**Exhibit 10.18**

 

OMNIBUS FIRSTAMENDMENT TO NOTE AND WARRANT PURCHASE AGREEMENT AND WARRANT

 

THIS OMNIBUS FIRSTAMENDMENT TO NOTE AND WARRANT PURCHASE AGREEMENT AND WARRANT (this “Amendment”)dated as of November 1, 2005, by and among ISI Detention Contracting Group, Inc.,a Delaware corporation (the “Company”), the Guarantors (as defined in thePurchase Agreement) from time to time party to the Purchase Agreement (asdefined below), and William Blair Mezzanine Capital Fund III, L.P., a Delaware limitedpartnership (the “Purchaser”).

 

RECITALS:

 

WHEREAS, the Company, thePurchaser and the Guarantors previously entered into that certain Note andWarrant Purchase Agreement dated as of October 22, 2004 (as amended, restated,supplemented or otherwise modified from time to time, the “Purchase Agreement” capitalizedterms used herein and not otherwise defined shall have the meaning given tosuch terms in the Purchase Agreement);

 

WHEREAS, pursuant to thePurchase Agreement, the Company and the Purchaser also executed and delivered,among other documents, the Warrant; and

 

WHEREAS, the Company, thePurchaser and the Guarantors now desire to amend the Purchase Agreement and theWarrant upon the terms and conditions set forth herein.

 

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     Amendments to the Purchase Agreement.

 

(a)      Section 1.1 of the Purchase Agreementis hereby amended by inserting the following definitions in their properalphabetical order to read as follows:

 

“Seller” means InstantPhotos, Inc., a Texas corporation.

 

“SellerNote” means that certain unsecured Seller Note dated as of November 1, 2005,in the aggregate original principal amount of Two Hundred Thousand Dollars ($200,000),made payable by MCFSA, Ltd. (a wholly-owned subsidiary of the Company) in favorof the Seller.

 

“SubordinatedNotes” means, collectively, (a) that certain Subordinated Promissory Notedated as of November 1, 2005, in the aggregate original principal amountof Fifty-One Thousand Six Hundred Nine and 00/100 Dollars ($51,609.00), made payableby the Company in favor of the Purchaser, (b) that certain Subordinated PromissoryNote dated as of November 1, 2005, in the aggregate original principal amountof Sixty-Five Thousand Nine Hundred Twenty-Two and 00/100 Dollars

 

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($65,922.00), madepayable by the Company in favor of Samuel Youngblood and (c) that certainSubordinated Promissory Note dated as of November 1, 2005, in theaggregate original principal amount of Thirty-Two Thousand Four HundredSixty-Nine and 00/100 Dollars ($32,469.00), made payable by the Company infavor of Donald Carr.

 

(b)    Section 1.1 of the Purchase Agreementis hereby further amended by amending and restating the following definition toread as follows:

 

“Note”  means that certain Amended and RestatedSenior Subordinated Promissory Note dated November 1, 2005, in theaggregate original principal amount of Sixteen Million Nine Hundred ThousandDollars ($15,900,000), made payable by the Company in favor of the Purchaser,in substantially the form as set forth in Exhibit A attached hereto, withappropriate insertions, as may be amended, restated, substituted, replaced orotherwise modified from time to time.

 

(c)    Section 1.1 of the Purchase Agreementis hereby further amended by deleting the “and” between clauses “(g)” and “(h)”and adding the following new clauses “(i)” and “(j)” at the end of thedefinition of Permitted Indebtedness to read as follows:

 

“(i)   the Seller Note; and

 

(j)    the Subordinated Notes.”

 

Section 2    Amendment to Warrant. Each reference in theWarrant to the “Note” shall be amended to refer to the “Note” as amendedhereby.

 

Section 3    Representations and Warranties. To inducethe Purchaser to enter into this Amendment, the Company represents and warrantsthat:

 

(a)    Representations, Warranties; No Default. Therepresentations, warranties and covenants of the Company set forth in thePurchase Agreement shall be deemed remade as of the date hereof by the Company,except that any and all references to the Purchase Agreement in suchrepresentations and warranties shall be deemed to include this Amendment. TheCompany represents and warrants that no Event of Default has occurred and iscontinuing and no event has occurred and is continuing which, with the lapse oftime, the giving of notice, or both, would constitute such and Event of Defaultunder the Purchase Agreement.

