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EXHIBIT 10.18
LIMITED FRAUD GUARANTY
This Limited Guaranty is executed as of August 11, 2003, by James.
H.
Long ("Guarantor") in favor of Textron
Financial Corporation ("Textron") and
each of Textron's affiliates (individually
and collectively, "Textron"). For
purposes of this Limited Guaranty, any
party that controls Textron, is
controlled by Textron, or is under common
control with Textron, shall be deemed
an affiliate of Textron.
RECITALS
A.
Whereas, Textron has entered into one or more loan agreements
(as amended, replaced, substituted or
supplemented from time to time, the "Loan
Agreements") with:
I-SECTOR CORPORATION ("I-Sector"), together with
its following subsidiary companies:
STRATASOFT, INC. ("Stratasoft"),
INTERNETWORK EXPERTS, INC. ("INX"),
VALERENT, INC., formerly ALLSTAR SOLUTIONS, INC. ("Valerent"),
(I-Sector, Stratasoft, INX and Valerent are referred to herein,
individually, as an "Obligor" and,
collectively, as the "Obligors"); and
B.
Whereas, Textron is agreeable to increasing the availability
in respect of the existing Loan Agreements
by an amount that has been agreed to
among Textron and the Obligors on the
condition that Guarantor shall execute and
deliver this Guaranty to Textron.
AGREEMENT
In consideration of Textron's increasing the availability in
respect of
the Loan Agreements, as set forth above
(which availability shall in all cases
continue to be subject to the terms and
conditions of the Loan Agreements),
Guarantor hereby agrees as follows:
1.
Limited Nature of Guaranty. In the event that Textron shall at any
time
determine, in good faith, that one or more
of the Obligors and/or the Guarantor
shall have committed a fraud upon Textron
under or in connection with the Loan
Agreements or this Limited Guaranty
(including, without limitation, in
connection with the obtaining and/or
repayment of loans and credit extended
under the Loan Agreements) or shall have
made a misrepresentation to Textron of
a material fact or circumstance under or in
connection with the Loan Agreements
or this Limited Guaranty (including,
without limitation, in connection with the
obtaining and/or repayment of loans and
credit extended under the Loan
Agreements), which has or could have, in
the reasonable opinion of Textron, a
material adverse effect on (a) the timely
payment of the loans and other credit
and amounts payable under the Loan
Agreements, (b) the collateral securing such
loans, credits and other amounts, (c) the
business and/or prospects of any of
the Obligors, (d) the Guarantor or (e) this
Limited Guaranty (a "Triggering
Determination"), Guarantor shall be liable
for all amounts payable and all
obligations to be performed by Obligors
under the Loan Agreements as set forth
therein and herein ("Guarantor Liability").
For the avoidance of doubt, Textron
shall not assert any Guarantor Liability
against Guarantor hereunder unless and
until a Triggering Determination shall have
been made and communicated in
writing to Guarantor.
2.
Limited Scope of Guaranty. Subject to the terms and conditions
of
Section 1 above, Guarantor guarantees to
Textron the prompt payment and/or
performance of all indebtedness,
obligations and liabilities of Obligors at any
time owing to Textron, whether direct or
indirect, matured or unmatured,
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primary or secondary, certain or contingent
or acquired or created by Textron
(individually, a "Guaranteed Obligation"
and, collectively, the "Guaranteed
Obligations"). This Limited Guaranty is a
guaranty of payment. Subject to the
terms and conditions of Section 1 above,
Guarantor guarantees to Textron the
punctual and faithful performance by
Obligors of each and every Guaranteed
Obligation. Without limiting the generality
of the foregoing, in the event of
Guarantor Liability, as referred to in
Section 1 above, if any Obligor defaults
in the payment or performance of any
Guaranteed Obligation, if there exists any
event or condition which, with notice
and/or the passage of time, would
constitute a default under any Guaranteed
Obligation (including, without
limitation, any cross-defaults by or among
the Obligors), or if there is a
liquidation, bankruptcy, assignment for the
benefit of creditors or similar
proceeding affecting the status, existence,
assets or obligations of any
Obligor, Guarantor shall pay directly to
Textron the sums which the Obligors are
obligated to pay to Textron, whether by
acceleration or otherwise, and promptly
perform all other Guaranteed Obligations.
In the event of Guarantor Liability,
as referred to in Section 1 above, and if
Textron is required to return any
payment made to Textron by or on behalf of
any Obligor, whether as a result of
such Obligor's bankruptcy, reorganization
or otherwise, Guarantor acknowledges
that this Limited Guaranty covers all such
amounts, notwithstanding that the
original of this Guaranty may have been
returned to Guarantor and/or otherwise
canceled.
3.
Continuing Nature of Guaranty. This Limited Guaranty is a
continuing
guarantee and shall apply without regard to
the form or amount of the Guaranteed
Obligations in existence at any time with
the following exceptions:
(a) In the event that Guarantor ceases to function as both (i)
the Chairman of
the Board of Directors and the Chief Executive Officer
of I-Sector and (ii) the majority shareholder of I-Sector ("Loss
Of
Control") and Textron shall have approved of such, in writing prior
to
the occurrence of the Loss Of Control, which approval shall not
be
unreasonably withheld, this Limited Guarantee shall apply only
to
Textron debt obligations of the Obligors that were created from
transactions between Textron and the Obligors dated prior to the
date
of Loss Of Control, and once all debt obligations that were
created
prior to the Loss Of Control have been fully, finally and
indefeasibly
repaid to Textron this Limited Guarantee shall terminate without
any
further action by Guarantor or Textron and all obligations
hereunder
shall be deemed satisfied in their entirety.
(b) In the event that Guarantor notifies Textron, in writing,
that Guarantor will no longer prospectively guarantee the
performance
of the terms and conditions, including repayment, of monies loaned
or
financial accommodations provided to any one of the individual
Obligors
(up to and including all of the Obligors) (the "Terminated
Obligor")
pursuant to the Loan Agreements ("Termination Notice"), the
Guarantor
Liability shall be limited to financing extended by Textron to
such
Terminated Obligor through the date of receipt by Textron of
such
Termination
Notice. If Textron continues to provide financing
accommodations, credit, loans or other financing services to
any
Terminated Obligor after receipt of such Termination Notice,
this
Limited Guarantee shall apply only to Textron debt obligations of
the
Terminated Obligor that were created from transactions between
Textron
and such Terminated Obligor prior to the date of receipt by Textron
of
such Termination Notice and any credit extended by Textron to
the
Terminated Obligor after the date of receipt by Textron of such
Termination Notice shall not be considered a Guaranteed Obligation.
The
Guarantor and the Obligors acknowledge and agree that the delivery
of a
Termination Notice may result, in the sole discretion of Textron,
in
the immediate cessation of all fundings and loans to the
affected
Obligor or Obligors by Textron.
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4.
Nature of Guaranty. In the event of Guarantor Liability, as
referred to
in Section 1 above, the obligations of
Guarantor under this Guaranty shall be
absolute and unconditional except as set
forth in Section 3 above, and such
obligations shall not be reduced,
diminished or discharged for any reason,
including, :
(a) Modifications and Indulgences. Any modification, renewal
or alteration of any agreement, document or instrument relating to
any
Guaranteed Obligation, or any indulgence, adjustment,
preference,
extension or compromise made by Textron in favor of any
