GUARANTY
THIS GUARANTY (this "Guaranty") is made and entered into as of
January 16, 2001 by Quixote Corporation, a Delaware corporation ("Guarantor").
RECITALS
WHEREAS, Quixote Transportation Safety, Inc., a Delaware
corporation and a wholly-owned subsidiary of Guarantor ("Buyer"), concurrent
with the execution of this Guaranty has entered into that certain Stock Purchase
Agreement of even date herewith (as it may be amended from time to time, the
"Stock Purchase Agreement"; capitalized terms used but not defined herein shall
have the meanings assigned to such terms in the Stock Purchase Agreement) with
Mark Fernandez and Guadalupe Martinez.
WHEREAS, pursuant to the Stock Purchase Agreement, the
consideration paid by Buyer includes delivery of that Promissory Note issued to
Mark Fernandez ("Seller") on January 16, 2001 ("Promissory Note"); and
WHEREAS, Guarantor owns all of the outstanding shares of
capital stock of Buyer, and thus will derive a financial benefit from the Stock
Purchase Agreement.
NOW, THEREFORE, in consideration of the above Recitals, which
are incorporated into the Guaranty below by reference as if fully set forth
therein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by Guarantor, Guarantor agrees with
Seller as follows:
AGREEMENT
ARTICLE I
GUARANTY
Section 1.1. GUARANTY. Guarantor hereby unconditionally and
irrevocably guaranties to Seller the prompt payment in full, whether at
maturity, by acceleration or otherwise (on demand and in lawful money of the
United States) and performance of any and all Guarantied Obligations (as defined
below) when they become due. The term "Guarantied Obligations" as used herein
means: (i) Buyer's obligations to pay principal, interest, and other amounts
payable to Seller under the Promissory Note, (ii) Buyer's obligations to pay all
reasonable costs, legal expenses, attorneys' fees, paralegals' fees, and
professional fees of every kind, paid or incurred by the Seller in enforcing its
rights under the Promissory Note, in each case, subject to the terms and
conditions set forth therein (as may be amended or waived by such Buyer and
Seller from time to time), and (iii) any and all obligations of Buyer arising
out of the Stock Purchase Agreement.
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Section 1.2. CONTINUING GUARANTY. This is a continuing guaranty
of the Guarantied Obligations and shall remain in full force and effect until
payment and performance in full of the Guarantied Obligations. Guarantor
understands and agrees that this Guaranty shall be construed as an irrevocable
and continuing guaranty of payment and performance. Guarantor authorizes Buyer
and Seller without notice or demand and without affecting Guarantor's liability
hereunder, to make any change from time to time to the terms of the Promissory
Note or in any other term of all or any of the Guarantied Obligations, or any
other amendment or waiver of or any consent to departure from the Promissory
Note or any of the documents executed in connection therewith.
Section 1.3. NATURE OF GUARANTY. This Guaranty is a guaranty of
full payment and performance and not merely of collectibility. A separate action
or separate actions under this Guaranty may be brought and prosecuted against
Guarantor whether or not any action is brought or prosecuted against Buyer or
any other person or whether Buyer or any other person is joined in any such
action or actions. Any circumstance which operates to toll any statute of
limitations applicable to Buyer shall also operate to toll the statute of
limitations applicable to Guarantor.
Section 1.4. WAIVERS. Guarantor hereby waives the right to
require Seller to proceed against Buyer or any other person liable on the
Guarantied Obligations or to pursue any other remedy in Seller's power
whatsoever, and Guarantor waives the right to have the proceeds of property of
Buyer or any other person liable on the Guarantied Obligations first applied to
the discharge of the Guarantied Obligations. When making any demand on Guarantor
hereunder against the Guarantied Obligations, Seller may, but shall be under no
obligation to, make a similar demand on Buyer, and any failure by Seller to make
any such demand or to collect any payments from Buyer shall not relieve
Guarantor of its obligations or liabilities hereunder. Seller may, at its
election, exercise any right or remedy it may have against Buyer or any other
person without affecting or impairing in any way the liability of Guarantor
hereunder, except to the extent the Guarantied Obligations have been
indefeasibly paid, and Guarantor waives any defense arising out of the absence,
impairment or loss of any right of reimbursement or subrogation or any other
right or remedy of Guarantor against Buyer, whether resulting from such election
by Seller or otherwise. Guarantor hereby waives, to the fullest extent permitted
by law, all rights and benefits under any applicable law purporting to reduce a
guarantor's obligations in proportion to the obligation of the principal.
