Document:

Exhibit 10.18

 

OMNIBUS FIRST
AMENDMENT 

TO NOTE AND WARRANT PURCHASE AGREEMENT 

AND WARRANT

 

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

 

RECITALS:

 

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

 

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

 

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

 

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     Amendments to the Purchase Agreement.

 

(a)      Section 1.1 of the Purchase Agreement
is hereby amended by inserting the following definitions in their proper
alphabetical order to read as follows:

 

“Seller” means Instant
Photos, Inc., a Texas corporation.

 

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

 

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

 

 

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

 

(b)    Section 1.1 of the Purchase Agreement
is hereby further amended by amending and restating the following definition to
read as follows:

 

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

 

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

 

“(i)   the Seller Note; and

 

(j)    the Subordinated Notes.”

 

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

 

Section 3    Representations and Warranties. To induce
the Purchaser to enter into this Amendment, the Company represents and warrants
that:

 

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

 

(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, delivery or performance by the Company of this Amendment (1) violates
any law or regulation, or any other or 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 other than Liens in favor of the Senior Lender and the Seller, (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 4    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 Transactions
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, and all of
such representations and warranties (except those relating to an earlier date)
are hereby remade by the Company as of the date hereof.

 

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

 

Section 5    Reference to and Effect on Operative
Documents.

 

(a)     Ratification.  Except as specifically amended above, the
Purchase Agreement and the other Transaction Documents shall remain in full
force and effect. Notwithstanding anything contained herein, the terms of this
Amendment 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 there under.

 

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

 

(c)     References. Upon the effectiveness of this
Amendment each reference in (a) the Purchase Agreement to “this Agreement,”
“hereunder,” “hereof,” or words of similar import, (b) the Warrant to “this
Warrant,” “hereunder,” “hereof,” or words of similar import and (c) any
other Transaction Document to “the Agreement,” “the Purchase Agreement” or “the
Warrant” shall, in each case and except as otherwise specifically stated
therein, mean and be a reference to the Purchase Agreement or the Warrant, as
applicable, as amended hereby.

 

 

Section 6    Miscellaneous.

 

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

 

(b)    Effectuation. This Amendment shall be
effective once the Company and the Purchaser have executed and delivered this
Amendment to each other.

 

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

 

(d)    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.

 

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

 

[Signatures follow]

 

 

Signature Page to
Omnibus First Amendment

 

COMPANY:

 

	
  ISI DETENTION
  CONTRACTING GROUP,

  	
   

  
	
  INC., a Delaware
  corporation

  	
   

  
	
   

  	
   

  
	
  By:

  	
   /Don Carr/

  	
   

  
	
  Name; Don Carr

  	
   

  
	
  Title: President

  	
   

  
	
   

  	
   

  
	
  PURCHASER:

  	
   

  
	
   

  	
   

  
	
  WILLIAM BLAIR MEZZANINE

  	
   

  
	
  CAPITAL FUND III, L.P.

  	
   

  
	
   

  	
   

  
	
  By: 

  	
  William Blair Mezzanine
  Capital

  	
   

  
	
    Partners
  III, L.L.C.

  	
   

  
	
    its General
  Partner

  	
   

  
	
   

  	
   

  
	
  By: 

  	
  / David M. Jones /

  	
   

  
	
  Name:  David
  M. Jones

  	
   

  
	
  Its:  Managing
  Director

  	
   

  

 

 

Signature Page to
Omnibus First Amendment

 

	
  GUARANTORS:

  
	
   

  
	
  DETENTION CONTRACTING
  GROUP, 

  
	
  LTD., a Texas limited
  partnership

  
	
   

  
	
  By:

  	
  ISI Detention
  Contracting Group, Inc.,

  	
   

  
	
  a Texas corporation

  	
   

  
	
  its General Partner

  
	
   

  
	
  By:

  	
  / Sam Youngblood/

  	
   

  
	
  Name: Sam Youngblood

  	
   

  
	
  Title: Chief Executive
  Officer

  
				

 

1ST DETENTION CONTRACTING
GROUP,

INC., a California corporation

 

 

	
  By:

  	
   / Sam Youngblood/

  	
   

  
	
  Name: Sam Youngblood 

  	
   

  
	
  Title: Chief Executive
  Officer

  	
   

  
	
