Document:

Unassociated Document

    COMMON
STOCK WARRANT AND CERTIFICATE

    

    

    NEITHER
THIS WARRANT NOR THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY
STATE SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY
BE OFFERED, SOLD, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A
REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT AND ANY
APPLICABLE STATE SECURITIES LAWS, OR (2) THE COMPANY RECEIVES AN OPINION OF
COUNSEL TO THE HOLDER OF SUCH SECURITIES, WHICH COUNSEL AND OPINION ARE
REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED,
SOLD, ASSIGNED OR TRANSFERRED IN THE MANNER CONTEMPLATED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR APPLICABLE STATE SECURITIES
LAWS.  THE TRANSFER OF THIS WARRANT IS RESTRICTED AS DESCRIBED
HEREIN.

    

     

    BRANDPARTNERS
GROUP, INC.

    Warrant
for the Purchase of Shares of Common Stock

    $0.01 par
value per share

     

    THIS
WARRANT EXPIRES ON May 12, 2011

     

    1,500,000  Warrants

     

    THIS
CERTIFIES that, for value received, Brand Capitalist LLC, with an address at 30
Rockefeller Center, Room 5600 New York, NY  10112(“BC” or “Holder”),
is entitled to subscribe for and purchase from Brand Partners Group, Inc.
(“BPTR” or the “Company”), a Delaware corporation, upon the terms and conditions
set forth herein, at any time or from time to time before 5:00 P.M. New York
time on May 12, 2011, (the “Exercise Period”), one million five hundred thousand
shares of Common Stock (the “Common Stock”), par value $0.01 per share, at
exercise price equal to $0.25 per share subject to adjustment as provided herein
(the “Exercise Price”).  As used herein the term “this Warrant” shall
mean and include this Warrant and any Warrant or Warrants hereafter issued as a
consequence of the exercise or transfer of this Warrant in whole or in
part.

    

    The
number of shares of Common Stock issuable upon exercise of this Warrant (the
“Warrant Shares”) and the Exercise Price may be adjusted from time to time as
hereinafter set forth.

     

    1.           (a)           This
Warrant may be exercised during the Exercise Period, as to the whole number of
Warrant Shares, by the surrender of this Warrant (with the election at the end
hereof duly executed) to the Company at 10 Main Street, Rochester,
NH  03839 Attn:  CFO, or at such other place as is
designated in writing by the Company.  Subject to Section 1(b) hereof,
such executed election must be accompanied by payment in an amount equal to the
Exercise Price multiplied by the number of Warrant Shares for which this Warrant
is being exercised.  Such payment may be made by certified or bank
cashier’s check payable to the order of the Company.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b)                      Payment
upon exercise of this Warrant may be made at the option of the Holder either in
(i) cash, wire transfer or by certified or official bank check payable to
the order of the Company equal to the applicable aggregate Purchase Price, (ii)
or  by a combination of any of the foregoing methods, for the number of
Common Stock specified in such form (as such exercise number shall be adjusted
to reflect any adjustment in the total number of shares of Common Stock issuable
to the holder per the terms of this Warrant) and the holder shall thereupon be
entitled to receive the number of duly authorized, validly issued, fully paid
and nonassessable shares of Common Stock determined as provided
herein.

     

    2.           (a)           Upon
each exercise of the Holder’s rights to purchase Warrant Shares, as of the close
of business on the date of such exercise, the Holder shall be deemed to be the
holder of record of the Warrant Shares issuable upon such exercise,
notwithstanding that the transfer books of the Company shall then be closed or
certificates representing such Warrant Shares shall not then have been actually
delivered to the Holder.  As soon as practicable after each such
exercise of this Warrant, the Company shall issue and deliver to the Holder a
certificate or certificates for the Warrant Shares issuable upon such exercise,
registered in the name of the Holder or its designee.  If this Warrant
should be exercised in part only, the Company shall, upon surrender of this
Warrant for cancellation, execute and deliver a new Warrant evidencing the right
of the Holder to purchase the balance of the Warrant Shares (or portions
thereof) subject to purchase hereunder.

     

    (b)           The
issuance of certificates for Warrant Shares upon exercise of this Warrant shall
be made without charge to Holder or the purchaser of any issuance tax in respect
thereof or other cost incurred by the Company in connection with such exercise
and the related issuance of Warrant Shares.

     

    (c)           The
Company shall not close its books against the transfer of this Warrant or of any
Warrant Shares issued or issuable upon the exercise of this Warrant in any
manner which interferes with the timely exercise of this Warrant.

     

    (d)           The
Company shall from time to time take all such action as may be necessary to
assure that the par value per share of the unissued Warrant Shares acquirable
upon exercise of this Warrant is at all times equal to or less than the Exercise
Price then in effect.

     

    (e)           The
Company shall assist and cooperate with any reasonable request by the Holder or
any purchaser which is required to make any governmental filings or obtain any
governmental approvals prior to or in connection with any exercise of this
Warrant.

     

    (f)           Notwithstanding
any other provision hereof, if an exercise of any portion of this Warrant is to
be made in connection with a public offering or sale of the Company (pursuant to
a merger, sale of stock or otherwise), such exercise may at the election of the
Holder be conditioned upon the consummation of such transaction, in which case
such exercise shall not be deemed to be effective until immediately prior to
consummation of such transaction.

     

    3.           (a)           Any
Warrants issued upon the transfer or exercise in part of this Warrant shall be
numbered and shall be registered in a Warrant Register as they are
issued.  The Company shall be entitled to treat the registered holder
of any Warrant on the Warrant Register as the owner in fact thereof for all
purposes and shall not be bound to recognize any equitable or other claim to or
interest in such Warrant on the part of any other person, and shall not be
liable for any registration or transfer of this Warrant which is registered or
to be registered in the name of a fiduciary or the nominee of a fiduciary unless
made with the actual knowledge that a fiduciary or nominee is committing a
breach of trust in requesting such registration or transfer, or with the
knowledge of such facts that its participation therein amounts to bad
faith.  This Warrant shall be transferable on the books of the Company
only upon delivery thereof duly endorsed by the Holder or by its duly authorized
attorney or representative, or accompanied by proper evidence of succession,
assignment or authority to transfer.  In all cases of transfer by an
attorney, executor, administrator, guardian or other legal representative, duly
authenticated evidence of his or its authority shall be
produced.  Upon any registration of transfer, the Company shall
deliver a new Warrant or Warrants to the person entitled
thereto.  This Warrant may be exchanged, at the option of the Holder
thereof, for another Warrant, or other Warrants of different denominations, of
like tenor and representing in the aggregate the right to purchase a like number
of Warrant Shares (or portions thereof), upon surrender to the Company or its
duly authorized agent.  Notwithstanding the foregoing, the Company
shall have no obligation to cause Warrants to be transferred on its books to any
person if, in the reasonable opinion of counsel to the Company, such transfer
does not comply with the provisions of the Act, and the rules and regulations
promulgated thereunder.

     

    
      
        
        

      

      
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    (b)           The
initial Holder acknowledges that it has been advised by the Company that neither
this Warrant nor the Warrant Shares have been registered under the Act, that
this Warrant is being or has been issued and the Warrant Shares may be issued on
the basis of the statutory exemption provided by Section 4(2) of the Act or
Regulation D promulgated thereunder, or both, relating to transactions by an
issuer not involving any public offering.  The initial Holder
acknowledges by the acceptance of this Warrant that (a) it has acquired this
Warrant for investment purposes only and not with a view to distribution in
violation of the Act; (b) by reason of its business or financial experience it
has the capacity to evaluate the merits and risks of an investment in the
Company; and (c) it is an accredited investor as that term is defined in
Regulation D promulgated under the Act.  The initial Holder agrees
that any Warrant Shares will be acquired for investment purposes only and not
with a view to distribution. The initial Holder acknowledges that it has been
informed by its advisors and professionals, or is otherwise familiar with, the
nature of the limitations imposed by the Act and the rules and regulations
thereunder on the transfer of securities.  In particular, the initial
Holder agrees that no sale, assignment or transfer of this Warrant or the
Warrant Shares issuable upon exercise hereof shall be valid or effective, and
the Company shall not be required to give any effect to any such sale,
assignment or transfer, unless (i) the sale, assignment or transfer of this
Warrant or such Warrant Shares is registered under the Act, it being understood
that neither this Warrant nor such Warrant Shares are currently registered for
sale, or (ii) this Warrant or such Warrant Shares are sold, assigned or
transferred in accordance with all the requirements and limitations of Rule 144
promulgated under the Act, it being understood that Rule 144 is not available at
the time of the original issuance of this Warrant for the sale of this Warrant
or such Warrant Shares and that there can be no assurance that Rule 144 sales
will be available at any subsequent time, or (iii) such sale, assignment, or
transfer is otherwise exempt from registration under the Act.

     

    
      
        
        

      

      
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    4.           (a)           The
Company shall at all times reserve and keep available out of its authorized and
unissued Common Stock, solely for the purpose of providing for the exercise of
the rights to purchase all Warrant Shares granted pursuant to this Warrant, such
number of shares of Common Stock as shall, from time to time, be sufficient
therefore.  The Company covenants that all Warrant Shares are validly
authorized and reserved for issuance and, if and when this Warrant is exercised
in whole or in part, and receipt by the Company of the full Exercise Price
therefore, the Warrant Shares will be duly and validly issued, fully paid,
nonassessable, without any personal liability attaching to the ownership
thereof, and will not be issued in violation of any preemptive or other rights
of stockholders.

     

    (b)           The
Company has all requisite corporate power and authority to enter into and
perform its obligations under this Warrant and to issue and deliver the Warrant
to the Holder.  The execution, delivery, and performance by the
Company of its obligations under this Warrant, including the issuance and
delivery of the Warrant to the Holder, have been duly authorized by all
necessary corporate action on the part of the Company.  This Warrant
has been duly executed and delivered by the Company and Holder and is a legal,
valid and binding obligation of the Company and is enforceable against the
Company in accordance with its terms.

     

    5.           (a)           In
case the Company shall at any time after the date this Warrant is first issued
(i) declare a dividend on the outstanding shares of Common Stock of the Company
payable in shares of its Common Stock, (ii) subdivide the outstanding shares of
Common Stock, or (iii) combine the outstanding shares of Common Stock into a
smaller number of shares the Exercise Price, and the number of Warrant Shares
issuable upon exercise of this Warrant, in effect at the time of the record date
for such dividend or of the effective date of such subdivision or combination,
shall be proportionately adjusted so that the Holder after such time shall be
entitled to receive the aggregate number and kind of shares for such
consideration which, if such Warrant had been exercised immediately prior to
such time at the then-current exercise price, such holder would have owned upon
such exercise and been entitled to receive by virtue of such dividend,
subdivision, or combination. Such adjustment shall be made successively whenever
any event listed above shall occur.

     

    (b)           Whenever
there shall be an adjustment as provided in this Section 5, the Company shall
promptly cause written notice thereof to be sent by certified mail, postage
prepaid, to the Holder, at its address as it shall appear in the Warrant
Register, which notice shall be accompanied by an officer’s certificate setting
forth the number of Warrant Shares purchasable upon the exercise of this Warrant
and the Exercise Price after such adjustment and setting forth a brief statement
of the facts requiring such adjustment and the computation thereof, which
officer’s certificate shall be conclusive evidence of the correctness of any
such adjustment absent manifest error.

     

    (c)           The
Company shall not be required to issue fractions of shares of Common Stock or
other capital stock of the Company upon the exercise of this
Warrant.  If any fraction of a share would be issuable on the exercise
of this Warrant (or specified portions thereof), the Company shall at its sole
discretion purchase such fraction for an amount in cash equal to the same
fraction of the Fair Market Value of such share of Common Stock on the date of
exercise of this Warrant or round the fractional share up to the next whole
number of shares.

     

    
      
        
        

      

      
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    6.           (a)           In
case of any consolidation or merger of the Company with or into another
corporation (other than a merger or consolidation in which the Company is the
surviving or continuing corporation or in which the shareholders of the Company
prior to such event hold more than 50% of the capital stock of the surviving or
continuing corporation), or in case of any sale, lease, or conveyance to another
corporation of the property and assets of any nature of the Company as an
entirety or substantially as an entirety, such successor, leasing or purchasing
corporation, as the case may be, shall (i) execute with the Holder an agreement
providing that the Holder shall have the right thereafter to receive upon
exercise of this Warrant solely the kind and amount of shares of stock and other
securities, property, cash or any combination thereof receivable upon such
consolidation, merger, sale, lease or conveyance by a holder of the number of
shares of Common Stock  for which this Warrant might have been
exercised immediately prior to such consolidation, merger, sale, lease or
conveyance, and (ii) make effective provisions in its certificate of
incorporation or otherwise, if necessary, to effect such
agreement.  Such agreement shall provide for adjustments which shall
be as nearly equivalent as practicable to the adjustments in Section
5.

     

    (b)           In
case of any reclassification or change of the shares of Common Stock issuable
upon exercise of this Warrant (other than a change in par value or from no par
value to a specified par value, or as a result of a subdivision or combination,
but including any change in the shares into two or more classes or series of
shares), or in case of any consolidation or merger of another corporation into
the Company in which the Company is the surviving or continuing corporation and
in which there is a reclassification or change (including a change to the right
to receive securities of another person, property, cash or any combination
thereof) of the shares of Common Stock (other than a change in par value, or
from no par value to a specified par value, or as a result of a subdivision or
combination, but including any change in the shares into two or more classes or
series of shares), the Holder shall have the right thereafter to receive upon
exercise of this Warrant solely the kind and amount of shares of stock and other
securities, property, cash or any combination thereof receivable upon such
reclassification, change, consolidation or merger by a holder of the number of
shares of Common Stock for which this Warrant might have been exercised
immediately prior to such reclassification, change, consolidation or
merger.  Thereafter, appropriate provision shall be made for
adjustments which shall be as nearly equivalent as practicable to the
adjustments in Section 5.

     

    (c)           The
above provisions of this Section 6 shall similarly apply to successive
reclassifications and changes of shares of Common Stock and to successive
consolidations, mergers, sales, leases or conveyances.

     

    7.           In
case at any time the Company shall propose to:

     

    (a)           pay
any dividend or make any distribution on shares of Common Stock in shares of
Common Stock or equivalents thereto or make any other distribution;
or

     

    (b)           effect
any reclassification or change of outstanding shares of Common Stock, or any
consolidation, merger, sale, lease or conveyance of property, described in
Section 6 hereof; or

     

    (c)           effect
any liquidation, dissolution or winding-up of the Company; or

     

    
      
        
        

      

      
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      (d)          
take any
other action which would cause an adjustment to the Exercise Price;
or

    

    

    (e)           provide
to its shareholders any information which is regularly provided to
shareholders,

    

    then, and
in any one or more of such cases (a) through (e), the Company shall give written
notice thereof, by certified mail, postage prepaid, to the Holder at the
Holder’s address as it shall appear in the Warrant Register, mailed at least
five (5) days prior to (i) the date as of which the holders of record of shares
of Securities to be entitled to receive any such dividend, distribution, rights,
warrants or other securities are to be determined, (ii) the date on which any
such reclassification, change of outstanding shares of Common Stock,
consolidation, merger, sale, lease, conveyance of property, liquidation,
dissolution or winding-up is expected to become effective, and the date as of
which it is expected that holders of record of shares of Common Stock shall be
entitled to exchange their shares for securities or other property, if any,
deliverable upon such reclassification, change of outstanding shares,
consolidation, merger, sale, lease, conveyance of property, liquidation,
dissolution or winding-up, or (iii) the date of such other action which would
require an adjustment to the Exercise Price.  In the case of
subsection (e) above, written notice to the Holder shall be given by regular
mail, without notice to counsel as set forth in Section 15 below.

    

    8.           The
issuance of any shares or other securities upon the exercise of this Warrant,
and the delivery of certificates or other instruments representing such shares
or other securities, shall be made without charge to the Holder for any tax
(other than taxes based on the net income of the Holder) or other charge in
respect of such issuance.  The Company shall not, however, be required
to pay any tax which may be payable in respect of any transfer involved in the
issue and delivery of any certificate in a name other than that of the Holder
and the Company shall not be required to issue or deliver any such certificate
unless and until the person or persons requesting the issue thereof shall have
paid to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.

    

    9.           The
Holder shall have piggy back registration rights.

    

    10.           Unless
registered pursuant to the provisions of Section 9, the Warrant Shares issued
upon exercise of this Warrant shall be subject to a stop transfer order and the
certificate or certificates evidencing such Warrant Shares shall bear the
following legend:

    

    “THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS AND
NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, ASSIGNED
OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT
THERETO IS EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR
(2) THE COMPANY RECEIVES AN OPINION OF COUNSEL TO THE HOLDER OF SUCH SECURITIES,
WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH
SECURITIES MAY BE OFFERED, SOLD, ASSIGNED OR TRANSFERRED IN THE MANNER
CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR
APPLICABLE STATE SECURITIES LAWS.”

     

    
      
        
        

      

      
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    11.           Upon
receipt of evidence satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant (and upon surrender of any Warrant if mutilated),
including an affidavit of the Holder that this Warrant has been lost, stolen,
destroyed or mutilated, together with an indemnity against any claim that may be
made against the Company on account of such lost, stolen, destroyed or mutilated
Warrant, and upon reimbursement of the Company’s reasonable incidental expenses,
the Company shall execute and deliver to the Holder a new Warrant of like date,
tenor, and denomination.

     

    12.           The
Holder of this Warrant shall not have solely on account of such status any
rights of a stockholder of the Company, either at law or in equity, or to any
notice of meetings of stockholders or of any other proceedings of the Company,
except as provided in this Warrant.

     

    13.           This
Warrant shall be construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed entirely within such State,
without regard to principles governing conflict of laws.

     

    14.           The
Company and the Holder irrevocably consents to the jurisdiction of the courts of
the State of New York and of any federal court located in New York in connection
with any action or proceeding arising out of or relating to this Warrant, any
document or instrument delivered pursuant to, in connection with or
simultaneously with this Warrant, or a breach of this Warrant or any such
document or instrument.  In any such action or proceeding, the Company
and the Holder waives personal service of any summons, complaint or other
process and agrees that service thereof may be made in accordance with Section
15 hereof.  Within thirty (30) days after such service, or such other
time as may be mutually agreed upon in writing by the attorneys for the parties
to such action or proceeding, the Company and the Holder shall appear to answer
such summons, complaint or other process.

     

    15.           Any
notice or other communication required or permitted to be given hereunder shall
be in writing and shall be mailed by certified mail, return receipt requested,
or by Federal Express, Express Mail or similar overnight delivery or courier
service or delivered (in person or by telecopy, telex or similar
telecommunications equipment) against receipt to the party to whom it is to be
given, (i) if to the Company, at 10 Main Street, Rochester, NH 03839, (ii) if
to the Holder, at
its address set forth on the first page hereof or (iii) in either case,
to such other address, facsimile number or person’s attention as the party shall
have furnished in writing in accordance with the provisions of this Section
15.  Notice to the estate of any party shall be sufficient if
addressed to the party as provided in this Section 15.  Any notice or
other communication given by certified mail shall be deemed given at the time of
certification thereof, except for a notice changing a party’s address which
shall be deemed given at the time of receipt thereof.  Any notice
given by other means permitted by this Section 15 shall be deemed given at the
time of receipt thereof.

     

    
      
        
        

      

      
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    16.           No
course of dealing and no delay or omission on the part of the Holder or the
Company in exercising any right or remedy shall operate as a waiver thereof or
otherwise prejudice the Holder’s or the Company’s rights, powers or
remedies.  No right, power or remedy conferred by this Warrant upon
the Holder or the Company shall be exclusive of any other right, power or remedy
referred to herein or now or hereafter available at law, in equity, by statute
or otherwise, and all such remedies may be exercised singly or
concurrently.

     

    17.           This
Warrant may be amended only by a written instrument executed by the Company and
the Holder hereof.  Any amendment shall be endorsed upon this Warrant,
and all future Holders shall be bound thereby.

     

    IN WITNESS WHEREOF, the Company has
delivered this Common Stock Warrant on the date set forth below.

     

    Dated as
of February  , 2009

    
      
        	 	 	 
	 	BRANDPARTNERS GROUP,
      INC.	 
	 	 	 	 
	
                 

              	
                By: 

              	/s/ James F.
Brooks	 
	 	 	JAMES F. BROOKS, President and
      Chief Executive Officer	 
	 	 	 	 
	 	 	 	 

      

    

    

    Agreed
to:

    

    
      	 	 
	
              Holder:
      

            	
              /s/
      Markus Deutsch

            
	 	Markus
      Deutsch, Partner 

              Brand
      Capitalist, LLC

            

    

                 

    
      
        
        

      

      
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    FORM
OF ASSIGNMENT

     

    (To be
executed by the registered holder if such holder desires to transfer the
attached Warrant.)

     

    FOR VALUE
RECEIVED, _____________________ hereby sells, assigns, and transfers unto
_________________ a Warrant to purchase ___________ shares of Common Stock,
$0.01 par value per share, of BrandPartners Group, Inc. (the “Company”),
together with all right, title and interest therein, and does hereby irrevocably
constitute and appoint ____________ ___________________ attorney to transfer
such Warrant on the books of the Company, with full power of
substitution.

    Dated:
_________________

    
      
        	 	 
	 	
                Signature____________________

              
	 	 
      
	 	
                (Signature
      Guarantee)

              

      

    

     

    

    NOTICE

    

    The
signature on the foregoing Assignment must correspond to the name as written
upon the face of this Warrant in every particular, without alteration or
enlargement or any change whatsoever.

    

    
      
        
        

      

      
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    To:          BrandPartners
Group, Inc.

    10 Main Street

    Rochester, NH 03839

    

    FORM
OF ELECTION TO EXERCISE

    

    The
undersigned, pursuant to the provisions set forth in the attached Warrant
(No.____), hereby irrevocably elects to purchase (check applicable
box):

     

    ___           ________
shares of the Common Stock covered by such Warrant; or

    ___           the
maximum number of shares of Common Stock covered by such Warrant pursuant to the
exercise procedure set forth in Section 1.

     

    The
undersigned herewith makes payment of the full purchase price for such shares at
the price per share provided for in such Warrant, which is
$___________.  Such payment takes the form of (check applicable box or
boxes):

     

    ___           $__________
in lawful money of the United States.

     

    The
undersigned requests that the certificates for such shares be issued in the name
of, and delivered to _____________________________________________________ whose
address is ________________________________________________ .

     

    The
undersigned represents and warrants that all offers and sales by the undersigned
of the securities issuable upon exercise of the within Warrant shall be made
pursuant to registration of the Common Stock under the Securities Act of 1933,
as amended (the "Securities Act"), or pursuant to an exemption from registration
under the Securities Act.

     

    
      	 	 
	
              Dated:___________________

            	
               

              ______________________________________________

              (Signature
      must conform to name of holder as specified on the face of the
      Warrant)

              
                ______________________________________________

                
                  ______________________________________________

                

              

              (Address)

            

    

     

    

    
      
        
        

      

      
        Page 10
of 10WELLS
FARGO BUSINESS CREDIT

    CREDIT
AND SECURITY AGREEMENT

    

    THIS CREDIT AND SECURITY
AGREEMENT (the “Agreement”) is dated February 12, 2009, and is entered
into among Command Security
Corporation, a New York corporation (“CSC”), Command Security Services,
Inc., a New York corporation (“CSS”), Strategic Security Services,
Inc., a California corporation (“SSS”), Rodgers Police Patrol, Inc., a
California corporation (“RPP”; RPP, CSC, CSS and SSS, individually and
collectively, jointly and severally, are referred to herein as “Borrower”), and
Wells Fargo Bank, National
Association (as more fully defined in Exhibit A, “Wells Fargo”), acting
through its Wells Fargo Business Credit operating
division.

    

    
      RECITALS

    

     

    Borrower
has asked Wells Fargo to provide it with a $20,000,000 revolving line of credit
(the “Line of Credit”) for working capital purposes (including the repayment of
certain of Borrower’s existing indebtedness) and to facilitate the issuance of
letters of credit. Wells Fargo is agreeable
to meeting Borrower’s request, provided that Borrower agrees to the terms and
conditions of this Agreement.

    

    For
purposes of this Agreement, capitalized terms not otherwise defined in the
Agreement shall have the meaning given them in Exhibit A.

     

    
      	
              1.

            	
              AMOUNT
      AND TERMS OF THE LINE OF CREDIT

            

    

     

    
      	
              1.1

            	
              Line
      of Credit; Limitations on Borrowings; Termination Date; Use of
      Proceeds.

            

    

     

    
      	
              (a)

            	
              Line of Credit and
      Limitations on Borrowing.  Wells Fargo shall make
      Advances to Borrower under the Line of Credit that, together with the L/C
      Amount, shall not at any time exceed in the aggregate the lesser of (i)
      $20,000,000 (the “Maximum Line Amount”), or (ii) the Borrowing Base
      limitations described in Section 1.2.  Within these limits,
      Borrower may periodically borrow, prepay in whole or in part, and
      re-borrow.  Wells Fargo has no obligation
      to make an Advance during a Default Period or at any time Wells Fargo
      reasonably believes that the making of an Advance would result in an Event
      of Default.

            

    

     

    
      	
              (b)

            	
              Maturity and
      Termination Dates.  Lead Borrower may request Advances
      from the date that the conditions set forth in Section 3 are satisfied
      until the earlier of: (i) February 12, 2012 (the “Maturity Date”), (ii)
      the date Lead Borrower terminates the Line of Credit, or (iii) the date
      Wells Fargo terminates the Line of Credit following an Event of Default
      (The earliest of these dates is the “Termination
  Date”).

            

    

     

    
      	
              (c)

            	
              Use of Line of Credit
      Proceeds.  Borrower shall use the proceeds of each
      Advance and each Letter of Credit to refinance certain existing
      indebtedness and for ongoing working capital
  purposes.

