Schedule 13D/A

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EWyjI2iwb1SfbMj1aAwlNETgLXQV1dMNmGVJ/Wlv4vTGWPOA3kvf59ecYq8P/FWk NGYO95hcSQovB2J1ynVZvQ== 0000950123-10-030137.txt : 20100330 0000950123-10-030137.hdr.sgml : 20100330 20100330172919 ACCESSION NUMBER: 0000950123-10-030137 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20100330 DATE AS OF CHANGE: 20100330 GROUP MEMBERS: MEZZANINE MANAGEMENT FUND IV A, L.P. GROUP MEMBERS: MEZZANINE MANAGEMENT FUND IV COINVEST A, L.P. GROUP MEMBERS: MEZZANINE MANAGEMENT LIMITED SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ARGYLE SECURITY, INC. CENTRAL INDEX KEY: 0001332585 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-DETECTIVE, GUARD & ARMORED CAR SERVICES [7381] IRS NUMBER: 203101079 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-81380 FILM NUMBER: 10714861 BUSINESS ADDRESS: STREET 1: 12903 DELIVERY DRIVE CITY: SAN ANTONIO STATE: TX ZIP: 78247 BUSINESS PHONE: 210-495-5245 MAIL ADDRESS: STREET 1: 12903 DELIVERY DRIVE CITY: SAN ANTONIO STATE: TX ZIP: 78247 FORMER COMPANY: FORMER CONFORMED NAME: Argyle Security Acquisition CORP DATE OF NAME CHANGE: 20050708 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MEZZANINE MANAGEMENT LTD CENTRAL INDEX KEY: 0001434284 IRS NUMBER: 000000000 STATE OF INCORPORATION: D0 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: CENTURY HOUSE, 16 PAR LA VILLE ROAD CITY: HAMILTON STATE: D0 ZIP: HM 08 BUSINESS PHONE: 203.323.9118 MAIL ADDRESS: STREET 1: C/O MEZZANINE MANAGEMENT, LLC STREET 2: 333 LUDLOW STREET, 2ND FL, NORTH TOWER CITY: STAMFORD STATE: CT ZIP: 06902 SC 13D/A 1 c98609sc13dza.htm SCHEDULE 13D/A Schedule 13D/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934
(Amendment No. 10)*

Argyle Security, Inc.

(Name of Issuer)

Common Stock, par value $0.0001

(Title of Class of Securities)

040311102

(CUSIP Number)

Mezzanine Management Limited
Century House
16 Par la Ville Road
Hamilton, Bermuda
Attention: Arthur Morris
(441) 296-8099

(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)

March 30, 2010

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).


CUSIP No.		893522 20 1

NAMES OF REPORTING PERSONS

Mezzanine Management Fund IV A, L.P.

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)

(a) þ

(b) o

SEC USE ONLY

SOURCE OF FUNDS (SEE INSTRUCTIONS)

CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)

CITIZENSHIP OR PLACE OF ORGANIZATION

United Kingdom

SOLE VOTING POWER

NUMBER OF

SHARED VOTING POWER

BENEFICIALLY

OWNED BY

5,300,100

EACH

SOLE DISPOSITIVE POWER

REPORTING

PERSON

WITH

SHARED DISPOSITIVE POWER

5,300,100

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

5,300,100 shares of common stock

CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

48.7%

TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)

Page 2 of 7 Pages


CUSIP No.		893522 20 1

NAMES OF REPORTING PERSONS

Mezzanine Management Fund IV Coinvest A, L.P.

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)

(a) þ

(b) o

SEC USE ONLY

SOURCE OF FUNDS (SEE INSTRUCTIONS)

CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)

CITIZENSHIP OR PLACE OF ORGANIZATION

United Kingdom

SOLE VOTING POWER

NUMBER OF

SHARED VOTING POWER

BENEFICIALLY

OWNED BY

69,700

EACH

SOLE DISPOSITIVE POWER

REPORTING

PERSON

WITH

SHARED DISPOSITIVE POWER

69,700

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

69,700 shares of common stock

CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

0.6%

TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)

Page 3 of 7 Pages


CUSIP No.		893522 20 1

NAMES OF REPORTING PERSONS

Mezzanine Management Limited

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)