   

  
	
  ISI DETENTION SYSTEMS,
  INC., a Texas corporation

  

 

	
  By:

  	
   

  	
   

  
	
  Name: Sam Youngblood

  	
   

  
	
  Title: Chief Executive
  Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  METROPLEX CONTROL
  SYSTEMS, INC.,

  	
   

  
	
  a Texas corporation

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   / Sam Youngblood/

  	
   

  
	
  Name: Sam Youngblood

  	
   

  
	
  Title: Chief Executive
  Officer

  	
   

  
	
   

  	
   

  
	
  ISI DETENTION
  CONTRACTING GROUP, INC., a Texas corporation

  
	
   

  	
   

  
	
  By:

  	
   / Sam Youngblood/

  	
   

  
	
  Name: Sam Youngblood

  	
   

  
	
  Title: Chief Executive
  Officer

  	
   

  
	
   

  	
   

  
	
  ISI DETENTION
  CONTRACTING GROUP, INC., a New Mexico corporation

  
	
   

  	
   

  
	
  By:

  	
   / Sam Youngblood/

  	
   

  
	
  Name: Sam Youngblood

  	
   

  
	
  Title: Chief Executive
  Officer

  	
   

  
	
   

  	
   

  
	
  ISI SYSTEMS, LTD., a
  Texas limited partnership

  	
   

  
	
   

  	
   

  
	
  By:

  	
  ISI Detention
  Systems, Inc., a Texas corporation

  	
   

  
	
  its Genera1 Partner

  	
   

  

 

 

	
  By:

  	
   / Sam Youngblood/

  	
   

  
	
  Name: Sam Youngblood

  	
   

  
	
  Title: Chief Executive
  Officer

  	
   

  
	
   

  	
   

  
	
  ISI CONTROLS, LTD., a
  Texas limited

  	
   

  
	
  partnership

  	
   

  
	
   

  	
   

  
	
  By:

  	
  Metroplex Control Systems, Inc.,

  	
   

  
	
  a Texas corporation

  	
   

  
	
   

  	
   

  
	
  By:

  	
  / Sam Youngblood/

  	
   

  
	
  Name: Sam Youngblood

  	
   

  
	
  Title: Chief Executive
  Officer

  	
   

  

 

 

Signature Page to
Omnibus First Amendment

 

	
  METROPLEX COMMERCIAL
  FIRE AND

  	
   

  
	
  SECURITY ALARMS, INC.,
  a Texas corporation

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name: Sam Youngblood

  	
   

  
	
  Title: Chief Executive
  Officer

  	
   

  
	
   

  	
   

  
	
  MCFSA, LTD., a Texas
  limited partnership

  	
   

  
	
   

  	
   

  
	
  By:

  	
   Metroplex Commercial Fire and

  	
   

  
	
  Security
  Alarms, Inc., a Texas corporation

  	
   

  
	
  its General Partner

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name: Sam Youngblood

  	
   

  
	
  Title: Chief Executive
  Officer

  	
   

  

 

 

EXHIBIT A

 

Closing Document
Checklist

 

(See Attached)Exhibit
10.19

 

OMNIBUS SECOND
AMENDMENT

TO NOTE AND
WARRANT PURCHASE AGREEMENT

AND WARRANT

 

THIS OMNIBUS SECOND
AMENDMENT TO NOTE AND WARRANT PURCHASE AGREEMENT AND WARRANT (this “Amendment”)
dated as of                           ,
2007, by and among ISI Detention Contracting Group, Inc., a Delaware
corporation (the “Original Company”), ISI Security Group, Inc., a Delaware
corporation (“Acquisition Corp.”), and 1Sf Detention Contracting Group, Inc.
(successor-by-merger to Acquisition Corp.), a Delaware corporation (the “Surviving
Company” and, together with the Original Company and Acquisition Corp.,
collectively, the “Company”), Argyle Security Acquisition Corporation, a
Delaware corporation (to be known as Argyle Security, Inc.) (“Parent”),
the other Guarantors (as defined in the Purchase Agreement) from time to time
party to the Purchase Agreement (as defined below) (the “Original Guarantors”
and, together with Parent, collectively, the “Guarantors”), and William Blair
Mezzanine Capital Fund III, L.P., a Delaware limited partnership (the “Purchaser”).

