UNCONDITIONAL CONTINUING
GUARANTY
This UNCONDITIONAL CONTINUING
GUARANTY (“ Guaranty ”) is
executed as of October 3, 2008, by DETENTION CONTRACTING
GROUP, LTD. , a Texas limited partnership, ISI
DETENTION CONTRACTING GROUP, INC. , a Texas corporation,
ISI DETENTION CONTRACTING GROUP, INC. , a
California corporation, ISI DETENTION CONTRACTING GROUP,
INC. , a New Mexico corporation, ISI DETENTION
SYSTEMS, INC. , a Texas corporation, ISI SYSTEMS,
LTD. , a Texas limited partnership, METROPLEX
CONTROL SYSTEMS, INC. , a Texas corporation, ISI
CONTROLS, LTD. , a Texas limited partnership,
METROPLEX COMMERCIAL FIRE AND SECURITY ALARMS,
INC. , a Texas corporation, MCFSA, LTD. ,
a Texas limited partnership, COM-TEC SECURITY, LLC
, a Wisconsin limited liability company, and COM-TEC
CALIFORNIA LIMITED PARTNERSHIP , a Wisconsin limited
partnership (each a “ Guarantor ” and
collectively, the “ Guarantors ”), for
the benefit of THE PRIVATEBANK AND TRUST COMPANY ,
an Illinois banking corporation (“ Bank
”).
R E C I T A L S
A. ISI Security Group, Inc., a Delaware
corporation (“ Borrower ”) and Bank
have entered into that certain Loan and Security Agreement of even
date herewith (the “ Loan Agreement ”),
pursuant to which the Bank has agreed to make two (2) revolving
loans and a term loan in the original aggregate amount of
twenty-five million and no/100 dollars ($25,000,000.00) (the
“ Loans ”). All capitalized terms used
herein but not defined herein shall have the meanings ascribed to
them in the Loan Agreement.
B. The Bank is not willing to make the Loans, or
otherwise extend credit, to Borrower unless the Guarantors
unconditionally guaranty payment and performance to Bank of the
Obligations; and
C. Each Guarantor is a subsidiary or affiliate of
the Borrower, and the Guarantors will directly benefit from the
Bank making the Loans to Borrower.
NOW THEREFORE, as an inducement to the Bank to
make the Loans to Borrower, and for other good and valuable
consideration, the receipt and legal sufficiency of which are
hereby acknowledged, each Guarantor agrees with Bank, as
follows:
A G R E E M E N T
:
Section 1. GUARANTY OF OBLIGATIONS .
Each Guarantor hereby absolutely, irrevocably
and unconditionally guarantees to Bank the payment and performance
of the obligations, as defined in the Loan Agreement (the “
Obligations ”), as and when the same shall be
due and payable, whether by lapse of time, by acceleration of
maturity or otherwise. Each Guarantor hereby absolutely,
irrevocably and unconditionally covenants and agrees that it is
liable, jointly and severally, for the Obligations as a primary
obligor, and that each Guarantor shall fully perform each and every
term and provision hereof. This Guaranty is a guaranty of payment
and not of collection only. Bank shall not be required to exhaust
any right or remedy or take any action against Borrower or any
other person or entity or any collateral. Each Guarantor agrees
that, as between each Guarantor and Bank, the Obligations may be
declared to be due and payable for the purposes of this Guaranty
notwithstanding any stay, injunction or other prohibition which may
prevent, delay or vitiate any declaration as regards Borrower and
that in the event of a declaration or attempted declaration, the
Obligations shall immediately become due and payable by Guarantors
for the purposes of this Guaranty.
Section 2. GUARANTY ABSOLUTE .
