SUBORDINATION AGREEMENT (Argyle)
(Argyle)
This
SUBORDINATION
AGREEMENT
(this
“Agreement”) is entered into as of September 30, 2008, among ARGYLE SECURITY,
INC., a Delaware corporation (“Parent”), and LASALLE BANK NATIONAL ASSOCIATION,
a national banking association (“Senior Lender”).
RECITALS
A. ISI
Security Group, Inc., a Delaware corporation (“ISI”) and Senior Lender have
entered into an Amended and Restated Loan and Security Agreement dated January
23, 2008 (as the same hereafter may be amended, restated, supplemented or
otherwise modified from time to time, the “Senior Loan Agreement”), subject to
the terms and conditions of which the Senior Lender has agreed to make, and
has
made, loans and other financial accommodations to ISI.
B. Parent
owns all of the issued and outstanding capital stock of ISI. ISI is indebted
to
Parent under that certain Loan Agreement, dated September 30, 2008, between
ISI
and Parent and Promissory Note, dated September 30, 2008 in the original
principal amount of $2,000,000, executed by ISI payable to Parent (such loan
documents, as the same hereafter may be amended, restated, supplemented or
otherwise modified from time to time, are collectively referred to herein as
the
“Subordinated Loan”).
C. Senior
Lender’s consent to the Subordinated Loan is required under the Senior Loan
Agreement and Senior Lender is willing to give its consent provided that Parent
executes this Subordination Agreement.
NOW
THEREFORE,
the
parties hereto hereby agree as follows:
SECTION
1.
RECITALS
AND DEFINITIONS
1.1 Recitals.
The
Recitals set forth above are acknowledged by the parties hereto to be true
and
correct and are incorporated herein by this reference.
1.2 Definitions.
All
capitalized terms used but not elsewhere defined herein shall have the
respective meanings ascribed to such terms in the Senior Loan Agreement. As
used
herein, the following terms shall have the following meanings:
“Event
of Default”
shall
mean the occurrence of an event of default, including a failure to pay when
due,
declared due, or properly demanded by Senior Lender, of any of the Senior
Indebtedness.
“Obligor”
shall
mean ISI.
“Person”
shall
mean any individual, sole proprietorship, partnership, joint venture, trust,
unincorporated organization, association, corporation, limited liability
company, institution, entity, party or foreign or United States government
(whether federal, state, county, city, municipal or otherwise), including,
without limitation, any instrumentality, division, agency, body or department
thereof.
“Proceeding”
shall
mean any insolvency, bankruptcy, receivership, custodianship, liquidation,
reorganization, assignment for the benefit of creditors or other proceeding
for
the liquidation, dissolution or other winding up of Obligor or its properties
(including, without limitation, any such proceeding under the Bankruptcy
Code).
“Senior
Collection Action”
shall
mean any judicial or non-judicial proceeding initiated by Senior Lender against
Obligor to collect the Senior Indebtedness, to foreclose the Senior Liens or
otherwise to enforce the rights of Senior Lender under the Senior Loan Agreement
and the other Senior Instruments or applicable law with respect to the Senior
Indebtedness.
“Senior
Indebtedness”
shall
mean all liabilities, indebtedness and obligations of Obligor owed to Senior
Lender under the Senior Instruments, whether now due or hereafter arising,
direct or indirect, absolute or contingent, joint and several or several,
secured or unsecured, together with all accrued and unpaid interest thereon,
including all interest which accrues during the pendency of any Proceeding,
whether or not allowed in such Proceeding.
“Senior
Instruments”
shall
mean the Senior Loan Agreement and all notes now or hereafter evidencing the
Senior Indebtedness, all guaranties of the Senior Indebtedness, all documents
and instruments securing the repayment of the Senior Indebtedness and all other
documents or instruments executed and delivered to Senior Lender evidencing
or
pertaining to the Senior Indebtedness.
“Senior
Liens”
shall
mean all Liens granted to Senior Lender by ISI or by any Guarantor (including
but not limited to Obligor) to secure the Senior Indebtedness.
