Exhibit 10.2
 
UNCONDITIONAL GUARANTY

 
This Guaranty is made as of December 10, 2009 by each of the undersigned
guarantors (individually, a “Guarantor” and collectively, the “Guarantors”) for
the benefits of Agility Capital, LLC (“Lender”).

Recitals

Lender and Pepperball Technologies-CA, Inc. (“Company”) are parties to that
certain Loan Agreement dated as of November 18, 2005, as amended on April 12,
2006, September 8, 2006, April 20, 2007, October 19, 2007, April 25, 2008,
December 12, 2008, and December 10, 2009, and as may be further amended from
time to time (collectively, the “Agreement”).  Company and Lender propose to
enter into a Sixth Amendment to Loan Agreement dated as of even date herewith
(the “Amendment”).  Guarantor is an affiliate of Company and expects to derive
benefit from Company entering into the Amendment.  Each Guarantor hereby
unconditionally and irrevocably guarantees the prompt and complete payment of
all amounts that Company owes to Lender and performance by Company of the
Agreement, as amended, in strict accordance with its terms.  All terms used
without definition in this Guaranty shall have the meaning assigned to them in
the Agreement.
 
 
1.  The obligations hereunder are joint and several, and whether or not there is
more than one guarantor, the obligations hereunder are independent of the
obligations of Company and any other person or entity, and a separate action or
actions may be brought and prosecuted against Guarantor whether action is
brought against Company or whether Company be joined in any such action or
actions.  Each Guarantor waives the benefit of any statute of limitations
affecting its liability hereunder or the enforcement thereof, to the extent
permitted by law.  Guarantor’s liability under this Guaranty is not conditioned
or contingent upon the genuineness, validity, regularity or enforceability of
the Agreement.
 
2.  Each Guarantor unconditionally and irrevocably guarantees the prompt and
complete payment of all amounts that Company owes to Lender and performance by
Company of the Agreement.  All terms used without definition in this Guaranty
shall have the meaning assigned to them in the Agreement.  If Company does not
pay any amount or otherwise perform its obligations in strict accordance with
the Agreement, Guarantors shall immediately pay all amounts due thereunder
(including, without limitation, all principal, interest, and fees) and otherwise
proceed to complete the same and satisfy all of Company’s obligations under the
Agreement.
 
3.  Each Guarantor authorizes Lender, without notice or demand and without
affecting its liability hereunder, from time to time to (a) renew, extend, or
otherwise change the terms of the Agreement or any part thereof; (b) take and
hold security for the payment of this Guaranty or the Agreement, and exchange,
enforce, waive and release any such security; and (c) apply such security and
direct the order or manner of sale thereof as Lender in its sole discretion may
determine.
 
4.  Each Guarantor waives any right to require Lender to (a) proceed against
Company, any guarantor, or any other person; (b) proceed against or exhaust any
security held from Company; or (c) pursue any other remedy in Lender’s power
whatsoever.  Lender may, at its election, exercise or decline or fail to
exercise any right or remedy it may have against Company or any security held by
Lender, including without limitation the right to foreclose upon any such
security by judicial or nonjudicial sale, without affecting or impairing in any
way the liability of Guarantor hereunder.  Each Guarantor waives any defense
arising by reason of any disability or other defense of Company, or by reason of
the cessation from any cause whatsoever of the liability of Company.  Each
Guarantor waives any setoff, defense or counterclaim that Company may have
against Lender.  Each Guarantor waives any defense arising out of the absence,
impairment or loss of any right of reimbursement or subrogation or any other
rights against Company.  Until all of the amounts that Company owes to Lender
have been paid in full, no Guarantor shall have no right of subrogation or
reimbursement, contribution or other rights against Company, and each Guarantor
waives any right to enforce any remedy that Lender now has or may hereafter have
against Company.  Each Guarantor waives all rights to participate in any
security now or hereafter held by Lender.  Each Guarantor 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
indebtedness.  Each Guarantor assumes the responsibility for being and keeping
itself informed of the financial condition of Company and of all other
circumstances bearing upon the risk of nonpayment of any indebtedness or
nonperformance of any obligation of Company, warrants to Lender that it will
keep so informed, and agrees that absent a request for particular information by
such Guarantor, Lender shall not have any duty to advise each Guarantor of
information known to Lender regarding such condition or any such
circumstances.  Each Guarantor waives the benefits of California Civil code
sections 2809, 2810, 2819, 2845, 2847, 2848, 2849, 2850, 2899, and 3433.
 
 
1

--------------------------------------------------------------------------------

5.  If Company becomes insolvent or is adjudicated Bankrupt or files a petition
for reorganization, arrangement, composition or similar relief under any present
or future provision of the United States Bankruptcy Code, or if such a petition
is filed against Company, and in any such proceeding some or all of any
indebtedness or obligations under the Agreement are terminated or rejected or
any obligation of Company is modified or abrogated, or if Company’s obligations
are otherwise avoided for any reason, each Guarantor agrees that such
Guarantor’s liability hereunder shall not thereby be affected or modified and
such liability shall continue in full force and effect as if no such action or
proceeding had occurred.  This Guaranty shall continue to be effective or be
reinstated, as the case may be, if any payment must be returned by Lender upon
the insolvency, Bankruptcy or reorganization of Company, a Guarantor, any other
guarantor, or otherwise, as though such payment had not been made.  Any
indebtedness of Company now or hereafter held by a Guarantor is hereby
subordinated to any indebtedness of Company to Lender; and during the existence
of an Event of Default such indebtedness of Company to a Guarantor shall be
collected, enforced and received by such Guarantor as trustee for Lender and be
paid over to Lender on account of the indebtedness of Company to Lender but
without reducing or affecting in any manner the liability of Guarantors under
the other provisions of this Guaranty.
 
