the debtor and, in respect of
Borrower, including the Revolving Credit Loan, the Term Loan, the aggregate
drawn amount of all outstanding Letters of Credit and Capital Lease Obligations.
"GAAP" shall mean generally accepted accounting principles in the United States
of America as in effect from time to time.
"Guaranteed Indebtedness" shall mean, as to any Person, any obligation of such
Person guaranteeing any indebtedness, lease, dividend, or other obligation
("primary obligations") of any other Person (the "primary obligor") in any
manner including, without limitation, any obligation or arrangement of such
Person (a) to purchase or repurchase any such primary obligation, (b) to
advance or supply funds (i) for the purchase or payment of any such primary
obligation or (ii) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency or any balance sheet
condition of the primary obligor, (c) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation, or (d) to indemnify the owner of such primary obligation
against loss in respect thereof.
"Hazardous Substances" shall mean all substances, wastes, pollutants,
contaminants and materials regulated or defined or designated as hazardous,
extremely or imminently hazardous, dangerous, or toxic pursuant to any law, by
any local, state, territorial or federal governmental authority, or with
respect to which such a governmental authority otherwise requires
environmental investigation, monitoring, reporting, or remediation;
including but notlimited to, (i) all substances, wastes, pollutants,
contaminants and materials regulated, or defined or designated as hazardous,
extremely or imminently hazardous, dangerous or toxic, under the following
federal statutes and their state counterparts, as well as their statutes'
implementing regulations: the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. section 9601 et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. section 6901 et seq., the Toxic
Substances Control Act, 15 U.S.C. section 2601 et seq., the Clean Water
Act, 33 U.S.C. section 1251 et seq., the Clean Air Act, 42 U.S.C. section
7401 et seq., the Emergency Planning and Community Right to Know Act,
42 U.S.C. section 11011 et seq., the Safe Drinking Water Act, 33 U.S.C.
section 300f et seq., the Federal Insecticide, Fungicide, and Rodenticide
Act, 7 U.S.C. section 136 et seq., the AtomicEnergy Act, 42 U.S.C. section
22011 et seq., and the Hazardous Materials Transportation Act, 42 U.S.C.
section 1801 et seq.; (ii) petroleum and petroleum products including
crude oil and any fractions thereof; (iii) natural gas, synthetic gas,
and any mixtures thereof; and (iv) radon, radioactive substances,
asbestos, urea formaldehyde, polychlorinated biphenyls and electromagnetic
field radiation.
"Indebtedness" shall mean all liabilities, obligations and indebtedness of any
and every kind and nature, including, without limitation, all liabilities and
all obligations to trade creditors, whether now or hereafter owing, arising,
due or payable, from Borrower or any of its Subsidiaries to any Person and
howsoever evidenced, created, incurred, acquired or owing, whether primary,
secondary, direct, contingent, fixed or otherwise. Without in any way
limiting the generality of the foregoing, Indebtedness shall specifically
include the following without duplication:
(a)amounts outstanding under this Agreement, including, without limitation,
amounts outstanding under the Revolving Credit Note, Term Note and the
aggregate drawn amount of all outstanding Letters of Credit.
(b)all obligations or liabilities of any Person that are secured by any Lien
upon property owned by Borrower or any of its Subsidiaries, even though
Borrower shall not have assumed or become liable for the payment thereof;
(c)all obligations and indebtedness of Borrower or any of its Subsidiaries for
borrowed money or for notes, bonds, debentures and other debt securities;
(d)all obligations or liabilities created or arising under any lease or
conditional sale or other title retention agreement with respect to property
used or acquired by Borrower or any of its Subsidiaries, even though the rights
and remedies of the lessor, seller or lender thereunder are limited to
repossession of such property;
(e)all obligations or liabilities under Guaranteed Indebtedness; and
(f)all Charges.
"Intercompany Indebtedness" shall mean any Indebtedness or Guaranteed
Indebtedness which is payable to any Borrower or any Subsidiary of any Borrower
by any other Borrower or Subsidiary of any Borrower.
"Interest Expense" shall mean for any fiscal period, the interest expense of
Quixote and its Subsidiaries (as determined in accordance with GAAP on a
consolidated basis) for such period in respect of Consolidated Funded Debt,
excluding the amortization of capitalized debt transaction costs.
"Interest Payment Date" shall have the meaning assigned to such term in Section
2.7(b) hereof.
"Inventory" shall mean any and all raw material, work-in-process and finished
goods inventory and other tangible personal property intended for sale or lease
by Borrower or any of its Subsidiaries.
"IRC" shall mean the Internal Revenue Code of 1986, as amended, and any
successor thereto, and any regulations or notices promulgated thereunder.
"IRS" shall mean the Internal Revenue Service.
"Leases" shall mean all of those leasehold estates in real property now owned
or hereafter acquired by Borrower or any Subsidiary of Borrower, as lessee.
"Lender(s)" shall mean each Lender, including Northern, listed on the signature
pages hereof and any future holder of all or any portion of the Notes.
"Letter of Credit Obligations" shall mean all outstanding obligations incurred
by Lenders at the request of Borrower, whether direct or indirect, contingent
or otherwise, due or not due, in connection with the issuance or guarantee, by
Lenders or another, of letters of credit. The amount of such Letter of Credit
Obligations shall equal the maximum amount which may be payable by Lenders
thereupon or pursuant thereto.
"Letters of Credit" shall mean commercial or standby letters of credit issued
at the request and for the account of Borrower for which Lenders have incurred
Letter of Credit Obligations pursuant thereto.
"LIBOR" shall mean that fixed rate of interest per year for deposits with
maturity periods of one, two, three, or six months (which maturity period
Borrower shall select subject to the terms stated herein) in United States
dollars offered to Agent in or through the London Interbank market at or
about 11:00 A.M., London time, two Business Days before the rate is
to take effect in an amount corresponding to the amount of that portion of the
Revolving Credit Loan or Term Loan to which LIBOR is to apply and for the
London deposit maturity requested, divided by one minus any applicable reserve
requirement (expressed as a decimal) on Eurodollar deposits of the same amount
and maturity as determined by Agent in its sole discretion, plus the Applicable
Margin.
"LIBOR Period" shall mean a period of one, two, three or six months commencing
on a Business Day selected by Borrower pursuant to this Agreement. Each LIBOR
Period shall end on the day in the succeeding calendar month which corresponds
numerically to the beginning day of such LIBOR Period, provided, however, that
if there is no such numerically corresponding day in such succeeding month,
such LIBOR Period shall end on the last Business Day of such succeeding month.
If a LIBOR Period would otherwise end on a day which is not a Business Day,
such LIBOR Period shall end on the next succeeding Business Day, provided,
however, that if said next succeeding Business Day falls in a new month, such
LIBOR Period shall end on the immediately preceding Business Day.
"Lien" shall mean any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, security interest, easement or
encumbrance, or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any lease intended as security or any title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of, or agreement to give, any financing statement
perfecting a security interest under the Code or comparable law of any
jurisdiction).
"Loan Documents" shall mean this Agreement, the Notes and the Letters of Credit.
"Material Adverse Effect" shall mean material adverse effect on (i) the
business, assets, operations or financial or other condition of Quixote and its
Subsidiaries taken as a whole, or (ii) Quixote's and its Subsidiaries'
collective ability to pay the Obligations in accordance with the terms thereof.
"Maximum Lawful Rate" shall have the meaning assigned to it in Section 2.7(e)
hereof.
"Maximum Revolving Credit Loan" shall mean, at any particular time, an amount
equal to $40,000,000.
"Minimum Interest Coverage Ratio" shall mean, at any date of determination
thereof the ratio of (i) EBITDA to (ii) Interest Expense for the four Fiscal
Quarter period then ended.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA, and to which Borrower or any ERISA Affiliate is making, or
is obligated to make, contributions or has made, or been obligated to make,
contributions.
"Net Consolidated Funded Debt to EBITDA Ratio" shall mean, at any date of
determination thereof, the ratio of (a) Consolidated Funded Debt less the
aggregate amount cash and cash equivalents described in Section 7.2(i), (ii),
(iii), (iv) and (v) of the Borrower and its Subsidiaries in excess of
$1,000,000 to EBITDA.
"Notes" shall mean the collective reference to the Revolving Credit Notes and
Term Notes.
"Notice of Revolving Credit Advance" shall mean a notice in the form attached
hereto as Exhibit A.
"Obligations" shall mean all loans, advances, letters of credit, debts,
liabilities, and obligations, for monetary amounts (whether or not such amounts
are liquidated or determinable) owing by Borrower or any or all of its
Subsidiaries or all of them to Lenders or Agent, and all covenants and duties
regarding such amounts, of any kind or nature, present or future, whether or
not evidenced by any note, agreement or other instrument, arising under any
of the Loan Documents. This term includes, without limitation, all interest,
charges, origination fees, Unused Revolving Credit Loan Charges, expenses,
attorneys' fees and any other sum chargeable to Borrower or any or all of
its Subsidiaries under any of the Loan Documents.
"Other Agreements" shall mean all agreements, instruments and documents,
including, without limitation, notes, guarantees, mortgages, deeds of trust,
chattel mortgages, pledges, powers of attorney, consents, assignments,
contracts, notices, security agreements, leases, financing statements,
subordination agreements, trust account agreements and all other written
matter whether heretofore, now, or hereafter executed by or on behalf of any
Borrower and delivered to Agent, any Lender or any Person participating with
Lenders in the loans made hereunder, with respect to this Agreement.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions.
"Permitted Encumbrances" shall mean the following encumbrances: (i) Liens for
Charges either not yet due and payable or to the extent that nonpayment thereof
is permitted by the terms of this Agreement; (ii) pledges or deposits securing
obligations under workmen's compensation, unemployment insurance, social
security or public liability laws or similar legislation; (iii) pledges or
deposits securing bids, tenders, contracts (other than contracts for the
payment of money) or leases to which Borrower or any of its Subsidiaries is a
party as lessee made in the ordinary course of business; (iv) deposits securing
public or statutory obligations of Borrower or any of its Subsidiaries; (v)
workers', mechanics', suppliers', carriers', warehouseman's, landlords' or
other similar liens arising in the ordinary course of business; (vi) deposits
securing or in lieu of surety, appeal or customs bonds in proceedings to which
Borrower or any of its Subsidiaries is a party; (vii) any attachment or
judgment Lien, unless the judgment it secures shall not, within 30 days after
the entry thereof, have been discharged or execution thereof stayed pending
appeal, or shall not have been discharged within five (5) days after the
expiration of any such stay; (viii) zoning restrictions, easements, licenses,
or other restrictions on the use of real property or other minor irregularities
in title (including leasehold title) thereto, so long as the same do not
materially impair the present use, value or marketability of such real
property, leases or leasehold estates; (ix) liens on fixtures granted to
lessors pursuant to Leases; (x) rights of lessees, sublessees, conditional
sales purchasers and borrowers under any agreements or contracts with Borrower
or any Subsidiary of Borrower; and (xi) the Liens listed on Schedule
1 hereto.
"Person" shall mean any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
institution, public benefit corporation, entity or government (whether
Federal, state, county, city, municipal or otherwise, including, without
limitation, any instrumentality, division, agency, body or department thereof).
"Plan" shall mean, with respect to Borrower or any ERISA Affiliate, at any
time, an employee pension benefit plan as defined in Section 3(2) of ERISA
(including a Multiemployer Plan) that is covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the IRC and is
maintained for the employees of Borrower or any ERISA Affiliate.
"Rate Option" shall mean either the Base Rate or LIBOR as from time to time
selected by Borrower in accordance with Section 2.7(a).
"Rate Period" shall mean any of a Base Rate Period, or a LIBOR Period, as the
case may be.
"Real Estate" shall mean all of those plots, pieces or parcels of land now
owned or hereafter acquired by Borrower or any Subsidiary of Borrower (the
"Land"), together with the right, title and interest, if any, of Borrower or
any Subsidiary of Borrower, if any, in and to the streets, the land lying in
the bed of any streets, roads or avenues, opened or proposed, in front of,
adjoining, or abutting the Land to the center line thereof, the air space and
development rights pertaining to the Land and right to use such air space and
development rights, all rights of way, privileges, liberties, tenements,
hereditaments, and appurtenances belonging or in any way appertaining
thereto, all fixtures, all easements now or hereafter benefiting the Land and
all royalties and rights appertaining to the use and enjoyment of the Land,
including, without limitation, all alley, vault, drainage, mineral, water, oil,
and gas rights, together with all of the buildings and other improvements
now or hereafter erected on the Land, and all fixtures and articles of
personal property appertaining thereto and all additions thereto and
substitutions and replacement thereof.
"Release" shall have the meanings assigned to it in 42 USC ' 9601(22).
"Reportable Event" shall mean any of the events set forth in Section 4043(c) of
ERISA or the regulations thereunder, other than an event for which the 30-day
notice requirement has been waived under the aforementioned regulations.
"Required Lenders" shall mean, as of any date, the holders of Notes evidencing
at least 100% of the sum of the aggregate unpaid principal amount of the
Revolving Credit Notes or, if then outstanding, the Term Notes, subject,
however, to the provisions of Section 11.1 hereof.
"Restricted Payment" shall mean (i) the declaration of any dividend or the
incurrence of any liability to make any other payment or distribution of cash
or other property or assets in respect of Stock issued by Borrower, or (ii) any
payment on account of the purchase, redemption or other retirement of Stock
issued by Borrower or any other payment or distribution made in respect
thereof, either directly or indirectly.
"Revolving Credit Advance" shall have the meaning assigned to it in Section 2.1
(a) hereof.
"Revolving Credit Loan" shall mean the aggregate amount of Revolving Credit
Advances outstanding at any time.
"Revolving Credit Loan Commitment" shall have the meaning assigned to it in
Section 2.1(a) hereof.
"Revolving Credit Note(s)" shall have the meaning assigned to it in Section
2.1(b) hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended, or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Solvent" shall mean, when used with respect to any Person, that:
(a)the fair value and present fair saleable value of such Person's assets is in
excess of the total amount of such Person's stated liabilities including
identified contingent liabilities;
(b)the present fair saleable value of such Person's assets is in excess of the
amount that will be required to pay such Person's probable liability on such
Person's debts as they become absolute and mature;
(c)such Person does not have unreasonably small capital to carry on the
business in which the business in which such Person is engaged and all
businesses in which such Person is about to engage; and
(d)such Person has not incurred debts beyond such Person's ability to pay such
debts as they mature.
"Stated Rate" shall have the meaning assigned to it in Section 2.7(e) hereof.
"Stock" shall mean all shares, options, warrants, interests, participations or
other equivalents (regardless of how designated) of or in a corporation or
equivalent entity, whether voting or nonvoting, including, without limitation,
common stock, preferred stock, or any other "equity security" (as such term
is defined in Rule 3a11-1 of the General Rules and Regulations promulgated
by the Securities and Exchange Commission under the Securities Exchange Act
of 1934, as amended).
"Subsidiary" shall mean, with respect to any Person, any corporation of which
an aggregate of more than 50% of the outstanding Stock having ordinary voting
power to elect a majority of the board of directors of such corporation
(irrespective of whether, at the time, Stock of any other class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time, directly or indirectly, owned
legally or beneficially by such Person and/or one or more Subsidiaries of
such Person. "Term" shall mean that period from and including the initial
Closing Date through the Termination Date.
"Term Loan" shall have the meaning assigned to it in Section 2.2(a) hereof.
"Term Note(s)" shall have the meaning assigned to it in Section 2.2(a) hereof.
"Termination Date" shall mean the date on which all Obligations hereunder have
been completely discharged and Borrower shall have no further right to borrow
any monies hereunder.
"Unused Revolving Credit Loan Charge" shall have the meaning assigned to it in
Section 2.11 hereof.
"Welfare Plan" shall mean, with respect to Borrower or any ERISA Affiliate,
at any time, an employee welfare benefit plan as defined in Section 3(1) of
ERISA that is maintained for the employees of Borrower or any ERISA Affiliate.
The term "Borrower" may be amended from time to time by the inclusion of
additional Subsidiaries of Borrower pursuant to an amendment to this
Agreement effected in accordance with the provisions of Section 11.1 hereof.
Any accounting term used in this Agreement shall have, unless otherwise
specifically provided herein, the meaning customarily given such term in
accordance with GAAP, and all financial computations hereunder shall be
computed, unless otherwise specifically provided herein, in accordance with
GAAP consistently applied. That certain terms or computations are
explicitly modified by the phrase "in accordance with GAAP" shall in no way be
construed to limit the foregoing. All other undefined terms contained in this
Agreement shall, unless the context indicates otherwise, have the meanings
provided for by the Code as in effect in the State of Illinois to the extent
the same are used or defined therein. The words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Agreement as a
whole, including the Exhibits and Schedules hereto, as the same may from time
to time be amended, modified or supplemented and not to any particular section,
subsection or clause contained in this Agreement.
Wherever from the context it appears appropriate, each term stated in either
the singular or plural shall include the singular and the plural, and pronouns
stated in the masculine, feminine or neuter gender shall include the masculine,
the feminine and the neuter.
2. AMOUNT AND TERMS OF CREDIT
2.1. Revolving Credit Advances. (a) The maximum aggregate amount of the
Revolving Credit Loan to be made by each Lender (such Lender's "Revolving
Credit Loan Commitment") shall be the amount set below such Lender's name on
the signature pages hereof. The aggregate principal amount of the Revolving
Credit Loan Commitments is $40,000,000. Each Lender's Revolving Credit Loan
Commitment shall be subject to a pro rata reduction as and when the aggregate
principal amount of the Revolving Credit Loan Commitments are reduced as
provided in the immediately preceding sentence. The percentage equal to the
quotient of (x)each Lender's Revolving Credit Loan Commitment, divided by (y)
the aggregate of all Revolving Credit Loan Commitments is that Lender's
"Revolving Credit Percentage". Upon and subject to the terms and conditions
hereof, each Lender, severally and for itself alone, agrees to make
available, from time to time, on and after the initial Closing Date and until
the Commitment Termination Date, for Borrower's use and upon the request of
Borrower therefor, advances (each, a "Revolving Credit Advance"), in an
aggregate amount outstanding which, together with that Lender's Revolving
Credit Percentage of all outstanding Letter of Credit Obligations, shall not
at any given time exceed the product of (A) that Lender's Revolving Credit
Percentage multiplied by (B) the Maximum Revolving Credit Loan. Subject to
the provisions of Section 8 and Section 9.2 hereof and until all amounts
outstanding in respect of the Revolving Credit Loan shall become due and
payable on the Commitment Termination Date, Borrower may from time to time
borrow, repay and reborrow under this Section
2.1(a). Each Revolving Credit Advance shall
be made on notice, given not later than (i) 10:00 A.M. (Chicago time) on the
Business Day on which any proposed Revolving Credit Advance is to occur for
which the Base Rate is to apply, or (ii) 11:30 A.M. (Chicago time) on the
Business Day which is two Business Days prior to any proposed Revolving
Credit Advance for which LIBOR is to apply, by Quixote to Agent, which shall
give to each Lender prompt written notice thereof by telecopy, telex or cable.