“Subordinated
Collection Action”
shall
mean (i) any acceleration of the Subordinated Indebtedness, or a termination
of
Obligor’s right of possession under the Subordinated Lease, (ii) to file or
initiate, or to join with other Persons in filing or initiating, an eviction
or
other Proceeding against Obligor or (iii) any judicial proceeding or other
action initiated or taken by Parent, or by Parent in concert with other Persons,
against Obligor or any other Person to collect the Subordinated Indebtedness
or
otherwise to enforce the rights of Parent under the Subordinated Loan or
applicable law with respect to the Subordinated Indebtedness.
“Subordinated
Default”
shall
mean a default in the payment of the Subordinated Indebtedness or any other
occurrence permitting Parent to accelerate the payment of all or any portion
of
the Subordinated Indebtedness.
“Subordinated
Default Notice”
shall
mean a written notice from Parent to Obligor of the occurrence of a Subordinated
Default.
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“Subordinated
Indebtedness”
shall
mean all of the Indebtedness of Obligor to Parent under the Subordinated Loan
and all other amounts now or hereafter owed by any Obligor to
Parent.
“Subordinated
Loan Documents”
shall
mean those documents described in Recital Paragraph C above, and all other
documents and instruments executed and delivered by Obligor to Parent evidencing
or pertaining to the Subordinated Indebtedness.
SECTION
2.
SUBORDINATION
OF THE SUBORDINATED
INDEBTEDNESS
TO SENIOR INDEBTEDNESS
2.1 Subordination.
Upon
the terms and conditions contained in this Agreement, the payment of any and
all
of the Subordinated Indebtedness hereby expressly is subordinated to the prior
indefeasible payment in full in cash of the Senior Indebtedness. Notwithstanding
the date, manner or order of perfection, or lack of perfection, any and all
liens, security interests, pledges, or other interests granted by or on behalf
of Obligor in favor of Parent (whether granted in the Subordinated Loan or
otherwise) shall be subordinate and junior to all liens, security interests,
pledges or hypothecs securing repayment of the Senior Indebtedness in all
respects.
2.2 Restrictions
on Payments.
Notwithstanding any provision of the Subordinated Loan to the contrary and
in
addition to any other limitations set forth herein or therein, no payment of
principal, interest, fees or any other amount due with respect to the
Subordinated Indebtedness shall be made, and Parent shall not exercise any
right
of setoff or recoupment with respect to any Subordinated Indebtedness, until
all
of the Senior Indebtedness is paid in full in cash. Prior to the date the Senior
Indebtedness is paid in full in cash, Obligor shall not make and Parent may
receive any payments of accrued interest, principal or any other amounts due
under the Subordinated Indebtedness.
2.3 Proceedings.
In the
event of any Proceeding (a) all Senior Indebtedness first shall be paid in
full
in cash before any payment of or with respect to the Subordinated Indebtedness
shall be made; (b) any payment which, but for the terms hereof, otherwise would
be payable or deliverable in respect of the Subordinated Indebtedness shall
be
paid or delivered directly to Senior Lender (to be held and/or applied by Senior
Lender in accordance with the terms of the Senior Loan Agreement) until all
Senior Indebtedness is paid in full, and Parent irrevocably authorizes, empowers
and directs all receivers, trustees, liquidators, custodians, conservators
and
others having authority in the premises to effect all such payments and
deliveries and further irrevocably authorizes and empowers Senior Lender to
demand, ▇▇▇ for, collect and receive every such payment or distribution; (c)
Parent agrees to execute and deliver to Senior Lender or its representative
all
such further instruments requested by Senior Lender confirming the authorization
referred to in the foregoing clause (b); (d) Parent agrees (i) not to waive,
discharge, release or compromise any claim of Parent in respect of the
Subordinated Indebtedness without the prior written consent of Senior Lender;
and (ii) to take all actions as Senior Lender reasonably may request in order
to
enable Senior Lender to enforce all claims upon or in respect of the
Subordinated Indebtedness; (e) Parent expressly consents to the granting by
Obligor to Senior Lender of first priority liens on Obligor’s property in
connection with any financing provided by Senior Lender to Obligor after the
commencement of such Proceeding; and (f) Parent agrees to timely execute,
verify, deliver and file any proofs of claim in respect of the Subordinated
Indebtedness in connection with any such Proceeding and agrees to vote such
proofs of claim in any such Proceeding in a manner which is consistent with
the
terms of this Agreement; provided, however, that Parent will not vote in a
manner which provides for less than full payment of the Senior Indebtedness
or
which is otherwise inconsistent with this Agreement.
