exv10w9






Exhibit 10.9




[EXECUTION COPY]




GUARANTY AND PAYMENT AGREEMENT

(FS DEPOT, INC.)





     This GUARANTY AND PAYMENT AGREEMENT (FS DEPOT, INC.) (this “Agreement”) is made as of
June 27, 2008 by FEDERAL SIGNAL CORPORATION, a Delaware corporation (“Guarantor”), in favor
of BANC OF AMERICA PUBLIC CAPITAL CORP, a Kansas corporation (“Buyer”).



STATEMENT OF PURPOSE




     FS Depot, Inc., a Wisconsin corporation (“Seller”), and Buyer propose to enter into a
Tax-Exempt Lease Purchase Agreement dated as of June 27, 2008 (as amended, supplemented, restated
or otherwise modified from time to time, the “Purchase Agreement”) pursuant to which Seller
has agreed to sell to Buyer, and Buyer has agreed to purchase from Seller, in each case from time
to time in accordance with the terms and conditions of the Purchase Agreement, certain tax-exempt
leases and certain related assets.



     Guarantor is the sole shareholder of Seller and will derive substantial benefit from the
execution and delivery of the Purchase Agreement. The execution and delivery of this Agreement by
Guarantor is a condition precedent to the execution and delivery of the Purchase Agreement by
Buyer.



     NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement and for
other consideration the receipt and sufficiency of which are hereby acknowledged, Guarantor hereby
agrees as follows:



ARTICLE I

DEFINITIONS




     1.1. Definitions. All capitalized terms used but not defined in this Agreement shall
have the respective meanings assigned to such terms in the Purchase Agreement. As used in this
Agreement, the following terms shall have the following meanings:



     “Buyer” has the meaning set forth in the preamble to this Agreement.



     “Enforcement Costs” has the meaning set forth in Section 2.8.



     “Excluded Amounts” has the meaning set forth in Section 5.2.



     “GAAP” means accounting principles as in effect from time to time generally accepted
in the United States, applied by Guarantor and its consolidated subsidiaries on a basis consistent
with the preparation of Guarantor’s consolidated financial statements.



     “Guaranteed Obligations” has the meaning set forth in Section 2.1.



     “Guarantor” has the meaning set forth in the preamble to this Agreement.



     “Indemnified Amounts” has the meaning set forth in Section 5.1.



     “Indemnified Party” has the meaning set forth in Section 5.1.



 









 





     “Material Adverse Effect” means a material adverse effect on (i) the ability of
Guarantor to perform its obligations under this Agreement or any other Transaction Document, (ii)
the legality, validity or enforceability of this Agreement or any other Transaction Document, (iii)
the interest of Buyer in the Purchased Assets or (iv) the collectibility of the Purchased Leases.



     “Purchase Agreement” has the meaning set forth in the preamble to this Agreement.



     “Recourse Obligations” means (i) the obligation of Seller to repurchase certain
Purchased Assets pursuant to Article V of the Purchase Agreement, (ii) the obligation of
Seller to forward certain Collections to Buyer pursuant to Section 6.2 of the Purchase
Agreement and (iii) the obligation of Seller to indemnify Buyer against certain amounts and to
reimburse Buyer for certain costs and expenses, in each case pursuant to Article VII of the
Purchase Agreement.



     “Seller” has the meaning set forth in the preamble to this Agreement.



ARTICLE II

GUARANTY




     2.1. Scope of Guaranty. Guarantor absolutely, unconditionally and irrevocably
guarantees to Buyer (i) the full and prompt payment of all Recourse Obligations when due and
payable and at all times thereafter, (ii) the full and prompt payment of all Enforcement Costs when
due and payable and at all times thereafter and (iii) the full, complete and punctual observance,
performance and satisfaction of all of the obligations, duties, covenants and agreements of Seller
under the Purchase Agreement and the other Transaction Documents to the extent that any failure or
delay by Seller in the observance, performance or satisfaction of such obligations, duties,
covenants or agreements would constitute or give rise to a Recourse Obligation. All payment
obligations described in clauses (i), (ii) or (iii) above are referred to herein as the
“Guaranteed Obligations”, whether or not allowed or allowable as a claim in any bankruptcy
or other insolvency proceeding, including any interest that would have accrued under the terms of
any of the Transaction Documents.