Guarantor hereby waives any defense based upon or arising by reason of: (a) any
lack of authority of any officer, director or any other person acting or
purporting to act on behalf of Buyer, or any defect in the formation of Buyer;
(b) any act or omission by Buyer which directly or indirectly results in or aids
the discharge of Buyer or any Guarantied Obligations by operation of law or
otherwise; (c) any modification of the Guarantied Obligations, in any form
whatsoever, including without limitation the renewal, extension, acceleration or
other change in time for payment or performance of the Guarantied Obligations,
any waiver or modification of conditions precedent or any other change in the
terms of the Guarantied Obligations or any part thereof, (d) any disability or
other defenses of Buyer, (e) any and all notices of every kind and description
which may be required to
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be given by any statute or rule of law in any jurisdiction, or (f) any
requirement of diligence or promptness on the part of Seller in the enforcement
of any rights under the provisions of the Guaranteed Obligations or this
Guaranty. Guarantor hereby waives all presentments, demands for performance,
notices of nonperformance, protests, notices of protest, notices of dishonor and
notices of acceptance of this Guaranty and of the existence, creation or
incurring of new or additional obligations. Guarantor assumes the responsibility
for being and keeping itself informed of the financial condition of Buyer and of
all other circumstances bearing upon the risk of nonpayment or nonperformance by
Buyer of the Guarantied Obligations which diligent inquiry would reveal,
represents that they have adequate means of obtaining such financial information
from Buyer on a continuing basis, and agrees that Seller shall have no duty to
advise Guarantor of information known to it regarding such condition or any such
circumstances.
Section 1.5. BANKRUPTCY NOT DISCHARGE. Notwithstanding anything
to the contrary herein contained, this Guaranty shall continue to be effective
or be reinstated, as the case may be, if at any time payment, or any part
thereof, of any or all of the Guarantied Obligations is rescinded or must
otherwise be restored or returned by Seller upon the insolvency, bankruptcy or
reorganization of Buyer. Notwithstanding any modification, discharge or
extension of the Guarantied Obligations or any amendment, waiver, modification,
stay or cure of Seller's rights which may occur in any bankruptcy or
reorganization case or proceeding concerning Buyer, whether permanent or
temporary, and whether or not assented to by Seller, Guarantor hereby agrees
that it shall be obligated hereunder to pay and perform the Guarantied
Obligations and discharge its other obligations in accordance with the terms of
the Guarantied Obligations as set forth in this Guaranty in effect on the date
hereof. Guarantor understands and acknowledges that by virtue of this Guaranty,
it has specifically assumed any and all risks of a bankruptcy or reorganization
case or proceeding with respect to Buyer.
Section 1.6. GUARANTOR'S UNDERSTANDINGS WITH RESPECT TO
WAIVERS. Guarantor warrants and agrees that each of the waivers set forth above
is made with Guarantor's full knowledge of its significance and consequences and
made after the opportunity to consult with counsel of its own choosing, and that
under the circumstances, the waivers are reasonable and not contrary to public
policy or law. If any of said waivers are determined to be contrary to any
applicable law or public policy, such waiver shall be effective only to the
extent permitted by law.
ARTICLE II
MISCELLANEOUS
Section 2.1. SET OFF. Notwithstanding anything herein, this
Guaranty does not in any way waive, modify or derogate Buyer's right to set-off
as set forth in the Stock Purchase Agreement and the Promissory Note.
