SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15 (d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
Date
of
Report (Date of earliest event reported): April 12, 2007
COMMAND
SECURITY CORPORATION
(Exact
name of registrant as specified in its charter)
|
New
York
|
0-18684
|
14-1626307
|
|
(State
or other jurisdiction of
incorporation
or organization)
|
(Commission
file number)
|
(I.R.S.
employer
identification
no.)
|
|
Lexington
Park
Lagrangeville,
New York
(Address
of principal executive offices)
|
|
12540
(Zip
code)
|
Registrant’s
telephone number, including area code: (845) 454-3703
Not
Applicable
----------------------------------------------------------------------------
(Former
name or former address, if changed since last report.)
Check
the
appropriate box below if the Form 8-K filing is intended to
simultaneously
satisfy the filing obligation of the registrant under any of the
following
provisions (see General Instruction A.2. below):
o
Written communications
pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o
Soliciting material pursuant to Rule
14a-12 under the Exchange Act (17 CFR
240.14a-12)
o
Pre-commencement communications pursuant
to Rule 14d-2(b) under the Exchange
Act
(17
CFR 240.14d-2(b))
o
Pre-commencement communications pursuant
to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item
1.01.
Entry
into a Material Definitive Agreement.
On
April
12, 2007, Command Security Corporation, a New York corporation (the
“
Company
”),
entered into an Amendment to its Financing Agreement (the “
Financing
Agreement
”)
with
its current lender, The CIT Group/Business Credit, Inc. (the “
Amendment
”)
in
connection with the closing of the transactions (the “
Transactions
”)
under
the Stock Purchase Agreement and the Merger Agreement described below in
Item
2.01 of this Current Report. Pursuant to the Amendment, the aggregate line
of
credit under the Financing Agreement was increased from $12.0 to $16.0 million,
and the Company was provided with a $2.4 million acquisition advance to fund
the
cash requirements of the Transactions. The Amendment also provides for an
extension of the maturity date of the Financing Agreement to December 12,
2008,
and for reductions in interest rates, fees and availability reserves and
an
increase in the letter of credit sub-line to an aggregate amount of up to
$3.0
million.
The
foregoing description of the Amendment is not complete, and is qualified
in its
entirety by reference to the complete text of the Amendment, which is filed
as
Exhibit 10.1 hereto, and incorporated herein by reference.
Item
2.01
.
Completion
of Acquisition or Disposition of Assets
.
(i)
On
April
12, 2007, the Company completed the previously-announced transaction under
the
Amended and Restated Stock Purchase Agreement among the Company, Brown Security
Industries, Inc., a California Corporation, (“
BSI
”),
and
Hal Brown and Marc Brown (collectively, the “
Shareholders
”),
individually and as the Trustees of the Rodgers Police Patrol, Inc./Strategic
Security Services, Inc. Employee Stock Ownership Plan and Trust Agreement
(the
“
ESOP
”)
(the
“
Stock
Purchase Agreement
”),
pursuant to which the Company purchased (the “
Stock
Purchase
”)
from
the ESOP 30% of the issued and outstanding shares of common stock (the
“
Shares
”)
of BSI
for a purchase price (the “
Purchase
Price
”)
of (i)
$900,000 plus (ii) 30% of BSI’s consolidated Tangible Net Worth (as defined in
the Stock Purchase Agreement), subject to adjustment as provided in the Stock
Purchase Agreement, and in each case paid or payable in cash.
The
closing of the Stock Purchase occurred immediately prior to the closing of
the
Merger described below in paragraph (ii) of Item 2.01 of this Current Report.
(ii)
On
April
12, 2007, the Company
completed
the previously-announced transaction under the Amended and Restated Agreement
and Plan of Merger by and among the Company
,
Command
Security Services, Inc., a New York corporation that is a wholly-owned
subsidiary of the Company (“
CSS
”),
BSI,
and
the Shareholders (the “
Merger
Agreement
”),
pursuant to which BSI merged with and into CSS (the “
Merger
”),
and
BSI’s wholly-owned subsidiaries Rodgers Police Patrol, Inc. and Strategic
Security Services, Inc. became wholly-owned subsidiaries of CSS. The closing
of
the Merger was completed immediately after the closing of the Stock Purchase
described above in paragraph (ii) of Item 2.01 of this Current Report.
Pursuant
to the Merger Agreement, the Company issued to the Shareholders an aggregate
of
(i) $2,100,000 plus (ii) 70% of BSI’s consolidated Tangible Net
Worth
(as
defined in the Merger Agreement
),
subject to adjustment as provided in the Merger Agreement (such consideration
is
referred to herein as the “
Merger
Consideration
”).
The
Company paid 25% of the Merger Consideration in cash and 75% of the Merger
Consideration by the delivery of shares of the Company’s common stock, valued at
a price per share of $2.906, representing the average closing price of the
Company’s common stock on the OTC Bulletin Board for the five consecutive
trading days immediately preceding the date that the Merger Agreement was
initially executed and delivered by the parties thereto.
The
foregoing description of the Stock Purchase and the Merger and the related
Stock
Purchase Agreement and the Merger Agreement is not complete, and is qualified
in
its entirety by reference to the complete text of the Stock Purchase Agreement
and the Merger Agreement, which are filed as Exhibits 10.2 and 10.3 hereto,
respectively, and incorporated herein by reference.
A
copy of
the press release announcing the completion of the Stock Purchase, the Merger
and the Amendment, which is filed as Exhibit 99.1 hereto, is incorporated
herein
by reference.
Item
3.02. Unregistered Sales of Equity Securities.
Pursuant
to the Merger Agreement described above in Item 2.01 of this Current Report,
which disclosure is incorporated herein by reference, the Company issued
to the
Shareholders as part of the Merger Consideration an aggregate of 541,982
shares
of the Company’s common stock, and will issue such number of additional shares
of the Company’s common stock as shall represent 52.5% of BSI’s consolidated
Tangible Net Worth (as defined in the Merger Agreement) as of the closing,
to be
determined on or before June 10, 2007. This issuance of these shares was
made
pursuant to an exemption from registration provided by Section 4(2) of the
Securities Act of 1933, as amended.
Item
5.02. Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers; Compensatory Arrangements of Certain Officers
Upon
the
closing of the Stock Purchase and the Merger described above in Item 2.01
of
this Current Report, Command and Marc W. Brown entered into an employment
agreement (the “
Employment
Agreement
”).
For
more than the past five years Mr. Brown, who is 50 years old, served as the
Chief Financial Officer of BSI, and as Chief Executive Officer and Chief
Financial Officer, respectively, of BSI’s wholly-owned subsidiaries Rodgers
Police Patrol, Inc. and Strategic Security Services, Inc. Under the Employment
Agreement, Mr. Brown will serve as Command’s Vice President—Corporate, and as
Command’s Regional Vice President. The Employment Agreement provides for the
payment to Mr. Brown of an annual base salary of $150,000, and for the grant
to
Mr. Brown of a stock option (the “
Option
”)
to
purchase an aggregate of 50,000 shares of the Company’s common stock, which
option vests as to 1/12 of the shares of common stock subject to the option
in
each month during his employment with the Company and is may be exercised
at any
time until April 12, 2017. The foregoing description of the Employment Agreement
and the Option is not complete, and is qualified in its entirety by reference
to
the complete text of the Employment Agreement and the Option, which are filed
hereto as Exhibits 10.4 and 10.5, respectively, and incorporated herein by
reference.
Item
9.01. Financial Statements and Exhibits
(c)
Exhibits
|
Exhibit
No
.
|
Description
|
|
|
|
|
10.1
|
Third
Amendment to Financing Agreement between Command Security Corporation,
Rodgers Police Patrol, Inc., Strategic Security Services, Inc. and
The CIT Group/Business Credit, Inc. dated April 12,
2007.
|
|
|
|
|
10.2
|
Stock
Purchase Agreement by and among
Command
Security Corporation, a New York corporation, Brown Security Industries,
Inc., and Hal Brown and Marc Brown, individually and as the Trustees
of
the Rodgers Police Patrol, Inc./Strategic Security Services, Inc.
Employee
Stock Ownership Plan and Trust Agreement dated April 12,
2007.
|
|
|
|
|
10.3
|
Amended
and Restated Agreement and Plan of Merger by and among Command
Security
Corporation, Command Security Services, Inc., Brown Security Industries,
Inc., Marc Brown and Hal Brown dated April 12, 2007.
|
|
|
|
|
10.4
|
Employment
Agreement between Command Security Corporation and Marc W. Brown
dated
April 12. 2007.
|
|
|
|
|
10.5
|
Stock
Option Agreement between Command Security Corporation and Marc
W. Brown
dated April 12. 2007.
|
|
|
|
|
99.1
|
Press
Release dated April 18, 2007 announcing the closing of the Stock
Purchase,
the Merger, and the Amendment.
|
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, Command Security
Corporation has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date:
April
19,
2007
|
|
COMMAND
SECURITY CORPORATION
|
|
|
|
|
|
|
|
|
|
|
By:
|
/s/
Barry Regenstein
|
|
|
|
Name:
Barry Regenstein
|
|
|
|
Title:
President and
|
|
|
|
Chief Financial Officer
|
THIRD
AMENDMENT AND CONSENT
TO
AMENDED AND RESTATED FINANCING AGREEMENT
THIRD
AMENDMENT AND CONSENT
,
dated
as of April 12, 2007 (this “
Amendment
”),
to
the Amended and Restated Financing Agreement referred to below, by and between
COMMAND
SECURITY CORPORATION
,
a New
York corporation (“
Command
”),
RODGERS
POLICE PATROL, INC.
,
a
California corporation (“
Rodgers
”),
STRATEGIC
SECURITY SERVICES, INC.
,
a
California corporation (“
Strategic
”,
and
collectively with Rodgers, the “
New
Borrowers
”)
(Command, Rodgers, and Strategic, collectively, jointly and severally, the
“
Company
”),
and
THE
CIT GROUP/BUSINESS CREDIT, INC.