            

    

     

    
      	
              (d)

            	
              Revolving
      Note.  Borrower’s obligation to repay Advances,
      regardless of how initiated under Section 1.3, shall be evidenced by a
      revolving promissory note (as renewed, amended or replaced from time to
      time, the “Revolving Note”).

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

      
        	
                1.2

              	
                Borrowing Base; Mandatory
      Prepayment.

              

      

      

      
        	
                (a)

              	
                Borrowing
      Base.  The borrowing base (the “Borrowing Base”) is an
      amount equal to:

              

      

       

      
        (i)            
85% or
such lesser percentage of Eligible Billed Accounts as Wells Fargo in its
reasonable commercial judgment may deem appropriate, including, without
limitation, in the event Dilution on the date of determination is in excess of
four percent (4.0%), plus

      

       

      
        (ii)            75% or
such lesser percentage of Eligible Unbilled Accounts as Wells Fargo in its
reasonable commercial judgment may deem appropriate, including, without
limitation, in the event Dilution on the date of determination is in excess of
four percent (4.0%),  less

      

       

      
        (iii)           the
Borrowing Base Reserve, less

      

       

      
        (iv)          the
outstanding amount of any Indebtedness of Borrower that is not otherwise
described in this Section 1 and that is then due and owing to Wells Fargo,
including Indebtedness that Wells Fargo in its sole discretion finds on the date
of determination to be equal to Wells Fargo’s net credit exposure with respect
to any swap, derivative, foreign exchange, hedge, deposit, treasury management
or similar transaction or arrangement extended to Borrower by Wells Fargo, and
any Indebtedness owed by Borrower to Wells Fargo Merchant Services, L.L.C., but
excluding Indebtedness incurred by Borrower under any credit card arrangements
between Borrower and Wells Fargo or any Affiliates.

      

       

      
        	
                 
      

              	
                Notwithstanding
      the foregoing, at no time shall (A) the outstanding balances of all
      Eligible Foreign Accounts included in the Borrowing Base exceed
      $3,500,000, or (B) the outstanding Advances supported by Eligible Foreign
      Accounts exceed $2,975,000.

              

      

       

      
        	
                (b)

              	
                Mandatory Prepayment;
      Overadvances.  If unreimbursed Advances evidenced by the
      Revolving Note plus the L/C Amount exceed the Borrowing Base or the
      Maximum Line Amount at any time, then Borrower shall immediately prepay
      the Revolving Note in an amount sufficient to eliminate the excess, and if
      payment in full of the Revolving Note is insufficient to eliminate this
      excess and the L/C Amount continues to exceed the Borrowing Base, then
      Borrower shall deliver cash to Wells Fargo in an amount equal to the
      remaining excess for deposit to the Special Account, unless in each case,
      Wells Fargo has delivered to Borrower an Authenticated Record consenting
      to the Overadvance prior to its
      occurrence, in which event the Overadvance shall be temporarily permitted
      on such terms and conditions as Wells Fargo in its sole discretion may
      deem appropriate, including the payment of additional fees or interest, or
      both.

              

      

      

      
        	
                1.3

              	
                Procedures
      for Line of Credit Advances.

              

      

      

      
        	
                (a)

              	
                Advances to Operating
      Account.  Advances shall be credited to Lead Borrower’s
      demand deposit account maintained with Wells Fargo (the “Operating
      Account”), unless the parties agree in a Record Authenticated by both of
      them to disburse to another
account.

              

      

      

      
        (i)           Advances upon Borrower’s
Request.  Advances may be funded upon Lead Borrower’s
request.  No request will be deemed received until Wells Fargo
acknowledges receipt, and Lead Borrower, if requested by Wells Fargo, confirms
the request in an Authenticated Record.  Borrower shall repay all
Advances to Borrower, even if the Person requesting the Advance on behalf of
Borrower lacked authorization.

      

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

      

      (A)           Base Rate
Advances.  If Borrower wants a Base Rate Advance, Lead Borrower
shall make the request no later than 11:59 a.m. Eastern Time on the Business Day
on which it wants the Base Rate Advance to be funded, which request shall
specify the principal Advance amount being requested.

      

      (B)           LIBOR
Advances.  If Borrower wants a LIBOR Advance, Lead Borrower
shall make the request no later than 11:59 a.m. Eastern Time on the Business Day
on which Borrower wants the LIBOR Advance to be funded, which request shall
specify both the principal Advance amount and Interest Period being
requested.  No more than 3 separate LIBOR Advance Interest Periods may
be outstanding at any time.  Each LIBOR Advance shall be in multiples
of $500,000 and in the minimum amount of at least $500,000.  LIBOR
Advances are not available for Advances made through the Loan Manager Service,
and shall not be available during Default Periods.

       

      
        	
                 (b)

              	
                Advances to Pay Costs
      and Expenses or Indebtedness Due.  Wells Fargo may
      initiate a Base Rate Advance on the Line of Credit and apply the proceeds
      of such Base Rate Advance (i) to reimburse Wells Fargo for any costs or
      expenses incurred by Wells Fargo pursuant to Section 5.27 or Section 7.7
      or (ii) to repay any Indebtedness then due and payable to Wells Fargo
      under the Loan Documents or (iii) to reimburse Wells Fargo for any
      indemnity amounts paid by Wells Fargo under the CIT Payoff
      Letter.

              

      

      

      
        	
                1.3A

              	
                LIBOR
      Advances.

              

      

       

      
        	
                (a)

              	
                Funding Advances as
      LIBOR Advances for Fixed Interest
      Periods.    Borrower may obtain an Advance as a
      LIBOR Advance for three or six periods (each period an “Interest Period”,
      as more fully defined in Exhibit
A).

              

      

      

      
        	
                (b)

              	
                Procedure for
      Converting Base Rate Advances to LIBOR Advances.  Lead
      Borrower may request that all or any part of an outstanding Base Rate
      Advance be converted to a LIBOR Advance, provided that no Default Period
      is in effect, and that Wells Fargo receives the request no later than
      11:59 a.m. Eastern Time on the Business Day on which Borrower wishes the
      conversion to become effective.  Each request shall (i) specify
      the principal amount of the Base Rate Advance to be converted, (ii) the
      Business Day of conversion, and (iii) the Interest Period desired. The
      request shall be confirmed in an Authenticated Record if requested by
      Wells Fargo.   Each conversion to a LIBOR Advance shall be
      in multiples of $500,000 and in the minimum amount of at least
      $500,000.

              

      

      

      
        	
                (c)

              	
                Expiring LIBOR Advance
      Interest Periods.  Unless Lead Borrower requests a new
      LIBOR Advance, or prepays an outstanding LIBOR Advance at the expiration
      of an Interest Period, Wells Fargo shall convert each LIBOR Advance to a
      Base Rate Advance on the last day of the expiring Interest
      Period.  If no Default Period is in effect, Lead Borrower may
      request that all or part of any expiring LIBOR Advance be renewed as a new
      LIBOR Advance, provided that Wells Fargo receives the request no later
      than 11:59 a.m. Eastern Time on the Business Day immediately preceding the
      Business Day that constitutes the first day of the new Interest
      Period.  Each request shall specify the principal amount of the
      expiring LIBOR Advance to be continued and Interest Period desired, and
      shall be confirmed in an Authenticated Record if requested by Wells
      Fargo.  Each renewal of a LIBOR Advance shall be in multiples of
      $500,000 and in the minimum amount of at least
  $500,000.

              

      

      
        
           

        

        
          -3-

          
            

          

        

        
           

        

      

      
        	
                (d)

              	
                Quotation of LIBOR
      Advance Interest Rates.  Wells Fargo shall, with respect
      to any request for a new or renewal LIBOR Advance, or the conversion of a
      Base Rate Advance to a LIBOR Advance, provide Lead Borrower with a LIBOR
      quote for each Interest Period identified by Lead Borrower on the Business
      Day on which the request was made, if the request is received by Wells
      Fargo no later than 11:59 a.m. Eastern Time of the Business Day on which
      Lead Borrower has requested that the LIBOR Advance be made effective. If
      Lead Borrower does not immediately accept a LIBOR quote, the quoted rate
      shall expire and any subsequent request for a LIBOR quote shall be subject
      to redetermination by Wells Fargo.

              

      

       

      
        	
                (e)

              	
                Taxes and Regulatory
      Costs.  Borrower shall also pay Wells Fargo with respect
      to any LIBOR Advance all (i) withholdings, interest equalization taxes,
      stamp taxes or other taxes (except income and franchise taxes) imposed by
      any domestic or foreign governmental authority that are related to LIBOR,
      and (ii) future, supplemental, emergency or other changes in the LIBOR
      Reserve Percentage, the assessment rates imposed by the Federal Deposit
      Insurance Corporation, or similar costs imposed by any domestic or foreign
      governmental authority or resulting from compliance by Wells Fargo with
      any request or directive (whether or not having the force of law) from any
      central bank or other governmental authority that are related to LIBOR but
      not otherwise included in the calculation of LIBOR.  In
      determining which of these amounts are attributable to an existing LIBOR
      Advance, any reasonable allocation made by Wells Fargo among its
      operations shall be deemed conclusive and
  binding.

              

      

      

      
        	
                1.4

              	
                Collection
      of Accounts and Application to Revolving
Note.

              

      

       

      
        	
                (a)

              	
                The Collection
      Account.  Borrower has granted a security interest to
      Wells Fargo in the Collateral, including all of Borrower’s Accounts.
      Except as otherwise agreed by Borrower and Wells Fargo in an Authenticated
      Record, all Proceeds of Accounts and other Collateral, upon receipt or
      collection (including, for a period of ninety (90) days after the closing,
      funds received in the CIT Collection Account) shall be deposited each
      Business Day into the Collection Account. Funds so deposited (“Account
      Funds”) are the property of Wells Fargo, and may only be withdrawn from
      the Collection Account by Wells
Fargo.

              

      

      

      
        	
                (b)

              	
                Payment of Accounts by
      Borrower’s Account Debtors.  Borrower shall instruct all
      account debtors to make payments either directly to the Lockbox for
      deposit by Wells Fargo directly to the Collection Account, or instruct
      them to deliver such payments to Wells Fargo by wire transfer, ACH, or
      other means as Wells Fargo may direct for deposit to the Collection
      Account or for direct application to the Line of Credit. If Borrower
      receives a payment or the Proceeds of Collateral directly, Borrower will
      promptly deposit the payment or Proceeds into the Collection Account.
      Until deposited, it will hold all such payments and Proceeds in trust for
      Wells Fargo without commingling with other funds or
      property.  All deposits held in the Collection Account shall
      constitute Proceeds of Collateral and shall not constitute the payment of
      Indebtedness.

              

      

      

      
        	
                (c)

              	
                Application of
      Payments to Revolving Note.  Wells Fargo will withdraw
      Account Funds deposited to the Collection Account and pay down borrowings
      on the Line of Credit by applying them to the Revolving Note on the first
      Business Day following the Business Day of deposit to the Collection
      Account, or, if payments are received by Wells Fargo that are not first
      deposited to the Collection Account pursuant to any treasury management
      service provided to Borrower by Wells Fargo, such payments shall be
      applied to the Revolving Note as provided in the Master Agreement for
      Treasury Management Services and the relevant service
      description.  Provided that no Default Period exists, Wells
      Fargo shall apply such payments to the Base Rate Advances with any excess
      being applied as directed by Lead Borrower.  During a Default
      Period, such payments shall be applied as determined by Wells Fargo in its
      sole discretion.

              

      

      
        
           

        

        
          -4-

          
            

          

        

        
           

        

      

      

      
        	
                1.5

              	
                Interest
      and Interest Related Matters.

              

      

       

      
        	
                (a)

              	
                Interest Rates
      Applicable to Line of Credit.  Except as otherwise
      provided in this Agreement, the unpaid principal amount of each Advance
      evidenced by the Revolving Note shall accrue interest at an annual
      interest rate calculated as
follows:

              

      

      

      Base
Rate

      

      Advances
= the Base Rate plus the Prime Rate Applicable Margin, which interest rate
shall change whenever the Base Rate changes

      

      LIBOR
Advance Rate for Three or Six Month Interest Periods

      

      Advances
= LIBOR plus the LIBOR Advance Rate Applicable Margin (the “LIBOR Advance
Rate”)

      

      Multiple
Advances under the Line of Credit may simultaneously accrue interest at both the
Base Rate and at the LIBOR Advance Rate, subject to the limitations of Section
1.3(a)(i).

      

      The Prime
Rate Applicable Margin and the LIBOR Advance Rate Applicable Margin each shall
be reduced by one-quarter of one percent (0.25%) effective on April 1, 2009 (the
“Interest Rate Reduction Effective Date”).  If (i) Borrower’s audited
consolidated annual financial statements for Borrower’s 2009 fiscal year in
accordance with Section 5.1(a) hereof indicate that Borrower failed to achieve
consolidated Net Income in Borrower’s 2009 fiscal year of at least 75% of the
Net Income for Borrower’s 2009 fiscal year projected in the financial
projections delivered to Wells Fargo pursuant to Section G(3) of Exhibit C
hereto prior to the funding of the initial Advance, (ii) Borrower fails to
timely deliver Borrower’s audited consolidated annual financial statements for
Borrower’s 2009 fiscal year in accordance with Section 5.1(a) hereof or (iii)
Wells Fargo determines that Borrower’s audited consolidated annual financial
statements for Borrower’s 2009 fiscal year have materially misstated Borrower’s
financial condition, then Wells Fargo may retroactively increase the Prime Rate
Applicable Margin and the LIBOR Advance Rate Applicable Margin by one-quarter of
one percent (0.25%) effective from the Interest Rate Reduction Effective Date
and charge Borrower such additional interest.

      

      
        	
                (b)

              	
                [Reserved]. 

              

      

      

      
        	
                (c)

              	
                Default Interest
      Rate.  Commencing on the day an Event of Default occurs,
      through and including the date confirmed by Wells Fargo in a Record as the
      date that the Event of Default has been cured or waived (each such period
      a “Default Period”), or at any time following the Termination Date, in
      Wells Fargo’s sole discretion and without waiving any of its other rights
      or remedies, the principal amount of the Revolving Note shall bear
      interest at a rate that is three percent (3.00%) above the
      contractual rate set forth in Section 1.5(a) (the “Default Rate”), or any
      lesser rate that Wells Fargo may deem appropriate, starting on the first
      day of the month in which the Default Period begins through the last day
      of that Default Period, or any shorter time period to which Wells Fargo
      may agree in an Authenticated
Record.

              

      

      

      
        	
                (d)

              	
                Interest Accrual on
      Payments Applied to Revolving Note.  Payments received by
      Wells Fargo shall be applied to the Revolving Note as provided in Section
      1.4(c), but the principal amount paid down shall continue to accrue
      interest through the end of the first Business Day following the Business
      Day that the payment was applied to the Revolving
  Note.

              

      

      
        
           

        

        
          -5-

          
            

          

        

        
           

        

      

      

      
        	
                (e)

              	
                Usury.  No
      interest rate shall be effective which would result in a rate greater than
      the highest rate permitted by law and Borrower is and shall be liable only
      for the payment of such highest rate as allowed by law.Payments in the
      nature of interest and other charges made under any Loan Documents or any
      other document or agreement described in or related to this Agreement that
      are later determined to be in excess of the limits imposed by applicable
      usury law will be deemed to be a payment of principal, and the
      Indebtedness shall be reduced by that amount so that such payments will
      not be deemed usurious.

              

      

      

      
        	
                1.6

              	
                Fees.

              

      

       

      
        	
                (a)

              	
                Closing
      Fee.  Borrower shall pay Wells Fargo a one-time closing
      fee of $100,000, which shall be fully earned and payable upon the
      execution of this Agreement.

              

      

       

      
        	
                (b)

              	
                Unused Line
      Fee.  Borrower shall pay
      Wells Fargo an annual unused line fee of fifteen one-hundredths of one
      percent (0.15%) of the daily
      average of the Maximum Line Amount reduced by outstanding Advances and the
      L/C Amount (the “Unused Amount”), from the date of this Agreement to and
      including the Termination Date, which unused line fee shall be payable
      quarterly in arrears on the first day of each fiscal quarter and on the
      Termination Date.

              

      

       

      
        	
                (c)

              	
                Collateral Exam
      Fees.  Borrower shall pay Wells Fargo fees in connection
      with any collateral exams, audits or inspections (“Field Exams”) conducted
      by or on behalf of Wells Fargo (including Field Exams conducted prior to
      the initial Advance hereunder), at the current rates established from time
      to time by Wells Fargo for its customers generally as its collateral exam
      fees (which fees are currently $1,000.00 per each 8 hour day per
      collateral examiner (whether the Field Exam shall have been conducted by a
      Wells Fargo employee or a third party contractor), together with all
      actual out-of-pocket costs and expenses (which may include the expenses,
      but no fees of any third party contractor other than the foregoing
      $1,000.00 daily fee) incurred in conducting any Field Exam; provided,
      however, that so long as no Event of Default shall have occurred and be
      continuing, Borrower shall not be obligated to reimburse Wells Fargo for
      more than four (4) Field Exams during any calendar year; and provided
      further that in the event that during the period commencing on the date of
      this Agreement and ending on the first anniversary thereof (i) no Event of
      Default has occurred and (ii) each of the collateral exams received by
      Wells Fargo during such period has been in all material respects in form
      and substance reasonably satisfactory to Wells Fargo, then from and after
      the first anniversary date of this Agreement,  provided no Event
      of Default shall have occurred and be continuing, Borrower shall not be
      obligated to reimburse Wells Fargo for more than three (3) Field Exams
      during any calendar year.

              

      

       

      (d)           [Reserved]. 

       

      
        	
                (e)

              	
                Collateral Monitoring
      Service Fees.  Borrower shall pay Wells Fargo fees in
      connection with any service conducted by or on behalf of Wells Fargo for
      purposes of identifying ineligible Collateral, calculating the Borrowing
      Base, and performing related collateral monitoring services at the rates
      established from time to time by Wells Fargo for its customers generally
      (which fees currently include a one-time initial set-up fee of $800 for each
      receivable aging that is being monitored (which fee shall also be payable
      in the event Borrower changes the format of its aging reporting), and a
      monthly fee of $125 for each such
      aging), which fees shall be due and payable monthly in arrears on the
      first day of the month and on the Termination
  Date.

              

      

      
        
           

        

        
          -6-

          
            

          

        

        
           

        

      

       

      
        	
                (f)

              	
                Line of Credit
      Termination and/or Reduction Fees.  If (i) Wells Fargo
      terminates the Line of Credit during a Default Period, or if (ii) Lead
      Borrower terminates the Line of Credit on a date prior to the Maturity
      Date, or if (iii) Borrower and Wells Fargo agree to reduce the Maximum
      Line Amount, then Borrower shall pay Wells Fargo as liquidated damages a
      termination or reduction fee in an amount equal to a percentage of the
      Maximum Line Amount (or the reduction of the Maximum Line Amount, as the
      case may be) calculated as follows: (A) three percent (3.00%) if the
      termination or reduction occurs on or before the first anniversary of the
      date of this Agreement; (B) one percent (1.00%) if the termination or
      reduction occurs after the first anniversary of the date of this
      Agreement, but on or before the second anniversary of the date of this
      Agreement; and (C) one-half of one percent  (0.50%) if the
      termination or reduction occurs after the second anniversary of the date
      of this Agreement.  Notwithstanding the foregoing, if Borrower
      refinances the Line of Credit with financing provided by Wells Fargo or
      its Affiliates after the date which 18 months from the date of this
      Agreement, Borrower’s obligation to pay the fee required hereby shall be
      waived.

              

      

      

      
        	
                (g)

              	
                Overadvance
      Fees.  Borrower shall pay a $500 Overadvance fee for each
      day that an Overadvance exists which was not agreed to by Wells Fargo in
      an Authenticated Record prior to its occurrence; provided that Wells
      Fargo’s acceptance of the payment of such fees shall not constitute either
      consent to the Overadvance or waiver of the resulting Event of Default;
      and provided further that Borrower shall not be obligated to pay such
      Overadvance fee if the Indebtedness is accruing interest at the Default
      Rate due to the occurrence of an Event of Default arising under Section
      6.1(c) and no other Event of Default then exists and is
      continuing.  Borrower shall pay additional Overadvance fees and
      interest in such amounts and on such terms as Wells Fargo in its sole
      discretion may consider appropriate for any Overadvance to which Wells
      Fargo has specifically consented in an Authenticated Record prior to its
      occurrence.

              

      

       

      
        	
                (h)

              	
                Treasury Management
      Fees.  Borrower will pay service fees to Wells Fargo for
      treasury management services provided pursuant to the Master Agreement for
      Treasury Management Services or any other agreement entered into by the
      parties, in the amount prescribed in Wells Fargo’s current service fee
      schedule.

              

      

       

      
        	
                (i)

              	
                Letter of Credit
      Fees.  Borrower shall pay a fee with respect to each
      Letter of Credit issued by Wells Fargo of one and three-quarters percent
      (1.75%) of the Aggregate Face Amount of such Letter of Credit accruing
      daily from and including the date the Letter of Credit is issued until the
      date that it either expires or is returned, which shall be payable monthly
      in arrears on the first day of each month and on the date that the Letter
      of Credit either expires or is returned; and following an Event of
      Default, this fee shall increase to four and three-quarters percent
      (4.75%) of the Aggregate Face Amount, commencing on the first day of the
      fiscal month in which the Default Period begins and continuing through the
      last day of such Default Period, or any shorter time period that Wells
      Fargo in its sole discretion may deem appropriate, without waiving any of
      its other rights and remedies.

              

      

       

      
        	
                (j)

              	
                Letter of Credit
      Administrative Fees.  Borrower shall pay all
      administrative fees charged by Wells Fargo in connection with the honoring
      of drafts under any Letter of Credit, and any amendments to or transfers
      of any Letter of Credit, and any other activity with respect to the
      Letters of Credit at the then current rates published by Wells Fargo for
      such services rendered on behalf of its customers
    generally.

              

      

      
        
           

        

        
          -7-

          
            

          

        

        
           

        

      

      

      
        	
                (k)

              	
                ACH Fees. 
      Borrower agrees to pay to the Lender all fees charged to Wells Fargo by
      ACH in connection with the transfer of funds in the Collateral Account
      and/or the Lockbox at the rates charged to its customers generally. 
      Such fees are currently in the amount of Twenty ($20.00) Dollars for each
      ACH initiated by or for the account of Borrower to a third
      party.  There shall be no such ACH fee on internal transfers
      within Wells Fargo.

              

      

       

      
        	
                (l)

              	
                Wire Transfer
      Fees.  
      Twenty ($20.00) Dollars for each wire transfer initiated by or for
      the account of Borrower to a third party.  Prior to the date on
      which the Collection Account and Borrower’s operating account have been
      established at Wells Fargo, Twenty ($20.00) Dollars for each wire transfer
      initiated by or for the account of Borrower within Wells
      Fargo.  After the date on which the Collection Account and
      Borrower’s operating account have been established at Wells Fargo, there
      shall be no such wire transfer fees on internal transfers within Wells
      Fargo.

              

      

       

      
        	
                (m)

              	
                ADP.   
      Borrower agrees to
      pay to the Lender all fees charged to Wells Fargo by ADP in connection
      with the transfer of funds in the Collateral Account and/or the
      Lockbox.  Such fees are currently in the amount of Two Hundred
      ($200.00) Dollars per month.

              

      

       

      
        	
                 (n)

              	
                Other Fees and
      Charges.  Wells Fargo may impose additional fees and
      charges during a Default Period for waiving an Event of
      Default.  All such fees and charges shall be imposed at Wells
      Fargo’s sole discretion following oral notice to Lead Borrower on either
      an hourly, periodic, or flat fee basis, and in lieu of or in addition to
      imposing interest at the Default Rate, and Borrower’s request for an
      Advance following such notice shall constitute Borrower’s agreement to pay
      such fees and charges.

              

      

      

      
        	
                 (o)

              	
                LIBOR Advance Breakage
      Fees.  Borrower may prepay any LIBOR Advance at any time
      in any amount, whether voluntarily or by acceleration; provided, however, that
      if the LIBOR Advance is prepaid, Borrower shall pay Wells Fargo upon
      demand a LIBOR Advance breakage fee equal to the sum of the discounted
      monthly differences for each month from the month of prepayment through
      the month in which such Interest Period matures, calculated as follows for
      each such month:

              

      

      
        
          	
                	
                  (i)

                	
                  Determine the
      amount of interest which would have accrued each month on the amount
      prepaid at the interest rate applicable to such amount had it remained
      outstanding until the last day of the applicable Interest
      Period.

                

        

      

      

      
        
          	
                	
                  (ii)

                	
                  Subtract from
      the amount determined in (i) above the amount of interest which would have
      accrued for the same month on the amount prepaid for the remaining term of
      such Interest Period at LIBOR in effect on the date of prepayment for new
      loans made for such term in a principal amount equal to the amount
      prepaid.

                

        

      

      

      
        
          	
                	
                  (iii)

                	
                  If
      the result obtained in (ii) for any month is greater than zero, discount
      that difference by LIBOR used in (ii)
above.

                

        

      

      

      Borrower
acknowledges that prepayment of the Revolving Note may result in Wells Fargo
incurring additional costs, expenses or liabilities, and that it is difficult to
ascertain the full extent of such costs, expenses or
liabilities.  Borrower agrees to pay the above-described LIBOR Advance
breakage fee and agrees that this amount represents a reasonable estimate of the
LIBOR Advance breakage costs, expenses and/or liabilities of Wells
Fargo.

      
        
           

        

        
          -8-

          
            

          

        

        
           

        

      

      

      
        	
                1.7

              	
                Interest
      Accrual; Principal and Interest Payments;
  Computation.

