Document:

Exhibit 10.12

 

BORROWER JOINDER

AND ASSUMPTION AGREEMENT

 

This
Borrower Joinder and Assumption Agreement (the “Borrower Joinder”) is
made as of October 20, 2010, by CASTLEROCK SECURITY HOLDINGS, INC., a
Delaware corporation (the “Additional Borrower”).

 

Background

 

Reference
is made to (i) that certain Credit Agreement, dated as of May 25,
2007, as amended by that Amendment to Credit Agreement and Credit Documents,
dated as of August 16, 2007 (the “First Amendment”), as further
amended by that Amended and Restated Forbearance Agreement and Amendment to
Credit Agreement, dated as of February 16, 2008 (the “Forbearance
Agreement”), and as amended by that certain Consent, Limited Waiver and
Third Amendment to Credit Agreement and Credit Documents dated as of the date
of this Borrower Joinder, by and among Alarm Funding, LLC, a Delaware limited
liability company (“Alarm Funding”), the Lenders party thereto, and Siemens
First Capital Commercial Finance, LLC, a Delaware limited liability company, as
successor in interest to FCC, LCC, in its capacity as Agent for the Lenders
(collectively, the “Credit Agreement”) (collectively, and as the same
may be further amended, restated, supplemented or otherwise modified, from time
to time, the “Agreement”), and (ii) the other Credit Documents
referred to in the Agreement.

 

Agreement

 

Capitalized
terms defined in the Agreement are used herein as defined therein.  The rules of construction set forth in Section
1.2 of the Agreement shall apply to this Borrower Joinder.  In consideration of Additional Borrower
becoming a Borrower under the terms of the Agreement and in consideration of
the value of the synergistic benefits received by Additional Borrower as a
result of the interdependence of the businesses of Alarm Funding and Additional
Borrower, Additional Borrower hereby agrees that effective as of the Third
Amendment Effective Date, it hereby joins in, and is and shall be deemed to be
a Borrower under, the Agreement and each of the other applicable Credit
Documents, and a Debtor under the Security Agreement.  Additional Borrower has assumed the
obligations of a Borrower under the Agreement and the other Credit Documents,
and a Debtor under the Security Agreement, and Additional Borrower shall
perform, comply with and be subject to and bound by each of the terms,
agreements, covenants and conditions of: (a) the Agreement, on a joint and
several basis with Alarm Funding, the other Borrower, and (b) each of the
other Credit Documents, on a joint and several basis, which is stated to apply
to or is made by a Borrower, in each case of clauses (a) and (b) as
such Credit Document is in effect as of the date hereof, as such with the same
force and effect as if it were an original signatory to the Agreement and each
other Credit Document to which a Borrower is a party or by which a Borrower is
bound; provided, however, that notwithstanding the terms of Section 7.2.24
of the Credit Agreement, Additional Borrower may be permitted to have employees
and pay compensation to such employees. Without limiting the generality of the
foregoing, Additional Borrower hereby represents and warrants that, except as
expressly set forth on the attached Schedule I: (i) each of the
representations and warranties with respect to a Borrower set forth in
Article V of the Agreement is true and correct as to Additional Borrower
on and as of the date hereof as if made on and as of the date hereof by
Additional Borrower (except representations and warranties which expressly
relate solely to an earlier date or time, 

 

1

 

which
representations and warranties shall be true and correct on and as of the
specific date or times referred to therein), and (ii) Additional Borrower
has heretofore received a true and correct copy of the Agreement and each of
the other Credit Documents (including any modifications thereof or supplements
or waivers thereto) as in effect on the date hereof.

 

Except
as expressly supplemented hereby and by Schedule I attached hereto, the
Agreement and each other Credit Document are hereby ratified and confirmed and
shall remain in full force and effect.

 

In
furtherance of the foregoing, each reference to a “Borrower” in the Agreement
and each other Credit Document and each reference to a “Debtor” in the Security
Agreement shall be deemed to include the undersigned Additional Borrower.

 

In
furtherance of the foregoing, Additional Borrower shall execute and deliver or
cause to be executed and delivered at any time and from time to time such
further instruments and documents, and do or cause to be done such further
acts, as may be reasonably necessary in the reasonable opinion of Agent to
carry out more effectively the provisions and purposes of this Borrower Joinder
and the other Credit Documents.

 

Additional
Borrower is simultaneously delivering to Agent the other documents required
under the Agreement.

 

Additional
Borrower acknowledges and agrees that a telecopy or other electronic
transmission to Agent of signature pages hereof purporting to be signed on
behalf of Additional Borrower shall constitute effective and binding execution
and delivery hereof by Additional Borrower.