(a) þ

(b) o

SEC USE ONLY

SOURCE OF FUNDS (SEE INSTRUCTIONS)

CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)

CITIZENSHIP OR PLACE OF ORGANIZATION

Bermuda

SOLE VOTING POWER

NUMBER OF

SHARED VOTING POWER

BENEFICIALLY

OWNED BY

5,369,800

EACH

SOLE DISPOSITIVE POWER

REPORTING

PERSON

WITH

SHARED DISPOSITIVE POWER

5,369,800

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

5,369,800 shares of common stock

CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

49.4%

TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)

Page 4 of 7 Pages


CUSIP No.		893522 20 1

Amendment No. 10 to Schedule 13D

This Amendment No. 10 to Schedule 13D (this “Tenth Amendment”) amends and supplements the Schedule 13D originally filed on May 5, 2008, as amended by Amendment No. 1 filed on January 15, 2009, Amendment No. 2 filed on May 20, 2009, Amendment No. 3 filed on June 2, 2009, Amendment No. 4 filed on June 5, 2009, Amendment No. 5 filed on June 11, 2009, Amendment No. 6 filed on June 16, 2009, Amendment No. 7 filed on August 5, 2009, Amendment No. 8 filed on October 1, 2009 and Amendment No. 9 filed on December 17, 2009 (together, the “Schedule 13D”), and relates to the common stock, par value $0.0001 (the “Common Stock”), of Argyle Security, Inc., a Delaware corporation (the “Issuer”). This Tenth Amendment is being filed by and on behalf of Mezzanine Management Fund IV A, L.P., a limited partnership organized under the laws of the United Kingdom (“Fund IV”), Mezzanine Management Fund IV Coinvest A, L.P., a limited partnership organized under the laws of the United Kingdom (“Fund IV Coinvest”), and Mezzanine Management Limited, a limited partnership organized under the laws of Bermuda (“Mezzanine”). Fund IV, Fund IV Coinvest, and Mezzanine are collectively referred to herein as the “Reporting Persons.”


Item 4.		Purpose of the Transaction.

Paragraphs (i) and (j) of Item 4 of the Schedule 13D are hereby amended and supplemented, with effect from the date of this Tenth Amendment, as follows:

On March 30, 2010, the Issuer filed a Form 15 with the U.S. Securities and Exchange Commission (the “SEC”) to (i) terminate the registration of its securities under Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and (ii) suspend its duty to file reports under Sections 13 and 15(d) of the Exchange Act. In connection with this filing, on March 30, 2010, the Issuer entered into a Standstill and Protective Measures Agreement with Fund IV and Fund IV Coinvest (the “Agreement”).

Pursuant to the Agreement, until December 31, 2010 (and subject to certain limitations), neither Fund IV or Fund IV Coinvest nor any of their affiliates will, directly or indirectly, or otherwise participate in, (a) any acquisition of any shares of Common Stock or common stock of any of the Issuer’s subsidiaries, including through any tender offer or similar mechanism or (b) any transaction that would have the effect of the acquisition of such common stock, including for example a cash out merger or other business combination or a reverse stock split by the Issuer; provided, however, the foregoing limitations shall not apply if (i) notice of such proposed transaction is provided to the Issuer by Fund IV, Fund IV Coinvest or any of their affiliates, (ii) such proposed transaction would not result in Fund IV, Fund IV Coinvest and/or their Affiliates owning 90% or more of the Issuer’s then outstanding shares of capital stock on a fully diluted basis (excluding the Common Stock which may be issued pursuant to certain convertible securities of the Issuer held by Fund IV and Fund IV Coinvest), and (iii) with respect to an acquisition under clause (a) above only, such acquisition is the result of an unsolicited offer made by a stockholder of the Issuer to sell its shares of Common Stock to one or more of Fund IV, Fund IV Coinvest or any of their affiliates.