              

      

       

      
        	
                (a)

              	
                Interest Payments and
      Interest Accrual.  Accrued and unpaid interest under the
      Revolving Note on Base Rate Advances shall be due and payable on the first
      day of each month (each an "Interest Payment Date") and on the Termination
      Date, and shall be paid in the manner provided in Section
      1.4(c).  Interest shall accrue from the most recent date to
      which interest has been paid or, if no interest has been paid, from the
      date of Advance to the Interest Payment Date.  Interest accruing
      on any LIBOR Advance shall be due and payable on the last day of the
      applicable Interest Period and on the Termination Date; provided, however,
      for Interest Periods in excess of one month, interest shall nevertheless
      be due and payable monthly on the last day of each month, and on the last
      day of the Interest Period.

              

      

       

      
        	
                (b)

              	
                Payment of Revolving
      Note Principal.  The principal amount of the Revolving
      Note shall be paid from time to time as provided in this Agreement, and
      shall be fully due and payable on the Termination
  Date.

              

      

       

      
        	
                (c)

              	
                Payments Due on
      Non-Business Days.  If an Interest Payment Date or the
      Termination Date falls on a day which is not a Business Day, payment shall
      be made on the next Business Day, and interest shall continue to accrue
      during that time period.

              

      

       

      
        	
                (d)

              	
                Computation of
      Interest and Fees.  Interest accruing on the unpaid
      principal amount of the Revolving Note and fees payable under this
      Agreement shall be computed on the basis of the actual number of days
      elapsed in a year of 360 days.

              

      

      

      
        	
                (e)

              	
                Liability
      Records.  Wells Fargo shall maintain accounting and
      bookkeeping records of all Advances and payments under the Line of Credit
      and all other Indebtedness due to Wells Fargo in such form and content as
      Wells Fargo in its sole discretion deems appropriate.  Wells
      Fargo’s calculation of current Indebtedness shall be presumed correct
      unless proven otherwise by Borrower.  Upon Wells Fargo’s
      request, Lead Borrower will admit and certify in a Record the exact
      principal balance of the Indebtedness that Borrower then believes to be
      outstanding.  Any billing statement or accounting provided by
      Wells Fargo shall be conclusive and binding unless Lead Borrower notifies
      Wells Fargo in a detailed Record of Borrower’s intention to dispute the
      billing statement or accounting within 45 days of
  receipt.

              

      

       

      
        	
                1.8

              	
                Termination,
      Reduction or Non-Renewal of Line of Credit by Borrower;
      Notice.

              

      

       

      
        	
                (a)

              	
                Termination by
      Borrower.  Borrower may terminate or reduce the Line of
      Credit at any time prior to the Maturity Date, if Lead Borrower
      (i) delivers an Authenticated Record notifying Wells Fargo of its
      intentions at least 30 days prior to the proposed effective date of such
      termination or reduction, (ii) pays to Wells Fargo the termination or
      reduction fee set forth in Section 1.6(f), and (iii) pays the Indebtedness
      in full or down to the reduced Maximum Line Amount.  Any
      reduction in the Maximum Line Amount shall be in multiples of
      $1,000,000.

              

      

       

      
        	
                (b)

              	
                Termination by
      Borrower without Advance Notice.  If Lead Borrower fails
      to deliver Wells Fargo timely notice of its intention to terminate the
      Line of Credit or reduce the Maximum Line Amount as provided in Section
      1.8(a), Borrower may nevertheless terminate the Line of Credit or reduce
      the Maximum Line Amount and pay the Indebtedness in full or down to the
      reduced Maximum Line Amount if it (i) pays the termination or reduction
      fee set forth in Section 1.6(f), and (ii) pays interest calculated at the
      Default Rate on the Revolving Note commencing on the 30th
      day prior to the proposed Termination Date or reduction date and
      continuing through the date that Wells Fargo receives delivery of an
      Authenticated Record giving it actual notice of Borrower’s intention to
      terminate or reduce the Line of
Credit.

              

      

      
        
           

        

        
          -9-

          
            

          

        

        
           

        

      

       

      
        	
                1.9

              	
                Letters of
      Credit

              

      

       

      
        	
                (a)

              	
                Issuance of Letters of
      Credit; Amount.  Wells Fargo, subject to the terms and
      conditions of this Agreement, shall issue, on or after the date that Wells
      Fargo is obligated to make its first Advance under this Agreement and
      prior to the Termination Date, one or more irrevocable standby or
      documentary letters of credit (each, a “Letter of Credit”, and
      collectively, “Letters of Credit”) for Borrower’s
      account.  Wells Fargo will not issue any Letter of Credit if the
      face amount of the Letter of Credit would exceed the lesser of: (i)
      $3,000,000 less the L/C Amount, or (ii) the Borrowing Base, less an amount
      equal to aggregate unreimbursed Advances plus the L/C
    Amount.

              

      

       

      
        	
                (b)

              	
                Additional Letter of
      Credit Documentation.  Prior to requesting issuance of a
      Letter of Credit, Borrower shall first execute and deliver to Wells Fargo
      a Standby Letter of Credit Agreement or a Commercial Letter of Credit
      Agreement, as applicable, an L/C Application, and any other documents that
      Wells Fargo may reasonably request, which shall govern the issuance of the
      Letter of Credit and Borrower’s obligation to reimburse Wells Fargo for
      any related Letter of Credit draws (the “Obligation of
      Reimbursement”).

              

      

       

      
        	
                (c)

              	
                Expiration.  No
      Letter of Credit shall be issued that has an expiry date that is later
      than one (1) year from the date of issuance, or the Maturity Date in
      effect on the date of issuance, whichever is
  earlier.

              

      

       

      
        	
                (d)

              	
                Obligation of
      Reimbursement During Default Periods.  If Borrower is
      unable, due to the existence of a Default Period or for any other reason,
      to obtain an Advance to pay any Obligation of Reimbursement, Borrower
      shall pay Wells Fargo on demand and in immediately available funds, the
      amount of the Obligation of Reimbursement together with interest, accrued
      from the date presentment of the underlying draft until reimbursement in
      full at the Default Rate.  Wells Fargo is authorized,
      alternatively and in its sole discretion, to make an Advance in an amount
      sufficient to discharge the Obligation of Reimbursement and pay all
      accrued but unpaid interest and fees with respect to the Obligation of
      Reimbursement.

              

      

       

      
        	
                1.10

              	
                Special
      Account.  If the Line of Credit is terminated for any
      reason while a Letter of Credit is outstanding, or if after prepayment of
      the Revolving Note the L/C Amount exceeds the Borrowing Base, then
      Borrower shall promptly pay Wells Fargo in immediately available funds for
      deposit to the Special Account, an amount equal, as the case may be, to
      either (a) the L/C Amount plus any anticipated fees and costs payable
      pursuant to Sections 1.6(i) and 1.6(j) hereof or the other Loan Documents,
      or (b) the amount by which the L/C Amount exceeds the Borrowing
      Base.  If Borrower fails to pay these amounts promptly, then,
      notwithstanding that an Event of Default may then exist or may arise
      therefrom, Wells Fargo may in its sole discretion make an Advance to pay
      these amounts and deposit the proceeds to the Special
      Account.  The Special Account shall be an interest bearing
      account maintained with Wells Fargo or any other financial institution
      acceptable to Wells Fargo.  For as long as the L/C Amount
      continues to exceed the Borrowing Base after prepayment of the Revolving
      Note and/or after the termination of the Line of Credit, Wells Fargo may
      in its sole discretion apply amounts on deposit in the Special Account to
      the Indebtedness.  Borrower may not withdraw amounts deposited
      to the Special Account until the Line of Credit has been terminated and
      all outstanding Letters of Credit have either been returned to Wells Fargo
      or have expired and the Indebtedness has been fully paid, provided Wells
      Fargo shall promptly remit amounts on deposit in the Special Account at
      the direction of Borrower following the date on which the L/C Amount no
      longer exceeds the Borrowing Base, provided no Event of Default has
      occurred and is continuing and provided that the Line of Credit has not
      been terminated.

              

      

      
        
           

        

        
          -10-

          
            

          

        

        
           

        

      

      

      
        	
                1.11

              	
                Designation of Lead Borrower as
      Borrower’s Agent.

              

      

       

      
        	
                 
      

              	
                (a)  Each
      Borrower hereby irrevocably designates and appoints Command Security
      Corporation as that Borrower’s agent (Command Security Corporation, in
      such capacity, is referred to herein as the “Lead Borrower”) to obtain
      Advances and Letters of Credit hereunder, the proceeds of which shall be
      available for those uses as those set forth herein. As the disclosed
      principal for its agent, each Borrower shall be obligated to Wells Fargo
      on account of Advances so made and Letters of Credit so issued hereunder
      as if made directly by Wells Fargo to that Borrower, notwithstanding the
      manner by which such Advance and Letters of Credit are recorded on the
      books and records of the Lead Borrower and of any
  Borrower.

              

      

       

      
        	
                 
      

              	
                (b)  The
      Lead Borrower shall act as a conduit for each Borrower (including itself,
      as “Borrower”) on whose behalf the Lead Borrower has requested an Advance.
      The Lead Borrower shall cause the transfer of the proceeds of each Advance
      to the Person(s) constituting Borrower on whose behalf such Advance was
      obtained.  Wells Fargo shall have no obligation to see to the
      application of such proceeds.

              

      

       

      
        	
                 
      

              	
                (c)  If,
      for any reason, and at any time during the term of this Agreement,
      Borrower, including the Lead Borrower, as agent, shall be unable to, or
      prohibited from carrying out the terms and conditions of this Agreement
      (as determined by Wells Fargo in Wells Fargo’s sole and absolute
      discretion), then Wells Fargo may make Advances directly to, and cause the
      issuance of Letters of Credit directly for the account of such of the
      Persons constituting Borrower as Wells Fargo determines to be expedient,
      which Advances may be made without regard to the procedures otherwise
      included herein.

              

      

       

      
        	
                 
      

              	
                (d)  Each
      Borrower shall remain liable to Wells Fargo for the payment and
      performance of all Obligations (which payment and performance shall
      continue to be secured by all Collateral granted by each Borrower)
      notwithstanding any determination by Wells Fargo to cease
      making  Advances or causing Letters of Credit to be issued to or
      for the benefit of any Borrower.

              

      

       

      
        	
                 
      

              	
                (e)  The
      authority of the Lead Borrower to request Advances on behalf of, and to
      bind, Borrower, shall continue unless and until Wells Fargo acts as
      provided in subparagraph (c), above, or Wells Fargo actually receives
      written notice of: (i) the termination of such authority, and (ii) the
      subsequent appointment of a successor Lead Borrower, which notice is
      signed by the respective Presidents of each Borrower (other than the
      President of the Lead Borrower being replaced) then eligible for borrowing
      under this Agreement; and written notice from such successive Lead
      Borrower (i) accepting such appointment; (ii) acknowledging that such
      removal and appointment has been effected by the respective Presidents of
      Borrower eligible for borrowing under this Agreement; and (iii)
      acknowledging that from and after the date of such appointment, the newly
      appointed Lead Borrower shall be bound by the terms hereof, and that as
      used herein, the term “Lead Borrower” shall mean and include the newly
      appointed Lead Borrower.

              

      

      
        
           

        

        
          -11-

          
            

          

        

        
           

        

      

      

      
        	
                2.

              	
                SECURITY
      INTEREST AND OCCUPANCY OF BORROWER’S
PREMISES

              

      

       

      
        	
                2.1

              	
                Grant of Security
      Interest. Borrower hereby pledges, assigns and grants to Wells
      Fargo, for the benefit of Wells Fargo and as agent for Wells Fargo
      Merchant Services, L.L.C., a Lien and security interest (collectively
      referred to as the “Security Interest”) in the Collateral, as security for
      the payment and performance of all Indebtedness. Following request by
      Wells Fargo, Borrower shall grant Wells Fargo, for the benefit of Wells
      Fargo and as agent for Wells Fargo Merchant Services, L.L.C., a Lien and
      security interest in all commercial tort claims that it may have against
      any Person.

              

      

      

      
        	
                2.2

              	
                Notifying Account Debtors and
      Other Obligors; Collection of Collateral.  Wells Fargo
      may at any time (whether or not a Default Period then exists) deliver a
      Record giving an account debtor or other Person obligated to pay an
      Account, a General Intangible, or other amount due, notice that the
      Account, General Intangible, or other amount due has been assigned to
      Wells Fargo for security and must be paid directly to Wells
      Fargo.  Borrower shall join in giving such notice and shall
      Authenticate any Record giving such notice upon Wells Fargo’s
      request.  After Borrower or Wells Fargo gives such notice, and
      upon the occurrence and during the continuance of an Event of Default, (i)
      Wells Fargo may, but need not, in Wells Fargo’s or in Borrower’s name,
      demand, sue for, collect or receive any money or property at any time
      payable or receivable on account of, or securing, such Account, General
      Intangible, or other amount due, or grant any extension to, make any
      compromise or settlement with or otherwise agree to waive, modify, amend
      or change the obligations (including collateral obligations) of any
      account debtor or other obligor and (ii) Wells Fargo may, in Wells Fargo’s
      name or in Borrower’s name, as Borrower’s agent and attorney-in-fact,
      notify the United States Postal Service to change the address for delivery
      of Borrower’s mail to any address designated by Wells Fargo, otherwise
      intercept Borrower’s mail, and receive, open and dispose of Borrower’s
      mail, applying all Collateral as permitted under this Agreement and
      holding all other mail for Borrower’s account or forwarding such mail to
      Borrower’s last known address.

              

      

       

      
        	
                2.3

              	
                Assignment of
      Insurance.  As additional security for the Indebtedness,
      Borrower hereby assigns to Wells Fargo and to Wells Fargo Merchant
      Services, L.L.C., all rights of Borrower under every policy of insurance
      covering the Collateral and all business records and other documents
      relating to it, and all monies (including proceeds and refunds) that may
      be payable under any policy, and Borrower hereby directs the issuer of
      each policy to pay all such monies directly to Wells
      Fargo.  During any Default Period, Wells Fargo may (but need
      not), in Wells Fargo’s or Borrower’s name, execute and deliver proofs of
      claim, receive payment of proceeds and endorse checks and other
      instruments representing payment of the policy of insurance, and adjust,
      litigate, compromise or release claims against the issuer of any
      policy.  Any monies received under any insurance policy assigned
      to Wells Fargo, other than liability or workers’ compensation insurance
      policies, or received as payment of any award or compensation for
      condemnation or taking by eminent domain, shall be paid to Wells Fargo
      and, as determined by Wells Fargo in its sole discretion, either be
      applied to prepayment of the Indebtedness or disbursed to
      Borrower.

              

      

      

      
        	
                2.4

              	
                Borrower’s
      Premises

              

      

      

      
        	
                (a)

              	
                Wells Fargo’s Right to
      Occupy Borrower’s Premises.  Borrower hereby grants to
      Wells Fargo the right, at any time during a Default Period and without
      notice or consent, to take exclusive possession of all locations where
      Borrower conducts its business or has any rights of possession, including
      the locations described on Exhibit B (the “Premises”), until the earlier
      of (i) payment in full and discharge of all Indebtedness and
      termination of the Line of Credit, or (ii) final sale or disposition
      of all items constituting Collateral and delivery of those items to
      purchasers.

              

      

      
        
           

        

        
          -12-

          
            

          

        

        
           

        

      

       

      
        	
                (b)

              	
                Wells Fargo’s Use of
      Borrower’s Premises.  During a Default Period, Wells
      Fargo may use the Premises to store, process, manufacture, sell, use, and
      liquidate or otherwise dispose of items that are Collateral, and for any
      other incidental purposes deemed appropriate by Wells Fargo in good
      faith.

              

      

       

      
        	
                (c)

              	
                Borrower’s Obligation
      to Reimburse Wells Fargo.  Wells Fargo shall not be
      obligated to pay rent or other compensation for the possession or use of
      any Premises during a Default Period, but if Wells Fargo elects to pay
      rent or other compensation, during a Default Period, to the owner of any
      Premises in order to have access to the Premises during a Default Period,
      then Borrower shall promptly reimburse Wells Fargo all such amounts, as
      well as all taxes, fees, charges and other expenses at any time payable by
      Wells Fargo with respect to the Premises by reason of the execution,
      delivery, recordation, performance or enforcement of any terms of this
      Agreement.

              

      

       

      
        	
                2.5

              	
                License.  Without
      limiting the generality of any other Security Document, Borrower hereby
      grants to Wells Fargo a non-exclusive, worldwide and royalty-free license
      to use or otherwise exploit all Intellectual Property Rights of Borrower
      for the purpose of: (a) completing the manufacture of any in-process
      materials during any Default Period so that such materials become saleable
      Inventory, all in accordance with the same quality standards previously
      adopted by Borrower for its own manufacturing and subject to Borrower’s
      reasonable exercise of quality control; and (b) selling, leasing or
      otherwise disposing of any or all Collateral during any Default
      Period.

              

      

       

      
        	
                2.6

              	
                Financing
      Statements.

              

      

      

      
        	
                (a)

              	
                Authorization to
      File.  Borrower authorizes Wells Fargo to file financing
      statements describing Collateral to perfect Wells Fargo’s Security
      Interest in the Collateral, and Wells Fargo may describe the Collateral as
      “all personal property” or “all assets” or describe specific items of
      Collateral including commercial tort claims as Wells Fargo may consider
      necessary or useful to perfect the Security Interest.  All
      financing statements filed before the date of this Agreement to perfect
      the Security Interest were authorized by Borrower and are hereby
      re-authorized.  Following the termination of the Line of Credit
      and payment of all Indebtedness, Wells Fargo shall, at Borrower’s expense
      and within the time periods required under applicable law, release or
      terminate any filings or other agreements that perfect the Security
      Interest.

              

      

      

      
        	
                (b)

              	
                Termination.  Wells
      Fargo shall, at Borrower’s expense, release or terminate any filings or
      other agreements that perfect the Security Interest, provided that there
      are no suits, actions, proceedings or claims pending or threatened against
      any Indemnitee under this Agreement with respect to any Indemnified
      Liabilities (in which event Wells Fargo shall release the lien upon
      receipt by Wells Fargo of an indemnity reasonably satisfactory to Wells
      Fargo and reasonable security from Borrower in respect thereof (provided
      no security shall be required with respect to threatened claims)), upon
      Wells Fargo’s receipt of the following, in form and content reasonably
      satisfactory to Wells Fargo: (i) cash payment in full of all Indebtedness
      under the Loan Documents, (ii) evidence that the commitment of Wells Fargo
      to make Advances under the Line of Credit or under any other facility with
      Borrower has been terminated, (iii) a release of all claims against Wells
      Fargo by Borrower relating to Wells Fargo’s performance and obligations
      under the Loan Documents, and (iv) an agreement by Borrower to indemnify
      Wells Fargo for any payments received by Wells Fargo that are applied to
      the Indebtedness as a final payoff that may subsequently be required as a
      matter of law to be returned or otherwise not paid for any
      reason.

              

      

      
        
           

        

        
          -13-

          
            

          

        

        
           

        

      

      

      
        	
                2.7

              	
                Setoff.  Wells
      Fargo may at any time, in its sole discretion and without demand or notice
      to anyone, setoff any liability owed to Borrower by Wells Fargo against
      any Indebtedness, whether or not
due.

              

      

       

      
        	
                2.8

              	
                Collateral Related
      Matters.  This Agreement does not contemplate a sale of
      Accounts or chattel paper, and, as provided by law, Borrower is entitled
      to any surplus and shall remain liable for any
      deficiency.  Wells Fargo’s duty of care with respect to
      Collateral in its possession (as imposed by law) will be deemed fulfilled
      if it exercises reasonable care in physically keeping such Collateral, or
      in the case of Collateral in the custody or possession of a bailee or
      other third Person, exercises reasonable care in the selection of the
      bailee or third Person, and Wells Fargo need not otherwise preserve,
      protect, insure or care for such Collateral.  Wells Fargo shall
      not be obligated to preserve rights Borrower may have against prior
      parties, to liquidate the Collateral at all or in any particular manner or
      order or apply the Proceeds of the Collateral in any particular order of
      application.  Wells Fargo has no obligation to clean-up or
      prepare Collateral for sale.  Borrower waives any right it may
      have to require Wells Fargo to pursue any third Person for any of the
      Indebtedness.

              

      

       

      
        	
                2.9

              	
                Notices Regarding Disposition
      of Collateral.  If notice to Borrower of any intended
      disposition of Collateral or any other intended action is required by
      applicable law in a particular situation, such notice will be deemed
      commercially reasonable if given in the manner specified in Section 7.4 at
      least ten calendar days before the date of intended disposition or other
      action.

              

      

       

      
        	
                3.

              	
                CONDITIONS
      PRECEDENT

              

      

       

      
        	
                3.1

              	
                Conditions Precedent to Initial
      Advance and Issuance of Initial Letter of Credit.  Wells
      Fargo’s obligation to make the initial Advance or issue the first Letter
      of Credit shall be subject to the condition that Wells Fargo shall have
      received this Agreement and each of the Loan Documents, and any document,
      agreement, or other item described in or related to this Agreement, and
      all fees and information described in Exhibit C, executed and in form
      satisfactory to Wells Fargo.

              

      

       

      
        	
                3.2

              	
                Additional Conditions Precedent
      to All Advances and Letters of Credit.  Wells Fargo’s
      obligation to make any Advance (including the initial Advance) or issue
      any Letter of Credit shall be subject to the further additional
      conditions: (a) that the representations and warranties described in
      Exhibit D are correct in all material respects on the date of the Advance
      or the issuance of the Letter of Credit, except to the extent that such
      representations and warranties relate solely to an earlier date; and (b)
      that no event has occurred and is continuing, or would result from the
      requested Advance or issuance of the Letter of Credit that would result in
      or constitute an Event of Default.

              

      

       

      
        	
                4.

              	
                REPRESENTATIONS
      AND WARRANTIES

              

      

      

      To induce
Wells Fargo to enter into this Agreement, Borrower makes the representations and
warranties described in Exhibit D.  Any request for an Advance will be
deemed a representation by Borrower that all representations and warranties
described in Exhibit D are true, correct, and complete in all material respects
as of the time of the request, unless they relate exclusively to an earlier
date. Borrower shall be permitted to update the Pending Jurisdiction Schedule
(solely to remove jurisdictions from such Schedule), Schedule (i) of the
Employee Benefits Plan Schedule, the Labor Agreements Schedule and Schedule
(iii) and Schedule (iv) (with respect to clauses B and C thereof) of the
Environmental Matters Schedule, all as set forth on Exhibit D, the Intellectual
Property Disclosures Schedule and the Chief Executive Office/Principal Place of
Business Schedule, from time to time by promptly providing copies of such
updated Schedules to Wells Fargo.

      
        
           

        

        
          -14-

          
            

          

        

        
           

        

      

      

      
        	
                5.

              	
                COVENANTS

              

      

      

      
        	
                 
      

              	
                So
      long as the Indebtedness remains unpaid, or the Line of Credit has not
      been terminated, Borrower shall comply with each of the following
      covenants, unless Wells Fargo shall consent otherwise in an Authenticated
      Record delivered to Lead Borrower.

              

      

      

      
        	
                5.1

              	
                Reporting
      Requirements.  Lead Borrower shall
      deliver to Wells Fargo the following information, compiled where
      applicable using GAAP consistently applied, in form and content reasonably
      acceptable to Wells Fargo:

              

      

       

      
        	
                (a)

              	
                Annual Financial
      Statements.  As soon as available and in any event within
      120 days after Borrower’s fiscal year end, Borrower’s audited
      consolidated financial statements prepared and certified without
      qualification by an independent certified public accountant acceptable to
      Wells Fargo, which shall include Borrower’s consolidated balance sheet,
      income statement, and statement of retained earnings and cash flows
      prepared, if requested by Wells Fargo, on a consolidated and consolidating
      basis to include Borrower’s Subsidiaries (it being understood that any
      consolidating financial statements will not be certified by such
      accountants).  The annual financial statements shall be
      accompanied by a certificate (the “Compliance Certificate”) in the form of
      Exhibit E that is signed by Borrower’s chief financial
      officer.

              

      

      

      Each
Compliance Certificate that accompanies an annual financial statement shall also
be accompanied by copies of all management letters prepared by Borrower’s
accountants.

      

      
        	
                (b)

              	
                Monthly Financial
      Statements.  As soon as available and in any event within
      30 days after
      the end of each month, a Borrower prepared balance sheet, and income
      statement prepared for that month and for the year–to-date period then
      ended, prepared, if requested by Wells Fargo, on a consolidated and
      consolidating basis to include Borrower’s Subsidiaries in accordance with
      GAAP, and stating in comparative form the figures for the corresponding
      date and periods in the prior fiscal year, subject to year-end
      adjustments.  The financial statements shall be accompanied by a
      Compliance Certificate in the form of Exhibit E that is signed by
      Borrower’s chief financial officer.

              

      

      

      
        	
                (c)

              	
                Collateral
      Reports.  No later than 10 days after each
      month end (or more frequently if Wells Fargo shall request it), detailed
      agings of Borrower’s accounts receivable and accounts payable and a
      calculation of Borrower’s Accounts and Eligible Accounts as of the end of
      that month.  Accounts receivable agings shall be submitted by
      Borrower to Wells Fargo through Wells Fargo’s Commercial Electronic
      Office® (“CEO®”) and Borrower
      shall pay Wells Fargo all processing fees charged by Wells Fargo in
      connection with the processing of the accounts receivable agings reports
      through the CEO®
      portal at the current rates published by Wells Fargo for such services
      rendered on behalf of its customers
generally.

              

      

       

      
        	
                (d)

              	
                Projections.  No
      later than 30 days prior to each
      fiscal year end, Borrower’s projected balance sheet and income statement
      and statement of cash flows for each month of
      the next fiscal year, certified as accurate by Borrower’s chief financial
      officer and accompanied by a statement of assumptions and supporting
      schedules and information.

