Guaranty



 






EXHIBIT 10.4




GUARANTY




     THIS
GUARANTY (this “Guaranty”) is made as of November 10, 2005 by DEVCON INTERNATIONAL CORP.,
a Florida corporation (“Guarantor”), to and for the benefit of CAPITALSOURCE FINANCE LLC, a
Delaware limited liability company (“Lender”).



     WHEREAS, Devcon Security Holdings, Inc., Devcon Security Services Corp., Coastal Security
Company, Coastal Security Systems, Inc. and Central One, Inc.
(collectively, “Borrower”) and Lender
have entered into that certain Bridge Loan Agreement dated as of the date hereof (as amended,
supplemented or modified from time to time, the “Loan Agreement”), pursuant to which Borrower has
agreed to borrow from Lender, and Lender has agreed to lend to Borrower, certain amounts pursuant
to a bridge loan facility, all in accordance with and subject to the terms and conditions set forth
in the Loan Agreement and all of the other agreements, documents, instruments, certificates,
reports and financing statements heretofore or hereafter executed or delivered in connection
therewith or with the Loan to be made under it, as the same may be amended, supplemented or
modified from time to time (collectively referred to herein as the “Loan Documents”);



     WHEREAS, Guarantor requested that Lender make the Loan to Borrower pursuant to the terms of,
and that Borrower and Lender execute, deliver and perform under, the Loan Agreement and the other
Loan Documents;



     WHEREAS, Guarantor is the owner of all of the ownership interests in Devcon Security Holdings,
Inc. (“Holdings”) and, pursuant to Lender’s request, has agreed to execute and deliver this
Agreement of even date herewith;



     WHEREAS, Lender is willing to execute, deliver and perform under the Loan Agreement and the
other Loan Documents and to make the Loan available only upon the condition that Guarantor executes
and delivers to Lender this Guaranty and agrees to perform and to comply with its obligations under
this Guaranty; and



     WHEREAS, Guarantor acknowledges and confirms that, as the owner of all of the outstanding
capital stock of Holdings, (a) it will benefit from the advancement of funds under the Loan to
Borrower, (b) the Loan constitutes valuable consideration to Guarantor, (c) this Guaranty is
intended to be inducement to Lender to continue to extend credit and the Loan to Borrower, and (d)
Lender is relying upon this Guaranty in making and advancing the Loan to Borrower.



     NOW, THEREFORE, in consideration of the foregoing and of the covenants and agreements
hereinafter set forth, the receipt and sufficiency of which are hereby acknowledged, and as an
inducement for Lender to enter into the Loan Agreement and the other Loan Documents, the Guarantor,
intending to be legally bound hereby, agrees as follows:



 









 





     1. All capitalized terms in this Guaranty and not defined herein shall have the defined meanings
provided in the Loan Agreement. Whenever the context so requires, each reference to gender
includes the masculine and feminine, the singular number includes the plural and vice versa. The
words “hereof” “herein” and “hereunder” and words of similar import when used in this Guaranty
shall refer to this Guaranty as a whole and not to any particular provision of this Guaranty, and
references to section, article, annex, schedule, exhibit and like references are references to this
Guaranty unless otherwise specified. A Default or Event of Default shall “continue” or be
“continuing” until such Default or Event of Default has been cured or waived by Lender. References
in this Guaranty to any Person (as defined in the Credit Agreement) shall include such Person and
its successors and permitted assigns.



     2. Guarantor unconditionally and absolutely guarantees (i) the due and punctual payment and
performance when due of the principal of any Note and the interest thereon and of the Obligations
and any and all other monies and amounts due or which may become due on or with respect to any of
the foregoing, and the due and punctual performance and observance by Borrower of all of the other
terms, covenants, agreements and conditions of the Loan Documents, in any case whether according to
the present terms thereof, at any earlier or accelerated date or dates or pursuant to any extension
of time or to any change in the terms, covenants, agreements and conditions thereof now or at any
time hereafter made or granted, (ii) all liabilities and obligations of Guarantor hereunder, and
(iii) all costs, expenses and liabilities (including, without limitation, reasonable attorneys fees
and expenses, documentation and diligence fees and legal expenses, and search, audit, recording,
professional and filing fees and expenses) that may be incurred or advanced by Lender in any way in
connection with the foregoing and/or otherwise required to be paid by Guarantor hereunder
(collectively, such items in clauses (i) through
(iii) being the “Guaranteed Obligations”).
Guarantor acknowledges that this Guaranty shall be deemed a continuing guaranty of the Guaranteed
Obligations under the Loan Documents.