Each such notice (a "Notice of Revolving Credit Advance") shall be in writing
or by telephone to the Administrative Assistant, South Division, Metropolitan
Group Two of Agent at [(▇▇▇) ▇▇▇-▇▇▇▇], confirmed immediately in writing, in
substantially the form of Exhibit A hereto, specifying therein the requested
date and amount of such Revolving Credit Advance and accompanied by a
Borrowing Notice. Each Lender shall, not later than 12:00 noon (Chicago time)
on each requested date, wire to a bank designated by Agent the amount of that
Lender's Revolving Credit Percentage of the requested Revolving Credit Advance.
Agent shall, before 2:00 P.M. (Chicago time) on the date of the proposed
Revolvig Credit Advance, upon fulfillment of the applicable conditions set
forth in Section 3, wire to a bank designated by Borrower and reasonably
acceptable to Agent, the amount of such Revolving Credit Advance to the
extent received from each Lender. The failure of any Lender to make the
Revolving Credit Advance to be made by it shall not relieve any other Lender of
its obligation hereunder to make its Revolving Credit Advance. No Lender shall
be responsible for the failure of any other Lender to make the Revolving Credit
Advance to be made by such other Lender.
(b) The Revolving Credit Loan shall be evidenced by promissory notes to be
executed and delivered by Borrower to each Lender at the time of the initial
Revolving Credit Advance, the form of which is attached hereto and made a
part hereof as Exhibit B (the "Revolving Credit Notes"). Each Revolving
Credit Note shall be payable to the order of a Lender and shall represent
the obligation of Borrower to pay the amount of such Lender's Revolving Credit
Loan Commitment or, if less, the aggregate unpaid principal amount of all
Revolving Credit Advances made by such Lender to Borrower with interest thereon
as prescribed in Section 2.7(b). The date and amount of the Revolving Credit
Advance by each Lender and the payment of principal with respect thereto shall
be recorded on the books and records of each Lender, which books and records
shall constitute prima facie evidence of the accuracy of the information
therein recorded. The entire unpaid balance of the Revolving Credit Loan shall
be due and payable on the Commitment Termination Date.
2.2.Term Loan. (a) Upon and subject to the terms and conditions hereof, each
Lender agrees to convert the Revolving Credit Loan to a term loan by making a
term loan (the "Term Loan") to Borrower on the Conversion Date, in a principal
amount equal to the product of (i) that Lender's Revolving Credit Percentage
multiplied by (ii) the outstanding principal amount of the Revolving Credit
Loan on the Conversion Date (such Lender's "Term Loan Commitment"). The
Term Loan shall be evidenced by promissory notes to be executed and
delivered by Borrower to each Lender at the time of such Term Loan, the form of
which is attached hereto and made a part hereof as Exhibit C
(the "Term Notes").
(b)The Term Loan shall be made on notice, given not later than 11:30 A.M.
(Chicago time) on the Business Day which is two Business Days prior to the
Conversion Date, by Quixote to Agent, which shall give to each Lender prompt
notice thereof by telecopy, telex or cable. Such notice from Borrower shall
be by telephone to the Administrative Assistant, South Division, Metropolitan
Group Two of Agent at [(▇▇▇) ▇▇▇-▇▇▇▇], confirmed immediately in writing.
(c)The aggregate principal amount of the Term Notes shall be payable in
quarterly installments on the last day of each March, June, September and
December within the Term hereof, commencing on the final day of such quarter
following the Conversion Date and ending on the date which is four years
subsequent to the Conversion Date. Each such principal installment shall be
in an amount equal to one-sixteenth (1/16) of the principal amount of the
Term Loan.
2.3.Letters of Credit. (a) Lenders agree, subject to the terms and conditions
hereinafter set forth, to incur, from time to time on the written request of
Borrower, Letter of Credit Obligations in respect of Letters of Credit
supporting obligations of Borrower arising in the ordinary course of
business; provided, however, that the amount of all Letter of Credit
Obligations incurred by Lenders pursuant to this Section 2.3(a) at any one time
outstanding (whether or not then due and payable) shall not exceed an amount
equal to $10,000,000; and further provided, however, that (A) no such Letter
of Credit shall have an expiry date which is more than one year following the
date of issuance thereof, and (B) Lenders shall be under no obligation to
incur Letter of Credit Obligations in respect of any Letter of Credit having
an expiry date which is later than the Commitment Termination Date. All Letters
of Credit shall be issued by Agent and shall represent Letter of Credit
Obligations of each Lender in proportion to each Lender's Revolving Credit
Percentage. At the time of each request by Borrower that a Letter of Credit
be issued, Agent, at its option, may require Borrower to execute and deliver
to Agent an application for such Letter of Credit in the form customarily
prescribed by Agent to issue Letters of Credit (the "Applications"). This
Agreement supersedes any terms of the Applications which are irrevocably
inconsistent with the terms hereof.
(b)In the event that Agent shall make any payment on or pursuant to any Letter
of Credit Obligation, such payments shall then be deemed to constitute a
Revolving Credit Advance by Lenders under Section 2.1(a) hereof. Upon any such
payment by Agent, each Lender shall pay to Agent such Lender's Revolving
Credit Percentage of such payment in the manner provided in Section 2.1 with
respect to Revolving Credit Advances.
(c)In the event that any Letter of Credit Obligation, whether or not then due
and payable, shall for any reason be outstanding on the Commitment Termination
Date, Borrower will pay to Agent cash or Cash Equivalents in an amount equal
to the outstanding Letter of Credit Obligations. Such funds or Cash
Equivalents shall be held by Agent in a cash collateral account (the "Cash
Collateral Account"). The Cash Collateral Account shall be in the name of
Agent, as agent for Lenders, (as a cash collateral account), and shall be under
the sole dominion and control of Agent and subject to the terms of this Section
2.3. Borrower hereby pledges, and grants to Agent a security interest in, all
such funds or Cash Equivalents held in the Cash Collateral Account from time
to time and all proceeds thereof, as security for payment of all amounts due
in respect of the Letter of Credit Obligations, whether or not then due.
From time to time after funds are deposited in the Cash Collateral Account,
Agent may apply such funds or Cash Equivalents then held in the Cash Collateral
Account to the payment of any amounts, in such order as Agent may elect, as
shall be or shall become due and payable by Borrower to Lenders with respect
to such Letter of Credit Obligations.
Neither Borrower nor any person or entity claiming on behalf or through
Borrower shall have any right to withdraw any of the funds or Cash Equivalents
held in the Cash Collateral Account, except that upon the termination of any
Letter of Credit Obligations in accordance with its terms and the payment of
all amounts payable by Borrower to Lenders in respect thereof, any funds
remaining in the Cash Collateral Account in excess of the then remaining
Letter of Credit Obligations shall be returned to Borrower.
Agent shall not have any obligation to invest the funds in Cash Collateral
Account or deposit such funds in an interest-bearing account, and interest
and earnings thereon, if any, shall be the property of Lenders. Interest and
earnings on the Cash Equivalents in the Cash Collateral Account shall be the
property of Borrower.
(d)In the event that Lenders shall incur any Letter of Credit Obligations
pursuant hereto at the request or on behalf of Borrower hereunder, Borrower
agrees to pay to Agent, for the benefit of Lenders, as compensation to
Lenders for such Letter of Credit Obligations (i) all fees and charges paid
by Lenders on account of such Letter of Credit Obligation to the issuer or
like party, (ii) commencing with the month in which a standby Letter of Credit
Obligation is incurred by Lenders and monthly thereafter for each month during
which such standby Letter of Credit Obligation shall remain outstanding, a
standby letter of credit fee in an amount equal to .875% per annum on the
maximum amount available from time to time to be drawn under the applicable
standby Letter of Credit, (iii) commencing with the month in which a
commercial Letter of Credit Obligation is incurred by Lenders and monthly
thereafter for each month during which such commercial Letter of Credit
Obligation shall remain outstanding, a commercial Letter of Credit fee in an
amount equal to .125% per annum of the maximum amount available from time to
time to be drawn under the applicable commercial Letter of Credit and (iv) to
pay to Agent, as issuer of such Letter of Credit Obligations, an additional
fee for its own account computed at a rate of .125% per annum of the maximum
amount available to be drawn from time to time under each Letter of Credit for
the period from and including the date of issuance of such Letter of Credit to
and including the stated expiration date of such Letter of Credit.
2.4 Optional Prepayment or Reduction of Commitments; Prepayment Fee.
(a) Borrower may, upon not less than five (5) Business Days, prior notice to
Agent, (i) prepay the Term Loan, in whole or in part, without premium or
penalty, except as otherwise provided in Section 2.10 hereof, or (ii)
permanently reduce the Maximum Revolving Credit Loan by an aggregate minimum
amount of $3,000,000 or any multiple of $1,000,000 in excess thereof. Once
reduced in accordance with this Section 2.4, the Maximum Revolving Credit Loan
may not be increased. Any reduction of the Revolving Credit Loan Commitments
shall be applied to each Lender according to its Revolving Credit Percentage.
(b)Any voluntary prepayment pursuant to this Section 2.4 shall be accompanied
by the payment of accrued and unpaid interest on the amount being prepaid
through the date of such prepayment. All prepayments pursuant to this Section
2.4 shall be applied to the principal installments of the Term Loan in the
inverse order of maturity.
2.5 Extraordinary Prepayment. Borrower shall have the right at any time, on
thirty (30) days prior written notice to Agent and the written consent of all
remaining Lenders, to prepay in whole, but not in part, the Obligations payable
to any single Lender. Upon any such prepayment, the Revolving Credit Loan
Commitment of the Lender receiving the prepayment shall terminate and the
Maximum Revolving Credit Loan shall, unless otherwise agreed to in writing
by Lenders, be reduced by an amount equal to the product of (i) such Lender's
Revolving Credit Percentage, times (ii) the Maximum Revolving Credit Loan then
otherwise in effect. Any amounts due under Section 2.10 as a result of such
prepayment shall be paid on the date the prepayment occurs.
2.6 Use of Proceeds. Borrower shall apply the proceeds of the Loans as set
forth in the Recitals to this Agreement.
2.7 Interest on the Revolving Credit Loan, and Term Loan
(a)Quixote on behalf of each Borrower shall select and may change its selection
of the Rate Option as to all, or any portion (equal to at least $1,000,000, in
the case of LIBOR and $100,000, in the case of the Base Rate), of the
Revolving Credit Loan or Term Loan by giving Agent irrevocable notice (a
"Borrowing Notice") not later than (i) 10:00 A.M. Chicago time on the
Business Day on which a Base Rate Period commences, and (ii) 11:30 A.M.
Chicago time at least two (2) Business Days prior to the commencement of a
LIBOR Period. Each Borrowing Notice shall specify: (i) the principal amount
of the Obligations to which each Rate Option selected is to apply; (ii) the
effective date(s) of the Rate Option(s) selected; (iii) the Rate Option(s)
selected; and (iv) in the event that LIBOR is selected, the LIBOR Period
selected. In the event that Quixote shall fail to provide Agent with an
effective Borrowing Notice or within two (2) Business Days prior to the
expiration of a LIBOR Period, the applicable portion of the Revolving Credit
Loan or the Term Loan, as the case may be, shall bear interest at the Base
Rate commencing on the expiration of the applicable Rate Period and continuing
thereafter until Borrower shall have provided Agent with an effective Borrowing
Notice. Quixote shall select LIBOR Periods, and the principal amounts subject
to such Rate Periods, so that no principal installment of the Term Loan is
scheduled to be repaid prior to the expiration of any LIBOR Period for such
principal amount. At no time may more than ten different Rate Options and/or
Rate Periods be in effect with respect to the Revolving Credit Loan or the
Term Loan.
(b) With respect to the Revolving Credit Loan and the Term Loan, Borrower shall
pay interest to Lenders in arrears (i) during any period in which the Base Rate
is in effect, on the last day of each March, June, September and December,
and (ii) during any period in which the LIBOR is in effect on the earlier of
(x) the last day of each LIBOR Period, or (y) in the case of a LIBOR Period
longer than three months, the last day of each three-month interval during
such LIBOR Period, commencing on the first such day occurring after the initial
Closing Date (each an "Interest Payment Date"), in an amount equal to the
quotient of (i) an amount equal to (A) the sum of the daily unpaid principal
amounts of the Revolving Credit Loan or the Term Loan, as the case may be,
outstanding on each day during the period following the immediately preceding
Interest Payment Date on which interest was paid, multiplied by (B) a rate
equal to the Applicable Interest Rate, divided by (ii) 360.
(c) Any change in the Base Rate shall be effective as of the date of the
relevant change. If any payment on the Revolving Credit Loan or the Term Loan
becomes due and payable on a day other than a Business Day, the maturity
thereof shall, except as otherwise provided in the definition of LIBOR Period,
be extended to the next succeeding Business Day and, with respect to payments
of principal, interest thereon shall be payable at the then Applicable
Interest Rate during such extension.
(d) Upon the occurrence of and during the continuation of Borrower's failure
to make any payment of principal of, or interest on, or any amount owing in
respect of, the Revolving Credit Loan, the Term Loan or any of the other
Obligations when due and payable or declared due and payable, the interest
rate applicable to the Revolving Credit Loan or the Term Loan, as the case
may be, shall be increased by 2% per annum above the rate otherwise
applicable.
(e)Notwithstanding anything to the contrary set forth in this Section 2.7, if
at any time until payment in full of all of the Obligations the interest
rate calculated pursuant to the foregoing paragraphs of this Section 2.7
(the "Stated Rate") exceeds the highest rate of interest permissible under
any law which a court of competent jurisdiction shall, in a final
determination, deem applicable hereto (the "Maximum Lawful Rate"), then in such
event and so long as the Maximum Lawful Rate would be so exceeded, the rate of
interest payable hereunder shall be equal to the Maximum Lawful Rate;
provided, however, that if at any time thereafter the Stated Rate is less
than the Maximum Lawful Rate, Borrower shall continue to pay interest
hereunder at the Maximum Lawful Rate until such time as the total interest
received by Lenders from the making of advances hereunder is equal to the
total interest which Lenders would have received had the Stated Rate been
(but for the operation of this Section 2.7(e)) the interest rate payable
since the initial Closing Date. Thereafter, the interest rate payable
hereunder shall be the Stated Rate unless and until the Stated Rate again
exceeds the Maximum Lawful Rate, in which event this paragraph shall again
apply. In no event shall the total interest received by Lenders pursuant to
the terms hereof exceed the amount which Lenders could lawfully have received
had the interest due hereunder been calculated for the full term hereof at
the Maximum Lawful Rate. In the event the Maximum Lawful Rate is calculated
pursuant to this paragraph, such interest shall be calculated at a daily rate
equal to the Maximum Lawful Rate divided by the number of days in the year in
which such calculation is made. In the event that a court of competent
jurisdiction, notwithstanding the provisions of this Section 2.7(e), shall
make a final determination that Lenders have received interest hereunder or
under any of the Loan Documents in excess of the Maximum Lawful Rate, Lenders
shall, to the extent permitted by applicable law, promptly apply such excess
first to any interest due and not yet paid under the Revolving Credit Loan or
the Term Loan, as the case may be, then to any due and payable principal of
the Revolving Credit Loan or the Term Loan, as the case may be, then to the
remaining principal amount of the Revolving Credit Loan or the Term Loan, as
the case may be, then to other unpaid Obligations and thereafter shall
refund any excess to Borrower or as a court of competent jurisdiction may
otherwise order.
2.8. Availability of Deposits at a Determinable Rate. If, after Borrower has
elected to borrow or maintain any portion of the Revolving Credit Loan or
the Term Loan at LIBOR, Agent notifies Borrower in writing that:
(i) United States dollar deposits in the amount and for the maturity requested
are not available to Lenders (in the case of LIBOR, in the London Interbank
market), or
(ii) reasonable means do not exist for Lenders to determine LIBOR for the
amounts and maturity requested, all as determined by the Agent in its sole
discretion, then the principal amount subject to LIBOR shall accrue or shall
continue to accrue interest at the Base Rate.
2.9. Prohibition of Making, Maintaining, or Repayment of Principal at LIBOR.
If any treaty, statute, regulation or interpretation thereof, or any
directive, guideline or otherwise by a central bank or fiscal authority
(whether or not having the force of law) shall either prohibit or extend the
time at which any principal portion of the Revolving Credit Loan or the Term
Loan subject to LIBOR may be purchased, maintained, or repaid, then on and as
of the date the prohibition becomes effective, the principal subject to that
prohibition shall bear interest at the Base Rate. Agent will notify Quixote
in writing of any such circumstance and describe the nature thereof, provided
that the failure to provide such notice shall not affect the application of
the Base Rate as provided in this Section.