              

      

      
        
           

        

        
          -15-

          
            

          

        

        
           

        

      

       

      
        	
                (e)

              	
                Supplemental
      Reports.  Weekly, or more frequently if Wells Fargo
      requests, Wells Fargo’s standard form of “daily collateral report”,
      together with receivables schedules, collection reports, scheduling
      activity reports, and, with respect to Eligible Accounts, daily, copies of
      the new invoices having the two highest balances (of the invoices, if
      any,  which have balances of $20,000 or greater) and related
      back-up information (provided the foregoing shall not restrict Wells
      Fargo’s general right to request, and Borrower’s obligation to deliver to
      Wells Fargo, copies of any invoice(s) with respect to Eligible Accounts),
      as reasonably requested by Wells
Fargo.

              

      

       

      
        	
                (f)

              	
                Litigation.  No
      later than three Business Days after discovery, a Record notifying Wells
      Fargo of any litigation or other proceeding before any court or
      governmental agency which seeks a monetary recovery against Borrower in
      excess of $150,000.

              

      

       

      
        	
                (g)

              	
                Intellectual
      Property.  (i) No later than 10 days before it acquires
      material Intellectual Property Rights, a Record notifying Wells Fargo of
      Borrower’s intention to acquire such rights and promptly upon receipt,
      copies of all registrations and filings with respect to Borrower’s
      Intellectual Property Rights; (ii) except for transfers permitted under
      Section 5.18, no later than 10 days before it disposes of material
      Intellectual Property Rights, a Record notifying Wells Fargo of Borrower’s
      intention to dispose of such rights, along with copies of all proposed
      documents and agreements concerning the disposal of such rights as
      requested by Wells Fargo; (iii) promptly upon discovery, a Record
      notifying Wells Fargo of (A) any Infringement of Borrower’s material
      Intellectual Property Rights by any Person, (B) claims that Borrower is
      Infringing another Person’s Intellectual Property Rights and (C) any
      threatened cancellation, termination or material limitation of Borrower’s
      material Intellectual Property
Rights.

              

      

       

      
        	
                (h)

              	
                Defaults.  No
      later than three Business Days after learning of the occurrence of any
      Event of Default or an event which, with the passage of time or notice or
      both, would constitute and Event of Default, a Record notifying Wells
      Fargo of the Event of Default and the steps being taken by Borrower to
      cure the Event of Default.

              

      

       

      
        	
                (i)

              	
                Disputes.  Promptly
      upon discovery, a Record notifying Wells Fargo of any disputes or claims
      by Borrower’s customers exceeding $50,000 individually or $250,000 in the
      aggregate during any fiscal year.

              

      

       

      
        	
                (j)

              	
                Changes in Officers
      and Directors.  Promptly following occurrence, a Record
      notifying Wells Fargo of any change in the persons constituting Borrower’s
      Officers and Directors.

              

      

       

      
        	
                (k)

              	
                Commercial Tort
      Claims.  Other than those disclosed on Exhibit F,
      promptly upon discovery, a Record notifying Wells Fargo of any commercial
      tort claims brought by Borrower against any Person, including the name and
      address of each defendant, a summary of the facts, an estimate of
      Borrower’s damages, copies of any complaint or demand letter submitted by
      Borrower, and such other information as Wells Fargo may reasonably
      request.

              

      

       

      
        	
                (l)

              	
                Reports to
      Owners.  Promptly upon distribution, copies of all
      financial statements, reports and proxy statements which Borrower shall
      have sent to its Owners.

              

      

       

      
        	
                (m)

              	
                Violations of
      Law.  No later than three Business Days after discovery
      of any violation, a Record notifying Wells Fargo of Borrower’s violation
      of any law, rule or regulation, the non-compliance with which could
      reasonably be expected to have a Material Adverse Effect on
      Borrower.

              

      

      
        
           

        

        
          -16-

          
            

          

        

        
           

        

      

       

      
        	
                (n)

              	
                Pension
      Plans.  (i) Promptly upon discovery, and in any event
      within 30 days after Borrower knows or has reason to know that any
      Reportable Event with respect to any Pension Plan has occurred, a Record
      authenticated by Borrower’s chief financial officer notifying Wells Fargo
      of the Reportable Event in detail and the actions which Borrower proposes
      to take to correct the deficiency, together with a copy of any related
      notice sent to the Pension Benefit Guaranty Corporation; (ii) promptly
      upon discovery, and in any event within 10 days after Borrower fails
      to make a required quarterly Pension Plan contribution under Section
      412(m) of the IRC, a Record authenticated by Borrower’s chief financial
      officer notifying Wells Fargo of the failure in detail and the actions
      that Borrower will take to cure the failure, together with a copy of any
      related notice sent to the Pension Benefit Guaranty Corporation; and (iii)
      promptly upon discovery, and in any event within 10 days after Borrower
      receives written notice from any Multiemployer Plan Sponsor concerning any
      withdrawal, partial withdrawal, reorganization or other event under any
      Multiemployer Plan under Sections 4201 or 4243 of ERISA, a Record
      authenticated by Borrower’s chief financial officer notifying Wells Fargo
      of the details of the event and the actions that Borrower proposes to take
      in response.

              

      

       

      
        	
                (o)

              	
                Other
      Reports.  From time to time, with reasonable promptness,
      all customer lists, receivables schedules, collection reports, deposit
      records, invoices to account debtors and back-up relating thereto, and
      such other materials, reports, records or information as Wells Fargo may
      reasonably request, including copies of Borrower’s state and federal
      income tax returns and all schedules and other information relating
      thereto.

              

      

       

      
        	
                (p)

              	
                Late
      Charges. In the event that Borrower fails to provide Wells Fargo with any
      of the information required by this Section 5.1 in accordance with the
      provisions hereof, and without derogating Wells Fargo’s rights upon the
      occurrence of a Default or an Event of Default, Borrower shall pay to
      Wells Fargo a fee in the amount of $200.00  per day for each separate
      item that Borrower has failed to provide to Wells Fargo in accordance with
      the provisions of this Section 5.1; provided, however, that Borrower shall
      not be obligated to pay such late charges if the Indebtedness is accruing
      interest at the Default Rate due to the occurrence of an Event of Default
      arising under Section 6.1(b)(i) or Section 6.1(b)(ii) for failure to
      deliver the applicable reports and no other Event of Default then exists
      and is continuing.

              

      

       

      
        	
                5.2

              	
                Financial
      Covenants.  Borrower agrees to comply with the financial
      covenants described below, which shall be calculated using GAAP
      consistently applied, except as they may be otherwise modified by the
      following capitalized definitions:

              

      

      

      
        	
                (a)

              	
                Minimum Debt Service
      Coverage Ratio.  Borrower shall maintain, as of each
      fiscal quarter end calculated for the twelve (12) month period ending on
      the last day of such fiscal quarter, a Debt Service Coverage Ratio of not
      less than 1.20 to 1.00.

              

      

       

      
        	
                (b)

              	
                Maximum Debt to Book
      Net Worth Ratio.  Borrower shall maintain, as of each
      fiscal quarter end, a ratio of its Debt to Book Net Worth of not greater
      than 3.00 to 1.00.

              

      

       

      
        	
                (c)

              	
                Capital
      Expenditures.  Borrower shall not incur or contract to
      incur Capital Expenditures of more than $750,000 in the aggregate during
      any fiscal year (commencing with Borrower’s fiscal year commencing April
      1, 2009), or more than $150,000 in any one
      transaction.

              

      

      
        
           

        

        
          -17-

          
            

          

        

        
           

        

      

      
        	
                5.3

              	
                Other
      Liens and Permitted Liens.

              

      

       

      
        	
                (a)

              	
                Other Liens; Permitted
      Liens. Borrower shall not
      create, incur or suffer to exist any Lien upon any of its assets, now
      owned or later acquired, as security for any indebtedness, with the
      exception of the following (each a “Permitted Lien”; collectively,
      “Permitted Liens”):  (i) statutory liens of landlords (provided
      that the landlords for Borrower’s Premises located at 3180 University
      Avenue, Suite 110, San Diego, California 92104 and 1133 Route 55, Suite D,
      Lagrangeville, New York 12540 shall have waived any such liens to the
      satisfaction of Wells Fargo) and liens of carriers, warehousemen, bailees,
      mechanics, materialmen and other like liens imposed by law, created in the
      ordinary course of business and for amounts not yet due (or which are
      being contested in good faith, by appropriate proceedings or other
      appropriate actions which are sufficient to prevent imminent foreclosure
      of such liens) and with respect to which adequate reserves or other
      appropriate provisions are being maintained by the Borrower in accordance
      with GAAP; (ii) deposits made (and the liens thereon) in the ordinary
      course of business of Borrower (including, without limitation, security
      deposits for leases, indemnity bonds, surety bonds and appeal bonds) in
      connection with workers’ compensation, unemployment insurance and other
      types of social security benefits or to secure the performance of tenders,
      bids, contracts (other than for the repayment or guarantee of borrowed
      money or purchase money obligations), statutory obligations and other
      similar obligations arising as a result of progress payments under
      government contracts; (iii) in the case of real property, covenants,
      restrictions, rights, easements (including, without limitation, reciprocal
      easement agreements and utility agreements) and minor defects or
      irregularities in title, variation and other restrictions, charges or
      encumbrances (whether or not recorded) which, in the aggregate, do not
      materially interfere with Borrower’s business or operations as presently
      conducted; (iv) liens of judgment creditors provided such liens do not
      exceed, in the aggregate, at any time, $250,000 (excluding judgments
      bonded or insured to the reasonable satisfaction of Wells Fargo); (v) tax
      liens in respect of taxes which are not yet due and payable or which are
      being diligently contested in good faith by the Borrower by appropriate
      proceedings, and which liens are not (a) filed on any public records, (b)
      senior to the liens of Wells Fargo or (c) for taxes due the United States
      of America or any state thereof having similar priority statutes; (vi)
      Liens in existence on the date of this Agreement that are described in
      Exhibit F; (vii) the Security Interest and Liens created by the Security
      Documents; and (viii) purchase money Liens relating to the acquisition of
      Equipment not exceeding the lesser of cost or fair market value, not
      exceeding $75,000 for any one purchase or $200,000 in the aggregate during
      any fiscal year, and so long as no
      Default Period is then in existence and none would exist immediately after
      such acquisition and provided that such Liens attach only to the assets
      acquired with the proceeds of such purchase money
      indebtedness.

              

      

       

      
        	
                (b)

              	
                Financing
      Statements.  Except with respect to Permitted Liens,
      Borrower shall not authorize the filing of any financing statement by any
      Person as Secured Party with respect to any of Borrower’s assets, other
      than Wells Fargo.  Borrower shall not amend any financing
      statement filed by Wells Fargo as Secured Party except as permitted by
      law.

              

      

       

      
        	
                5.4

              	
                Indebtedness.  Borrower
      shall not incur, create, assume or permit to exist any indebtedness or
      liability on account of deposits or letters of credit issued on Borrower’s
      behalf, or advances or any indebtedness for borrowed money of any kind,
      whether or not evidenced by an instrument, except: (a)
      Indebtedness described in this Agreement; (b) indebtedness of Borrower
      described in Exhibit F; (c) deferred taxes and trade payables incurred in
      the ordinary course of business; and (d) intercompany loans among the
      Persons constituting “Borrower” hereunder; and (e) indebtedness secured by
      Permitted Liens relating to purchase money indebtedness described in
      Section 5.3(a)(viii).

              

      

       

      
        	
                5.5

              	
                Guaranties.  Borrower
      shall not assume, guarantee, endorse or otherwise become directly or
      contingently liable for the obligations of any Person, except: (a) the
      endorsement of negotiable instruments by Borrower for deposit or
      collection or similar transactions in the ordinary course of business; and
      (b) guaranties, endorsements and other direct or contingent liabilities in
      connection with the obligations of other Persons in existence on the date
      of this Agreement and described in Exhibit
F.

              

      

      
        
           

        

        
          -18-

          
            

          

        

        
           

        

      

       

      
        	
                5.6

              	
                Investments and Subsidiaries.
      Except as otherwise expressly permitted by Sections 5.4, 5.5, 5.18
      and 5.19, Borrower shall not make or permit to exist any loans or advances
      to, or make any investment or acquire any interest whatsoever in, any
      Person or Subsidiary, including any partnership or joint venture, nor
      purchase or hold beneficially any stock or other securities or evidence of
      indebtedness of any Person or Subsidiary, except:

              

      

       

      
        	
                (a)

              	
                Investments
      in direct obligations of the United States of America or any of its
      political subdivisions whose obligations constitute the full faith and
      credit obligations of the United States of America and have a maturity of
      one year or less, commercial paper issued by U.S. corporations rated “A-1”
      or “A-2” by Standard & Poor’s Ratings Services or “P-1” or “P-2”
      by Moody’s Investors Service or certificates of deposit or bankers’
      acceptances having a maturity of one year or less issued by members of the
      Federal Reserve System having deposits in excess of $100,000,000 (which
      certificates of deposit or bankers’ acceptances are fully insured by the
      Federal Deposit Insurance
Corporation);

              

      

       

      
        	
                (b)

              	
                Intercompany
      loans among the Persons constituting “Borrower”
  hereunder.

              

      

       

      
        	
                (c)

              	
                Travel
      advances or loans to Borrower’s Officers and employees not exceeding an
      aggregate of $50,000 during any fiscal
year;

              

      

       

      
        	
                (d)

              	
                Prepaid
      rent not exceeding three (3) months or security deposits in the ordinary
      course of business; and

              

      

       

      
        	
                (e)

              	
                Current
      investments in those Subsidiaries in existence on the date of this
      Agreement which are identified on Exhibit
D.

              

      

       

      
        	
                5.7

              	
                Dividends and
      Distributions.  Borrower shall not declare or pay any
      dividends (other than dividends payable solely in stock of Borrower) on
      any class of its stock, or make any payment on account of the purchase,
      redemption or retirement of any shares of its stock, or other securities
      or evidence of its indebtedness or make any distribution regarding its
      stock, either directly or indirectly, except that CSC may declare and pay
      dividends in the ordinary course of its business with respect to its
      Series A Convertible Preferred Stock, provided that (i) the aggregate
      amount of such dividends does not exceed in any fiscal quarter $41,000 and
      (ii) immediately before and after giving effect to the making of such
      dividend (A) no Event of Default shall have occurred and be continuing,
      and (B) Borrower shall have at least $500,000 in availability immediately
      before and after giving effect to the making of each such
      dividend.

              

      

       

      
        	
                5.8

              	
                Salaries.  Borrower
      shall not pay excessive or unreasonable salaries, bonuses, commissions,
      consultant fees or other
compensation.

              

      

       

      
        	
                5.9

              	
                Key
      Person.  Borrower shall retain at least two of the three
      Key Persons in their respective positions with Borrower unless a
      replacement reasonably satisfactory to Wells Fargo is made for each
      departing Key Person within 120 days after the departure from Borrower of
      the second departing Key
Person.

              

      

      
        
           

        

        
          -19-

          
            

          

        

        
           

        

      

      
        	
                5.10

              	
                Books
      and Records; Collateral Examination; Inspection and
      Appraisals.

              

      

       

      
        	
                (a)

              	
                Books and Records;
      Inspection.  Borrower shall keep complete and accurate
      books and records with respect to the Collateral and Borrower’s business
      and financial condition and any other matters that Wells Fargo may
      reasonably request, in accordance with GAAP. Borrower shall permit any
      employee, attorney, accountant or other agent of Wells Fargo, upon
      reasonable notice, to audit, review, make extracts from and copy any of
      its books and records at any time during ordinary business hours, and to
      discuss Borrower’s affairs with any of its Directors, Officers, employees,
      or agents.

              

      

       

      
        	
                (b)

              	
                Authorization to
      Borrower’s Agents to Make Disclosures to Wells
      Fargo.  Borrower authorizes all accountants and other
      Persons acting as its agent to disclose and deliver, if requested by Wells
      Fargo, to Wells Fargo’s employees, accountants, attorneys and other
      Persons acting as its agent, at Borrower’s reasonable expense, all
      financial information, books and records, work papers, management reports
      and other information in their possession regarding
    Borrower.

              

      

       

      
        	
                (c)

              	
                Collateral Exams and
      Inspections.  Borrower shall permit Wells Fargo’s
      employees, accountants, attorneys or other Persons acting as its agent,
      upon reasonable notice, to examine and inspect any Collateral or any other
      property of Borrower at any time on Premises of Borrower during ordinary
      business hours subject to Section
1.6(c).

              

      

       

      
        	
                (d)

              	
                Collateral
      Appraisals.  Wells Fargo may also obtain, from time to
      time, an appraisal
      of Borrower’s Collateral by an appraiser acceptable to Wells Fargo in its
      sole discretion. Notwithstanding the foregoing, so long as no Default
      Period exists, Borrower shall only be obligated to reimburse Wells Fargo
      for the reasonable costs of one such appraisal during any one fiscal
      year.

              

      

       

      
        	
                5.11

              	
                Account
      Verification; Payment of Permitted
Liens.

              

      

       

      
        	
                (a)

              	
                Account
      Verification.  Wells Fargo or its agents may (i) contact
      account debtors and other obligors at any time to verify Borrower’s
      Accounts; (ii) require Borrower to send requests for verification of
      Accounts or send notices of assignment of Accounts to account debtors and
      other obligors and (iii) upon the occurrence and continuance of an Event
      of Default, bill or invoice any account debtor of Borrower’s unbilled
      Accounts.

              

      

       

      
        	
                (b)

              	
                Covenant to Pay
      Permitted Liens.  Borrower shall pay in the ordinary
      course of business each account payable due to any Person holding a
      Permitted Lien (as a result of such payable) on any
      Collateral.

              

      

       

      
        	
                5.12

              	
                Compliance
      with Laws.

              

      

       

      
        	
                (a)

              	
                General Compliance
      with Applicable Law; Use of Collateral.  Borrower shall
      (i) comply, and cause each Subsidiary to comply, with the
      requirements of applicable laws and regulations, the non-compliance with
      which would have a Material Adverse Effect on its business or its
      financial condition and (ii) use and keep the Collateral, and require
      that others use and keep the Collateral, only for lawful purposes, without
      violation of any federal, state or local law, statute or ordinance, the
      violation of which could reasonably be expected to have a Material Adverse
      Effect on the Collateral; provided that the Borrower may contest any acts,
      rules, regulations, orders and directions of such bodies or officials in
      any reasonable manner which will not, in Wells Fargo’s reasonable opinion,
      materially and adversely affect Wells Fargo’s rights or priority in the
      Collateral.

              

      

      
        
           

        

        
          -20-

          
            

          

        

        
           

        

      

      
        	
                (b)

              	
                Compliance with
      Federal Regulatory Laws.  Borrower shall (i) prohibit,
      and cause each Subsidiary to prohibit, any Person that is an Officer from
      being listed on the Specially Designated Nationals and Blocked Person List
      or other similar lists maintained by the Office of Foreign Assets Control
      ("OFAC"), the Department of the Treasury or included in any Executive
      Orders, (ii) not use the proceeds of the Line of Credit or any other
      financial accommodation extended by Wells Fargo in any way that violates
      any foreign asset control regulations of OFAC or other applicable law,
      (iii) provide such information to Wells Fargo in regard to Borrower as
      Wells Fargo shall reasonably request from time to time in order for Wells
      Fargo to comply with all its obligations under applicable Bank Secrecy Act
      laws and regulations, as amended from time to time, the USA Patriot Act
      and Wells Fargo’s related policies and
  procedures.

              

      

       

      
        	
                (c)

              	
                Compliance with
      Environmental Laws.  Borrower shall (i) comply, and cause
      each Subsidiary to comply, with the requirements of applicable
      Environmental Laws and obtain and comply with all permits, licenses and
      similar approvals required by them, the non-compliance with which could
      reasonably be expected to have a Material Adverse Effect on the operation
      and business of Borrower and (ii) not generate, use, transport, treat,
      store or dispose of any Hazardous Substances in such a manner as to create
      any material liability under any Environmental
  Law.

              

      

       

      
        	
                (d)

              	
                Borrower
      shall not be deemed to have breached any provision of this Section 5.12 or
      paragraph (p) of Exhibit D if (i) the failure to comply with the
      requirements of this Section 5.12 resulted from good faith error or
      innocent omission, (ii) the Borrower promptly commences and diligently
      pursues a cure of such breach, and (iii) such failure is cured within
      thirty (30) days following the Borrower’s receipt of notice of such
      failure, or if such breach cannot in good faith be cured within thirty
      (30) days, then such breach is cured within a reasonable time frame based
      upon the extent and nature of the breach and the necessary remediation
      (but not to exceed ninety (90) days) and in conformity with any applicable
      consent order, consensual agreement and applicable
  law.

              

      

       

      
        	
                5.13

              	
                Payment of Taxes and Other
      Claims.  Borrower shall pay or discharge, when due,
      (including after any extension period) and cause each Subsidiary to pay or
      discharge, when due, (a) all taxes,
      assessments and governmental charges levied or imposed upon it or upon its
      income or profits, upon any properties belonging to it (including the
      Collateral) or upon or against the creation, perfection or continuance of
      the Security Interest, prior to the date on which penalties attach,
      (b) all federal, state and local taxes required to be withheld by it,
      and (c) all lawful claims for labor, materials and supplies which, if
      unpaid, might by law become a Lien upon any properties of Borrower,
      although Borrower shall not be required to pay any such tax, assessment,
      charge or claim whose amount, applicability or validity is being contested
      in good faith by appropriate proceedings and for which proper reserves
      have been made.

              

      

       

      
        	
                5.14

              	
                Maintenance
      of Collateral and Properties.

              

      

       

      
        	
                (a)

              	
                Borrower
      shall keep and maintain the Collateral and all of its other properties
      necessary or useful in its business in good condition, repair and working
      order (normal wear and tear excepted), although Borrower may discontinue
      the operation and maintenance of any properties if Borrower believes that
      such discontinuance is desirable to the conduct of its
      business.  Borrower shall take all commercially reasonable steps
      necessary to protect and maintain its material Intellectual Property
      Rights if failure to do so could reasonably be expected to have a Material
      Adverse Effect on Borrower.

              

      

       

      
        	
                (b)

              	
                Borrower
      shall defend
      the Collateral against all Liens, claims and demands of all third Persons
      claiming any interest in the Collateral. Borrower shall keep all
      Collateral free and clear of all Liens except Permitted Liens. Borrower
      shall take all commercially reasonable steps necessary to prosecute any
      Person Infringing its material Intellectual Property Rights and to defend
      itself against any Person accusing it of Infringing any Person’s
      Intellectual Property Rights if failure to do so could reasonably be
      expected to have a Material Adverse Effect on Borrower.   

              

      

      
        
           

        

        
          -21-

          
            

          

        

        
           

        

      

       

      
        	
                5.15

              	
                Insurance.  Borrower
      shall at all times maintain insurance with insurers reasonably acceptable
      to Wells Fargo, in such reasonable amounts and on such terms (including
      deductibles) as are at all times reasonably satisfactory to Wells Fargo
      including, as applicable and without limitation, hazard coverage on an
      “all risks” basis for all tangible Collateral, and theft and physical
      damage coverage for Collateral consisting of motor
      vehicles.  All insurance policies must contain an appropriate
      lender’s interest endorsement or clause, and name Wells Fargo as an
      additional insured and are subject to the rights of any holders of
      Permitted Liens holding claims senior to Wells
  Fargo.

              

      

       

      
        	
                5.16

              	
                Preservation of
      Existence.  Borrower shall preserve and maintain its
      existence and all of its rights, privileges and franchises necessary in
      the normal conduct of its business.

              

      

       

      
        	
                5.17

              	
                Delivery of Instruments,
      etc.  Upon request by Wells Fargo, Borrower shall
      promptly deliver to Wells Fargo in pledge all instruments, documents and
      chattel paper constituting Collateral, endorsed or assigned by
      Borrower.

              

      

       

      
        	
                5.18

              	
                Sale or Transfer of Assets;
      Suspension of Business Operations.  Except as otherwise
      expressly permitted in Section 5.19, Borrower shall not sell, lease,
      assign, transfer or otherwise dispose of (a) the stock of any
      Subsidiary, (b) all or a substantial part of its assets, or
      (c) any Collateral or any interest in Collateral (whether in one
      transaction or in a series of transactions) to any other Person other than
      the sale or other disposition of Inventory or other non-material assets
      not constituting Accounts in the ordinary course of business and shall not
      liquidate, dissolve or suspend any material business
      operations.  Borrower shall not transfer any part of its
      ownership interest in any material Intellectual Property Rights and shall
      not permit its rights as licensee of material Licensed Intellectual
      Property to lapse, except that Borrower may transfer such rights or permit
      them to lapse if it has reasonably determined that such Intellectual
      Property Rights are no longer useful in its business.  If
      Borrower transfers any material Intellectual Property Rights for value,
      Borrower shall pay the Proceeds to Wells Fargo for application to the
      Indebtedness.  Borrower shall not license any other Person to
      use any of Borrower’s material Intellectual Property Rights, except that
      Borrower may grant licenses in the ordinary course of its business in
      connection with sales of Inventory or other non-material assets not
      constituting Accounts or the provision of services to its
      customers.

              

      

       

      
        	
                5.19

              	
                Consolidation and Merger; Asset
      Acquisitions.  Borrower shall not consolidate with or
      merge into any other entity, or permit any other entity to merge into it,
      or acquire (in a transaction analogous in purpose or effect to a
      consolidation or merger) all or substantially all of the assets of any
      other entity, except consolidation or merger of any Subsidiary into
      another Subsidiary or into the Borrower is permitted, provided the
      surviving entity is a “Borrower”
hereunder.

              

      

       

      
        	
                5.20

              	
                Sale and
      Leaseback.  Borrower shall not enter into any
      arrangement, directly or indirectly, with any other Person pursuant to
      which Borrower shall sell or transfer any real or personal property,
      whether owned now or acquired in the future, and then rent or lease all or
      part of such property or any other property which Borrower intends to use
      for substantially the same purpose or purposes as the property being sold
      or transferred.