Page 5 of 7 Pages


CUSIP No.		893522 20 1

Notwithstanding the above, the above limitations do not apply with respect to (i) any capital funding provided by Fund IV, Fund IV Coinvest or their affiliates that the board of directors of the Issuer (the “Board”) determines in good faith is necessary to (A) avoid a pending or anticipated default under the existing loan agreements of the Issuer or any of its subsidiaries, (B) support bonding lines critical to the business of the Issuer or any of its subsidiaries, (C) provide additional working capital and general corporate expenses to the Issuer or any of its subsidiaries in the event of a shortfall of unrestricted cash or (D) pay for costs specifically related to a critical project of the Issuer or any of its subsidiaries, (ii) any transaction, such as a cash out merger or reverse split, that the Board determines in good faith is necessary to avoid the potential that the Issuer may revive its reporting obligations under Section 13 or Section 15(d) of the Exchange Act based on the number of its stockholders of record of Common Stock, warrants or units to purchase common stock and warrants, (iii) any acquisition of Common Stock by Fund IV or Fund IV Coinvest as a result of the conversion of any securities of the Issuer held as of the date of the Agreement or (iv) any acquisition effected with the approval of a special committee of the Board comprised solely of independent, disinterested directors.

In addition, until December 31, 2010, Fund IV and Fund IV Coinvest agree to defer payment of accrued interest under certain convertible notes of the Issuer which they hold and defer requests for reimbursement of certain legal costs incurred in prior dealings with the Issuer.

The foregoing description of the Agreement is qualified in its entirety by the actual terms of the form of Agreement filed herewith as Exhibit B. The press release filed by the Issuer with respect to the actions described in this Item 4 is filed herewith as Exhibit C.


Item 6.		Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

Item 6 of the Schedule 13D is hereby amended and supplemented, with effect from the date of this Tenth Amendment, as follows:

See the discussion of the Agreement and the related transactions in Item 4 above.


Item 7.		Material to be Filed as Exhibits.

Item 7 of the Schedule 13D is hereby amended and supplemented, with effect from the date of this Tenth Amendment, as follows:

Exhibit A — Joint Filing Agreement for the Tenth Amendment.

Exhibit B — Form of Standstill and Protective Measures Agreement dated March 30, 2010 by and among the Issuer, Fund IV and Fund IV Coinvest.

Exhibit C — Press Release of the Issuer dated March 30, 2010.

Page 6 of 7 Pages


CUSIP No.		893522 20 1

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Date: March 30, 2010


MEZZANINE MANAGEMENT FUND IV A, L.P.
By:	/s/ Dudley R. Cottingham
	Name:	Dudley R. Cottingham
	Title:	Authorized Signatory

MEZZANINE MANAGEMENT FUND IV COINVEST A, L.P.
By:	/s/ Dudley R. Cottingham
	Name:	Dudley R. Cottingham
	Title:	Authorized Signatory

MEZZANINE MANAGEMENT LIMITED
By:	/s/ Dudley R. Cottingham
	Name:	Dudley R. Cottingham
	Title:	Authorized Signatory

Page 7 of 7 Pages

EX-99.A 2 c98609exv99wa.htm EXHIBIT A Exhibit A

EXHIBIT A

JOINT FILING AGREEMENT

The undersigned agree that this Tenth Amendment dated March 30, 2010, relating to Argyle Security, Inc., shall be filed on behalf of the undersigned.


MEZZANINE MANAGEMENT FUND IV A, L.P.
By:	/s/ Dudley R. Cottingham
	Name:	Dudley R. Cottingham
	Title:	Authorized Signatory

MEZZANINE MANAGEMENT FUND IV COINVEST A, L.P.
By:	/s/ Dudley R. Cottingham
	Name:	Dudley R. Cottingham
	Title:	Authorized Signatory

MEZZANINE MANAGEMENT LIMITED
By:	/s/ Dudley R. Cottingham
	Name:	Dudley R. Cottingham
	Title:	Authorized Signatory

EX-99.B 3 c98609exv99wb.htm EXHIBIT B Exhibit B

Exhibit B

ARGYLE SECURITY, INC.
STANDSTILL AND PROTECTIVE MEASURES AGREEMENT

THIS STANDSTILL AND PROTECTIVE MEASURES AGREEMENT (this “Agreement”) is made as of March 30, 2010, by and among Argyle Security, Inc., a Delaware corporation (the “Company”), and the Investors listed on Exhibit A hereto.

