THIRD AMENDMENT AND CONSENT TO AMENDED AND RESTATED FINANCING AGREEMENT
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”),
▇▇▇▇▇▇▇
POLICE PATROL, INC.,
a
California corporation (“▇▇▇▇▇▇▇”),
STRATEGIC
SECURITY SERVICES, INC.,
a
California corporation (“Strategic”,
and
collectively with ▇▇▇▇▇▇▇, the “New
Borrowers”)
(Command, ▇▇▇▇▇▇▇, 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, ▇▇▇▇▇ Security Industries, a California corporation (“BSI”)
and
▇▇▇▇▇▇▇ 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, ▇▇▇▇ ▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇
(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 ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ 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:
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(i)
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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;
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(ii)
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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;
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(iii)
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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;
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(iv)
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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
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(v)
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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
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(vi)
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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.
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(b) Command
hereby acknowledges and agrees that:
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(i)
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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;
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(ii)
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from
and after the Third Amendment Effective Date, Command shall be a
joint and
several obligor with New Borrowers with respect to the
Obligations;
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(iii)
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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
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(vi)
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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.
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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.
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(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 (1st)
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.
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(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.
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(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).
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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.
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(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 ▇▇▇▇▇▇▇ 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, ▇▇▇▇▇▇▇ 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, ▇▇▇▇▇▇▇ and
Strategic;
(vi) a
funds
flow chart for all consideration to be paid for or on account of the BSI
Acquisition; and
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(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.
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(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.
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(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.
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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 ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇) 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.
12
(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, ▇▇▇▇▇▇▇, 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.]
13
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:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title:
President
|
||
|
▇▇▇▇▇▇▇
POLICE PATROL, INC.,
a California corporation
|
||
| |
|
|
| By: | ||
|
Name:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title:
President
|
||
|
STRATEGIC SECURITY SERVICES,
INC.,
a California corporation
|
||
| |
|
|
| By: | ||
|
Name:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title:
President
|
||
[Acknowledgment
by CSI follows.]
14
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 ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ 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,
▇▇▇▇▇▇▇ 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:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title:
President
|
||
15
EXHIBIT
A
Liens
to be terminated or amended on or before the Third Amendment Effective
Date
|
DEBTOR
|
SECURED
PARTY
|
RECORD
NUMBER
|
JURISDICTION
|
|
▇▇▇▇▇▇▇
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
|
16
EXHIBIT
B
Permitted
Liens
|
DEBTOR
|
SECURED
PARTY
|
RECORD
NUMBER
|
JURISDICTION
|
|
▇▇▇▇▇▇▇
|
Lease
Corporation of America
|
023960789
|
SOS
California
|
17