     2.2. Payment by Guarantor. The liability of Guarantor under this Agreement shall be
direct and immediate and not conditional or contingent upon the pursuit of any remedies against
Seller or any other Person (including, without limitation, any other guarantor). Guarantor hereby
waives any right to require that an action be brought against Seller or any other Person or to
require that resort be had to any security or to any balance of any deposit account or credit on
the books of Buyer in favor of Seller or any other Person. Buyer shall have the right, at its
option, either before, during or after pursuing any other right or remedy against Seller or
Guarantor, to perform any and all of the Guaranteed Obligations by or through any agent, contractor
or subcontractor, or any of their agents, of its selection, all as Buyer in its sole discretion
deems proper, and Guarantor shall indemnify and hold Buyer free and harmless from and against any
and all loss, damage, cost, expense, injury or liability Buyer may suffer or incur in connection
with the exercise of its rights under this Agreement or the performance of the Guaranteed
Obligations, except to the extent the same arises as a result of the gross negligence or willful
misconduct of Buyer.



     2.3. Cumulative Remedies. All of the remedies set forth herein and/or provided by any
of the other Transaction Documents or in equity or at law shall be equally available to Buyer, and
the choice by Buyer of one such alternative over another shall not be subject to question or
challenge by Guarantor or any other Person, nor shall any such choice be asserted as a defense,
set-off or failure to mitigate damages
in any action, proceeding or counteraction by Buyer to recover or seeking any other remedy
under this Agreement, nor shall such choice preclude Buyer from subsequently electing to exercise a
different remedy. The parties have agreed to the alternative remedies hereinabove specified in
part because they



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recognize that the choice of remedies in the event of a failure hereunder will
necessarily be and should properly be a matter of business judgment, which the passage of time and
events may or may not prove to have been the best choice to maximize recovery by Buyer at the
lowest cost to Seller and/or Guarantor. It is the intention of the parties that such choice by
Buyer be given conclusive effect regardless of such subsequent developments.



     2.4. Waivers. Guarantor hereby waives, to the fullest extent permitted by law, and
agrees not to assert: (i) notice of acceptance of this Agreement by Buyer and any and all notices
and demands of every kind which may be required to be given by any statute, rule or law; (ii) the
defense of the statute of limitations in any action hereunder; (iii) any defense that may arise by
reason of the lack of authority of Seller or the failure of Buyer to file or enforce a claim
against the estate (in any bankruptcy or other proceeding) of Seller; (iv) demand, presentment for
payment, notice of nonpayment, protest, notice of protest and all other notices (other than as may
be expressly herein required) of any kind, or the lack of any thereof, including, without limiting
the generality of the foregoing, notice of the existence, creation or incurrence of any new or
additional indebtedness or obligation of Seller or of any action or non action on the part of
Seller or Buyer under this Agreement or any other Transaction Document; (v) any defense based upon
an election of remedies by Buyer; (vi) any right or claim to or right to cause a marshalling of the
assets of Seller or Guarantor; (vii) any principle or provision of law, statutory or otherwise,
which is or might be in conflict with the terms and provisions of this Agreement; (viii) any duty
on the part of Buyer to disclose to Guarantor any facts Buyer may now or hereafter know about
Seller, regardless of whether Buyer has reason to believe that any such facts materially increase
the risk beyond that which Guarantor intends to assume or have reason to believe that such facts
are unknown to Guarantor or have a reasonable opportunity to communicate such facts to Guarantor,
it being understood and agreed that Guarantor is fully responsible for being and keeping informed
of the financial condition of Seller and of any and all circumstances bearing on the risk that
liability may be incurred by Guarantor hereunder; (ix) any invalidity, irregularity or
unenforceability, in whole or in part, of any one or more of the Transaction Documents; (x) any
assertion or claim that the automatic stay provided by 11 U.S.C. §362 (arising upon an insolvency
proceeding of Seller) or any other stay provided under any other debtor relief law (whether
statutory, common law, case law or otherwise) of any jurisdiction whatsoever, now or hereafter in
effect, which may be or become applicable, shall operate or be interpreted to stay, interdict,
condition, reduce or inhibit the ability of Buyer to enforce any of its rights, whether now or
hereafter required, which Buyer may have against Guarantor; and (xi) any modification of any
Transaction Document or any obligation of Seller relating to any of the Recourse Obligations by
operation of law or by action of any court, whether pursuant to the Bankruptcy Reform Act of 1978,
as amended, or any other debtor relief law (whether statutory, common law, case law or otherwise)
of any jurisdiction whatsoever, now or hereafter in effect, or otherwise. Without limiting the
foregoing, Guarantor acknowledges and agrees that Leases may be purchased from time to time by
Buyer from Seller without notice to or authorization from Guarantor, regardless of the financial or
other condition of Seller at the time of any such purchase. Buyer shall have no obligation to
disclose or discuss with Guarantor its assessment of the financial or other condition of Seller.
Guarantor acknowledges that no representations of any kind whatsoever have been made by Buyer to
Guarantor.