WHEREAS, the Investors beneficially own an aggregate of 5,369,800 shares of Common Stock, which include: (i) 1,900,200 shares directly held, (ii) 742,300 shares issuable upon conversion of 11,327 shares of Series A Convertible Preferred Stock and (iii) 2,727,300 shares issuable upon conversion of 27,273 shares of Series B Convertible Preferred Stock;

WHEREAS, the Investors also hold (i) $8.0 million aggregate principal amount of 10% Convertible Subordinated Bridge Promissory Notes of the Company (collectively, the “MML Bridge Notes”) and (ii) $2.45 million aggregate principal amount of 10% Convertible Subordinated Promissory Notes of the Company (collectively, the “MML Convertible Notes”), each of which will have a fixed conversion price per common share of $0.4302, assuming no Qualified Equity Offering (as defined in such notes) occurs prior to June 30, 2010;

WHEREAS, the Company intends to file a Form 15 with the U.S. Securities and Exchange Commission (the “SEC”) to (i) terminate the registration of its securities under Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and (ii) suspend its duty to file reports under Sections 13 and 15(d) of the Exchange Act (collectively, the “Proposal”);

WHEREAS, the parties hereto acknowledge the right of a holder of 90% or more of the voting power of the Shares to effectuate a “short form” merger under Section 253 of the Delaware General Corporation Law (the “DGCL”) pursuant to which, absent fraud or illegality, appraisal rights under Section 262 of the DGCL would be the only remedy of any minority stockholder of the Company; and

WHEREAS, the parties hereto have agreed to enter into this Agreement to provide for certain rights and obligations in respect of, among other things, the Shares.

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Investors agree as follows:

1. Definitions.

1.1 “Affiliate” shall mean, with respect to any specified Person, any other Person who directly or indirectly, controls, is controlled by or is under common control with such Person, including without limitation any general partner, managing member, officer or director of such Person, or any venture capital fund now or hereafter existing which is controlled by one or more general partners or managing members of, or shares the same management company with, such Person.

1.2 “Board” shall mean the Board of Directors of the Company.

1.3 “Business Day” shall mean any day other than a Saturday or Sunday or a day on which banks are required or authorized to close in the City of Stamford or the City of San Antonio.

1.4 “Common Stock” means the Common Stock, par value $0.0001 per share, of the Company.

1.5 “Investors” initially means the Persons named in Exhibit A hereto, the Affiliates (other than the Company) of each of them, and any one of them, as the context may require.

1.6 “Person” shall mean a natural person, corporation, limited partnership, general partnership, joint stock company, joint venture, association, company, bank, trust company, and trust, business trust or other organization, whether or not a legal entity, or a government or agency or any political subdivision thereof.

1.7 “Series A Convertible Preferred Stock” means the Series A Convertible Preferred Stock, par value $0.0001 per share, of the Company.

1.8 “Series B Convertible Preferred Stock” means the Series B Convertible Preferred Stock, par value $0.0001 per share, of the Company.

1.9 “Shares” shall mean shares of capital stock of the Company.

1.10 “Stockholder” shall mean each holder of Shares.

2. Standstill; Deferral; Insurance.

2.1 From the date hereof until December 31, 2010 (the “Standstill Period”), neither the Investors nor any of their Affiliates will, directly or indirectly, or otherwise participate in, (a) any acquisition of any shares of Common Stock or common stock of any of the Company’s subsidiaries, including through any tender offer or similar mechanism or (b) any transaction that would have the effect of the acquisition of such common stock, including for example a cash out merger or other business combination or a reverse stock split by the Company; provided, however, the foregoing limitations shall not apply if (i) notice of such proposed transaction is provided to the Company by such Investors or any of their Affiliates, (ii) such proposed transaction would not result in the Investors and/or their Affiliates owning 90% or more of the Company’s then outstanding Shares on a fully diluted basis (excluding the Common Stock represented by the Series A Preferred Stock, Series B Preferred Stock and MML Convertible Notes), and (iii) with respect to an acquisition under clause (a) above only, such acquisition is the result of an unsolicited offer made by a Stockholder to sell such Stockholder’s shares of Common Stock to one or more of the Investors or any of their Affiliates. Notwithstanding the foregoing, the first sentence of this Section 2.1 shall not apply with respect to (i) any capital funding provided by the Investors or their Affiliates that the Board determines in good faith is necessary to (A) avoid a pending or anticipated default under the existing loan agreements of the Company or any of its Subsidiaries, (B) support bonding lines critical to the business of the Company or any of its Subsidiaries, (C) provide additional working capital and general corporate expenses to the Company or any of its Subsidiaries in the event of a shortfall