2.10. Payments of Principal and Interest to be Net of Any Taxes or Costs. All
payments of principal and interest shall be made net of any taxes and costs
incurred by Lenders resulting from having principal outstanding hereunder at
LIBOR. Without limiting the generality of the preceding obligations,
illustrations of such taxes and costs are:
(i) Taxes (or the withholding of amounts for taxes) of any nature whatsoever
including income, excise, and interest equalization taxes (other than income
taxes imposed by the United States or any state thereof on the income of any
Lender), as well as all levies, imposts, duties, or fees, whether now in
existence or resulting from a change in, or promulgation of, any treaty,
statute, regulation, interpretation thereof, or any directive, guideline, or
otherwise, by a central bank of fiscal authority (whether or not having the
force of law) or a change in the basis of, or time of payment of, such taxes
and other amounts resulting therefrom;
(ii) Any reserve or special deposit requirements against assets or liabilities
of, or deposits with or for the account of, any Lender with respect to
principal outstanding at LIBOR (including those imposed under Regulation D
of the Federal Reserve Board) or resulting from a change in, or the
promulgation of, such requirements by treaty, statute, regulation,
interpretation thereof, or any directive, guideline, or otherwise by a central
bank or fiscal authority (whether or not having the force of law);
(iii) Any other costs resulting from compliance with treaties, statutes,
regulations, interpretations, or any directives or guidelines, or otherwise
by a central bank or fiscal authority (whether or not having the force of law);
(iv) Any loss (including loss of anticipated profits) or expense incurred by
reason of the liquidation or re-employment of deposits acquired by any Lender
to make advances or maintain principal outstanding at LIBOR:
(A)As the result of a voluntary prepayment at a date other than the maturity
date selected for principal outstanding at LIBOR; or
(B)As the result of a mandatory repayment at a date other than that maturity
date selected for principal outstanding at LIBOR as a result of Borrower
exceeding the Maximum Revolving Credit Loan or as the result of the
occurrence of an Event of Default and the acceleration of any portion of the
indebtedness hereunder; or
(C)As the result of a prohibition on making, maintaining, or repaying principal
outstanding at LIBOR.
If Lenders incur any such taxes or costs, Borrower, upon demand in writing
specifying such taxes and costs, shall promptly pay them. Absent manifest
error, Agent's specification shall be presumptively deemed correct. All
advances made at the LIBOR Rate shall be conclusively deemed to have been
funded by or on behalf of Lenders in the London interbank market by the
purchase of deposits corresponding in amount and maturity to the amount and
interest periods selected (or deemed to have been selected) by Borrower under
this Agreement.
2.11. Fees (a)If during any calendar quarter prior to the Commitment
Termination Date, the average daily balance of the Revolving Credit Loan is
less than the Maximum Revolving Credit Loan, Borrower shall pay to Agent, for
the ratable benefit of Lenders in proportion to their respective Revolving
Credit Loan Commitments, in addition to any interest, late charges or
liquidated damages due under this Agreement, an amount ("Unused Revolving
Credit Loan Charge") equal to the product of (i) an amount equal to the
positive difference between the Maximum Revolving Credit Loan and the
average daily balance of the Revolving Credit Loan during such calendar
quarter multiplied by (ii) the Applicable Margin. The amount of any Unused
Revolving Credit Loan Charge shall be payable quarterly in arrears on each
March 31, June 30, September 30 and December 31, commencing September 30, 1997.
(b) Borrower shall also pay to Agent, for its benefit, a fee (the "Agent Fee")
in consideration for its services as Agent hereunder, in an annual amount
equal to 0.05% of (i) until the Conversion Date, the Maximum Revolving Credit
Loan, and (ii) from and after the Conversion Date, the aggregate outstanding
principal amount, if any, of the Term Loan. The Agent Fee shall be payable
quarterly in arrears on each March 31, June 30, September 30 and December 31,
commencing on September 30, 1997.
2.12. Receipt and Application of Payment. Borrower shall make each payment
provided for under this Agreement to Agent not later than 11:00 A.M. (Chicago
time) on the day when due in lawful money of the United States of America in
immediately available funds. For purposes of computing interest under this
Agreement, all payments shall be applied by each Lender to its loan on the
day payment has been received by Agent in immediately available funds.
Upon receipt from Borrower of good funds, Agent will promptly thereafter cause
to be distributed like funds relating to the payment of principal, interest
or, if applicable, fees ratably to Lenders in proportion to the respective
principal amounts of the Notes held by each Lender, and like funds relating
to the payment of any other amount payable to any Lender to such Lender, in
each case to be applied in accordance with the terms of this Agreement.
2.13. Sharing of Payments, Etc If any Lender shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of setoff, or
otherwise) on account of the Revolving Credit Loan or the Term Loan made by
it in excess of its ratable share of payments on account on the Revolving
Credit Loan or the Term Loan made by all Lenders, such Lender shall forthwith
purchase from each other Lender such participations in the Revolving Credit
Loan or the Term Loan as shall be necessary to cause such purchasing Lender
to share the excess payment ratably with each other Lender; provided, however,
that if all or any portion of such excess payment is thereafter recovered from
such purchasing Lender, such purchase from each Lender shall be rescinded and
such Lender shall repay to the purchasing Lender the purchase price to the
extent of such recovery together with an amount equal to such Lender's
ratable share (according to the proportion of (i) the amount of such Lender's
required repayment to (ii) the total amount so recovered from the purchasing
Lender) of any interest or other amount paid or payable by the purchasing
Lender in respect of the total amount so recovered. Borrower agrees that any
Lender so purchasing a participation from another Lender pursuant to this
Section 2.13 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of setoff) with respect to such
participation as fully as if such Lender were the direct creditor of Borrower
in the amount of such participation.
2.14. Accounting. Agent will provide a monthly accounting of transactions
under the Revolving Credit Loan or the Term Loan, as the case may be, to
Borrower. Each and every such accounting shall (absent manifest error) be
deemed final, binding and conclusive upon Borrower in all respects as to all
matters reflected therein, unless Borrower, within 30 days after the accounting
is received, shall notify Agent in writing of any objection which Borrower may
have to any such accounting, describing the basis for such objection with
specificity. In that event, only those items expressly objected to in such
notice shall be deemed to be disputed by Borrower. Agent's determination,
based upon the facts available, of any item objected to by Borrower in such
notice shall (absent manifest error) be final, binding and conclusive on
Borrower, unless Borrower shall commence a judicial proceeding to resolve
such objection within 60 days following Agent's notifying Borrower of such
determination.
2.15. Indemnity. Borrower hereby indemnifies Agent, Lenders, and their
respective directors, officers, employees, Affiliates and agents
(collectively, "Indemnified Persons") against, and agrees to hold each such
Indemnified Person harmless from, any and all losses, claims, damages and
liabilities, including claims brought by any stockholder or former stockholder
of Borrower, and related expenses, including reasonable counsel fees and
expenses, incurred by such Indemnified Person arising out of any claim,
litigation, investigation or proceeding (whether or not such Indemnified
Person is a party thereto) relating to the Revolving Credit Loan, the Term
Loan, this Agreement, the Notes, the Other Agreements or Agent's or
Lenders' involvement therein or herein; provided, however, that such indemnity
shall not apply to any such losses, claims, damages, or liabilities or
related expenses determined by a court of competent jurisdiction to have
arisen from the gross negligence, or willful misconduct of such Indemnified
Person. If any litigation or proceeding is brought against any Indemnified
Person in respect of which indemnity may be sought against Borrower pursuant
to this Section 2.15, such Indemnified Person shall promptly notify Borrower
in writing of the commencement of such litigation or proceeding, but the
omission so to notify Borrower shall not relieve Borrower from any other
obligation or liability which it may have to any Indemnified Person otherwise
than under this Section 2.15. Failure of the Indemnified Person to timely
notify Borrower of the commencement of such litigation or proceeding shall
not relieve Borrower of its obligations under this Section 2.15, except where
such failure irrevocably prejudices Borrower's ability to defend such
litigation or proceeding and to hold such Indemnified Person harmless
therefrom. In case any such litigation or proceeding shall be brought
against any Indemnified Person and such Indemnified Person shall notify
Borrower of the commencement of such litigation or proceeding, Borrower shall
be entitled to participate in such litigation or proceeding and, after
written notice from Borrower to such Indemnified Person, to assume the
defense of such litigation or proceeding with counsel of its choice at its
expense, provided that such counsel is satisfactory to the Indemnified Person
in the exercise of its reasonable judgment. Notwithstanding the election of
Borrower to assume the defense of such litigation or proceeding, such
Indemnified Person shall have the right to employ separate counsel and to
participate in the defense of such litigation or proceeding, and Borrower
shall bear the reasonable fees, costs and expenses of such separate counsel
if (i) the use of counsel chosen by Borrower to represent such Indemnified
Person would present such counsel with a conflict of interest; (ii)
the defendants in, or targets of, any such litigation or proceeding include
both an Indemnified Person and Borrower, and such Indemnified
Person shall have reasonably concluded that there may be legal defenses
available to it which are different from or additional to those available to
Borrower (in which case Borrower shall not have the right to direct the
defense of such action on behalf of the Indemnified Person); (iii) Borrower
shall not have employed counsel satisfactory to such Indemnified Person in the
exercise of the Indemnified Person's reasonable judgment to represent such
Indemnified Person within a reasonable time after notice of the institution
of such litigation or proceeding; or (iv) Borrower shall authorize such
Indemnified Person to employ separate counsel at the expense of Borrower,
provided that Borrower shall not be liable for the fees, costs and expenses
of more than one separate counsel at the same time for all such Indemnified
Persons in connection with the same action and any separate but substantially
similar or related action in the same jurisdiction. Borrower shall not
consent to the entry of any judgment or enter into any settlement in any
such litigation or proceeding unless such judgment or settlement includes as
an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Person of a release from all liability in respect to such claim
or litigation.
The agreements of Borrower in this Section 2.15 shall be in addition to any
liability that Borrower may otherwise have. All amounts due under this
Section 2.15 shall be payable as incurred upon written demand therefor.
2.16. Joint and Several Liability. Each Borrower shall be jointly and
severally liable for the payment and performance of each of the Obligations
and the liability of each Borrower shall be absolute, unconditional and
without regard to the liability of any other Borrower.
2.17. Access. Agent and each Lender and any of their officers, employees
and/or agents shall have the right, exercisable as frequently as Agent or any
Lender determines to be reasonably appropriate during normal business hours
(or at such other times as may reasonably be requested by Agent or any
Lender), to inspect the properties and facilities of Borrower with its
Subsidiaries and to inspect, audit and make extracts from all of Borrower's
and its Subsidiaries' records, files and books of account. Borrower shall
deliver any document or instrument reasonably necessary for Agent or Lender,
as any of them may request, to obtain records from any service bureau
maintaining records for Borrower or its Subsidiaries, and shall maintain
duplicate records or supporting documentation on media, including, without
limitation, computer tapes and discs owned by Borrower and its Subsidiaries.
Borrower shall instruct its and its Subsidiaries' banking and other financial
institutions to make available to Agent and each Lender such information and
records as Agent and each Lender may reasonably request. Agent and each
Lender will utilize reasonable, good faith efforts to maintain as
confidential any information obtained from Borrower or its Subsidiaries (other
than information which (i) at the time of disclosure or thereafter is
generally available to and known by the public (other than as a result of a
disclosure directly or indirectly by Agent or a Lender or any of their
representatives), (ii) is available to Agent or Lender on a non-confidential
basis from a source other than Borrower or its Subsidiaries, provided that
such source was not at the time bound by a confidentiality agreement with
Borrower or its Subsidiaries, or (iii) has been independently developed by
Agent or Lender but in no event (other than willful misconduct) shall Agent
or any Lender be liable for damages resulting from the disclosure of any such
confidential information obtained from Borrower or its Subsidiaries.
3. CONDITIONS PRECEDENT
This Agreement shall become effective upon the satisfaction of the following
conditions precedent:
3.1. Execution and Delivery of Agreement; Fees. This Agreement or counterparts
thereof shall have been duly executed by, and delivered to, Borrower, Lenders
and Agent and all fees required by Section 2.11 shall have been paid by
Borrower to Agent and Lenders.
3.2. Documents and Other Agreements. Lenders shall have received all of the
following, each in form and substance satisfactory to Required Lenders:
A. Revolving Credit Notes of Borrower payable to Lenders as required by
Section 2. l(b);
B. A Certificate of the Secretary of each Borrower, together with true and
correct copies of the Certificate of Incorporation and Bylaws of each Borrower,
and all amendments thereto, true and correct copies of the resolutions of the
Board of Directors of each Borrower authorizing Lenders or ratifying the
execution, delivery and performance of this Agreement, the Notes and the
Other Agreements and the names of the officer or officers of Borrower
authorized to sign this Agreement, the Notes and the Other Agreements together
with a sample of the true signature of each such officer;
C. Certified copies of all documents evidencing any other necessary corporate
action, consents and governmental approvals (if any) with respect to this
Agreement, the Notes and the Other Agreements;
D. The opinion of ▇▇▇▇ ▇. ▇▇▇▇▇, General Counsel of Borrower, addressed to
Lenders and Agent in the form of Exhibit D attached hereto and made a part
hereof;
E. The Certificate of Incorporation of each Borrower certified by the Secretary
of State of each state in which they are incorporated;
F. Good Standing Certificates for each Borrower from the Secretaries of State
of each State in which they are required to be qualified to do business;
G. UCC lien search reports of filings against Borrower and tax lien and
judgment searches relating to Borrower for such jurisdictions as Agent deems
appropriate; and
H. Accountant's Letter.
3.3. Absence of Material Adverse Change. No material and adverse change in the
business, operations or condition, financial or otherwise, of any Borrower
shall have occurred or be continuing and no litigation except for the
litigation described on Schedule 4.6 which, if adversely determined, would
result in a Material Adverse Change shall be pending or threatened.
3.4. Conditions to the Initial Revolving Credit Advance. It shall be a
condition to the initial Revolving Credit Advance that the conditions
contained in Sections 3.1, 3.2 and 3.3 shall have been fulfilled, and that
Borrower shall have delivered to Agent a Notice of Revolving Credit Advance.
3.5. Conditions to Each Revolving Credit Advance. It shall be a further
condition to the funding of the initial Revolving Credit Advance and each
subsequent Revolving Credit Advance after the initial Revolving Credit
Advance that the following statements shall be true on the date of each such
funding or advance:
(a) All of the representations and warranties of Borrower contained herein
shall be correct in all material respects as to Borrower and its Subsidiaries
taken as a whole on and as of the date of each such Revolving Credit Advance
as though made on and as of such date, except (i) to the extent that any
such representation or warranty expressly relates to an earlier date, and
(ii) for changes therein permitted or contemplated by this Agreement.
(b) No event shall have occurred and be continuing, or would result from the
funding of the Revolving Credit Advance, which constitutes or would
constitute a Default or an Event of Default.
(c) The aggregate unpaid principal amount of the Revolving Credit Loan, after
giving effect to such Revolving Credit Advance, shall not exceed the Maximum
Revolving Credit Loan.
The acceptance by Borrower of the proceeds of any Revolving Credit Advance
shall be deemed to constitute, as of the date of such acceptance, a
representation and warranty by Borrower that the conditions in this
Section 3.5 have been satisfied.
3.6. Conditions to the Term Loan Conversion. Notwithstanding any other
provision in this Agreement and without affecting the rights of Agent or any
Lender hereunder, Borrower shall not be entitled to convert the Revolving
Credit Loan into the Term Loan pursuant to Section 2.2 until each of the
following conditions have been satisfied:
a. Lenders shall have received Term Notes of Borrower payable to Lenders as
required by Section 2.2(a);
b. Borrower shall have delivered to Agent a Notice effective as of the
Conversion Date in accordance with the provisions of Section 2.2(b);
c. All of the representations and warranties of Borrower contained herein
shall be correct in all material respects as to each Borrower and its
Subsidiaries
taken as a whole on and as of the Conversion Date as though made on and as of
such date, except (i) to the extent that any such representation or warranty
expressly relates to an earlier date, and (ii) for changes therein permitted
or contemplated by this Agreement; and
d. No event shall have occurred or be continuing, or would result from the
conversion of the Revolving Credit Loan into the Term Loan, which constitutes
or would constitute a Default or Event of Default.
4. REPRESENTATIONS AND WARRANTIES
To induce Lenders to make the Revolving Credit Loan and Term Loan, each as
herein provided for, each Borrower makes the following representations and
warranties to Lenders:
4.1. Corporate Existence; Compliance with Law. Borrower and each Subsidiary
of Borrower (i) is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation; (ii) is duly
qualified as a foreign corporation and in good standing under the laws of
each jurisdiction where its ownership or lease of property or the conduct of
its business requires such qualification (except for jurisdictions in which
such failure to so qualify or to be in good standing could not reasonably be
expected to have a Material Adverse Effect); (iii) has the requisite corporate
power and authority and the legal right to own and operate its properties, to
lease the property it operates under lease, and to conduct its business as
now, heretofore and proposed to be conducted; (iv) has all licenses, permits,
consents or approvals from or by, and has or will have made all filings with,
and has or will have given all notices to, all governmental authorities
having jurisdiction, to the extent required for such ownership, operation
and conduct (except for such licenses, etc., the absence of which, and such
filings and notices, as to which the failure to make or give, could not
reasonably be expected to have a Material Adverse Effect); (v) is in compliance
with its certificate or articles of incorporation and by-laws; and (vi) is
in compliance with all applicable provisions of law, including, without
limitation, ERISA, those provisions regarding the collection, payment and
deposit of employees' income, unemployment and Social Security taxes, and
those provisions relating to environmental matters and Environmental Laws
where the failure to comply could reasonably be expected to have a Material
Adverse Effect.
4.2. Executive Offices. The location of Borrower's and each of its
Subsidiaries' chief executive office, principal place of business, and other
offices and places of business are set forth on Schedule 4.2 hereto, and are
the sole offices and places of business of Borrower and its Subsidiaries.
4.3. Subsidiaries. There exist no Subsidiaries of Borrower other than as set
forth on Schedule 4.3 hereto, which sets forth such Subsidiaries, together with
their respective jurisdictions of organization, the authorized and outstanding
capital Stock of each such Subsidiary, by class and number and percentage of
each class legally owned by Borrower or a Subsidiary of Borrower or any other
Person. There are no options, warrants, rights to purchase or similar
rights covering capital Stock for any such Subsidiary.