,
a New
York corporation (“
CIT
”).
WHEREAS,
Command and CIT are parties to that certain Amended and Restated Financing
Agreement dated as of March 22, 2006, as amended by that certain First Amendment
and Consent to Amended and Restated Financing Agreement, dated as of June 13,
2006, and by that certain Second Amendment to Amended and Restated Financing
Agreement, dated as of September 30, 2006 (as amended, restated, supplemented,
modified or otherwise changed from time to time, the "
Financing
Agreement
"),
pursuant to which CIT has agreed to make revolving credit loans to Command
from
time to time in an aggregate amount at any time outstanding not to exceed the
Revolving Line of Credit (as defined in the Financing Agreement);
WHEREAS,
Command, Brown Security Industries, a California corporation (“
BSI
”)
and
Rodgers Police Patrol, Inc./Strategic Security Services, Inc. Employee Stock
Ownership Plan and Trust Agreement (the “
ESOP
”)
have
entered into that certain Stock Purchase Agreement (the “
BSI
ESOP Stock Purchase Agreement
”)
dated
as of April 12, 2007, pursuant to which Command has agreed to purchase all
of
the issued and outstanding stock of BSI owned by the ESOP for consideration
consisting of cash (such transaction is referred to herein as the “Stock
Purchase”);
WHEREAS,
Command, Command Security Services, Inc., a New York corporation and
wholly-owned subsidiary of Command (“CSI”), BSI, Marc Brown and Hal Brown
(collectively, the "
Shareholders
")
have
entered into that certain Amended and Restated Agreement and Plan of Merger
dated as of April 12, 2007 (the “
BSI
Merger Agreement
”),
pursuant to which BSI will merge (the “Merger”) with and into CSI, and CSI will
be the surviving corporation in the Merger;
WHEREAS,
as the result of the Stock Purchase and the Merger, CSI shall become the owner
of,
inter
alia
,
all of
the issued and outstanding capital stock of Rodgers and Strategic, each of
which
desires to avail themselves of the accommodations provided to Command pursuant
to the Financing Agreement as New Borrowers;
WHEREAS,
CIT is willing to enter into this Amendment in order to (i) consent to (A)
the
Stock Purchase, (B) the Merger (which, together with the Stock Purchase, shall
result in CSI having become the owner, free and clear of all liens, of all
of
the issued and outstanding stock of BSI) pursuant to the BSI ESOP Agreement
and
the BSI Merger Agreement (the Stock Purchase and the Merger are together
referred to herein as the “
BSI
Acquisition
”),
and
(C) the addition of the New Borrowers as parties to the Financing Agreement;
and
(ii) amend certain other terms and conditions of the Financing Agreement,
in each case subject to the terms and conditions set forth in this
Amendment.
NOW
THEREFORE, in consideration of the premises and other good and valuable
consideration, the parties hereto hereby agree as follows:
1.
The
Financing Agreement is hereby amended in order to add Rodgers and Strategic
as
joint and several obligors with Command as follows:
(a)
By
the
execution and delivery of this Third Amendment, and in consideration of the
agreement by CIT to allow New Borrowers to avail themselves of the financial
accommodations provided to Command under the Financing Agreement, each of the
New Borrowers hereby:
|
|
(i)
|
assumes
and accepts as a joint and several obligor, all of the Obligations,
covenants, terms and conditions of the Financing Agreement and of
all the
other Loan Documents to which Command is a party in the same manner
and to
the same extent as Command and agrees to be bound thereby as if it
was an
original party to the Financing Agreement and such other Loan
Documents;
|
|
|
(ii)
|
acknowledges
and agrees that from and after the Third Amendment Effective Date,
each
New Borrower shall be a “Company” for all purposes under the Loan
Documents and all references in the Loan Documents to the “Company” shall
be deemed inclusive of each of the New Borrowers, unless inconsistent
with
the context in which used;
|
|
|
(iii)
|
agrees
to pay all sums due pursuant to the Financing Agreement in the manner
and
at the times set forth therein or in the other Loan
Documents;
|
|
|
(iv)
|
grants
to CIT a security interest in and to and a lien upon the Collateral
whether now owned or hereafter acquired by such New Borrower, as
collateral security for all of the Obligations, in the same manner
and to
the same extent as Command; and
|
|
|
(v)
|
agrees
that CIT may file such financing statements under the UCC and
continuations of and amendments to previously filed financing statements
as CIT determines are necessary and appropriate in order to perfect
the
security interest granted by each New Borrower;
and
|
|
|
(vi)
|
agrees
to execute and deliver to CIT such other documents and instruments
as may
be reasonably required by CIT in order to further effectuate the
understandings set forth herein.
|
(b)
Command
hereby acknowledges and agrees that:
|
|
(i)
|
from
and after the Third Amendment Effective Date, each of the New Borrowers
shall be a “Company” for all purposes under the Loan Documents and all
references in the Loan Documents to the “Company” shall be deemed
inclusive of each of the New Borrowers;
|
|
|
(ii)
|
from
and after the Third Amendment Effective Date, Command shall be a
joint and
several obligor with New Borrowers with respect to the
Obligations;
|
|
|
(iii)
|
the
assumption and acceptance of the Obligations by New Borrowers as
herein
set forth does not diminish or release and shall not in any way affect
any
of the Obligations, duties or liabilities of Command to CIT;
and
|
|
|
(vi)
|
it
shall execute and deliver to CIT such other documents and instruments
as
may be reasonably required by CIT in order to further effectuate
the
understandings set forth herein.
|
2.
Definitions
in Amendment
.
Any
capitalized term used herein and not defined shall have the meaning assigned
to
it in the Financing Agreement. Definitions set forth in the preamble hereof
are
hereby incorporated into the substance of the Third Amendment (as hereinafter
defined).
3.
Definitions
in the Financing Agreement
.
Section
1
of the
Financing Agreement is hereby amended as follows:
(a)
The
definition of the term “
BSI
Acquisition Documents
”
is
hereby inserted, in appropriate alphabetical order, to read in its entirety
as
follows:
“
BSI
Acquisition Documents
”
means
the BSI ESOP Stock Purchase Agreement, the BSI Merger Agreement, the Escrow
Agreement and all other agreements, instruments and other documents executed
or
delivered in connection therewith with.
(b)
The
definition of the term "
BSI
Acquisition Overadvance Amount
"
is
hereby inserted, in appropriate alphabetical order, to read in its entirety
as
follows:
“
BSI
Acquisition Overadvance Amount
”
means an
amount to be added to the Borrowing Base upon the following terms and
conditions: (i) such amount shall be added to the Borrowing Base during the
period commencing on the Third Amendment Effective Date through and continuing
through and including August 31, 2008; (ii) the initial amount added shall
be
Two Million Four Hundred Thousand Dollars ($2,400,000.00), and shall be reduced
each month by the sum of One Hundred Fifty Thousand Dollars ($150,000.00),
commencing on June 1, 2007, and continuing on the first (1
st
)
day of
each successive month; and (iii) on September 1, 2008 such amount shall be
reduced to Zero Dollars ($0).
(c)
The
definition of the term "
Third
Amendment
"
is
hereby inserted
in
appropriate alphabetical order, to read in its entirety as follows:
“
Third
Amendment
”
means
the Third Amendment and Consent to the Amended and Restated Financing Agreement
dated as of April 12, 2007, by and between the Company and CIT.
(d)
The
definition of the term “
Third
Amendment Effective Date
”
is
hereby inserted
in
appropriate alphabetical order, to read in its entirety as follows:
“
Third
Amendment Effective Date
”
means
the date on which all of the conditions precedent to the effectiveness of the
Third Amendment have been fulfilled or waived in writing by CIT acting in its
discretion.
(e)
The
definition of the term “
Adjustment
Date
”
is
hereby amended and restated in its entirety to read as follows:
“
Adjustment
Date
”
shall
have the meaning, if any, provided for in the definition of “Applicable Margin”
in
Section
1
of this
Financing Agreement.
(f)
The
definition of the term “
Anniversary
Date
”
is
hereby amended and restated in its entirety to read as follows:
“
Anniversary
Date
”
shall
mean the date occurring five (5) years from the Original Closing Date and the
same date in every year thereafter.
(g)
The
definition of the term “
Applicable
Revolving Line of Credit Fee Margin
”
is
hereby amended and restated in its entirety to read as follows:
“
Applicable
Revolving Line of Credit Fee Margin
”
shall
mean for any month, one-eighth of one percent (0.125%) per annum, for the number
of days in such month, based on the average daily principal balance of Revolving
Loans and the average daily undrawn amount of Letters of Credit outstanding
during such month.
(h)
The
definition of the term “
Applicable
Margin
”
is
hereby amended and restated in its entirety to read as follows:
“
Applicable
Margin
”
shall
mean (a) for Chase Bank Rate Loans, negative one-quarter of one percent (-0.25%)
per annum and (b) for LIBOR Loans, two percent (2%) per annum.
(i)
The
definition of the term “
Borrowing
Base
”
is
hereby amended and restated in its entirety to read as follows:
“
Borrowing
Base
”
shall
mean (without duplication) (a) the sum of (i) eighty-five percent (85%) of
the
Company’s aggregate outstanding Eligible Accounts Receivable; provided however,
that if the then Dilution Percentage is greater than five percent (5%), then
the
rate of advance herein shall be reduced by the amount of such excess Dilution
Percentage,
plus
(ii) the
lesser of (a) 75% of the Company’s aggregate outstanding Eligible Unbilled
Accounts Receivable or (B) $2,500,000.00,
plus
(iii)
eight-five percent (85%) of the aggregate outstanding Delta Receivables of
up to
(but not exceeding) $1,750,000.00,
plus
(iv) the
BSI Acquisition Overadvance Amount,
less
(b) any
applicable Availability Reserves. For purposes of calculating the Borrowing
Base, no Trade Accounts Receivable of the Company may constitute at the same
time both Eligible Accounts Receivable and Eligible Unbilled Accounts
Receivable.