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2.4 Incorrect
Payment.
If any
payment not permitted under Section 2.2 is received by Parent on account of
the
Subordinated Indebtedness before all Senior Indebtedness is paid in full in
cash, such payment shall be held in trust by Parent for the benefit of Senior
Lender and shall be paid over to Senior Lender, or its designated
representative, for application (in accordance with the Senior Loan Agreement)
to the payment of the Senior Indebtedness then remaining unpaid, until all
of
the Senior Indebtedness is paid in full in cash. Except for any payment made
by
Parent to Senior Lender pursuant to this Section 2.4, Parent has no other
payment obligation, duty or commitment with respect to the Senior
Indebtedness.
2.5 Sale,
Transfer.
Parent
shall not sell, assign, dispose of or otherwise transfer all or any portion
of
the Subordinated Indebtedness unless, prior to the consummation of any such
action, the transferee thereof executes and delivers to Senior Lender an
agreement substantially identical to this Agreement, providing for the continued
subordination and forbearance of the Subordinated Indebtedness to the Senior
Indebtedness as provided herein and for the continued effectiveness of all
of
the rights of Senior Lender arising under this Agreement. Notwithstanding the
failure to execute or deliver any such agreement, the subordination effected
hereby shall survive any sale, assignment, disposition or other transfer of
all
or any portion of the Subordinated Indebtedness, and the terms of this Agreement
shall be binding upon the successors and assigns of Parent, as provided in
Section 10 below.
2.6 Legends.
Until
the Senior Indebtedness is paid in full in cash, each of the Subordinated Loan
at all times shall contain in a conspicuous manner a legend stating
substantially as follows:
“The
obligations evidenced hereby are subordinate in the manner and to the extent
set
forth in that certain Subordination Agreement (the “Subordination Agreement”)
dated as of September 30, 2008, by and between Argyle Security Inc., and LaSalle
Bank National Association, a national banking association (“Senior Lender”) to
the obligations (including interest) owed by ISI Security Group, Inc.
(“Obligor”) to the holders of all of the notes issued pursuant to that certain
Amended and Restated Loan and Security Agreement dated as of January 23, 2008,
between Obligor and Senior Lender, as such Agreement may be supplemented,
modified, restated or amended from time to time; and each holder hereof, by
its
acceptance hereof, shall be bound by the provisions of the Subordination
Agreement.”
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2.7 Restriction
on Action by Parent.
(A) Until
the
Senior Indebtedness is paid in full in cash and notwithstanding anything
contained in the Subordinated Loan or the Senior Loan Agreement to the contrary,
Parent shall not agree to any amendment or modification of, or supplement to,
the Subordinated Loan as in effect on the date hereof, the effect of which
is to
(i) increase the base rent payable in respect of the Subordinated Indebtedness,
(ii) accelerate the date of any regularly scheduled rental payments on the
Subordinated Indebtedness, or (iii) make the covenants and events of default
contained in the Subordinated Loan materially more restrictive.
(B) Until
the
Senior Indebtedness is paid in full in cash, Parent shall not take any
Subordinated Collection Action.
(C) Notwithstanding
the provisions of the foregoing clause (B), (i) Parent may participate in any
Proceeding not initiated by or at the request of Parent or any other Persons
acting in concert with Parent and (ii) in the event the Senior Indebtedness
is
accelerated, Parent may accelerate the Subordinated Indebtedness. If Senior
Lender subsequently rescinds such acceleration, then all Subordinated Collection
Actions shall likewise be rescinded or terminated, without prejudice to the
rights of Parent.
