sc13d

-----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, SUEe4Bxx+cdgN3rdGgJ1y1gHU0SQDqw3zr8nL/j5DwhZogJETq29aTakIIjFzNgS /kwqHgzKtbRqQaiiDsdYKg== 0000950134-07-017898.txt : 20070810 0000950134-07-017898.hdr.sgml : 20070810 20070810151036 ACCESSION NUMBER: 0000950134-07-017898 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20070810 DATE AS OF CHANGE: 20070810 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: Argyle Security Acquisition CORP CENTRAL INDEX KEY: 0001332585 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 203101079 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-81380 FILM NUMBER: 071044951 BUSINESS ADDRESS: STREET 1: 200 CONCORD PLAZA STREET 2: SUITE 700 CITY: SAN ANTONIO STATE: TX ZIP: 78216 BUSINESS PHONE: 2108298779 MAIL ADDRESS: STREET 1: 200 CONCORD PLAZA STREET 2: SUITE 700 CITY: SAN ANTONIO STATE: TX ZIP: 78216 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: Youngblood Sam CENTRAL INDEX KEY: 0001409128 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: BUSINESS PHONE: 210 495-5245 MAIL ADDRESS: STREET 1: 12903 DELIVERY DRIVE CITY: SAN ANTONIO STATE: TX ZIP: 78247 SC 13D 1 d49066sc13d.htm SCHEDULE 13D sc13d

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

INFORMATION TO BE INCLUDED IN STATEMENTS
FILED PURSUANT TO RULE 13d-2(a)

ARGYLE SECURITY, INC.

(Name of Issuer)

Common Stock, par value $0.0001 per share

(Title of Class of Securities)

040311102

(CUSIP Number)

Sam Youngblood
12903 Delivery Drive
San Antonio, Texas 78247
(210) 495-5245

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

July 31, 2007

(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 §240.13d-7 for other parties to whom copies are to be sent.

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 (the “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).

Page 1 of 7


CUSIP No.		040311102	SCHEDULE 13D

NAMES OF REPORTING PERSONS

Sam Youngblood

I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a) o

(b) o

SEC USE ONLY

SOURCE OF FUNDS

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

CITIZENSHIP OR PLACE OF ORGANIZATION

United States of America

SOLE VOTING POWER

NUMBER OF

392,496

SHARES

SHARED VOTING POWER

BENEFICIALLY

OWNED BY

EACH

SOLE DISPOSITIVE POWER

REPORTING

PERSON

392,496

WITH

SHARED DISPOSITIVE POWER

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

392,496

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

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

6.6% (see Item 5)

TYPE OF REPORTING PERSON

Page 2 of 7

TABLE OF CONTENTS


	Item 1. Security and Issuer
	Item 2. Identity and Background
	Item 3. Source and Amount of Funds or Other Consideration
	Item 4. Purpose of Transaction
	Item 5. Interest in Securities of Issuer
	Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer
	Item 7. Materials to be Filed as Exhibits
SIGNATURES
Amendment to Merger Agreement dated June 29, 2007
Amendment to Merger Agreement dated July 11, 2007
Lock-Up Agreement - Sam Youngblood
Lock-Up Agreement - Youngblood Charitable Remainder Unitrust

Item 1. Security and Issuer.

This statement relates to the common stock, par value $0.0001 per share (the “Common Stock”), of Argyle Security, Inc., a Delaware corporation (the “Issuer”), whose principal executive offices are located at 200 Concord Plaza, Suite 700, San Antonio, Texas 78216.

Item 2. Identity and Background.

a. Sam Youngblood.

b. 12903 Delivery Drive, San Antonio, Texas 78247.

c. Sam Youngblood is the Chief Executive Officer of ISI Security Group, Inc., a wholly owned subsidiary of the Issuer.

d. During the last five years, Sam Youngblood has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

e. During the last five years, Sam Youngblood has not been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

f. Sam Youngblood is a citizen of the United States of America.


Item 3.		Source and Amount of Funds or Other Consideration.