(j)
The
definition of the term “
Delta
Receivables
”
is
hereby amended and restated in its entirety to read as follows:
“
Delta
Receivables
”
shall
mean the Company’s Accounts which arise from the rendition of services to Delta
Airlines in accordance with agreements entered into with Delta Airlines on
or
after Delta Airline’s commencement of cases under Chapter 11 of Title 11 of the
United States Code in the United States Bankruptcy Court, so long as such
Accounts do not remain unpaid for more than sixty (60) days from invoice
date.
(k)
The
definition of the term “
Letter
of Credit Sub-Line
”
is
hereby amended and restated in its entirety to read as follows:
“
Letter
of Credit Sub-Line
”
shall
mean the commitment of CIT to assist the Company in obtaining Letters of Credit
in an aggregate amount of up to $3,000,000.00.
(l)
The
definition of the term “
Permitted
Indebtedness
”
is
hereby amended and restated in its entirety to read as follows:
“
Permitted
Indebtedness
”
shall
mean: (a) current Indebtedness maturing in less than one year and incurred
in
the ordinary course of business for raw materials, supplies, equipment,
services, Taxes or labor; (b) the Indebtedness secured by Purchase Money Liens;
(c) Indebtedness arising under this Financing Agreement; (d) deferred Taxes
and
other expenses incurred in the ordinary course of business; (e) other
Indebtedness existing on the date of execution of the Existing Financing
Agreement and listed in the most recent financial statement delivered to CIT
or
otherwise disclosed to CIT in writing prior to the Original Closing Date; (f)
unsecured Indebtedness owing by the Company to Sterling Protective Group, Inc.
pursuant to the terms of the Asset Purchase Agreement (as in effect on the
First
Amendment Effective Date);
provided
that no
payments on such Indebtedness may be paid except in accordance with the express
terms and conditions of the Protective Acquisition Documents (as in effect
on
the Third Amendment Effective Date); and (g) unsecured Indebtedness owing by
the
Company to the Shareholders or the ESOP as a result of adjustments to
consideration amounts under the BSI Acquisition Documents.
(m)
The
definition of the term “
Revolving
Line of Credit
”
is
hereby amended and restated in its entirety to read as follows:
“
Revolving
Line of Credit
”
shall
mean the aggregate commitment of CIT to make Revolving Loans pursuant to
Section
3
of this
Financing Agreement and assist the Company in opening Letters of Credit pursuant
to
Section
5
of this
Financing Agreement, in an aggregate amount not to exceed Sixteen Million
Dollars ($16,000,000.00).
4.
Fixed
Charge Coverage Ratio
.
Section
7
of the
Financing Agreement is hereby amended by amending and restating
Sub-Section
7.10
in its
entirety as follows:
7.10
The
Company will, as of the end of each Fiscal Quarter, maintain a Fixed Charge
Coverage Ratio of not less than 1.10 to 1.00.
5.
Amendments
to Acquisition Documents
.
Section
7
of the
Financing Agreement is hereby amended by amending and restating
Section
7.16
in its
entirety as follows:
7.16.
Without
the prior written consent of CIT, the Company agrees that it will not amend,
change, agree to any amendment or other change to (or make any payment
consistent with any amendment or other change to) or waive any of its rights
under any of the Protective Acquisition Documents or the BSI Acquisition
Documents.
6.
Letter
of Credit Guaranty Fee
.
Section
8 of the Financing Agreement is hereby amended by amending and restating
Sub-Section 8.1, clause (d) in its entirety as follows:
(d)
In
consideration of the issuance of any Letter of Credit Guaranty by CIT or other
assistance of CIT in obtaining Letters of Credit pursuant to
Section
5
hereof,
the Company agrees to pay to CIT a Letter of Credit Guaranty Fee equal to one
and three-quarters percent (1.75%) per annum of the face amount of each Letter
of Credit. All Letter of Credit Guaranty Fees shall be due and payable monthly
on the first day of each month.
7.
Conditions
Precedent
.
The
effectiveness of this Amendment is subject to the fulfillment, in a manner
satisfactory to CIT, of each of the following conditions precedent (the first
date upon which all such conditions shall have been fulfilled or waived being
herein called the "
Third
Amendment Effective Date
"):
(a)
Representations
and Warranties; No Event of Default
.
The
representations and warranties contained herein, in
Section
7
of the
Financing Agreement and in each other Loan Document and certificate or other
writing delivered to CIT pursuant hereto on or prior to the Third Amendment
Effective Date shall be correct in all material respects on and as of the Third
Amendment Effective Date as though made on and as of such date, except to the
extent that such representations and warranties (or any schedules related
thereto) expressly relate solely to an earlier date (in which case such
representations and warranties shall be true and correct in all material
respects on and as of such date); and no Default or Event of Default shall
have
occurred and be continuing on the Third Amendment Effective Date or would result
from this Amendment becoming effective in accordance with its
terms.
(b)
Delivery
of Documents
.
CIT
shall have received on or before the Third Amendment Effective Date the
following, each in form and substance satisfactory to CIT and, unless indicated
otherwise, dated the Third Amendment Effective Date:
(i)
counterparts
of this Amendment which bear the signatures of the Company and CIT, together
with an acknowledgment bearing the signature of CSI in the form attached
hereto;
(ii)
a
certificate or certificates of an Executive Officer, of each Company certifying
(A) that attached thereto are complete and correct copies of the BSI ESOP Stock
Purchase Agreement and the BSI Merger Agreement, (B) that true and complete
copies of all other BSI Acquisition Documents have been delivered to CIT, (C)
that attached thereto is a
copy
of
the resolutions of each Company authorizing the execution, delivery and
performance by each Company of this Amendment, and the performance of the
Financing Agreement as amended by this Amendment, (D) the names and true
signatures of the officers of each Company authorized to sign this Amendment,
together with evidence of the incumbency of such authorized officers, (E) that
attached thereto are true and complete copies of the charter and by-laws of
each
of Rodgers and Strategic, each as amended to date and in full force and effect,
(F) that the charter and by-laws of Command have not been amended or otherwise
modified since the Restatement Effective Date and that the copies thereof
previously delivered to CIT are true, correct and complete, and (G)
that
all
conditions to the effectiveness of the BSI Acquisition have been
satisfied;
(iii)
to
the
extent that CSI shall survive the Merger and shall continue to own all of the
issued and outstanding voting stock of New Borrowers, (A) a continuing,
unlimited agreement of guaranty of the Obligations, by CSI, and (B) a pledge
agreement by Command, pledging all of the stock in CSI to CIT, each in form
and
substance acceptable to CIT;
(iv)
a
fully
executed payoff letter from U.S. Bank, National Association with respect to
the
payment in full of all obligations owed to it by BSI, Rodgers and Strategic;
UCC
termination statements and other instruments or documentation evidencing the
termination of each lien described on
Exhibit
A
attached
hereto;
(v)
updated
UCC, judgment and tax searches with respect to BSI, Rodgers and
Strategic;
(vi)
a
funds
flow chart for all consideration to be paid for or on account of the BSI
Acquisition; and
(vii)
such
other agreements, instruments and other documents as CIT may reasonably request
from the Company.
(c)
Amendment
Fee
.
CIT
shall have received payment of a non-refundable amendment fee equal to Five
Thousand Dollars ($5,000.00), which fee shall be fully earned when paid (it
being agreed and understood that CIT may charge the Revolving Loan Account
in
respect of such amendment fee).
(d)
Overadvance
Fee
.
CIT
shall have received payment of the first installment of a fully earned and
non-refundable fee in consideration for CIT’s making the BSI Acquisition
Overadvance Amount available to the Company, which fee shall equal One Hundred
Twenty Thousand Dollars ($120,000.00) and which, as an accommodation to the
Company, shall be paid in three (3) equal installments of Forty Thousand Dollars
($40,000.00) each. Such installments shall be due and payable (i) on or before
the Third Amendment Effective Date, (ii) on October 1, 2007 and (iii) on April
1, 2008;
provided
however
,
in the
event that the Financing Agreement is sooner terminated, for any reason, then
the entire unpaid balance of such fee shall become immediately due and payable
(it being agreed and understood that CIT may charge the Revolving Loan Account
in respect of such fee on the due date or accelerated due date of each
installment as applicable).
(e)
Proceedings
.
All
proceedings in connection with the transactions contemplated by this Amendment,
and all documents incidental thereto, shall be satisfactory to CIT and its
counsel, and CIT and such counsel shall have received from the Company all
such
information and such
counterpart
originals or certified copies of documents, and such other agreements,
instruments, approvals, opinions and other documents, as CIT or such counsel
may
reasonably request.
(f)
Consummation
of BSI Acquisition
.
(i)
Pursuant to the BSI Acquisition Documents (no provision of which shall have
been
amended or otherwise modified or waived without the prior written consent of
CIT), BSI shall have merged with and into CSI, which shall be the surviving
corporation in the Merger, and, after giving effect to the Merger, CSI shall
have become the owner, free and clear of all liens, of all of the issued and
outstanding capital stock of the New Borrowers and, all of the assets of BSI;
(ii) all of the assets of BSI and New Borrowers shall be free and clear of
all
liens (other than (A) Permitted Encumbrances, and (B) each lien described on
Exhibit
B
hereto);
and (iii) each of the ESOP, BSI, the Shareholders and the Company shall have
fully performed all of the obligations to be performed by such person in all
material respects under the BSI Acquisition Documents on or prior to the Third
Amendment Effective Date.
(g)
Legal
Fees and Expenses and Out-of-Pocket-Expenses
.
The
Company shall have paid to CIT, in immediately available funds, (i) the fees
and
expenses of CIT’s legal counsel incurred in
the
preparation,
execution
and delivery of this
Amendment,
and
(ii)
an amount equal to the amount of all Out-of-Pocket-Expenses which were incurred
by CIT in connection with the preparation, execution and delivery of this
Amendment and the other related agreements, instruments and documents.