4.4. Corporate Power: Authorization; Enforceable Obligations The execution,
delivery and performance by each Borrower of the Loan Documents and Other
Agreements (i) are within Borrower's corporate power; (ii) have been, and
will be, duly authorized by all necessary or proper corporate action; (iii)
are not in contravention of any provision of Borrower's or its Subsidiaries'
respective certificates or articles of incorporation or bylaws; (iv) will not
violate any law or regulation, or any order or decree of any court or
governmental instrumentality; (v) will not conflict with or result in the
breach or termination of, constitute a default under, or accelerate any
performance required by, any indenture, mortgage, deed of trust, lease,
agreement or other instrument to which Borrower or any of its Subsidiaries
is a party or by which Borrower or any of its Subsidiaries or any of their
property is bound (except for such conflict, breach, termination, default or
acceleration as could not reasonably be expected to have a Material Adverse
Effect); (vi) will not result in the creation or imposition of any Lien
upon any of the property of Borrower or any of its Subsidiaries; and (vii)
do not require the consent or approval of any governmental body, agency,
authority or any other Person. At or prior to the initial Closing Date,
each of the Loan Documents to be delivered at such time shall have been duly
executed and delivered for the benefit of or on behalf of each Borrower
and each shall then constitute a legal, valid and binding obligation of each
Borrower, enforceable against them in accordance with its terms.
4.5. Solvency. After giving effect to the initial Revolving Credit Advance,
if made on the initial Closing Date, the transactions contemplated by the
Loan Documents and the Other Agreements, and the payment of all estimated
legal, accounting and other fees related hereto and thereto, Quixote and
each other Borrower will be Solvent on a consolidated basis as of and on the
initial Closing Date and at all times thereafter.
4.6. Financial Statements. (a) All of the following consolidated balance
sheets and statements of income and cash flow of Quixote and its Subsidiaries,
copies of which have been furnished to Agent prior to the date of this
Agreement, have been, except as noted therein, prepared in conformity with
GAAP consistently applied throughout the periods involved, and present
fairly the consolidated financial position of Quixote and its consolidated
Subsidiaries in each case as at the dates thereof, and the results of
operations and the statements of cash flows for the periods then ended (as
to the unaudited interim financial statements, subject to normal year-end audit
adjustments and the absence of footnotes):
(i) the audited consolidated balance sheet of Quixote and its Subsidiaries as
at June 30, 1997, and the related consolidated statements of income and cash
flows for the year then ended, with the opinion thereon of Coopers & ▇▇▇▇▇▇▇.
(b) Except as listed in Schedule 4.6, Quixote and its Subsidiaries as of
June 30, 1997, had no obligations, contingent liabilities or liabilities for
Charges, long-term leases or unusual forward or long-term commitments which
are not reflected in the audited consolidated balance sheet of Borrower and
its Subsidiaries referred to in subsection (a)(i) above and which could
reasonably be expected to have a Material Adverse Effect.
(c) There has been no material adverse change in the business, assets,
operations or financial or other condition of Quixote and its Subsidiaries
taken as a whole since June 30, 1997. No dividends or other distributions
have been declared, paid or made upon any shares of Stock of Borrower or any
of the Subsidiaries, nor have any shares of Stock of Borrower or any of the
Subsidiaries been redeemed, retired, purchased or otherwise acquired for
value by Borrower or its Subsidiaries since June 30, 1997, except for (i)
open market purchases by Quixote of its common stock approved by its Board
of Directors and (ii) its regular semiannual dividend.
4.7. Ownership of Properties; Liens. (a) Borrower or its Subsidiaries own
good and marketable fee simple title to all of the Real Estate described on
Schedule 4.7(a) hereto and good and valid leasehold interests in the Leases
relating to the locations described in Schedule 4.7(b) hereto, and good and
merchantable title to, or valid leasehold interest in, all of its other
properties and assets and none of the properties and assets of Borrower or its
Subsidiaries, including, without limitation, the Real Estate and Leases, are
subject to any Liens, except Liens permitted by Section 7.9 hereof; and
Borrower and its Subsidiaries shall have received all deeds, assignments,
waivers, consents, non-disturbance and recognition or similar agreements,
bills of sale and other documents, and duly effected all recordings, filings
andother actions necessary to establish, protect and perfect Borrower's and
its Subsidiaries' right, title and interest in and to all such property except
where the failure to have received such documents or effected such actions
could not reasonably be expected to have a Material Adverse Effect.
(b) All real property owned or leased by Borrower and its Subsidiaries is as
set forth on Schedules 4.7(a) and 4.7(b) respectively. Neither Borrower nor
its Subsidiaries own any other Real Estate or are lessee or lessor under any
leases of Real Estate other than as set forth therein. Schedules 4.7(a) and
4.7(b) are true and correct in all material respects. Schedule 4.7(b) hereto
sets forth all leases of real property which are held by Borrower or any
Subsidiary as lessee. Each of such leases are valid and enforceable in
accordance with its terms and are in full force and effect. Neither Borrower
nor the applicable Subsidiary nor any other party to any such lease is in
default of its obligations thereunder or has delivered or received any notice
of default under any such lease, nor has any event occurred which, with
the giving of notice, the passage of time or both, would constitute a default
under any such lease, except for any default which could not reasonably be
expected to have a Material Adverse Effect.
4.8. No Default. Neither Borrower nor any of its Subsidiaries is in default,
nor, to the knowledge of any executive officer of Quixote after a reasonable
investigation, is any third party in default, under or with respect to any
contract, agreement, lease or other instrument to which it is a party, except
for any default which (either individually or collectively with other defaults
arising out of the same event or events) could not reasonably be expected to
have a Material Adverse Effect. No Default or Event of Default has occurred
and is continuing.
4.9. Burdensome Restrictions. No contract, lease, agreement or other
instrument to which Borrower or any of its Subsidiaries is a party or is bound
and no provision of applicable law or governmental regulation could
reasonably be expected to have a Material Adverse Effect.
4.10. Labor Matters. There are no strikes or other labor disputes against
Borrower or any of its Subsidiaries pending or, to Quixote's knowledge,
threatened which could reasonably be expected to have a Material Adverse
Effect. Hours worked by and payment made to employees of Borrower and its
Subsidiaries have not been in violation of the Fair Labor Standards Act or
any other applicable law dealing with such matters which could reasonably
be expected to have a Material Adverse Effect. All payments due from
Borrower or any of its Subsidiaries on account of employee health and
welfare insurance which could reasonably be expected to have a Material
Adverse Effect if not paid have been paid or accrued as a liability on the
books of Borrower or such Subsidiary.
4.11. Other Ventures. Except as set forth in Schedule 4.11, neither Borrower
nor any Subsidiary of Borrower is engaged in any joint venture or partnership
with any other Person.
4.12. Investment Company Act. Neither Borrower nor any Subsidiary of
Borrower is an "investment company" or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company", as such
terms are defined in the Investment Company Act of 1940, as amended. The
making of the Revolving Credit Advances, the conversion of the Revolving
Credit Loan to the Term Loan, the application of the proceeds and repayment
thereof by Borrower and the consummation of the transactions contemplated by
this Agreement and the other Loan Documents will not result in the violation
by Borrower or any of its Subsidiaries of any provision of such act or any
rule, regulation or order issued by the Commission thereunder.
4.13. Margin Regulation. Neither Borrower nor its Subsidiaries own any
"margin security", as that term is defined in Regulations G and U of the
Board of Governors of the Federal Reserve System (the "Federal Reserve
Board"), and the proceeds of the Revolving Credit Advances and the Term Loan
will be used only for the purposes contemplated hereunder. Neither the
Revolving Credit Advances nor the Term Loan will be used, directly or
indirectly, for the purpose of purchasing or carrying any margin security,
for the purpose of reducing or retiring any indebtedness which was originally
incurred to purchase or carry any margin security or for any other purpose
which might cause any of the loans under this Agreement to be considered a
"purpose credit" within the meaning of Regulations G, T, U or X of the Federal
Reserve Board. Borrower will not take or permit any agent acting on its
behalf to take any action which might cause this Agreement or any document or
instrument delivered pursuant hereto to violate any regulation of the Federal
Reserve Board. The making of either the Revolving Credit Loan or the Term
Loan will not constitute a violation of such Regulations G, T, U or X.
4.14. Taxes. All federal, state, local and foreign tax returns, reports and
statements required to be filed by Borrower and its Subsidiaries (other than
immaterial state, local and foreign filings) have been filed with the
appropriate governmental agencies and all Charges and other impositions
shown thereon to be due and payable have been paid prior to the date on which
any fine, penalty, interest or late charge may be added thereto for nonpayment
thereof, or any such fine, penalty, interest, late charge or loss has been paid
promptly following the assessment thereof by the applicable taxing authority.
Each of Borrower and its Subsidiaries has paid when due and payable all
requisite Charges upon the books of such company, as the case may be, except
such Charges being contested pursuant to Sections 6.2(b) or (c) hereof.
Proper and accurate amounts have been withheld by Borrower and its Subsidiaries
from their respective employees for all periods in full and complete
compliance with the tax, social security and unemployment withholding
provisions of applicable federal, state, local and foreign law (except
possible inadvertent under withholdings which do not exceed $100,000
in the aggregate at any time), and such withholdings have been timely paid to
the respective governmental agencies. Schedule 4.14 sets forth, for each of
Borrower and its Subsidiaries, those taxable years for which its tax returns
are currently being audited by the IRS or any other applicable governmental
authority. Except as described in Schedule 4.14 hereto, neither Borrower nor
any of its Subsidiaries has executed or filed with the IRS or any other
governmental authority any agreement or other document extending, or having
the effect of extending, the period for assessment or collection of any
Charges. Except as set forth on Schedule 4.14 hereto, neither Borrower nor
any of its Subsidiaries has agreed or has been requested to make any adjustment
under IRC Section 481(a) by reason of a change in accounting method or
otherwise. Except as set forth on Schedule 4.14 hereto, neither Borrower nor
any of its Subsidiaries has any obligation under any written tax sharing
agreement.
4.15. ERISA. Except as otherwise stated in Schedule 4.15 hereto: (i) neither
Borrower nor any ERISA Affiliate maintains or contributes to any Plan,
Defined Contribution Plan or Welfare Plan; (ii) each Defined Contribution
Plan or Plan, other than a Multiemployer Plan, which is intended to be tax
qualified under IRC Section 401(a) has been determined by the IRS to
qualify under IRC Section 401(a), and the trusts created thereunder have been
determined to be exempt from tax under the provisions of IRC Section 501(a)
(except with respect to amendments required by legislation or regulations
for which the remedial amendment period under IRC Section 401(b) has not
lapsed), and nothing has occurred which could cause the loss of such
qualification or the imposition on Borrower or any of its Subsidiaries of any
liability or penalty under the IRC or ERISA in excess of $100,000; (iii) with
respect to each Plan, each Defined Contribution Plan and each Welfare Plan
(in each case, other than a Multiemployer Plan), all reports required under
ERISA or any other applicable law or regulation to be filed by Borrower or
any ERISA Affiliate with the relevant governmental authority have been duly
filed and all such reports are true and correct in all material respects
as of the date given; (iv) neither Borrower nor any ERISA Affiliate has
engaged in a "prohibited transaction," as such term is defined in IRC Section
4975 or Title I of ERISA, in connection with any Plan, Defined Contribution
Plan or Welfare Plan which would subject Borrower or any of its Subsidiaries
(after giving effect to any prohibited transaction exemption) to the tax on
prohibited transactions imposed by IRC Section 4975 or any other liability;
(v) no Plan which is not a Multiemployer Plan has been terminated, nor has any
accumulated funding deficiency (as defined in IRC Section 412(a)) been incurred
(without regard to any waiver granted under IRC Section 412), nor has any
funding waiver from the IRS been received or requested, nor has Borrower or
any ERISA Affiliate failed to make any contributions or to pay any amounts
due and owing as required by the terms of any Plan; (vi) there has not been
any Reportable Event or any event requiring disclosure under
Section 4041(c)(3)(C) or 4063(a) of ERISA with respect to any Plan (other than
a Multiemployer Plan); (vii) the value of the assets of each Plan (other than a
Multiemployer Plan) equaled or exceeded the present value of the Benefit
Liabilities (as defined in Section 4001(b)(16) of ERISA) of each such Plan as
of the last day of the plan year most recently ended using PBGC termination
actuarial assumptions currently in effect or other actuarial assumptions
certified by the Plan's actuary as reasonable for purposes of a Standard
Termination (as described in Section 4041(b) of ERISA); (viii) there are no
claims (other than claims for benefits in the normal course), actions or
lawsuits asserted or instituted against, and neither Borrower nor any ERISA
Affiliate has knowledge of any threatened litigation or claims against (a) the
assets of any Plan (other than a Multiemployer Plan) or Defined Contribution
Plan or against any fiduciary of such plan with respect to the operation of
such plan or (b) the assets of any Welfare Plan or against any fiduciary
thereof with respect to the operation of any such plan, which, in either
case, if adversely determined, could reasonably be expected to have a
Material Adverse Effect; (ix) any bond required to be obtained by Borrower
or any of its Subsidiaries under ERISA with respect to any Plan, Defined
Contribution Plan or Welfare Plan has been obtained and is in full force and
effect; (x) neither Borrower nor any ERISA Affiliate has incurred (a) any
liability to the PBGC or to a trust (for Plan terminations instituted prior
to December 18, 1987) described in Section 4049 of ERISA (prior to its
repeal), (b) any withdrawal liability (and no event has occurred which, with
the giving of notice under Section 4219 of ERISA, would result in such
liability) under Section 4201 of ERISA as a result of a complete or partial
withdrawal (within the meaning of Section 4203 or 4205 of ERISA) from a
Multiemployer Plan, which would result in annual withdrawal liability payments
in excess of $100,000, or (c) any liability under ERISA Section 4062,
4063 or 4064 to the PBGC, to a trust terminated under ERISA Section 4041 or
4042 or to a trustee appointed under ERISA Section 4042; (xi) neither
Borrower nor any ERISA Affiliate nor any organization to which Borrower or
any such ERISA Affiliate is a successor or parent corporation within the
meaning of ERISA Section 4069(b) has engaged in a transaction within the
meaning of ERISA Section 4069; and (xii) neither Borrower nor any of its
Subsidiaries maintains or has established any Welfare Plan which provides for
continuing benefits or coverage for any participant or any beneficiary of a
participant after such participant's termination of employment except as may
be required by IRC Section 4980B or Section 601 (et seq.) of ERISA, or under
any state law and at the expense of the participant or the beneficiary of the
participant.
4.16. No Litigation Except as set forth on Schedule 4.16 hereto, no action,
claim or proceeding is now pending or, to the knowledge of Quixote,
threatened against Borrower or any of Borrower's Subsidiaries, at law, in
equity or otherwise, before any court, board, commission, agency or
instrumentality of any federal, state, or local government or of any agency or
subdivision thereof, or before any arbitrator or panel of arbitrators, which,
if determined adversely, could reasonably be expected to have a Material
Adverse Effect, nor to the knowledge of Borrower does a state of facts exist
which is reasonably likely to give rise to such proceedings. Except as
expressly set forth on Schedule 4.16, none of the matters set forth therein
questions the validity of any of the Loan Documents or the Other Agreements
or any action taken or to be taken pursuant thereto, or could reasonably be
expected to have either individually or in the aggregate a Material Adverse
Effect.
4.17. Outstanding Stock; Options; Warrants, Etc. Schedule 4.17 sets forth the
names, together with the number of shares owned and percentage of total
outstanding shares, of each Person holding 5 % or more of the capital stock
of Quixote. The capital stock of each Borrower, other than Quixote, is
owned by the Persons and in the amounts set forth on Schedule 4.17. Except
as set forth on Schedule 4.17, Borrower has no outstanding rights, options,
warrants, debentures or agreements pursuant to which it may be required to
issue or sell any Stock or other equity security.
4.18. Employment and Labor Agreements. Except as set forth on Schedule 4.18,
there are no employment agreements covering management of Borrower or any of
Borrower's Subsidiaries and there are no collective bargaining agreements or
other labor agreements covering any employees of Borrower or any of its
Subsidiaries. Borrower and its Subsidiaries are in compliance with the terms
and conditions of all such collective bargaining agreements and other labor
agreements except where the failure to so comply could not reasonably be
expected to have a Material Adverse Effect.
4.19. Patents, Trademarks, Copyrights and Licenses. Except as set forth on
Schedule 4.19, Borrower and its Subsidiaries own all material licenses,
patents, patent applications, copyrights, service marks, trademarks, trademark
applications, and trade names necessary to continue to conduct their business
as heretofore conducted by them, now conducted by them and proposed to be
conducted by them. Borrower and its Subsidiaries conduct their respective
businesses without infringement or claim of infringement of any license, patent,
copyright, service ▇▇▇▇, trademark, trade name, trade secret or other
intellectual property right of others, except where such infringement or
claim of infringement could not reasonably be expected to have a Material
Adverse Effect. To the best knowledge of Borrower, there is no infringement
or claim of infringement by others of any material license, patent,
copyright, service ▇▇▇▇, trademark, trade name, trade secret or other
intellectual property right of Borrower or any of its Subsidiaries.
4.20. Full DisclosureNo information contained in this Agreement, the other
Loan Documents, the Financials or any written statement furnished by or on
behalf of Borrower or its Subsidiaries pursuant to the terms of this Agreement,
which has previously been delivered to Agent or Lenders, contains any untrue
statement of a material fact or omits to state a material fact necessary to
make the statements contained herein or therein not misleading at the time and
in light of the circumstances under which made.
4.21. No Material Adverse Effect. No event has occurred since June 30, 1997,
and is continuing, which has had or could reasonably be expected to have a
Material Adverse Effect.
4.22. Environmental Matters. (a) Except as disclosed in Schedule 4.22, all
facilities currently or formerly owned, leased, used or operated by Borrower
or any Subsidiary of Borrower are and have been owned, leased, used or
operated by Borrower and, to the knowledge of any executive officer of
Quixote, after a reasonable investigation, have been owned, leased, used
or operated by any predecessor in interest, in compliance in all material
respects with all applicable Environmental Laws.