The Reporting Person received 392,496 shares of the Issuer’s Common Stock in exchange for 67 shares of common stock in ISI Detention Contracting, Group, Inc. (“ISI”) as part of the merger consideration in the transaction contemplated by that certain Merger Agreement by and among the Issuer, ISI Security Group, Inc., a wholly owned subsidiary of the Issuer (“Acquisition Corp.”), and ISI dated December 8, 2006, as first amended on June 29, 2007 and subsequently amended on July 11, 2007 (as amended, the “Merger Agreement”), pursuant to which Acquisition Corp. was merged with and into ISI, with ISI being the surviving entity (the “Merger”). On July 31, 2007, the Merger was consummated and the name of the surviving entity was changed to ISI Security Group, Inc. A copy of the Merger Agreement is incorporated by reference herein as Exhibit 1 to this Schedule 13D as set forth in Item 7 below. A copy of Amendment to Merger Agreement dated June 29, 2007 is filed as Exhibit 2 to this Schedule 13D. A copy of Amendment to Merger Agreement dated July 11, 2007 is filed as Exhibit 3 to this Schedule 13D.

Of the 67 shares of ISI common stock that the Reporting Person exchanged in the Merger, 63 shares were directly owned by the Reporting Person and four shares were owned by the Youngblood Charitable Remainder Unitrust, of which the Reporting Person is the trustee.

Page 3 of 7

Item 4. Purpose of Transaction.

As stated above, the Reporting Person acquired the shares of the Common Stock of the Issuer as part of the consideration he received in the Merger. References to, and descriptions of, the Merger and the Merger Agreement as set forth in this Item 4 are qualified in their entirety by reference to the copy of the Merger Agreement included as Exhibit 1 to this Schedule 13D, and hereby incorporated in this Item 4 in its entirety.

Except as set forth in the Merger Agreement, the Reporting Person does not have any specific plans or proposals which relate to or would result in:

(a) the acquisition by any person of additional securities of the Issuer, or the disposition of securities of the Issuer;

(b) any extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Issuer or any of its subsidiaries;

(d) any change in the present board of directors or management of the Issuer;

(e) any material change in the present capitalization or dividend policy of the Issuer;

(f) any other material change in the Issuer’s business or corporate structure;

(g) changes in the Issuer’s charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Issuer by any person;

(h) causing a class of securities of the Issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association;

(i) a class of equity securities of the Issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended, or

(j) any action similar to any of those enumerated above.


Item 5.		Interest in Securities of Issuer.


(a)		Amount Beneficially Owned:		392,496

Includes 369,063 shares directly owned and 23,433 shares indirectly owned by the Reporting Person as trustee for the Youngblood Charitable Remainder Unitrust.


		Percent of Class:		6.6%

Based on 5,961,307 shares of Common Stock of the Issuer outstanding upon consummation of the Merger.

Page 4 of 7

(b)

Number of shares as to which such person has:

(i)

Sole power to vote or to direct the vote:

392,496

(ii)

Shared power to vote or to direct the vote:

(iii)

Sole power to dispose or to direct the disposition of:

392,496

(iv)

Shared power to dispose or to direct the disposition of:

(c) On July 31, 2007, the Reporting Person acquired 392,496 shares of the Issuer’s Common Stock as part of the consideration he received in the Merger. The parties to the Merger valued the shares of the Issuer’s Common Stock at $8.475 per share pursuant to the Merger Agreement.

(d) To the knowledge of the Reporting Person, no other person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the securities of the Issuer reported herein.

(e) Not applicable.


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

The Reporting Person and the Issuer entered into that certain Lock-Up Agreement dated July 31, 2007 pursuant to which the Reporting Person may not offer, sell, contract to sell, pledge or grant any option to purchase any of his 369,063 shares for a period commencing on the date thereof and ending on January 24, 2009. A copy of this Lock-Up Agreement is filed as Exhibit 4 to this Schedule 13D.

The Youngblood Charitable Remainder Unitrust and the Issuer entered into that certain Lock-Up Agreement dated July 31, 2007 pursuant to which the Youngblood Charitable Remainder Unitrust may not offer, sell, contract to sell, pledge or grant any option to purchase any of its 23,433 shares for a period commencing on the date thereof and ending on January 24, 2009. The Reporting Person is the trustee of the Youngblood Charitable Remainder Unitrust. A copy of this Lock-Up Agreement is filed as Exhibit 5 to this Schedule 13D.