Such
legal fees and expenses and
Out-of-Pocket-Expenses
shall be due and payable in full on the date hereof and may, at CIT’s option, be
charged to the Company’s Revolving Loan Account.
8.
Conditions
Subsequent
.
The
obligation of CIT to continue to make Revolving Loans (or otherwise extend
credit under the Financing Agreement) is subject to CIT’s receipt not later than
April 20, 2007 of the following:
(a)
Original
certificate(s) for all issued and outstanding capital stock of Command
Securities Services, Inc. together with stock power(s) executed in blank and
resignation(s) of officers and directors executed in blank; and
(b)
Certificates
of insurance designating CIT as loss payee and additional insured as to
liability, together with a lenders loss payable endorsement, all with respect
to
coverage of the assets and operations of New Borrowers.
9.
Representations
and Warranties
.
The
Company hereby represents and warrants to CIT as follows:
(a)
Representations
and Warranties; No Event of Default
.
The
representations and
warranties
herein,
in
Section
7
of the
Financing Agreement and in each other Loan Document and certificate or other
writing delivered to CIT pursuant hereto on or prior to the Third Amendment
Effective Date are correct in all material respects on and as of the Third
Amendment Effective Date as though made on and as of such date, except to the
extent that such representations and warranties (or any schedules related
thereto) expressly relate solely to an earlier date (in which case such
representations and warranties are true and correct in all material respects
on
and as of such date); and no Default or Event of Default has occurred and is
continuing on the Third Amendment Effective Date or would result from this
Amendment becoming effective in accordance with its terms.
(b)
Organization,
Good Standing, Etc.
The
Company (i) is a corporation duly organized,
validly
existing
and in good standing under the laws of the State of New York, as to Command,
and
California, as to New Borrowers, and (ii) has all requisite power and
authority to execute, deliver and perform this Amendment, and to perform the
Financing Agreement, as amended hereby.
(c)
Authorization,
Etc.
The
execution, delivery and performance by the Company of this Amendment, and the
performance by the Company of the Financing Agreement, as amended hereby,
(i) have been duly authorized by all necessary action on the part of the
Company, (ii) do not and will not contravene the Company’s charter or
by-laws, any applicable law or any material contractual restriction binding
on
or otherwise affecting it or any of its properties, (iii) do not and will
not result in or require the creation of any lien (other than pursuant to any
Loan Document) upon or with respect to any of its properties, and (iv) do
not and will not result in any suspension, revocation, impairment, forfeiture
or
nonrenewal of any permit, license, authorization or approval applicable to
its
operations or any of its properties.
(d)
Governmental
Approvals
.
No
authorization or approval or other action by, and no notice to or filing with,
any governmental authority or other regulatory body is required in connection
with the due execution, delivery and performance by
the
Company
of
this
Amendment, or for the performance of the Financing Agreement, as amended
hereby.
(e)
Enforceability
of Loan Documents
.
Each of
this Amendment, the Financing Agreement, as amended hereby, and each other
Loan
Document to which
the
Company
is a
party is a legal, valid and binding obligation of
the
Company
,
enforceable against
the
Company
in
accordance with its terms, except as such enforceability may be limited by
or
subject to any bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally.
(f)
BSI
Acquisition Documents
.
The
Company has delivered to CIT a complete and correct copy of each of the BSI
ESOP
Stock Purchase Agreement and the BSI Merger Agreement, in each case including
all schedules and exhibits thereto, the Escrow Agreement, and all other BSI
Acquisition Documents. The BSI Acquisition Documents set forth the entire
agreement and understanding of the parties thereto relating to the subject
matter thereof, and there are no other agreements, arrangements or
understandings, written or oral, relating to the matters covered thereby. The
BSI Acquisition Documents are the legal, valid and binding obligations of the
Company and, to the best knowledge of the Company, each of the other parties
thereto, enforceable against the Company, and to the best knowledge of the
Company, each of the other parties thereto, in accordance with their
terms.
(g)
Consummation
of BSI Acquisition
.
All
conditions precedent to the consummation of the BSI Acquisition have been
fulfilled or (with the written consent of CIT) waived, the BSI Acquisition
Documents have not been amended or otherwise modified, and there has been no
breach of any term or condition of the BSI Acquisition Documents. No
authorization or approval or other action by, and no notice to or filing with,
any governmental authority or any other person is required for such acquisition,
other than such as have been or will be obtained on or prior to the Third
Amendment Effective Date. As of the Third Amendment Effective Date, (i) pursuant
to the BSI Acquisition Documents (no provision of which shall have been amended
or otherwise modified or waived without the prior written consent of CIT),
BSI
shall have merged with and into CSI, which shall be the surviving corporation
in
the Merger, and, after giving effect to the Merger, CSI shall have become the
owner, free and clear of all liens, of all of the issued and outstanding capital
stock of the New Borrowers and all of the assets of BSI; (ii) all of the assets
of BSI and New Borrowers are free and clear of any lien other than (i) Permitted
Encumbrances and (ii) each lien described on
Exhibit
B
hereto.
10.
Consent
.
Notwithstanding anything to the contrary set forth in
Section
7.9(g)
of the
Financing Agreement, CIT hereby consents to the BSI Acquisition pursuant to
the
BSI Acquisition Documents and agrees that such acquisition shall be permitted
for all purposes of the Financing Agreement and the other Loan Documents. The
foregoing consent shall be effective on the Third Amendment Effective Date.
Notwithstanding the foregoing, (a) in no event shall any of the Accounts of
New
Borrowers (hereinafter, the “
New
Borrower Accounts
”
)
be
deemed “Eligible Accounts Receivable” and/or included in the calculation of the
Borrowing Base under the Financing Agreement until (a) CIT shall have received
a
detailed ageing, in form and substance acceptable to CIT, of the New Borrower
Accounts prepared as of March 31, 2007, (b) CIT shall have a perfected first
priority security interest (subject only to Permitted Encumbrances and the
liens
described on
Exhibit
B
hereto)
on all of the assets of New Borrowers, and (c) all termination statements,
releases of security interests and other instruments or documentation evidencing
the termination of each lien described on
Exhibit
A
attached
hereto shall have been filed.
11.
Miscellaneous
.
(a)
Continued
Effectiveness of the Financing Agreement
.
Except
as otherwise expressly provided herein, the Financing Agreement and the other
Loan Documents are, and shall continue to be, in full force and effect and
are
hereby ratified and confirmed in all respects,
except
that
on
and
after the Third Amendment Effective Date (i) all references in the Financing
Agreement to “this Agreement”, “hereto”, “hereof”, “hereunder” or words of like
import referring to the Financing Agreement shall mean the Financing Agreement
as amended by this Amendment, and (ii) all references in the other Loan
Documents to which the Company is a party to the "Financing Agreement",
“thereto”, “thereof”, “thereunder” or words of like import referring to the
Financing Agreement shall mean the Financing Agreement as amended by this
Amendment. Except as expressly provided herein, the execution, delivery and
effectiveness of this Amendment shall not operate as an amendment of any right,
power or remedy of CIT under the Financing Agreement or any other Loan Document,
nor constitute an amendment of any provision of the Financing Agreement or
any
other Loan Document.
(b)
Counterparts
.
This
Amendment may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which shall be deemed to be an
original, but all of which taken together shall constitute one and the same
agreement.
Delivery
of an executed counterpart of this Amendment by telefacsimile or electronic
mail
shall be equally effective as delivery of a manually executed
counterpart.
(c)
Headings
.
Section
headings herein are included for convenience of reference only and shall not
constitute a part of this Amendment for any other purpose.
(d)
Governing
Law
.
This
Amendment shall be governed by, and construed in accordance with, the law of
the
State of New York without giving effect to any conflict of law rule or principle
that would give effect to the laws of another jurisdiction.
(e)
Amendment
as Loan Document
.
The
Company hereby acknowledges and agrees that this Amendment constitutes a "Loan
Document" under the Financing Agreement. Accordingly, it shall be an Event
of
Default under the Financing Agreement if any representation or warranty made
by
the Company under or in connection with this Amendment shall have been untrue,
false or misleading in any material respect when made or if the Company fails
to
perform, keep, or observe any term, provision, condition, covenant, or agreement
contained
in this
Amendment.
(f)
Collateral
.
It is
understood and agreed that all Collateral (including the Collateral granted
by
the New Borrowers pursuant to this Amendment) shall secure the Obligations
under
the Loan Documents.
In
addition, the Company confirms and agrees that to the extent that any Loan
Document purports to assign or pledge to CIT, or to grant to CIT a lien on
any
collateral as security for the Obligations of the Company from time to time
existing in respect of the Financing Agreement and the Loan Documents, such
pledge, assignment and/or grant of a lien is hereby ratified and confirmed
in
all respects.
(g)
Waiver
of Jury Trial
.
EACH OF
COMMAND, RODGERS, STRATEGIC AND CIT HEREBY IRREVOCABLY
WAIVES
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON
OR ARISING OUT OF THIS AMENDMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW OR STATUTORY CLAIMS
.
[Signature
page follows.]
IN
WITNESS WHEREOF, the parties hereto have caused this Third Amendment and Consent
to be executed and delivered as of the date first above written.
|
|
|
|
|
|
Company
:
|
|
|
|
|
|
COMMAND
SECURITY CORPORATION,
a New York corporation
|
|
|
|
|
|
By:
|
|
|
|
Name:
Barry Regenstein
Title:
President
|
|
|
|
|
|
|
|
|
|
RODGERS
POLICE PATROL, INC.,
a California corporation
|
|
|
|
|
|
By:
|
|
|
|
Name:
Barry Regenstein
Title:
President
|
|
|
|
|
|
|
|
|
|
STRATEGIC SECURITY SERVICES,
INC.,
a California corporation
|
|
|
|
|
|
By:
|
|
|
|
Name:
Barry Regenstein
Title:
President
|
|
|
|
|
|
|
|
|
|
CIT
|
|
|
|
|
|
THE
CIT GROUP/BUSINESS CREDIT, INC.,
a
New York corporation
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
|
[Acknowledgment
by CSI follows.]