              

      

       

      
        	
                5.21

              	
                Restrictions on Nature of
      Business.  Borrower will not engage in any line of
      business materially different from that presently engaged in by Borrower,
      and will not purchase, lease or otherwise acquire assets not related to
      its business.

              

      

      
        
           

        

        
          -22-

          
            

          

        

        
           

        

      

       

      
        	
                5.22

              	
                Accounting.  Borrower
      will not adopt any material change in accounting principles except as
      required by GAAP, consistently applied.  Borrower will not
      change its fiscal year unless it has given Wells Fargo at least sixty (60)
      days prior written notice.

              

      

       

      
        	
                5.23

              	
                [Reserved]

              

      

       

      
        	
                5.24

              	
                Pension
      Plans.  Except as disclosed to Wells Fargo in a Record
      prior to the date of this Agreement, neither Borrower nor any ERISA
      Affiliate will (a) adopt, create, assume or become party to any Pension
      Plan, (b) become obligated to contribute to any Multiemployer Plan, (c)
      incur any obligation to provide post-retirement medical or insurance
      benefits with respect to employees or former employees (other than
      benefits required by law) or (d) amend any Plan in a manner that would
      materially increase its funding
obligations.

              

      

       

      
        	
                5.25

              	
                Place of Business;
      Name.  Borrower will not (i) transfer its chief executive
      office or principal place of business, or move, relocate, close or sell
      any business Premises, (ii) permit any tangible Collateral or any records
      relating to the Collateral to be located in any state or area in which, in
      the event of such location, a financing statement covering such Collateral
      would be required to be, but has not in fact been, filed in order to
      perfect the Security Interest, or (iii) change its name or jurisdiction of
      organization, unless (a) Borrower provides Wells Fargo thirty (30) days
      prior written notice thereof, and (b) Borrower executes and delivers,
      prior to or simultaneously with any such actions, any and all documents
      and agreements required to maintain the perfection and priority of all
      security interests and liens granted by Wells Fargo
    hereunder.

              

      

       

      
        	
                5.26

              	
                Constituent Documents;
      Borrower will not amend its Constituent Documents in a manner
      adverse to Wells Fargo without Wells Fargo’s prior written
      consent.

              

      

       

      
        	
                5.27

              	
                Performance by Wells
      Fargo.  If Borrower fails to perform or observe any of
      its obligations under this Agreement at any time, Wells Fargo may, upon
      reasonable notice to Borrower, but need not, perform or observe them on
      behalf of Borrower and may, but need not, take any other actions which
      Wells Fargo may reasonably deem necessary to cure or correct this failure;
      and Borrower shall pay Wells Fargo upon demand the amount of all costs and
      expenses (including reasonable attorneys’ fees and legal expense) incurred
      by Wells Fargo in performing these obligations, together with interest on
      these amounts at the Default Rate.

              

      

       

      
        	
                5.28

              	
                Wells Fargo Appointed as
      Borrower’s Attorney in Fact.  To facilitate Wells Fargo’s
      performance or observance of Borrower’s obligations under this Agreement,
      Borrower hereby irrevocably appoints Wells Fargo and Wells Fargo’s agents,
      as Borrower’s attorney in fact (which appointment is coupled with an
      interest), effective upon the occurrence of an Event of Default, with the
      right (but not the duty) to create, prepare, complete, execute, deliver,
      endorse or file on behalf of Borrower any instruments, documents,
      assignments, security agreements, financing statements, applications for
      insurance and any other agreements or any Record required to be obtained,
      executed, delivered or endorsed by Borrower in accordance with the terms
      of this Agreement.

              

      

       

      
        	
                5.29

              	
                Maintenance of Deposit and
      Securities Accounts at Wells Fargo. Borrower shall maintain each of
      its deposit accounts, securities accounts and other investment accounts
      with Wells Fargo; provided, however, that Borrower may maintain the
      accounts listed on Exhibit G hereto for up to sixty (60) days after the
      date of this Agreement provided that the amount on deposit in each
      particular account does not exceed the amount specified for such account
      on Exhibit G hereto; and provided, further that Borrower may maintain the
      CIT Collection Account for a period of ninety (90) days after the date of
      this Agreement.

              

      

      
        
           

        

        
          -23-

          
            

          

        

        
           

        

      

       

      
        	
                6.

              	
                EVENTS
      OF DEFAULT AND REMEDIES

              

      

       

      
        	
                6.1

              	
                Events of
      Default.  An “Event of Default” means any of the
      following:

              

      

       

      
        	
                (a)

              	
                Borrower
      fails to pay any the amount of any Indebtedness on the date that it
      becomes due and payable;

              

      

       

      
        	
                (b)

              	
                Borrower
      fails to (i) observe or perform  any covenant or agreement of
      Borrower set forth in Sections 5.1(a), (b) or (h), 5.2, 5.3, 5.4, 5.5,
      5.6, 5.7, 5.8, 5.10, 5.15, 5.16, 5.18, 5.19, 5.20, 5.21, 5.22, 5.24 or
      5.25, (ii) observe or perform any covenant or agreement of Borrower set
      forth in Section 5.1 (c) or (d) and such failure continues for a period of
      three (3) Business Days from the date of such failure; or (iii) observe or
      perform any covenant or agreement of Borrower set forth in this Agreement
      (other than a section that is expressly dealt with elsewhere in this
      Section 6.1 or in this Agreement) hereof  and such failure
      continues for a period of 15 days from the date of such
      failure;

              

      

       

      
        	
                (c)

              	
                An
      Overadvance arises and continues for a period of three (3) Business Days
      as the result of any reduction in the Borrowing Base, or arises in any
      manner or on terms not otherwise approved of in advance by Wells Fargo in
      a Record that it has Authenticated;

              

      

       

      
        	
                (d)

              	
                An
      event of default or termination event (however defined) (after giving
      effect to any applicable grace or cure periods) occurs under any swap,
      derivative, foreign exchange, hedge or any similar transaction or
      arrangement entered into between Borrower and Wells
  Fargo;

              

      

       

      
        	
                (e)

              	
                A
      Change of Control shall occur;

              

      

       

      
        	
                (f)

              	
                Borrower
      becomes insolvent or admits in a Record an inability to pay debts as they
      mature, or Borrower makes an assignment for the benefit of creditors; or
      Borrower applies for or consents to the appointment of any receiver,
      trustee, or similar officer for the benefit of Borrower, or for any of
      their properties;

              

      

       

      
        	
                (g)

              	
                Borrower
      files a petition under any chapter of the United States Bankruptcy Code or
      under the laws of any other jurisdiction naming Borrower as debtor; or any
      such petition is instituted against Borrower; or Borrower institutes (by
      petition, application, answer, consent or otherwise) any bankruptcy,
      insolvency, reorganization, debt arrangement, dissolution, liquidation or
      similar proceeding under the laws of any jurisdiction; or any such
      proceeding is instituted (by petition, application or otherwise) against
      Borrower; or any receiver, trustee or similar officer is appointed without
      the application or consent of Borrower provided that a proceeding
      instituted against Borrower or such appointment shall not constitute an
      Event of Default if such proceeding or appointment is dismissed,
      terminated or vacated within thirty (30) days of
    commencement;

              

      

       

      
        	
                (h)

              	
                Any
      representation or warranty made by Borrower in this Agreement, or by
      Borrower (or any of its Officers) in any agreement, certificate,
      instrument or financial statement or other statement delivered to Wells
      Fargo in connection with this Agreement is untrue or misleading in any
      material respect when delivered to Wells
Fargo;

              

      

      
        
           

        

        
          -24-

          
            

          

        

        
           

        

      

      
        	
                (i)

              	
                A
      final, non-appealable arbitration award, judgment, or decree or order for
      the payment of money in an amount in excess of $250,000 which is not
      insured or subject to indemnity, is entered against Borrower and which is
      unstayed for more than ten (10) Business Days; or any judgment, writ,
      warrant of attachment or execution or similar process is issued or levied
      against a substantial part of the property of Borrower and such judgment,
      writ or warrant is not released or is unstayed for more than ten (10)
      Business Days;

              

      

       

      
        	
                (k)

              	
                Borrower
      is in default with respect to any bond, debenture, note or other evidence
      of material indebtedness issued by Borrower, having a principal amount in
      excess of $250,000 that is held by any third Person other than Wells
      Fargo, or under any instrument under which any such evidence of
      indebtedness has been issued or by which it is governed, or under any
      material lease or other contract, and the applicable grace period, if any,
      has expired;

              

      

       

      
        	
                (l)

              	
                Borrower
      liquidates, dissolves, terminates or suspends its business operations or
      otherwise fails to operate its business in the ordinary course, or unless
      permitted pursuant to Section 5.19 hereof, merges with another Person; or
      sells or attempts to sell all or substantially all of its
      assets;

              

      

       

      
        	
                (m)

              	
                Borrower
      fails to pay any indebtedness or obligation owed to Wells Fargo which is
      unrelated to the Line of Credit or this Agreement as it becomes due and
      payable;

              

      

       

      
        	
                (n)

              	
                Any
      Director or Officer of Borrower is indicted for a felony offense under
      state or federal law, unless, with respect to felonies other than felonies
      involving fraud, such Director is removed from Borrower’s Board of
      Directors or such Officer’s employment with Borrower is terminated, in
      each case within one hundred twenty (120) days of the date of the related
      indictment, or Borrower hires an Officer or appoints a Director who has
      been convicted of any felony offense under state or federal law;
      and

              

      

      

      
        	
                (o)

              	
                Any
      Reportable Event, which Wells Fargo in good faith believes to constitute
      sufficient grounds for termination of any Pension Plan or for the
      appointment of a trustee to administer any Pension Plan, has occurred and
      is continuing 30 days after Borrower gives Wells Fargo a Record
      notifying it of the Reportable Event; or a trustee is appointed by an
      appropriate court to administer any Pension Plan; or the Pension Benefit
      Guaranty Corporation institutes proceedings to terminate or appoint a
      trustee to administer any Pension Plan; or Borrower or any ERISA Affiliate
      files for a distress termination of any Pension Plan under Title IV of
      ERISA; or Borrower or any ERISA Affiliate fails to make any quarterly
      Pension Plan contribution required under Section 412(m) of the IRC, which
      Wells Fargo in good faith believes may, either by itself or in combination
      with other failures, result in the imposition of a Lien on Borrower’s
      assets in favor of the Pension Plan; or any withdrawal, partial
      withdrawal, reorganization or other event occurs with respect to a
      Multiemployer Plan which could reasonably be expected to result in a
      material liability by Borrower to the Multiemployer Plan under Title IV of
      ERISA.

              

      

      

      
        	
                6.2

              	
                Rights and
      Remedies.  During any Default Period, Wells Fargo may in
      its discretion exercise any or all of the following rights and
      remedies:

              

      

       

      
        	
                (a)

              	
                Wells
      Fargo may terminate the Line of Credit and decline to make Advances, and
      terminate any services extended to Borrower under the Master Agreement for
      Treasury Management Services;

              

      

       

      
        	
                (b)

              	
                Wells
      Fargo may declare the Indebtedness to be immediately due and payable and
      accelerate payment of the Revolving Note, and all Indebtedness shall
      immediately become due and payable, without presentment, notice of
      dishonor, protest or further notice of any kind, all of which Borrower
      hereby expressly waives;

              

      

      
        
           

        

        
          -25-

          
            

          

        

        
           

        

      

       

      
        	
                (c)

              	
                Wells
      Fargo may, without notice to Borrower, apply any money owing by Wells
      Fargo to Borrower to payment of the
  Indebtedness;

              

      

       

      
        	
                (d)

              	
                Wells
      Fargo may exercise and enforce any rights and remedies available upon
      default to a secured party under the UCC, including the right to take
      possession of Collateral, proceeding with or without judicial process
      (without a prior hearing or notice of hearing, which Borrower hereby
      expressly waives) and sell, lease or otherwise dispose of Collateral for
      cash or on credit (with or without giving warranties as to condition,
      fitness, merchantability or title to Collateral, and in the event of a
      credit sale, Indebtedness shall be reduced only to the extent that
      payments are actually received), and Borrower will upon Wells Fargo’s
      demand assemble the Collateral and make it available to Wells Fargo at any
      place designated by Wells Fargo which is reasonably convenient to both
      parties;

              

      

       

      
        	
                (e)

              	
                Wells
      Fargo may exercise and enforce its rights and remedies under any of the
      Loan Documents and any other document or agreement described in or related
      to this Agreement, including, without limitation, billing or invoicing any
      account debtor in respect of Borrower’s unbilled
  Accounts;

              

      

       

      
        	
                (f)

              	
                Borrower
      will pay Wells Fargo upon demand in immediately available funds an amount
      equal to the Aggregate Face Amount plus any anticipated costs and fees
      under Sections 1.6(i) and 1.6(j) hereof or any other Loan Document for
      deposit to the Special Account pursuant to Section 1.10;
    and

              

      

      

      
        	
                (g)

              	
                Wells
      Fargo may exercise any other rights and remedies available to it by law or
      agreement.

              

      

       

      
        	
                6.3

              	
                Immediate Default and
      Acceleration.  Following the occurrence of an Event of
      Default described in Section 6.1(f) or (g), the Line of Credit shall
      immediately terminate and all of Borrower’s Indebtedness shall immediately
      become due and payable without presentment, demand, protest or notice of
      any kind.

              

      

       

      
        	
                7.

              	
                MISCELLANEOUS

              

      

      

      
        	
                7.1

              	
                No Waiver; Cumulative
      Remedies.  No delay or any single or partial exercise by
      Wells Fargo of any right, power or remedy under the Loan Documents, or
      under any other document or agreement described in or related to this
      Agreement, shall constitute a waiver of any other right, power or remedy
      under the Loan Documents or granted by Borrower to Wells Fargo under other
      agreements or documents that are unrelated to the Loan
      Documents.  No notice to or demand on Borrower in any
      circumstance shall entitle Borrower to any additional notice or demand in
      any other circumstances.  The remedies provided in the Loan
      Documents or in any other document or agreement described in or related to
      this Agreement are cumulative and not exclusive of any remedies provided
      by law.  Wells Fargo shall comply with applicable law in
      connection with a disposition of Collateral, and such compliance will not
      be considered to adversely affect the commercial reasonableness of any
      sale of the Collateral.

              

      

      
        
           

        

        
          -26-

          
            

          

        

        
           

        

      

      
        	
                7.2

              	
                Amendment; Consents and
      Waivers; Authentication.  No amendment or modification of
      any Loan Documents, or any other document or agreement described in or
      related to this Agreement, or consent to or waiver of any Event of
      Default, or consent to or waiver of the application of any covenant or
      representation set forth in any of the Loan Documents, or any other
      document or agreement described in or related to this Agreement, or any
      release of Wells Fargo’s Security Interest in any Collateral, shall be
      effective unless it has
      been agreed to by Wells Fargo and Borrower and memorialized in a Record
      that: (a) specifically states that it is intended to amend or modify
      specific Loan Documents, or any other document or agreement described in
      or related to this Agreement, or waive any Event of Default or the
      application of any covenant or representation of any terms of specific
      Loan Documents, or any other document or agreement described in or related
      to this Agreement, or is intended to release Wells Fargo’s Security
      Interest in specific Collateral; and (b) is Authenticated by the signature
      of an authorized employee of both parties, or by an authorized employee of
      Wells Fargo with respect to a consent or waiver.  The terms of
      an amendment, consent or waiver memorialized in any Record shall be
      effective only to the extent, and in the specific instance, and for the
      limited purpose to which Wells Fargo and Borrower have
    agreed.

              

      

      

      
        	
                7.3

              	
                Execution in Counterparts;
      Delivery of Counterparts.  This Agreement and all other
      Loan Documents, or any other document or agreement described in or related
      to this Agreement, and any amendment or modification to them may be
      Authenticated by the parties in any number of counterparts, each of which,
      once authenticated and delivered in accordance with the terms of this
      Section 7.3, will be deemed an original, and all such counterparts, taken
      together, shall constitute one and the same
      instrument.  Delivery by fax or by encrypted e-mail or e-mail
      file attachment of any counterpart to any Loan Document Authenticated by
      an authorized signature will be deemed the equivalent of the delivery of
      the original Authenticated instrument.  Borrower shall send the
      original Authenticated counterpart to Wells Fargo by first class U.S. mail
      or by overnight courier, but Borrower’s failure to deliver a Record in
      this form shall not affect the validity, enforceability, and binding
      effect of this Agreement or the other Loan Documents, or any other
      document or agreement described in or related to this
      Agreement.

              

      

       

      
        	
                7.4

              	
                Notices, Requests, and
      Communications; Confidentiality.  Except as otherwise
      expressly provided in this
Agreement:

              

      

       

      
        	
                (a)

              	
                Delivery of Notices,
      Requests and Communications.  (1) Any notice, request,
      demand, or other communication by either party that is required under the
      Loan Documents, or any other document or agreement described in or related
      to this Agreement, to be in the form of a Record (but excluding any Record
      containing information Borrower must report to Wells Fargo under Section
      5.1) may be delivered (i) in person, (ii) by first class U.S. mail,
      (iii) by overnight courier of national reputation, or (iv) by fax, or
      the Record may be sent as an Electronic Record and delivered (v) by an
      encrypted e-mail, or (vi) through Wells Fargo’s CEO® portal or other
      secure electronic channel to which the parties have agreed.  (2)
      Pursuant to Section 5.1, any information that Borrower is required to
      deliver under Section 5.1 in the form of a Record may be delivered to
      Wells Fargo (i) in person, or by (ii) first class U.S. mail,
      (iii) overnight courier, or (iv) fax, or the Record may be sent
      as an Electronic Record (v) by encrypted e-mail, or (vi) through the file
      upload service of Wells Fargo’s CEO® portal or other
      secure electronic channel to which the parties have
  agreed.

              

      

       

      
        	
                (b)

              	
                Addresses for
      Delivery.  Delivery of any Record under the Loan
      Documents shall be made to the appropriate address set forth on the last
      page of this Agreement (which either party may modify by a Record sent to
      the other party), or through Wells Fargo’s CEO® portal or other
      secure electronic channel to which the parties have
  agreed.

              

      

       

      
        	
                (c)

              	
                Date of
      Receipt. Each Record sent
      pursuant to the terms of this Section 7.4 will be deemed to have been
      received on (i) the date of delivery if delivered in person,
      (ii) the date deposited in the mail if sent by mail, (iii) the
      date delivered to the courier if sent by overnight courier, (iv) the date
      of transmission if sent by fax, or (v) the date of transmission, if
      sent as an Electronic Record by electronic mail or through Wells Fargo’s
      CEO® portal or similar
      secure electronic channel to which the parties have agreed; except that any
      request for an Advance or any other notice, request, demand or other
      communication from Borrower required under Section 1, and any request for
      an accounting under Section 9-210 of the UCC, will not be deemed to have
      been received until actual receipt by Wells Fargo on a Business Day in
      accordance with the terms of this
Agreement.

              

      

      
        
           

        

        
          -27-

          
            

          

        

        
           

        

      

       

      
        	
                (d)

              	
                Authentication of
      Borrower Information Records.  Borrower shall
      Authenticate any Record delivered (i) in person, or by U.S. mail,
      overnight courier, or fax, by the signature of the Officer or employee of
      Borrower who prepared the Record; (ii) as an Electronic Record sent via
      encrypted e-mail, by the signature of the Officer or employee of Borrower
      who prepared the Record by any file format signature that is reasonably
      acceptable to Wells Fargo, or by a separate certification signed and sent
      by fax; or (iii) as an Electronic Record via the file upload service of
      Wells Fargo’s CEO® portal or similar
      secure electronic channel to which the parties have agreed, through such
      credentialing process as Wells Fargo and Borrower may agree to under the
      CEO® agreement.

              

      

       

      
        	
                (e)

              	
                Certification of
      Borrower Information Records.  Any Record
      (including any Electronic Record) Authenticated and delivered to Wells
      Fargo under this Section 7.5 will be deemed to have been certified as
      materially true, correct, and complete by Borrower and each Officer or
      employee of Borrower who prepared and Authenticated the Record on behalf
      of Borrower, and may be legally relied upon by Wells Fargo without regard
      to method of delivery or
transmission.

              

      

       

      
        	
                (f)

              	
                Confidentiality of
      Borrower Information Records Sent by Unencrypted
      E-mail.  Borrower acknowledges that if it sends an
      Electronic Record to Wells Fargo without encryption by e-mail or as an
      e-mail file attachment, there is a risk that the Electronic Record may be
      received by unauthorized Persons, and that by so doing it will be deemed
      to have accepted this risk and the consequences of any such unauthorized
      disclosure.  Borrower acknowledges that it may deliver
      Electronic Records containing Borrower information to Wells Fargo by
      e-mail pursuant to any encryption tool acceptable to Wells Fargo and
      Borrower, or through Wells Fargo’s CEO® portal file upload
      service without risk of unauthorized
disclosure.

              

      

       

      
        	
                7.5

              	
                [Reserved].
  

              

      

       

      
        	
                7.6

              	
                Further
      Documents.  Borrower will from time to time execute,
      deliver, endorse and authorize the filing of any instruments, documents,
      conveyances, assignments, security agreements, financing statements,
      control agreements and other agreements that Wells Fargo may reasonably
      request in order to secure, protect, perfect or enforce the Security
      Interest or Wells Fargo’s rights under the Loan Documents, or any other
      document or agreement described in or related to this Agreement (but any
      failure to request or assure that Borrower executes, delivers, endorses or
      authorizes the filing of any such item shall not affect or impair the
      validity, sufficiency or enforceability of the Loan Documents, or any
      other document or agreement described in or related to this Agreement, and
      the Security Interest, regardless of whether any such item was or was not
      executed, delivered or endorsed in a similar context or on a prior
      occasion).

              

      

       

      
        	
                7.7

              	
                Costs and
      Expenses.  Borrower shall pay on demand all costs and
      expenses, including, without limitation, reasonable attorneys’ fees,
      incurred by Wells Fargo in connection with the Indebtedness, this
      Agreement, the Loan Documents, or any other document or agreement
      described in or related to this Agreement, and the transactions
      contemplated by this Agreement, including all such costs, expenses and
      fees incurred in connection with the negotiation, preparation, execution,
      delivery, amendment, administration, performance, collection and
      enforcement of the Indebtedness and all such documents and agreements and
      the creation, perfection, protection, satisfaction, foreclosure or
      enforcement of the Security
Interest.

              

      

      
        
           

        

        
          -28-

          
            

          

        

        
           

        

      

       

      
        	
                7.8

              	
                Indemnity.  In
      addition to its obligation to pay Wells Fargo’s expenses under the terms
      of this Agreement, Borrower shall indemnify, defend and hold harmless
      Wells Fargo, its parent Wells Fargo & Borrower, and any of its
      affiliates and successors, and all of their present and future Officers,
      Directors, employees, attorneys and agents (each an “Indemnitee”) from and
      against any of the following (collectively, “Indemnified
      Liabilities”):

              

      

       

      
        	
                (a)

              	
                Any
      and all transfer taxes, documentary taxes, assessments or charges made by
      any governmental authority by reason of the execution and delivery of the
      Loan Documents, or any other document or agreement described in or related
      to this Agreement or the making of the
Advances;

              

      

       

      
        	
                (b)

              	
                Any
      claims, loss or damage to which any Indemnitee may be subjected if any
      representation or warranty contained in Exhibit D proves to be incorrect
      in any respect or as a result of any violation of the covenants contained
      in Section 5.12; and

              

      

       

      
        	
                (c)

              	
                Any
      and all other liabilities, losses, damages, penalties, judgments, suits,
      claims, costs and expenses of any kind or nature whatsoever (including the
      reasonable fees and disbursements of counsel) in connection with this
      Agreement and any other investigative, administrative or judicial
      proceedings, whether or not such Indemnitee shall be designated a party to
      such proceedings, which may be imposed on, incurred by or asserted against
      any such Indemnitee, to the extent any of the foregoing is related to or
      arising out of or in connection with the Loan Documents and/or the making
      of the Advances, or the use or intended use of the proceeds of the
      Advances, with the exception of any Indemnified Liability caused by the
      gross negligence or willful misconduct of an
  Indemnitee.

              

      

       

      
        	
                (d)

              	
                If
      any investigative, judicial or administrative proceeding described in this
      Section is brought against any Indemnitee, Wells Fargo shall promptly
      notify Borrower in writing, and upon the Indemnitee’s request, Borrower,
      or counsel designated by Borrower and satisfactory to the Indemnitee, will
      resist and defend the action, suit or proceeding to the extent and in the
      manner directed by the Indemnitee, at Borrower’s sole cost and
      expense.  Each Indemnitee will use its best efforts to cooperate
      in the defense of any such action, suit or proceeding.  If this
      agreement to indemnify is held to be unenforceable because it violates any
      law or public policy, Borrower shall nevertheless make the maximum
      contribution to the payment and satisfaction of each of the Indemnified
      Liabilities to the extent permissible under applicable
      law.  Borrower’s obligations under this Section shall survive
      the termination of this Agreement and the discharge of Borrower’s other
      obligations under this Agreement.

              

      

       

      
        	
                7.9

              	
                Retention of Borrower’s
      Records.  Wells Fargo shall have no obligation to
      maintain Electronic Records or retain any documents, schedules, invoices,
      agings, or other Records delivered to Wells Fargo by Borrower in
      connection with the Loan Documents, or any other document or agreement
      described in or related to this Agreement for more than 30 days after
      receipt by Wells Fargo.  If there is a special need to retain
      specific Records, Borrower must notify Wells Fargo of its need to retain
      or return such Records with particularity, which notice must be delivered
      to Wells Fargo in accordance with the terms of this Agreement at the time
      of the initial delivery of the Record to Wells
  Fargo.