To the knowledge of the Reporting Person, except as stated above, there are no contracts, arrangements, understandings or relationships (legal or otherwise), between the person named in Item 2 and any person with respect to any securities of the Issuer, including but not limited to transfer or voting of any of the securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies, including any securities pledged or otherwise subject to a contingency

Page 5 of 7

the occurrence of which would give another person voting power or investment power over such securities other than standard default and similar provisions contained in loan agreements.

Item 7. Materials to be Filed as Exhibits.

1. Merger Agreement dated as of December 8, 2006, by and among the Issuer, Acquisition Corp. and ISI (Incorporated by reference to the Issuer’s 8-K filed on December 14, 2006).

2. Amendment to Merger Agreement dated June 29, 2007.

3. Amendment to Merger Agreement dated July 11, 2007.

4. Lock-Up Agreement between the Reporting Person and the Issuer dated July 31, 2007.

5. Lock-Up Agreement between the Youngblood Charitable Remainder Unitrust and the Issuer dated July 31, 2007.

Page 6 of 7

SIGNATURES

After reasonable inquiry and to the best of the undersigned’s knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct.


Dated: August 10, 2007

		/s/ Sam Youngblood

		Sam Youngblood

Page 7 of 7

EX-99.2 2 d49066exv99w2.htm AMENDMENT TO MERGER AGREEMENT DATED JUNE 29, 2007 exv99w2

EXHIBIT 99.2

AMENDMENT TO

MERGER AGREEMENT

This Amendment to Merger Agreement (this “Amendment”), dated June 29, 2007, is made by and among Argyle Security Acquisition Corp., a Delaware corporation (“Parent”), ISI Security Group, Inc., a Delaware corporation (“Acquisition Corp.”), ISI Detention Contracting Group, Inc., a Delaware corporation, d/b/a “ISI Security Group” (the “Company”). Any capitalized term not defined herein shall have the meaning for such term specified in the Merger Agreement (as defined below).

WHEREAS, Parent, Acquisition Corp. and the Company entered into a Merger Agreement dated December 8, 2006 (the “Merger Agreement”);

WHEREAS, Section 13.1 of the Merger Agreement provides that the parties to the Merger Agreement may, individually, terminate the Merger Agreement if the Closing has not occurred by July 1, 1007 (the “Outside Closing Date”);

WHEREAS, the Company is willing to extend the Outside Closing Date on the terms and conditions contained in this Amendment; and

WHEREAS, Parent, Acquisition Corp. and the Company wish to amend the terms of the Merger Agreement on the terms contained herein.

NOW THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

1. Section 1.1 of the Merger Agreement is hereby amended by adding the following after the definition of the term “Proceeding”:

“Promissory Notes” means unsecured subordinated promissory notes issued to the holders of Company Common Stock in partial consideration for the merger of the Company with Acquisition Corp. The Promissory Notes will (i) be in form mutually acceptable to the Company and Parent, (ii) bear interest at the rate of 5% per annum, paid semi-annually, (iii) mature five years from the date of issuance, (iv) be convertible (in whole or in part) into shares of Parent Common Stock at the election of the holders of the Promissory Notes at any time after January 1, 2008 at a price per share of $10.00, (v) be unsecured and subordinated to institutional debt other than trade debt (with which it will be in pari passu) outstanding at and after the Closing and similar debt arrangements with any institution. In addition, the Promissory will be redeemable at Parent’s election after January 1, 2009, at a price per share of $10.00.”

2. Section 2.6(b)(i) of the Merger Agreement is hereby amended by deleting the phrase “$18,200,000” and replacing it with “$18,600,000”.

3. Section 2.6(b) of the Merger Agreement is hereby amended by adding the following after subparagraph (ii):

“(iii) Promissory Notes in the aggregate principal amount of $1,925,000, convertible into 192,500 shares of Parent Common Stock.”