2.8 Subrogation.
Subject
to the payment in full in cash of all Senior Indebtedness, Parent shall be
subrogated to the rights of Senior Lender to receive payments or distributions
of assets of Obligor applicable to the Senior Indebtedness until the principal
of, and interest and premium, if any, on, and all other amounts payable in
respect of the Subordinated Indebtedness shall be paid in full. For purposes
of
such subrogation, no payment or distribution to Senior Lender under the
provisions hereof to which Parent would have been entitled but for the
provisions of this Agreement, and no payment pursuant to the provisions of
this
Agreement to Senior Lender by Parent, as among Obligor and its creditors other
than Senior Lender, shall be deemed to be a payment by Obligor to or on account
of the Senior Indebtedness;
2.9 Waivers.
All of
the Senior Indebtedness shall be deemed to have been made or incurred in
reliance upon this Agreement. Parent expressly waives all notice of the
acceptance by Senior Lender of the subordination and other provisions of this
Agreement and agrees that Senior Lender has made no warranties or
representations with respect to the legality, validity, enforceability,
collectability or perfection of the Senior Indebtedness or any liens or security
interests held in connection therewith. The Parent agrees that Senior Lender
shall be entitled to manage and supervise its loans in accordance with
applicable law and its usual practices, modified from time to time as it deems
appropriate under the circumstances, without regard to the existence of any
rights that Parent may now or hereafter have in or to any assets. Senior Lender
shall have no liability to Parent as a result of any and all lawful actions,
which do not violate any express provision of this Agreement, which Senior
Lender takes or omits to take (including, without limitation, actions with
respect to the creation, perfection or continuation of liens or security
interests, actions with respect to the occurrence of any Default under the
Senior Loan Agreement, actions with respect to the foreclosure upon, sale,
release or failure to realize upon, any collateral, and actions with respect
to
the collection of any claim for all or any part of the Senior Indebtedness
from
any account debtor or any other party), regardless of whether any such actions
or omissions may affect Senior Lender’s rights to a deficiency or Parent’s
rights of subrogation or reimbursement. Senior Lender may, from time to time,
enter into agreements and settlements with Obligor as they may determine,
including, without limitation, any substitution of collateral, any release
of
any lien or security interest and any release of Obligor. Parent waives any
and
all rights it may have to require Senior Lender to marshal assets. Parent agrees
that in the event Senior Lender forecloses or realizes upon or enforces any
of
its rights with respect. to the collateral subject to Senior Liens, or Obligor
sells any such collateral or property in a transaction consented to by Senior
Lender, Parent shall, upon demand, execute such terminations, partial releases
and other documents as Senior Lender requests in its reasonable discretion
to
release Parent’s lien, if any, upon such property.
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SECTION
3.
CONTINUED
EFFECTIVENESS OF THIS AGREEMENT
The
terms
of this Agreement, the subordination effected hereby, and the rights and the
obligations of Parent and Senior Lender arising hereunder, shall not be
affected, modified or impaired in any manner or to any extent by (a) any
amendment or modification of or supplement to the Senior Loan Agreement or
any
of the other Senior Instruments or any of the Subordinated Loan, and Parent
hereby irrevocably consents to and waives any claim it may have as a result
of
any such amendment, modification or supplement of the Senior Loan Agreement
or
the other Senior Instruments; (b) the validity or enforceability of any of
such
documents; or (c) any exercise or non-exercise of any right, power or remedy
under or in respect of the Senior Indebtedness or the Subordinated Indebtedness
or any of the instruments or documents referred to in clause (a) above. The
Senior Indebtedness shall continue to be treated as Senior Indebtedness and
the
provisions of this Agreement shall continue to govern the relative rights and
priorities of the holders of Senior Indebtedness and Parent even if all or
part
of the Senior Liens are subordinated, set aside, avoided or disallowed in
connection with any Proceeding (or if all or part of the Senior Indebtedness
is
subordinated, set aside, avoided or disallowed in connection with any Proceeding
as a result of the fraudulent conveyance or fraudulent transfer provisions
under
the Bankruptcy Code or under any state fraudulent conveyance or fraudulent
transfer statute or if any interest accruing on the Senior Indebtedness
following the commencement of such Proceeding is otherwise disallowed) and
this
Agreement shall be reinstated if at any time any payment of any of the Senior
Indebtedness is rescinded or must otherwise be returned by any holder of Senior
Indebtedness or any representative of such holder.
SECTION
4.
REPRESENTATIONS
AND WARRANTIES
Parent
hereby represents and warrants to Senior Lender as follows:
4.1 Existence
and Power.