 

(b)    Organizational Authority. (i) Theexecution, delivery and performance by the Company of this Amendment are withinits corporate 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, delivery or performance by the Company of this Amendment (1) violatesany law or regulation, or any other or 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

 

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any of its property isbound, (3) results in the creation or imposition of any Lien upon any ofthe Collateral other than Liens in favor of the Senior Lender and the Seller, (4) violatesor conflicts with the certificate of incorporation or bylaws of such Person, or(5) requires the consent, approval or authorization of, or declaration orfiling with, any other Person, except for those already duly obtained.

 

Section 4    Conditions Precedent. The effectiveness ofthis Amendment is subject to the following conditions precedent:

 

(a)     No Default. No Potential Event of Defaultor Event of Default under the Purchase Agreement, shall have occurred and becontinuing.

 

(b)     Warranties and Representations. Thewarranties and representations of the Company contained in the TransactionsDocuments 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, and all ofsuch representations and warranties (except those relating to an earlier date)are hereby remade by the Company as of the date hereof.

 

(c)     Other Requirements.  The Purchaser shall have received such other documentationwhich it shall have requested in the Closing Document Checklist attached heretoas Exhibit A and as the Purchaser may reasonably request.

 

Section 5    Reference to and Effect on OperativeDocuments.

 

(a)     Ratification.  Except as specifically amended above, thePurchase Agreement and the other Transaction Documents shall remain in fullforce and effect. Notwithstanding anything contained herein, the terms of thisAmendment are not intended to and do not effect a novation of the PurchaseAgreement or any other Transaction Document. The Company hereby ratifies andreaffirms each of the terms and conditions of the Transaction Documents towhich it is a party and all of its obligations there under.

 

(b)     No Waiver. The execution, delivery andeffectiveness of this Amendment shall not operate as a waiver of any right,power or remedy of the Purchaser under the Purchase Agreement or any of theother Transaction Documents.

 

(c)     References. Upon the effectiveness of thisAmendment each reference in (a) the Purchase Agreement to “this Agreement,”“hereunder,” “hereof,” or words of similar import, (b) the Warrant to “thisWarrant,” “hereunder,” “hereof,” or words of similar import and (c) anyother Transaction Document to “the Agreement,” “the Purchase Agreement” or “theWarrant” shall, in each case and except as otherwise specifically statedtherein, mean and be a reference to the Purchase Agreement or the Warrant, asapplicable, as amended hereby.

 

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Section 6    Miscellaneous.

 

(a)    Fees and Expenses. Pursuant to Section 9.1of the Purchase Agreement, the Company agrees to pay on demand all reasonablelegal fees and out-of-pocket costs and expenses of or incurred by the Purchaseror its counsel in connection with the negotiation, preparation, execution anddelivery of this Amendment and the documents, instruments and agreementscontemplated hereby.

 

(b)    Effectuation. This Amendment shall beeffective once the Company and the Purchaser have executed and delivered thisAmendment to each other.

 

(c)    Binding Effect. This Amendment shall bebinding upon and shall inure to the benefit of the parties hereto and theirrespective successors and assigns.

 

(d)    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.

 

(e)    Governing Law. This Amendment shall begoverned by the laws of the State of Illinois, without giving effect to itsconflict of laws principles.

 

[Signatures follow]

 

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Signature Page toOmnibus First Amendment

 

COMPANY:

 
| ISI DETENTION  CONTRACTING GROUP,  |                             |
|------------------------------------|----------------------------------|
| INC., a Delaware  corporation      |                             |
|                               |                             |
| By:                                |  /Don Carr/                 |   |
| Name; Don Carr                     |                             |
| Title: President                   |                             |
|                               |                             |
| PURCHASER:                         |                             |
|                               |                             |
| WILLIAM BLAIR MEZZANINE            |                             |
| CAPITAL FUND III, L.P.             |                             |
|                               |                             |
| By:                                | William Blair Mezzanine  Capital |   |
|   Partners  III, L.L.C.  |                             |
|   its General  Partner   |                             |
|                               |                             |
| By:                                | / David M. Jones /               |   |
| Name:  David  M. Jones   |                             |
| Its:  Managing  Director |                             |