              

      

      
        
           

        

        
          -29-

          
            

          

        

        
           

        

      

       

      
        	
                7.10

              	
                Binding Effect; Assignment;
      Complete Agreement.  The Loan Documents, or any other
      document or agreement described in or related to this Agreement, shall be
      binding upon and inure to the benefit of Borrower and Wells Fargo and
      their respective successors and assigns, except that Borrower shall not
      have the right to assign its rights under this Agreement or any interest
      in this Agreement without Wells Fargo’s prior consent, which must be
      confirmed in a Record Authenticated by Wells Fargo. To the extent
      permitted by law, Borrower waives and will not assert against any assignee
      any claims, defenses or set-offs which Borrower could assert against Wells
      Fargo. This Agreement shall also bind all Persons who become a party to
      this Agreement as a borrower.  This Agreement, together with the
      Loan Documents, or any other document or agreement described in or related
      to this Agreement, comprises the complete and integrated agreement of the
      parties on the subject matter of this Agreement and supersedes all prior
      agreements, whether oral or evidenced in a Record.  To the
      extent that any provision of this Agreement contradicts other provisions
      of the Loan Documents other than this Agreement, or any other document or
      agreement described in or related to this Agreement, this Agreement shall
      control.

              

      

       

      
        	
                7.11

              	
                Confidentiality.  Wells
      Fargo agrees that material, non-public information regarding Borrower and
      its Subsidiaries, their operations, assets and existing and contemplated
      business plans shall be treated by Wells Fargo in a confidential manner,
      shall not be used for the purpose of competing with Borrower, and shall
      not be disclosed by Wells Fargo to Persons who are not parties to this
      Agreement, except (i)  to its accountants, lawyers, and other
      advisors, and with each business unit and line of business within Wells
      Fargo and each direct and indirect subsidiary of Wells Fargo, who shall be
      advised of the confidential nature of such information; (ii) as may be
      required by statute, decision, or judicial or administrative order, rule
      or regulation; and (iii) as requested or required by any governmental
      authority pursuant to any subpoena or other legal
  process.

              

      

       

      
        	
                7.12

              	
                Severability of
      Provisions.  Any provision of this Agreement which is
      prohibited or unenforceable shall be ineffective to the extent of such
      prohibition or unenforceability without invalidating the remaining terms
      of this Agreement.

              

      

       

      
        	
                7.13

              	
                Headings.  Section
      and subsection headings in this Agreement are included for convenience of
      reference only and shall not constitute a part of this Agreement for any
      other purpose.

              

      

       

      
        	
                7.14

              	
                Governing Law; Jurisdiction,
      Venue; Waiver of Jury Trial.  The Loan Documents (other
      than real estate related documents, if any) shall be governed by and
      construed in accordance with the substantive laws (other than conflict
      laws) of the Commonwealth of Massachusetts. The parties to this Agreement
      (a) consent to the personal jurisdiction of the state and federal
      courts located in the Commonwealth of Massachusetts in connection with any
      controversy related to this Agreement; (b) waive any argument that
      venue in any such forum is not convenient; (c) agree that any
      litigation initiated by Wells Fargo or Borrower in connection with this
      Agreement or the other Loan Documents may be venued in either the state or
      federal courts located in the City of Boston, County of
      Suffolk,  Commonwealth
      of Massachusetts; and (d) agree that a final judgment in any such
      suit, action or proceeding shall be conclusive and may be enforced in
      other jurisdictions by suit on the judgment or in any other manner
      provided by law.

              

      

       

      
        
          
          

        

        
          -30-

          
            

          

        

        
          
          

        

      

       

      
        	
                7.15

              	
                Joint and Several
      Liability.

              

      

      
        	
                (a)

              	
                Borrower
      is defined collectively to include all Persons named as “Borrower” herein;
      provided, however, that any references herein to “any Borrower”, “each
      Borrower” or similar references, shall be construed as a reference to each
      individual Person named as Borrower herein.  Each Person so
      named shall be jointly and severally liable for all of the obligations of
      the other Persons named as “Borrower” under this Agreement and the other
      Loan Documents.  Each Borrower, individually, expressly
      understands, agrees and acknowledges that the Advances and Letters of
      Credit would not be made available on the terms herein in the absence of
      the collective credit of all of the Persons named as Borrower herein, the
      joint and several liability of all such Persons, and the
      cross-collateralization of the collateral of all such
      Persons.  Accordingly, each Borrower, individually, acknowledges
      that the benefit to each of the Persons named as Borrower as a whole
      constitutes reasonably equivalent value, regardless of the amount of the
      Advances and/or Letters of Credit actually borrowed by, advanced to, or
      the amount of collateral provided by, any individual
      Borrower.  In addition, each Person named as Borrower herein
      hereby acknowledges and agrees that all of the representations,
      warranties, covenants, obligations, conditions, agreements and other terms
      contained in this Agreement shall be applicable to and shall be binding
      upon and measured and enforceable individually against each Person named
      as Borrower herein as well as all such Persons when taken
      together.  By way of illustration, but without limiting the
      generality of the foregoing, the terms of Section 6 of this Agreement are
      to be applied to each individual Person named as Borrower herein (as well
      as to all such Persons taken as a whole), such that the occurrence of any
      of the events described in Section 6  of this Agreement as to
      any Person named as Borrower herein shall constitute an Event of Default
      even if such event has not occurred as to any other Persons named as
      Borrower or as to all such Persons taken as a
  whole.

              

      

       

      
        	
                (b)

              	
                Notwithstanding
      any provisions of this Agreement to the contrary, it is intended that the
      joint and several nature of the liability of each Borrower for the payment
      of the Indebtedness evidenced by the Loan Documents and the performance of
      the obligations pursuant to the Loan Documents (collectively, the
      “Obligations”) and the Liens granted by Borrower to secure the
      Obligations, not constitute a Fraudulent Conveyance (as defined below).
      Consequently, Wells Fargo and each Borrower agree that if the liability of
      a Borrower for the Obligations, or any Liens granted by such Borrower
      securing the Obligations would, but for the application of this sentence,
      constitute a Fraudulent Conveyance, the liability of such Borrower and the
      Liens securing such liability shall be valid and enforceable only to the
      maximum extent that would not cause such liability or such Lien to
      constitute a Fraudulent Conveyance, and the liability of such Borrower and
      this Agreement shall automatically be deemed to have been amended
      accordingly.  For purposes hereof, the term “Fraudulent
      Conveyance” means a fraudulent conveyance under Section 548 of Chapter 11
      of Title II of the Bankruptcy Code or a fraudulent conveyance or
      fraudulent transfer under the applicable provisions of any fraudulent
      conveyance or fraudulent transfer law or similar law of any State, as in
      effect from time to time.

              

      

       

      
        	
                (c)

              	
                Wells
      Fargo is hereby authorized, without notice or demand (except as otherwise
      specifically required under this Agreement) and without affecting the
      liability of any Borrower hereunder, at any time and from time to time, to
      (i) renew, extend or otherwise increase the time for payment of the
      Obligations; (ii) with the written agreement of any Borrower, accelerate
      or otherwise change the terms relating to the Obligations or otherwise
      modify, amend or change the terms of this Agreement, the Revolving Note,
      any Letter of Credit or any other Loan Document now or hereafter executed
      by any Borrower and delivered to Wells Fargo; (iii) accept partial
      payments of the Obligations; (iv) take and hold any collateral for the
      payment of the Obligations or for the payment of any guaranties of the
      Obligations and exchange, enforce, waive and release any such collateral;
      (v) after the occurrence and during the continuance of an Event of
      Default, apply any such collateral and direct the order or manner of sale
      thereof that Wells Fargo, in its sole discretion, may determine; and (vi)
      after the occurrence and during the continuance of an Event of Default,
      settle, release, compromise, collect or otherwise liquidate the
      Obligations and any collateral therefor in any manner, all surety defenses
      being hereby waived by each
Borrower.

              

      

      
        
           

        

        
          -31-

          
            

          

        

        
           

        

      

    

    
      	
              (d)

            	
              (1)
      Each Borrower hereby agrees that, except as hereinafter provided, its
      obligations hereunder shall be unconditional, irrespective of (i) the
      absence of any attempt to collect the Obligations from any obligor or
      other action to enforce the same; (ii) the waiver or consent by Wells
      Fargo with respect to any provision of any instrument evidencing the
      Obligations, or any part thereof, or any other agreement heretofore, now
      or hereafter executed by a Borrower and delivered to Wells Fargo; (iii)
      failure by Wells Fargo to take any steps to perfect and maintain its
      security interest in, or to preserve its rights to, any security or
      collateral for the Obligations; (iv) the institution of any proceeding
      under the Bankruptcy Code, or any similar proceeding, by or against a
      Borrower or Wells Fargo’s election in any such proceeding of the
      application of Section 1111(b)(2) of the Bankruptcy Code; (v) any
      borrowing or grant of a security interest by a Borrower as
      debtor-in-possession, under Section 364 of the Bankruptcy Code; (vi) the
      disallowance, under Section 502 of the Bankruptcy Code, of all or any
      portion of Wells Fargo’s claim(s) for repayment of any of the Obligations;
      or (vii) any other circumstance other than payment in full of the
      Obligations which might otherwise constitute a legal or equitable
      discharge or defense of a guarantor or
surety.

            

    

     

    (2) The
Persons constituting Borrower hereby agree, as between themselves, that to the
extent that Wells Fargo shall have received from any Borrower any Recovery
Amount (as defined below), then the paying Borrower shall have a right of
contribution against each other Borrower in an amount equal to such other
Borrower’s contributive share of such Recovery Amount; provided, however, that in
the event any Borrower suffers a Deficiency Amount (as defined below), then the
Borrower suffering the Deficiency Amount shall be entitled to seek and receive
contribution from and against the other Borrowers in an amount equal to the
Deficiency Amount; and provided further, that in no
event shall the aggregate amounts so reimbursed by reason of the contribution of
any Borrower equal or exceed an amount that would, if paid, constitute or result
in a Fraudulent Conveyance.  Until all Obligations have been paid and
satisfied in full, after the occurrence and during the continuance of an Event
of Default, no payment made by or for the account of a Borrower including,
without limitation, a payment made by such Borrower on behalf of the liabilities
of any other Borrower, shall entitle such Borrower, by subrogation or otherwise,
to any payment from such other Borrower or from or out of such other Borrower’s
property.  The right of each Borrower to receive any contribution
under this Section 7.15 or by subrogation or otherwise from any other Borrower
shall be subordinate in right of payment to the Obligations and such Borrower
shall not exercise any right or remedy against such other Borrower or any
property of such other Borrower by reason of any performance of such Borrower of
its joint and several obligations hereunder, until the Obligations have been
indefeasibly paid and satisfied in full, and no Borrower shall exercise any
right or remedy with respect to this Section 7.15  until the
Obligations have been indefeasibly paid and satisfied in full.  As
used in this Section 7.15, the term “Recovery Amount” means the amount of
proceeds received by or credited to Wells Fargo from the exercise of any remedy
of Wells Fargo under this Agreement or the other Loan Documents, including,
without limitation, the sale of any collateral.  As used in this
Section 7.15, the term “Deficiency Amount” means any amount that is less than
the entire amount a Borrower is entitled to receive by way of contribution or
subrogation from, but that has not been paid by, the other Persons constituting
Borrower in respect of any Recovery Amount attributable to the Borrower entitled
to contribution, until the Deficiency Amount has been reduced to zero through
contributions and reimbursements made under the terms of this Section 7.15 or
otherwise.

    
      
         

      

      
        -32-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (3)
      Each Borrower agrees to the provisions of the Loan Documents and hereby
      waives notice of (i) any loans or advances or other financial
      accommodations made by Wells Fargo to any Borrower, (ii) acceptance
      of the Loan Documents, (iii) any amendment or extension of the Revolving
      Note, any Letter of Credit, this Agreement or any other Loan Document,
      (iv) the execution and delivery by any Borrower and Wells Fargo, of any
      other loan or credit agreement or of any Borrower’s execution and delivery
      of any promissory note or other document arising under the Loan Documents,
      (v) the occurrence of (A) any breach by any Borrower of any of the terms
      or conditions of this Agreement or any of the other Loan Documents, or (B)
      an Event of Default, (vi) Wells Fargo’s transfer or disposition of
      any collateral for the Obligations, or any part thereof, (vii) the sale or
      foreclosure (or the posting or advertising for the sale or foreclosure) of
      any collateral for the Obligations, (viii) protest, proof of non-payment
      or default by any Borrower, or (ix) any other action at any time taken or
      omitted by Wells Fargo and, generally, all demands and notices of every
      kind in connection with this Agreement, the Loan Documents, any documents
      or agreements evidencing, securing or relating to the
      Obligations.

            

    

     

    
      	
               
      

            	
              (4)
      Subject to paragraph 7.15(d)(2) above, (a) for so long as any
      Obligation of any Borrower to Wells Fargo, including without limitation
      any portion of the Loans remains outstanding, Borrower hereby
      unconditionally and irrevocably waives, releases and abrogates, after the
      occurrence and during the continuance of an Event of Default, any and all
      rights it may now or hereafter have under any agreement, at law or in
      equity (including, without limitation, any law subrogating such Borrower
      to the rights of Wells Fargo), to assert any claim against or seek
      contribution, indemnification or any other form of reimbursement from any
      other Borrower for the payment of any or all of the Obligations for any
      payment made by any Borrower under or in connection with this Agreement or
      otherwise and (b) for so long as any portion of the Obligations remains
      outstanding, Borrower hereby unconditionally and irrevocably waives,
      releases and abrogates, after the occurrence and during the continuance of
      an Event of Default, any and all rights it may now or hereafter have under
      any agreement, at law or in equity (including, without limitation, any law
      subrogating such Borrower to the rights of Wells Fargo), to assert any
      claim against or seek contribution, indemnification or any other form of
      reimbursement from any Borrower of any or all of the Obligations for any
      payment made by such Borrower under or in connection with this Agreement,
      the other Loan Documents, or
otherwise.

            

    

     

    
      	
               
      

            	
              (5)
      Without limiting the generality of the foregoing, or of any other waiver
      or other provision set forth in this Agreement, each Borrower hereby
      absolutely, knowingly, unconditionally, and expressly waives any and all
      claim, defense or benefit arising directly or indirectly under any one or
      more of Sections 2787 to 2855 inclusive of the California Civil Code or
      any similar law of California.

            

    

     

    
      8.1

    

    
      
        

      

       

    

    BORROWER
AND WELLS FARGO WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION AT LAW OR IN
EQUITY OR IN ANY OTHER PROCEEDING BASED ON OR PERTAIING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT.

    
       

      
        

      

    

    
      
         

      

      
        -33-

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    COMMAND
      SECURITY

                                    CORPORATION

                                  	 
      	
                                    WELLS
      FARGO BANK,

                                    NATIONAL
      ASSOCIATION

                                  
	 
      	 
      	 
      	 
      	 
      
	
                                    By:

                                  	 
      	 
      	
                                    By:

                                  	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                    Its:

                                  	 
      	 
      	
                                    Its:

                                  	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                    COMMAND
      SECURITY

                                    SERVICES,
      INC.

                                  	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                    By:

                                  	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                    Its:

                                  	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                    STRATEGIC
      SECURITY

                                    SERVICES,
      INC.

                                  	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                    By:

                                  	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                    Its:

                                  	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                    RODGERS
      POLICE PATROL, INC.

                                  	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                    By:

                                  	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                                    Its:

                                  	 
      	 
      	 
      	 
      

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        -34-

        
          

        

      

      
         

      

    

    

    BORROWER AND WELLS FARGO have
executed this Agreement as a sealed instrument under the laws of the
Commonwealth of Massachusetts through
their authorized officers as of the date set forth above.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                
                                                                                  
                                                                                    
                                                                                      
                                                                                        
                                                                                          
                                                                                            
                                                                                              
                                                                                                
                                                                                                  
                                                                                                    
                                                                                                      
                                                                                                        
                                                                                                          
                                                                                                            
                                                                                                              
                                                                                                                
                                                                                                                  
                                                                                                                    
                                                                                                                      
                                                                                                                        	
                                                                                                                                      
                                                                                                                                  WELLS
      FARGO BANK,

                                                                                                                                  NATIONAL
      ASSOCIATION

                                                                                                                                

                                                                                                                              	 
      	
                                                                                                                                COMMAND
      SECURITY CORPORATION

                                                                                                                              
	  
      	 
      	 
      	
                                                                                                                                 

                                                                                                                              	
                                                                                                                                 

                                                                                                                              
	

                                                                                                                                By: 
      

                                                                                                                              	 
      	 
      	

                                                                                                                                By: 
      

                                                                                                                              	 
      
	
                                                                                                                                 

                                                                                                                              	 
      	 
      	 
      	 
      
	 	 	 	 	 
	 
      	 
      	 
      	
                                                                                                                                Its 

                                                                                                                              	 
      
	 
      	
                                                                                                                                Its
      Vice President

                                                                                                                              	 
      	 
      	 
      
	 
      	 
      	
                                                                                                                                By:

                                                                                                                              	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	
                                                                                                                                Its

                                                                                                                              	 
      
	 
      	 
      	 
      	 
      
	
                                                                                                                                Wells
      Fargo Bank, National Association

                                                                                                                              	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	
                                                                                                                                MAC-

                                                                                                                              	 
      	 
      	 
      
	 
      	 
      	
                                                                                                                                Fax: 
      ______________________________

                                                                                                                              
	 
      	 
      	
                                                                                                                                Attention:
      ______________________________

                                                                                                                              
	
                                                                                                                                Fax:
      ______________________________

                                                                                                                              	 
      	
                                                                                                                                e-mail:
      _________________________________

                                                                                                                              
	
                                                                                                                                Attention:  Mr.
      John P. Nuzzo

                                                                                                                              	 
      	
                                                                                                                                Federal
      Employer Identification No.

                                                                                                                              
	
                                                                                                                                e-mail: John.P.Nuzzo@wellsfargo.com

                                                                                                                              	 
      	 
      
	 
      	 
      	
                                                                                                                                Organizational
      Identification No.

                                                                                                                              
	 
      	 
      	 
      
	 	 	 
	 	 	 
	 
      	 
      	
                                                                                                                                      
                                                                                                                                  COMMAND
      SECURITY SERVICES, INC.

                                                                                                                                

                                                                                                                              
	 
      	 
      	 
      
	 
      	 
      	

                                                                                                                                By:

                                                                                                                              	
                                                                                                                                 

                                                                                                                              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	

                                                                                                                                Its  

                                                                                                                              	
                                                                                                                                 

                                                                                                                              
	 
      	 
      	 
	 
      	 
      	By: 	
                                                                                                                                 

                                                                                                                              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	

                                                                                                                                Its

                                                                                                                              	
                                                                                                                                 

                                                                                                                              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	
                                                                                                                                Fax:
      ______________________________

                                                                                                                              
	 
      	 
      	
                                                                                                                                Attention:
      ______________________________

                                                                                                                              
	 
      	 
      	
                                                                                                                                e-mail:
      _________________________________

                                                                                                                              
	 
      	 
      	
                                                                                                                                Federal
      Employer Identification No.

                                                                                                                              
	 
      	 
      	 
      
	 
      	 
      	
                                                                                                                                Organizational
      Identification No.

                                                                                                                              
	 	 	 

                                                                                                                      

                                                                                                                    

                                                                                                                  

                                                                                                                

                                                                                                              

                                                                                                            

                                                                                                          

                                                                                                        

                                                                                                      

                                                                                                    

                                                                                                  

                                                                                                

                                                                                              

                                                                                            

                                                                                          

                                                                                        

                                                                                      

                                                                                    

                                                                                  

                                                                                

                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        -35-

        
          

        

      

      
         

      

    

    
      
        	 
      	 
      	
                

                  STRATEGIC
      SECURITY SERVICES, INC.

                

              
	 
      	 
      	 
      
	 
      	 
      	

                By:

              	
                 

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	

                Its  

              	
                 

              
	 
      	 
      	 
	 
      	 
      	By: 	
                 

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	

                Its

              	
                 

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	
                Fax:
      ______________________________

              
	 
      	 
      	
                Attention:
      ______________________________

              
	 
      	 
      	
                e-mail:
      _________________________________

              
	 
      	 
      	
                Federal
      Employer Identification No.

              
	 
      	 
      	 
      
	 
      	 
      	
                Organizational
      Identification No.

              
	 	 	 

      

    

    

      
        
          	 	 	 
	 
      	 
      	
                  

                    RODGERS
      POLICE PATROL, INC.

                  

                
	 
      	 
      	 
      
	 
      	 
      	

                  By:

                	
                   

                
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	

                  Its  

                	
                   

                
	 
      	 
      	 
	 
      	 
      	By: 	
                   

                
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	

                  Its

                	
                   

                
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	
                  Fax:
      ______________________________

                
	 
      	 
      	
                  Attention:
      ______________________________

                
	 
      	 
      	
                  e-mail:
      _________________________________

                
	 
      	 
      	
                  Federal
      Employer Identification No.

                
	 
      	 
      	 
      
	 
      	 
      	
                  Organizational
      Identification No.

                
	 	 	 

        

      

    

    
      
         

      

      
        -36-

        
          

        

      

      
         

      

    

     

    REVOLVING
NOTE

     

    
      
        	
                $20,000,000

              	
                February
      12, 2009

              

      

    

     

    FOR VALUE RECEIVED, the
undersigned, COMMAND SECURITY CORPORATION, a New York corporation (“CSC”),
COMMAND SECURITY SERVICES, INC., a New York corporation (“CSS”), STRATEGIC
SECURITY SERVICES, INC., a California corporation (“SSS”) and RODGERS POLICE
PATROL, INC., a California corporation (“RPP”; RPP, CSC, CSS and SSS,
individually and collectively, jointly and severally, are referred to herein
as  “Borrower”), hereby promise to pay to the order of WELLS FARGO
BANK, NATIONAL ASSOCIATION (“Wells Fargo”), acting through its WELLS FARGO
BUSINESS CREDIT operating division, on the Termination Date described in the
Credit and Security Agreement dated February 12, 2009 (as amended from time to
time, the “Agreement”) and entered into between Wells Fargo and Borrower, at
Wells Fargo’s office at 300 Commercial Street, Boston, Massachusetts 02109, or
at any other place designated at any time by the holder, in lawful money of the
United States of America and in immediately available funds, the principal sum
of Twenty Million Dollars ($20,000,000) or the aggregate unpaid principal amount
of all Advances under the Line of Credit made by Wells Fargo to Borrower under
the terms of the Agreement, together with interest on the principal amount
computed on the basis of actual days elapsed in a 360-day year, from the date of
this Revolving Note until this Revolving Note is fully paid at the rate from
time to time in effect under the terms of the Agreement.  Principal
and interest accruing on the unpaid principal balance amount of this Revolving
Note shall be due and payable as provided in the Agreement.  This
Revolving Note may be prepaid only in accordance with the
Agreement.

     

    This
Revolving Note is the Revolving Note referred to in the Agreement, and is
subject to the terms of the Agreement, which provides, among other things, for
the acceleration of this Revolving Note.  This Revolving Note is
secured, among other things, by the Agreement and the Security Documents as
defined in the Agreement, and by any other security agreements, mortgages, deeds
of trust, assignments or other instruments or agreements that may subsequently
be given for good and valuable consideration as security for this Revolving
Note.

     

    Borrower
shall pay all costs of collection, including reasonable attorneys’ fees and
legal expenses if this Revolving Note is not paid when due, whether or not legal
proceedings are commenced.

     

    Presentment
or other demand for payment, notice of dishonor and protest are expressly
waived.

     

    Borrower
has executed this Revolving Note as a sealed instrument under the laws of the
Commonwealth of Massachusetts through
its authorized officer as of the date set forth above

    

    
      
        
          
            
              	 
      	
                      COMMAND
      SECURITY CORPORATION

                    
	 
      	 
      
	 
      	
                      By:

                    	 
      
	 
      	
                      Name: 

                    	 
      
	 
      	
                      Its:

                    	 
      

            

          

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	 
      	
                                      COMMAND
      SECURITY SERVICES, INC.

                                    
	 
      	 
      
	 
      	
                                      By:

                                    	 
      
	 
      	
                                      Name:

                                    	 
      
	 
      	
                                      Its:

                                    	 
      
	 
      	 
      	 
      
	 	 
	 
      	
                                      STRATEGIC
      SECURITY SERVICES, INC.

                                    
	 
      	 
      
	 
      	
                                      By:

                                    	 
      
	 
      	
                                      Name:

                                    	 
      
	 
      	
                                      Its:

                                    	 
      
	 
      	 
      	 
      
	 	 
	 
      	
                                      RODGERS
      POLICE PATROL, INC.

                                    
	 
      	 
      
	 
      	
                                      By:

                                    	 
      
	 
      	
                                      Name:

                                    	 
      
	 
      	
                                      Its:

                                    	 
      

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        A-2

        
          

        

      

      
         

      

    

     

    Exhibit
A to Credit and Security Agreement

    

    DEFINITIONS

     

    “Account
Funds” is defined in Section 1.4(a).

    

    “Accounts”
shall have the meaning given it under the UCC.

    

    “Advance”
and “Advances” means an advance or advances under the Line of
Credit.

    

    “Affiliate”
or “Affiliates” means any Person controlled by, controlling or under common
control with Borrower, including any Subsidiary of Borrower.  For
purposes of this definition, “control,” when used with respect to any specified
Person, means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise.

     

     “Aggregate
Face Amount” means the aggregate amount that may then be drawn under each
outstanding Letter of Credit, assuming compliance with all conditions for
drawing.

     

    “Agreement”
means this Credit and Security Agreement.

     

    “Authenticated”
means (a) to have signed; or (b) to have executed or to have otherwise adopted a
symbol, or have encrypted or similarly processed a Record in whole or in part,
with the present intent of the authenticating Person to identify the Person and
adopt or accept a Record.

     

    “Base
Rate” means, for any day, a fluctuating rate equal to the highest of: (a)
the Prime Rate in effect on such day and (b) a rate determined by Wells
Fargo to be one and one-half percent (1.50%) above Daily Three Month
LIBOR.

    

    “Base
Rate Advance” means an Advance bearing interest at the Base Rate.

     

    “Book Net
Worth” means the aggregate of the Owners’ equity in Borrower, determined in
accordance with GAAP.