4. Section 2.9(b) of the Merger Agreement is hereby amended by deleting the text of Section 2.9(b) (and all of the subparagraphs of Section 2.9(b)) and replacing it with the following:

“If at the time of the Closing the Adjusted EBITDA of the Company is $4,500,000.00 or more, and the amount of the 2/28 Backlog is $80,000,000.00 or more, then the Enhanced Cash Consideration and the other consideration shall be distributed pursuant to Schedule 2.9. The Parties hereby stipulate that for all purposes in this Agreement (including but not limited to Section 2.6(b) hereof and this 2.9(b)), the Closing Adjusted EBITDA of the Company is $4,500,000 or more, and the amount of the 2/28 Backlog of the Company is more than $80,000,000.”

5. Section 13.1(a) of the Merger Agreement is hereby amended by deleting the phrase “by July 1, 2007” and replacing it with “on or before July 16, 2007”.

6. Schedule 2.9 to the Merger Agreement is hereby deleted in its entirety and replaced by Schedule 2.9 attached hereto.

7. Parent and Acquisition Corp. hereby knowingly, voluntarily, and irrevocably, release, give up and forever discharge ISI and its officers, directors, agents, representatives, employees and attorneys, of and from any and all rights, duties and obligations, and any and all claims, actions, suits, debts, causes of actions and demands of any and every kind, both known and unknown, foreseen and unforeseen, which they may have against ISI or any of its officers, directors, agents, representatives, employees and attorneys, arising from any cause whatsoever, from the beginning of time to the date hereof, except for claims relating to intentional fraud or theft. Without limiting the foregoing in any manner, and by way of illustration only, this Section 7 is intended by the Parent and Acquisition Corp. to release and forever discharge ISI and all of its officers, directors, agents, representatives, employees and attorneys from any and all claims, of any and every nature, relating in any way, whether directly or indirectly to the closing, failure to close, or any delay in the closing, of the transactions contemplated by the Merger Agreement through the date of this Amendment.

8. This Amendment shall be construed in accordance with and governed by the laws of the State of Texas, without giving effect to the conflict of laws principles thereof.

9. From and after the date of this Amendment, Argyle will reimburse Sam Youngblood for any and all expenses incurred by Mr. Youngblood after the date hereof in connection with the transactions contemplated by the Merger Agreement.

10. This Amendment may be signed in any number of counterparts, each of which shall be an original and all of which shall be deemed to be one and the same instrument, with the

same effect as if the signatures thereto and hereto were upon the same instrument. A facsimile signature shall be deemed to be an original signature for purposes of this Amendment.

11. This Amendment is intended to be in full compliance with the requirements for an Amendment to the Merger Agreement as required by Section 14.2(a) of the Merger Agreement, and every defect in fulfilling such requirements for an effective amendment to the Merger Agreement is hereby ratified, intentionally waived and relinquished by all Parties hereto.

[Remainder of page intentionally left blank]

IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of the day and year first above written.


ARGYLE SECURITY ACQUISITION CORP.
By:	/s/ Bob Marbut
	Name:	Bob Marbut
	Title:	Chairman and Co-CEO

ISI SECURITY GROUP, INC.
By:	/s/ Bob Marbut
	Name:	Bob Marbut
	Title:	Chairman

ISI DETENTION CONTRACTING GROUP, INC.
By:	/s/ Sam Youngblood
	Name:	Sam Youngblood
	Title:	CEO

EX-99.3 3 d49066exv99w3.htm AMENDMENT TO MERGER AGREEMENT DATED JULY 11, 2007 exv99w3

EXHIBIT 99.3

AMENDMENT TO

MERGER AGREEMENT

This Amendment to Merger Agreement (this “Amendment No. 2”), dated July 11, 2007, is made by and among Argyle Security Acquisition Corp., a Delaware corporation (“Parent”), ISI Security Group, Inc., a Delaware corporation (“Acquisition Corp.”), ISI Detention Contracting Group, Inc., a Delaware corporation, d/b/a “ISI Security Group” (the “Company”). Any capitalized term not defined herein shall have the meaning for such term specified in the Merger Agreement (as defined below).