 

[SIGNATURE PAGE FOLLOWS]

 

2

 

[SIGNATURE PAGE TO BORROWER JOINDER- PAGE 1 of 2]

 

IN
WITNESS WHEREOF, each of the undersigned has duly executed this Borrower
Joinder and delivered the same to Agent, as of the date and year first above
written, intending to be legally bound hereby.

 

	
   

  	
  CASTLEROCK
  SECURITY HOLDINGS, INC.

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /
  s /    Brian E. Johnson

  
	
   

  	
   

  	
        Brian
  E. Johnson, President

  

 

 

ACCEPTED AND AGREED:

 

ALARM FUNDING, LLC,

a Delaware limited liability company

 

	
  By:

  	
  /
  s /      Westin Lovy

  	
   

  	
   

  	
   

  
	
   

  	
  Name:
  

  	
  Westin
  Lovy

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Managing
  Director

  	
   

  	
   

  
						

 

 

CASTLEROCK
SECURITY, INC.,

a
Delaware corporation

 

 

	
  By:

  	
  /
  s /      Brian E. Johnson

  	
   

  	
   

  	
   

  
	
   

  	
  Name:
  

  	
  Brian
  E. Johnson 

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  President

  	
   

  	
   

  
						

 

 

[SIGNATURE PAGE TO BORROWER JOINDER- PAGE 2 of 2]

 

ACKNOWLEDGED AND ACCEPTED:

 

 

	
   

  	
  SIEMENS
  FIRST CAPITAL COMMERCIAL

  FINANCE, LLC, as Agent and a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /
  s /      Anthony Casciano

  
	
   

  	
  Name:
  Anthony Casciano

  
	
   

  	
  Title:
  Senior Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  and

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /
  s /      Matthew R. Begley

  
	
   

  	
  Name:
  Matthew R. Begley

  
	
   

  	
  Title:
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FCC,
  LLC, as a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /
  s /      Lee Elmore

  
	
   

  	
  Name:
  Lee Elmore

  
	
   

  	
  Title:
  Senior Vice President

  

 

 

SCHEDULE I

 

DISCLOSURE SCHEDULE

 

None.Exhibit 10.13

 

GUARANTY AND SURETYSHIP AGREEMENT

 

This
Guaranty and Suretyship Agreement (the “Guaranty”), dated as of this
20th day of October, 2010, is made by the undersigned (“Guarantor”) in
favor of SIEMENS FIRST CAPITAL COMMERCIAL FINANCE, LLC, as agent for Lenders (“Agent”)
in connection with that certain Credit Agreement dated as of May 25, 2007, as
amended, by and among ALARM FUNDING, LLC, a Delaware limited liability company
(“Alarm Funding”), CASTLEROCK SECURITY HOLDINGS, INC., a Delaware
corporation (“NewCo, and pursuant to the terms of that certain Borrower Joinder
and Assumption Agreement of NewCo dated as of the date hereof, together with
Alarm Funding the “Borrower”), and other Credit Parties now  or hereafter party thereto, Agent  and Lenders now or hereafter party thereto (“Lenders”)
(as further amended, restated, modified, or supplemented from time to time
hereafter, the “Credit Agreement”). 
Capitalized terms not otherwise defined herein shall have the respective
meanings ascribed to them by the Credit Agreement and the rules of construction
set forth in Section 1.2 [Construction] of the Credit Agreement shall apply to
this Guaranty.

 

1.             Guarantied Obligations.  To induce Agent and Lenders to waive certain
Events of Default, restructure certain loans and grant other financial
accommodations to the Borrower under the Credit Agreement, Guarantor hereby
unconditionally, and irrevocably, guaranties to Agent and each Lender; and
becomes surety, as though it were a primary obligor for, the full and punctual
payment and performance when due (whether on demand, at stated maturity, by
acceleration, or otherwise and including any amounts which would become due but
for the operation of an automatic stay under the federal Bankruptcy Code of the
United States or any similar laws of any country or jurisdiction) of all
Obligations, including all obligations, liabilities, and indebtedness from time
to time of Borrower or any other guarantor to Agent or any Lender or any
Affiliate of any Lender under or in connection with the Credit Documents,
whether for principal, interest, fees, indemnities, expenses, or otherwise, and
all refinancings or refundings thereof, whether such obligations, liabilities,
or indebtedness are direct or indirect, secured or unsecured, joint or several,
absolute or contingent, due or to become due, whether for payment or
performance, now existing or hereafter arising (and including obligations,
liabilities, and indebtedness arising or accruing after the commencement of any
bankruptcy, insolvency, reorganization, or similar proceeding with respect to
the Borrower or any other guarantor or which would have arisen or accrued but
for the commencement of such proceeding, even if the claim for such obligation,
liability, or indebtedness is not enforceable or allowable in such proceeding,
and including all Obligations, liabilities, and indebtedness arising from any
extensions of credit under or in connection with the Credit Documents from time
to time, regardless whether any such extensions of credit are in excess of the
amount committed under or contemplated by the Credit Documents or are made in
circumstances in which any condition to extension of credit is not satisfied)
(all of the foregoing obligations, liabilities and indebtedness are referred to
herein collectively as the “Guarantied Obligations” and each as a “Guarantied
Obligation”).  Without limitation of the
foregoing, any of the Guarantied Obligations shall be and remain Guarantied
Obligations entitled to the benefit of this Guaranty if Agent or any of Lenders
(or any one or more assignees or transferees thereof) from time to time assign
or otherwise transfer all or any portion of their respective rights and
obligations under the Credit Documents, or any other Guarantied Obligations, to
any other Person.