of unrestricted cash or (D) pay for costs specifically related to a critical project of the Company or any of its Subsidiaries, (ii) any transaction, such as a cash out merger or reverse split, that the Board determines in good faith is necessary to avoid the potential that the Company may revive its reporting obligations under Section 13 or Section 15(d) of the Exchange Act based on the number of its stockholders of record of Common Stock, warrants or units to purchase common stock and warrants, (iii) any acquisition of Common Stock by the Investors as a result of the conversion of any Company securities held by the Investors as of the date hereof or (iv) any acquisition effected with the approval of a special committee of the Board comprised solely of independent, disinterested directors. For avoidance of doubt, the first sentence of this Section 2.1 shall not apply and the Board shall deemed to be acting in good faith if it determines to take action under clause (ii) of the immediately preceding sentence where the Company has 200 or more holders of record for any of its Common Stock, warrants or units to purchase common stock and warrants. During the Standstill Period, the Investors agree not to request that the Company (or any of its directors, officers, employees or other representatives), directly or indirectly, amend or waive any material provision of this Agreement.

2.2 During the Standstill Period, the Investors agree to defer payment of accrued interest under the MML Convertible Notes and defer requests for reimbursement of certain legal costs incurred by the Investors in prior dealings with the Company.

2.3 From the date hereof until such time as the matters set forth in Section 5.1(b) have occurred, the Investors will use their reasonable best efforts to cause the Company to provide for continued D&O liability coverage at levels the Board determines in good faith are adequate.

3. Information; Stockholder Meetings.

3.1 From the date hereof until the date of the submission to the OTC Disclosure and News Service of the Company’s financial statements for the year ending December 31, 2010 (the “Reporting Period”), the Investors will use their reasonable best efforts to cause the Company to provide annual and quarterly financial statements through the OTC Disclosure and News Service as they becomes available, but no later than six months from the date of such reporting period. The parties agree that such annual and quarterly financial statements shall include, at a minimum, a balance sheet, an income statement and number of shares of Common Stock outstanding. The parties acknowledge that the submission of the Company’s financial statements for the year ending December 31, 2009 to the OTC Disclosure and News Service is not expected to occur until the middle of April 2010.

3.2 During the Reporting Period, the Investors will use their reasonable best efforts to cause the Company to continue to hold and conduct annual stockholders meetings pursuant to Delaware law, in form and substance substantially similar to those conducted during the two years prior to the date hereof; provided, however, the Company shall not be required to distribute a proxy statement in similar form and substance as that which had been distributed for meetings occurring during the two years prior to the date hereof.

4. Legends.

4.1 Each certificate representing Shares now or hereafter owned by an Investor shall be endorsed with the following legend:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAIN STOCKHOLDERS AGREEMENT BY AND BETWEEN THE COMPANY AND CERTAIN HOLDERS OF STOCK OF THE COMPANY. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY.”

4.2 The legend required by Section 4.1 shall be removed upon termination of this Agreement.

5. Termination.

5.1 Except as set forth in Section 2.3 and Section 5.2, this Agreement shall terminate upon the earlier to occur of any of the following:

(a) the written agreement of the Company and the Investors;

(b) the Investors (together with their Affiliates) collectively ceasing (i) to hold beneficially at least 10% of the Common Stock on a fully diluted basis and (ii) to have a representative on the Board;

(d) the date of the submission to the OTC Disclosure and News Service of the Company’s financial statements for the year ending December 31, 2010.