     

     “Borrowing
Base” is defined in Section 1.2(a).

    

    
      	
              “Borrowing
      Base Reserve” means, as of any date of determination, an amount or a
      percent of a specified category or item that Wells Fargo deems necessary
      in its reasonable business judgment from time to time to reduce
      availability under the Borrowing Base (a) to reflect events, conditions,
      or risks which adversely affect the assets, business or prospects of
      Borrower, or the Collateral or its value, or the enforceability,
      perfection or priority of Wells Fargo’s Security Interest in the
      Collateral, as the term “Collateral” is defined in this Agreement, or (b)
      to reflect Wells Fargo’s reasonable judgment that any collateral report or
      financial information relating to Borrower and furnished to Wells Fargo
      may be incomplete, inaccurate or misleading in any material
      respect.

            

    

    
      
         

      

      
        A-1

        
          

        

      

      
         

      

    

    “Business
Day” means a day on which the Federal Reserve Bank of New York is open for
business and, if such day relates to a LIBOR Advance, a day on which dealings
are carried on in the London interbank eurodollar market.

    

    “Capital
Expenditures” means for a period, any expenditure of money during such period
for the purchase or construction of assets, or for improvements or additions to
such assets, which are capitalized on Borrower’s balance sheet.

    

    “CEO®” is defined in Section
5.1(c).

    

    
      “Change
of Control” means the occurrence of any of the following
events:

    

     

    
      	
              (a)

            	
              Any
      Person or “group” (as such term is used in Sections 13(d) and 14(d) of the
      Securities Exchange Act of 1934) who does not have an ownership interest
      in Borrower on the date of the initial Advance is or becomes the
      “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
      Securities Exchange Act of 1934, except that any such Person, entity or
      group will be deemed to have “beneficial ownership” of all securities that
      such Person, entity or group has the right to acquire, whether such right
      is exercisable immediately or only after the passage of time), directly or
      indirectly, of more than forty-nine percent (49%) of the voting power of
      all classes of ownership of
Borrower;

            

    

     

    
      	
              (b)

            	
              During
      any consecutive two-year period, individuals who at the beginning of such
      period constituted the board of Directors of Borrower (together with any
      new Directors whose election to such board of Directors, or whose
      nomination for election by the Owners of Borrower, was approved by a vote
      of two thirds of the Directors then still in office who were either
      Directors at the beginning of such period or whose election or nomination
      for election was previously so approved) cease for any reason to
      constitute a majority of the board of Directors of Borrower then in
      office.

            

    

    

    “CIT”
means The CIT Group/Business Credit, Inc.

     

     “CIT
Collection Account” means account #304181153 maintained by The CIT
Group/Business Credit, Inc. with JPMorgan Chase Bank, N.A.

     

    “CIT
Payoff Letter” means the letter agreement dated February 12, 2009 between
Borrower, CIT and Wells Fargo, in the form attached hereto as Exhibit
H.

     

     “Collateral”
means all of Borrower’s Accounts, chattel paper and electronic chattel paper,
deposit accounts, documents, Equipment, General Intangibles, goods, instruments,
Inventory, Investment Property, letter-of-credit rights, letters of credit, all
sums on deposit in any Collection Account, and any items in any Lockbox;
together with (a) all substitutions and replacements for and products of
such property; (b) in the case of all goods, all accessions; (c) all
accessories, attachments, parts, Equipment and repairs now or subsequently
attached or affixed to or used in connection with any goods; (d) all
warehouse receipts, bills of lading and other documents of title that cover such
goods now or in the future; (e) all collateral subject to the Lien of any
of the Security Documents; (f) any money, or other assets of Borrower that
come into the possession, custody, or control of Wells Fargo now or in the
future; (g) Proceeds of any of the above Collateral; (h) books and records
of Borrower, including all mail or e-mail addressed to Borrower; and (i) all of
the above Collateral, whether now owned or existing or acquired now or in the
future or in which Borrower has rights now or in the future. Collateral also
includes Borrower’s commercial tort claim in respect of the action captioned
Command Security
Corporation, Plaintiff, vs. Gemini Security Services, LLC; William A. Casey;
Simpson, Herbert & Associates d/b/a Gemini Security Services; an
unincorporated association; Joseph L. Simpson, Jr. and Richard Herbert,
Partners, d/b/a Simpson, Herbert & Associates; Joseph L. Simpson, Jr
individually, and Richard Herbert, individually, Defendants filed in the
Superior Court of New Jersey, Law Division, Union County, Docket No.
UNN-L-1267-08.

    
      
         

      

      
        A-2

        
          

        

      

      
         

      

    

    “Collection
Account” means “Collection Account” as defined in the Master Agreement for
Treasury Management Services and related Lockbox and Collection Account Service
Description or Collection Account Service Description, whichever is applicable.
..

    

    “Compliance
Certificate” is defined in Section 5.1(a) and is in the form of Exhibit
E.

     

    “Commercial
Letter of Credit Agreement” means an agreement governing the issuance of
documentary letters of credit entered into between Borrower as applicant and
Wells Fargo as issuer.

     

    “Constituent
Documents” means with respect to any Person, as applicable, that Person’s
certificate of incorporation, articles of incorporation, by-laws, certificate of
formation, articles of organization, limited liability company agreement,
management agreement, operating agreement, shareholder agreement, partnership
agreement or similar document or agreement governing such Person’s existence,
organization or management or concerning disposition of ownership interests of
such Person or voting rights among such Person’s owners.

     

    “Current
Maturities of Long Term Debt” means as of each fiscal quarter end, the amount of
Borrower’s long-term debt and capitalized leases which become due during that
quarterly period.

     

    “Daily
Three Month LIBOR" means, for any day, the rate of interest equal to LIBOR then
in effect for delivery for a three (3) month period.

    

     “Debt” means of a Person
as of a given date, all items of indebtedness or liability which in accordance
with GAAP would be included in determining total liabilities as shown on the
liabilities side of a balance sheet for such Person and shall also include the
aggregate payments required to be made by such Person at any time under any
lease that is considered a capitalized lease under GAAP.

     

    “Debt
Service Coverage Ratio” means (a) the sum of (i) Funds from Operations
and (ii) Interest Expense minus (iii) Unfinanced Capital Expenditures
divided by (b) the sum of (i) Current Maturities of Long Term Debt and
(ii) Interest Expense.

     

    “Default
Period” is defined in Section 1.5(c).

     

    “Default
Rate” is defined in Section 1.5(c).

    

    “Dilution”
means, as of any date of determination, a percentage, based upon the prior six
(6) months, which is the result of dividing (a) actual bad debt write-downs,
discounts, advertising allowances, credits, and any other items with respect to
the Accounts determined to be dilutive by Wells Fargo in its reasonable
discretion during this period, by (b) Borrower’s net sales during such period
(excluding extraordinary items) plus the amount of clause (a).

    
      
         

      

      
        A-3

        
          

        

      

      
         

      

    

     “Director”
means a director if Borrower is a corporation, or a governor or manager if
Borrower is a limited liability company.

     

     “Earnings Before Taxes”
means pretax earnings from operations, excluding extraordinary gains, and
extraordinary losses.

    

    “Electronic
Record” means a Record that is created, generated, sent, communicated, received,
or stored by electronic means, but does not include any
Record that is sent, communicated, or received by fax.

    

    “Eligible
Accounts” means all Eligible Billed Accounts and Eligible Unbilled
Accounts.

     

    “Eligible
Billed Accounts” means all unpaid Accounts of Borrower arising from the sale or
lease of goods or the performance of services, net of any credits, but excluding
any Accounts that would otherwise qualify as Eligible Unbilled Accounts, and
excluding any Accounts having any of the following characteristics:

     

    
      	
              (a)

            	
              That
      portion of Accounts unpaid 90 days or more after the invoice
      date;

            

    

     

    
      	
              (b)

            	
              That
      portion of Accounts related to goods or services with respect to which
      Borrower has received notice of a claim or dispute, which are subject to a
      claim of offset or a contra account, or which reflect a reasonable reserve
      for warranty claims or returns;

            

    

     

    
      	
              (c)

            	
              That
      portion of Accounts not yet earned by the final delivery of goods or that
      portion of Accounts not yet earned by the final rendition of services by
      Borrower to the account debtor, including with respect to both goods and
      services, progress billings, and that portion of Accounts for which an
      invoice has not been sent to the applicable account
  debtor;

            

    

     

    
      	
              (d)

            	
              Accounts
      constituting (i) Proceeds of copyrightable material unless such
      copyrightable material shall have been registered with the United States
      Copyright Office, or (ii) Proceeds of patentable inventions unless such
      patentable inventions have been registered with the United States Patent
      and Trademark Office;

            

    

     

    
      	
              (e)

            	
              Accounts
      owed by any unit of government, whether foreign or domestic;
      provided that there shall be included (subject, for the
      avoidance of doubt, in each case, to Wells Fargo’s right at any time to
      deem any Account(s) ineligible in its sole discretion pursuant to
      paragraph (o) below) in Eligible Accounts (i) Accounts owed by units of
      U.S. state and local government unless the Borrower has failed to
      provide, following request by Wells Fargo, evidence satisfactory to Wells
      Fargo that (1) Wells Fargo’s Security Interest constitutes a perfected
      first priority Lien in such Accounts, and (2) such Accounts may be
      enforced by Wells Fargo directly against such unit of government under all
      applicable laws and (ii) accounts owed by the United States federal
      government or divisions thereof but only to the extent that the Borrower
      has complied with the Assignment of Claims Act of 1940 with respect to
      such Accounts;

            

    

     

    
      	
               (f)

            	
              Accounts
      denominated in any currency other than United States
    Dollars;

            

    

    
      
         

      

      
        A-4

        
          

        

      

      
         

      

    

    
      	
              (g)

            	
              Accounts
      owed by an account debtor located outside the United States or Canada
      (other than Eligible Foreign
Accounts);

            

    

     

    
      	
              (h)

            	
              Accounts
      owed by an account debtor (i) who is insolvent, (ii) who is the subject of
      bankruptcy proceedings (which Accounts Wells Fargo will consider on a
      case-by-case basis) or (iii) who has gone out of
  business;

            

    

     

    
      	
              (i)

            	
              Accounts
      owed by an Owner, Subsidiary, Affiliate, Officer or employee of
      Borrower;

            

    

     

    
      	
              (j)

            	
              Accounts
      not subject to the Security Interest or which are subject to any Lien in
      favor of any Person other than Wells Fargo other than Permitted
      Liens;

            

    

     

    
      	
              (k)

            	
              Accounts
      which have been credited and re-billed or restructured, extended, amended
      or modified due to credit or collection
  considerations;

            

    

     

    
      	
              (l)

            	
              That
      portion of Accounts that constitutes advertising, finance charges, service
      charges or sales or excise taxes;

            

    

     

    
      	
              (m)

            	
              Accounts
      owed by an account debtor, regardless of whether otherwise eligible, to
      the extent that the aggregate balance of such Accounts exceeds 20% of the
      aggregate amount of all Eligible Accounts provided
      that in the event Delta and Northwest merge or otherwise consolidate into
      one Person, the surviving Person of such merger or other consolidation may
      owe up to 25% of the aggregate amount of all Eligible
      Accounts;

            

    

     

    
      	
              (n)

            	
              Accounts
      owed by an account debtor, regardless of whether otherwise eligible, if
      33% or more of the total amount of Accounts due from such debtor is
      ineligible under clauses (a), (b), or (k) above;
  and

            

    

     

    
      	
              (o)

            	
              Accounts,
      or portions of Accounts, otherwise deemed ineligible by Wells Fargo in its
      sole discretion.

            

    

    

    “Eligible
Foreign Accounts” means all unpaid Accounts from the Borrower which would
otherwise qualify as Eligible Accounts (except for the fact that such Accounts
are owed by an account debtor located outside the United States or Canada),
provided that such Accounts are (i) billed by Borrower in the United States to
an address maintained by the applicable account debtor in the United States,
(ii) relate to services rendered to such account debtor in the United
States, (iii) paid from a bank account maintained by such account debtor in the
United States, and (iv) owed by an account debtor that is actively maintaining a
presence and conducting a substantial business in the United
States.   

     

     “Eligible
Unbilled Accounts” means all unpaid Accounts of Borrower arising from the
performance of services by Borrower, net of any credits, that would otherwise
qualify as Eligible Billed Accounts except invoices have not been rendered by
Borrower to the account debtors of such Accounts, but excluding any Account for
which an invoice has not been rendered to the account debtor within thirty (30)
days of Borrower having performed the services giving rise to such
Account.

     

    “Environmental
Law” means any federal, state, local or other governmental statute, regulation,
law or ordinance dealing with the protection of human health and the
environment.

    
      
         

      

      
        A-5

        
          

        

      

      
         

      

    

    “Equipment”
shall have the meaning given it under the Uniform Commercial Code in effect in
the state whose laws govern this Agreement.

    

    “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended from time
to time.

     

    “ERISA
Affiliate” means any trade or business (whether or not incorporated) that is a
member of a group which includes Borrower and which is treated as a single
employer under Section 414 of the IRC.

    

    “Event of
Default” is defined in Section 6.1.

     

    “Field
Exams” is defined in Section 1.6(c).

    

     “Funds
from Operations” means for a given period, the sum of (a) Net Income,
(b) depreciation and amortization, (c) any increase (or decrease) in
deferred income taxes, (d) any increase (or decrease) in lifo reserves, and
(e) other non-cash items, each as determined for such period in accordance
with GAAP.

     

    “GAAP”
means generally accepted accounting principles, applied on a basis consistent
with the accounting practices applied in the financial statements described on
Exhibit D.

     

    “General
Intangibles” shall have the meaning given it under the UCC.

    

    “Hazardous
Substances” means pollutants, contaminants, hazardous substances, hazardous
wastes, petroleum and fractions thereof, and all other chemicals, wastes,
substances and materials listed in, regulated by or identified in any
Environmental Law.

     

    "Indebtedness"
means any Loans, advances, extensions of credit, debts, obligations and/or
liabilities of Borrower to Wells Fargo arising under this Agreement or any other
Loan Document, whether now in existence or hereafter incurred, whether voluntary
or involuntary, and whether due or not due, absolute or contingent, liquidated
or unliquidated, and including without limitation all obligations arising under
any swap, derivative, foreign exchange, hedge, deposit, treasury management or
similar transaction or arrangement however described or defined that Borrower
may enter into at any time with Wells Fargo or with Wells Fargo Merchant
Services, L.L.C., whether or not Borrower may be liable individually or jointly
with others, or whether recovery upon such Indebtedness may subsequently become
unenforceable.

     

    “Indemnified
Liabilities” is defined in Section 7.8.

     

    “Indemnitee”
is defined in Section 7.8.

     

    “Infringement”
or “Infringing” when used with respect to Intellectual Property Rights means any
infringement or other violation of Intellectual Property Rights.

     

    “Intellectual
Property Rights” means all actual or prospective rights arising in connection
with any intellectual property or other proprietary rights, including all rights
arising in connection with copyrights, patents, service marks, trade dress,
trade secrets, trademarks, trade names or mask works.

    
      
         

      

      
        A-6

        
          

        

      

      
         

      

    

    “Interest
Expense” means for a fiscal year-to-date period, Borrower’s total gross interest
expense during such period (excluding interest income), and shall in any event
include (a) interest expensed (whether or not paid) on all Debt,
(b) the amortization of debt discounts, (c) the amortization of all
fees payable in connection with the incurrence of Debt to the extent included in
interest expense, and (d) the portion of any capitalized lease obligation
allocable to interest expense.

     

    “Interest
Payment Date” is defined in Section 1.7(a).

    

    “Interest
Period” means the period that commences on (and includes) the Business Day on
which either a LIBOR Advance is made or continued or on which a Base Rate
Advance is converted to a LIBOR Advance, and ending on (but excluding) the
Business Day numerically corresponding to that date that falls the number of
months afterward as selected by Borrower pursuant to Section 1.3A, during which
period the outstanding principal amount of the LIBOR Advance shall bear interest
at the LIBOR Advance Rate; provided, however,
that:

    

    
      	
              (a)

            	
              If
      an Interest Period would otherwise end on a day which is not a Business
      Day, then it shall end on the next Business Day, unless that day is the
      first Business Day of a month, in which case the Interest Period shall end
      on the last Business Day of the preceding
month;

            

    

     

    
      	
              (b)

            	
              No
      Interest Period applicable to an Advance may end later than the Maturity
      Date; and

            

    

     

    
      	
              (c)

            	
              In
      no event shall Lead Borrower select Interest Periods with respect to LIBOR
      Advances which would result in the payment of a LIBOR Advance breakage fee
      under this Agreement in order to make required principal
      payments.

            

    

    

    “Interest
Rate Reduction Effective Date” is defined in Section 1.5(a).

    

    “Inventory”
shall have the meaning given it under the UCC.

    

    “Investment
Property” shall have the meaning given it under the UCC.

    

    “Key
Persons” means Barry Regenstein, President and Chief Financial Officer, Edward
S. Fleury, Chief Executive Officer, and Martin C. Blake, Jr., Chief Operating
Officer of Borrower.

     

    “Lead
Borrower” is defined in Section 1.11.

     

    L/C
Amount” means the sum of (a) the Aggregate Face Amount of any outstanding
Letters of Credit, plus (b) the amount of each Obligation of Reimbursement
that either remains unreimbursed or has not been paid through an Advance on the
Line of Credit.

     

    “L/C
Application” means an application for the issuance of standby or documentary
Letters of Credit pursuant to the terms of a Standby Letter of Credit Agreement
or Commercial Letter of Credit Agreement, in form acceptable to Wells
Fargo.

    

     “Letter
of Credit” and “Letters of Credit” are each defined in Section
1.9(a).

    

    “Licensed
Intellectual Property” is defined in Exhibit D.

    
      
         

      

      
        A-7

        
          

        

      

      
         

      

    

    “LIBOR”
means the rate per annum (rounded upward, if necessary, to the nearest whole
1/8th of one
percent (1%)) determined pursuant to the following formula:

    

    
      
        	
                LIBOR
      =

              	
                Base
      LIBOR

              	 
      
	 
      	
                100%
      - LIBOR Reserve Percentage

              	 
      

      

    

    

    
      	
              (a)

            	
              "Base
      LIBOR" means the rate per annum for United States dollar deposits quoted
      by Wells Fargo as the Inter-Bank Market Offered Rate, with the
      understanding that such rate is quoted by Wells Fargo for the purpose of
      calculating effective rates of interest for loans making reference to it,
      on the first day of an Interest Period for delivery of funds on that date
      for a period of time approximately equal to the number of days in that
      Interest Period and in an amount approximately equal to the principal
      amount to which that Interest Period applies.  Borrower
      understands and agrees that Wells Fargo may base its quotation of the
      Inter-Bank Market Offered Rate upon such offers or other market indicators
      of the Inter-Bank Market as Wells Fargo in its discretion deems
      appropriate including the rate offered for U.S. dollar deposits on the
      London Inter-Bank Market.

            

    

     

    
      	
              (b)

            	
              "LIBOR
      Reserve Percentage" means the reserve percentage prescribed by the Board
      of Governors of the Federal Reserve System (or any successor) for
      "Eurocurrency Liabilities" (as defined in Regulation D of the Federal
      Reserve Board, as amended), adjusted by Wells Fargo for expected changes
      in such reserve percentage during the applicable Interest
      Period.

            

    

    

    “LIBOR
Advance” means an Advance bearing interest at the LIBOR Advance
Rate.

     

    “LIBOR
Advance Rate” is defined in Section 1.5(a).

     

    “LIBOR
Advance Rate Applicable Margin” means two and three-quarters percent (2.75%) per
annum, subject to the provisions of Section 1.5(a).

     

     “Lien”
means any security interest, mortgage, deed of trust, pledge, lien, charge,
encumbrance, title retention agreement or analogous instrument or device,
including the interest of each lessor under any capitalized lease and the
interest of any bondsman under any payment or performance bond, in, of or on any
assets or properties of a Person, whether now owned or subsequently acquired and
whether arising by agreement or operation of law.

     

     “Line
of Credit” is defined in the Recitals.

     

    “Loan
Documents” means this Agreement, the Revolving Note, the Master Agreement for
Treasury Management Services, each Standby Letter of Credit Agreement, each
Commercial Letter of Credit Agreement, any L/C Applications, and the Security
Documents, together with every other agreement, note, document, contract or
instrument to which Borrower now or in the future may be a party and which may
be required by Wells Fargo in connection with, or as a condition to, the
execution of this Agreement. Any documents or other agreements entered into
between Borrower and Wells Fargo that relate to any swap, derivative, foreign
exchange, hedge, or similar product or transaction, or which are entered into
with an operating division of Wells Fargo other than Wells Fargo Business
Credit, shall not be included in this definition.

     

    “Loan
Manager Service” means the treasury management service defined in the Master
Agreement for Treasury Management Services and related Loan Manager Service
Description.

    
      
         

      

      
        A-8

        
          

        

      

      
         

      

    

    

    “Lockbox”
means “Lockbox” as defined in the Master Agreement for Treasury Management
Services and related Lockbox and Collection Account Service
Description.

     

    “Master
Agreement for Treasury Management Services” means the Master Agreement for
Treasury Management Services, the related Acceptance of Services, and the
Service Description governing each treasury management service used by
Borrower.

     

    “Material
Adverse Effect” means any of the following:

     

    
      	
              (a)

            	
              A
      material adverse effect on the business, operations, results of
      operations, prospects, assets, liabilities or financial condition of
      Borrower;

            

    

     

    
      	
              (b)

            	
              A
      material adverse effect on the ability of Borrower to perform its
      obligations under the Loan Documents;
or

            

    

     

    
      	
              (c)

            	
              A
      material adverse effect on the ability of Wells Fargo to enforce the
      Indebtedness or to realize the intended benefits of the Security
      Documents, including a material adverse effect on the validity or
      enforceability of any Loan Document, or on the status, existence,
      perfection, priority (subject to Permitted Liens) or enforceability of any
      Lien securing payment or performance of the
  Indebtedness.

            

    

     

    “Maturity
Date” is defined in Section 1.1(b).

     

    “Maximum
Line Amount” is defined in Section 1.1(a).

     

    “Multiemployer
Plan” means a multiemployer plan (as defined in Section 4001(a)(3) of ERISA) to
which Borrower or any ERISA Affiliate contributes or is obligated to
contribute.

     

    “Net
Income” means fiscal year-to-date after-tax net income from continuing
operations, excluding extraordinary losses and extraordinary gains and including
any tax benefit, all as determined in accordance with GAAP.

    

    “Obligation
of Reimbursement” is defined in Section 1.9(b).

     

    “OFAC” is
defined in Section 5.12(b).

     

    “Officer”
means with respect to Borrower, an officer if Borrower is a corporation, a
manager if Borrower is a limited liability company, or a partner if Borrower is
a partnership.

    

    “Operating
Account” is defined in Section 1.3(a), and maintained in accordance with the
terms of Wells Fargo’s Commercial Account Agreement in effect for demand deposit
accounts.

    

    "Overadvance"
means the amount, if any, by which the unpaid principal amount of the Revolving
Note, plus the L/C Amount, is in excess of the
then-existing Borrowing Base.

    

    “Owned
Intellectual Property” is defined in Exhibit D.

     

    “Owner”
means with respect to Borrower, each Person having legal or beneficial title to
an ownership interest in Borrower.

    
      
         

      

      
        A-9

        
          

        

      

      
         

      

    

     “Patent and Trademark
Security Agreement” means each Patent and Trademark Security Agreement entered
into between Borrower and Wells Fargo.

     

    “Pension
Plan” means a pension plan (as defined in Section 3(2) of ERISA) maintained for
employees of Borrower or any ERISA Affiliate and covered by Title IV of
ERISA.

     

    “Permitted
Lien” and “Permitted Liens” are defined in Section 5.3(a).

     

    “Person”
means any individual, corporation, partnership, joint venture, limited liability
company, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision of a governmental
entity.

     

    “Plan”
means an employee benefit plan (as defined in Section 3(3) of ERISA) maintained
for employees of Borrower or any ERISA Affiliate.

     

    “Premises”
is defined in Section 2.4(a).

     

    “Prime
Rate” means at any time the rate of interest most recently announced by Wells
Fargo at its principal office as its Prime Rate, with the understanding that the
Prime Rate is one of Wells Fargo's base rates, and serves as the basis upon
which effective rates of interest are calculated for those loans making
reference to it, and is evidenced by its recording in such internal publication
or publications as Wells Fargo may designate.  Each change in the rate
of interest shall become effective on the date each Prime Rate change is
announced by Wells Fargo.

     

    “Prime
Rate Applicable Margin” means one and one-half percent (1.50%) per
annum,  subject to the provisions of Section 1.5(a).

     

    “Proceeds”
shall have the meaning given it under the UCC.

    

    “Record”
means information that is inscribed on a tangible medium or that is stored in an
electronic or other medium and is retrievable in perceivable form, and includes
all information that is required to be reported by Borrower to Wells Fargo
pursuant to Section 5.1.

    

    “Reportable
Event” means a reportable event (as defined in Section 4043 of ERISA), other
than an event for which the 30-day notice requirement under ERISA has been
waived in regulations issued by the Pension Benefit Guaranty
Corporation.

    

    “Revolving
Note” is defined in Section 1.1(d).

     

    “Security
Documents” means this Agreement, the Patent and Trademark Security
Agreement, and any
other document delivered to Wells Fargo from time to time to secure the
Indebtedness.

     

    “Security
Interest” is defined in Section 2.1.

     

    “Special
Account” means a specified cash collateral account maintained with Wells Fargo
or another financial institution acceptable to Wells Fargo in connection with
each undrawn Letter of Credit issued by Wells Fargo, as more fully described in
Section 1.10.

     

     “Standby
Letter of Credit Agreement” means an agreement governing the issuance of standby
letters of credit by Wells Fargo entered into between Borrower as applicant and
Wells Fargo as issuer.

