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Exhibit
10.83
AMENDMENT AND
FORBEARANCE
This AMENDMENT AND
FORBEARANCE (“Agreement”) to is entered into as of
March 26, 2008 by and between LSQ Funding Group, L.C. and BRE
LLC (collectively, “Lender”), and Tri-S Security
Corporation (“TSS”), Paragon Systems, Inc.
(“Paragon”), The Cornwall Group, Inc., Vanguard
Security, Inc., Forestville Corporation, Vanguard Security of
Broward County, Inc., On Guard Security and Investigations, Inc.,
Armor Security, Inc. (“Armor”), Protection Technologies
Corporation, International Monitoring, Inc., Guardsource Corp. and
Virtual Guard Source, Inc. (collectively,
“Borrower”).
WHEREAS, Lender and Borrower
have, entered into that certain AMENDED AND RESTATED CREDIT
AGREEMENT (the “Credit Agreement”) and that certain
LOAN AND SECURITY AGREEMENT (the “Loan Agreement”),
both dated as of December 31, 2007, and the other documents
entered into and contemplated therein, all as amended hereby
(collectively, “Loan Documents”); and
WHEREAS, Borrower is or may
be in default under section 13.3 of the Loan Agreement, and
sections 5.16, and 5.17 of the Credit Agreement (each of the above
collectively, the “Existing Defaults”). Notwithstanding
anything to the contrary contained herein, no new or other Event of
Default shall be an Existing Default; and
WHEREAS, Borrower has
requested that Lender forbear from exercising its rights and
remedies against Borrower relating to Existing Defaults from the
date hereof through the earlier of the events described below,
January 1, 2009, or the occurrence of an Event of Default
other than an Existing Default (the “Forbearance
Period”). Although Lender is under no obligation to do so,
Lender is willing to forbear from exercising its rights and
remedies against Borrower through the Forbearance Period on the
terms and conditions set forth in this Agreement, so long as
Borrower complies with the terms, covenants and conditions set
forth in this Agreement in a timely manner.
A
GREEMENT
N OW , T
HEREFORE , in consideration of the foregoing
recitals and other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, and intending to be
legally bound, the parties hereto agree as follows:
1. Definitions .
Capitalized terms used but not defined in this Agreement shall have
the meanings given to them in the Credit Agreement and Loan
Agreement.
2. Agreements
.
2.1 Forbearance . So
long as no Event of Default, other than the Existing Defaults,
occurs or exists, subject to the terms and conditions set forth
herein, Lender agrees that during the Forbearance Period, Lender
will not (x) exercise any default remedy available to Lender
under any Loan Document or applicable law; (y) enforce
collection from any Borrower or any Guarantor of any of the
Obligations; or (z) foreclose on its security interest in any
of the Collateral (as defined in all Loan Documents)
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(a) Compliance with
the terms of Section 13.3 of Loan Agreement are waived until
the date that Borrower raises equity or subordinated debt on terms
and conditions that are accepted by Lender, but not later than
January 1, 2009.
(b) Compliance with
terms of Sections 5.16 and 5.17 of Credit Agreement are waived
until the date that Borrower raises equity or subordinated debt on
terms and conditions that are accepted by Lender, but not later
than January 1, 2009.
(c) To the extent that
Borrower shall fail to repay the obligations owing on the 10%
callable convertible promissory notes when due, compliance with
Section 7.1(e) of Credit Agreement shall be waived, unless and
until the date that Borrower raises equity or subordinated debt on
terms and conditions that are accepted by Lender, but not later
than January 1, 2009.
Except as expressly provided
herein, this Agreement does not constitute a waiver or release by
Lender of any Obligations or of any Event of Default other than the
Existing Defaults, or of any Event of Default which may arise in
the future after the date of this Agreement. If Borrower does not
comply with the terms of this Agreement and the Loan Documents, as
modified herein, Lender shall have no further obligations under
this Agreement and shall be permitted to exercise at such time any
rights and remedies against Borrower as it deems appropriate in its
sole and absolute discretion. Borrower understands that Lender has
made no commitment and is under no obligation whatsoever to grant
any additional extensions of time at the end of the Forbearance
Period.
3. Limitation of
Forbearance .
