EXHIBIT 10(a)
EXECUTION COPY
SEVENTH AMENDMENT TO LOAN AGREEMENT
THIS SEVENTH AMENDMENT TO LOAN AGREEMENT ("Seventh Amendment"), dated as
of November 10, 1995, is by and among QUIXOTE CORPORATION, a Delaware
corporation ("Quixote"), ENERGY ABSORPTION SYSTEMS, INC., a Delaware
corporation ("EAS"), DISC MANUFACTURING, INC., a Delaware corporation ("DMI"),
LEGAL TECHNOLOGIES, INC., a Delaware Corporation ("LTI"), STENOGRAPH
CORPORATION, a Delaware corporation ("Stenograph"), DISCOVERY PRODUCTS, INC.
f/k/a STENOGRAPH LEGAL SERVICES, INC., a Delaware corporation ("SLS"), SPIN-
CAST PLASTICS, INC., an Indiana corporation ("Spin-Cast"), COURT TECHNOLOGIES,
INC., a Delaware corporation ("Court"), COMPOSITE COMPONENTS, INC., a Delaware
corporation ("CCI"), INTEGRATED INFORMATION SERVICES, INC., a Delaware
corporation ("IIS"), LITIGATION SCIENCES, INC., a Delaware corporation
("LSI"), and SAFE-HIT CORPORATION, a Nevada corporation (Safe-Hit"), the
lenders ("Lenders") named in the Loan Agreement referred to below, and THE
NORTHERN TRUST COMPANY, an Illinois banking corporation ("Northern"), as agent
for the Lenders (Northern, in such capacity, being "Agent"). Quixote, EAS,
DMI, LTI, Stenograph, SLS, Spin-Cast, Court, CCI, IIS, LSI, and Safe-Hit are
individually and collectively referred to herein as "Borrower".
RECITALS
A. Quixote, EAS, DMI, Stenograph, SLS, Spin-Cast, Court, CCI, IIS, LTI,
LSI, Safe-Hit, Agent and Lenders entered into a certain Loan Agreement dated
as of June 26, 1992 as amended by a First Amendment to Loan Agreement, dated
as of June 30, 1992, as further amended by a Second Amendment to Loan
Agreement dated as of May 28, 1993, as further amended by a Third Amendment to
Loan Agreement dated as of June 26, 1993, as further amended by a Fourth
Amendment to Loan Agreement dated May 31, 1994, as further amended by a Fifth
Amendment to Loan Agreement dated December 15, 1994, and as further amended by
a Sixth Amendment to Loan Agreement dated April 3, 1995 (as so amended and as
the same may be hereafter amended, restated, supplemented or otherwise
modified, the "Loan Agreement").
B. Pursuant to the terms of the Loan Agreement, and at the request of
Borrower, the parties wish to further amend the Loan Agreement.
C. In consideration of the mutual agreements contained herein, and
subject to the terms and conditions hereof, the parties hereto agree as
follows:
1. Amendment.
1.1 Terms Used. Terms used but not otherwise defined herein are used
with the same meanings as provided therefor in the Loan Agreement.
1.2 Section 1 of the Loan Agreement. Section 1 of the Loan Agreement is
hereby amended by deleting the definition of Maximum Revolving Credit Loan and
inserting the following in its stead:
"'Maximum Revolving Credit Loan' shall mean an amount equal to $70,000,000,
subject to reduction as provided in Section 2.4."
1.3 Section 2.1 of the Loan Agreement. Section 2.1 of the Loan
Agreement is hereby amended by deleting the first and second sentences of such
Section and inserting the following in its stead:
"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 to the Seventh Amendment
to Loan Agreement dated as of November 10, 1995. The aggregate principal
amount of the Revolving Credit Loan Commitments is $70,000,000."
1.4 Section 6.3 of the Loan Agreement. Section 6.3 of the Loan
Agreement is hereby amended by deleting subsections (b) - (f) thereof and
inserting the following in their stead.
"(b) (i) at the end of the Fiscal Quarter ending December 31, 1995, a positive
Consolidated Net Income for such Fiscal Quarter, (ii) at the end of the Fiscal
Quarter ending March 31, 1996, for the two Fiscal Quarter period then ended, a
positive Consolidated Net Income and (iii) at the end of each succeeding
Fiscal Quarter, for the three Fiscal Quarter period then ended, a positive
Consolidated Net Income, (in each case certified by Quixote at the end of such
Fiscal Quarter).
(c) (i) at the end of the Fiscal Year ended June 30, 1996, a positive
Consolidated Net Income from its continuing operations and (ii) at the end of
each Fiscal Year thereafter, a positive Consolidated Net Income, (in each case
certified by Quixote at the end of such Fiscal Year).