     3. This Guaranty is a guaranty of payment and not a guaranty of collection. If any Guaranteed
Obligation is not satisfied when due, whether by acceleration or otherwise, the Guarantor shall
forthwith satisfy such Guaranteed Obligation, upon demand, and no such satisfaction shall discharge
the obligations of the Guarantor hereunder until all Guaranteed Obligations have been indefeasibly
paid in cash and performed and satisfied in full and the Loan Agreement terminated. The liability
of Guarantor under this Guaranty shall be primary and direct and not conditional or contingent upon
the enforceability of any obligation, the solvency of Borrower or any other Person, any obligation
or circumstance which might otherwise constitute a legal or equitable discharge or defense of a
surety or guaranty or the pursuit by Lender of any remedies it may have against Borrower or any
other guarantor of the Guaranteed Obligations or any other Person. Without limiting the generality
of the foregoing, Lender shall not be required to make any demand on Borrower or any other
guarantor of the Guaranteed Obligations or any other Person or to sell at foreclosure or otherwise
pursue or exhaust its remedies against any Collateral of Borrower or any other guarantor of the
Guaranteed Obligations or any other Person before, simultaneously with or after enforcing its
rights and remedies hereunder against Guarantor, and any one or more successive and/or concurrent
actions may be brought against Guarantor in the same action brought against Borrower or any other
guarantor of the Guaranteed Obligations or any other Person or in separate actions, as often as
Lender may deem advisable, in its sole discretion. The obligations of Guarantor hereunder shall



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not in any way be affected by any action taken or not taken by Lender, which action or
inaction is hereby consented and agreed to by Guarantor, or by the partial or complete
unenforceability or invalidity of any other guaranty or surety agreement, pledge, assignment, Lien
(as defined in the Credit Agreement) or other security interest or security for any of the
Guaranteed Obligations or of the value, genuineness, validity or enforceability of the Collateral
or any of the Guaranteed Obligations.



     4. Guarantor hereby represents and warrants to Lender (which representations and warranties
shall survive the execution and delivery of this Guaranty and the making of the Loan under the Loan
Agreement) as follows:



          (A) Guarantor is a corporation, duly organized, validly existing and in good standing under
the laws of the State of Florida;



          (B) Guarantor (i) has all requisite power and authority to own its properties and assets and
to carry on its business as now being conducted and as contemplated in the Loan Documents, and (ii)
is duly qualified to do business in every jurisdiction in which failure so to qualify could
reasonably be expected to have or result in a Material Adverse Effect (as defined in the Credit
Agreement).



          (C) Guarantor has all requisite power and authority (i) to execute, deliver and perform this
Guaranty and other Loan Documents to which it is a party, and (ii) to consummate the transactions
contemplated hereunder and the other Loan Documents to which it is a party, and Guarantor is under
no legal restriction, limitation or disability that would prevent it from doing any of the
foregoing.



          (D) The execution, delivery and performance by Guarantor of this Guaranty and other Loan
Documents to which it is a party and the consummation of the transactions contemplated hereby and
thereby have been duly and validly authorized by all necessary actions on the part of Guarantor
(including any required approval of shareholders or other equity holders, if applicable) (none of
which actions have been modified or rescinded, and all of which actions are in full force and
effect), and have been duly executed and delivered by Guarantor and constitute the legal, valid and
binding obligation of Guarantor, enforceable against Guarantor in accordance with its terms,
subject to the effect of any applicable bankruptcy, moratorium, insolvency, reorganization or other
similar law affecting the enforceability of creditors’ rights generally and to the effect of
general principles of equity which may limit the availability of equitable remedies (whether in a
proceeding at law or in equity);



          (E) The execution, delivery and performance by Guarantor of this Guaranty and the consummation
of the transactions contemplated hereby and thereby do not and will not (1) conflict with or
violate any provision of any applicable law, statute, rule, regulation, ordinance, license or
tariff or any judgment, decree or order of any court or other Governmental Authority (as defined in
the Credit Agreement) binding on or applicable to Guarantor or any of its properties or assets; (2)
conflict with, result in a breach of, constitute a default of or an event of default under, or an
event, fact, condition or circumstance which, with notice or passage of time, or both, would
constitute or result in a conflict, breach, default or event of default under, require any consent
not obtained under, or result in or require the acceleration of any



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indebtedness pursuant to, any indenture, agreement or other instrument to which Guarantor is a
party or by which it or any of its properties or assets are bound or subject; (3) conflict with or
violate any provision of the certificate of incorporation or formation, by-laws, limited liability
company agreement or similar documents of Guarantor or Borrower or any agreement by and between
Guarantor and its shareholders or equity owners or among any such shareholders or equity owners; or
(4) result in the creation or imposition of any Lien of any nature whatsoever upon any of the
properties or assets of Guarantor;



          (F) Guarantor is not (1) a party or subject to any judgment, order or decree or any agreement,
document or instrument or subject to any restriction, any of which do or would materially and
adversely affect or prevent its ability to execute or deliver, perform under, consummate the
transactions contemplated by, or observe the covenants and agreements contained in, this Guaranty
or other Loan Documents to which it is a party or to pay the Guaranteed Obligations; or (2) in
default or breach of the performance, observance or fulfillment of any obligation, covenant or
condition contained in any agreement, document or instrument to which it is a party or by which it
or any of its properties or assets is or are bound or subject, which default or breach, if not
remedied within any applicable grace period or cure period, could reasonably be expected to have or
result in a Material Adverse Effect, nor is there any event, fact, condition or circumstance which,
with notice or passage of time, or both, would constitute or result in a conflict, breach, default
or event of default under, any of the foregoing which, if not remedied within any applicable grace
or cure period, could reasonably be expected to have or result in a Material Adverse Effect.