3.1 This Agreement is
effective for the purposes set forth herein and shall be limited
precisely as written and shall not be deemed to (a) be a
consent to any amendment, waiver or modification of any other term
or condition of any Loan Document, or (b) otherwise prejudice
any right or remedy which Lender may now have or may have in the
future under or in connection with any Loan Document.
3.2 This Agreement
shall be construed in connection with and as part of the Loan
Documents and all terms, conditions, representations, warranties,
covenants and agreements set forth in the Loan Documents are hereby
ratified and confirmed and shall remain in full force and
effect.
4. Representations and
Warranties . To induce Lender to enter into this Agreement,
Borrower hereby represents and warrants to Lender as
follows:
4.1 Immediately after
giving effect to this Agreement (a) the representations and
warranties contained in the Loan Documents are true, accurate and
complete in all material respects as of the date hereof (except to
the extent such representations and warranties relate to an earlier
date, in which case they are true and correct as of such date), and
(b) no Event of Default other than the Existing Defaults has
occurred and is continuing;
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4.2 Borrower has the
power and authority to execute and deliver this Agreement and to
perform its obligations under the Credit Agreement and Loan
Agreement;
4.3 The organizational
documents of Borrower delivered to Lender on the Effective Date
remain true, accurate and complete and have not been amended,
supplemented or restated and are and continue to be in full force
and effect;
4.4 The execution and
delivery by Borrower of this Agreement and the performance by
Borrower of its obligations under the Credit Agreement and Loan
Agreement have been duly authorized by all necessary action on the
part of Borrower;
4.5 The execution and
delivery by Borrower of this Agreement and the performance by
Borrower of its obligations under the Loan Documents do not and
will not contravene (a) any law or regulation binding on or
affecting Borrower, (b) any contractual restriction with a
Person binding on Borrower, (c) any order, judgment or decree
of any court or other governmental or public body or authority, or
subdivision thereof, binding on Borrower, or (d) the
organizational documents of Borrower;
4.6 The execution and
delivery by Borrower of this Agreement and the performance by
Borrower of its obligations under the Loan Documents do not require
any order, consent, approval, license, authorization or validation
of, or filing, recording or registration with, or exemption by any
governmental or public body or authority, or subdivision thereof,
binding on either Borrower, except as already has been obtained or
made; and
4.7 This Agreement has
been duly executed and delivered by Borrower and is the binding
obligation of Borrower, enforceable against Borrower in accordance
with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, liquidation, moratorium or
other similar laws of general application and equitable principles
relating to or affecting creditors’ rights.
5. Prior Agreement .
The Loan Documents are hereby ratified and reaffirmed and shall
remain in full force and effect. This Agreement is not a novation
and the terms and conditions of this Agreement shall be in addition
to and supplemental to all terms and conditions set forth in the
Loan Documents. In the event of any conflict or inconsistency
between this Agreement and the terms of such documents, the terms
of this Agreement shall be controlling, but such document shall not
otherwise be affected or the rights therein impaired.
6. Release by
Borrower.
6.1 FOR GOOD AND VALUABLE
CONSIDERATION , Borrower hereby forever relieves, releases, and
discharges Lender and its present or former employees, officers,
directors, agents, representatives, attorneys, and each of them,
from any and all claims, debts, liabilities, demands, obligations,
promises, acts, agreements, costs and expenses, actions and causes
of action, of every type, kind, nature, description or character
whatsoever, whether known
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or unknown, suspected or unsuspected,
absolute or contingent, arising out of or in any manner whatsoever
connected with or related to facts, circumstances, issues,
controversies or claims existing or arising from the beginning of
time through and including the date of execution of this Agreement
(collectively “Released Claims”). Without limiting the
foregoing, the Released Claims shall include any and all
liabilities or claims arising out of or in any manner whatsoever
connected with or related to the Loan Documents, the Recitals
hereto, any instruments, agreements or documents executed in
connection with any of the foregoing or the origination,
negotiation, administration, servicing and/or enforcement of any of
the foregoing.
6.2 In furtherance of
this release, Borrower expressly acknowledges and waives any and
all rights under Section 1542 of the California Civil Code, or
any equivalent statute or rule that may be applicable, which
provides as follows:
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