(d) at all times Consolidated Tangible Net Worth (which shall be certified by
Quixote at the end of each Fiscal Year) equal to or greater than
(i) for the 1996 Fiscal Year, $36,000,000;
(ii) for the 1997 Fiscal Year, the sum of (A) $36,000,000 plus
(B) 50% of Quixote's positive Consolidated Net Income for the 1996 Fiscal
Year;
(iii) for the 1998 Fiscal Year, the sum of (A) the required
Consolidated Tangible Net Worth for the 1997 Fiscal Year plus (B) 50% of
Quixote's positive Consolidated Net Income for the 1997 Fiscal Year; and
(iv) for each Fiscal Year thereafter, the sum of (A) the required
Consolidated Tangible Net Worth for the previous Fiscal Year and (B) 50% of
Quixote's positive Consolidated Net Income for the previous Fiscal Year.
(e) at the end of each Fiscal Quarter, a Consolidated Cash Flow to
Consolidated Fixed Charges Ratio (which shall be certified by Quixote at the
end of each Fiscal Quarter) for the four Fiscal Quarter period then ended
equal to or greater than 2.0 to 1.0; provided, however, that with respect to
the Fiscal Quarters ending on or prior to June 30, 1996 such ratio shall be
measured for the period beginning October 1, 1995 and ending at the end of
such Fiscal Quarter.
(f) 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:
(i) 66% for the 1996 Fiscal Year;
(ii) 63% for the 1997 Fiscal Year; and
(iii) 60% for the 1998 Fiscal Year and each Fiscal Year
thereafter."
1.5 Section 8 of the Loan Agreement. Section 8 of the Loan Agreement is
hereby amended by deleting it in its entirety and inserting the following in
its stead:
"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 ending on October 31, 1998
("Original Term") and on each October 31, commencing October 31, 1996, shall
be subject to extension for successive one-year periods ("Renewal Terms") with
the consent of all the Lenders and the Borrower."
1.6 Section 7.9 of the Loan Agreement. Section 7.9 of the Loan
Agreement is hereby amended by deleting it and inserting the following in its
stead:
"7.9 Capital Expenditures. Borrower shall not and shall not permit any of
its Subsidiaries to make Capital Expenditures within any Fiscal Year that, in
the aggregate, shall exceed (i) for the 1996 Fiscal Year, the lesser of (A)
$20,000,000 or (B) the sum of Quixote's Consolidated Net Income attributable
to its continuing operations plus depreciation and amortization for the 1996
Fiscal Year and (ii) for each Fiscal Year thereafter, the sum of Quixote's
Consolidated Net Income plus depreciation and amortization for such Fiscal
Year."
1.7 Exhibit B to the Loan Agreement. Exhibit B to the Loan Agreement is
hereby amended by deleting it in its entirety and inserting in lieu thereof a
new Exhibit B, which is attached hereto as Annex 1.
2. Consent and Approval. The Agent and each of the Lenders hereby
consent to and approve an investment by EAS of up to $1,200,000 in a joint
venture to be known as FIP-Energy Absorption Systems LLC. Notwithstanding
anything to the contrary contained in the Loan Agreement, neither Borrower nor
any Subsidiary of Borrower shall make any other investment in such joint
venture. This consent and approval shall be limited precisely as written and
shall not be deemed to approve any other transaction not otherwise in
compliance with the terms and conditions of the Loan Agreement.
3. Term Loan Agreement. The parties hereto hereby agree that that
certain Term Loan Agreement (the "Term Loan Agreement") dated as of August 4,
1995 among the parties hereto shall be terminated on the date hereof. The
parties hereto hereby agree that all obligations owing under the Term Loan
Agreement by the Borrowers (as defined therein) shall be satisfied by the
Agent increasing the amount of the Revolving Credit Loan by $10,000,000 on the
date hereof and Quixote hereby directs the Agent to make such a Revolving
Credit Loan.
4. Waiver. The Lenders hereby waive any and all Defaults or Events of
Default caused by Borrower's failure to comply with the terms of subsections
6.3(b) through 6.3(f) of the Loan Agreement during the first Fiscal Quarter of
the 1996 Fiscal Year. This waiver shall be limited precisely as written and
shall not be deemed to prejudice the Lenders' rights and remedies with respect
to any future Defaults or Events of Default.
5. Representation and Warranties. In order to induce the Lenders to
enter into this Seventh Amendment, each Borrower represents and warrants that:
5.1 The representations and warranties set forth in Section 4 of
the Agreement, as hereby amended, are true, correct and complete on the date
hereof as if made on and as of the date hereof and that there exists no
Default of Event of Default on the date hereof.
5.2 The execution and delivery by each Borrower of this Seventh
Amendment has been duly authorized by proper corporate proceedings of each
Borrower and this Seventh Amendment, and the Agreement, as amended by this
Seventh Amendment, constitutes a valid and binding obligation of each
Borrower.