          (G) Guarantor and each of its Subsidiaries (as defined in the Credit Agreement) is in
compliance with all laws, statutes, rules, regulations, ordinances and tariffs of any Governmental
Authority with respect or applicable to it and/or its assets and properties and is not in violation
of any order, judgment or decree of any court or other Governmental Authority or arbitration board
or tribunal, in each case except where noncompliance or violation could not reasonably be expected
to have or result in a Material Adverse Effect, and there is no event, fact, condition or
circumstance which, with notice or passage of time, or both, would constitute or result in any
noncompliance with, or any violation of, any of the foregoing, in each case except where
noncompliance or violation could not reasonably be expected to have or result in a Material Adverse
Effect;



          (H) There is no action, suit, proceeding or investigation pending or, to Guarantor’s
knowledge, threatened before or by any court, arbitrator or Governmental Authority against or
affecting the Guarantor, this Guaranty or other Loan Documents to which Guarantor is a party or the
transactions contemplated hereby or thereby, (1) that questions or could prevent the validity of
this Guaranty or other Loan Documents to which Guarantor is a party or the right or ability of
Guarantor to execute or deliver this Guaranty or such other documents or to consummate the
transactions contemplated hereby and thereby; (2) that could reasonably be expected to have or
result in, either individually or in the aggregate, any Material Adverse Effect, or (3) that could
reasonably be expected to result in any change in the current equity ownership of Guarantor or
otherwise in a Change of Control (as defined in the Credit Agreement), nor is Guarantor aware that
there is any basis for the foregoing;



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          (I) None of the business or properties of Guarantor, any relationship between Guarantor and
any other Person, any circumstance in connection with the execution, delivery and performance of
this Guaranty, or any of the other Loan Documents to which it is a party or the consummation of the
transactions contemplated hereby or thereby, requires a consent, approval or authorization of, or
filing, registration or qualification which has not been obtained with, any Governmental Authority
or any other Person;



          (J) Guarantor is not a party to and has not entered into any agreement, document or instrument
that conflicts with this Guaranty or that otherwise relates to the Guaranteed Obligations (other
than the Loan Documents to which it is a party);



          (K) The obligations of Guarantor under this Guaranty are not subordinated in any way to any
other obligation of Guarantor or to the rights of any other Person;



          (L) Guarantor and its Affiliates (as defined in the Credit Agreement) licensed employees and
contractors are in compliance with, have procured and are now in possession of, all material
licenses, permits, franchises, certificates and other approvals or authorizations of or required by
any applicable federal, state, foreign or local law, statute, ordinance or regulation or
Governmental Authority or regulatory authority, including without limitation, for the operation of
their respective businesses in each jurisdiction (including foreign jurisdictions) wherein they are
now conducting business and/or where the failure to procure such licenses or permits could
reasonably be expected to have or result in a Material Adverse Effect and as proposed to be
conducted pursuant to this Guaranty; and Guarantor is not in breach of or default under the
provisions of any of the foregoing and there is no event, fact, condition or circumstance which,
with notice or passage of time, or both, would constitute or result in a conflict, breach, default
or event of default under, any of the foregoing which, if not remedied within any applicable grace
or cure period could reasonably be expected to have or result in a Material Adverse Effect;



          (M) No representation or warranty made by Guarantor in this Guaranty or in any other Loan
Document contains any untrue statement of material fact or omits to state any fact necessary to
make the statements herein or therein not materially misleading, and there is no fact known to
Guarantor which Guarantor has not disclosed to Lender in writing which could reasonably be expected
to have or result in a Material Adverse Effect;



          (N) During the five years prior to the date hereof, Guarantor has not conducted business under
or used any other name (whether corporate, partnership or assumed); and



          (O) The foregoing representations and warranties are made with the knowledge and intention
that Lender is relying and will rely thereon, and such representations and warranties shall survive
the execution and delivery of this Guaranty.



     5. Guarantor hereby waives demand, setoff, counterclaim, presentment, protest, notice of
dishonor or non-payment, as well as all defenses with respect to any and all instruments, notice of
acceptance hereof, notice of the Loan made, credit extended, collateral received or delivered, or
any other action taken by Lender in reliance hereon, and all other demands and notices of any
description, except such as are expressly provided for herein, it being the intention hereof that
Guarantor shall remain liable as a principal until the full amount



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of all Guaranteed Obligations shall have been indefeasibly paid in full in cash and performed
and satisfied in full and the Loan Agreement terminated, notwithstanding any act, omission, or
anything else which might otherwise operate as a legal or equitable discharge of Guarantor. The
pleading of any statute of limitations as a defense to any demand against Guarantor hereunder and
under the other Loan Documents is expressly waived by Guarantor.



     6. Guarantor acknowledges and agrees that its obligations as Guarantor shall not be impaired,
modified, changed, released or limited in any manner whatsoever by any impairment, modification,
change, release or limitation of the liability of Borrower or any other guarantor of the Guaranteed
Obligations or any other Person or its estate in bankruptcy resulting from the operation of any
present or future provision of the bankruptcy laws or other similar statute, or from the decision
of any court.