 

RECITALS:

 

WHEREAS, the Original
Company, the Purchaser and the Original Guarantors 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 (as further amended, restated, supplemented
or otherwise modified from time to time, the “Purchase Agreement”)

 

WHEREAS, pursuant to the
Purchase Agreement, the Original Company and the Purchaser also executed and
delivered, among other documents, the Warrant (as defined in the Purchase
Agreement); 

 

WHEREAS, (a) the
number of shares which the Purchaser was granted the right to purchase under
the Purchase Agreement and the Warrant was incorrectly calculated based on the intent
of the parties hereto at the time the Purchase Agreement and the Warrant were
originally executed and (b) pursuant to that certain Merger Agreement,
dated as of December 8, 2006 (as amended, the “Merger Agreement”), by and
among Parent, Acquisition Corp. and the Original Company, the Original Company
will merge with and into Acquisition Corp. with the Original Company being the
surviving corporation (the “Merger”);

 

WHEREAS, in connection
with the consummation of the Merger, the Original Company, the Purchaser and
the Original Guarantors now desire to amend the Purchase Agreement and the
Warrant to, among other things, (a) correct the number of shares which the
Purchaser has the right to purchase under the Purchase Agreement and the
Warrant upon the terms and conditions set forth herein, (b) add
Acquisition Corp. as a Company with respect to the obligations under the
Purchase Agreement and (c) add Parent as a Guarantor with respect to the obligations
under the Purchase Agreement; 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.    Joinder of Company and Guarantor.  Acquisition Corp., following the consummation
of the Merger, hereby agrees to become a party to the Purchase Agreement and agrees
to be bound by all of the terms, conditions, obligations and covenants
contained therein that apply to “Company” there under. Parent, following the
consummation of the Merger, hereby agrees to become a party to the Purchase
Agreement and agrees to be bound by all of the terms, conditions, obligations
and covenants contained therein that apply to “Guarantors” there under, including,
without limitation, the provisions of Section 8 of the Purchase Agreement.

 

Section 2.    Amendments to the Purchase Agreement.

 

(a)   The definition of “Company” contained in the
preamble to the Purchase Agreement is hereby amended to also refer to,
following the consummation of the Merger, ISI Security Group, Inc., a
Delaware corporation. For the avoidance of doubt, following the consummation of
the Merger, the definition of “Company” contained in the preamble to the Purchase
Agreement will also refer to ISI Detention Contracting Group, Inc.
(successor-by-merger to Acquisition Corp.), a Delaware corporation.

 

(b)   Section 1.1 of the Purchase Agreement is
hereby amended by inserting the following definitions in their proper
alphabetical order to read as follows:

 

“Acquisition Corp.” means
1ST Security Group, Inc., a Delaware corporation, prior to the consummation
of the Merger.

 

“Merger” means that
certain merger whereby the separate existence of Acquisition Corp. will cease
and Acquisition Corp. will be merged with and into ISI Detention Contracting
Group, Inc., a Delaware corporation (the “Original Company”), with the
Original Company being the surviving corporation.

 

“Parent” means Argyle
Security Acquisition Corporation, a Delaware corporation (to be known as Argyle
Security, Inc. effective upon the Merger).

 

“Second Restatement
Closing Date” means July 31, 2007.

 

(c)   Section 1.1 of the Purchase Agreement is
hereby amended by amending and restating the following definitions in their
entirety:

 

“Change
In Control” means (a) any event whereby Parent ceases to own and control
100%, directly or indirectly, of the economic and voting rights associated with
all of the outstanding Capital Stock of the Company; (b) any event whereby
the Company

 

 

ceases to own and control
100%, directly or indirectly, of the economic and voting rights associated with
all of the outstanding Capital Stock of any of its Subsidiaries; (c) a
sale, transfer or other disposition of all or substantially all of the assets
of the Company or any of its Subsidiaries in any transaction or series of
transactions; or (d) any recapitalization, reorganization,
reclassification, merger, consolidation or exchange to which the Company or any
of its Subsidiaries is a party and as a result of which any other Person or
Persons or its or their Affiliates (other than the owners of the Capital Stock
of the Company, and holders of rights to acquire Capital Stock of the Company,
as of the date hereof) owns a majority of the Capital Stock of the Company
possessing the voting power (under ordinary circumstances) to elect a majority
of the members of the Board of the Company.