 

 

In
furtherance of the foregoing, Guarantor agrees as follows.

 

2.             Guaranty. Guarantor hereby promises to pay and
perform all such Guarantied Obligations immediately upon demand of Agent and
Lenders or any one or more of them.   All
payments made hereunder shall be made by Guarantor in immediately available
funds in United States Dollars and shall be made without setoff, counterclaim,
withholding, or other deduction of any nature.

 

3.             Obligations Absolute.  The obligations of the Guarantor hereunder
shall not be discharged or impaired or otherwise diminished by the failure,
default, omission, or delay, willful or otherwise, by any Lender, Agent, or
Borrower or any other obligor on any of the Guarantied Obligations, or by any
other act or thing or omission or delay to do any other act or thing which may
or might in any manner or to any extent vary the risk of any guarantor or would
otherwise operate as a discharge of any guarantor as a matter of law or equity.  Guarantor agrees that the Guarantied
Obligations will be paid and performed strictly in accordance with the terms of
the Credit Documents.  Without limiting
the generality of the foregoing, Guarantor hereby consents to, at any time and
from time to time, and the obligations Guarantor hereunder shall not be
diminished, terminated, or otherwise similarly affected by any of the
following:

 

(a)           Any lack of genuineness, legality, validity,
enforceability or allowability (in a bankruptcy, insolvency, reorganization or
similar proceeding, or otherwise), or any avoidance or subordination, in whole
or in part, of any Credit Document or any of the Guarantied Obligations and
regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of the Guarantied Obligations, any of the terms of
the Credit Documents, or any rights of Agent or Lenders or any other Person
with respect thereto;

 

(b)           Any increase, decrease, or change in the amount, nature,
type or purpose of any of, or any release, surrender, exchange, compromise or
settlement of any of the Guarantied Obligations (whether or not contemplated by
the Credit Documents as presently constituted); any change in the time, manner,
method, or place of payment or performance of, or in any other term of, any of
the Guarantied Obligations; any execution or delivery of any additional Credit
Documents; or any amendment, modification or supplement to, or refinancing or
refunding of, any Credit Document or any of the Guarantied Obligations;

 

(c)           Any failure to assert any breach of or default under any
Credit Document or any of the Guarantied Obligations; any extensions of credit
in excess of the amount committed under or contemplated by the Credit
Documents, or in circumstances in which any condition to such extensions of
credit has not been satisfied; any other exercise or non-exercise, or any other
failure, omission, breach, default, delay, or wrongful action in connection
with any exercise or non-exercise, of any right or remedy against Borrower or
any other Person under or in connection with any Credit Document or any of the
Guarantied Obligations; any refusal of payment or performance of any of the
Guarantied Obligations, whether or not with any reservation of rights against
the any guarantor; or any application of collections (including collections
resulting from realization upon any direct or indirect security for the
Guarantied Obligations) to other obligations, if any, not entitled to the
benefits of this Guaranty, in preference to Guarantied 

 

2

 

Obligations entitled to the benefits of this
Guaranty, or if any collections are applied to Guarantied Obligations, any
application to particular Guarantied Obligations;

 