     7. Guarantor acknowledges and agrees that Lender shall have the full right and power, in its
sole discretion and without any notice to or consent from Guarantor and without affecting or
discharging, in whole or in part, the liability of Guarantor hereunder to deal in any manner with
the Guaranteed Obligations and any security or guaranties therefor, including, without limitation,
to (A) release, extend, renew, accelerate, compromise or substitute and administer the Guaranteed
Obligations and other obligations under the Loan Documents in any manner it sees fit, (B) release
any or all collateral for the Guaranteed Obligations, (C) release any guarantor of the Guaranteed
Obligations, (D) extend the time for payment of the Guaranteed Obligations or any part thereof, (E)
change the interest rate on the Guaranteed Obligations or any Note under the Loan Agreement, (F)
reduce or increase the outstanding principal amount of the Guaranteed Obligations or any Note under
the Loan Agreement, (G) accelerate the Guaranteed Obligations, (H) make any change, amendment or
modification whatsoever to the terms or conditions of the Loan Documents, (I) extend, in whole or
in part, on one or any number of occasions, the time for the payment of any principal or interest
or any other amount pursuant to any Note or for the performance of any term or condition of the
Loan Documents, (J) settle, compromise, release, substitute, impair, enforce or exercise, or fail
or refuse to enforce or exercise, any claims, rights, or remedies, of any kind or nature, which
Lender may at any time have against Borrower or any other guarantor of the Guaranteed Obligations
or any other Person, or with respect to any security interest of any kind held by Lender at any
time, whether under any Loan Document or otherwise, (K) release or substitute any security interest
of any kind held by Lender at any time, (L) collect and retain or liquidate any collateral subject
to such security interest, (M) make advances for the purpose of performing any term or covenant
contained in the Loan Documents with respect to which the Borrower or any other guarantor of the
Guaranteed Obligations is in default, (N) foreclose on any of the Collateral, (O) grant waivers or
indulgences, (P) take additional collateral, (Q) obtain any additional guarantors, (R) take a deed
in lieu of foreclosure and/or (S) take or fail to take any other action whatsoever with respect to
the Guaranteed Obligations. Guarantor hereby waives and agrees not to assert against Lender any
rights which a guarantor or surety could exercise. Notwithstanding any other provision of this
Guaranty or any other Loan Document, Guarantor agrees that Lender has no duties of any nature
whatsoever to Guarantor, whether express or implied, by virtue of this Guaranty or any other Loan
Document, operation of law or otherwise.



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     8. Guarantor agrees that its obligations hereunder are irrevocable, joint and several and
independent of the obligations of Borrower or any other guarantor of the Guaranteed Obligations or
any other Person. Guarantor shall take all necessary and appropriate actions to ensure that this
Guaranty is and remains enforceable against Guarantor in accordance with their respective terms and
that Guarantor complies with each of its obligations hereunder and thereunder. Guarantor shall not
(a) cause or permit to be done, or enter into or make or become a party to any agreement (oral or
written), arrangement or commitment to do or cause to be done, any of the things prohibited by this
Guaranty or the other Loan Documents to which it is a party or that would breach this Guaranty any
other Loan Document to which it is a party or any other instrument, agreement, arrangement,
commitment or document to which Guarantor is a party or by which it or any of its properties or
assets is or may be bound or subject, or (b) enter into or make or become a party to any agreement,
document or instrument or arrangement that conflicts with this Guaranty or other Loan Documents to
which it is a party or that would prevent Guarantor from complying with and performing under this
Guaranty or other Loan Documents to which it is a party. If applicable, each Guarantor executing
this Guaranty shall be jointly and severally liable for all of the Guaranteed Obligations.



     9. Guarantor agrees that it shall have no right of subrogation whatever with respect to the
Guaranteed Obligations guaranteed hereby or to any collateral securing such Guaranteed Obligations
unless and until such Guaranteed Obligations have been irrevocably and indefeasibly paid in full in
cash and performed in full and the Loan Agreement and this Guaranty have been terminated.



     10. Guarantor acknowledges and agrees that (a) it will benefit from the execution, delivery
and performance by Lender of the Loan Agreement and the other Loan Documents and the advancement of
the Loan to Borrower and that the Loan by Lender constitutes valuable consideration to Guarantor,
(b) this Guaranty is intended to be an inducement to Lender to execute, deliver and perform the
Loan Agreement and the other Loan Documents and to extend credit and the Loan to Borrower, whether
the Guaranteed Obligations were created or acquired before or after the date of this Guaranty, and
(c) Lender is relying upon this Guaranty in making and advancing the Loan to Borrower.