5.3 Neither the execution and delivery by each Borrower of this
Seventh Amendment, nor the consummation of the transactions herein
contemplated, nor compliance with the provisions hereof will violate any law,
rule, regulation, order, writ, judgment, injunction, decree or award binding
on any Borrower or any Borrower's articles of incorporation or by-laws or the
provisions of any indenture, instrument or agreement to which any Borrower is
a party or is subject, or by which it or its property, is bound, or conflict
with or constitute a default thereunder.
6. Effective Date. This Seventh Amendment shall become effective as of
the date first above written (the "Effective Date") upon receipt by the Agent
of (i) four (4) copies of this Amendment duly executed by each Borrower, the
Agent and all Lenders, (ii) Revolving Credit Notes executed by each Borrower
in favor of each of the Lenders substantially in the form of Annex 1 hereto
(the "Replacement Notes"), (iii) copies for each Lender of a certificate
executed by each Borrower certifying (a) board resolutions authorizing the
execution and delivery of this Seventh Amendment and the Replacement Notes and
authorizing the borrowings contemplated thereby and (b) incumbency, and (iv) a
$36,000 closing fee.
7. Reference to Loan Agreement. From and after the Effective Date
hereof, each reference in the Loan Agreement to "this Agreement", "hereof", or
"hereunder" or words of like import, and all references to the Loan Agreement
in any and all agreements, instruments, documents, notes, certificates and
other writings of every kind and nature shall be deemed to mean the Loan
Agreement, as amended by this and all previous Amendments.
8. Miscellaneous.
8.1 Except as specifically set forth herein, the Loan Agreement and
all provisions of contained therein shall remain and continue in full force
and effect.
8.2 The execution delivery and effectiveness of this Seventh
Amendment shall not, except as expressly provided for herein, operate as a
waiver of (i) any right, power or remedy of the Lenders or the Agent under the
Loan Agreement, or (ii) any Default or Event of Default under the Loan
Agreement.
8.3 This Seventh Amendment 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.
8.4 This Seventh Amendment may be executed in any number of
separate counterparts, each of which shall, collectively and separately,
constitute one agreement.
IN WITNESS WHEREOF, this Seventh Amendment has been duly executed as of
the date first written above.
THE NORTHERN TRUST COMPANY,
as Agent and as Lender
By: /s/ Daniel J. Honegger
-----------------------------
Name: Daniel J. Honegger
Title: Second Vice President
Revolving Credit Loan
Commitment: $23,333,334
LA SALLE NATIONAL BANK,
as Lender
By: /s/ Betty T. Latson
----------------------------
Name: Betty T. Latson
Title: First Vice President
Revolving Credit Loan
Commitment: $23,333,333
NBD BANK,
as Lender
By: /s/ Peter K. Gillespie
----------------------------
Name: Peter K. Gillespie
Title: Vice President
Revolving Credit Loan
Commitment: $23,333,333
QUIXOTE CORPORATION ENERGY ABSORPTION SYSTEMS, INC.
By: /s/ Myron R. Shain By: /s/ Myron R. Shain
- ---------------------- ----------------------
Name: Myron R. Shain Name: Myron R. Shain
Title: Executive Vice President-Finance Title: Vice President
DISC MANUFACTURING, INC. STENOGRAPH CORPORATION
By: /s/Myron R. Shain By: /s/ Myron R. Shain
- --------------------- ----------------------
Name: Myron R. Shain Name: Myron R. Shain
Title: President Title: Vice President
LEGAL TECHNOLOGIES, INC. DISCOVERY PRODUCTS
By: /s/ Myron R. Shain By: /s/ Myron R. Shain
- ---------------------- ----------------------
Name: Myron R. Shain Name: Myron R. Shain
Title: Vice President Title: Vice President
INTEGRATED INFORMATION SERVICES,INC. SPIN-CAST PLASTICS, INC.
By: /s/ Myron R. Shain By: /s/ Myron R. Shain
- ---------------------- ----------------------
Name: Myron R. Shain Name: Myron R. Shain
Title: Vice President Title: Vice President
LITIGATION SCIENCES, INC. COURT TECHNOLOGIES, INC.
By: /s/ Myron R. Shain By: /s/ Myron R. Shain
- ---------------------- ----------------------
Name: Myron R. Shain Name: Myron R. Shain
Title: Vice President Title: Vice President
SAFE-HIT CORPORATION COMPOSITE COMPONENTS, INC.
By: /s/ Myron R. Shain By: /s/ Myron R. Shain
- ---------------------- ----------------------
Name: Myron R. Shain Name: Myron R. Shain
Title: Vice President Title: Vice President
Document Number: SEVENTH.AMD