**Exhibit 10.99**

 

**Execution Version**

 

**SEVENTH AMENDMENTTO NOTE AND WARRANT PURCHASE AGREEMENT**

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THIS SEVENTH AMENDMENT TO NOTE AND WARRANT PURCHASEAGREEMENT (this “Amendment”) is dated as of March 30, 2009 by andamong ISI Security Group, Inc., a Delaware corporation formerly known asISI Detention Contracting Group, Inc. (the “Company”), and WilliamBlair Mezzanine Capital Fund III, L.P., a Delaware limited partnership(the “Purchaser”).

 

RECITALS:

 

**WHEREAS**, theCompany, the Purchaser and the Guarantors (as such term is defined in thePurchase Agreement (as defined below)) (such Guarantors are parties to thePurchase Agreement solely for the purposes of Section 8 thereof)previously entered into that certain Note and Warrant Purchase Agreement, datedas of October 22, 2004, as amended by that certain Omnibus First Amendmentto Note and Warrant Purchase Agreement and Warrant dated as of November 1,2005, by that certain Omnibus Second Amendment to Note and Warrant PurchaseAgreement and Warrant, dated as of July 31, 2007, by that certain ThirdAmendment to Note and Warrant Purchase Agreement, dated as of January 2,2008, by that certain Fourth Amendment to Note and Warrant Purchase Agreement,dated as of June 25, 2008, by that certain Fifth Amendment and Waiver toNote and Warrant Purchase Agreement, dated as of November 13, 2008 and bythat certain Sixth Amendment to Note and Warrant Purchase Agreement, dated asof January 8, 2009 (as further amended, restated, supplemented orotherwise modified from time to time, the “Purchase Agreement”);

 

**WHEREAS**, theCompany has requested, and the Purchaser is willing to, amend the PurchaseAgreement, subject to the terms and conditions of this Amendment;

 

**WHEREAS**, thisAmendment shall constitute a Transaction Document, and these Recitals shall beconstrued as part of this Amendment; and

 

**WHEREAS**,capitalized terms used but not otherwise defined herein shall have therespective meanings given to them in the Purchase Agreement.

 

**NOW, THEREFORE**, inconsideration of the above premises, the agreements contained herein and othergood and valuable consideration, the adequacy, sufficiency and receipt of whichare hereby acknowledged, the parties hereto agree as follows:

 

Section 1.               Amendment to thePurchase Agreement.

 

(a)           Effective as of December 31,2008, Section 1.1 of the Purchase Agreement is hereby amended by amendingand restating the following definitions in their entirety:

 

““PermittedIndebtedness” means:

 

(a)           the Obligations;

 

(b)           the Senior Debt;

 

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(c)           Indebtedness (other thanwith regard to the Green Wing Lease as described in subpart (i) below) not toexceed $600,000 in the aggregate at any time outstanding secured by purchasemoney Liens or incurred with respect to Capital Leases;

 

(d)           Indebtedness identifiedon the Indebtedness Schedule,

 

(e)           unsecured Indebtednessto trade creditors incurred in the ordinary course of business;

 

(f)            Indebtedness securedby Permitted Encumbrances;

 

(g)           operating leaseobligations, excluding real property leases, requiring payments not to exceed$500,000 in the aggregate for the Company and its Subsidiaries during anyFiscal Year of the Company;

 

(h)           operating leaseobligations solely with respect to real property leases requiring payments notto exceed $750,000 in the aggregate for the Company and its Subsidiaries duringany Fiscal Year of the Company;

 

(i)            intercompanyIndebtedness; and

 

(j)            Indebtedness inconnection with the Green Wing Lease.”

 

(b)           Section 4.7(a) ofthe Purchase Agreement is hereby amended and restated in its entirety to readas follows:

 

“(a)         Maximum CapitalExpenditures.  (i) For thefiscal quarters ending March 31, 2009, June 30, 2009 and September 30,2009, the Company and its Subsidiaries, on a consolidated basis, shall not makeCapital Expenditures in excess of $330,000 per fiscal quarter; and (ii) forthe twelve (12) month period ending on December 31, 2009 and each twelve(12) month period ending on the last day of each fiscal quarter thereafter, theCompany and its Subsidiaries, on a consolidated basis, shall not make CapitalExpenditures in excess of $2,000,000.”

 

Section 2.               Representationsand Warranties.  To induce thePurchaser to enter into this Amendment, the Company represents and warrantsthat:

 

(a)           Representations,Warranties; No Default.  Thewarranties and representations of the Company contained in the TransactionDocuments shall be true and correct as of the effective date hereof, with thesame effect as though made on such date, except to the extent that suchwarranties and representations expressly relate to an earlier date.  No Event of Default or Potential Event ofDefault has occurred and is continuing under the Purchase Agreement.