(d)           Any taking, exchange, amendment, modification, waiver,
supplement, termination, subordination, compromise, release, surrender, loss,
or impairment of, or any failure to protect, perfect, or preserve the value of,
or any enforcement of, realization upon, or exercise of rights, or remedies
under or in connection with, or any failure, omission, breach, default, delay,
or wrongful action by Agent or Lenders, or any of them, or any other Person in
connection with the enforcement of, realization upon, or exercise of rights or
remedies under or in connection with, or, any other action or inaction by any
of Agent or Lenders, or any of them, or any other Person in respect of, any
direct or indirect security for any of the Guarantied Obligations.  As used in this Guaranty, “direct or indirect
security” for the Guarantied Obligations, and similar phrases, includes any
collateral security, guaranty, suretyship, letter of credit, capital
maintenance agreement, put option, subordination agreement, or other right or
arrangement of any nature providing direct or indirect assurance of payment or
performance of any of the Guarantied Obligations, made by or on behalf of any
Person;

 

(e)           Any merger, consolidation, liquidation, dissolution,
winding-up, charter revocation, or forfeiture, or other change in,
restructuring or termination of the corporate structure or existence of,
Borrower or any other Person; any bankruptcy, insolvency, reorganization or
similar proceeding with respect to Borrower or any other Person; or any action
taken or election made by Agent or Lenders, or any of them (including any
election under Section 1111(b)(2) of the United States Bankruptcy Code), any
Borrower, or any other Person in connection with any such proceeding;

 

(f)            Any defense, setoff, or counterclaim which may at any
time be available to or be asserted by Borrower or any other person with
respect to any Credit Document or any of the Guarantied Obligations; or any
discharge by operation of law or release of Borrower or any other Person from
the performance or observance of any Credit Document or any of the Guarantied
Obligations; and

 

(g)           Any other event or circumstance, whether similar or
dissimilar to the foregoing, and whether known or unknown, which might
otherwise constitute a defense available to, or limit the liability of, any
guarantor or a surety, excepting only full, strict, and indefeasible payment
and performance of the Guarantied Obligations in full.

 

4.             Waivers, etc. 
To the full extend permitted by law, Guarantor hereby waives any defense
to or limitation on its obligations under this Guaranty arising out of or based
on any event or circumstance referred to in Section 3.  Without limitation and to the fullest extent
permitted by applicable law, Guarantor waives each of the following:

 

(a)           All notices, disclosures and demand of any nature which
otherwise might be required from time to time to preserve intact any rights
against any other guarantor, including the following:  any notice of any event or circumstance
described in Section 3; any notice required by any law, regulation or order now
or hereafter in effect in any jurisdiction; any notice of nonpayment,
nonperformance, dishonor, or protest under any Credit Document or any of the

 

3

 

Guarantied Obligations; any notice of the incurrence
of any Guarantied Obligation; any notice of any default or any failure on the
part of the Borrower or any other Person to comply with any Credit Document or
any of the Guarantied Obligations or any direct or indirect security for any of
the Guarantied Obligations; and any notice of any information pertaining to the
business, operations, condition (financial or otherwise) or prospects of
Borrower or any other Person;

 

(b)           Any right to any marshalling of assets, to the filing of
any claim against Borrower or any other Person in the event of any bankruptcy,
insolvency, reorganization or similar proceeding, or to the exercise against
Borrower or any other Person of any other right or remedy under or in
connection with any Credit Document or any of the Guarantied Obligations or any
direct or indirect security for any of the Guarantied Obligations; any
requirement of promptness or diligence on the part of Agent or Lenders, or any
of them, or any other Person; any requirement to exhaust any remedies under or
in connection with, or to mitigate the damages resulting from default under,
any Credit Document or any of the Guarantied Obligations or any direct or
indirect security for any of the Guarantied Obligations; any benefit of any
statute of limitations; and any requirement of acceptance of this Guaranty or
any other Credit Document, and any requirement that any Guarantor receive
notice of any such acceptance;

 

(c)           Any defense or other right arising by reason of any law
now or hereafter in effect in any jurisdiction pertaining to election of
remedies (including anti-deficiency laws, “one action” laws or the like), or by
reason of any election of remedies or other action or inaction by Agent or
Lenders, or any of them (including commencement or completion of any judicial
proceeding or nonjudicial sale or other action in respect of collateral
security for any of the Guarantied Obligations), which results in denial or
impairment of the right of Agent or Lenders, or any of them, to seek a
deficiency against Borrower or any other Person or which otherwise discharges
or impairs any of the Guarantied Obligations; and

 

(d)           Any and all defenses it may now or hereafter have based on
principles of suretyship, impairment of collateral, or the like.

 

5.             Reinstatement. This Guaranty is a continuing
obligation of the Guarantor and shall remain in full force and effect
notwithstanding that no Guarantied Obligations may be outstanding from time to
time and notwithstanding any other event or circumstance.  Upon termination of all Commitments, and
indefeasible payment in full of all Guarantied Obligations, this Guaranty shall
terminate; provided, however, that this Guaranty shall continue to be
effective or be reinstated, as the case may be, any time any payment of any of
the Guarantied Obligations is rescinded, recouped, avoided, or must otherwise
be returned or released by any Lender or Agent upon or during the insolvency,
bankruptcy, or reorganization of, or any similar proceeding affecting, Borrower
or any Guarantor or for any other reason whatsoever, all as though such payment
had not been made and was due and owing.