     2.5. Renewals; Modifications; Amendments. Guarantor agrees that Guarantor’s liability
as guarantor shall in no way be impaired by (i) any renewals or extensions which may be made from
time to time, with or without the knowledge or consent of Guarantor, of the time for payment of any
Guaranteed Obligation, (ii) any forbearance or delay in collecting any Guaranteed Obligation or any
waiver by Buyer under the Purchase Agreement or any other Transaction Document, (iii) Buyer’s
failure or election not to pursue any other remedies it may have against Seller or any change or
modification in the Purchase
Agreement or any other Transaction Document, (iv) the acceptance by Buyer of any security or
any increase, substitution or change therein, (v) the release by Buyer of any security or any
withdrawal thereof or decrease therein or (vi) the application of payments received from any source
other than on account of



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the Guaranteed Obligations to the payment of any obligation other than the
Guaranteed Obligations, even though Buyer might lawfully have elected to apply such payments to all
or any part of the Guaranteed Obligations. Guarantor further agrees that Buyer may at any time
enter into agreements with Seller to amend and modify the Purchase Agreement or any other
Transaction Document and may waive or release any provision of the Purchase Agreement or any other
Transaction Document and, with reference to such instruments, may make and enter into any such
agreement as Buyer and Seller may deem proper and desirable, without in any manner impairing this
Agreement or any of Buyer’s rights hereunder or any of Guarantor’s obligations hereunder.



     2.6. Unconditional Obligation. This Agreement constitutes an absolute, unconditional,
complete, present and continuing guaranty of payment and performance and not of collection, and the
obligations of Guarantor hereunder shall be primary, absolute, independent and unconditional under
any and all circumstances whatsoever. Guarantor intends to remain liable as principal for payment
or performance of the Guaranteed Obligations until all such indebtedness has been irrevocably paid
in full and the other terms, covenants and conditions of the Purchase Agreement, the other
Transaction Documents and this Agreement have been performed, notwithstanding any circumstance, act
or thing that might otherwise operate as a legal or equitable discharge of a surety. Neither
Guarantor’s obligations under this Agreement nor any remedy for the enforcement thereof shall be
impaired, modified, changed or released in any manner whatsoever by any impairment, modification,
change, release or limitation of the liability of Seller under the Purchase Agreement or any other
Transaction Document or by reason of Seller’s bankruptcy or by reason of any creditor or bankruptcy
proceeding instituted by or against Seller. If at any time all or any part of any payment made by
Guarantor or received by Buyer under or with respect to this Agreement or any other Transaction
Document is or must be rescinded or returned for any reason whatsoever (including, without
limitation, the insolvency, bankruptcy or reorganization of Guarantor or Seller), then the
obligations of Guarantor hereunder shall, to the extent of the payment rescinded or returned, be
deemed to have continued in existence, notwithstanding such previous payment by Guarantor or
receipt of payment by Buyer, and the obligations of Guarantor hereunder shall continue to be
effective or be reinstated, as the case may be, as to such payment, all as though such previous
payment had never been made. The obligations of Guarantor pursuant to the preceding sentence shall
survive any termination, cancellation or release of this Agreement.



     2.7. Application of Payments. Buyer may apply any amounts received by it from any
source on account of any Guaranteed Obligation to the payment of the Guaranteed Obligations in such
order as Buyer may from time to time elect.



     2.8. Enforcement Costs. If (i) an attorney is retained to collect this Agreement or
this Agreement is collected through any legal proceeding, (ii) an attorney is retained to represent
Buyer in any bankruptcy, reorganization, receivership, or other proceedings affecting creditors’
rights and involving a claim under this Agreement or in respect of any Guaranteed Obligation, (iii)
an attorney is retained to provide advice or other representation with respect to an enforcement
action or potential enforcement action relating to this Agreement after a default has occurred
hereunder or (iv) an attorney is retained to represent Buyer in any other legal proceeding
whatsoever in connection with this Agreement or any Guaranteed Obligation, then Guarantor shall pay
to Buyer upon demand all reasonable attorneys’ fees, costs and expenses, including, without
limitation, court costs, filing fees, recording costs, expenses of foreclosure and all other costs
and expenses incurred in connection therewith, (collectively, “Enforcement Costs”) in
addition to all other amounts due hereunder.



