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)
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New
York
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0-18684
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14-1626307
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(State
or other jurisdiction of
incorporation
or organization)
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(Commission
file number)
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(I.R.S.
employer
identification
no.)
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Lexington
Park
Lagrangeville,
New York
(Address
of principal executive offices)
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12540
(Zip
code)
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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
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Exhibit
No.
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Description
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10.1
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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.
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10.2
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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.
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10.3
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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.
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10.4
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Employment
Agreement between Command Security Corporation and Marc W. Brown
dated
April 12. 2007.
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10.5
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Stock
Option Agreement between Command Security Corporation and Marc
W. Brown
dated April 12. 2007.
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99.1
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Press
Release dated April 18, 2007 announcing the closing of the Stock
Purchase,
the Merger, and the Amendment.
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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
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COMMAND
SECURITY CORPORATION
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By:
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/s/
Barry Regenstein
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Name:
Barry Regenstein
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Title:
President and
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Chief Financial Officer
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