(b) Schedule 4.22 identifies, with respect to Borrower or any Subsidiary of
Borrower, or, to the knowledge of any executive officer of Quixote after a
reasonable investigation, any predecessor in interest: (i) all environmental
audits, assessments or occupational health studies undertaken by, or at the
direction of, Borrower, any Subsidiary of Borrower, or any governmental
agency; (ii) the results of the most recent analyses of water (including
groundwater analyses), soil, air or asbestos samples whether or not
non-compliance or contamination is indicated; (iii) the most recent inspection
of each operating facility by the United States Environmental Protection
Agency, the United States Occupational Safety and Health Administration, or
other relevant environmental agencies whether or not relating to issues of
non-compliance or contamination; (iv) any claim, lien or complaint, including
requests for information, against Borrower or any Subsidiary of Borrower
concerning Environmental Laws; and (v) all permits, applications for permits
and variances issued, pending or denied under any Environmental Laws.
(c) Except as disclosed in Schedule 4.22, Borrower and/or its Subsidiaries
have obtained and are in compliance with all permits, certificates licenses,
approvals and other authorizations required for the operation of their
business and have filed all required notifications or reports relating to
chemical substances, air emissions, effluent discharges and storage, treatment,
transport and disposal of Hazardous Substances.
(d)Except as disclosed in Schedule 4.22, Borrower and/or its Subsidiaries or,
to the knowledge of any executive officer of Quixote after a reasonable
investigation, any predecessor in interest, have reported promptly to
appropriate authorities each Release reportable under 42 USC '9603, 42
USC '11004, 33 USC '1321(b)(5), or any counterpart or similar state or local
requirement, at any facility leased, owned, used or operated by Borrower or
any Subsidiary of Borrower. Each such reported Release is also disclosed in
Schedule 4.22.
(e) Except as disclosed in Schedule 4.22, neither Borrower nor any Subsidiary
of Borrower nor, to the knowledge of any executive officer of Quixote after a
reasonable investigation, predecessor in interest, has disposed, treated, or
arranged for the storage, disposal or treatment of, any Hazardous Substance
or other waste at a site or location, or has leased, used or owned a site or
location including, but not limited to, any site or location pursuant to the
Environmental Laws that: (i) has been placed on the National Priorities List
or its state equivalent; (ii) the United States Environmental Protection
Agency or relevant state authority has scored or caused to be scored for the
purpose of placement, proposed, or is proposing, to place, on the National
Priorities List or state equivalent; (iii) is subject to a claim,
administrative order or other demand either to take response or other action,
as response is defined in 42 USC '9601(25), or other Federal or state
environmental law, or to reimburse any person who has taken response or
other action in connection with that site; or (iv) is on any state
Comprehensive Environmental Response Compensation Liability Information System
list.
(f) Schedule 4.22 sets forth the age, contents or former contents of any above
ground or underground storage tanks located on any premises owned or operated
by Borrower or any Subsidiary and any registration forms, spill countermeasure
and containment plan or other documentation pertaining thereto. Except as
set forth in Schedule 4.22, neither Borrower nor any Subsidiary has owned or
operated, or presently owns or operates, any above ground or underground
storage tanks as defined in the Environmental Laws. Except as otherwise stated
in Schedule 4.22, all tanks and pipes pertinent thereto are presently and have
been, to the knowledge of any executive officer of Borrower after a reasonable
investigation, in good condition and do not leak.
(g) Except as set forth in Schedule 4.22, there are no Hazardous Substances or
wastes, drums or containers containing Hazardous Substances disposed of or
buried on, in or under the ground or any surface waters located on any premises
owned or operated by Borrower or any Subsidiary of Borrower. Except as
disclosed in Schedule 4.22, none of Borrower, its Subsidiaries nor, to the
knowledge of any executive officer of Borrower after a reasonable
investigation, any third parties have disposed of or buried any wastes, drums
or containers containing Hazardous Substances on, in or under the ground or
any surface waters located on the premises other than those pursuant to and
in compliance with applicable Environmental Laws.
(h) Except as set forth in Schedule 4.22, there are (i) no water ▇▇▇▇▇,
injection ▇▇▇▇▇, surface impoundments, waste water ponds, landfills, waste
piles or facilities for land disposal, and (ii) no polychlorinated biphenyls,
asbestos or urea formaldehyde in or on premises currently or formerly owned
or operated by Borrower or any Subsidiary of Borrower.
(i) As of the date hereof, Borrower and its Subsidiaries do not have
liabilities exceeding $100,000 with respect to compliance with applicable
Environmental Laws and permits, or related to the generation, treatment,
storage, disposal, release, investigation or cleanup of Hazardous Substances,
no facts or circumstances exist which could give rise to such liabilities,
and the operation and production/business of Borrower and its Subsidiaries will
not be materially impacted or affected by Borrower's and its Subsidiaries
compliance with applicable Environmental Laws or permits or related to the
generation, treatment, storage, disposal, release investigation or cleanup of
Hazardous Substances
5. FINANCIAL STATEMENTS AND INFORMATION
5.1. Reports and Notices. Borrower covenants and agrees that from and after
the initial Closing Date and until the Termination Date, it shall deliver to
Agent and to Lenders:
(a) Within 52 days after the end of each Fiscal Quarter, copies of the
unaudited consolidated and consolidating balance sheets of Quixote and its
operating units and Subsidiaries as of the end of such Fiscal Quarter, and
the related consolidated and consolidating statements of income for that
portion of the Fiscal Year ending as of the end of such quarter, prepared in
accordance with GAAP (subject to normal year end adjustments), setting forth
in comparative form in each case the projected consolidated and consolidating
figures for such period.
(b) Within 90 days after the close of each Fiscal Year, a copy of the annual
audited consolidated and unaudited consolidating financial statements of
Quixote and its operating units and Subsidiaries consisting of consolidated and
consolidating balance sheets and consolidated and consolidating statements
of income, consolidated statement of retained earnings and statement of
consolidated cash flows, setting forth in comparative form in each case the
consolidated figures for the previous fiscal year, which financial statements
shall be prepared in accordance with GAAP, certified (only with respect to the
consolidated financial statements) without qualification as to its scope of
audit or the financial condition of Quixote and its Subsidiaries as a going
concern by a firm of independent certified public accountants of recognized
national standing selected by Quixote and acceptable to Agent, and accompanied
by (i) a statement in reasonable detail showing the calculations used in
determining the financial covenants under Sections 6.3 and 7.10 hereof, (ii)
a report from such accountants to the effect that in connection with their
audit examination, nothing, with respect to accounting matters, has come to
their attention to cause them to believe that a Default or Event of Default
had occurred or, if anything has come to their attention to cause them to
believe that a Default or Event of Default had occurred, a description of such
Default or Event of Default, and (iii) a certification of the chief executive
officer or chief financial officer of Quixote that all such financial
statements present fairly in accordance with GAAP the consolidated financial
position and results of operations and the consolidated statement of cash
flows of Quixote and its Subsidiaries as at the end of such year and for the
period then ended, and that there was no Default or Event of Default in
existence as of such time or, if there was any Default or Event of Default in
existence as of such time, setting forth a description of such Default or
Event of Default and specifying the action, if any, taken by Quixote to
remedy the same.
(c) Within 52 days after the close of each Fiscal Quarter within each Fiscal
Year, a Compliance Certificate in the form of Exhibit E attached hereto
setting forth the information requested therein and certified by the chief
executive officer or chief financial officer of Quixote.
(d) On or before June 1 of each year, a budget and projections for the next
Fiscal Year on a month-by-month and consolidated and consolidating basis and
otherwise in form and substance reasonably acceptable to Agent.
(e) As soon as practicable, but in any event within two (2) Business Days
after any executive officer of Quixote becomes aware of the existence of any
Default or Event of Default, or any development or other information which
could reasonably be expected to have a Material Adverse Effect, telephonic
or telecopy notice specifying the nature of such Default or Event of Default
or development or information, including the anticipated effect thereof, which
notice shall be promptly confirmed in writing within five (5) days.
(f) If requested by Agent, a copy of all federal, state, local and foreign
tax returns and reports in respect of income, franchise or other taxes on or
measured by income (excluding sales, use or like taxes) filed by Quixote or
any of its Subsidiaries.
(g) If requested by Agent, a copy of any auditors' management letter with
respect to the business, financial condition and other affairs of Quixote and
any of its Subsidiaries, which, following review by Agent, shall be returned
to Borrower, together with any copies thereof.
(h) Such other information respecting Borrower's or any of its Subsidiaries'
business, financial condition or prospects as Agent may, from time to time,
reasonably request.
(i) Within five (5) days after the earlier of the last day of each Fiscal Year
and the date Quixote engages independent certified public accountants to audit
Quixote's financial statements, a letter from Quixote addressed to such
independent certified public accountants indicating that it is a primary
intention of Quixote in engaging such accountants that Agent and Lenders rely
upon such financial statements of Quixote and its Subsidiaries.
5.2. Communication with Accountants. Borrower authorizes Agent to communicate
directly with its independent certified public accountants and authorizes those
accountants to disclose to Agent any and all financial statements and other
supporting financial documents and schedules. At or before the initial
Closing Date, Borrower shall deliver a letter addressed to such accountants
instructing them to comply with the provisions of this Section 5.2.
6. AFFIRMATIVE COVENANTS
Each Borrower covenants and agrees that, unless the Required Lenders shall
otherwise consent in writing, from and after the initial Closing Date and
until the Termination Date.
6.1. Maintenance of Existence and Conduct of Business. Borrower shall and
shall cause each of its Subsidiaries to (a) do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate
existence, rights and franchises; (b) continue to conduct its business
substantially as now conducted or as otherwise permitted hereunder; and (c) at
all times maintain, preserve and protect all of its patents, trademarks,
service marks and trade names, and preserve all the remainder of its property,
in use or useful in the conduct of its business, and keep the same in good
operating condition (taking into consideration ordinary wear and tear) and
from time to time make, or cause to be made, all needful and proper repairs,
renewals and replacements, betterments and improvements thereto consistent
with industry practices, so that the business carried on in connection
therewith may be properly and advantageously conducted at all times.
6.2. Payment of Obligations. (a) Subject to paragraphs (b) and (c) of this
Section 6.2, Borrower shall and shall cause each of its Subsidiaries to (i)
pay and discharge or cause to be paid and discharged all its Indebtedness,
including, without limitation, all the Obligations, as and when due and
payable, and (ii) pay and discharge or cause to be paid and discharged
promptly all (A) Charges imposed upon it, its income and profits, or any of
its property (real, personal or mixed), and (B) lawful claims for labor,
materials, supplies and services or otherwise before any thereof shall
become in default.
(b) Borrower and its Subsidiaries may in good faith contest, by proper legal
actions or proceedings, the validity or amount of any Charges, Liens or claims
arising under Section 6.2(a)(ii), provided that Borrower gives Agent advance
notice of its intention to contest the validity or amount of any such Charge,
Lien or claim, and that at the time of commencement of any such action or
proceeding, and during the pendency thereof (i) no Default or Event of
Default shall have occurred; (ii) adequate reserves with respect thereto are
maintained on the books of Borrower or such Subsidiary, in accordance with
GAAP; (iii) such contest operates to suspend collection of the contested
Charges or claims and is maintained and prosecuted continuously with
diligence; (iv) none of Borrower's assets having a value in excess of
$500,000 would be subject to forfeiture or loss of any Lien by reason of the
institution or prosecution of such contest; (v) no Lien shall exist for such
Charges or claims during such action or proceeding; (vi) Borrower or such
Subsidiary shall promptly pay or discharge such contested Charges and all
additional charges, interest, penalties and expenses, if any, and shall
deliver to Lender evidence acceptable to Lender of such compliance, payment or
discharge, if such contest is terminated or discontinued adversely to Borrower
or such Subsidiary; and (vii) Agent has not advised Borrower in writing that
Agent reasonably believes that nonpayment or nondischarge thereof would have
a Material Adverse Effect.
(c) In addition to the right to contest pursuant to the provisions of Section
6.2(b) hereof, Borrower and each of its Subsidiaries shall have the right to
contest any Lien, Charge or claim, in good faith and by appropriate
proceedings, if, with respect to any such Lien, Charge or claim so contested
in excess of $500,000, Borrower provides Agent with a bond or indemnity
insuring the payment of such Lien, Charge or claim or Agent, upon request by
Borrower, has established a reserve against the Revolving Credit Loan for
such Lien, Charge or claim. In addition, Borrower and each of its
Subsidiaries shall have the right to pay the Charges or claims and to
discharge the Liens and in good faith and by appropriate proceedings contest
the validity or amount of such Charges, Liens or claims.
6.3. Financial Covenants. Quixote and its Subsidiaries shall have, on a
consolidated basis:
(a) at all times a Consolidated Net Worth (which shall be certified by Quixote
at the end of each Fiscal Year) equal to or greater than (i) $38,000,000,
plus (ii) 50% of Quixote's positive Consolidated Net Income for the 1998
Fiscal Year and each Fiscal Year thereafter;
(b) at the end of each Fiscal Quarter, a Minimum Interest Coverage Ratio
(which shall be certified by Quixote at the end of each Fiscal Quarter)
of not less than 2.0 to 1.0;
(c) at the end of each Fiscal Quarter, a Consolidated Funded Debt to Adjusted
Capitalization Percentage (which shall be certified by Quixote at the end of
each Fiscal Quarter) equal to or less than 50%; and
(d) at the end of each of the following periods, a Net Consolidated Funded
Debt to EBITDA Ratio (which shall be certified by Quixote at the end of such
period):
Maximum Funded
Period Debt to EBITDA
June 30, 1997 to December 31, 1997 less than or equal to 4.0 to 1.0
January 1, 1998 to December 31, 1998 less than or equal to 3.75 to 1.0
January 1, 1999 and thereafter less than or equal to 3.5 to 1.0;
provided, that upon completion of an acquisition by the Borrower of 100% of
the businesses and assets of any person that is not an Affiliate, the Net
Consolidated Funded Debt to EBITDA Ratio shall be adjusted to reflect the
acquired Person's historical EBITDA for the preceding four quarter period in
a form acceptable to Agent; provided, further, that the acquired Person's
historical EBITDA may be adjusted solely to reflect owner's compensation.
6.4. Books and RecordsBorrower shall and shall cause each of its Subsidiaries
to keep adequate records and books of account with respect to its business
activities, in which proper entries, reflecting all of their financial
transactions, are made in accordance with GAAP and on a basis consistent
with the Financials referred to in Section 4.6(a) hereof.
6.5. Litigation. Borrower shall notify Agent in writing, promptly upon any
executive officer of Quixote learning thereof, of any litigation commenced
against Borrower and/or any Subsidiary of Borrower, and of the institution
against any of them of any suit or administrative proceeding that could
reasonably be expected to involve an amount in excess of $250,000 in any one
instance or could reasonably be expected to have a Material Adverse Effect.
Any such written notification shall be deemed to be a supplement to
Schedule 4.16.
6.6. Insurance. Borrower shall, at its sole cost and expense, maintain
"All Risk" physical damage insurance on all real and personal property,
including, but not limited to, fire and extended coverage, boiler and
machinery coverage, flood, earthquake, liquids, theft, explosion, collapse,
and all other hazards and risks ordinarily insured against by owners or users
of such properties in similar businesses. The physical damage insurance shall
be written on a repair or replacement cost basis, with Inventory insured on the
basis of cost, except Inventory consisting of finished goods, which shall be
insured on the basis of selling price (coinsurance is not acceptable).
Borrower shall, at its sole cost and expense, maintain comprehensive general
liability insurance on an "occurrence basis" (unless such insurance cannot
be reasonably obtained at commercially reasonable rates, in which case such
insurance shall be on a "claims made" basis) against claims for personal
injury, bodily injury and property damage with a minimum limit of $45,000,000
per occurrence and $45,000,000 in the aggregate. Such coverage shall include
but not be limited to premises/operations, broad form contractual liability,
underground, explosion and collapse hazard, independent contractors, broad form
property damage and personal injury and, products and completed operations
liability.
Borrower shall, at its sole cost and expense, maintain workers' compensation
insurance including employers liability in the amount of $500,000 for each
accident, $500,000 disease-policy limit, and $500,000 disease-each employee.
Borrower shall, at its sole cost and expense, maintain automobile liability
insurance for all owned, non-owned or hired automobiles against claims for
personal injury, bodily injury and property damage with a minimum combined
single limit of $1,000,000 per occurrence.
All policies of insurance required to be maintained under this Agreement shall
be in form and with insurers recognized as adequate by Agent and all such
policies shall be in such amounts as may from time to time be satisfactory
to Agent. Borrower shall deliver to Agent the original (or certified copy)
of each policy of insurance and evidence of payment of all premiums thereof.
In the event Borrower at any time or times hereafter shall fail to obtain or
maintain any of the policies of insurance required by this Section 6.6 or to
pay any premium in whole or in part relating thereto, Agent, without waiving or
releasing any obligations or default by Borrower hereunder, may at any time
or times thereafter (but shall not be obligated to) obtain and maintain such
policies of insurance and pay such premium and take any other action with
respect thereto which Agent deems advisable. All sums so disbursed by Agent,
including reasonable attorneys' fees, court costs, expenses and other charges
relating thereto, shall be payable, on demand, by Borrower to Agent or,
subject to the consent of the Required Lenders, may be charged against the
Revolving Credit Loan, and shall be additional Obligations hereunder. Agent
reserves the right at any time, upon review of Borrower's risk profile, to
require additional forms and limits of insurance to, in Agent's reasonable
discretion, adequately protect Lender's investment. Schedule 6.6 hereto lists
all insurance maintained by Borrower and each Subsidiary of Borrower,
together with a summary of the terms of such insurance.
6.7. Compliance with Law. Borrower shall and shall cause each of its
Subsidiaries to comply with all federal, state and local laws and regulations
applicable to it, including, without limitation, ERISA, those laws regarding
the collection, payment and deposit of employees' income, unemployment and
Social Security taxes, and those laws relating to environmental matters and
Environmental Laws and, in each case where the failure to comply could
reasonably be expected to have a Material Adverse Effect.
