Exhibit 10.99


 


Execution Version


 


SEVENTH AMENDMENT

TO NOTE AND WARRANT PURCHASE AGREEMENT


 


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


 


RECITALS:


 


WHEREAS, the
Company, the Purchaser and the Guarantors (as such term is defined in the
Purchase Agreement (as defined below)) (such Guarantors are parties to the
Purchase Agreement solely for the purposes of Section 8 thereof)
previously entered into that certain Note and Warrant Purchase Agreement, dated
as of October 22, 2004, as amended by that certain Omnibus First Amendment
to Note and Warrant Purchase Agreement and Warrant dated as of November 1,
2005, by that certain Omnibus Second Amendment to Note and Warrant Purchase
Agreement and Warrant, dated as of July 31, 2007, by that certain Third
Amendment 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 to
Note and Warrant Purchase Agreement, dated as of November 13, 2008 and by
that certain Sixth Amendment to Note and Warrant Purchase Agreement, dated as
of January 8, 2009 (as further amended, restated, supplemented or
otherwise modified from time to time, the “Purchase Agreement”);


 


WHEREAS, the
Company has requested, and the Purchaser is willing to, amend the Purchase
Agreement, subject to the terms and conditions of this Amendment;


 


WHEREAS, this
Amendment shall constitute a Transaction Document, and these Recitals shall be
construed as part of this Amendment; and


 


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


 


NOW, THEREFORE, in
consideration of the above premises, the agreements contained herein and other
good and valuable consideration, the adequacy, sufficiency and receipt of which
are hereby acknowledged, the parties hereto agree as follows:


 


Section 1.               Amendment to the
Purchase Agreement.


 


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


 


““Permitted
Indebtedness” means:


 


(a)           the Obligations;


 


(b)           the Senior Debt;


 

















 


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


 


(d)           Indebtedness identified
on the Indebtedness Schedule,


 


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


 


(f)            Indebtedness secured
by Permitted Encumbrances;


 


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


 


(h)           operating lease
obligations solely with respect to real property leases requiring payments not
to exceed $750,000 in the aggregate for the Company and its Subsidiaries during
any Fiscal Year of the Company;


 


(i)            intercompany
Indebtedness; and


 


(j)            Indebtedness in
connection with the Green Wing Lease.”


 


(b)           Section 4.7(a) of
the Purchase Agreement is hereby amended and restated in its entirety to read
as follows:


 


“(a)         Maximum Capital
Expenditures.  (i) For the
fiscal quarters ending March 31, 2009, June 30, 2009 and September 30,
2009, the Company and its Subsidiaries, on a consolidated basis, shall not make
Capital Expenditures in excess of $330,000 per fiscal quarter; and (ii) for
the 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, the
Company and its Subsidiaries, on a consolidated basis, shall not make Capital
Expenditures in excess of $2,000,000.”


 


Section 2.               Representations
and Warranties.  To induce the
Purchaser to enter into this Amendment, the Company represents and warrants
that:


 


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


 


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


 


Section 3.               Conditions
Precedent.  The effectiveness of this
Amendment is subject to the following conditions precedent:


 


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


 


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


 


(c)           Execution and
Delivery.  The Company and the
Purchaser shall have executed and delivered this Amendment, that certain
Allonge to Amended and Restated Senior Subordinated Promissory Note A dated as
of the date hereof between the Company and the Purchaser and that certain
Allonge to Third Amended and Restated Senior Subordinated Promissory Note dated
as of the date hereof between the Company and the Purchaser.


 


(d)           Other.  The Company shall have executed and delivered
to the Purchaser such other documents and instruments that the Purchaser may
reasonably request to effect the purposes of this Amendment, including, without
limitation, a corresponding amendment to the Loan and Security Agreement of
Senior Lender.


 


Section 4.               Reference and
Effect on Operative Documents.


 


(a)           Ratification.  Except as specifically amended above, the
Purchase Agreement and the other Transaction Documents, as amended, shall
remain in full force and effect. 
Notwithstanding anything contained herein, the terms of this Agreement
are not intended to and do not effect a novation of the Purchase Agreement or
any other Transaction Document.  The
Company hereby ratifies and reaffirms each of the terms and conditions of the
Transaction 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) any
other Transaction Document to “the Agreement” or “the Purchase Agreement”
shall, in each case and except as otherwise specifically stated therein, mean
and be a reference to the Purchase Agreement or such other Transaction
Documents, as applicable, as amended hereby.


 


Section 5.               Miscellaneous.


 


(a)           Additional Fee and
Expenses.  Pursuant to Section 9.1
of the Purchase Agreement, the Company further agrees to pay on demand all
reasonable legal fees and out-of-pocket costs and expenses of or incurred by
the Purchaser in connection with the instruments and agreements contemplated
hereby.  The failure of the Company to
comply with the foregoing requirements shall constitute an immediate Event of
Default under the Purchase Agreement.


 


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


 


(c)           Counterparts.  This Amendment may be executed in one or more
counterparts, each of which when so executed and delivered, shall be an
original, and all of which together shall constitute one and the same
instrument.


 


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


 


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blank.]


 


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Signature Page to
Seventh Amendment and

Waiver 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