 

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(b)           OrganizationalAuthority.  (i) The execution,delivery and performance by the Company of this Amendment are within itscorporate powers and have been duly authorized by all necessary corporateaction, (ii) this Amendment is the legal, valid and binding obligation ofthe Company enforceable in accordance with its terms and (iii) neither theexecution and delivery nor the performance by the Company of this Amendment (1) violatesany law or regulation, or any other decree of any governmental body, (2) conflictswith or results in the breach or termination of, constitutes a default under oraccelerates any performance required by, any indenture, mortgage, deed oftrust, lease, agreement or other instrument to which such Person is a party orby which such Person or any of its property is bound, (3) results in thecreation or imposition of any Lien, upon any of the Collateral (as defined inthe Senior Loan Documents) other than Liens in favor of the Senior Lender,(4) violates or conflicts with the certificate of incorporation or bylawsof such Person, or (5) requires the consent, approval or authorization of,or declaration or filing with, any other Person, except for those already dulyobtained.

 

Section 3.               ConditionsPrecedent.  The effectiveness of thisAmendment is subject to the following conditions precedent:

 

(a)           No Default.  No Potential Event of Default or Event ofDefault under the Purchase Agreement shall have occurred and be continuing.

 

(b)           Warranties andRepresentations.  The warranties andrepresentations of the Company contained in the Transaction Documents shall betrue and correct as of the effective date hereof, with the same effect asthough made on such date, except to the extent that such warranties andrepresentations expressly relate to an earlier date.

 

(c)           Execution andDelivery.  The Company and thePurchaser shall have executed and delivered this Amendment, that certainAllonge to Amended and Restated Senior Subordinated Promissory Note A dated asof the date hereof between the Company and the Purchaser and that certainAllonge to Third Amended and Restated Senior Subordinated Promissory Note datedas of the date hereof between the Company and the Purchaser.

 

(d)           Other.  The Company shall have executed and deliveredto the Purchaser such other documents and instruments that the Purchaser mayreasonably request to effect the purposes of this Amendment, including, withoutlimitation, a corresponding amendment to the Loan and Security Agreement ofSenior Lender.

 

Section 4.               Reference andEffect on Operative Documents.

 

(a)           Ratification.  Except as specifically amended above, thePurchase Agreement and the other Transaction Documents, as amended, shallremain in full force and effect. Notwithstanding anything contained herein, the terms of this Agreementare not intended to and do not effect a novation of the Purchase Agreement orany other Transaction Document.  TheCompany hereby ratifies and reaffirms each of the terms and conditions of theTransaction Documents to which it is a party and all of its obligations thereunder.

 

(b)           References.  Upon the effectiveness of this Amendment,each reference in (i) the Purchase Agreement to “this Agreement,” “hereunder,”“hereof,” or words of similar import, and 

 

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(ii) anyother Transaction Document to “the Agreement” or “the Purchase Agreement”shall, in each case and except as otherwise specifically stated therein, meanand be a reference to the Purchase Agreement or such other TransactionDocuments, as applicable, as amended hereby.

 

Section 5.               Miscellaneous.

 

(a)           Additional Fee andExpenses.  Pursuant to Section 9.1of the Purchase Agreement, the Company further agrees to pay on demand allreasonable legal fees and out-of-pocket costs and expenses of or incurred bythe Purchaser in connection with the instruments and agreements contemplatedhereby.  The failure of the Company tocomply with the foregoing requirements shall constitute an immediate Event ofDefault under the Purchase Agreement.

 

(b)           Binding Effect.  This Amendment shall be binding upon andshall inure to the benefit of the parties hereto and their respectivesuccessors and assigns.

 

(c)           Counterparts.  This Amendment may be executed in one or morecounterparts, each of which when so executed and delivered, shall be anoriginal, and all of which together shall constitute one and the sameinstrument.

 

(d)           Governing Law.  This Amendment shall be governed by the lawsof the State of Illinois, without giving effect to its conflict of lawsprinciples.

 

[Remainder of page intentionally leftblank.]

 

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***Signature Page toSeventh Amendment andWaiver to Note and Warrant Purchase Agreement***

 

 
| **COMPANY:**                                                                                                          | **PURCHASER:**                                            |
|-----------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------|
| ** **                                                                                                            | ** **                                                |
| ** **                                                                                                            | ** **                                                |
| **ISI  SECURITY GROUP, INC.**,  a Delaware corporation, formerly known  as ISI Detention Contracting Group, Inc. | **WILLIAM  BLAIR MEZZANINE  CAPITAL FUND III, L.P.** |
| ** **                                                                                                            | By:                                                       | William Blair Mezzanine  Capital |
| ** **                                                                                                            |                                                      | Partners III, L.L.C.,  its General Partner |
| By:                                                                                                                   |  /s/ Donald F. Neville                               |   |   |   |
| Name:                                                                                                            | Donald F. Neville                                         |   |   |
| Its:                                                                                                                  | CFO                                                       |   |   |
|                                                                                                                  |                                                      | By: | /s/ Marc Walfish |
|                                                                                                                  | Name:                                                | Marc Walfish |
|                                                                                                                  | Its:                                                      | Managing Director |
|                                                                                                                       |                                                           |  |  |  |

 

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