6.8. Agreements. Borrower shall and shall cause each of its Subsidiaries to
perform, within any required time period (after giving effect to any
applicable grace periods), all of its obligations and enforce all of its
rights under each agreement to which it is a party, including, without
limitation, collective bargaining agreements and leases to which any such
company is a party, where the failure to so perform and enforce could
reasonably be expected to have a Material Adverse Effect. Borrower shall not
and shall cause each of its Subsidiaries not to terminate or modify in any
manner adverse to any such company any provision of any agreement to which
it is a party, which termination or modification could reasonably be expected
to have a Material Adverse Effect.
6.9. Supplemental Disclosure. From time to time as may be necessary (in the
event that such information is not otherwise delivered by Borrower to Agent
pursuant to this Agreement), so long as there are Obligations outstanding
hereunder, Borrower will, as promptly as is reasonable under the circumstances
after any executive officer of Quixote has knowledge with respect thereto,
and at least quarterly, supplement or amend and deliver to Agent each Schedule
or representation herein with respect to any material matter hereafter arising
which, if existing or occurring at the date of this Agreement, would have
been required to be set forth or described in such Schedule or as an
exception to such representation or which is necessary to correct any
information in such Schedule or representation which has been rendered
inaccurate thereby.
6.10. Employee Plans. (a) For each Plan or Defined Contribution Plan
hereafter adopted by Borrower or any Subsidiary of Borrower which is intended
to be tax qualified under IRC Section 401(a), Borrower shall or shall cause
such Subsidiary to (i) use its best efforts to seek and receive determination
letters from the IRS to the effect that such plan is qualified within the
meaning of IRC Section 401(a) and the trust created under such plan is
tax-exempt under IRC Section 501(a); (ii) from and after the adoption of any
Plan or Defined Contribution Plan, use its best efforts to cause such plan to
be qualified within the meaning of IRC Section 401(a) and to be administered
in all material respects in accordance with the requirements of ERISA and
IRC Section 401(a); and (iii) not take any action which would cause such Plan or
Defined Contribution Plan not to be qualified within the meaning of IRC Section
401(a) or not to be administered in all material respects in accordance with
the requirements of ERISA and IRC Section 401(a).
(b) As soon as possible, and in any event within ten (10) days after Borrower
or any ERISA Affiliate knows or has reason to know or believes that any ERISA
Event has occurred, Borrower shall and shall cause such ERISA Affiliate to
deliver to Agent a statement of the chief financial officer of Borrower or
such ERISA Affiliate describing such ERISA Event, together with any
correspondence with, or filings made with, the PBGC or DOL, and the action,
if any, which Borrower or such ERISA Affiliate proposes to take with respect
thereto.
(c) Borrower shall and shall cause each ERISA Affiliate to deliver to Agent:
(i) if requested by Agent, promptly after the filing thereof by Borrower or
such ERISA Affiliate with the DOL, IRS or the PBGC, copies of each annual
and other report with respect to each Plan, Defined Contribution Plan or
Welfare Plan; (ii) promptly after receipt thereof, a copy of any notice,
determination letter, ruling or opinion Borrower or such ERISA Affiliate may
receive from the PBGC, DOL or IRS with respect to any Plan, Defined
Contribution Plan or Welfare Plan; (iii) promptly, and in any event within
ten (10) Business Days, after receipt thereof, a copy of any correspondence
Borrower or such ERISA Affiliate receives from the Plan Sponsor (as
defined by ERISA Section 4001(a)(10)) of any Plan concerning potential
multiemployer withdrawal liability pursuant to ERISA Section 4219 and/or
Section 4202, and a statement from the chief financial officer of Borrower or
such ERISA Affiliate setting forth details as to the events giving rise to
such potential withdrawal liability and the action which Borrower or
such ERISA Affiliate proposes to take with respect thereto; (iv) notification
within thirty (30) days of any material increases in the benefits of any
existing Plan, Defined Contribution Plan or Welfare Plan which is not a
Multiemployer Plan, or the establishment of any new Plans, Defined
Contribution Plans or Welfare Plans, or the commencement of contributions to
any such plan to which Borrower or such ERISA Affiliate was not previously
contributing within thirty (30) days; and (v) notification within ten (10)
days of a request for a minimum funding waiver under IRC Section 412 or a
prohibited transaction exemption under ERISA Section 408(a) with respect to
any Plan.
6.11. SEC Filings; Certain Other Notices. Borrower shall furnish to Agent and
Lenders promptly after the filing thereof with the Securities and Exchange
Commission (i) a copy (exclusive of exhibits) of each report, notice or
other filing, if any, by Borrower with the Securities and Exchange Commission,
and (ii) a copy of each written communication accessible to the public which
is received by Borrower from or delivered by Borrower to the Securities and
Exchange Commission promptly after each such receipt or delivery.
6.12. Compliance with Taxes. Borrower shall pay all transfer, excise, or
similar taxes (but excluding income or franchise taxes) in connection with
the issuance, sale, delivery or transfer by Borrower to Lenders of the
Revolving Credit Notes or the Term Notes, and the execution and delivery of
the Loan Documents and any other agreements and instruments contemplated
thereby, and shall save Lenders harmless against any and all liabilities with
respect to such taxes. Borrower shall not be responsible for any taxes in
connection with the transfer of the Revolving Credit Notes or the Term Notes
by the holder thereof. The obligations of Borrower under this Section 6.12
shall survive the payment, prepayment or redemption of the Revolving Credit
Notes and the Term Notes and the termination of this Agreement.
6.13. Leases; Real Estate. Borrower shall, or shall cause the applicable
Subsidiary to, make available to Agent and, if requested, provide Agent with,
copies of all leases of real property or similar agreements (and all
amendments thereto) entered into by Borrower or any Subsidiary of Borrower
after the initial Closing Date, whether as lessor or lessee. Borrower
shall, and shall cause each of its Subsidiaries to, comply with all of its
and their obligations under all Leases now existing or hereafter entered into
by it or them with respect to, real property including, without limitation,
all Leases listed on Schedule 4.7(b) hereto, if the failure to so comply
could reasonably be expected to have a Material Adverse Effect. Borrower
shall, or shall cause the appropriate Subsidiary to, (i) make available to
Agent and, if requested, provide Agent with, a copy of each notice of default
received by Borrower or such Subsidiary under any such lease and make available
to Agent and, if requested, provide Agent with, a copy of each notice of
default sent by Borrower or such Subsidiary under any such lease; and (ii)
notify Agent, on or before the 15th day of each month, of any new leased
premises or lease that Borrower or such Subsidiary plans to take possession
of during the following 30 day period or has become liable for during the
preceding 30 day period.
6.14. Environmental Matters. (a) Borrower shall and shall cause each of its
Subsidiaries to (i) comply strictly and in all respects with all applicable
Environmental Laws, (ii) notify the proper governmental agency promptly
in the event of any Release of any Hazardous Substance reportable under 42
USC '9603, 42 USC '11004, 33 USC '1321(b)(5) or any counterpart or similar
state or local requirement, and (iii) promptly forward to Agent a copy
of any order, notice, permit, application, or any other communication or report
in connection with any such Release of any Hazardous Substance or any other
matter relating to the Environmental Laws as they may affect such premises.
(b) Borrower and its Subsidiaries shall promptly take any and all necessary
remedial actions in response to the presence, storage, use, disposal,
transportation or Release of any Hazardous Substances on, under, or about
any real property owned, leased or operated by Borrower and its Subsidiaries.
In the event Borrower or any Subsidiary undertakes any remedial action with
respect to any Hazardous Substance on, under or about any real property, such
Borrower or Subsidiary shall conduct and complete such remedial action in
compliance with all applicable Environmental Laws, and in accordance with the
policies, orders and directives of all federal, state and local governmental
authorities, except when such Borrower or Subsidiary's liability for such
presence, storage, use, disposal, transportation or Release of any Hazardous
Material is being contested in good faith by such Borrower or Subsidiary and
appropriate reserves therefore have been established. If Agent or Lenders at
any time have a reasonable basis to believe that there may be a violation of
any Environmental Law by Borrower or its Subsidiaries, or any liability
arising thereunder, or related to a Release of Hazardous Substances on any
real property owned, leased or operated by Borrower or its Subsidiaries or a
Release on real property adjacent to such real property, then Borrower agrees,
upon request from Agent or any Lender, to provide Agent and Lenders with such
reports, certificates, engineering studies or other written material or data
as Lenders may required and permit Agents or its representatives to have access
to such real property for the purpose of conducting audits or investigations,
at Borrower's expense.
(c) Borrower shall indemnify Lenders and Agent and hold Lenders and Agent
harmless from and against any loss, liability, damage or expense, including
attorneys' fees, suffered or incurred by any Lender and Agent, whether as
judgment creditor, mortgagee in possession, or as successor in interest to
Borrower or any of its Subsidiaries as owner or lessee of any premises by
virtue of foreclosure or acceptance of deed in lieu of foreclosure (i) under
or on account of the Environmental Laws, including the assertion of any Lien
thereunder; (ii) with respect to any Release of any Hazardous Substance
affecting such premises or the premises of a third party, whether or not the
same originates or emanates from such premises or any other place, including
any loss of value of such premises as a result of a Release of any Hazardous
Substance; and (iii) with respect to any other environmental matter within the
jurisdiction of any federal, state, or municipal official administering the
Environmental Laws; provided, however, that Borrower will not be liable for
such indemnification to Lender and/or Agent to the extent that any such loss,
liability, damage or expense results from the gross negligence or willful
misconduct of the Person who would otherwise be entitled to be indemnified
pursuant to this Section 6.14(b). The procedure to be followed as to any
indemnity pursuant to this Section 6.14(b) shall be as set forth in Section
2.15 hereof.
6.15. Book Entry System. Borrower shall maintain, if requested by Agent, a
book entry system with respect to the Notes, and any transfers thereof, in
accordance with the requirements set forth in temporary Treasury Regulation
Section 5f.103-1(c).
7. NEGATIVE COVENANTS
Each Borrower covenants and agrees that, unless the Required Lenders shall
otherwise consent in writing, from and after the initial Closing Date and until
the Termination Date:
7.1. Mergers, Acquisitions, Etc. Neither Borrower nor any Subsidiary of
Borrower shall directly or indirectly, by operation of law or otherwise,
merge or consolidate with or into, acquire all or substantially all of the
assets or capital stock of, or otherwise combine with, any Person nor form
any Subsidiary, provided that, (i) any Subsidiary of any Borrower may be merged
with and into any Borrower, any Borrower may be merged into any other Borrower,
and any Subsidiary which is not a Borrower may be merged into any other
subsidiary; (ii) any Borrower may acquire all or substantially all of the
assets or capital stock of any Person that is not an Affiliate, provided
that (A) the Borrower is in compliance with Section 6.3 hereof, (B) the
assets to be acquired shall only be of businesses and assets related or similar
to the Borrower's current lines of business, (C) the total cash consideration
paid for any such acquisition during any Fiscal Year does not exceed 50% of
the Consolidated Net Worth for the immediately preceding Fiscal Year and (D)
upon completion of the acquisition, 10% of the Maximum Revolving Credit Loan
shall remain available; (iii) any Borrower may acquire all or substantially
all of the assets or capital stock of any Person that is not an Affiliate
which are outside of the Borrower's current lines of business provided, (A)
the Borrower is in compliance with Section 6.3 hereof, (B) the total cash
consideration paid for such assets does not exceed 20% of the Consolidated
Net Worth in the aggregate during the term of the Agreement; and (iv) subject
to the provisions of Section 7.2, any Borrower or any Subsidiary may form
any other Subsidiary, provided that seven days prior written notice is
provided to Agent.
7.2. Investments; Loans and Advances. Except as otherwise permitted by
Sections 7.1, 7.3 or 7.4 hereof, Borrower shall not and shall not permit any
Subsidiary of Borrower to make any investment in, or make or accrue loans or
advances of money to any Person, through the direct or indirect holding of
securities or otherwise; provided, however, that Borrower may make and own
investments in (i) marketable direct obligations issued or unconditionally
guaranteed by the United States of America or any agency thereof maturing
within one year from the date of acquisition thereof, (ii) commercial paper
maturing no more than one year from the date of creation thereof and currently
having the highest rating obtainable from either Standard & Poor's Corporation
or ▇▇▇▇▇'▇ Investors Service, Inc., (iii) certificates of deposit, maturing
no more than one year from the date of creation thereof, issued by commercial
banks incorporated under the laws of the United States of America, each having
combined capital, surplus and undivided profits of not less than $200,000,000
and having a rating of "A" or better by a nationally recognized rating
agency, provided that the aggregate amount invested in such certificates of
deposit shall not at any time exceed $100,000 for any one such certificate
of deposit and $200,000 for any one such bank, except in the case of
certificates of deposit issued by Northern, LaSalle National Bank or American
National Bank and Trust Company of Chicago; (iv) time deposits, maturing no
more than 30 days from the date of creation thereof with commercial banks or
savings banks or savings and loan associations each having membership in the
Federal Deposit Insurance Corporation and, in amounts not exceeding the
maximum amounts of insurance thereunder; and (v) investments, classified in
accordance with GAAP as current assets, in money market investment programs
registered under the Investment Company Act of 1940, as amended, which are
administered by reputable financial institutions having capital of at least
$100,000,000 and the portfolio's of which are limited to investments of the
character described in the foregoing clause (i), (ii), (iii) and (iv).
Notwithstanding the foregoing, Borrower may (i) make investments in
Subsidiaries (whether in the form of contributions to capital or otherwise)
in excess of the amounts, if any, in effect on the initial Closing Date if
and to the extent that such investments in Subsidiaries which are not
Borrowers do not exceed $1,000,000 with respect to any one such Subsidiary
or $3,000,000 in the aggregate with respect to all such Subsidiaries, and (ii)
make investments in, or make or accrue loans or advances of money to any
Person which is not a Borrower or Subsidiary if and to the extent that such
investments, loans or advances do not exceed $1,000,000 with respect to any
one such Person or $3,000,000 in the aggregate with respect to all such
Persons, provided, however, that the aggregate amount expanded for
such loans and advances in any Fiscal Year do not exceed the remainder of (x)
25% of the consolidated after tax net income of Quixote and its Subsidiaries
for the immediately preceding Fiscal Year, less (y) the aggregate amount of
dividends paid to Quixote's stockholders plus the amount of open market
purchases of Quixote's common stock made during the Fiscal Year.
7.3. Indebtedness. (a) Except as otherwise expressly permitted by this
Section 7.3 or by any other Section of this Agreement, Borrower shall not,
nor permit any of its Subsidiaries to, create, incur, assume or permit to
exist any Indebtedness, whether recourse or nonrecourse, and whether superior
or junior, resulting from borrowings, loans, advances or the granting of
credit, whether secured or unsecured, except (i) Indebtedness existing on
the Closing Date and set forth on Schedule 7.3, (ii) Indebtedness secured by
Liens permitted under Section 7.8 hereof, (iii) the Revolving Credit Loan,
the Term Loan and the Letter of Credit Obligations, (iv) Guaranteed
Indebtedness permitted under Section 7.9 hereof, (v) trade credit incurred to
acquire goods, supplies, services, including, without limitation, obligations
incurred to employees for compensation for services rendered in the ordinary
course of business, or merchandise on terms similar to those granted to
purchasers in similar lines of business as Borrower or such Subsidiary and
incurred in the ordinary and normal course of business, (vi) lease payment
obligations under leases which Borrower or such Subsidiary is not prohibited
from entering into under the Loan Documents, (vii) all deferred taxes, (viii)
all unfunded pension and other employee benefit plan obligations and
liabilities but only to the extent they are permitted to remain unfunded
under applicable law, (ix) Intercompany Indebtedness, provided that the
amount of any Intercompany Indebtedness which may at any time be outstanding
to any Subsidiary which is not a Borrower shall not exceed $1,000,000 and the
aggregate amount of Intercompany Indebtedness which may be outstanding to all
Subsidiaries which are not Borrowers shall not exceed $3,000,000, (x)
Indebtedness incurred pursuant to Capital Leases having annual lease payments
not exceeding $200,000 in any Fiscal Year, (xi) Indebtedness incurred in the
ordinary course of business other than Indebtedness for borrowed money,
including, but not limited to, obligations for letters of credit not exceeding
$10,000,000 in the aggregate at any time outstanding, (xii) purchase money
Indebtedness in an aggregate amount not to exceed $7,000,000 incurred in
connection with the acquisition of all or substantially all of the assets or
capital stock of Roadway Safety Services, Inc.; and (xiii) Indebtedness
under the Promissory Note dated December 31, 1996 from Quixote Steno
Corporation and Quixote Corporation to Coventry Fund III, Ltd.
(b) Except as otherwise expressly permitted by Section 7.10 hereof, Borrower
shall not and shall not permit any Subsidiary of Borrower to sell or transfer,
either with or without recourse, any assets of any nature whatsoever, or
engage in any sale-leaseback or similar transaction involving any of its
assets existing on the date hereof.
7.4. Employee Loans. Borrower shall not and shall not permit any Subsidiary
of Borrower to make or accrue any loans or other advances of money to any
director, officer or employee of Borrower or such Subsidiary which at any
time exceed an amount equal to (i) $100,000 with respect to any director,
officer or employee, or (ii) $500,000 in the aggregate with respect to all
directors, officers and employees of Borrower and its Subsidiaries.
7.5. Capital Structure. Quixote shall not permit any Subsidiary of Quixote or
any Subsidiary thereof to issue or agree to issue any of their respective
authorized but not outstanding shares of Stock (including treasury shares),
which would be equal to more than 20% of the total outstanding shares of
Stock of such Person. Quixote shall not be restricted by this Section 7.5
from issuing or agreeing to issue its stock.