5.2 The provisions set forth in Section 6 below shall survive any termination of this Agreement.

6. Miscellaneous.

6.1 Governing Law. This Agreement shall be governed by and construed under the laws of the State of Delaware, without regard to principles of conflict of laws.

6.2 Amendment and Waiver. This Agreement may be amended or terminated and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) with the written consent of the Company and the Investors. No waivers of or exceptions to any term, condition or provision of this Agreement, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision.

6.3 Assignment of Rights. This Agreement and the rights and obligations of the parties hereunder shall inure to the benefit of, and be binding upon, their respective successors, assigns and legal representatives.

6.4 Notices. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified, (ii) five (5) Business Days after having been sent by certified mail, return receipt requested, postage prepaid, or (iii) one (1) Business Day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the party to be notified at the following addresses (or at such other address for a party as shall be specified by notice given in accordance with this Section):

	(a)		if to the Company:

			Argyle Security, Inc. 12903 Delivery Drive San Antonio, Texas 78247 Attention: Chief Executive Officer

	(b)		if to the Investors:

			c/o MML Capital Partners, LLC Stamford Harbor Park 333 Ludlow Street Stamford, Connecticut 06902 Attention: Robert Davies

6.5 Severability. In the event one or more of the provisions of this Agreement should, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provisions of this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.

6.6 Attorneys’ Fees. In the event that any suit or action is instituted to enforce any provision in this Agreement, the prevailing party in such dispute shall be entitled to recover from the losing party all reasonable fees, costs and expenses incurred in connection with enforcing any right of such prevailing party under or with respect to this Agreement, including without limitation, such reasonable fees and expenses of attorneys, which shall include, without limitation, all reasonable fees, costs and expenses of appeals.

6.7 Entire Agreement. This Agreement and the Exhibits hereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and no party shall be liable or bound to any other party in any manner by any representations, warranties, covenants and agreements except as specifically set forth herein and therein.

6.8 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

6.9 Specific Performance. The parties hereto hereby declare that it is impossible to measure in money the damages which will accrue to a party hereto or to its heirs, personal representatives, or assigns by reason of a failure to perform any of the obligations under this Agreement and agree that the terms of this Agreement shall be specifically enforceable. If any party hereto or its heirs, personal representatives or assigns institutes any action or proceeding to specifically enforce the provisions hereof, any person against whom such action or proceeding is brought (i) hereby waives the claim or defense therein that such party or such personal representative has an adequate remedy at law, (ii) hereby waives any bond, surety, or other security that might be required of any other party with respect thereto, and (iii) shall not offer in any such action or proceeding the claim or defense that an adequate remedy at law exists

6.10 Indemnification. The Investors agree to indemnify, hold harmless and defend the Company’s directors from any breach of this Agreement by any of the Investors or any of their Affiliates.

[Signature page follows]

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date above first written.


ARGYLE SECURITY, INC.:
By:	/s/ Richard Watts
	Name:	Richard Watts
	Title:	Chief Financial Officer

THE INVESTORS: Mezzanine Management Fund IV A, LP
By:	/s/ Dudley R. Cottingham
	Name:	Dudley R. Cottingham
	Title:	Authorized Signatory

Mezzanine Management Fund IV Coinvest A, LP
By:	/s/ Dudley R. Cottingham
	Name:	Dudley R. Cottingham
	Title:	Authorized Signatory

[Signature Page to Standstill and Protective Measures Agreement]

EXHIBIT A

LIST OF INVESTORS

Mezzanine Management Fund IV A, LP

Mezzanine Management Fund IV Coinvest A, LP

EX-99.C 4 c98609exv99wc.htm EXHIBIT C Exhibit C

Exhibit C

ARGYLE SECURITY, INC. ANNOUNCES DEREGISTRATION OF COMMON STOCK,
WARRANTS AND UNITS

SAN ANTONIO, March 30, 2010 /PRNewswire via COMTEX/ — Argyle Security, Inc., (OTC Bulletin Board: ARGL) (the “Company”), a service and solutions provider in the physical and electronic security industry, announced that it has voluntarily deregistered its common stock, warrants and units consisting of common stock and warrants and suspended its reporting obligations under the federal securities laws by filing today a Form 15 with the Securities and Exchange Commission (“SEC”). The Company is eligible to deregister these securities because it has fewer than 300 holders of record of each class of these securities.