     11. Guarantor agrees that this Guaranty shall inure to the benefit of, and may be enforced by,
Lender, all future holders of any Note or any of the Guaranteed Obligations or any of the
Collateral and all Transferees (as defined below), and each of their respective successors and
permitted assigns, and shall be binding upon and enforceable against Guarantor and Guarantor’s
assigns and successors. Guarantor agrees that it may not assign, delegate or transfer this
Guaranty or any of its rights or obligations under this Guaranty without the prior written consent
of Lender. Nothing contained in this Guaranty, or any other Loan Document shall be construed as a
delegation to Lender of Guarantor’s duty of performance, including, without limitation, any duties
under any account or contract in which Lender has a security interest or Lien. GUARANTOR
ACKNOWLEDGES THAT LENDER AT ANY TIME AND FROM TIME TO TIME MAY SELL, ASSIGN OR GRANT PARTICIPATING
INTERESTS IN OR TRANSFER ALL OR ANY PART OF ITS RIGHTS OR OBLIGATIONS UNDER, THIS GUARANTY, ANY
NOTE, THE GUARANTEED OBLIGATIONS, THE COLLATERAL AND/OR THE LOAN DOCUMENTS TO ONE OR MORE OTHER
PERSONS, INCLUDING, WITHOUT LIMITATION, FINANCIAL INSTITUTIONS (EACH SUCH TRANSFEREE,



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ASSIGNEE
OR PURCHASER, A “TRANSFEREE”). In such case, the Transferee shall have all of the
rights and benefits with respect to the portion of such Guaranteed Obligations, any Note, this
Guaranty, the Collateral and the Loan Documents held by it as fully as if such Transferee were the
original holder thereof (including without limitation rights of set-off and recoupment), and shall
become vested with all of the powers and rights given to Lender hereunder with respect thereto, and
shall be deemed to be a “Lender” for all purposes hereunder, the predecessor Lender shall
thereafter be forever released and fully discharged from any liability or responsibility hereunder
with respect to the rights and interests so assigned, and either Lender or any Transferee may be
designated as the sole agent to manage the transactions and obligations contemplated herein.
Notwithstanding any other provision of this Guaranty, or any other Loan Document, Lender may
disclose to any Transferee all information, and may furnish to such Transferee copies of reports,
financial statements, certificates, and documents obtained under any provision of this Guaranty or
any Loan Document.



     12. Guarantor hereby agrees to take or cause to be taken such further actions, to obtain such
consents and approvals and to duly execute, deliver and file or cause to be executed, delivered and
filed such further agreements, assignments, instructions, documents and instruments as may be
necessary or as may be reasonably requested by Lender in order to fully effectuate the purposes,
terms and conditions of this Guaranty and the consummation of the transactions contemplated hereby
and performance and payment of the Guaranteed Obligations hereunder, whether before, at or after
the performance and/or consummation of the transactions contemplated hereby or the occurrence of a
Default or Event of Default under any Loan Document.



     13. Notwithstanding and without limiting or being limited by any other provision of this
Guaranty or the Loan Documents, Guarantor shall pay all costs and expenses incurred by Lender or
any of its Affiliates, including, without limitation, documentation and diligence fees and
expenses, all search, audit, appraisal, recording, professional and filing fees and expenses and
all other out-of-pocket charges and expenses (including, without limitation, UCC (as defined in the
Credit Agreement) and judgment and tax lien searches), and reasonable attorneys’ fees and expenses
(a) in any effort to enforce this Guaranty any other Loan Document and/or any related agreement,
document or instrument, or to effect collection hereunder or thereunder, (b) in connection with
entering into, negotiating, preparing, reviewing and executing this Guaranty and the other Loan
Documents and all related agreements, documents and instruments, (c) arising in any way out of
administration of the Guaranteed Obligations or the security interests or Liens created with
respect thereto, including without limitation, any wire transfer fees or audit expenses or filing
or recordation fees, (d) in connection with instituting, maintaining, preserving and enforcing
Lender’s rights hereunder or under all related agreements, documents and instruments, (e) in
defending or prosecuting any actions, claims or proceedings arising out of or relating to this
Guaranty and/or any related agreement, document or instrument, (f) in seeking or receiving any
advice with respect to its rights and obligations under this Guaranty, any of the other Loan
Documents and/or all related agreements, documents and instruments, and/or (g) in connection with
any modification, amendment, supplement, waiver or extension of this Guaranty any other Loan
Document and/or any related agreement, document or instrument, and all of the same shall be part of
the Guaranteed Obligations. If Lender or any of its Affiliates uses in-house counsel for any of
the purposes set forth above or any other purposes under this Guaranty for which Guarantor is
responsible to pay or indemnify, Guarantor expressly agrees that its



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obligations include reasonable charges for such work commensurate with the fees that would
otherwise be charged by outside legal counsel selected by Lender or such Affiliate in its sole
discretion for the work performed.



     14. Any notice or request under this Agreement shall be given to any Guarantor or to Lender at
their respective addresses set forth below or at such other address as such Person may hereafter
specify in a notice given in the manner required under this Section 14. Any notice or
request hereunder shall be given only by, and shall be deemed to have been received upon (each a
“Receipt”): (i) registered or certified mail, return receipt requested, on the date on which such
is received as indicated in such return receipt, (ii) receipt of delivery by a nationally
recognized overnight courier, or (iii) facsimile, upon telephone or further electronic
communication from the recipient acknowledging receipt (whether automatic or manual from
recipient), as applicable.