Parent
is duly organized, validly existing and in good standing under the laws of
its
state of organization and has all requisite power and authority to own its
property and to carry on its business as now conducted and as proposed to be
conducted.
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4.2 Authority.
Parent
has full power and authority to enter into, execute, deliver and carry out
the
terms of this Agreement and to incur the obligations provided for herein, all
of
which have been duly authorized by all proper and necessary action and are
not
prohibited by the organizational instruments of Parent.
4.3 Binding
Agreements.
This
Agreement, when executed and delivered, will constitute the valid and legally
binding obligation of Parent enforceable in accordance with its terms, except
as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by equitable principles.
4.4 No
Conflicts.
Parent
is the current owner and holder of the Subordinated Indebtedness free and clear
of any Liens. No provisions of any mortgage, indenture, contract, agreement,
statute, rule, regulation, judgment, decree or order binding on Parent or
affecting the property of Parent conflicts with, or requires any consent which
has not already been obtained under, or would in any way prevent the execution,
delivery or performance of the terms of this Agreement. No pending or, to the
best of Parent’s knowledge, threatened, litigation, arbitration or other
proceedings if adversely determined would in any way prevent the performance
by
Parent of the terms of this Agreement.
SECTION
5.
CUMULATIVE
RIGHTS, NO WAIVERS
Each
and
every right, remedy and power granted to Senior Lender hereunder shall be
cumulative and in addition to any other right, remedy or power specifically
granted herein, in the Senior Loan Agreement and the other Senior Instruments
or
in the
Subordinated Loan or now or hereafter existing in equity, at law, by virtue
of
statute or otherwise, and may be exercised by Senior Lender, from time to time,
concurrently or independently and as often and in such order as Senior Lender
may deem expedient. Any failure or delay on the part of Senior Lender in
exercising any such right, remedy or power, or abandonment or discontinuance
of
steps to enforce the same, shall not operate as a waiver thereof or affect
Senior Lender’s right thereafter to exercise the same, and any single or partial
exercise of any such right, remedy or power shall not preclude any other or
further exercise thereof or the exercise of any other right, remedy or power,
and no such failure, delay, abandonment or single or partial exercise of Senior
Lender’s rights hereunder shall be deemed to establish a custom or course of
dealing or performance among the parties hereto.
SECTION
6.
MODIFICATION
Any
modification, termination or waiver of any provision of this Agreement, or
any
consent to any departure by Parent therefrom, shall not be effective in any
event unless the same is in writing and signed by Senior Lender and Parent
and
then such modification, termination, waiver or consent shall be effective only
in the specific instance and for the specific purpose given. Any notice to
or
demand on Parent in any event not specifically required of Senior Lender
hereunder shall not entitle Parent to any other or further notice or demand
in
the same, similar or other circumstances unless specifically required
hereunder.
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SECTION
7.
ADDITIONAL
DOCUMENTS AND ACTIONS
Parent
at
any time, and from time to time, after the execution and delivery of this
Agreement, upon the reasonable request of Senior Lender, promptly will execute
and deliver such further documents and do such further acts and things as Senior
Lender reasonably may request in order to affect fully the purposes of this
Agreement.
SECTION
8.
NOTICES
All
notices under this Agreement shall be in writing and shall be (a) delivered
in
person, (b) sent by telecopy or (c) mailed, postage prepaid, either by
registered or certified mail, return receipt requested, or by overnight express
courier, addressed as follows:
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To
Parent:
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▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇
▇▇▇
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▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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ATTN:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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To
Senior Lender:
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LaSalle
Bank National Association
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Republic
Plaza
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▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
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ATTN:
▇▇▇▇▇▇ ▇▇▇▇
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With
a copy to:
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▇▇▇▇▇▇▇
& ▇▇▇▇▇▇ LLC
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▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
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ATTN:
▇▇▇▇ ▇. ▇▇▇▇▇▇
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or
to any
other address or telecopy number, as to any of the parties hereto, as such
party
shall designate in a notice to the other parties hereto. All notices sent
pursuant to the terms of this Section 8 shall be deemed received (a) if
personally delivered, then on the Business Day of delivery, (b) if sent by
telecopy, on the next Business Day, (c) if sent by registered or certified
mail,
on the earlier of the seventh (7th) Business Day following the day sent or
when
actually received or (d) if sent by overnight, express courier, on the second
Business Day immediately following the day sent. Any notice by telecopy shall
be
followed by delivery of a copy of such notice on the next Business Day by
overnight, express courier or by personal delivery.