6.  Each Guarantor agrees to pay reasonable attorneys’ fees and all other costs
and expenses which may be incurred by Lender in the enforcement of this
Guaranty.  No terms or provisions of this Guaranty may be changed, waived,
revoked or amended without Lender’s prior written consent.  Should any provision
of this Guaranty be determined by a court of competent jurisdiction to be
unenforceable, all of the other provisions shall remain effective.  This
Guaranty, together with any Agreement (including without limitation any security
Agreement or any pledge Agreement) executed in connection with this Guaranty,
embodies the entire agreement among the parties hereto with respect to the
matters set forth herein, and supersedes all prior Agreement among the parties
with respect to the matters set forth herein.  No course of prior dealing among
the parties, no usage of trade, and no parol or extrinsic evidence of any nature
shall be used to supplement, modify or vary any of the terms hereof.  There are
no conditions to the full effectiveness of this Guaranty.  Lender may assign
this Guaranty without in any way affecting Guarantor’s liability under it.  This
Guaranty shall inure to the benefit of Lender and its successors and
assigns.  This Guaranty is in addition to the guaranties of any other guarantors
and any and all other guaranties of Company’s indebtedness or liabilities to
Lender.
 
7.  Each Guarantor represents and warrants to Lender that (i) such Guarantor has
taken all necessary and appropriate action to authorize the execution, delivery
and performance of this Guaranty and (ii) execution, delivery and performance of
this Guaranty do not conflict with or result in a breach of or constitute a
default under such Guarantor’s organizational documents or agreements to which
it is party or by which it is bound.
 
8.  This Guaranty shall be governed by the laws of the State of California,
without regard to conflicts of laws principles.  EACH GUARANTOR WAIVES ANY RIGHT
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
THIS GUARANTY OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS.  Each Guarantor submits to the jurisdiction of the state and
federal courts located in Santa Barbara County, California for purposes of this
Guaranty and the Agreement.  If the jury waiver set forth in this Section is not
enforceable, then any dispute, controversy or claim arising out of or relating
to this Agreement or any of the transactions contemplated herein shall be
settled by judicial reference pursuant to Code of Civil Procedure Section 638 et
seq before a mutually acceptable referee sitting without a jury, or if no
agreement is reached, then a referee sitting without a jury selected by the
Presiding Judge of the California Superior Court for Santa Barbara
County.  Nothing in this section shall restrict the exercise of any non-judicial
remedies.
 
 
2

--------------------------------------------------------------------------------

9.  All payments made by each Guarantor hereunder will be made free and clear
of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any governmental authority or by any political
subdivision or taxing authority thereof or therein with respect to such payments
(but excluding any tax imposed on or measured by the net income or profits of a
Lender pursuant to the laws of the jurisdiction in which it is organized or the
jurisdiction in which the principal office or applicable lending office of such
Lender is located or any subdivision thereof or therein) and all interest,
penalties or similar liabilities with respect thereto (all such non-excluded
taxes, levies, imposts, duties, fees, assessments or other charges being
referred to collectively as “Taxes”).  If any Taxes are so levied or imposed,
each Guarantor agrees to pay the full amount of such Taxes, and such additional
amounts as may be necessary so that every payment of all amounts due under this
Guaranty, after withholding or deduction for or on account of any Taxes, will
not be less than the amount provided for herein and in the Loan Documents
 
10.  To secure performance of this Guaranty and any amounts due under this
Guaranty, each Guarantor grants Lender a security interest in all of such
Guarantor’s property, now owned or hereafter arising, including accounts,
inventory, equipment, general intangibles, intellectual property, copyrights,
patents, trademarks, financial assets, securities, instruments, deposit
accounts, chattel paper, investment property, and the proceeds thereof
(collectively, the “Collateral”).  No Guarantor shall not encumber, sell,
license or otherwise dispose of any interest in the Collateral without Lender’s
prior written consent.  Each Guarantor authorizes Lender to file a financing
statement, and take such other actions as Lender deems appropriate to perfect
this security interest.
 
 
 
 
 
 
 
 

--------------------------------------------------------------------------------

In Witness Whereof, the undersigned Guarantor has executed this Guaranty as of
the date first written above.
 

 
PEPPERBALL TECHNOLOGIES, INC.
 
By: /s/ Christin Lewis
 
Title: Asst Secretary
 
Address for notices:
6142 Nancy Ridge Drive, Suite 101
San Diego, CA 92121
Telephone: 858.638.0236
Fax: 858.638.0781
 
 
 
VIZER GROUP, INC.
 
By: /s/ Christin Lewis
 
Title: Asst Secretary
 
Address for notices:
10855 Dover Street, Suite 1000
Westminster, CO 80021
Telephone: 303.439.0372
Fax: 303.439.0414
 
 
VERITAS TACTICAL, INC.
 
By: /s/ Christin Lewis
 
Title: Asst Secretary
 
Address for notices:
10855 Dover Street, Suite 1000
Westminster, CO 80021
Telephone: 303.439.0372
Fax: 303.439.0414
           

 
 
 
 
4