Acknowledgment
by Command Security Services, Inc.
The
undersigned Command Security Services, Inc., a New York corporation, hereby
represents, warrants, covenants and agrees as follows:
(a)
the
description of the BSI Acquisition and of the Merger set forth in the preamble
to the foregoing Third Amendment and Consent to Amended and Restated Financing
Agreement is accurate in all respects,
(b)
it
has no
assets other than the issued and outstanding voting stock of Rodgers and
Strategic and does not intend to conduct any business other than acting as
a
holding company for such stock,
(c)
it
hereby
consents to Rodgers and Strategic becoming joint and several obligors with
Command under the Financing Agreement, and
(d)
it
agrees
to provide an agreement of guaranty to CIT, in form and substance acceptable
to
CIT, guaranteeing all of the obligations of Command Security Corporation,
Rodgers Police Patrol and Strategic Security Services, Inc. under the Financing
Agreement
IN
WITNESS WHEREOF, the undersigned has caused this Acknowledgement to be executed
and delivered as of the ___ day of April, 2007.
|
|
|
|
|
|
COMMAND
SECURITY SERVICES, INC.,
a New York corporation
|
|
|
|
|
|
By:
|
|
|
|
Name:
Barry Regenstein
Title:
President
|
|
|
|
EXHIBIT
A
Liens
to be terminated or amended on or before the Third Amendment Effective
Date
|
DEBTOR
|
SECURED
PARTY
|
RECORD
NUMBER
|
JURISDICTION
|
|
|
|
Rodgers
Police Patrol, Inc.
|
U.S.
Bank, National Association
|
#9831360341,
filed 11/3/98
|
California
SOS
|
|
Strategic
Security Service, Inc.
|
U.S.
Bank, National Association
|
#9734360519,
filed 12/3/97
|
California
SOS
|
EXHIBIT
B
Permitted
Liens
|
DEBTOR
|
SECURED
PARTY
|
RECORD
NUMBER
|
JURISDICTION
|
|
|
|
Rodgers
|
Lease
Corporation of America
|
023960789
|
SOS
California
|
COMMAND
SECURITY CORPORATION
EMPLOYMENT
AGREEMENT
This
Agreement, made April 9
,
2007
by
Marc
W. Brown
(“Employee”)
whose address is 3910 Gresham Street, Unit 3, San Diego, California 92109 and
Command
Security Corporation
,
a New
York corporation, with offices at 1133 Route 55, Suite D, Lagrangeville, NY
12540 (“Employer”). Employer and Employee are at times collectively referred to
as “the Parties” and may individually be referred to as a “Party.”
Article
I. Employment Term and Location
The
Employer hereby employs the Employee at its offices located at 3180 University
Avenue, San Diego, California 92104 for a period of three (3) years commencing
on April 12, 2007 and ending April 11, 2010
(the
“Initial Term). The Initial Term shall be extended for additional periods of
one
(1) year each (“Extended Term”), commencing immediately following the prior
Term, unless either Party notifies the other Party of its intention not to
extend the Term by providing sixty (60) days prior written notice of its
decision not to extend. Either Party may terminate this Agreement as provided
in
Article V below.
Article
II. Employee’s Duties, Title; and Compensation
A.
The
Employee shall be responsible for reasonably implementing all of Employer’s
policies and procedures. The Employee agrees to perform all duties reasonably
assigned or delegated to his position and in such manner as the Employer may
reasonably direct. All duties shall be consistent with those of an upper level
managerial employee.
B.
Employee’s
title shall be Corporate Vice-President and in additional he shall hold the
title of Regional Vice-President - West Region. The West Region consists of
all
portions of the United States west of the Mississippi River and the City of
Chicago, State of Illinois. Employee shall enjoy the authority commensurate
with
the position of Regional Vice-President.
C.
The
Employee shall generally perform his work at 3180 University Avenue, San Diego,
California 92104, and shall not generally be required to travel outside of
San
Diego County, California.
D.
The
Employee shall not be required to relocate at any time during the Term.
E.
Employee’s
total compensation shall be as set forth in Schedule A attached hereto.
F.
As
an
inducement to enter into this Agreement, Employer hereby grants to Employee
options for the purchase of fifty thousand (50,000) shares of Employer’s common
stock, said grant being governed by Employer’s 2005 Stock Incentive Plan.
Article
III. Performance of Work
The
Employee agrees to perform faithfully the duties assigned to him to the best
of
his ability, to devote his full and undivided time to the transaction of the
Employer’s business and to give to the Employer prompt, complete and accurate
reports of and relating to his work in such form as the Employer may from time
to time require. The Employee further agrees that during the term of this
Agreement he will not directly or indirectly engage in or carry on any other
competing or conflicting business for his benefit or the benefit of any other
person, firm, or corporation. The Parties agree the Employee’s pursuit and
investment in a business developing new technology and security apparatus
devices, not previously sold or distributed by Brown Security Industries, Inc.,
or its then subsidiaries, shall not be a violation of this
Agreement.
Article
IV. Salary and Benefits
A.
The
Employee shall receive a yearly salary set forth on Schedule A and shall be
paid
no less frequently than bi-weekly and reviewed in accordance with the policies
of Employer applicable to managerial employees. It is understood and agreed
that
the normal deductions will be withheld from said salary.
B.
In
addition, Employee will receive four (4) weeks of vacation annually and such
benefits, and other forms of compensation as the Employer may deem appropriate
and in accordance with Employer’s policies for an entire class of employee which
includes Vice-Presidents of Employer at the expense of Employer. Any and all
benefits, health and similar plans may be modified or terminated upon prior
notice at the sole discretion of the Employer, provided that such is replaced
with substantially similar benefits.
C.
Employee’s salary and benefits are as set forth on Schedule A, the terms of
which are hereby incorporated by this reference. Employee shall receive annual
performance and salary reviews from his direct Supervisor of Employer, which
shall be considered in determining increases in Employee’s base pay.
D.
Employee
shall be allowed to participate in any managerial stock option program
maintained by Employer.
Article
V. Termination of Employment
A.
Upon
a
termination by Employer without cause before the expiration of the Initial
Term,
or in the event of a constructive termination, Employee’s annual salary shall
continue for the remaining term of this Agreement according to the regular
payroll intervals of Employer.
B.
Upon
a
voluntary resignation by Employee before the expiration of the Initial Term,
Employee’s salary shall terminate upon the effective date of his termination,
C.
In
the
event Employee’s services are terminated for cause, as provided in paragraph E
below, Employee’s salary shall be discontinued upon the effective date of
Employee’s termination.
D.
Notwithstanding
anything to the contrary contained herein, compensation for Special Services
shall continue for a full five (5) years as set forth in Schedule A, regardless
of whether or not the Employee has been terminated and regardless of the reason
for termination.
E.
The
Employer may terminate Employee’s employment for cause, after providing to the
Employee notice of the alleged cause, and providing a ten (10) day opportunity
to cure such conduct. A ten (10) day prior notice and opportunity to cure shall
be applicable to items 5 and 6 below. For purposes of this Agreement cause
shall
mean:
|
|
1.
|
Willful
breach of duty by the Employee in the course of
employment;
|
|
|
2.
|
Habitual
material neglect by Employee of his duties to
Employer;
|
|
|
3.
|
Conduct
by Employee that if convicted, would constitute a felony or an act
of
moral turpitude in the state in which the conduct occurs, it being
understood that an accusation of such conduct is insufficient to
support a
for cause termination and the conduct must be proven by a preponderance
of
the evidence;
|
|
|
4.
|
Intentional
destruction of Employer’s property or theft of funds or property of the
Employer;
|
|
|
5.
|
Material
breach of Employer’s Policies applicable to management personnel; or
|
|
|
6.
|
Repeated
conduct that is materially injurious to the reputation of the
Employer.
|
Upon
receipt of such notice, Employee may contest such termination by bringing an
action for declaratory and other relief, and during the pendency of such action,
the employment relationship shall remain in full force and effect. Employee
shall post security, which at the Employee’s option may be in Command stock,
equal to ninety (90) days salary as security for the payment of the continued
salary. Nothing stated herein shall be deemed to limit a Parties’ right to seek
damages in a court of law. All of the above causes for termination shall be
exercised in good faith and shall take into consideration industry standards,
practices and customs.
F.
In
the
event of Employee’s death during the term all base salary that has been earned
up to Employee’s death shall be paid to Employee’s estate at the next payroll
interval that such payments would have been due to Employee and the Special
Services shall be treated consistent with paragraph V.D. above, which shall
be
paid as set forth in Schedule A.
Article
VI. Successors and Assigns
This
Agreement shall inure to the benefit of and shall be binding upon the Employer,
its successors and assigns. Should the Employer at any time be merged into
or
consolidated with another corporation, or should substantially all of the assets
of the Employer be transferred to another corporation, the provisions of this
Agreement shall be binding upon and inure to the benefit of the entity resulting
from such merger or consolidation or to which substantially all of the assets
of
the Employer shall be transferred. In the event that the Employer is merged
into
or consolidated with another entity, or substantially all of the assets of
the
Employer are transferred to another entity, Employee shall be deemed fully
vested in and fully earned the maximum compensation allowable for Special
Services as detailed in Schedule A of this Agreement, as if all goals and
obligations of Employee had been successfully met. This provision shall apply
in
the event of any subsequent merger, consolidation or transfer, and such other
entity shall, for all purposes of this Agreement, be deemed the Employer. This
Agreement is not assignable by the Employee.
Article
VII. Restrictive Covenants
On
even
date herewith, Employee has agreed to transfer stock owned by him in Brown
Security Industries, Inc., pursuant to a Plan of Merger, to Employer.