 

6.             Subrogation. 
Guarantor waives and agrees it will not exercise any rights against
Borrower or any other guarantor arising in connection with, or any Collateral
securing, the Guarantied Obligations (including rights of subrogation,
contribution, and the like) until the Guarantied Obligations have been
indefeasibly paid in full and all Commitments have been terminated.  If any amount shall be paid to Guarantor by
or on behalf of Borrower or any other

 

4

 

guarantor by virtue of any right of subrogation,
contribution, or the like, such amount shall be deemed to have been paid to
such other guarantor for the benefit of, and shall be held in trust for the
benefit of, Agent and Lenders and shall forthwith be paid to Agent to be
credited and applied upon the Guarantied Obligations, whether matured or
unmatured, in accordance with the terms of the Credit Agreement.

 

7.             No Stay. 
Without limitation of any other provision of this Guaranty, if any
declaration of default or acceleration or other exercise or condition to
exercise of rights or remedies under or with respect to any Guarantied
Obligation shall at any time be stayed, enjoined, or prevented for any reason
(including stay or injunction resulting from the pendency against Borrower or
any other Person of a bankruptcy, insolvency, reorganization or similar
proceeding), the Guarantor agrees that, for the purposes of this Guaranty and
its obligations hereunder, the Guarantied Obligations shall be deemed to have
been declared in default or accelerated, and such other exercise or conditions
to exercise shall be deemed to have been taken or met.

 

8.             Taxes.

 

(a)           No Deductions. 
All payments made by Guarantor under any of the Credit Documents shall
be made free and clear of and without deduction for any present or future
taxes, levies, imposts, deductions, charges, or withholdings, and all
liabilities with respect thereto, excluding taxes imposed on the net income of
any Lender and all income and franchise taxes of the United States applicable
to any Lender (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings, and liabilities being hereinafter referred to as “Taxes”).  If Guarantor shall be required by law to
deduct any Taxes from or in respect of any sum payable under any of the Credit
Documents, (i) the sum payable shall be increased as may be necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Subsection (a) such Lender receives an
amount equal to the sum it would have received had no such deductions been
made, (ii)  Guarantor shall make such deductions, and (iii) 
Guarantor shall timely pay the full amount deducted to the relevant tax
authority or other authority in accordance with applicable law.

 

(b)           Stamp Taxes. 
In addition, Guarantor agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges, or similar
levies which arise from any payment made hereunder or from the execution,
delivery, or registration of, or otherwise with respect to, any of the Credit
Documents (hereinafter referred to as “Other Taxes”).

 

(c)           Indemnification for Taxes Paid by any Lender.  Guarantor shall indemnify each Lender for the
full amount of Taxes or Other Taxes (including any Taxes or Other Taxes imposed
by any jurisdiction on amounts payable under this Subsection) paid by any
Lender and any liability (including penalties, interest, and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes
were correctly or legally asserted.  This
indemnification shall be made within thirty (30) days from the date a Lender
makes written demand therefor.

 

5

 

(d)           Certificate. 
Within thirty (30) days after the date of any payment of any Taxes by
Guarantor, it shall furnish to each Lender, the original or a certified copy of
a receipt evidencing payment thereof.  If
no Taxes are payable in respect of any payment by Guarantor, it shall, if so
requested by a Lender, provide a certificate of an officer of Guarantor to that
effect.

 

9.             Judgment Currency.

 

(a)           If for the purposes of obtaining judgment in any court it
is necessary to convert a sum due under any of the Credit Documents in any
currency (the “Original Currency”) into another currency (the “Other
Currency”), Guarantor hereby agrees, to the fullest extent permitted by
law, that the rate of exchange used shall be that at which in accordance with
normal banking procedures each Lender could purchase the Original Currency with
the Other Currency after any premium and costs of exchange on the Business Day
preceding that on which final judgment is given.

 

(b)           The obligation of Guarantor in respect of any sum due from
Guarantor to any Lender under any of the Credit Documents shall,
notwithstanding any judgment in an Other Currency, whether pursuant to a
judgment or otherwise, be discharged only to the extent that, on the business
day (being a day on which it is open for business at its principal office in
the United States) following receipt by any Lender of any sum adjudged to be so
due in such Other Currency, such Lender may in accordance with normal banking
procedures purchase the Original Currency with such Other Currency.  If the amount of the Original Currency so
purchased is less than the sum originally due to such Lender in the Original
Currency, Guarantor agrees, as a separate obligation and notwithstanding any
such judgment or payment, to indemnify such Lender against such loss.