 

“Guarantors”
means ISI Detention Contracting Group, Ltd., a Texas limited partnership, ISI
Detention Contracting Group, Inc., a Texas corporation, 151 Detention
Contracting Group, Inc., a California corporation, ISI Detention
Contracting Group, Inc., a New Mexico corporation, ISI Detention Systems, Inc.,
a Texas corporation, 1Sf Detention Systems, Ltd., a Texas limited partnership,
Metroplex Control Systems, Inc., a Texas corporation, ISI Controls, Ltd.,
a Texas limited partnership, Metroplex Commercial Fire and Security Alarms, Inc.,
a Texas corporation, MCFSA, Ltd., a Texas limited partnership (each of the
foregoing a Subsidiary of the Company) and, following the consummation of the
Merger, Parent. 

 

“Note”
means that certain Second Amended and Restated Senior Subordinated Promissory
Note, dated July 31, 2007, in the aggregate original principal amount of
Five Million Nine Hundred Fifty-One Thousand Six Hundred Nine and No/100
Dollars ($5,951,609.00), made payable by the Company in favor of Purchaser, in
substantially the form as set forth in Exhibit A attached hereto, with
appropriate insertions, as may be further amended, restated, substituted,
replaced or otherwise modified from time to time. 

 

(d)    A new Section 4.9 is hereby inserted
immediately following Section 4.8 of the Purchase Agreement: 

 

4.9   Assumption of Responsibilities. As of the
Second Restatement Closing Date, each of Acquisition Corp. and Parent shall
become parties to this Agreement as a Company and a Guarantor, respectively. 

 

(e)    The first sentence of Section 5.5(a) of
the Purchase Agreement is hereby amended and restated in its entirety to read
as follows: 

 

Immediately following the
consummation of the Merger on the Second Restatement Closing Date, the
authorized Capital Stock of the Company consists of (i) 550 shares of Common
Stock, 119.0064 shares of which are validly issued and outstanding, fully paid
and non assessable and (ii) 50 shares of Preferred A Stock, 50 shares of
which are validly issued and outstanding, fully paid and non assessable.

 

(f)    Section 9.11 is hereby amended by
amending and restating the Company’s address for notice purposes to read as
follows:

 

 

If to the Company:

 

ISI Detention Contracting
Group, Inc.

12903 Delivery Drive

San Antonio, Texas 78247

Telephone: 210-495-5245

FAX: 210-495-5613

Attention: Samuel C.
Youngblood, CEO

 

with a copy to:

 

Hughes & Luce
LLP

111 Congress Avenue, Suite 900

Austin, Texas 78701

Telephone: 512-482-6870

FAX: 512-482-6859

Attention D. Hull
Youngblood, Esq.

 

(g)    The updated Capitalization Schedule attached
hereto as Exhibit B is incorporated by reference into the Purchase
Agreement and hereby replaces in its entirety the Capitalization Schedule
originally attached thereto (which shall indicate the capitalization of the
Parent and its Subsidiaries immediately following the consummation of the
Merger on the Second Restatement 

Closing Date).

 

Section 3.    Warrant.

 

(a)    Amendment to the Warrant. The first sentence
of the first paragraph of the Warrant is hereby amended and restated in its
entirety to read as follows:

 

FOR
VALUE RECEIVED, ISI Detention Contacting Group, Inc., a Delaware corporation
(the “Company”), hereby grants to William Blair Mezzanine Capital Fund III,
L.P., a Delaware limited partnership (the “Holder”), or its successors and
assigns (together with the Holder, the “Registered Holders” and, individually,
a “Registered Holder”), the right to purchase from the Company Forty-Eight and
Ninety Five Hundredths (48.95) shares of the Common Stock, $1.00 par value per
share, of the Company (the “Common Stock”) at a price per share of $1.00 (the “Exercise
Price”).

 

(b) The
Warrant will be returned to the Company following the consummation of the
Merger and will be of no further force or effect upon payment of the Merger
Consideration (as such term is defined in the Merger Agreement).