	 	 	 
	(i)
	 	If to Lender:

	 
	 	 	CapitalSource Finance LLC

	 	 	4445 Willard Avenue

	 	 	12th Floor

	 	 	Chevy Chase, MD 20815

	 	 	Attention: Health Care and Specialty Finance Business,

	 	 	                    Portfolio Manager

	 	 	Telephone: (301) 841-2700

	 	 	FAX: (301) 841-2340

	 
	 	 

	(ii)
	 	If to Guarantor:

	 
	 	 	Devcon International Corp.

	 	 	1350 E. Newport Center Drive, #201

	 	 	Deerfield Beach, FL 33442

	 	 	Attention: President

	 	 	Telephone: (954) 429-1500

	 	 	FAX: (954) 429-1506







     15. No course of action or delay, renewal or extension of this Guaranty or any rights or
obligations hereunder, release of Guarantor or any of the foregoing, or delay, failure or omission
on Lender’s part in enforcing this Guaranty, or any other Loan Document or in exercising any right,
remedy, option or power hereunder or thereunder shall affect the liability of Guarantor or operate
as a waiver of such or of any other right, remedy, power or option or of any default, nor shall any
single or partial exercise of any right, remedy, option or power hereunder or thereunder affect the
liability of Guarantor or preclude any other or further exercise of such or any other right,
remedy, power or option. No waiver by Lender of any one or more defaults by Guarantor party in the
performance of any of the provisions of this Guaranty shall operate or be construed as a waiver of
any future default or defaults, whether of a like or different nature. Notwithstanding any other
provision of this Guaranty or any other Loan Document, by making the Loan, Lender does not waive a
breach of any representation or warranty of Guarantor under this Guaranty or under any other Loan
Document, and all of Lender’s claims and rights resulting from any breach or misrepresentation by
Guarantor are specifically reserved by Lender.



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     16. If any term or provision of this Guaranty is adjudicated to be invalid under applicable
laws or regulations, such provision shall be inapplicable to the extent of such invalidity or
unenforceability without affecting the validity or enforceability of, the remainder of this
Guaranty which shall be given effect so far as possible.



     17. It is the express intention and agreement of the Guarantor that all obligations,
covenants, agreements, representations, warranties, waivers and indemnities made by Guarantor
herein shall survive the execution and delivery of this Guaranty until all Guaranteed Obligations
are performed in full and indefeasibly paid in full in cash and the Loan Agreement is terminated.



     18. Lender shall have the right in its sole discretion to determine which rights, powers,
Liens, security interests or remedies Lender may at any time pursue, relinquish, subordinate or
modify or to take any other action with respect thereto and such determination will not in any way
modify or affect any of Lender’s rights, powers, Liens, security interests or remedies hereunder or
under any of the Loan Documents or under applicable law or at equity. The enumeration of the
rights and remedies herein is not intended to be exhaustive. The rights and remedies of Lender
described herein are cumulative and are not alternative to or exclusive of any other rights or
remedies which Lender otherwise may have by contract or at law or in equity, and the partial or
complete exercise of any right or remedy shall not preclude any other further exercise of such or
any other right or remedy.



     19. This Guaranty shall be effective on the date hereof and shall continue in full force and
effect until full performance and indefeasible payment in full in cash of all Guaranteed
Obligations and termination of this Guaranty and the Loan Agreement, all in accordance with the
Loan Agreement, and the rights and powers granted to Lender hereunder shall continue in full force
and effect notwithstanding the fact that Borrower’s borrowings under the Loan Agreement may from
time to time be temporarily in a zero or credit position until all of the Guaranteed Obligations
have been indefeasibly paid in full in cash and performed and satisfied in full.



     20. This Guaranty shall be governed by and construed in accordance with the internal laws of
the State of Maryland without giving effect to its choice of law provisions. Any judicial
proceeding brought by or against Guarantor with respect to any of the Guaranteed Obligations or any
of the rights or obligations hereunder, this Guaranty or any related agreement may be brought in
any federal or state court of competent jurisdiction located in the State of Maryland, and, by
execution and delivery of this Guaranty, Guarantor accepts for itself and in connection with its
properties generally and unconditionally the non-exclusive jurisdiction of the aforesaid courts and
irrevocably agrees to be bound by any judgment rendered thereby in connection with this Guaranty
and/or any of the other Loan Documents or any such other agreement. Guarantor hereby waives
personal service of process and agrees that service of process upon Guarantor may be made by
certified or registered mail, return receipt requested, at Guarantor’s address specified or
determined in accordance with Section 14, and service so made shall be deemed completed on
the third (3rd) Business Day after mailing. Nothing herein shall affect the right to serve process
in any manner permitted by law or shall limit the right of Lender to bring proceedings against
Guarantor in the courts of any other jurisdiction having jurisdiction over Guarantor. Guarantor
waives any objection to jurisdiction and venue of any action instituted hereunder and shall not
assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. Any
judicial proceeding by Guarantor against Lender involving, directly or indirectly, any matter



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or claim in any way arising out of, related to or connected with the Guaranteed Obligations,
this Guaranty, any related agreement or any of the other Loan Documents, shall be brought only in a
federal or state court located in the State of Maryland. Guarantor acknowledges that Guarantor
participated in the negotiation and drafting of this Guaranty and that, accordingly, Guarantor
shall not move or petition a court construing this Guaranty to construe it more stringently against
Lender than against Guarantor.