Employee
acknowledges and agrees that during the course of his employment: Employee
has
been and/or will be provided with the benefit of access to Employer’s customers
and employees; Employer has and/or will place Employee in a position of trust
and confidence with respect to Employer’s customers and employees; that the
goodwill customer relationships and contacts constitute substantial assets
of
Employer which have been acquired and/or developed at considerable expense
to
Employer; and Employee has and/or shall continue to receive direct financial
remuneration as a result of the goodwill established by the Employer with such
customers. As further consideration for the covenants contained herein, Employee
shall receive certain benefits and severance pay as described in Articles IV
and
V.
Employee
agrees that the restrictions set forth below are necessary and reasonable for
the protection of the goodwill, customer relationships, employee relationships
and business of Employer and therefore covenants as follows:
Employee
agrees that from the commencement of his employment until the termination of
his
employment and for the periods set forth below following termination of his
employment (whatever the reasons for such termination may be and whether such
termination is voluntary or involuntary), that the Employee will not:
A.
For
three
(3) years following the termination of his employment, directly or indirectly,
alone or in any capacity, within the geographic area in which he actively works
or worked for Employer or within the geographic area of Employee’s
responsibilities performed while in the employ of Employer, solicit, divert,
accept or take away for any competing business any customer of Employer who
was
such at any time during the one (1) year immediately preceding the termination
of Employee’s employment.
B.
For
three
(3) years following the termination of his employment, directly of indirectly,
alone or in any capacity, within the geographic area in which he works or worked
for Employer or within the geographic area of Employee’s responsibilities
performed while in the employ of Employer, solicit, divert, hire or take away
for any competing business any other employee of Employer who was such at any
time during the one (1) year immediately preceding or following the termination
of Employee’s employment.
C.
For
a
period of two (2) years following the termination of his employment, directly
or
indirectly, alone or in any capacity, within the geographic area in which he
actively works or worked for Employer or within the geographic area of
Employee’s responsibilities performed while in the employ of Employer, engage in
the security guard or patrol business.
The
Parties agree that if the scope or enforceability of the restrictive covenants
set forth in this Article VII is in any way disputed at any time, it is the
intent of such Parties that the court or other trier of fact shall modify and
enforce the covenants to the full extent required to render the same
enforceable.
Article
VIII. Blue Pencil
In
the
event that any judgment by a court holds any paragraph of Article VII invalid
and that judgment is ultimately reversed on final appeal from which no appeal
is
taken, the three-year period set forth in the third paragraph of Article VII
shall be extended for a period equal to the difference between three years
and
the period after termination during which Employee complied with the paragraph
that was initially adjudged invalid, such extension period to commence on the
day after such judgment of reversal.
Article
IX. Confidentiality
Employee
covenants and agrees, which covenant and Agreement is of the essence of this
Agreement, that upon termination of his employment, whether voluntary or
involuntary, he will promptly deliver to the Employer all property, customer
lists, sales information, memoranda, documents containing trade secrets,
information relating to Employer’s business and other confidential information
and all other property belonging to the Employer and any and all copies thereof,
and that he will not, either during the term of his employment under this
Agreement or any time thereafter, (1) disclose to any person, firm, partnership,
association or corporation, other than Employer, any trade secrets or other
confidential information which was disclosed to him or came within his knowledge
during the course of his employment, or (2) make or cause to be made any use
of
such trade secrets or confidential information.
Article
X. Miscellaneous
A.
Each
section, paragraph and subparagraph contained in this Agreement and each
covenant and obligation of the Employee hereunder is separable and independent
and in the event any section, paragraph, subparagraph, covenant or obligation
is
held invalid or unenforceable, it shall affect neither the validity or
enforceability of any other section, paragraph, subparagraph, covenant or
obligation contained in this Agreement.
B.
The
covenants of Employee set forth in this Agreement shall be construed as
independent covenants and the existence of any claim, demand, action or cause
of
action of Employee against Employer, whether predicated upon this Agreement
or
otherwise, shall not constitute a defense to the enforcement by the Employer
of
any of the covenants contained herein. Furthermore, the Parties agree that
any
breach of this Agreement by Employee may result in irreparable injury to the
Employer, and therefore, in addition to all other remedies provided by law,
Employee agrees and consents that the Employer shall be entitled to an
injunction to prevent a breach or contemplated breach of any of the covenants
of
the Employee contained herein.
C.
This
Agreement and any and all disputes, claims and/or questions regarding the
hiring, employment and termination of employment of Employee shall be governed
by the laws of the State of California. The Employer and Employee hereby consent
to the jurisdiction of any state or federal court located within the County
of
San Diego, State of California and irrevocably agree that all actions or
proceedings arising out of or relating to this Agreement shall be litigated
in
such courts. The Parties hereto each accepts for himself or itself generally
and
unconditionally, the exclusive jurisdiction of the aforesaid courts and waives
any defense of forum non conveniens, and irrevocably agrees to be bound by
any
judgment rendered thereby in connection with this Agreement. Employer and
Employee agree to be bound and accept service served by certified mail, return
receipt requested, mailed to the addresses indicated herein or to the last
known
address if different, such service being hereby acknowledged to be effective
and
binding service in every respect. Nothing herein shall affect the right to
serve
process in any other manner permitted by law or shall limit the right of any
Party hereto to bring proceedings against any other Party hereto in the court
of
any other jurisdiction. In the event of a conflict between this Agreement and
the Agreement and Plan of Merger and Reorganization, as to employment issues,
this Agreement shall control.
D.
Neither
this Agreement nor any of the rights of or benefits to Employee arising
hereunder (including, without limitation, those payments and rights due under
Schedule A), shall be assignable, transferable or encumbered in any way by
Employee.
Article
XI. Entire Agreement
This
Agreement supersedes and cancels all prior Agreements between the Parties and
represents the entire Agreement between the Parties or between Employer and
Employee. No modification of the terms of this Agreement shall be effective
unless such modification shall be in writing and shall be signed by both
Employer and Employee.
IN
WITNESS WHEREOF, the Parties have hereunto set their hands and seals the day
and
year first aforesaid.
Command
Security Corporation
By:___________________________
Barry
I. Regenstein
President
The
undersigned acknowledges that he has read and understands the provisions of
the
Agreement and agrees to be bound thereby.
By:___________________________
Marc
W. Brown
Witnessed
By:_____________________
SCHEDULE
A
|
I.
|
Base
Salary--$2,884.62 weekly, or $150,000 annualized.
|
|
II.
|
Auto
allowance--$900.00 per month plus reimbursement for fuel
.
|
III.
Special
Services-- For developing new business for Employer, by bringing to Employer
the
new accounts set forth on Schedule A-1; Employee shall be entitled to receive
additional compensation as set forth herein below. The additional compensation
shall be based upon the net amounts (“Net Receipts”) received by Employer from
each of the Scheduled Accounts. For purposes of this Schedule A, net receipts
are defined as: Gross amount, received by Employer reduced by sales and other
taxes billed to the client, refunds and pass-throughs.
Each
twelve (12) months of service by Employer to a Scheduled Account shall begin on
the start date of service by Employer to that scheduled account through the
date
next preceding the anniversary of the Start Date.
|
MONTHS
|
|
AMOUNT
OF ADDITIONAL COMPENSATION
|
|
|
|
|
|
1
-
12
|
|
2%
of Net Receipts
|
|
13
- 24
|
|
1%
|
|
25
- 36
|
|
1/2
of 1%
|
|
37
- 48
|
|
1%
|
|
49
- 60
|
|
1%
|
Additionally,
after each of the first three twelve months of service the Employee shall
receive, at Employee’s option, either (i) restricted shares of the common stock
of the Employer ("Restricted Stock") or (ii) options to purchase common stock
of
the Employer ("Stock Options"), in each case in an amount of two and three
quarter (2.75%) percent of the Net Receipts from the Scheduled Accounts.
Employee must notify Employer in writing within 30 days after the last day
of
each applicable twelve month period whether he has chosen Restricted Stock
or
Stock Options, or Employer shall have the sole discretion to determine whether
to issue to Employee Restricted Stock or Stock Options. In the event Employee
receives Restricted Stock, any and all subsequent sales of such Restricted
Stock
will be subject to compliance with all applicable securities laws as then in
effect including, without limitation, Rule 144. In the event that Employer
issues a new registration statement with regard to restricted shares of the
corporation, Employer shall include Employee’s restricted shares in any such new
registration. In the event Employee seeks to receive Stock Options, Employee
shall execute an option agreement in a form satisfactory to Employer's counsel,
which shall provide,
inter
alia,
the date
the option must be exercised which shall in no event be later than five (5)
years after date of grant, the purchase price per share which shall be equal
to
the fair market value of the Company’s common stock at the date of grant, and
valued at a call price as calculated under the Black-Scholes formula consistent
with past Company practice.
Any
and
all compensation for Special Services shall be limited as follows: (i) Net
Receipts from the Scheduled Accounts shall not exceed a total of six million
($6,000,000) per year for purposes of calculating payment due Employee for
Special Services; and (ii) payments due for Special Services shall accrue and
shall be due and owing sixty days after each twelfth consecutive month ("Twelfth
Month") for which Employer has received payment from the Scheduled Account(s).
If Employee is terminated without cause at any time the provisions of Section
V.
(A). of the Employment Agreement shall govern.
|
IV.
|
Participation
in Employer's Executive Incentive Program
.
|
|
V.
|
Vacation,
Health and Similar Benefits--As provided from time to time to Employer’s
Corporate Vice Presidents.
|
Benefits
described in Sections "IV" and "V" above may be changed from time to time by
Employer without prior notice or liability, so long as Benefits are changed
for
the entire Class of Employee where Employee is employed.