7.6. Transactions with Affiliates. (a) Except as may otherwise be permitted
under Sections 7.1 and 7.3, Borrower shall not and shall not permit any
Subsidiary of Borrower to enter into or be a party to any transaction with
any Affiliate of Borrower or such Subsidiary, except as otherwise provided
herein or in the ordinary course of and pursuant to the reasonable
requirements of Borrower's or such Subsidiary's business and upon fair and
reasonable terms that are no less favorable to Borrower or such Subsidiary than
would obtain in a comparable arm's length transaction with a Person not an
Affiliate of Borrower or such Subsidiary. The provisions of this Section 7.6
shall not prevent any Borrower or any Subsidiary of any Borrower from entering
into transactions with any other Borrower or Subsidiary which provide for
terms that are more favorable to the Borrower or Subsidiary receiving any goods
or services than would ordinarily be obtained by a Person that is not an
Affiliate.
(b) Except for payments to a Borrower or a subsidiary of a Borrower, Borrower
shall not and shall not permit any Subsidiary of Borrower to enter into any
agreement or transaction to pay to any Person any management or similar fee
based on or related to Borrower's or any of its Subsidiaries' operating
performance or income or any percentage thereof, nor pay any management or
similar fee to an Affiliate. The provisions of this subsection do not restrict
the ability of Borrower or any Subsidiary of Borrower to provide usual and
customary bonus or incentive compensation programs to its employees.
7.7. Guaranteed Indebtedness. Borrower shall not and shall not permit any
Subsidiary of Borrower to incur any Guaranteed Indebtedness except (i)
by endorsement of instruments of items of payment for deposit to the general
account of Borrower or such Subsidiary, and (ii) for Guaranteed Indebtedness
incurred for the benefit of Borrower or any Subsidiary of Borrower if the
primary obligation is permitted by this Agreement.
7.8. Liens. Borrower shall not and shall not permit any Subsidiary of
Borrower to create or permit any Lien on any of its properties or assets
except:
(a) Permitted Encumbrances; and
(b) Liens permitted by Section 6.2 hereof.
7.9. Capital Expenditures. Borrower shall not and shall not permit any of its
Subsidiaries to make Capital Expenditures within any one Fiscal Year that, in
the aggregate, shall exceed (a) 100% of the sum of Quixote's consolidated
income attributable to its continuing operations plus depreciation and
amortization for the 1997 Fiscal Year and (b) for each Fiscal Year
thereafter, the Borrower's Consolidated Net Income plus depreciation and
amortization.
7.10. Sales of Assets. Except as expressly set out in this Section 7.10,
Borrower shall not and shall not permit any Subsidiary of Borrower to sell,
transfer, convey or otherwise dispose of any assets (including Stock of
Subsidiaries) or properties, other than the sale of Inventory in the ordinary
course of business. The foregoing notwithstanding, (i) Borrower or any
Subsidiary of Borrower may sell, transfer, convey or otherwise dispose of
any obsolete or redundant assets or other properties and may transfer any
assets or other properties in connection with any condemnation thereof,
provided that Borrower uses the proceeds thereof or therefrom to purchase
new, additional, replacement or substitute assets or properties (collectively,
"Replacement Assets"), and promptly delivers to Agent written notice of the
use of such proceeds for such purpose to the extent that the value of any
such assets disposed of exceeds $250,000; (ii) Borrower or any Subsidiary
may in addition sell, transfer, convey or otherwise dispose of assets or
properties (in addition to sales of Inventory in the ordinary course of
business and dispositions in which Replacement Assets are acquired), provided
that the aggregate amount of the assets or properties disposed of during any
Fiscal Year does not exceed 20% of the consolidated assets of Quixote and
its Subsidiaries as of the end of the immediately preceding Fiscal Year; and
(iii) Borrower or any Subsidiary may sell, transfer, convey or otherwise
dispose of Stock of any Subsidiary if and to the extent that (x) the
applicable Borrower or Subsidiary receives consideration for such sale,
transfer, conveyance or disposition of not less than reasonably equivalent
value, and (y) the value of all such Stock sold, transferred, conveyed or
otherwise disposed of in any Fiscal Year does not exceed an amount equal to
20% of the consolidated assets (exclusive of Intangible Assets) of Quixote
and its Subsidiaries as of the end of the immediately preceding Fiscal Year.
Any Replacement Asset purchased by Borrower or any Subsidiary of Borrower
shall be free and clear of all Liens, except for those permitted hereunder.
7.11. Cancellation of Indebtedness; Prepayment. Borrower shall not and shall
not permit any Subsidiary of Borrower to cancel any claim or debt owing to
it, except for reasonable consideration or in the ordinary course of business.
7.12. Events of Default. Borrower shall not and shall not permit any
Subsidiary of Borrower to take or omit to take any action, which act or
omission would constitute (i) a default or an event of default pursuant to,
or noncompliance with any of, the terms of any of the Loan Documents or the
Other Agreements; or (ii) a material default or an event of default pursuant
to, or noncompliance with any other contract, lease, mortgage, deed of trust
or instrument to which it is a party or by which it or any of its property
is bound, or any document creating a Lien, unless, in either case, such
default, event of default or noncompliance could not reasonably be expected
to have a Material Adverse Effect.
7.13. Hedging Transactions. Except currency hedging in the ordinary course of
business, Borrower shall not and shall not permit any of its Subsidiaries to
engage in any interest rate hedging, swaps, caps or similar transaction,
except for such types of transactions provided by or through any of Northern,
LaSalle National Bank or American National Bank and Trust Company of Chicago.
7.14. Restricted Payments. Borrower shall not make any Restricted Payments
except for (i) semiannual dividends not to exceed 50% of Borrower's
Consolidated Net Income for the Fiscal Year in which such dividends are paid
and (ii) purchases of Stock issued by Borrower for an aggregate amount not to
exceed 1,000,000 shares of Stock.
7.15. ERISA. Borrower shall not, directly or indirectly, and will not permit
any ERISA Affiliate to, directly or indirectly (i) terminate any Plan
subject to Title IV of ERISA so as to result in any liability to Borrower or
any ERISA Affiliate which could reasonably be expected to have a Material
Adverse Effect, (ii) permit to exist any ERISA Event or any other event or
condition which presents the risk of liability of Borrower or any ERISA
Affiliate which could reasonably be expected to have a Material Adverse
Effect, (iii) make a complete or partial withdrawal (within the meaning of
Section 4201 of ERISA) from any Multiemployer Plan so as to result in any
liability to Borrower or any ERISA Affiliate which could reasonably be
expected to have a Material Adverse Effect, (iv) enter into any new Plan or
modify any existing Plan so as to increase its obligations thereunder which
could result in any liability to Borrower or any ERISA Affiliate which could
reasonably be expected to have a Material Adverse Effect, or (v) permit the
present value of all Benefit Liabilities under each Plan (using the actuarial
assumptions utilized by the PBGC upon termination of a Plan) materially to
exceed the fair market value of Plan assets allocable to such benefits, all
determined as of the then most recent valuation date for each such Plan.
8. TERM AND TERMINATION
(a) The agreement of Lenders to extend Revolving Credit Loans to Borrower and
of Borrower to borrow money from Lenders pursuant to this Agreement and the
Revolving Credit Notes shall continue for a period of three (3) years ending
October 31, 2000 ("Original Term") and on each October 31, commencing October
31, 1997, the Revolving Credit Loan shall be subject to extension for
successive one-year periods ("Renewal Term(s)") with the written consent of
all of the Lenders. Either Borrower or Required Lenders may terminate
financing under the Revolving Credit Loan at the end of the Original Term or
at the end of any Renewal Term by giving to the other party written notice
of termination hereunder, by registered or certified mail addressed to the
other party at its principal place of business at least 90 days prior to the
end of any such term, in the case of Borrower, or at least 60 days prior to
the end of any such term, in the case of Required Lenders. In order for such
notice of termination to become effective, Borrower shall, on or before the
termination date, either (i) pay to Lenders in full all of Borrower's
Obligations under this Agreement, the Letters of Credit Obligations and the
Notes, or (ii) cause the conversion of the Revolving Credit Loan into the
Term Loan to become effective.
9. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
9.1. Events of Default. The occurrence of any one or more of the following
events (regardless of the reason therefor) shall constitute an "Event of
Default" hereunder:
(a) Borrower shall fail to make any payment of principal of the Revolving
Credit Loan or the Term Loan when due and payable or declared due and payable
and such failure shall remain unremedied for a period of three (3) days.
(b) Borrower shall fail to make any payment of interest on the Revolving Credit
Loan or the Term Loan when due and payable and such failure shall remain
unremedied for a period of five (5) days.
(c) Borrower shall fail to make any payment of expenses payable under this
Agreement, or fail to pay any of the other Obligations owing under any Loan
Document, and such failure shall have remained unremedied for a period of
five (5) days after Borrower has received notice of such failure from Agent
or any Lender.
(d) Borrower shall fail or neglect to perform, keep or observe any of the
provisions of Section 6.3 ("Financial Covenants") or Section 7 of this
Agreement.
(e) Borrower shall fail or neglect to perform, keep or observe any other
provision of this Agreement or of any of the other Loan Documents, and the
same shall remain unremedied for a period ending 15 days after Borrower
shall receive written notice of any such failure from Agent or any Lender;
provided, however, that if such failure cannot be remedied during such
15-day period despite all reasonable efforts of Borrower, then such 15-day
period, as the case may be, shall be extended by an additional 30 days or
such longer period of time (but not more than 60 days without the consent of
Required Lenders, which shall not be unreasonably withheld) as is necessary
to cure such failure as long as Borrower is proceeding diligently to cure
such failure and the delay could not reasonably be expected to have a
Material Adverse Effect.
(f) A default shall occur under any other agreement, document or instrument
to which Borrower is a party or by which Borrower or Borrower's property is
bound and such default is not cured within any applicable grace period or
waived in writing, or being contested pursuant to the provisions of Section
6.2 and such default either (i) involves the failure to make any payment
when due of an amount in excess of $250,000 (whether of principal, interest
or otherwise and whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) in respect of any Indebtedness of Borrower,
or (ii) causes (or permits any holder of such Indebtedness or a trustee to
cause) such Indebtedness or a portion thereof in an aggregate amount
exceeding $250,000 to become due prior to its stated maturity or prior to its
regularly scheduled dates of payment.
(g) Any representation or warranty herein or in any Loan Document or in any
written statement pursuant thereto or hereto, report, financial statement or
certificate made or delivered to Lenders by Borrower shall be untrue or
incorrect in any material respect as to Borrower and its Subsidiaries taken
as a whole, as of the date when made or deemed made (including those made or
deemed made pursuant to Section 3.5 and Section 3.6).
(h) Any of the assets of Borrower (i) having an aggregate value in excess of
$50,000 shall be attached, seized, levied upon or subjected to a writ or
distress warrant, or come within the possession of any receiver, trustee,
custodian or assignee for the benefit of creditors of Borrower and shall
remain unstayed or undismissed for 30 consecutive days; (ii) any Person shall
apply for the appointment of a receiver, trustee or custodian for any of the
assets of Borrower and shall remain unstayed or undismissed for 30
consecutive days; or (iii) Borrower shall have concealed, removed or
permitted to be concealed or removed, any part of its property with intent
to hinder, delay or defraud its creditors or any of them or made or suffered
a transfer of any of its property or the incurring of an obligation which may be
fraudulent under bankruptcy, fraudulent conveyance or other similar law.
(i) A case or proceeding shall have been commenced against Borrower in a court
having competent jurisdiction seeking a decree or order in respect of
Borrower (i) under title 11 of the United States Code, as now constituted or
hereafter amended or any other applicable Federal, state or foreign
bankruptcy or other similar law, (ii) appointing a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or similar official) of Borrower
or of any substantial part of its properties, or (iii) ordering the
winding-up or liquidation of the affairs of Borrower and such case or
proceeding shall remain undismissed or unstayed for 30 consecutive days or
such court shall enter a decree or order granting the relief sought in such
case or proceeding.
(j) Borrower shall (i) file a petition seeking relief under title 11 of the
United States Code, as now constituted or hereafter amended, or any other
applicable Federal, State or foreign bankruptcy or other similar law, (ii)
consent to the institution of proceedings thereunder or to the filing of any
such petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee or sequestrator (or similar official)
of Borrower or of any substantial part of its properties, (iii) fail
generally to pay its debts as such debts become due, or (iv) take any
corporate action in furtherance of any such action.
(k) Final judgment or judgments (after the expiration of all times to appeal
therefrom) for the payment of money in excess of $5 ,000,000 in the
aggregate shall be rendered against Borrower and the same shall not (i) be
fully covered by insurance in accordance with Section 6.6 hereof, or (ii)
within thirty (30) days after the entry thereof, have been discharged or
execution thereof stayed pending appeal, or shall not have been discharged
within five (5) days after the expiration of any such stay.
(l) With respect to any Plan: (i) or any Defined Contribution Plan or Welfare
Plan, Borrower or any ERISA Affiliate or any other party-in-interest or
disqualified person shall engage in any transactions which in the aggregate
would reasonably result in a final assessment or liability to Borrower or
any Subsidiary of Borrower in excess of $50,000 under Section 409 or 502 of
ERISA or IRC Section 4975, which assessment or liability has not been paid
within 30 days of final assessment and which is not being contested pursuant
to Sections 6.2(b) or (c) hereof; (ii) Borrower or any Subsidiary of Borrower
shall incur any accumulated funding deficiency, as defined in IRC Section
412, in the aggregate in excess of $50,000, or request a funding waiver from
the IRS for contributions in the aggregate in excess of $50,000; (iii)
Borrower or any ERISA Affiliate shall not pay any withdrawal liability which
involves annual withdrawal liability payments which exceed $50,000, as a
result of a complete or partial withdrawal within the meaning of Section 4203
or 4205 of ERISA, within 30 days after the date such payment becomes due,
unless such payment is being contested pursuant to Sections 6.2(b) or (c)
hereof; (iv) Borrower or any ERISA Affiliate shall fail to make a required
contribution by the due date under Section 412 of the IRC or Section 302 of
ERISA which would result in the imposition of a lien under Section 412 of
the IRC or Section 302 of ERISA within 30 days after the date such payment
becomes due, unless such payment is being contested pursuant to Sections
6.2(b) or (c) hereof; or (v) an ERISA Event with respect to a Plan has
occurred, and within the time period described below, such ERISA Event has
not been corrected, with the time periods to correct such ERISA Event being
as follows: (A) with respect to an event described in clause (a) of the
definition of ERISA Event, within 60 days after the occurrence of such
event; (B) with respect to an event described in clause (b) of the definition
of ERISA Event, within 30 days after the date on which withdrawal liability
under Section 4063 becomes due and owing; (C) with respect to an event
described in clause (c) of the definition of ERISA Event, before the final
distribution of the assets from the Plan that was terminated; or (D) with
respect to an event described in clause (d) or clause (e) of the definition
of ERISA Event, within 30 days after the institution of proceedings by the
PBGC to terminate such Plan or Borrower or any ERISA Affiliate has incurred
liability under Title IV of ERISA for such Plan; provided, however, that an
ERISA Event shall not constitute an Event of Default if the maximum
liability (determined after the time periods for correction described above)
which Borrower or any Subsidiary of Borrower could incur under Section 4062,
4063, 4064, 4201, 4219 or 4243 of ERISA, or any other provision of law
with respect to a Plan, as a result of such event does not exceed $50,000
(computed by the actuary for the Plan taking into account any applicable
rules or regulations of the PBGC and based on actuarial assumptions used by
the Plan), or the ERISA Event is being contested under Sections 6.2(b) or
(c) hereof.
(m) There exists any uncorrected violation by Borrower or any Subsidiary of
Borrower of any Environmental Laws which requires, or may require, a
"response", as defined under CERCLA, or other remedial action by Borrower
or any Subsidiary of Borrower under any Environmental Laws, such uncorrected
violation could reasonably be expected to have a Material Adverse Effect,
and such "response" or other remedial action is not completed within 90 days
from the date of written notice from Agent to Borrower of the violation, or
such longer period of time as is necessary to cure such violation as long as
Borrower or such Subsidiary is proceeding diligently to cure such violation
and the delay could not reasonably be expected to have a Material Adverse
Effect.
(n) 50% or more of the outstanding capital stock of Quixote is owned by any
one Person and/or the Affiliates of any one Person or, without the consent
of Required Lenders, at least 51% of the voting Stock of any Borrower (other
than Quixote) is not owned by Quixote and/or any other Borrower.
9.2. Remedies. If any Event of Default shall have occurred and be continuing,
Agent may, or at the request of the Required Lenders, shall, without notice,
(i) terminate this facility with respect to further Revolving Credit
Advances, whereupon no Revolving Credit Advances may be made hereunder,
and/or (ii) declare all Obligations to be forthwith due and payable,
whereupon all Obligations shall become and be due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
expressly waived by Borrower; provided, however, that upon the occurrence of
an Event of Default specified in Sections 9.1(i) or hereof, the Obligations
shall become due and payable without declaration, notice or demand by Agent.
Agent shall take such action with respect to any Default or Event of Default
as shall be directed by the Required Lenders; provided that, unless and
until Agent shall have received such directions, Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of Agent and Lenders holding Revolving Credit Notes or Term
Notes taken as a whole, including any action (or the failure to act)
pursuant to the Loan Documents.
9.3. Waivers by Borrower. Except as otherwise provided for in this Agreement
and applicable law, each Borrower waives (i) presentment, demand and protest
and notice of presentment, dishonor, notice of intent to accelerate, notice
of acceleration, protest, default, nonpayment, maturity, release, compromise,
settlement, extension or renewal of any or all commercial paper, accounts,
contract rights, documents, instruments, chattel paper and guaranties at any
time held by Agent or any Lender on which Borrower may in any way be liable
and hereby ratifies and confirms whatever Agent or any Lender may do in this
regard; (ii) all rights to notice and a hearing prior to Agent's or any
Lender's taking possession or control of, or to Agent's or Lender's replevy,
attachment or levy upon, the assets of any Borrower or any bond or security
which might be required by any court prior to allowing Agent or any Lender to
exercise any of its remedies; and (iii) the benefit of all valuation, appraisal
and exemption laws. Borrower acknowledges that it has been advised
by counsel of its choice with respect to this Agreement, the other Loan
Documents and the transactions evidenced by this Agreement and the other
Loan Documents.