 

Section 4. Consent
to the Merger. The Original Company has entered into the Merger Agreement and
desires to consummate the Merger contemplated therein. The Original Company
acknowledges that the Merger will constitute an Event of Default pursuant to
Section 7.1(o) of the Purchase Agreement. The Purchaser hereby consents to
the Merger and waives 

 

 

such Event of Default
allowing the Original Company to consummate the Merger and any other transaction
contemplated by the Merger Agreement.

 

Section 5.   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 and Guarantors 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. The Company represents and warrants that
no Event of Default has occurred and is continuing and no event has occurred
and is continuing which, with the lapse of time, the giving of notice, or both,
would constitute an Event of Default under the Purchase Agreement. 

 

(b)    Organizational Authority. (i) The
execution, delivery and performance by the Company and each Guarantor 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 and each Guarantor enforceable in accordance
with its terms and (iii) neither the execution and delivery nor the
performance by the Company and each Guarantor 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 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 6.   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 and each Guarantor 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.

 

 

Section 7.   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 and each Guarantor 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)    No Waiver. The execution, delivery and
effectiveness of this Amendment shall not operate as a waiver of any right,
power or remedy of the Purchaser under the Purchase Agreement or any of the
other Transaction Documents. 

 

(c)    References. Upon the effectiveness of this
Amendment, each reference in (a) the Purchase Agreement to “this
Agreement,” “hereunder,” “hereof,” or words of similar import, (b) the
Warrant to “this Warrant,” “hereunder,” “hereof,” or words of similar import
and (c) any other Transaction Document to “the Agreement,” “the Purchase
Agreement” or “the Warrant” shall, in each case and except as otherwise
specifically stated therein, mean and be a reference to the Purchase Agreement,
the Warrant or such other Transaction Documents, as applicable, as amended
hereby.

 

Section 8.   Miscellaneous.

 

(a)    Fees and Expenses. Pursuant to Section 9.1
of the Purchase Agreement, the Company 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. 

 

(b)    Effectuation. This Amendment shall be
effective once the Company, the Purchaser and the Guarantors have executed and
delivered this amendment. 

 

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

 

(d)    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. 

 

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

 

[Remainder of page intentionally
left blank.] 

 

 

	
  Signature
  Page to Omnibus Second Amendment

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ORIGINAL COMPANY:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ISI DETENTION
  CONTRACTING

  	
   

  	
   

  
	
  GROUT, INC a Delaware
  corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  / Sam Youngblood/

  	
   

  	
   

  
	
  Name: Sam Youngblood

  	
   

  	
   

  
	
  Title: CEO

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ACQUISITION CORP.:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ISI SECURITY GROUP, INC.

  	
   

  	
   

  
	
  a Delaware corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /Bob Marbut/

  	
   

  	
   

  
	
  Name: Bob Marbut

  	
   

  	
   

  
	
  Title: President

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  PURCHASER:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WILLIAM BLAIR MEZZANINE

  	
   

  	
   

  
	
  CAPITAL FUND III, L.P.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  William Blair Mezzanine
  Capital

  	
   

  	
   

  
	
   

  	
  Partners III, L.L.C.

  	
   

  	
   

  
	
   

  	
  its General Partner

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /David M. Jones/

  	
   

  	
   

  
	
  Name: David M. Jones

  	
   

  	
   

  
	
  Its:

  	
  Managing Director

  	
   

  	
   

  
							

 

 

	
  Signature
  Page to Omnibus Second Amendment

  	
   

  
	
   

  	
   

  
	
  Following the
  consummation of the Merger:

  	
   

  
	
   

  	
   

  
	
  SURVIVING COMPANY:

  	
   

  
	
   

  	
   

  
	
  ISI DETENTION
  CONTRACTING

  	
   

  
	
  GROUP, INC., a Delaware
  corporation

  	
   

  
	
  (successor-by-merger
  Acquisition Corp.)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  / Sam Youngblood/

  	
   

  
	
  Name: Sam Youngblood

  	
   

  
	
  Title: CEO

  	
   

  
			

 

 

	
  Signature
  Page to Omnibus Second Amendment

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  GUARANTORS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ISI DETENTION
  CONTRACTING

  	
   

  	
   

  
	
  GROUP, LTD., a Texas
  limited partnership

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  ISI Detention
  Contracting Group, Inc.