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SECTION
9.
SEVERABILITY
In
the
event that any provision of this Agreement is deemed to be invalid by reason
of
the operation of any law or by reason of the interpretation placed thereon
by
any court or governmental authority, the validity, legality and enforceability
of the remaining terms and provisions of this Agreement shall not in any way
be
affected or impaired thereby, all of which shall remain in full force and
effect; and the affected term or provision shall be modified to the minimum
extent permitted by law so as to achieve most fully the intention of this
Agreement.
SECTION
10.
SUCCESSORS
AND ASSIGNS
This
Agreement shall be binding upon and inure to the benefit of the successors
and
assigns of Senior Lender, Obligor and Parent.
SECTION
11.
COUNTERPARTS
This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed to be an original, but all of which taken together shall be one and
the
same instrument.
SECTION
12.
DEFINES
RIGHTS OF CREDITORS
The
provisions of this Agreement are solely for the purpose of defining the relative
rights of Parent and Senior Lender and shall not be deemed to create any rights
or priorities in favor of any other Person, including, without limitation,
Obligor. This Agreement or any part hereof shall not be deemed the creation
of a
security interest for the benefit of any party hereto in the Subordinated
Indebtedness.
SECTION
13.
CONFLICT
In
the
event of any conflict between any term, covenant or condition of this Agreement
and any term, covenant or condition of any of the Subordinated Loan, the Senior
Loan Agreement or the other Senior Instruments, the provisions of this Agreement
shall control and govern. For purposes of this Section 13, to the extent that
any provisions of any of the Subordinated Loan provide rights, remedies and
benefits to Senior Lender that exceed the rights, remedies and benefits provided
to Senior Lender under this Agreement, such provisions of the applicable
Subordinated Loan shall be deemed to supplement (and not to conflict with)
the
provisions hereof.
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SECTION
14.
STATEMENTS
OF INDEBTEDNESS
Upon
demand by Senior Lender, Parent will furnish to Senior Lender a statement of
the
indebtedness owing from Obligor to Parent. Senior Lender may rely without
further investigation upon such statements.
SECTION
15.
HEADINGS
The
paragraph headings used in this Agreement are for convenience only and shall
not
affect the interpretation of any of the provisions hereof.
SECTION
16.
TERMINATION
This
Agreement shall terminate upon the indefeasible payment in full in cash of
the
Senior Indebtedness.
SECTION
17.
DEFAULT
NOTICES
Parent
shall provide Senior Lender with a copy of each Subordinated Default Notice
concurrently with the sending thereof to Obligor and promptly shall notify
Senior Lender in the event the Subordinated Default which is the subject of
such
Subordinated Default Notice is cured or waived.
SECTION
18.
NO
CONTEST OF LIENS;
NO
SECURITY FOR SUBORDINATED INDEBTEDNESS
Parent
agrees that it will not at any time contest the validity, perfection, priority
or enforceability of the Liens in the Collateral granted to Senior Lender
pursuant to the Senior Loan Agreement and the other Senior Instruments.
Notwithstanding the date, manner or order of perfection of the security
interests and liens granted to Senior Lender and Parent, and notwithstanding
any
provisions of the Uniform Commercial Code, or any applicable law or decision
or
whether Senior Lender or Parent holds possession of all or any part of the
collateral security for the repayment of the Senior Indebtedness or the
Subordinated Indebtedness, as between Senior Lender and Parent, Senior Lender
shall have a first (and prior in right and time to Parent) interest in all
the
Collateral and proceeds thereof, including insurance proceeds relating thereto,
and products thereof. The provisions of this Agreement shall apply regardless
of
any invalidity, unenforceability or lack of perfection of the Senior
Liens.
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SECTION
19.