9.4. Right of Setoff. Upon the occurrence and during the continuance of any
Event of Default and Agent's termination of this facility or Agent's declaring
all Obligations to be forthwith due and payable pursuant to the provisions
of Section 9.2 hereof, each Lender is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to setoff and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by such Lender to or
for the credit or the account of Borrower against any and all of the
obligations of Borrower now or hereafter existing under this Agreement, and
the Notes held by such Lender irrespective of whether or not such Lender
shall have made any demand under this Agreement or any such Note and although
such obligations may be unmatured. Each Lender agrees promptly to notify
Borrower after any such setoff and application made by such Lender; provided,
however, that the failure to give such notice shall not affect the validity
of such setoff and application. The rights of each Lender under this Section
9.4 are in addition to other rights and remedies (including, without
limitation, other rights of setoff) which such Lender may have.
10. THE AGENT
10.1. Authorization and Action. Each Lender hereby appoints and authorizes
Agent to take such action on its behalf and to exercise such powers under
this Agreement, and the other Loan Documents as are delegated to Agent by
the terms hereof and thereof, together with such powers as are reasonably
incidental thereto. As to any matters not expressly provided for by this
Agreement and the other Loan Documents (including, without limitation,
enforcement or collection of the Notes), Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or
to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders (or, with
respect to those actions to be taken at the direction of the holders of a
majority of the principal amount of Revolving Credit Notes, upon the
instruction of such holders), and such instructions shall be binding upon
all Lenders; provided, however, that Agent shall not be required to take any
action which exposes Agent to personal liability or which is contrary to
this Agreement or the other Loan Documents or applicable law. Agent agrees
to give each Lender prompt notice of each notice given to it by Borrower
pursuant to the terms of this Agreement and the other Loan Documents.
10.2. Agent Reliance, Etc. Neither Agent nor any of its directors, officers,
agents or employees shall be liable for any action taken or omitted to be
taken by it or them under or in connection with this Agreement or the other
Loan Documents, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, Agent:
(i) may treat the payee of any Note as the holder thereof until Agent receives
written notice of the assignment or transfer thereof signed by such payee and
in form satisfactory to Agent; (ii) may consult with legal counsel,
independent public accountants and other experts selected by it and shall
not be liable for any action taken or omitted to be taken in good faith
by it in accordance with the advice of such counsel, accountants or experts;
(iii) makes no warranty or representations to any Lender and shall not be
responsible to any Lender for any statements, warranties or representations
made in or in connection with this Agreement or the other Loan Documents;
(iv) shall not have any duty to ascertain or to inquire as to the performance
or observance of any of the terms, covenants or conditions of this Agreement
or the other Loan Documents on the part of Borrower or to inspect the
property (including the books and records) of Borrower; (v) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or the
other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto; and (vi) shall incur no liability under or in respect of
this Agreement or the other Loan Documents by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telecopy, telegram,
cable or telex) believed by it to be genuine and signed or sent by the
proper party or parties.
10.3. Northern and Affiliates. With respect to its commitment hereunder to
make Revolving Credit Advances and the Term Loan, Northern shall have the same
rights and powers under this Agreement and the other Loan Documents as any
other Lender and may exercise the same as though it were not Agent; and the
term "Lender" or "Lenders" shall, unless otherwise expressly indicated,
include Northern in its individual capacity. Northern and its Affiliates may
lend money to, and generally engage in any kind of business with, Borrower,
any of its Subsidiaries and any Person who may do business with or own
securities of Borrower or any such Subsidiary, all as if Northern were not
Agent and without any duty to account therefor to Lenders.
10.4. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon Agent or any other Lender and based
on the financial statements referred to in Section 4.6 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon Agent 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 this Agreement.
10.5. Indemnification. Lenders agree to indemnify Agent (to the extent not
reimbursed by Borrower), ratably according to the respective principal
amounts of the Notes then held by each of them, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by, or asserted against Agent in any way
relating to or arising out of this Agreement or any other Loan Document or
any action taken or omitted by Agent under this Agreement; provided that no
Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from Agent's gross negligence or wilful misconduct.
Without limitation of the foregoing, each Lender agrees to reimburse Agent
promptly upon demand for its ratable shares of any out-of-pocket expenses
(including counsel fees) incurred by Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement and each
other Loan Document, to the extent that Agent is not reimbursed for such
expenses by Borrower.
10.6. Successor Agent. Agent may resign at any time by giving written notice
thereof to Lenders and Borrower. Upon any such resignation, the Required
Lenders shall have the right to appoint a successor Agent which shall be
reasonably acceptable to Borrower. If no successor Agent shall have been so
appointed by the Required Lenders, and shall have accepted such appointment,
within 30 days after the retiring Agent's giving notice of resignation, then
the retiring Agent may, on behalf of the Lenders, appoint a successor Agent,
which shall be a commercial bank or financial institution organized under the
laws of the United States of America or of any State thereof and having a
combined capital and surplus of at least $50,000,000 and which shall be
reasonably acceptable to Borrower. Upon the acceptance of any appointment
as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations under this Agreement and the other
Loan Documents. After any retiring Agent's resignation hereunder as Agent,
the provisions of this Section 10 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement and the other Loan Documents.
11. MISCELLANEOUS
11.1. Complete Agreement; Modification of Agreement; Sale of Interest.
The Loan Documents constitute the complete agreement between the parties with
respect to the subject matter hereof and may not be modified, altered or
amended except by an agreement in writing signed by Borrower, Agent and
Required Lenders. Borrower may not sell, assign or transfer any of the Loan
Documents or any portion thereof, including, without limitation, Borrower's
rights, title, interests, remedies, powers and duties hereunder or thereunder.
Borrower hereby consents to Agent's and any Lender's sale of participations,
assignment, transfer or other disposition, at any time or times, of any of
the Loan Documents or of any portion thereof or interest therein, including,
without limitation, Agent's and any Lender's rights, title, interests,
remedies, powers or duties thereunder, whether evidenced by a writing or not;
and Borrower agrees that it will use its best efforts to assist and cooperate
with Agent in any manner reasonably requested by Agent to effect the sale of
participations in or assignments of any of the Loan Documents or of any
portion thereof or interest therein, including, without limitation,
assistance in the preparation of appropriate disclosure documents or placement
memoranda and executing appropriate amendments to the signature pages hereto
to reflect the addition of any Lenders and such Lender's respective
commitments. Agent and Lenders agree that notwithstanding any sale of
participations, assignment, transfer or other disposition of any of the Loan
Documents or any portion thereof or interest therein, by any Lender, those
Persons that were Lenders on the initial Closing Date shall at all times
retain all voting and consensual rights and such Persons shall be at all
times regarded as the Lenders for purposes of the definition of Required
Lenders.
In the event Agent or any Lender assigns or otherwise transfers all or any
part of the Revolving Credit Notes or the Term Notes, Agent or any such Lender
shall so notify Borrower and Borrower shall record the assignment pursuant
to Section 6.15 hereof, and shall, upon the request of Agent or such Lender,
issue new Revolving Credit Notes or Term Notes in exchange for the old
Revolving Credit Notes or Term Notes.
No amendment or waiver of any provision of this Agreement or the Notes or
any other Loan Document, nor consent to any departure by Borrower therefrom,
shall in any event be effective unless the same shall be in writing and
signed by the Required Lenders, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for
which given; provided, however: (a) that no amendment, waiver or consent shall,
unless in writing and signed by each Lender affected thereby, do any of the
following: (i) increase the Maximum Revolving Credit Loan or the Term Loan
or subject any Lender to any additional obligations, (ii) reduce the
principal of, or interest on, the Notes or other amounts payable hereunder
other than those payable only to Northern which may be reduced by Northern
unilaterally, (iii) postpone any date fixed for any payment of principal of, or
interest on, the Notes or other amounts payable hereunder, other than those
payable only to Northern which may be postponed by Northern unilaterally,
(iv) change the aggregate unpaid principal amount of the Notes, or the
number of Lenders which shall be required for the Lenders or any of them to
take any action hereunder, (v) release or discharge any Person liable for
the performance of any Obligations of Borrower hereunder or under any of the
Loan Documents, or (vi) amend this Section 11.1; and (b) that no amendment,
waiver or consent shall, unless in writing and signed by the Agent in
addition to the Required Lenders required above to take such action, affect
the rights or duties of the Agent under this Agreement, any Note or any Loan
Document.
11.2. Fees and Expenses. Borrower shall pay all reasonable out-of-pocket
expenses of Agent in connection with the preparation of the Loan Documents
(including the reasonable fees and expenses of all of its counsel retained
in connection with the Loan Documents and the transactions contemplated
thereby). If, at any time or times, regardless of the existence of any
Event of Default (except with respect to paragraphs (iii) and (iv) below, which
shall be subject to an Event of Default having occurred and be continuing),
Agent (or in the case of paragraphs (ii), (iii) and (iv) below, any Lender)
shall employ counsel for advice or other representation in connection with
or shall incur reasonable legal or other costs and expenses in connection
with:
(i) any amendment, modification, termination, or waiver, or consent with
respect to, any of the Loan Documents;
(ii) any litigation, contest, dispute, suit, proceeding or action
(whether instituted by Agent or any Lender, Borrower, any Subsidiary of
Borrower or any other Person) in any way relating to any of the Loan
Documents or any other agreements to be executed or delivered in connection
herewith;
(iii) any attempt to enforce any rights of Agent or any Lender against
Borrower, any Subsidiary of Borrower or any other Person, that may be
obligated to any Lender by virtue of any of the Loan Documents; and
(iv) any attempt to verify, protect, collect, sell, liquidate or otherwise
dispose of any assets of Borrower; then, and in any such event, the reasonable
attorneys' fees arising from such services, including those of any appellate
proceedings, and all reasonable expenses, costs, charges and other fees
incurred by such counsel in any way or respect arising in connection with or
relating to any of the events or actions described in this Section 11.2 shall
be payable, on demand, by Borrower to Agent or such Lender and shall be
additional Obligations secured under this Agreement and the other Loan
Documents. Without limiting the generality of the foregoing, such expenses,
costs, charges and fees may include: paralegal fees, costs and expenses;
accountants' fees, costs and expenses; court costs and expenses; photocopying
and duplicating expenses; word processing charges; court reporter fees,
costs and expenses; long distance telephone charges; air express charges;
telegram charges; secretarial overtime charges; and expenses for travel,
lodging and food paid or incurred in connection with the performance of such
legal services.
11.3. No Waiver by Lender. Agent's or any Lender's failure, at any time or
times, to require strict performance by Borrower of any provisions of this
Agreement and any of the other Loan Documents shall not waive, affect or
diminish any right of Agent or such Lender thereafter to demand strict
compliance and performance therewith. Any suspension or waiver by Required
Lenders of an Event of Default by Borrower under the Loan Documents shall not
suspend, waive or affect any other Event of Default by Borrower under this
Agreement and any of the other Loan Documents whether the same is prior or
subsequent thereto and whether of the same or of a different type.
None of the undertakings, agreements, warranties, covenants and representations
of Borrower contained in this Agreement or any of the other Loan Documents,
and no Event of Default by Borrower under this Agreement and no defaults by
Borrower under any of the other Loan Documents, shall be deemed to have been
suspended or waived by Agent or any Lender, unless such suspension or waiver
is by an instrument in writing signed by an officer of Agent and Required
Lenders and directed to Borrower specifying such suspension or waiver.
11.4. Remedies. Agent's and each Lender's rights and remedies under this
Agreement shall be cumulative and nonexclusive of any other rights and
remedies which Agent and Lenders may have under any other agreement,
including, without limitation, the Loan Documents, by operation of law or
otherwise.
11.5. MUTUAL WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN
CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST
QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT
PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO
APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT
THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE
LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS
OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO
WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTON, SUIT OR PROCEEDING
BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES UNDER THIS
AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS OR ANY OF THE OTHER
AGREEMENTS.
11.6. Severability. Wherever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement shall be prohibited by or invalid
under applicable law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
11.7. Parties. This Agreement and the other Loan Documents shall be binding
upon, and inure to the benefit of, the successors of Borrower, Agent and
Lenders and the assigns, transferees and endorsees of Agent and Lenders.
Nothing in this Agreement or the other Loan Documents, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, any benefit or any legal or equitable right, remedy or claim under
this Agreement.
11.8. Conflict of Terms. Except as otherwise provided in this Agreement or
any of the other Loan Documents by specific reference to the applicable
provisions of this Agreement, if any provision contained in this Agreement
is in conflict with, or inconsistent with, any provision in any of other
Loan Documents, the provision contained in this Agreement shall govern and
control.
11.9. Authorized Signatories. Until Agent shall be notified by Borrower to
the contrary, the signature upon any document or instrument delivered
pursuant hereto of an officer of Borrower listed in Schedule 11.9 hereto
shall bind Borrower and be deemed to be the act of Borrower affixed pursuant
to and in accordance with resolutions duly adopted by Borrower's Board of
Directors.
11.10. GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF
THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE
OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF ILLINOIS APPLICABLE TO CONTRACTS MADE AND PERFORMED IN
SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES THEREOF REGARDING
CONFLICT OF LAWS, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA. AGENT, EACH LENDER AND BORROWER AGREE TO SUBMIT TO
PERSONAL JURISDICTION AND TO WAIVE ANY OBJECTION AS TO VENUE IN
THE COUNTY OF ▇▇▇▇, STATE OF ILLINOIS. SERVICE OF PROCESS ON
BORROWER, AGENT OR ANY LENDER IN ANY ACTION ARISING OUT OF OR
RELATING TO ANY OF THE LOAN DOCUMENTS SHALL BE EFFECTIVE IF
MAILED TO SUCH PARTY AT THE ADDRESS LISTED IN SECTION 11.11 HEREOF.
BORROWER HEREBY IRREVOCABLY APPOINTS CT CORPORATION SYSTEM AS
BORROWER'S AGENT FOR THE PURPOSE OF ACCEPTING THE SERVICE OF ANY
PROCESS WITHIN THE STATE OF ILLINOIS. BORROWER AGREES NOTHING
HEREIN SHALL PRECLUDE AGENT, ANY LENDER OR BORROWER FROM
BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER
JURISDICTION.
11.11. Notices. Except as otherwise provided herein, whenever it is provided
herein that any notice, demand, request, consent, approval, declaration or
other communication shall or may be given to or served upon any of the
parties by another, or whenever any of the parties desires to give or serve
upon another any communication with respect to this Agreement, each such
notice, demand, request, consent, approval, declaration or other communication
shall be in writing and shall be delivered in person (by personal delivery,
delivery service or overnight courier service) with receipt acknowledged,
or telecopied and confirmed immediately in writing by a copy mailed by
registered or certified mail, return receipt requested, postage prepaid,
addressed as hereafter set forth, or mailed by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:
(a) If to Northern, as Agent or Lender, at
The Northern Trust Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Division Manager, Division IV
Telecopier No: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Winston & ▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Telecopier No: (▇▇▇) ▇▇▇-▇▇▇▇
and
The Northern Trust Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Law Department
Telecopier No: (▇▇▇) ▇▇▇-▇▇▇▇
(b)If to Borrower, at
Quixote Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopier No: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Quixote Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopier No: (▇▇▇) ▇▇▇-▇▇▇▇
(c)If to any Lender other than Northern, at its address indicated on the
signature pages hereof or in a notice to Borrower of assignment of a Note,
or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in
writing by the party entitled to receive such notice. Every notice, demand,
request, consent, approval, declaration or other communication hereunder
shall be deemed to have been duly given or served on the date on which
personally delivered, in person, by delivery service or by overnight
courier service, with receipt acknowledged, or the date of the telecopy
transmission, or three (3) Business Days after the same shall have been
deposited in the United States mail. Failure or delay in delivering copies
of any notice, demand, request, consent, approval, declaration or other
communication to the persons designated above to receive copies shall in no
way adversely affect the effectiveness of such notice, demand, request,
consent, approval, declaration or other communication.
11.12. Survival. The representations and warranties of Borrower in this
Agreement shall survive the execution, delivery and acceptance hereof by the
parties hereto and the closing of the transactions described herein or
related hereto.
11.13. Section Title. The Section titles and Table of Contents contained in
this Agreement are and shall be without substantive meaning or content of
any kind whatsoever and are not a part of the agreement between the parties
hereto.
11.14. Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which shall, collectively and separately,
constitute one agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first
written above.
THE NORTHERN TRUST COMPANY,
as Agent and as Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President
Revolving Credit Loan Commitment:
$13,334,000
LASALLE NATIONAL BANK,
as Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Assistant Vice President
Revolving Credit Loan Commitment:
$13,333,000
Address for Notices:
LaSalle National Bank
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▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
AMERICAN NATIONAL BANK AND TRUST COMPANY,
as Lender
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Assistant Vice President
Revolving Credit Loan Commitment:
$13,333,000
Address for Notices:
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▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Division Head
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
QUIXOTE CORPORATION ENERGY ABSORPTION SYSTEMS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: .▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title(s): Chief Financial Officer Title(s): Chief Financial Officer,
Vice President and Treasurer Vice President and Treasurer
QUIXOTE LASER CORPORATION QUIXOTE STENO CORPORATION
(f/k/a Disc Manufacturing, Inc.) (f/k/a Stenograph Corporation)
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title(s): Chief Financial Officer, Title(s): Chief Financial Officer,
Vice President and Treasurer Vice President and Treasurer
LEGAL TECHNOLOGIES, INC. TRANSAFE CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title(s): Chief Financial Officer, Title(s): Chief Financial Officer,
Vice President and Treasurer Vice President and Treasurer
LITIGATION COMMUNICATIONS, INC. SPIN-CAST PLASTICS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title(s): Chief Financial Officer, Title(s): Chief Financial Officer,
Vice President and Treasurer Vice President and Treasurer
QUIXOTE LSI CORPORATION SAFE-HIT CORPORATION
(f/k/a Litigation Sciences, Inc.)
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title(s): Chief Financial Officer, Title(s): Chief Financial Officer,
Vice President and Treasurer Vice President and Treasurer
E-TECH TESTING SERVICES, INC. ROADWAY SAFETY SERVICE, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title(s): Chief Financial Officer, Title(s): Chief Financial Officer,
Vice President and Treasurer Vice President and Treasurer