WHEREAS, Parent, Acquisition Corp. and the Company entered into a Merger Agreement dated December 8, 2006 (the “Merger Agreement”);

WHEREAS, Parent, Acquisition Corp. and the Company entered into an amendment to the Merger Agreement dated June 29, 2007 (“Amendment No. 1”) pursuant to which the parties changed the date after which the parties to the Merger Agreement could, individually, terminate the Merger Agreement from July 1, 2007 to July 16, 2007 (the “Outside Closing Date”); and

WHEREAS, the parties to Merger Agreement wish to further extend the Outside Closing Date;

1. Each instance of July 1, 2007 in the Merger Agreement, and each instance of July 16, 2007 in Amendment No. 1, is hereby deleted in its entirety and replaced with the term July 31, 2007.

2. Parent and Acquisition Corp. hereby knowingly, voluntarily, and irrevocably, release, give up and forever discharge ISI and its officers, directors, agents, representatives, employees and attorneys, of and from any and all rights, duties and obligations, and any and all claims, actions, suits, debts, causes of actions and demands of any and every kind, both known and unknown, foreseen and unforeseen, which they may have against ISI or any of its officers, directors, agents, representatives, employees and attorneys, arising from any cause whatsoever, from the beginning of time to the date hereof, except for claims relating to intentional fraud or theft. Without limiting the foregoing in any manner, and by way of illustration only, this Section 2 is intended by the Parent and Acquisition Corp. to release and forever discharge ISI and all of its officers, directors, agents, representatives, employees and attorneys from any and all claims, of any and every nature, relating in any way, whether directly or indirectly to the closing, failure to close, or any delay in the closing, of the transactions contemplated by the Merger Agreement through the date of this Amendment No. 2.

3. This Amendment No. 2 shall be construed in accordance with and governed by the laws of the State of Texas, without giving effect to the conflict of laws principles thereof.

4. This Amendment No. 2 may be signed in any number of counterparts, each of which shall be an original and all of which shall be deemed to be one and the same instrument, with the same effect as if the signatures thereto and hereto were upon the same instrument. A facsimile signature shall be deemed to be an original signature for purposes of this Amendment No. 2.

5. This Amendment No. 2 is intended to be in full compliance with the requirements for an amendment to the Merger Agreement as required by Section 14.2(a) of the Merger Agreement, and every defect in fulfilling such requirements for an effective amendment to the Merger Agreement is hereby ratified, intentionally waived and relinquished by all Parties hereto.

[Remainder of page intentionally left blank]

IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment No. 2 as of the day and year first above written.


ARGYLE SECURITY ACQUISITION CORP.
By:	/s/ Bob Marbut
	Name:	Bob Marbut
	Title:	Chairman and Co-CEO

ISI SECURITY GROUP, INC.
By:	/s/ Bob Marbut
	Name:	Bob Marbut
	Title:	Chairman

ISI DETENTION CONTRACTING GROUP, INC.
By:	/s/ Sam Youngblood
	Name:	Sam Youngblood
	Title:	CEO

EX-99.4 4 d49066exv99w4.htm LOCK-UP AGREEMENT - SAM YOUNGBLOOD exv99w4

EXHIBIT 99.4

LOCK-UP AGREEMENT

by and between
Argyle Security Acquisition Corporation
and
Sam Youngblood

THIS LOCK-UP AGREEMENT (this “Lock-Up Agreement”), dated as of July 31, 2007, by and among ARGYLE SECURITY ACQUISITION CORPORATION, a Delaware corporation (the “Company”) and Sam Youngblood (the “Stockholder”).

WHEREAS, This Lock-Up Agreement is made pursuant to the Merger Agreement, dated December 8, 2006, as amended, by and among the Company, ISI Security Group, Inc., a Delaware corporation and ISI Detention Contracting Group, Inc., a Delaware corporation (the “Merger Agreement”).

WHEREAS, the Company has entered into the Merger Agreement pursuant to which it will, among other things, issue 369,063 shares of its common stock (the “Shares”) to the Stockholder; and

WHEREAS, it is a condition of the Merger Agreement that the Stockholder enter into a lock-up agreement with the Company in the form of this Lock-Up Agreement relating to the Shares.