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ARTICLE III

REPRESENTATIONS AND WARRANTIES OF GUARANTOR




     3.1. Representations and Warranties Concerning Guarantor. Guarantor represents and
warrants that the following are true as of the date of this Agreement. Each representation and
warranty is made to induce Buyer to enter into the Purchase Agreement and shall be automatically
restated and ratified as of each Purchase Date.




	 	3.1.1.	 	Organized and Existing. Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, and Guarantor is
qualified and in good standing to do business as a foreign corporation in each state or
other jurisdiction where its business requires such qualification and where the failure
to be so qualified and in good standing would not reasonably be expected to have a
Material Adverse Effect.
	 
	 	3.1.2.	 	No Contravention. Guarantor’s execution, delivery and performance of this
Agreement and each other Transaction Document to which it is a party do not and will
not conflict with its charter or by-laws, any material agreement to which it is a party
or by which it is bound, any applicable law, rule or regulation, or any court or
administrative order, judgment or decree binding on it or its properties.
	 
	 	3.1.3.	 	Power and Authority; Authorization, Execution and Delivery. Guarantor’s
execution, delivery and performance of this Agreement and each other Transaction
Document to which it is a party are within its corporate power and authority and have
been duly authorized by all necessary corporate action. Guarantor has duly executed
and delivered this Agreement and each other Transaction Document to which it is a
party.
	 
	 	3.1.4.	 	Valid, Binding and Enforceable. This Agreement and each other Transaction
Document to which it is a party are valid, binding and enforceable against Guarantor in
accordance with their respective terms, except as such enforcement may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws relating to or
limiting creditors’ rights generally and by general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law).
	 
	 	3.1.5.	 	Governmental Authorization; Other Consents. No authorization or approval or
other action by, and no notice to or filing with, any governmental authority or other
Person that has not been obtained is required for the due execution and delivery by
Guarantor of this Agreement or any other Transaction Document to which Guarantor is a
party or the performance by Guarantor of its obligations hereunder or thereunder.
	 
	 	3.1.6.	 	Actions; Suits; Proceedings. Except as described in the Forms 10-K, 10-Q and
8-K of Guarantor, there are no actions, suits or proceedings pending or, to Guarantor’s
knowledge, threatened, against or affecting Guarantor or any of its properties in or
before any court, arbitrator or governmental body that, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect. Guarantor
is not in default with respect to any order of any court, arbitrator or governmental
body binding upon it or any of its properties
	 
	 	3.1.7.	 	Accuracy of Information. All written information with respect to Guarantor
or the Purchased Assets furnished by Guarantor to Buyer under or in connection with
this Agreement or any other Transaction Document is true and accurate in all material
respects as of the date such information is or is deemed to be stated or certified and
does




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	 	 	 	not contain any material misstatement of fact or omit to state any material fact
necessary to make the statements contained therein not misleading in any material
respect as of the date such information is or is deemed to be stated or certified
(it being understood that this Section 3.1.7 shall not apply to any untrue
or inaccurate information or any information that contains a misstatement or
omission if, in each case, such information is corrected in written information
subsequently furnished by Guarantor to Buyer under or in connection with this
Agreement or any other Transaction Document).
	 
	 	3.1.8.	 	Financial Statements. All financial statements of Guarantor delivered to
Buyer have been prepared in accordance with GAAP (except, in the case of unaudited
financial statements, for the lack of footnotes and being subject to year-end audit
adjustments) and present fairly in all material respects the financial condition of
Guarantor as of the date thereof and results of operations for the period then ended.
	 
	 	3.1.9.	 	Compliance with Laws. Guarantor has complied with all applicable laws,
rules, regulations, orders, writs, judgments, injunctions, decrees or awards to which
it may be subject, except where the failure to comply would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.
	 
	 	3.1.10.	 	Solvency. Both before and immediately after giving effect to any of the
transactions contemplated by this Agreement, the Purchase Agreement and the other
Transaction Documents, (i) the present fair salable value of the assets of Guarantor is
in excess of the amount that will be required to pay its probable liability on its
existing debts as such debts become absolute and matured, (ii) Guarantor has received
reasonably equivalent value for executing and delivering this Agreement, (iii) the
property remaining in the hands of Guarantor is not an unreasonably small capital and
(iv) Guarantor is able to pay its debts as they mature.