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Section 2.2. NOTICES. All notices, requests, demands, claims
and other communications hereunder shall be in writing. Any notice, request,
demand, claim, or other communication hereunder shall be deemed duly given (i)
if personally delivered, when so delivered, (ii) if mailed, two Business Days
after having been sent by registered or certified mail, return receipt
requested, postage prepaid and addressed to the intended recipient as set forth
below, (iii) if given by telex or telecopier, once such notice or other
communication is transmitted to the telex or telecopier number specified below
and the appropriate answer back or telephonic confirmation is received, PROVIDED
that a copy of such notice or other communication is promptly thereafter mailed
or sent in accordance with the provisions of clause (ii) or (iv) hereof, or (iv)
if sent through an overnight delivery service in circumstances in which such
service guarantees next day delivery, the day following being so sent:
If to Guarantor or Buyer:
Quixote Corporation
One East Wacker Drive
30th Floor
Chicago, IL 60601
Attn.: Leslie J. Jezuit
Telecopier No.: (312) 467-0197
with copies to:
McBride, Baker & Coles
500 West Madison Street
40th Floor
Chicago, IL 60661-2511
Attn.: Anne Hamblin Schiave
Telecopier No.: (312) 993-9350
If to Seller:
Mark Fernandez
6 Obispo
Rancho Santa Margarita, California 92688
with a copy to:
Rutan & Tucker, LLP
611 Anton Boulevard
14th Floor
Costa Mesa, CA 92626-1998
Attn.: Vicki Dallas
Telecopier No.: (714) 546-9035
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Any party may give any notice, request, demand, claim or other
communication hereunder using any other means (including ordinary mail or
electronic mail), but no such notice, request, demand, claim or other
communication shall be deemed to have been duly given unless and until it
actually is received by the individual for whom it is intended. Any party may
change the address to which notices, requests, demands, claims and other
communications hereunder are to be delivered by giving the other parties notice
in the manner herein set forth.
Section 2.3. SEVERABILITY. Any provision of this Guaranty which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or thereof
or affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 2.4. GOVERNING LAW; JURISDICTION. This Guaranty shall
be governed by and construed in accordance with the substantive laws of the
State of California and the United States of America without regard to any law
which would result in the selection or application of the law of any other
jurisdiction.
Section 2.5. BINDING EFFECT; ASSIGNMENT. This Guaranty shall be
binding upon and inure to the benefit of Seller and Guarantor and their
respective successors and assigns, provided that Guarantor shall not have the
right to assign its rights and obligations hereunder without the prior written
consent of Seller (and any attempted assignment in contravention of the terms
hereof shall be void). This Guaranty shall, without further reference, pass to,
and may be relied on and enforced by, any successor or assignee of Seller.
Section 2.6. HEADINGS. Article and Section headings in this
Guaranty are included herein for the convenience of reference only and shall not
constitute a part of this Guaranty for any other purpose.
Section 2.7. ENTIRE AGREEMENT. This Guaranty constitutes the
entire agreement and understanding between the parties pertaining to the subject
matter hereof and supersedes all prior or contemporaneous drafts, agreements,
representations and understandings of the parties. Each party acknowledges that
it has expressly bargained for a prohibition of any implied or oral amendments
or modifications of any kind, nature or character. Each party agrees and
acknowledges that this Guaranty is fully integrated and not in need of parol
evidence in order to reflect the intentions of the parties, and that the parties
intend the literal words of this agreement to govern the transactions described
herein, and for all prior negotiations, drafts and other extraneous
communications to have no significance or evidentiary effect whatsoever.
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IN WITNESS WHEREOF, this Guaranty has been entered into by the
undersigned as of the date and year first above written.
GUARANTOR:
Quixote Corporation,
a Delaware corporation
By: /s/ Leslie J. Jezuit
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Name: Leslie J. Jesuit
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Title: CEO and President
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