NOW, THEREFORE, in consideration of the foregoing and the terms, conditions and mutual covenants appearing in this Lock-Up Agreement, the parties hereto hereby agree as follows:

Section 1. Capitalized terms used and not otherwise defined herein that are defined in the Merger Agreement shall have the meanings given such terms in the Merger Agreement.

Section 2. (a) The Company agreed to file a registration statement with the SEC relating to the resale of the Shares on Form S-1, or such other form as may be applicable, within 30 days of Closing Date and to use commercially reasonable efforts to have such registration statement declared effective by the staff of the SEC within 150 days after the Closing Date. Regardless of the effective date of the registration statement, the Stockholder may not offer, sell, contract to sell, pledge or grant any option to purchase any of the Shares for a period commencing on the date hereof and ending on January 24, 2009, without the prior written consent of the Company, unless the Company consummated a transaction after the date of this Agreement which results in all of the Company’s stockholders having the right to exchange their shares of the Company’s common stock for cash, securities or other property.

(b) Notwithstanding the foregoing, the Stockholder may make transfers to (i) family

members and/or estate planning vehicles (i.e., family limited partnerships and trusts), or (ii) to any controlled affiliate of the Stockholder if, prior to such transfer, any person who is permitted to receive the Shares pursuant to paragraphs (i) and (ii), above, agrees in writing to be bound by the restrictions set forth herein; provided, further, however, that any such transfer is made in compliance with all applicable securities laws and the Company receives an opinion of counsel that such transfer does not violate applicable securities laws.

(c) For the purpose of effectuating this Lock-Up Agreement, the Stockholder hereby consents to the Company issuing a stop transfer instruction to the transfer agent in accordance with the terms of this Lock-Up Agreement. Any sale of Shares in violation of this Lock-Up Agreement by the Stockholder without the consent of the Company shall constitute a material breach of this Agreement.

(d) The Stockholder acknowledges that its breach or impending violation of any of the provisions of this Lock-Up Agreement may cause irreparable damage to the Company for which remedies at law would be inadequate. The Stockholder further acknowledges and agrees that the provisions set forth herein are essential terms and conditions of the Lock-Up Agreement that the Company may seek to enforce in addition to any of its rights or remedies provided under any other agreement decree or order by any court of competent jurisdiction enjoining such impending or actual violation of any of such provisions. Such decree or order, to the extent appropriate, shall specifically enforce the full performance of any such provision by the Stockholders, and the Stockholders and the Company hereby consent to the jurisdiction of any such court of competent jurisdiction, state or federal, sitting in the City of San Antonio, Texas, and authorizes the entry on its behalf of any required appearance for such purpose. This remedy shall be in addition to all other remedies available to the Company at law or equity. If any portion of this Section 2 is adjudicated to be invalid or unenforceable, this Section 2 shall be deemed amended to delete there from the portion so adjudicated, such deletion to apply only with respect to the operation of this Section 2 in the jurisdiction in which such adjudication is made.

Section 3. Subject to Section 7 hereunder, this Lock-Up Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns, and upon the Stockholder and his or her heirs, executors, administrators, legatees and legal representatives.

Section 4. Should any part of this Lock-Up Agreement, for any reason whatsoever, be declared invalid, illegal, or incapable of being enforced in whole or in part, such decision shall not affect the validity of any remaining portion, which remaining portion shall remain in full force and effect as if this Lock-Up Agreement had been executed with the invalid portion thereof eliminated, and it is hereby declared the intention of the parties hereto that they would have executed the remaining portion of this Lock-Up Agreement without including therein any portion which may for any reason be declared invalid.

Section 5. If the Merger Agreement (other than the provisions thereof that survive termination) is terminated or is to be terminated prior to the payment for and delivery of the Shares, the Company will release the Stockholder from its obligations under this Lock-Up Agreement.

-2-

Section 6. This Lock-Up Agreement shall be construed and enforced in accordance with the laws of the State of Texas applicable to agreements made and to be performed in such State without application of the principles of conflicts of laws of such State.

Section 7. This Lock-Up Agreement and all rights hereunder are personal to the parties and shall not be assignable, and any purported assignment in violation thereof shall be null and void.