ARTICLE IV

COVENANTS OF GUARANTOR




     4.1. Financial Reporting. Guarantor shall maintain and cause to be maintained, for
itself and each of its subsidiaries, a system of accounting established and administered in
accordance with GAAP, and, if Guarantor shall cease to file periodic Forms 10-K and 10-Q and other
periodic financial statements required of reporting companies by the SEC, Guarantor shall, with
respect to the first such period for which it ceases to file such reports, begin furnishing to
Buyer (i) not later than forty-five (45) days after the end of each of its fiscal quarters,
quarterly unaudited financial statements for Guarantor and its consolidated subsidiaries, prepared
according to GAAP and presenting fairly the financial condition of Guarantor and its consolidated
subsidiaries as at the end of such quarter, and certified as true and correct by Guarantor’s chief
financial officer (subject to year-end adjustments), (ii) not later than one hundred twenty (120)
days after the end of each of its fiscal years, annual audited financial statements for Guarantor
and its consolidated subsidiaries and related audit reports for such year, prepared according to
GAAP and presenting fairly the year-end financial condition of Guarantor and its consolidated
subsidiaries and the results of operations for such year, signed by independent certified public
accountants of recognized national standing and (iii) such other information regarding any of the
foregoing that Buyer may reasonably request.



     4.2. Notice of Material Events. Guarantor shall promptly forward to Buyer all
material written communications that it receives after the related Purchase Date with respect to
any Purchased Lease (other than any such communication also sent to Buyer) and shall promptly
notify Buyer in writing if it receives written notice of the occurrence of an Insolvency Event with
respect to any Obligor under a



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Purchased Lease or the occurrence of an event of non-appropriation with respect to any
Purchased Lease. Guarantor shall endeavor in good faith to notify Buyer promptly if it receives
written notice of or otherwise obtains knowledge of the occurrence or existence of any other event
or circumstance with respect to any Obligor or any Equipment that would reasonably be expected to
have a material adverse effect on the interest of Buyer in the related Purchased Assets or the
collectibility of the related Purchased Leases.



     4.3. Compliance with Laws; Preservation of Corporate Existence. Guarantor shall
comply in all respects with all applicable laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards imposed by all governmental authorities in respect of the conduct of
its business and the ownership of its properties, except where the failure to so comply would not
reasonably be expected to have a Material Adverse Effect. Guarantor shall preserve and maintain
its corporate existence, rights, franchises and privileges in the jurisdiction of its
incorporation, and qualify and remain qualified in good standing as a foreign corporation in each
jurisdiction where its business is conducted, except where the failure to so qualify or remain
qualified would not reasonably be expected to have a Material Adverse Effect.



     4.4. Adverse Claims. Guarantor shall defend the interest of Buyer (to the extent
transferred to Buyer under the Purchase Agreement) in, to and under the Purchased Leases and all
other Purchased Assets against all claims of third parties claiming through or under Guarantor or
any of its affiliates.



ARTICLE V

INDEMNIFICATION




     5.1. Indemnification. Without limiting any other rights that Buyer may have hereunder
or under applicable law, Guarantor hereby agrees to indemnify Buyer and its assigns, officers,
directors, agents and employees (each, an “Indemnified Party”) from and against any and all
damages, losses, claims, taxes, liabilities, costs, expenses and other amounts payable by, awarded
against or incurred by any such Indemnified Party, including reasonable attorneys’ fees and
disbursements (collectively, “Indemnified Amounts”), including losses in respect of
uncollectible Purchased Leases (regardless of whether reimbursement therefor would constitute
recourse to Guarantor) but excluding any Excluded Amounts, to the extent arising out of or as a
result of (or claimed or alleged to be arising out of or as a result of):




	 	(a)	 	any failure of any written representation or warranty made by or on behalf of
Guarantor or Seller (or any officer of Guarantor or Seller) under or in connection with
this Agreement, the Purchase Agreement or any other Transaction Document to be true and
correct when made or deemed made (it being understood that the Indemnified Amounts with
respect to any breach of the representation and warranty set forth in Section
3.2.9 of the Purchase Agreement shall be limited to amounts necessary to restore to
Buyer its after-tax yield on the transaction evidenced by the related Purchased Lease);
	 