     21. This Guaranty may be executed in one or more counterparts, all of which taken together
shall constitute one and the same instrument. This Guaranty may be executed by facsimile
transmission, which facsimile signatures shall be considered original executed counterparts for
purposes of this Section 21, and Guarantor agrees that it will be bound by its own
facsimile signature and that it accepts the facsimile signature of each other party to this
Guaranty.



     22. Notwithstanding and without limiting any other provision of this Guaranty or any Loan
Document, Guarantor shall indemnify Lender and its Affiliates and its and their respective
managers, members, officers, employees, Affiliates, agents, representatives, accountants,
successors, assigns and attorneys and their respective Affiliates (collectively, the “Indemnified
Persons”) from and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses and disbursements of any kind or nature whatsoever
(including, without limitation, in-house documentation and diligence fees and legal expenses and
reasonable fees and disbursements of counsel) which may be imposed on, incurred by or asserted
against Lender or any other Indemnified Person with respect to or arising out of any aspect of, or
in any litigation, proceeding or investigation instituted or conducted by any Governmental
Authority or any other Person with respect to, or any transaction contemplated by or referred to
in, or any matter related to or any aspect of, this Guaranty or any of the Guaranteed Obligations
or any of the Loan Documents or any agreement or document contemplated hereby or thereby, whether
or not Lender or such Indemnified Person is a party thereto, except to the extent that any of the
foregoing arises out of the gross negligence or willful misconduct of Lender or such Indemnified
Person. Lender agrees to give Guarantor reasonable notice of any event of which Lender becomes
aware for which indemnification may be required under this Section 22, and Lender may elect
(but is not obligated) to direct the defense thereof, provided that the selection of counsel shall
be subject to Guarantor’s consent, which consent shall not be unreasonably withheld or delayed.
Lender and any other Indemnified Person may, in its reasonable discretion, take such actions as it
deems necessary and appropriate to investigate, defend or settle any event or take other remedial
or corrective actions with respect thereto as may be necessary for the protection of Lender or any
of the other Indemnified Persons, its or their interest or the Collateral generally. If any
Indemnified Person uses in-house counsel for any of the purposes set forth above or any other
purposes under this Guaranty for which Guarantor is responsible to pay or indemnify, Guarantor
expressly agrees that its indemnification obligations include reasonable charges for such work
commensurate with the fees that would otherwise be charged by outside legal counsel selected by
such Indemnified Person in its sole discretion for the work performed.



     23. GUARANTOR HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM OR CAUSE OF
ACTION (I) ARISING UNDER THIS GUARANTY OR ANY RELATED AGREEMENT OR (II) IN ANY WAY RELATING TO THIS
GUARANTY OR THE TRANSACTIONS EVIDENCED HEREBY, IN EACH CASE



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WHETHER NOW EXISTING OR HEREAFTER ARISING, AND GUARANTOR HEREBY AGREES THAT ANY SUCH CLAIM OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT EITHER GUARANTOR OR LENDER
MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 23 WITH ANY COURT AS WRITTEN EVIDENCE OF
THE CONSENT OF GUARANTOR TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.



     24. This Guaranty and the other Loan Documents to which Guarantor is a party constitute the
entire agreement between Guarantor and Lender with respect to the subject matter hereof and
thereof, and supersede all prior agreements and understandings, if any, relating to the subject
matter hereof or thereof. Neither this Guaranty nor any provision hereof may be changed,
modified, amended, waived, restated, supplemented, canceled or terminated other than by an
agreement in writing signed by both Lender and Guarantor. Guarantor acknowledges that Guarantor
has been advised by counsel in connection with the negotiation and execution of this Guaranty and
the other Loan Documents to which it is a party and is not relying upon oral representations or
statements inconsistent with the terms and/or provisions of this Guaranty or such documents. Any
waiver of this Guaranty by Lender shall be limited solely to the express terms and provisions of
such waiver.



     25. This Guaranty is not intended to benefit or confer any rights upon Borrower or upon any
third party other than Lender, who is an intended beneficiary hereof and for whose benefit this
Guaranty is explicitly made.



     26. In addition to any other rights Lender may have hereunder or under any of the Loan
Documents or under applicable law or at equity, upon the occurrence and continuation of any Event
of Default, Lender shall have the right to apply any property of Guarantor held by Lender to reduce
the Guaranteed Obligations.



     27. Lender shall have no responsibility for or obligation or duty with respect to all or any
part of the Collateral or any matter or proceeding arising out of or relating thereto or to this
Guaranty, including without limitation, any obligation or duty to collect any sums due in respect
thereof or to protect or preserve any rights pertaining thereto. Guarantor hereby waives any and
all defenses and counterclaims it may have or could interpose in any action or procedure brought by
Lender to obtain an order of court recognizing the assignment of security interests and Liens of
Lender in and to any of the Collateral, whether payable to Guarantor or any Subsidiary of Guarantor
or any other Person.