Upon the filing of the Form 15, the Company’s obligation to file certain reports with the SEC, including Forms 10-K, 10-Q and 8-K, will be suspended immediately, and deregistration of the securities is expected to be effective within 90 days after the filing of the Form 15.

The Company is taking these actions consistent with its heightened focus on cash management and cost and expense containment initiatives stemming from its 2009 financial results that it plans to submit to the OTC Disclosure and News Service not later than mid April 2010 as described below. Deregistration is expected to reduce significant financial and administrative burdens associated with being a SEC reporting company and related regulatory compliance under the Sarbanes-Oxley Act of 2002 (“SOX”), including under Section 404 of SOX that is currently scheduled to be applicable to the Company this year. As a result of deregistration of its securities, the Company will not conduct the proposed rights offering to purchase shares of its common stock as previously reported by the Company. In addition, the Company has no current plans to conduct any other “qualified equity offering” as previously described and reported by the Company in connection with its December 2009 refinancing transactions.

In connection with the Company’s decision to deregister its securities, the Company and its independent director negotiated a limited standstill agreement through the end of 2010, subject to certain exceptions, with the Company’s largest stockholder. In addition, the Company agreed to provide annual and quarterly financial statements through the OTC Disclosure and News Service at least through its 2010 annual financial statements. The Company plans to submit its audited financial statements for the year ended December 31, 2009 for dissemination on the OTC Disclosure and News Service not later than mid April 2010. Due to its prior SEC reporting and the reporting of its annual and quarterly financial statements through the OTC Disclosure and News Service, the Company anticipates that its common stock, units and warrants will continue to be eligible to be quoted on the Pink Sheets in the near term, however, there can be no assurances that any broker will make a market in the Company’s common stock or other securities.

Sam Youngblood, the President and Chief Executive Officer of the Company, commented: “After careful consideration, the Company took this action because we believe that the costs associated with being a SEC reporting company significantly outweigh the benefits to the Company and our stakeholders, particularly in light of the Company’s size, small market capitalization and thin trading of our securities.”

About Argyle Security, Inc.

Based in San Antonio, TX, Argyle is a provider of services and solutions in the physical electronic security industry. Argyle’s Corrections division is the controlling entity for business units consisting of ISI, PDI, Com-Tec and MCS, and is one of the nation’s largest providers of detention equipment products and service solutions, as well as turnkey, electronic security systems. These systems include unique engineering competencies and proprietary software products. Argyle’s Commercial division, consisting of MCS-Commercial Fire & Security and MCS Federal Systems focuses on the commercial security sector and provides turnkey, electronic security systems to the commercial and government markets. Please visit www.argylesecurity.com for additional information on Argyle.

Safe Harbor

Certain statements in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. When used in this press release, words such as “will,” “believe,” “expect,” “anticipate,” “encouraged,” “foresees,” “forecasts,” “estimates” and similar expressions, as they relate to the company or its management, as well as assumptions made by and information currently available to the Company’s management identify forward-looking statements. The forward-looking statements are subject to risks and uncertainties, including the Company’s ability to successfully implement its cash management and cost and expense containment initiatives, the Company’s ability to have its common stock or other securities traded on the Pink Sheets, the scope and timing of reporting future financial results, downturns in economic conditions generally, the Company’s business or the state of the corporate credit markets. Consider these factors carefully in evaluating the forward-looking statements. The risk factors listed in the Company’s Form 10-K for the year ended December 31, 2008 and subsequently filed Forms 10-Q and 8-K or the information submitted to and disseminated by the OTC Disclosure and News Service also provide, or will provide, examples of risks, uncertainties and events that could cause actual results to differ materially from those contained in forward-looking statements. The forward-looking statements made herein are only made as of the date of this press release and the Company undertakes no obligation to publicly update such forward-looking statements and is not responsible for changes made to this press release for Internet or wire services.

CONTACT:

Argyle Security, Inc.
Sam Youngblood, President and CEO of Argyle Security, Inc.
(210) 495-5245

http://www.argylesecurity.com

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