	 	(b)	 	any failure of Guarantor or Seller to comply on or before the related Purchase
Date with any applicable law, rule or regulation with respect to any Purchased Lease or
the nonconformity of any Purchased Lease on or before the related Purchase Date with
any applicable law, rule or regulation, or any failure of Guarantor or Seller to keep
or perform any obligation, express or implied, arising or accrued with respect to any
Purchased Lease on or before the related Purchase Date;




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	 	(c)	 	any failure of Guarantor or Seller to perform its covenants or other
obligations under and in accordance with the provisions of this Agreement, the Purchase
Agreement or any other Transaction Document;
	 
	 	(d)	 	any products liability, personal injury or damage suit or other similar claim
arising out of or in connection with any Equipment that is the subject of any Purchased
Lease;
	 
	 	(e)	 	any dispute, claim, offset or defense of any Obligor (other than any discharge
in bankruptcy of such Obligor or any failure to appropriate by such Obligor) to the
payment of any amount payable under any Purchased Lease (including, without limitation,
a defense based on such Purchased Lease not being a legal, valid and binding obligation
of such Obligor enforceable against such Obligor in accordance with its terms), or any
other claim relating to the sale or performance of any goods, merchandise, insurance or
services that are the subject of such Purchased Lease or the furnishing or failure to
furnish such goods, merchandise, insurance or services;
	 
	 	(f)	 	the occurrence of any Insolvency Event with respect to Guarantor or Seller,
including, without limitation, any adversary proceeding or any contested matter arising
in any insolvency proceeding, whether or not an Indemnified Person is a party thereto;
	 
	 	(g)	 	any failure of Buyer to acquire legal and equitable title to, and ownership of,
any Purchased Lease (including the Collections thereon) free and clear of any Adverse
Claim (except as created by the Purchase Agreement or any other Transaction Document);
	 
	 	(h)	 	any failure of Buyer to acquire a perfected, first-priority security interest
in any Equipment leased under any Purchased Lease, free and clear of any Adverse Claim
(except as created by the Purchase Agreement or any other Transaction Document), or any
attempt by any Person to void such security interest under statutory provisions or
common law or equitable action; or
	 
	 	(i)	 	the existence with respect to Equipment that constitutes fire trucks or other
emergency response vehicles of any lien held by the Pennsylvania Emergency Management
Agency (PEMA) arising pursuant to its Volunteer Fire Company, Ambulance Services and
Rescue Squad Assistance program.




provided, however, that, if Buyer seeks indemnification from Guarantor for a breach
of the representation and warranty set forth in Section 3.2.9 of the Purchase Agreement,
Guarantor may, in its absolute and sole discretion, repurchase the related Purchased Lease and all
other related Purchased Assets for an amount equal to the Investment Balance of such Purchased
Lease (such Investment Balance to be calculated as of the date of such repurchase) plus any
additional amount necessary to restore to Buyer its after-tax yield on the transaction evidenced by
such Purchased Lease through the date of such repurchase. If Guarantor elects to repurchase
Purchased Assets pursuant to the preceding proviso, (i) Guarantor shall, on the related repurchase
date, pay the related repurchase price by wire transfer of immediately available funds to an
account designated by Buyer, (ii) Buyer shall, on such repurchase date, execute such documents and
instruments of transfer or assignment and take such other actions as may be reasonably requested by
Guarantor to effect the sale of such Purchased Assets to Guarantor and (iii) all obligations of
Guarantor under this Section 5.1 with respect to such breach shall terminate automatically
as of such repurchase date. All such Purchased Assets shall be reassigned by Buyer without
recourse, representation or warranty of any kind.




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     Buyer shall provide (or shall cause another Indemnified Party to provide) prompt written
notice to Guarantor of any event or circumstance giving rise to an Indemnified Amount;
provided, however, that any delay or failure to do so shall not limit Guarantor ‘s
obligations under this Section 5.1. If Guarantor pays or provides to Buyer’s satisfaction
for payment under this Section 5.1, Guarantor shall have the right to control indemnity
defenses and settle indemnity claims.