GOVERNING
LAW
THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED AS TO VALIDITY,
INTERPRETATION, CONSTRUCTION, EFFECT AND IN ALL OTHER RESPECTS BY THE LAWS
AND
DECISIONS OF THE STATE OF ILLINOIS. FOR PURPOSES OF THIS SECTION 19, THIS
AGREEMENT SHALL BE DEEMED TO BE PERFORMED AND MADE IN THE STATE OF
ILLINOIS.
SECTION
20.
JURISDICTION
AND VENUE
PARENT
HEREBY AGREES THAT ALL ACTIONS OR PROCEEDINGS INITIATED BY PARENT AND ARISING
DIRECTLY OR INDIRECTLY OUT OF THE SENIOR INSTRUMENTS SHALL BE LITIGATED IN
EITHER THE CIRCUIT COURT OF ▇▇▇▇ COUNTY, ILLINOIS OR IN THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, OR IF SENIOR LENDER
INITIATES SUCH ACTION, IN ADDITION TO THE FOREGOING COURTS, ANY COURT IN WHICH
SENIOR LENDER SHALL INITIATE OR TO WHICH SENIOR LENDER SHALL REMOVE SUCH ACTION,
TO THE EXTENT SUCH COURT HAS JURISDICTION. PARENT HEREBY EXPRESSLY SUBMITS
AND
CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING COMMENCED
BY SENIOR LENDER IN OR REMOVED BY SENIOR LENDER TO ANY OF SUCH COURTS. PARENT
WAIVES ANY CLAIM THAT EITHER THE CIRCUIT COURT OF ▇▇▇▇ COUNTY, ILLINOIS OR
THE
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS IS AN
INCONVENIENT FORUM OR AN IMPROPER FORUM BASED ON LACK OF VENUE. TO THE EXTENT
PROVIDED BY LAW, SHOULD PARENT, AFTER BEING SO SERVED, FAIL TO APPEAR OR ANSWER
TO ANY SUMMONS, COMPLAINT, PROCESS OR PAPERS SO SERVED WITHIN THE NUMBER OF
DAYS
PRESCRIBED BY LAW AFTER THE MAILING THEREOF, PARENT SHALL BE DEEMED IN DEFAULT
AND AN ORDER AND/OR JUDGMENT MAY BE ENTERED BY THE COURT AGAINST PARENT AS
DEMANDED OR PRAYED FOR IN SUCH SUMMONS, COMPLAINT, PROCESS OR PAPERS. THE
EXCLUSIVE CHOICE. OF FORUM FOR PARENT SET FORTH IN THIS SECTION 20 SHALL NOT
BE
DEEMED TO PRECLUDE THE ENFORCEMENT BY SENIOR LENDER OF ANY JUDGMENT OBTAINED
IN
ANY OTHER FORUM OR THE TAKING BY SENIOR LENDER OF ANY ACTION TO ENFORCE THE
SAME
IN ANY OTHER APPROPRIATE JURISDICTION, AND PARENT HEREBY WAIVES THE RIGHT TO
COLLATERALLY ATTACK ANY SUCH JUDGMENT OR ACTION.
SECTION
21.
WAIVER
OF RIGHT TO JURY TRIAL
SENIOR
LENDER AND PARENT ACKNOWLEDGE AND AGREE THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT WOULD BE BASED UPON DIFFICULT AND COMPLEX ISSUES AND
THEREFORE, SENIOR LENDER AND PARENT AGREE THAT ANY COURT PROCEEDING ARISING
OUT
OF ANY SUCH CONTROVERSY WILL BE TRIED IN A COURT OF COMPETENT JURISDICTION
BY A
JUDGE SITTING WITHOUT A JURY.
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SECTION
22.
TIME
OF ESSENCE
Time
for
the performance of Parent’s obligations under this Agreement is of the
essence.
[SIGNATURE
PAGE FOLLOWS]
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IN
WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed as of the date first
above written.
|
ARGYLE
SECURITY, INC., a Delaware corporation
|
|
|
By:
|
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
|
|
Name:
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
|
|
Title:
|
Chief
Financial Officer
|
|
SENIOR
LENDER:
|
|
|
LASALLE
BANK NATIONAL ASSOCIATION,
|
|
|
a
national banking association
|
|
|
By:
|
/s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
|
|
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
|
|
|
Title:
|
Senior
Vice President
|
-13-