NEITHER
THIS OPTION (THE "
OPTION
")
NOR THE SHARES OF COMMON STOCK OR OTHER SECURITIES RECEIVABLE UPON THE EXERCISE
HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"
ACT
")
OR ANY APPLICABLE STATE SECURITIES LAWS. THIS OPTION AND THE SHARES OF COMMON
STOCK OR OTHER SECURITIES RECEIVABLE UPON THE EXERCISE HEREOF MAY NOT BE
OFFERED, SOLD, ASSIGNED, TRANSFERRED OR HYPOTHECATED, EXCEPT IN COMPLIANCE
WITH
THE ACT, THE RULES AND REGULATIONS THEREUNDER AND APPLICABLE STATE
LAWS.
|
Registered
Holder:
|
MARC
W. BROWN
|
|
|
|
|
Certificate
Number:
|
A5
|
|
|
|
|
Date
of Issuance:
|
APRIL
12, 2007
|
COMMAND
SECURITY CORPORATION
COMMON
STOCK OPTION
This
certifies that the Registered Holder is entitled to purchase from Command
Security Corporation, a New York corporation (the "
Company
"),
subject to the occurrence of certain specified time vesting criteria, at any
time commencing from the Date of Issuance and ending at 11:59 p.m., New York
City time, on the tenth (10
th
)
anniversary date of the Date of Issuance hereof, at the purchase price per
share
(the "
Exercise
Price
")
of
$3.00, an aggregate of fifty thousand (50,000) shares (the “
Shares
”)
of
Common Stock, $.0001 par value, of the Company; provided that this Option shall
be exercisable only with respect to “Earned Options” as set forth in the
schedule contained in Section 2 of this Option. The number of Shares purchasable
upon exercise of this Option and the Exercise Price shall be subject to
adjustment from time to time as set forth herein.
This
Option may be exercised in whole or in part by presentation of this Option
with
the Exercise Agreement, a form of which is attached hereto as Exhibit I (the
"
Exercise
Agreement
"),
duly
executed and simultaneous payment of the Exercise Price (subject to any
adjustment) at the principal office of the Company. Payment of such price shall
be made at the option of the Holder hereof in cash or by certified check or
bank
cashier's check.
This
Option is subject to the terms and conditions of the Company's 2005 Stock
Incentive Plan (the "
Plan
"),
the
terms of which are hereby incorporated herein by reference. Terms used herein
and not otherwise defined shall have the meanings as set forth in the Plan.
In
the event of any conflict between the terms of this Option and those contained
in the Plan, the terms of the Plan shall determine the outcome of such conflict
and shall prevail. This Option is a Non-Qualified Stock Option as determined
under the Plan.
This
Option is subject to the following provisions:
Section
1.
Certain
Definitions
.
When
used in this Option, the following terms, when capitalized, shall have the
meanings set forth below. Certain other terms are defined in the text of this
Option.
1.1.
"
Act
"
means
the Securities Act of 1933, as amended, and any successor law or statute
thereto.
1.2.
"
Common
Stock
"
means
the Company's Common Stock, par value $.0001 per share.
1.3.
"
Company
"
means
Command Security Corporation, a New York corporation, and any other corporation
or any other entity which shall succeed to or assume the obligations of the
Company.
1.4
“
Conversion
Shares
”
means
the Shares of Common Stock that have been purchased upon the exercise of this
Option.
1.5.
"
Date
of Issuance
"
is the
date set forth on the first page of this Option.
1.6.
"
Earned
Options
"
means
that portion of the Option Grant that has been earned as a result of the passage
of time as set forth in Section 2 hereto.
1.7.
"
Registered
Holder
”
or
"
Holder
"
means
the person whom this Option was originally issued.
1.8.
"
Option
Grant
"
means
the total number of Options granted to the Holder which are each convertible
into shares of Common Stock upon the attainment of specified vesting criteria
set forth herein.
Section
2.
Vesting
Criteria
.
2.1.
This
Option, and the Shares of Common Stock that may be purchased hereunder, shall
vest with respect to one-twelfth (1/12) of the aggregate number of Shares on
the
Date of Issuance and on the same date of each succeeding month (and the balance,
if any of the Shares that is subject to this Option may be purchased in the
12
th
month
from the Date of Issuance), so long as the Holder is still an employee of the
Company on such date. The portion of this Option that shall have so vested
and
become exercisable is referred to herein as the “
Earned
Option
.”
2.2.
Notwithstanding
the foregoing, upon a Change of Control of the Company occurring during the
Holder’s employment by the Company or during a period of 30 days thereafter,
this entire Option shall vest and become exercisable. For purposes of this
Agreement, a "
Change
in Control
"
shall
mean:
(i)
The
acquisition (other than by or from the Company), at any time after the date
hereof, by any person, entity or "group", within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (the
"
Exchange
Act
"),
of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of 20% or more of either the then outstanding shares of common
stock or the combined voting power of the Company's then outstanding voting
securities entitled to vote generally in the election of directors (together
with such common stock, "
Voting
Securities
");
or
(ii)
If
the
six members who comprise the Company’s Board of Directors on the Issuance Date
cease for any reason to comprise a majority of the members of the Board;
or
(iii)
Approval
by the shareholders of the Company of (x) a reorganization, merger or
consolidation with respect to which persons who were the shareholders of the
Company immediately prior to such reorganization, merger or consolidation do
not, immediately thereafter, own more than 50% of the combined voting power
entitled to vote generally in the election of directors of the reorganized,
merged or consolidated company's then outstanding voting securities, (y) a
liquidation or dissolution of the Company or (z) the sale of all or
substantially all of the assets of the Company, unless the approved
reorganization, merger, consolidation, liquidation, dissolution or sale is
subsequently abandoned.
Section
3.
Adjustments
.
In
order
to prevent dilution of the rights granted under this Option, the Exercise Price
and the number of shares of other securities to be received upon the exercise
hereof shall be adjusted as set forth in the Plan.
Section
4.
Exercise
of Option
.
Upon
any partial exercise of this Option, there shall be countersigned and issued
to
the Holder hereof a new Option in respect of the Shares as to which this Option
shall not have been exercised. This Option may be exchanged at the principal
office of the Company by surrender of this Option properly endorsed either
separately or in combination with one or more other Options for one or more
new
Options of the same aggregate number of shares of Common Stock evidenced by
the
Option or Options exchanged. No fractional Shares will be issued upon the
exercise of rights to purchase hereunder, but the Company shall pay the cash
value of any fraction of a Share upon the exercise of this Option.
Section
5.
Registered
Holder Termination
.
In the
event of the voluntary or involuntary termination (including by reason of death)
of employment of the original Registered Holder of the Option for any reason
whatsoever, all Options which have not vested pursuant to Sections 2.1 or 2.2
hereof shall expire and become void and shall no longer be exercisable, and
all
Shares of Common Stock received upon the exercise of this Option that are held
by the Holder on the date immediately preceding such Termination shall be
subject to the repurchase provisions of Section 11 hereof.
Section
6.
No
Voting Rights
.
This
Option will not entitle the Holder hereof to any voting rights or other rights
as a stockholder of the Company.
Section
7.
Section
83(b) Election
.
If as a
result of exercising all or any part of this Option, the Holder receives shares
that are subject to a "substantial risk of forfeiture" and are not
"transferable" as those terms are defined for purposes of Section 83(a) of
the
Internal Revenue Code, then such Holder may elect under Section 83(b) of the
Internal Revenue Code to include in the Holder's gross income, for the Holder's
taxable year in which the shares are transferred to the Holder, the excess
of
the fair market value of such shares at the time of transfer (determined without
regard to any restriction other than one that by its terms will never lapse),
over the amount paid for the shares. If the Holder makes the Section 83(b)
election described above, the Holder shall (i) make such election in a manner
that is satisfactory to the Committee, (ii) provide the Company with a copy
of
such election, (iii) agree to promptly notify the Company if any Internal
Revenue Service or state tax agent, on audit or otherwise, questions the
validity or correctness of such election or of the amount of income reportable
on account of such election, and (iv) agree to such tax withholding as the
Company may reasonably require in its sole and absolute discretion.
Section
8.
No
Right to Employment
.
This
Option shall not confer upon the Holder any right to
employment.
Section
9.
Compliance
with the Act; Transferability
.
9.1.
Compliance
with the Act
.
The
Holder acknowledges that neither this Option nor the shares of Common Stock
issuable upon exercise of this Option have been registered under the Act or
the
securities laws of any state and agrees that this Option and all shares
purchased upon exercise hereof shall be disposed of only in accordance with
the
Act and the rules and regulations of the Securities and Exchange Commission
promulgated thereunder and applicable state securities laws. Except as provided
herein, the Holder further agrees not to offer, sell, transfer or otherwise
dispose of this Option or any shares issuable upon exercise of this Option
to
any other person unless a registration statement covering the sale, transfer
or
other disposition shall then be effective under the Act and except in compliance
with any applicable state securities laws, or there shall have been delivered
to
the Company an opinion of counsel reasonably acceptable to the Company to the
effect that such offer, sale, transfer or other disposition may be effected
without compliance with the registration and prospectus delivery requirements
of
the Act and any applicable state securities laws. Each certificate evidencing
shares purchased upon exercise of this Option shall bear a legend to the
foregoing effect, and the Holder and any other Person to whom a certificate
for
shares or a new warrant is to be delivered shall be required, at or before
receipt of such certificate or warrant, to execute and deliver to the Company
a
letter to the effect that it is acquiring the shares evidenced by such
certificate or such warrant for its own account and not with a view to, or
for
resale in connection with, any distribution thereof.
9.2.
Transferability
of Options
.
This
Option shall be transferable only on the books of the Company maintained at
the
principal office of the Company. The transferability of the Option is limited
to
the Holder's estate or family trust for which the Holder is a
trustee.
Section
10.
Notice
of Certain Events
.
10.
1.
Adjustment
of Exercise Price
.
Immediately upon any adjustment of the Exercise Price, the Company will give
written notice thereof to the Holder.
10.2.