     5.2. Excluded Amounts. Notwithstanding anything in Section 5.1 to the
contrary, Guarantor shall not have any obligation to indemnify an Indemnified Party with respect to
any of the following (collectively, “Excluded Amounts”): (i) Indemnified Amounts to the
extent a final judgment of a court of competent jurisdiction holds that such Indemnified Amounts
resulted from gross negligence or willful misconduct on the part of the Indemnified Party seeking
indemnification; (ii) Indemnified Amounts to the extent such amounts include losses in respect of a
Purchased Lease that is uncollectible on account of the insolvency, bankruptcy or lack of
creditworthiness of the related Obligor or the failure at any time of the related Obligor to budget
and appropriate sufficient moneys to make any Scheduled Payment or other amount due under such
Purchased Lease (except to the extent that such losses arise out of or as a result of a breach with
respect to such Purchased Lease of the representation and warranty set forth in Section 3.2
of the Purchase Agreement); or (iii) taxes on or measured by the overall net income of such
Indemnified Party imposed by any jurisdiction in which such Indemnified Party is subject to
taxation; provided, however, that nothing contained in this Section 5.2
shall limit the liability of Guarantor, or limit the recourse of Buyer to Guarantor or Seller, for
amounts otherwise specifically provided to be Recourse Obligations under the terms of this
Agreement.



ARTICLE VII

MISCELLANEOUS




     6.1. Notices. All notices and other communications provided to Guarantor or Buyer
under this Agreement shall be in writing (including, without limitation, bank wire, telecopy or
electronic facsimile transmission or similar writing) and shall be given to such Person at their
respective addresses specified below or at such other address or fax number as such Person may
hereafter specify for the purpose of notice to the other Person. Each such notice or other
communication shall be effective (i) if given by telecopy or electronic facsimile transmission,
upon receipt of electronic confirmation of receipt thereof, (ii) if given by mail, three (3)
Business Days after the time such communication is deposited in the mail registered with return
receipt requested or (iii) if given by any other means, when received at the address specified in
this Section 6.1. All such notices and other communications shall be given to the
following addresses:


If to Guarantor:



Federal Signal Corporation

1415 West 22nd Street, Suite 1100

Oak Brook, Illinois 60523

Telecopy: (630) 954-2041

Attention: Treasurer



with a copy to:



Federal Signal Corporation

1415 West 22nd Street, Suite 1100

Oak Brook, Illinois 60523

Telecopy: (630) 954-2138

Attention: General Counsel




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If to Buyer:



Banc of America Public Capital Corp

231 South LaSalle Street

8th Floor

Chicago, Illinois 60697

Telecopy: (312) 974-9052

Attention: Senior Credit Officer, Global Vendor Finance Division

Reference: Federal Signal




     6.2. Termination. This Agreement constitutes a continuing guaranty and shall remain
in full force and effect until the irrevocable payment in full of all of the Guaranteed
Obligations, irrespective of any interruption in the business relations of Seller and Buyer or any
transfer by Guarantor of any interest in Seller.



     6.3. Survival of Terms. All representations and warranties made by Guarantor in this
Agreement shall survive the execution and delivery of this Agreement regardless of any
investigation made by Buyer and notwithstanding that Buyer may have had notice or knowledge that
any such representation or warranty was incorrect. The provisions of Article IV and
Article V (and any provisions of this Agreement relating to the enforcement of such
provisions) shall survive any termination of this Agreement.



     6.4. Successive Actions. A separate right of action hereunder shall arise each time
Buyer acquires knowledge of any matter indemnified or guaranteed by Guarantor under this Agreement.
Buyer may bring separate and successive actions hereunder to enforce any of the provisions hereof
at any time and from time to time. No action hereunder shall preclude any subsequent action, and
Guarantor hereby waives and covenants not to assert any defense in the nature of splitting of
causes of action or merger of judgments.



     6.5. Waiver by Guarantor. Guarantor covenants and agrees that, upon the commencement
of a voluntary or involuntary bankruptcy proceeding by or against Seller, Guarantor shall not seek
or cause Seller or any other Person to seek a supplemental stay or other relief, whether injunctive
or otherwise, pursuant to 11 U.S.C. §105 or any other provision of the Bankruptcy Reform Act of
1978, as amended, or any other debtor relief law (whether statutory, common law, case law or
otherwise) of any jurisdiction, now or hereafter in effect, which may be or become applicable, to
stay, interdict, condition, reduce or inhibit the ability of Buyer to enforce any rights of Buyer
against Guarantor by virtue of this Agreement or otherwise.



     6.6. Governing Law; Assignments. This Agreement has been delivered for acceptance by
Buyer in Chicago, Illinois and shall be governed by, and construed in accordance with, the internal
laws (as opposed to the conflicts of law provisions) of the State of Illinois. The rights and
obligations of Buyer and Guarantor under this Agreement will inure to the benefit of, and be
binding upon, their successors and permitted assigns. Buyer may assign or transfer this Agreement
or any of its rights under this Agreement or any Purchased Assets to any other party without
notice. All references to “Buyer” in this Agreement shall include its assigns and transferees,
whether immediate or remote. Guarantor may not assign or transfer this Agreement or any of its
rights or obligations under this Agreement without the prior written consent of Buyer (which
consent shall not be unreasonably withheld).