Each Guarantor guarantees that the Obligations
shall be paid strictly in accordance with the terms of the Loan
Documents. The liability of the Guarantors under this Guaranty is
absolute and unconditional irrespective of: (a) any change in
the time, manner or place of payment of, or in any other term of,
all or any of the Obligations, or any other amendment or waiver of
or any consent to departure from any of the terms of any Loan
Document, including any increase or decrease in the rate of
interest thereon; (b) any release or amendment or waiver of,
or consent to departure from, or failure to act by Bank with
respect to, any other guaranty or support document, or any
exchange, release or non-perfection of, or failure to act by Bank
with respect to, any Collateral, for all or any of the Obligations;
(c) any present or future law, regulation or order of any
jurisdiction (whether of right or in fact) or of any agency thereof
purporting to reduce, amend, restructure or otherwise affect any
term of the Obligations or any Loan Document; (d) any change
in the corporate existence, structure, or ownership of Borrower;
(e) without being limited by the foregoing, any lack of
validity or enforceability of any Loan Document; and (f) any
other setoff, recoupment, defense or counterclaim whatsoever (in
any case, whether based on contract, tort or any other theory) with
respect to the Loan Documents or the transactions contemplated
thereby which might constitute a legal or equitable defense
available to, or discharge of, Borrower or a Guarantor.
Section 3. GUARANTY IRREVOCABLE .
This Guaranty is a continuing guaranty of the
payment of all Obligations now or hereafter existing and shall
remain in full force and effect until payment in full of all
Obligations and other amounts payable under this Guaranty and until
the Loan Documents are no longer in effect.
Section 4. REINSTATEMENT .
This Guaranty shall continue to be effective or
be reinstated, as the case may be, if at any time any payment of
any of the Obligations is rescinded or must otherwise be returned
by the Bank on the insolvency, bankruptcy or reorganization of
Borrower or otherwise, all as though the payment had not been made,
whether or not Bank is in possession of the Guaranty.
Guarantors shall not exercise any rights which
they may acquire by way of subrogation, by any payment made under
this Guaranty or otherwise, until all the Obligations have been
paid in full and the Loan Documents are no longer in effect. If any
amount is paid to any Guarantor on account of subrogation rights
under this Guaranty at any time when all the Obligations have not
been paid in full, the amount shall be held in trust for the
benefit of the Bank and shall be promptly paid to Bank to be
credited and applied to the Obligations, whether matured or
unmatured or absolute or contingent, in accordance with the terms
of the Loan Documents. If Guarantors make payment to Bank of all or
any part of the Obligations and all the Obligations are paid in
full and the Loan Documents are no longer in effect, Bank shall, at
any Guarantor's request, execute and deliver to Guarantors
appropriate documents, without recourse and without representation
or warranty, necessary to evidence the transfer by subrogation to
Guarantors of the interest in the Obligations resulting from the
payment.
Section 6. SUBORDINATION .
Without limiting Bank’s rights under any
other agreement, any liabilities owed by Borrower to any Guarantor
in connection with any extension of credit or financial
accommodation by any Guarantor to or for the account of Borrower,
including but not limited to interest accruing at the agreed
contract rate after the commencement of a bankruptcy or similar
proceeding, are hereby subordinated to the Obligations, and such
liabilities of Borrower to Guarantors, if Bank so requests, shall
be collected, enforced and received by a Guarantor as trustee for
the Bank and shall be paid over to Bank on account of the
Obligations but without reducing or affecting in any manner the
liability of Guarantors under the other provisions of this
Guaranty.
Section 7. REPRESENTATIONS AND WARRANTIES
.
Each Guarantor represents and warrants that:
(a) this Guaranty (i) has been authorized by all
necessary action; (ii) does not violate any agreement,
instrument, law, regulation or order applicable to any Guarantor;
(iii) does not require the consent or approval of any person
or entity, including but not limited to any governmental authority,
or any filing or registration of any kind; and (iv) is the
legal, valid and binding obligation of Guarantors enforceable
against Guarantors, jointly and severally, in accordance with its
terms, except to the extent that enforcement may be limited by
applicable bankruptcy, insolvency and other similar laws affecting
creditors' rights generally; and (b) in executing and
delivering this Guaranty, Guarantors have (i) without reliance
on Bank or any information received from Bank and based upon such
documents and information it deems appropriate, made an independent
investigation of the transactions contemplated hereby and Borrower,
Borrower’s business, assets
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