Dividend
Distributions, etc
.
The
Company will give written notice to the Holder at least ten calendar days prior
to the date on which the Company closes its books or takes a record (i) with
respect to any dividend or distribution upon the Common Stock, and (ii) with
respect to any pro rata subscription offer to holders of Common Stock (although
the Company shall have no obligation to cause to occur any of the events set
forth in the foregoing subparagraphs (i) or (ii)).
10.3.
Other
Events
.
The
Company will give written notice to the Holder at least ten (10) calendar days
prior to the date on which any dissolution, liquidation, capital reorganization,
reclassification, consolidation or merger (in which the Company is not the
surviving corporation) or sale of all or substantially all of the Company's
assets will take place.
Section
11.
Company
Repurchase Rights
.
(a)
In
the
event a Holder ceases to be employed by the Company or its subsidiaries (the
"
Termination
"),
the
Earned Option granted to such Holder and the Shares of Common Stock (or other
securities received upon exercise of this Option received upon the exercise
of
Earned Options (whether held by the Holder or otherwise) shall be subject to
repurchase by the Company on or after the Holder's Termination date pursuant
to
the terms and conditions set forth in this Section 11 (the "
Repurchase
Option
").
The
Company shall have the right, but not the obligation, to purchase all, but
not
less than all, the Earned Option granted or issued to the Holder for the Option
Repurchase Price (as defined below) multiplied by the number of Shares of Common
Stock represented by the Option(s) to be repurchased. The Company shall
concurrently therewith also have the right, but not the obligation, to purchase
all, but not less than all, of the Conversion Shares for the Stock Repurchase
Price (as defined below) multiplied by the number of Conversion Shares to be
repurchased.
(b)
When
and
as permitted under paragraph (a) above, the Company may elect to purchase all
of
the Earned Options and Conversion Shares by delivering written notice (the
"
Repurchase
Notice
")
to the
Holder. The Repurchase Notice will set forth the number of Options and the
Conversion Shares to be acquired from such Holder, the aggregate consideration
to be paid for such securities and the time and place for the closing of the
transaction.
(c)
The
closing of the purchase of the Options and Conversion Shares pursuant to the
Repurchase Option shall take place on the date designated by the Company in
the
Repurchase Notice, which date shall not be more than forty-five (45) days nor
less than two (2) business days after the delivery of the Repurchase Notice.
The
Company will pay for the Earned Option and Conversion Shares to be purchased
pursuant to the Repurchase Option by delivery of (i) a check or wire transfer
of
funds, (ii) a subordinated promissory note payable prior to the six (6) month
anniversary of the closing of such purchase and bearing interest (payable
quarterly) at a rate per annum equal to the prime rate of interest as announced
by Citibank, N.A. plus 1% or (iii) both (i) and (ii), in the aggregate amount
of
the Option Repurchase Price and/or Stock Repurchase Price for such Earned Option
or Conversion Shares. Any promissory note issued by the Company pursuant to
this
Section 11(c) shall be subject to any restrictive covenants under any credit
agreements to which the Company is subject at the time of such purchase. The
Company will be entitled to receive customary representations and warranties
as
to title from the sellers regarding such sale and to require all sellers'
signatures be guaranteed. The Company may elect to assign its right to purchase
hereunder to the shareholders of the Company (which right to purchase shall
be
distributed
pro
rata
to all
shareholders (other than the Holder), based upon the number of votes held by
such shareholders). The other shareholders (other than the Holder) shall have
the same rights and shall be subject to the same obligations as the Company
to
purchase the Earned Option or the Conversion Shares pursuant to the Repurchase
Notice.
(d)
The
Option Repurchase Price and the Stock Repurchase Price shall be equal to the
fair market value of the Earned Options or Conversion Shares, as the case may
be, as determined by the Company’s Board of Directors in its sole and absolute
discretion.
Section
12.
Supplements
and Amendments
.
The
Board of Directors of Company may from time to time supplement or amend this
Option in order to cure any ambiguity or to correct or supplement any provision
contained herein which may be defective or inconsistent with the Company's
policies or operations.
Section
13.
Notices
.
Except
as otherwise expressly provided herein, all notices referred to in this Option
will be in writing and will be delivered personally, mailed by registered or
certified first class mail, return receipt requested, postage prepaid or
transmitted by telegram, telecopy or telex, and will be deemed to have been
given when so delivered, mailed or transmitted (a) to the Company, at its
principal executive offices and (b) to the Holder of this Option, at such
Holder's address as it appears in the records of the Company.
Section
14.
Other
.
The
Holder hereof may be treated by the Company and all other persons dealing with
this Option as the absolute owner hereof for any purpose and as the person
entitled to exercise the rights represented hereby, or to the transfer hereof
on
the books of the Company any notice to the contrary notwithstanding, and until
such transfer on such books, the Company may treat the Holder hereof as the
owner for all purposes.
Section
15.
Law
Governing
.
This
Agreement shall be construed in accordance with and governed by the internal
laws of the State of New York.
Section
16.
Interpretation
.
The
Holder accepts this Option subject to all the terms and provisions of the Plan
and this Agreement. The undersigned Holder hereby accepts as binding, conclusive
and final all decisions or interpretations of the Company’s Board of Directors
upon any questions arising under the Plan and this Agreement.
*
* *
*
IN
WITNESS WHEREOF, the Company has caused this Option to be signed and attested
by
its duly authorized officers under its corporate seal and to be dated the Date
of Issuance hereof.
|
|
COMMAND
SECURITY CORPORATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
|
|
|
|
|
|
|
|
|
OPTIONEE:
|
|
|
|
|
|
|
|
|
|
Marc
W. Brown
|
EXHIBIT
I
_____________________________________
COMMON
STOCK OPTION
EXERCISE
AGREEMENT
|
TO:
_____________________________
|
DATED:
_______________
|
The
undersigned, pursuant to the provisions set forth in the attached Option
(Certificate No. __________), hereby agrees to subscribe for the purchase of
________ shares of the Common Stock covered by such Option and makes payment
herewith in full therefor at the price per share provided by such
Option.
Witness:
_____________________________
Name:
_______________________________
Address:
_____________________________
NEWS
RELEASE
|
Company
Contact:
|
|
|
Terri
MacInnis, Director of Investor Relations
Bibicoff
& Associates, Inc.
Phone:
(818) 379-8500
|
|
|
Email:
terrimac@bibicoff.com
|
|
|
|
|
|
|
|
COMMAND
SECURITY COMPLETES MERGER WITH BROWN SECURITY INDUSTRIES, INC., INCLUDING ITS
SUBSIDIARIES, STRATEGIC SECURITY SERVICES, INC. AND RODGERS POLICE PATROL
-
-
LAGRANGEVILLE,
N.Y., APRIL 18, 2007 -- Command Security Corporation (OTCBB:CMMD) announced
today that it has completed its acquisition of California-based Brown Security
Services, Inc., including its wholly-owned operating subsidiaries, Strategic
Security Services, Inc. and Rodgers Police Patrol, Inc. The total purchase
price
for these companies was $3.0 million, plus an amount equal to their estimated
consolidated tangible net worth on the closing date of $400,000, subject
to
adjustment. The purchase price was comprised of approximately $1.6 million
in
cash and 614,286 shares of Command’s common stock, based on the average closing
price of Command’s common stock on the OTC Bulletin Board for the five
consecutive trading days immediately preceding the date that the parties
first
entered into the definitive transaction documents.
Also,
in conjunction with this transaction, the Financing Agreement between Command
and The CIT Group/Business Credit, Inc. was amended to increase the aggregate
line of credit under such agreement from $12.0 to $16.0 million and to provide
for a $2.4 million acquisition advance to fund the cash requirements of this
transaction. This amendment also provides for an extension of the maturity
date
of the Financing Agreement to December 12, 2008, reductions in interest rates,
fees and availability reserves and an increase in the letter of credit sub-line
to an aggregate amount of up to $3.0 million.
Commenting
on the transactions, Barry I. Regenstein, President of Command Security,
stated,
"This acquisition broadens Command’s national network of office locations and
expands our geographic reach. Brown’s clientele fits our model perfectly and we
expect this acquisition to be accretive to our results in fiscal 2008.
Additionally, we are pleased by the favorable responses received from our
new
and existing customers and the financial support provided by The CIT
Group/Business Credit, Inc. These transactions further enhance our position
as a
nationally recognized provider of security services in this growing market
within the United States.”
San
Diego-based Strategic Security Services, Inc. and Rodgers Police Patrol,
Inc.
have been providing high-quality security services since 1940 as a family-owned
operation. With security officers and a management team focused on the
protection of its client's employees, visitors and assets, Brown currently
serves the California market principally from its two regional offices located
in San Diego and in Fremont with a total of approximately 300 employees,.
About
Command:
Command
Security Corporation (www.commandsecurity.com) provides aviation and security
officer services through company-owned offices in California, Connecticut,
Delaware, Florida, Illinois, Maine, Maryland, Massachusetts, Nevada, New
Jersey,
New York, Oregon, Pennsylvania and Washington
This
announcement contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, Section 21E of the Securities Exchange
Act of
1934, and within the meaning of the Private Securities Litigation Reform
Act of
1995. Actual results could differ materially from those projected in the
forward-looking statements as a result of various factors including the ability
of the Company to successfully commercialize its new technologies as well
as
risk factors set forth under "Risk Factors" in the Company's annual report
on
Form 10-K for the year ended March 31, 2006, and such other risks detailed
from
time to time in the Company's reports filed with the Securities and Exchange
Commission. Command undertakes no obligation to publicly release the result
of
any revisions to these forward-looking statements, which may be made to reflect
events or circumstances after the date hereof or to reflect the occurrence
of
unanticipated events. For more information concerning Command, please refer
to
its website at
www.commandsecurity.com
and to
the Securities and Exchange Commission’s website
at
www.sec.gov/edgar.shtml
.
#
#
#