 

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Signature Page toOmnibus First Amendment

 
| GUARANTORS:                        |
|------------------------------------|
|                               |
| DETENTION CONTRACTING  GROUP,      |
| LTD., a Texas limited  partnership |
|                               |
| By:                                | ISI Detention  Contracting Group, Inc., |   |
| a Texas corporation                |   |
| its General Partner                |
|                               |
| By:                                | / Sam Youngblood/ |   |
| Name: Sam Youngblood               | ** ** |
| Title: Chief Executive  Officer    |
|                                    |  |  |  |

 

1ST DETENTION CONTRACTINGGROUP,INC., a California corporation

 

 
| By:                                               |  / Sam Youngblood/ |   |
|---------------------------------------------------|-------------------------|--------|
| Name: Sam Youngblood                              |                    |
| Title: Chief Executive  Officer                   |                    |
|                                              |
| ISI DETENTION SYSTEMS,  INC., a Texas corporation |

 
| By:                                                              |                                                   |   |
|------------------------------------------------------------------|--------------------------------------------------------|--------|
| Name: Sam Youngblood                                             |                                                   |
| Title: Chief Executive  Officer                                  |                                                   |
|                                                             |                                                   |
|                                                             |                                                   |
| METROPLEX CONTROL  SYSTEMS, INC.,                                |                                                   |
| a Texas corporation                                              |                                                   |
|                                                             |                                                   |
|                                                             |                                                   |
| By:                                                              |  / Sam Youngblood/                                |   |
| Name: Sam Youngblood                                             |                                                   |
| Title: Chief Executive  Officer                                  |                                                   |
|                                                             |                                                   |
| ISI DETENTION  CONTRACTING GROUP, INC., a Texas corporation      |
|                                                             |                                                   |
| By:                                                              |  / Sam Youngblood/                                |   |
| Name: Sam Youngblood                                             |                                                   |
| Title: Chief Executive  Officer                                  |                                                   |
|                                                             |                                                   |
| ISI DETENTION  CONTRACTING GROUP, INC., a New Mexico corporation |
|                                                             |                                                   |
| By:                                                              |  / Sam Youngblood/                                |   |
| Name: Sam Youngblood                                             |                                                   |
| Title: Chief Executive  Officer                                  |                                                   |
|                                                             |                                                   |
| ISI SYSTEMS, LTD., a  Texas limited partnership                  |                                                   |
|                                                             |                                                   |
| By:                                                              | ISI Detention  Systems, Inc., a Texas corporation |   |
| its Genera1 Partner                                              |                                                   |

 

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| By:                                  |  / Sam Youngblood/               |   |
|--------------------------------------|---------------------------------------|--------|
| Name: Sam Youngblood                 |                                  |
| Title: Chief Executive  Officer      |                                  |
|                                 |                                  |
| ISI CONTROLS, LTD., a  Texas limited |                                  |
| partnership                          |                                  |
|                                 |                                  |
| By:                                  | Metroplex Control Systems, Inc., |   |
| a Texas corporation                  |                                  |
|                                 |                                  |
| By:                                  | / Sam Youngblood/                     |   |
| Name: Sam Youngblood                 |                                  |
| Title: Chief Executive  Officer      |                                  |

 

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Signature Page toOmnibus First Amendment

 
| METROPLEX COMMERCIAL  FIRE AND                   |                                |
|--------------------------------------------------|-------------------------------------|
| SECURITY ALARMS, INC.,  a Texas corporation      |                                |
|                                             |                                |
| By:                                              |                                |   |
| Name: Sam Youngblood                             |                                |
| Title: Chief Executive  Officer                  |                                |
|                                             |                                |
| MCFSA, LTD., a Texas  limited partnership        |                                |
|                                             |                                |
| By:                                              |  Metroplex Commercial Fire and |   |
| Security  Alarms, Inc., a Texas corporation |                                |
| its General Partner                              |                                |
|                                             |                                |
|                                             |                                |
| By:                                              |                                |   |
| Name: Sam Youngblood                             |                                |
| Title: Chief Executive  Officer                  |                                |

 

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EXHIBIT A

 

Closing DocumentChecklist

 

(See Attached)

 

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