 

10.           Notices. 
Guarantor agrees that all notices, statements, requests, demands and
other communications under this Guaranty shall be given to Guarantor at the
address set forth on a Schedule to, or in a Guarantor Joinder and Assumption
Agreement given under, the Credit Agreement and in the manner provided in
Section 11.6 [Notices] of the Credit Agreement.  Agent and Lenders may rely on any notice
(whether or not made in a manner contemplated by this Guaranty) purportedly
made by or on behalf of a Guarantor, and Agent and Lenders shall have no duty
to verify the identity or authority of the Person giving such notice.

 

11.           Counterparts; Telecopy Signatures.  This Guaranty may be executed in any number
of counterparts, each of which, when so executed, shall be deemed an original,
but all such counterparts shall constitute but one and the same
instrument.  Guarantor acknowledges and
agrees that a telecopy or other electronic transmission to Agent or any Lender
of signature pages hereof purporting to be signed on behalf of Guarantor shall
constitute effective and binding execution and delivery hereof by Guarantor.

 

12.           Setoff, Default Payments by Borrower.

 

(a)           In the event that at any time any obligation of the
Guarantor now or hereafter existing under this Guaranty shall have become due
and payable, Agent and Lenders, or any of them, shall have the right from time
to time, without notice to Guarantor, to set off against

 

6

 

and apply to such due and payable amount any
obligation of any nature of any Lender or Agent hereunder or under any other
loan, or any subsidiary or affiliate of any such Lender or Agent, to Guarantor,
including all deposits (whether time or demand, general or special,
provisionally credited or finally credited, however evidenced) now or hereafter
maintained by Guarantor with Agent or any Lender.  Such right shall be absolute and
unconditional in all circumstances and, without limitation, shall exist whether
or not Agent or Lenders, or any of them, shall have given any notice or made
any demand under this Guaranty or under such obligation to the Guarantor,
whether such obligation to the Guarantor is absolute or contingent, matured or
unmatured (it being agreed that Agent and Lenders, or any of them, may deem
such obligation to be then due and payable at the time of such setoff), and
regardless of the existence or adequacy of any collateral, guaranty, or other
direct or indirect security or right or remedy available to Agent or any of
Lenders.  The rights of Agent and Lenders
under this Section are in addition to such other rights and remedies (including
other rights of setoff and banker’s lien) which Agent and Lenders, or any of
them, may have, and nothing in this Guaranty or in any other Credit Document
shall be deemed a waiver of or restriction on the right of setoff or banker’s
lien of Agent and Lenders, or any of them. 
Guarantor hereby agrees that, to the fullest extent permitted by law,
any affiliate or subsidiary of Agent or any of Lenders and any holder of a
participation in any obligation of Guarantor under this Guaranty, shall have
the same rights of setoff as Agent and Lenders as provided in this Section (regardless
whether such affiliate or participant otherwise would be deemed a creditor of
the Guarantor).

 

(b)           Upon the occurrence and during the continuation of any
default under any Guarantied Obligation, if any amount shall be paid to
Guarantor by or for the account of Borrower, such amount shall be held in trust
for the benefit of each Lender and Agent and shall forthwith be paid to Agent
to be credited and applied to the Guarantied Obligations when due and payable.

 

13.           Construction. 
The section and other headings contained in this Guaranty are for
reference purposes only and shall not affect interpretation of this Guaranty in
any respect.  This Guaranty has been
fully negotiated between the applicable parties, each party having the benefit
of legal counsel, and accordingly neither any doctrine of construction of
guaranties or suretyships in favor of the guarantor or surety, nor any doctrine
of construction of ambiguities in agreement or instruments against the party
controlling the drafting thereof, shall apply to this Guaranty.

 

14.           Successors and Assigns.  This Guaranty shall be binding upon
Guarantor, its successors and assigns, and shall inure to the benefit of and be
enforceable by Agent and Lenders, or any of them, and their successors and
permitted assigns; provided, however, that Guarantor may not assign or
transfer any of its rights or obligations hereunder or any interest herein and
any such purported assignment or transfer shall be null and void.  Without limitation of the foregoing, Agent
and Lenders, or any of them (and any successive assignee or transferee), from
time to time may assign or otherwise transfer all or any portion of its rights
or obligations under the Credit Documents (including all or any portion of any
commitment to extend credit), or any other Guarantied Obligations, to any other
person and such Guarantied Obligations (including any Guarantied Obligations
resulting from extension of credit by such other Person under or in connection
with the Credit Documents) shall be and remain Guarantied Obligations entitled
to the benefit of this Guaranty, and to the extent of its interest in such
Guarantied

 

7

 

Obligations such other Person shall be vested with
all the benefits in respect thereof granted to Agent and Lenders in this
Guaranty or otherwise.