  	
   

  	
   

  
	
   

  	
  a Texas corporation

  	
   

  	
   

  
	
   

  	
  its General Partner

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  / Sam Youngblood/

  	
   

  	
   

  
	
  Name: Sam Youngblood

  	
   

  	
   

  
	
  Title: CEO

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ISI DETENTION
  CONTRACTING

  	
   

  	
   

  
	
  GROUP, INC., a
  California corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  / Sam Youngblood/

  	
   

  	
   

  
	
  Name: Sam Youngblood

  	
   

  	
   

  
	
  Title: CEO

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ISI DETENTION SYSTEMS,
  INC.,

  	
   

  	
   

  
	
  a Texas Corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  / Sam Youngblood/

  	
   

  	
   

  
	
  Name: Sam Youngblood

  	
   

  	
   

  
	
  Title: CEO

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  METROPLEX CONTROL
  SYSTEMS

  	
   

  	
   

  
	
  INC. a Texas
  corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  / Mark McDonald /

  	
   

  	
   

  
	
  Name: Mark McDonald

  	
   

  	
   

  
	
  Title: President

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ISI DETENTION
  CONTRACTING

  	
   

  	
   

  
	
  GROUP, INC., a Texas
  corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  / Sam Youngblood/

  	
   

  	
   

  
	
  Name: Sam Youngblood

  	
   

  	
   

  
	
  Title: CEO

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ISI DETENTION
  CONTRACTING

  	
   

  	
   

  
	
  GROUP, a New Mexico
  corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  / Sam Youngblood/

  	
   

  	
   

  
	
  Name: Sam Youngblood

  	
   

  	
   

  
	
  Title: CEO

  	
   

  	
   

  
					

 

 

	
  ISI DETENTION SYSTEMS,
  LTD., a

  	
   

  	
   

  
	
  Texas limited
  partnership

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  ISI Detention
  Systems, Inc.,

  	
   

  	
   

  
	
   

  	
  a Texas corporation

  	
   

  	
   

  
	
   

  	
  its General Partner

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  / Sam Youngblood/

  	
   

  	
   

  
	
  Name: Sam Youngblood

  	
   

  	
   

  
	
  Title: CEO

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ISI CONTROLS, LTD., a
  Texas limited

  	
   

  	
   

  
	
  partnership

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  Metroplex Control
  Systems, Inc.,

  	
   

  	
   

  
	
   

  	
  A Texas corporation

  	
   

  	
   

  
	
   

  	
   Its General
  Partner

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  / Sam Youngblood/

  	
   

  	
   

  
	
  Name: Sam Youngblood

  	
   

  	
   

  
	
  Title: CEO

  	
   

  	
   

  
						

 

 

	
  Signature
  Page to Omnibus Second Amendment

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  METROPLEX COMMERCIAL
  FIRE

  	
   

  	
  MCFSA, LTD., a Texas
  limited

  
	
  AND SECURITY ALARMS,
  INC., a

  	
   

  	
  partnership

  
	
  Texas Corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  / Sam Youngblood/

  	
   

  	
  By:

  	
  / Sam Youngblood/

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ARGYLE SECURITY
  ACQUISITION

  	
   

  	
   

  
	
  CORPORATION, a Delaware
  corporation

  	
   

  	
   

  
	
  (to be known as Argyle
  Security, Inc.)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  / Bob Marbut/

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
										

 

 

EXHIBIT A

 

SECOND AMENDED AND
RESTATED

SENIOR SUBORDINATED
PROMISSORY NOTE

 

*see tab 30 for
document

 

 

	
    Exhibit B

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Capitalization
  Schedule

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equity Owner

  	
   

  	
  Shares of Common

  	
   

  	
  Shares of Preferred Stock

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sam Youngblood

  	
   

  	
   

  	
  63 shares

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Youngblood Charitable
  Remainder Trust

  	
   

  	
   

  	
  4 shares

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Don Carr

  	
   

  	
   

  	
  33 shares

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mark McDonald

  	
   

  	
   

  	
  11.9064 shares

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Robert Roller

  	
   

  	
   

  	
  3.050 shares

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tim Moxon

  	
   

  	
   

  	
  2.000 shares

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Neal Horman

  	
   

  	
   

  	
  2.050 shares

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  William Blair Mezzanine
  Capital Fund III,

  	
   

  	
   

  	
   

  	
  50.00 shares

  
	
  L.P.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}]]