     6.7. Cooperation. Guarantor shall, from time to time upon reasonable notice and
during normal business hours, in each case to the extent reasonably necessary to enable Buyer to
reconcile



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Obligor payments or otherwise service the Purchased Leases, to comply with governmental
requirements or regulations or to prosecute or defend third-party claims, make reasonably available
to Buyer and its agents all information maintained by or on behalf of Guarantor with respect to the
Purchased Assets. Buyer shall, from time to time upon reasonable notice and during normal business
hours, in each case to the extent reasonably necessary to enable Guarantor to comply with its
obligation to repurchase Purchased Assets pursuant to this Agreement, to comply with governmental
requirements or regulations or to prosecute or defend third-party claims, make reasonably available
to Guarantor or its agents copies of the Purchased Leases and all other documents included in the
related Lease Files.



     6.8. JURY TRIAL WAIVER; VENUE; JURISDICTION; SERVICE. BUYER AND GUARANTOR EACH WAIVE
ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION ARISING FROM OR RELATED TO THIS AGREEMENT. ANY STATE OR
FEDERAL COURT LOCATED IN COOK COUNTY, ILLINOIS, SHALL HAVE NON-EXCLUSIVE JURISDICTION OVER ANY
ACTION OR PROCEEDING ARISING FROM OR RELATED TO THIS AGREEMENT. GUARANTOR SUBMITS TO THE
JURISDICTION OF SUCH COURTS AND WAIVES, TO THE FULLEST EXTENT IT MAY DO SO, ANY INCONVENIENT FORUM
DEFENSE IT MAY HAVE TO ANY SUCH ACTION OR PROCEEDING. A FINAL JUDGMENT RENDERED IN ANY SUCH ACTION
OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS SECTION 6.8 SHALL AFFECT
OR IMPAIR GUARANTOR’S OR BUYER’S RIGHT TO SERVE LEGAL PROCESS IN ANY MANNER PERMITTED BY LAW.



     6.9. Captions; Savings. The section headings in this Agreement shall not be used to
construe the terms and conditions of this Agreement. The obligations of Buyer and Guarantor to
perform under this Agreement are limited by and subject to all applicable laws, rules and
regulations. Wherever possible, each provision of this Agreement shall be interpreted as effective
and valid under applicable law. If any provision of this Agreement is prohibited or invalid, such
provision shall be ineffective to the extent of such prohibition or invalidity and the remainder of
this Agreement shall remain valid.



     6.10. Complete Agreement; Amendments; Waivers. This Agreement and the other
Transaction Documents represent the complete understanding of the parties concerning the subject
matter of this Agreement and supersede any and all previous agreements or understandings, written
or oral, relating to the subject matter of this Agreement. Amendments to this Agreement shall only
be effective if in writing and signed by duly authorized officers of Buyer and Guarantor. Waivers
of any provision of this Agreement shall only be effective if in writing and signed by the party to
be bound, and any waiver will be effective only as to the matters expressly covered in such
writing. Any party’s knowledge of any breach of or non-compliance with any other party’s
covenants, agreements, representations or warranties shall not constitute a waiver. No failure or
delay by any party in exercising any right or remedy under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right or remedy. The rights and remedies provided in this
Agreement are cumulative and not exclusive of any rights and/or remedies provided by law.



     6.11. Counterparts. This Agreement may be executed in any number of counterparts and
by different parties hereto on separate counterparts, each of which when so executed shall be
deemed to be an original and all of which when taken together shall constitute one and the same
agreement.



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     IN WITNESS WHEREOF, duly authorized officers of Guarantor and Buyer have executed this
Agreement as of the date first set forth above.



	 	 	 	 	 
	 	FEDERAL SIGNAL CORPORATION

 	 
	 	By:  	
 	 
	 	 	Name:  	David Janek 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 
	 	BANC OF AMERICA PUBLIC CAPITAL CORP

 	 
	 	By:  	
 	 
	 	 	Name:  	Glen L. Van de Loo 	 
	 	 	Title:  	Senior Vice President 	 
	 



Guaranty and Payment Agreement

(FS Depot, Inc.)




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