 

15.           Governing Law; Submission to Jurisdiction; Waiver of
Jury Trial.

 

(a)           Governing Law. 
This Guaranty shall be deemed to be a contract under the Laws of the
State of New York and shall, pursuant to New York General Obligations Law
Section 5-1401, and for all purposes be governed by and construed and enforced
in accordance with the laws of the State of New York.

 

(b)           Certain Waivers; Submission to Jurisdiction.

 

(i)            Guarantor
hereby irrevocably submits to the nonexclusive jurisdiction of any New York
state or federal court sitting in New York, New York, and waives personal
service of any and all process upon it and consents that all such service of
process be made by certified or registered mail directed to the Borrower at the
address provided for in the Credit Agreement and service so made shall be
deemed to be completed upon actual receipt thereof.  Guarantor waives any objection to
jurisdiction and venue of any action instituted against it as provided herein
and agrees not to assert any defense based on lack of jurisdiction or venue.

 

(ii)           Guarantor hereby irrevocably waives any objection to
jurisdiction and venue of any action instituted against it as provided herein
and agrees not to assert any defense based on lack of jurisdiction or venue;
and

 

(iii)          GUARANTOR HEREBY IRREVOCABLY WAIVES TRIAL BY JURY IN ANY
ACTION, SUIT, PROCEEDING, OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED
TO THIS AGREEMENT, THE CREDIT AGREEMENT, OR ANY OTHER CREDIT DOCUMENT TO THE
FULLEST EXTENT PERMITTED BY LAW.

 

16.           Severability; Modification to Conform to Law.

 

(a)           It is the intention of the parties that this Guaranty be
enforceable to the fullest extent permissible under applicable law, but that
the unenforceability (or modification to conform to such law) of any provision
or provisions hereof shall not render unenforceable, or impair, the remainder
hereof. If any provision in this Guaranty shall be held invalid or
unenforceable in whole or in part in any jurisdiction, this Guaranty shall, as
to such jurisdiction, be deemed amended to modify or delete, as necessary, the
offending provision or provisions and to alter the bounds thereof in order to
render it or them valid and enforceable to the maximum extent permitted by
applicable law, without in any manner affecting the validity or enforceability
of such provision or provisions in any other jurisdiction or the remaining
provisions hereof in any jurisdiction.

 

(b)           Without limitation of the preceding subsection (a), to the
extent that applicable law (including applicable laws pertaining to fraudulent
conveyance or fraudulent or preferential transfer) otherwise would render the
full amount of the Guarantor’s obligations hereunder invalid, voidable, or
unenforceable on account of the amount of Guarantor’s aggregate

 

8

 

liability under this Guaranty, then, notwithstanding
any other provision of this Guaranty to the contrary, the aggregate amount of
such liability shall, without any further action by Agent or any of Lenders or
Guarantor or any other Person, be automatically limited and reduced to the
highest amount which is valid and enforceable as determined in such action or
proceeding, which (without limiting the generality of the foregoing) may be an
amount which is equal to the greater of:

 

(i)            the fair consideration actually received by Guarantor
under the terms and as a result of the Credit Documents and the value of the
benefits described in Section 17(b), including (and to the extent not
inconsistent with applicable federal and state laws affecting the
enforceability of guaranties) distributions, commitments, and advances made to
or for the benefit of such Guarantor with the proceeds of any credit extended
under the Credit Documents, or

 

(ii)           the excess of: (1) the amount of the fair value of
the assets of Guarantor as of the date of this Guaranty as determined in
accordance with applicable federal and state laws governing determinations of
the insolvency of debtors as in effect on the date hereof, over (2) the
amount of all liabilities of Guarantor as of the date of this Guaranty, also as
determined on the basis of applicable federal and state laws governing the
insolvency of debtors as in effect on the date hereof.

 

(c)           Notwithstanding anything to the contrary in this Section
or elsewhere in this Guaranty, this Guaranty shall be presumptively valid and
enforceable to its full extent in accordance with its terms, as if this Section
(and references elsewhere in this Guaranty to enforceability to the fullest
extent permitted by law) were not a part of this Guaranty, and in any related
litigation the burden of proof shall be on the party asserting the invalidity
or unenforceability of any provision hereof or asserting any limitation on
Guarantor’s obligations hereunder as to each element of such assertion.