    
      
         

      

      
        A-10

        
          

        

      

      
         

      

    

     “Subsidiary”
means any Person of which more than 50% of the outstanding ownership interests
having general voting power under ordinary circumstances to elect a majority of
the board of directors or the equivalent of such Person, irrespective of whether
or not at the time ownership interests of any other class or classes shall have
or might have voting power by reason of the happening of any contingency, is at
the time directly or indirectly owned by Borrower, by Borrower and one or more
other Subsidiaries, or by one or more other Subsidiaries.

     

    “Termination
Date” is defined in Section 1.1(b).

     

     “UCC”
means the Uniform Commercial Code in effect in the state designated in this
Agreement as the state whose laws shall govern this Agreement, or in any other
state whose laws are held to govern this Agreement or any portion of this
Agreement.

    

     “Unfinanced Capital
Expenditures” means for a period, any expenditure of money during such period
for the purchase or construction of assets, or for improvements or additions to
such assets, which are not financed with borrowed funds and are not capitalized
on Borrower’s balance sheet.

    

    “Unused
Amount” is defined in Section 1.6(b).

    

    “Wells
Fargo” means Wells Fargo Bank, National Association in its broadest and most
comprehensive sense as a legal entity, and is not limited in its meaning to the
Wells Fargo Business Credit operating division, or to any other operating
division of Wells Fargo.

    
      
         

      

      
        A-11

        
          

        

      

      
         

      

    

    Exhibit
B to Credit and Security Agreement

    

    PREMISES

     

    The
Premises referred to in the Credit and Security Agreement have the following
addresses, and are legally described as follows:

     

    3180
University Avenue

    Suite
110

    San
Diego, California 92104

     

    1133
Route 55

    Suite
D

    Lagrangeville,
New York 12540

     

    In the
event of any conflict between the address and the legal description, the legal
description shall control.

    
      
         

      

      
        B-1

        
          

        

      

      
         

      

    

    Exhibit
C to Credit and Security Agreement

    

    CONDITIONS
PRECEDENT

     

    Wells
Fargo’s obligation to make an initial Advance shall be subject to the condition
that Wells Fargo shall have received the following, executed and in form and
content satisfactory to Wells Fargo.  The following descriptions are
limited descriptions for reference purposes only and should not be construed as
limiting in any way the subject matter that Wells Fargo requires each document
to address.

     

    A.           Loan
Documents to be Executed by Borrower:

     

    (1)           The
Revolving Note.

     

    
      	
              (2)

            	
              The
      Credit and Security Agreement.

            

    

     

    
      	
              (3)

            	
              The
      Master Agreement for Treasury Management Services, the Acceptance of
      Services, and the related Service Description for each deposit or treasury
      management related product or service that Borrower will subscribe to,
      including without limitation the Loan Manager Service Description, and the
      Lockbox and Collection Account Service Description, and Collection Account
      Service Description.

            

    

     

    (4)           The
Patent and Trademark Security Agreement.

    

    (5)           A
Standby Letter of Credit Agreement or a Commercial Letter of Credit Agreement,
and a separate L/C Application for each Letter of Credit that Borrower has
requested that Wells Fargo issue.

    

    
      	
              B.

            	
              Loan
      Documents to be Executed by Third
Parties:

            

    

     

    
      	
              (1)

            	
              Certificates
      of Insurance required under
      this Agreement, with all hazard insurance containing a lender’s interest
      endorsement in Wells Fargo’s favor and with all liability insurance naming
      Wells Fargo as additional insured.

            

    

    

    
      	
              (2)

            	
              Control
      agreements with each bank at which Borrower maintain deposit accounts
      other than Wells Fargo.

            

    

     

    (3)           The  CIT
Payoff Letter executed by Borrower and CIT.

     

    
      	
              (4)

            	
              A
      Landlord’s Disclaimer and Consent to each lease entered into by Borrower
      and that Landlord with respect to the Premises located at 3180 University
      Avenue, Suite 110, San Diego, California 92104 and 1133 Route 55, Suite D,
      Lagrangeville, New York 12540, pursuant to which the Landlord waives its
      Lien in any Collateral of Borrower located on the
  Premises.

            

    

    
      
         

      

      
        C-1

        
          

        

      

      
         

      

    

    
      	
              C.

            	
              Documents
      Related to the Premises

            

    

     

    
      	
              (1)

            	
              Any
      leases pursuant to which Borrower is leasing the Premises from a
      lessor.

            

    

     

    
      	
              D.

            	
              Federal
      Tax, State Tax, Judgment, UCC and Intellectual Property Lien
      Searches

            

    

     

    
      	
              (1)

            	
              Current
      searches of Borrower in appropriate filing offices showing that
      (i) no Liens have been filed and remain in effect against Borrower
      and Collateral except Permitted Liens or Liens held by Persons who have
      agreed in an Authenticated Record that upon receipt of proceeds of the
      initial Advances, they will satisfy, release or terminate such Liens in a
      manner satisfactory to Wells Fargo, and (ii) Wells Fargo has filed
      all UCC financing statements necessary to perfect the Security Interest,
      to the extent the Security Interest is capable of being perfected by
      filing.

            

    

     

    
      	
              E.

            	
              Constituent
      Documents:

            

    

     

    
      	
              (1)

            	
              The
      Certificate of Authority of Borrower, which shall include as part of the
      Certificate or as exhibits to the Certificate, (i) the Resolution of
      Borrower’s Directors and, if required, Owners, authorizing the execution,
      delivery and performance of those Loan Documents and other documents or
      agreements described in or related to this Agreement to which Borrower is
      a party, (ii) an Incumbency Certificate containing the signatures of
      Borrower’s Officers or agents authorized to execute and deliver those
      instruments, agreements and certificates referenced in (i) above, as well
      as Advance requests, on Borrower’s behalf, (iii) Borrower’s Constituent
      Documents, (iv) a current Certificate of Good Standing or Certificate of
      Status issued by the secretary of state or other appropriate authority for
      Borrower’s state of organization, certifying that Borrower is in good
      standing and in compliance with all applicable organizational requirements
      of the state of organization, and (v) a Secretary’s Certificate of
      Borrower’s secretary or assistant secretary certifying that the
      Certificate of Authority of Borrower is true, correct and
      complete.

            

    

     

    
      	
              (2)

            	
              Evidence
      that Borrower is licensed or qualified to transact business in all
      jurisdictions where the character of the property owned or leased or the
      nature of the business transacted by it makes such licensing or
      qualification necessary.

            

    

     

    
      	
              (3)

            	
              An
      Officer’s Certificate of an appropriate
      Officer of Borrower confirming, in his or her personal capacity, the
      representations and warranties set forth in this
  Agreement.

            

    

     

    
      	
              (5)

            	
              A
      Customer Identification Information Form and such other forms and
      verification as Wells Fargo may need to comply with the U.S.A. Patriot
      Act.

            

    

     

    
      	
              (6)

            	
              An
      Opinion of Counsel issued by Borrower’s counsel and addressed to Wells
      Fargo, that opines that (a) Borrower is organized and in good standing in
      its state of organization; (b) Borrower is in good standing in each state
      in which it does business; (c) Borrower has the power to execute and
      deliver the Loan Documents and any other document or agreement described
      in or related to this Agreement, and to borrow money and perform in
      accordance with the terms of the Loan Documents, or any other document or
      agreement described in or related to this Agreement; (d) all corporate
      action and consent necessary to the validity of the Loan Documents and any
      other document or agreement described in or related to this Agreement has
      been obtained; (e) the Loan Documents and any other document or agreement
      described in or related to this Agreement, have been signed and are the
      valid and binding obligation of Borrower and enforceable in accordance
      with their terms; and (f) to the best of counsel's knowledge, the Loan
      Documents and any other document or agreement described in or related to
      this Agreement, and the transactions they contemplate do not conflict
      Borrower’s articles of incorporation or by-laws or any agreement binding
      upon Borrower or its
properties.

            

    

    
      
         

      

      
        C-2

        
          

        

      

      
         

      

    

    

    F.           Miscellaneous
Matters or Documents:

     

    
      	
              (1)

            	
              Payment
      of fees and reimbursable costs and expenses due under this Agreement
      through the date of initial Advance or issuance of a Letter of Credit,
      including all legal expenses incurred through the date of the closing of
      this Agreement.

            

    

     

    
      	
              (2)

            	
              Evidence
      that after making the initial Advance and satisfying all obligations owed
      to Borrower’s prior lender, paying all trade payables older than
      60 days from invoice date, and paying all book overdrafts and closing
      costs, availability under the Line of Credit is not less than
      $2,000,000.

            

    

     

    
      	
              (3)

            	
              Any
      documents or other agreements entered into by Borrower and Wells Fargo
      that relate to any swap, derivative, foreign exchange, hedge, deposit,
      treasury management or similar product or transaction extended to Borrower
      by Wells Fargo not already provided pursuant to the requirements of
      (A)-(F) above.

            

    

     

    
      	
              (4)

            	
              Such
      other documents as Wells Fargo in its sole discretion may
      require.

            

    

     

    
      
         

      

      
        C-3

        
          

        

      

      
         

      

    

    Exhibit
D to Credit and Security Agreement

     

    REPRESENTATIONS AND
WARRANTIES

     

    Borrower
represents and warrants to Wells Fargo as follows:

     

    
      	
              (a)

            	
              Existence and Power;
      Name; Chief Executive Office; Inventory and Equipment Locations; Federal
      Employer Identification Number and Organizational Identification
      Number.  Borrower is a corporation organized, validly
      existing and in good standing under the laws of its state of
      incorporation and is licensed or
      qualified to transact business in all jurisdictions where the character of
      the property owned or leased or the nature of the business transacted by
      it makes such licensing or qualification necessary (excluding the
      jurisdictions set forth below in which the Borrower is not in good
      standing or the Borrower’s qualification to transact business in such
      jurisdictions is pending), except where the failure to be so qualified
      could not reasonably be expected to have a Material Adverse
      Effect.  Borrower has all requisite power and authority to
      conduct its business, to own its properties and to execute and deliver,
      and to perform all of its obligations under, those Loan Documents and any
      other documents or agreements that it has entered into with Wells Fargo
      related to this Agreement.  During its existence, Borrower has
      done business solely under the names set forth below in addition to its
      correct legal name.  Borrower’s chief executive office and
      principal place of business is located at the address set forth below, and
      all of Borrower’s records relating to its business or the Collateral are
      kept at that location.  All of Borrower’s books and records
      relating to its Accounts are located at that location or at one of the
      other locations set forth below.  Borrower’s name, Federal
      Employer Identification Number and Organization Identification Number are
      correctly set forth at the end of the Agreement next to Borrower’s
      signature.

            

    

     

    (i)
Pending Jurisdictions

     

    Command Security
Corporation

    Colorado
- Pending

    Washington,
D.C. - Pending

     

    (ii)
Jurisdictions Not in Good Standing

     

    None

     

    (iii)
Trade Names

     

    Aviation
Safeguards

    CSC
Security Services

    

    Chief
Executive Office / Principal Place of Business

     

    P.O. Box
340

    1133
Route 55, Suite D

    Lagrangeville,
New York 12540

    
      
         

      

      
        D-1

        
          

        

      

      
         

      

    

    

    
      	
              (b)

            	
              Capitalization.  Borrower
      is a reporting company pursuant to the Securities Act of 1933, as amended,
      and its ownership interests are held by in excess of [100]
      holders.  According to Borrower’s Form 10-Q filed November 14,
      2008, as of November 6, 2008, there were [10,757,216] shares of issued and
      outstanding common stock and [0] shares of issued and outstanding
      preferred stock of Borrower.  The Organizational Chart below
      shows the ownership structure of all Subsidiaries of
    Borrower.

            

    

     

    Organizational
Chart

     

    See
attached Exhibit D-2

    

    
      	
              (c)

            	
              Authorization of
      Borrowing; No Conflict as to Law or Agreements.  The
      execution, delivery and performance by Borrower of the Loan Documents and
      any other documents or agreements described in or related to this
      Agreement, and all borrowing under the Line of Credit have been authorized
      and do not (i) require the consent or approval of Borrower’s Owners;
      (ii) require the authorization, consent or approval by, or
      registration, or filing with, or notice to, any governmental agency or
      instrumentality, whether domestic or foreign, or any other Person, except
      to the extent obtained, accomplished or given on or prior to the date of
      this Agreement; (iii) violate any provision of any law, rule or
      regulation (including Regulation X of the Board of Governors of the
      Federal Reserve System) applicable to Borrower or of any order, writ,
      injunction, judgment or decree presently in effect having applicability to
      Borrower or of Borrower’s Constituent Documents; (iv) result in a
      breach of or constitute (with due notice or lapse of time or both) a
      default or event of default under any material agreement to which Borrower
      is a party or by which it or its properties may be bound or affected; or
      (v) result in, or require, the creation or imposition of any Lien
      (other than the Security Interest) upon or with respect to any of the
      properties now owned or subsequently acquired by
  Borrower.

            

    

     

    
      	
              (d)

            	
              Legal
      Agreements.  This Agreement and the other Loan Documents
      to which Borrower is a party, and any other document or agreement
      contemplated hereby and thereby, when executed and delivered by Borrower,
      will constitute the legal, valid and binding obligations of Borrower,
      enforceable against Borrower in accordance with their respective terms,
      except as enforcement may be limited by equitable principles or by
      bankruptcy, insolvency, reorganization, moratorium, or similar laws
      relating to or limiting creditors’ rights
  generally.

            

    

    
      	
               (e)

            	
              Subsidiaries.  Except
      as disclosed below, Borrower has no
  Subsidiaries.

            

    

     

    Subsidiaries

     

    
      
         

      

      
        D-2

        
          

        

      

      
         

      

    

     

    Command
Security Services, Inc.

    Strategic
Security Services, Inc.

    Rodgers
Police Patrol, Inc.

    

    
      	
              (f)

            	
              Financial Condition;
      No Adverse Change.  Borrower has furnished to Wells Fargo
      its audited financial statements for its fiscal year ended March 31,
      2008 and
      unaudited financial statements for the fiscal-year-to-date period ended
      September 30, 2008 and those statements fairly present in all material
      respects Borrower’s financial condition as of those dates and the results
      of Borrower’s operations and cash flows for the periods then ended and
      were prepared in accordance with GAAP.  Since the date of the
      most recent financial statements, there has been no Material Adverse
      Effect in Borrower’s business, properties or condition (financial or
      otherwise).

            

    

     

    
      	
              (g)

            	
              Litigation.  There
      are no actions, suits or proceedings pending or, to Borrower’s knowledge,
      threatened against Borrower or any of its Subsidiaries or the properties
      of Borrower or any of its Subsidiaries before any court or governmental
      department, commission, board, bureau, agency or instrumentality, domestic
      or foreign, which, if determined adversely to Borrower or any of its
      Subsidiaries, would result in a final judgment or judgments against
      Borrower or any of its Subsidiaries in an amount in excess of $250,000
      (excluding judgments which are fully insured, bonded or subject to an
      indemnity in favor of Borrower), apart from those matters specifically
      disclosed below.

            

    

     

    Litigation
Matters in Excess of $250,000

     

    None

    

    
      	
              (h)

            	
              Intellectual Property
      Rights.

            

    

     

    (i)           Owned Intellectual
Property.  Borrower owns, or holds licenses in, all trademarks,
trade names, copyrights, patents, patent rights and licenses that are material
to the conduct of its business as currently conducted, and set forth below is a
complete list of all material patents, applications for patents, trademarks,
applications to register trademarks, service marks, applications to register
service marks, mask works, trade dress and copyrights for which Borrower is the
owner of record or is an exclusive licensee (the “Owned Intellectual Property”).
Except as set forth in any Record, copies of which have been given to Wells
Fargo or where the failure of any of the following to be true would not have a
Material Adverse Effect, (A) Borrower owns the Owned Intellectual Property free
and clear of all restrictions (including covenants not to sue any Person), court
orders, injunctions, decrees, writs or Liens, whether by agreement memorialized
in a Record Authenticated by Borrower or otherwise, (B) to Borrower’s knowledge,
no Person other than Borrower owns or has been granted any right in the Owned
Intellectual Property, (C) all Owned Intellectual Property is valid, subsisting
and enforceable, and (D) Borrower has taken all commercially reasonable action
necessary to maintain and protect the Owned Intellectual Property.

     

    
      
         

      

      
        D-3

        
          

        

      

      
         

      

    

     

    (ii)           Intellectual Property Rights
Licensed from Others.  Set forth below is a complete list of
all agreements under which Borrower has licensed Intellectual Property Rights
from another Person (“Licensed Intellectual Property”) other than readily
available, non-negotiated licenses of computer software and other intellectual
property used solely for performing accounting, word processing and similar
administrative tasks (“Off-the-shelf Software”) and a summary of any ongoing
payments Borrower is obligated to make with respect thereto.  Except
as set forth below or in any other Record, copies of which have been given to
Wells Fargo, Borrower’s licenses to use the Licensed Intellectual Property are
free and clear of all restrictions, Liens, court orders, injunctions, decrees,
or writs, whether by agreed to in a Record Authenticated by Borrower or
otherwise, except where failure of the foregoing to be true would not have a
Material Adverse Effect.  Except as set forth below or in any other
Record, copies of which have been given to Wells Fargo, Borrower is not
contractually obligated to make royalty payments of a material nature, or pay
fees to any owner of, licensor of, or other claimant to, any Intellectual
Property Rights, where the failure to pay such payments would have a Material
Adverse Effect.

     

    (iii)           Other Intellectual Property
Needed for Business.  Except for Off-the-shelf Software and as
disclosed below, the Owned Intellectual Property and the Licensed Intellectual
Property constitute all Intellectual Property Rights used or necessary to
conduct Borrower’s business as it is presently conducted or as Borrower
reasonably foresees conducting it, the loss of which would have a Material
Adverse Effect.

     

    (iv)           Infringement.  Except
as disclosed below, Borrower has no knowledge of, and has not received notice in
a Record alleging, any Infringement of another Person’s Intellectual Property
Rights (including any claim set forth in a Record that Borrower must license or
refrain from using the Intellectual Property Rights of any Person) nor, to
Borrower’s knowledge, is there any threatened claim or any reasonable basis for
any such claim, which would have a Material Adverse Effect.

    

    Intellectual Property
Disclosures

     

    (i)
Command Security Corporation Logo – Registration No. 1823346

        

    Smart
Wheel (words only) – Registration No. 3287575

     

    (ii)
None

     

    (iii)
None

     

    (iv)
None

    
      
         

      

      
        D-4

        
          

        

      

      
         

      

    

    
      	
              (i)

            	
              Taxes.  Borrower
      and its Subsidiaries have paid or caused to be paid to the proper
      authorities when due all federal, state and local taxes required to be
      withheld by each of them.  Borrower and its Subsidiaries have
      filed all federal, state and local tax returns which to the knowledge of
      the Officers of Borrower or any Subsidiary, as the case may be, are
      required to be filed, and Borrower and its Subsidiaries have paid or
      caused to be paid to the respective taxing authorities all taxes as shown
      on these returns or on any assessment received by any of them to the
      extent such taxes have become due, unless such taxes are being diligently
      contested in good faith by Borrower by appropriate proceedings and
      adequate reserves are established in accordance with
  GAAP.

            

    

     

    
      	
              (j)

            	
              Titles and
      Liens.  Borrower has good and absolute title to all
      Collateral free and clear of all Liens other than Permitted
      Liens.  To Borrower’s knowledge, no financing statement naming
      Borrower as debtor is on file in any office except to perfect only
      Permitted Liens.

            

    

     

    
      	
              (k)

            	
              No
      Defaults.  Borrower is in compliance with all provisions
      of all agreements, instruments, decrees and orders to which it is a party
      or by which it or its property is bound or affected, the breach or default
      of which could reasonably be expected to have a Material Adverse Effect on
      Borrower’s financial condition, properties or operations
  .

            

    

     

    
      	
              (l)

            	
              Submissions to Wells
      Fargo.  All financial and other information provided to
      Wells Fargo by or on behalf of Borrower in connection with Borrower’s
      request for the credit facilities contemplated hereby (x) is, with respect
      to information other than projections, valuations or pro forma financial
      statements, (i) true and correct in all material respects, and
      (ii) does not omit any material fact that would cause such
      information to be materially misleading, and (y) as to projections,
      valuations or pro forma financial statements, present a good faith opinion
      as to such projections, valuations and pro forma condition and
      results.

            

    

     

    
      	
              (m)

            	
              Financing
      Statements.  Borrower has previously authorized the
      filing of financing statements sufficient when filed to perfect the
      Security Interest and other Liens created by the Security
      Documents.  When such financing statements are filed, Wells
      Fargo will have a valid and perfected security interest in all Collateral
      capable of being perfected by the filing of financing statements in the
      offices where such financing statements are filed.  None of the
      Collateral is or will become a fixture on real estate, unless a sufficient
      fixture filing has been filed with respect to such
    Collateral.

            

    

     

    
      	
              (n)

            	
              Rights to
      Payment.  Each right to payment and each instrument,
      document, chattel paper and other agreement constituting or evidencing
      Collateral is (or, in the case of all future Collateral, will be when
      arising or issued) the valid, genuine and legally enforceable obligation,
      subject to no defense, setoff or counterclaim of the account debtor or
      other obligor named in that instrument, except for disputes and other
      matters arising in the ordinary course of
  business.

            

    

     

    (o)           Employee Benefit
Plans.

     

    
      (i)     
 Maintenance and
Contributions to Plans.  Except as disclosed below, neither
Borrower nor any ERISA Affiliate (A) maintains or has maintained any Pension
Plan, (B) contributes or has contributed to any Multiemployer Plan, or (C)
provides or has provided post-retirement medical or insurance benefits to
employees or former employees (other than benefits required under Section 601 of
ERISA, Section 4980B of the IRC, or applicable state
law).

    

    
      
         

      

      
        D-5

        
          

        

      

      
         

      

    

    
      (ii)      Knowledge of Plan
Noncompliance with Applicable Law.  Except as disclosed below,
neither Borrower nor any ERISA Affiliate has (A) knowledge that Borrower or the
ERISA Affiliate is not in compliance in all material respects with the
requirements of ERISA, the IRC, or applicable state law with respect to any
Plan, (B) knowledge that a Reportable Event occurred or continues to exist in
connection with any Pension Plan, or (C) during the six year period ending on
the date of this Agreement, sponsored a Plan that it intends to maintain as
qualified under the IRC that is not so qualified, and no fact or circumstance
exists which may have an adverse effect on such Plan’s tax-qualified
status.

    

     

    
      (iii)    
Funding Deficiencies and
Other Liabilities.  Neither Borrower nor any ERISA Affiliate
has liability for any (A) accumulated funding deficiency (as defined in
Section 302 of ERISA and Section 412 of the IRC) under any Plan, whether or not
waived, (B) withdrawal, partial withdrawal, reorganization or other event
under any Multiemployer Plan under Section 4201 or 4243 of ERISA, or
(C) event or circumstance which could result in financial obligation to the
Pension Benefit Guaranty Corporation, the Internal Revenue Service, the
Department of Labor or any participant in connection with any Plan (other than
routine claims for benefits under the Plan).

    

     

    Employee
Benefit Plans

     

    (i)
None

     

    (ii)
None

    

    (p)           Environmental
Matters.

     

    
      (i)       Hazardous Substances on
Premises.  Except as disclosed below, there are not present in,
on or under the Premises any Hazardous Substances in such form or quantity as to
create any material liability or obligation for either Borrower or Wells Fargo
under the common law of any jurisdiction or under any Environmental Law, and no
Hazardous Substances have ever been stored, buried, spilled, leaked, discharged,
emitted or released in, on or under the Premises in such a way as to create a
material liability.

    

    

    
      (ii)     
Disposal of Hazardous
Substances.  Except as disclosed below, Borrower has not
disposed of Hazardous Substances in such a manner as to create any material
liability under any Environmental Law.

    

     

    
      (iii)    
Claims and Proceedings with
Respect to Environmental Law Compliance. Except as disclosed below, there
have not existed in the past, nor are there any threatened or impending
requests, claims, notices, investigations, demands, administrative proceedings,
hearings or litigation relating in any way to the Premises or Borrower, alleging
material liability under, violation of, or noncompliance with any Environmental
Law or any license, permit or other authorization issued pursuant
thereto.

    

     

    
      (iv)    
Compliance with
Environmental Law; Permits and Authorizations.  Except as
disclosed below, Borrower (A) conducts its business at all times in compliance
with applicable Environmental Law, except where the failure to comply would not
reasonably be expected to have a Material Adverse Effect, (B) possesses valid
licenses, permits and other authorizations required under applicable
Environmental Law for the lawful and efficient operation of its business, none
of which are scheduled to expire, or withdrawal, or material limitation within
the next 12 months, and (C) has not been denied insurance on grounds related to
potential environmental liability.

    

    
      
         

      

      
        D-6

        
          

        

      

      
         

      

    

    
      (v)     
Status of
Premises.  To Borrower’s knowledge, except as disclosed below,
the Premises are not and never have been listed on the National Priorities List,
the Comprehensive Environmental Response, Compensation and Liability Information
System or any similar federal, state or local list, schedule, log, inventory or
database, except where such denial could reasonably be expected to have a
Material Adverse Effect.

    

     

    Environmental
Matters

     

    (i)
None

     

    (ii)
None

     

    (iii)
None

     

    (iv)
None

     

    (v)
None

     

    (p)           Labor
Relations.  Except
as described below, neither Borrower nor any Subsidiary is party to or bound by
any collective bargaining agreement, management agreement or consulting
agreement (collectively, the “Labor Agreements”).  There are no
material grievances, disputes or controversies with any union or other
organization of Borrower's or Subsidiary's employees, or, to Borrower’s
knowledge, any asserted or threatened strikes, work stoppages or demands for
collective bargaining.

     

    Labor
Agreements

     

    None

    
      
         

      

      
        D-7

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