     28. Guarantor agrees (a) to treat this Guaranty and all other Loan Documents and all
provisions thereof confidentially and not to transmit any copy hereof or thereof or disclose the
contents hereof or thereof, in whole or in part, to any Person (including, without limitation, any
financial institution or intermediary) without Lender’s prior written consent, other than to
Guarantor’s advisors and officers on a need-to-know basis, (b) that Guarantor shall inform all such
Persons who receive information concerning this Guaranty or any of the Loan Documents of the
confidential nature hereof and thereof and shall direct them to treat the same confidentially and
not to disclose it to any other Person, and (c) that each of them shall agree to be bound by these
provisions. Lender shall have the right to review and approve all materials that any Guarantor
prepares that contain Lender’s name or describe or refer to this Guaranty or any Loan



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Document or any of the terms hereof or thereof or any of the transactions contemplated hereby
or thereby. Notwithstanding any other provision of this Guaranty or any Loan Document, Guarantor
shall not, and shall not permit any of its Subsidiaries to, use Lender’s name (or the name of any
of Lender’s Affiliates) in connection with any of its business operations. Nothing contained in
this Guaranty or in any of the other Loan Documents is intended to permit or authorize Guarantor to
make any contract on behalf of Lender.



     29. Upon the exercise by Lender or any of its Affiliates of any right or remedy under this
Guaranty or any other Loan Document that requires any consent, approval or registration with, or
consent, qualification or authorization by, any Governmental Authority, Guarantor will execute and
deliver, or will cause the execution and delivery of, all applications, certificates, instruments
and other documents that Lender may be required to obtain for such governmental consent, approval,
registration, qualification or authorization.



     30. Unless expressly provided herein to the contrary, Guarantor agrees that any approval,
consent, waiver or satisfaction of Lender with respect to any matter that is subject of this
Guaranty, or the other Loan Documents may be granted or withheld by Lender in its sole and absolute
discretion.



     31. Notwithstanding any other provision of this Guaranty, or any other Loan Document,
Guarantor voluntarily, knowingly, unconditionally and irrevocably, with specific and express
intent, for and on behalf of itself and its Affiliates and its and their respective heirs,
managers, members, directors, officers, employees, shareholders, Affiliates, agents,
representatives, accountants, attorneys, successors and assigns and their respective Affiliates
(collectively, the “Releasing Parties”) hereby does fully and completely release and forever
discharge the Indemnified Parties and any other Person, business or insurer which may be
responsible or liable for the acts or omissions of any of the Indemnified Parties, or who may be
liable for the injury or damage resulting therefrom (collectively, with the Indemnified Parties,
the “Released Parties”), of and from any and all actions, causes of action, damages, claims,
obligations, liabilities, costs, expenses and demands of any kind whatsoever, at law or in equity
or otherwise, whether matured or unmatured, vested or contingent, whether or not resulting from
acts or conduct of any or all of them (but specifically excluding herefrom any act constituting
gross negligence or willful misconduct by any Released Party), that the Releasing Parties or any of
them have against the Released Parties or any of them (whether directly or indirectly) at any time
and as of the date the Loan is made or requested hereunder or any other financial accommodation is
made or extended to Borrower or Guarantor hereunder or under any Loan Document. Guarantor
acknowledges that the foregoing release is a material inducement to Lender’s decision to extend to
Guarantor and Borrower the financial accommodations hereunder and under the Loan Documents and has
been relied upon by Lender in agreeing to make the Loan.



     32. In any litigation, arbitration or other dispute resolution proceeding relating to this
Guaranty, or to any of the other Loan Documents, Guarantor waives any and all defenses, objections
and counterclaims (other than compulsory counterclaims) it may have or could interpose with respect
to any director, officer, employee or agent of Guarantor and/or its and their Affiliates being
deemed to be employees or managing agents of Guarantor for purposes of all applicable law or court
rules regarding the production of witnesses by notice for testimony



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(whether in a deposition, at trial or otherwise). Guarantor waives any and all defenses,
objections and counterclaims (other than compulsory counterclaims) it may have or could interpose
with respect to Lender’s counsel in any such dispute resolution proceeding examining any such
individuals as if under cross-examination and using any discovery deposition of any of them in that
proceeding as if it were an evidence deposition. Guarantor waives any and all defenses, objections
and counterclaims (other than compulsory counterclaims) it may have or could interpose with respect
to it using all commercially reasonable efforts to produce in any such dispute resolution
proceeding, at the time and in the manner requested by Lender, all Persons, documents (whether in
tangible, electronic or other form) and/or other things under its control and relating to the
dispute in any jurisdiction that recognizes that (or any similar) distinction.



[SIGNATURE APPEARS ON THE FOLLOWING PAGE]




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     IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the day and year first above
written.



	 	 	 	 	 
	 	DEVCON INTERNATIONAL CORP.,

a Florida corporation

 	 
	 	By:  	/s/ Stephen J. Ruzika
 	 
	 	 	Name:  	Stephen J. Ruzika 	 
	 	 	Its:  President & CEO 	 
	 




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