 

17.           Receipt of Credit Documents, Benefits.

 

(a)           Guarantor hereby acknowledges that it has received a copy
of the Credit Documents and Guarantor certifies that the representations and
warranties made therein with respect to Guarantor are true and correct.  Further, Guarantor acknowledges and agrees to
perform, comply with, and be bound by all of the provisions of the Credit
Documents.

 

(b)           Guarantor hereby acknowledges, represents, and warrants
that it receives synergistic benefits by virtue of its affiliation with the
Borrower and that it will receive direct and indirect benefits from the
financing arrangements contemplated by the Credit Agreement and that such
benefits, together with the rights of contribution and subrogation that may
arise in connection herewith are a reasonably equivalent exchange of value in
return for providing this Guaranty.

 

9

 

18.           Miscellaneous.

 

(a)           Amendments, Waivers. No amendment to or waiver of
any provision of this Guaranty, and no consent to any departure by Guarantor
herefrom, shall in any event be effective unless in a writing manually signed
by Guarantor and by or on behalf of Agent and Lenders.  Any such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which
given.  No delay or failure of Agent or
Lenders, or any of them, in exercising any right or remedy under this Guaranty
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right or remedy preclude any other or further exercise thereof or the
exercise of any other right or remedy. 
The rights and remedies of Agent and Lenders under this Guaranty are
cumulative and not exclusive of any other rights or remedies available
hereunder, under any other agreement or instrument, by law, or otherwise.

 

(b)           Telecommunications. Each Lender and Agent shall be
entitled to rely on the authority of any individual making any telecopy or
telephonic notice, request, or signature without the necessity of receipt of
any verification thereof.

 

(c)           Expenses. 
Guarantor unconditionally agrees to pay all costs and expenses,
including reasonable attorney’s fees incurred by Agent or any of Lenders in
enforcing this Guaranty against Guarantor and Guarantor shall pay and indemnify
each Lender and Agent for, and hold each of them harmless from and against, any
and all obligations, liabilities, losses, damages, costs, expenses (including disbursements
and reasonable legal fees of counsel to any Lender or Agent), penalties,
judgments, suits, actions, claims, and disbursements imposed on, asserted
against, or incurred by any Lender or Agent: (i) relating to the
preparation, negotiation, execution, administration, or enforcement of or
collection under this Guaranty or any document, instrument, or agreement
relating to any of the Obligations, including in any bankruptcy, insolvency, or
similar proceeding in any jurisdiction or political subdivision thereof;  (ii) relating to any amendment,
modification, waiver, or consent hereunder or relating to any telecopy or
telephonic transmission purporting to be by Guarantor or Borrower;  (iii) in any way relating to or arising out
of this Guaranty, or any document, instrument, or agreement relating to any of
the Guarantied Obligations, or any action taken or omitted to be taken by any
Lender or Agent hereunder, and including those arising directly or indirectly
from the violation or asserted violation by Guarantor or Borrower or Agent or
any Lender of any law, rule, regulation, judgment, order, or the like of any
jurisdiction or political subdivision thereof (including those relating to
environmental protection, health, labor, importing, exporting, or safety) and
regardless whether asserted by any governmental entity or any other Person.

 

(d)           Prior Understandings.  This Guaranty constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersedes any and all other prior and contemporaneous understandings and
agreements.

 

(e)           Survival. 
All representations and warranties of the Guarantor made in connection
with this Guaranty shall survive, and shall not be waived by, the execution and
delivery of this Guaranty, any investigation by or knowledge of Agent and
Lenders, or any of them, any extension of credit, or any other event or
circumstance whatsoever.

 

10

 

[SIGNATURE PAGE FOLLOWS]

 

11

 

[SIGNATURE PAGE 1 OF 1 OF GUARANTY AND SURETYSHIP AGREEMENT]

 

IN
WITNESS WHEREOF, Guarantor, intending to be legally bound, has caused this
Guaranty to be executed as of the date first above written with the intention
that this Guaranty shall constitute a sealed instrument.

 

 

	
   

  	
  CASTLEROCK
  SECURITY, INC.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /
  s /     Brian E. Johnson

  
	
   

  	
   

  	
  Brian
  E. Johnson, President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address
  for Notices:

  
	
   

  	
   

  
	
   

  	
  2101
  S. Arlington Heights Road, Suite 150

  Arlington Heights, Illinois  60005

  Attention:  Brian E. Johnson

  Telephone:  847-956-2929

  Telecopy:    847-890-6688

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