Section 8. All notices, requests, demands and other communications to any party hereunder shall be in writing and shall be given to such party at its address or telecopier number set forth below, or such other address or telecopier number as such party may hereinafter specify by notice to each other party hereto:

if to the Company, to:

Argyle Security Acquisition Corporation
200 Concord Plaza, Suite 700
San Antonio, TX 78216
Attn: Bob Marbut
Telecopy: (210) 828-7300

with a copy to:

Loeb & Loeb LLP
345 Park Avenue
New York, New York 10154
Attention: Mitchell S. Nussbaum
Telecopy:

if to the Stockholder:

c/o ISI Detention Contracting Group, Inc.
12903 Delivery Drive
San Antonio, Texas 78247
Attention: Sam Youngblood
Telecopy: 210.495.5613

with a copy to:

Hughes & Luce, LLP
111 Congress Ave; Ste. 900
Austin, TX 78701
Attention: Hull Youngblood
Telecopy : 512.482.6859

-3-

Each such notice, request or other communication shall be effective (i) if given by telecopy, when such telecopy is transmitted to the telecopy number specified herein and the appropriate answer back is received or, (ii) if given by certified mail, 72 hours after such communication is deposited in the mails with first class and certified postage prepaid, properly addressed or, (iii) if given by any other means, when delivered at the address specified herein.

Section 9. The failure of either party to insist upon the strict performance of any of the terms, conditions and provisions of this Lock-Up Agreement shall not be construed as a waiver or relinquishment of future compliance therewith, and said terms, conditions and provisions shall remain in full force and effect. No waiver of any term or any condition of this Lock-Up Agreement on the part of either party shall be effective for any purpose whatsoever unless such waiver is in writing and signed by such party.

-4-

IN WITNESS WHEREOF, the parties hereto have executed this Lock-Up Agreement as of the day and year first written above.


ARGYLE SECURITY ACQUISITION CORP.
By:	/s/ Bob Marbut
	Name:	Bob Marbut
	Title:	Chairman and Co-CEO

STOCKHOLDER:
By:	/s/ Sam Youngblood
	Sam Youngblood

-5-

EX-99.5 5 d49066exv99w5.htm LOCK-UP AGREEMENT - YOUNGBLOOD CHARITABLE REMAINDER UNITRUST exv99w5

EXHIBIT 99.5

LOCK-UP AGREEMENT

by and between
Argyle Security Acquisition Corporation
and
Youngblood Charitable Remainder Unitrust

WHEREAS, the Company has entered into the Merger Agreement pursuant to which it will, among other things, issue 23,433 shares of its common stock (the “Shares”) to the Stockholder; and

WHEREAS, it is a condition of the Merger Agreement that the Stockholder enter into a lock-up agreement with the Company in the form of this Lock-Up Agreement relating to the Shares.

NOW, THEREFORE, in consideration of the foregoing and the terms, conditions and mutual covenants appearing in this Lock-Up Agreement, the parties hereto hereby agree as follows:

Section 1. Capitalized terms used and not otherwise defined herein that are defined in the Merger Agreement shall have the meanings given such terms in the Merger Agreement.

(b) Notwithstanding the foregoing, the Stockholder may make transfers to (i) family members and/or estate planning vehicles (i.e., family limited partnerships and trusts), or (ii) to any controlled affiliate of the Stockholder if, prior to such transfer, any person who is permitted to receive the Shares pursuant to paragraphs (i) and (ii), above, agrees in writing to be bound by the restrictions set forth herein; provided, further, however, that any such transfer is made in compliance with all applicable securities laws and the Company receives an opinion of counsel that such transfer does not violate applicable securities laws.

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Section 7. This Lock-Up Agreement and all rights hereunder are personal to the parties and shall not be assignable, and any purported assignment in violation thereof shall be null and void.

if to the Company, to:

Argyle Security Acquisition Corporation
200 Concord Plaza, Suite 700
San Antonio, TX 78216
Attn: Bob Marbut
Telecopy: (210) 828-7300

with a copy to:

Loeb & Loeb LLP
345 Park Avenue
New York, New York 10154
Attention: Mitchell S. Nussbaum
Telecopy:

if to the Stockholder:

c/o ISI Detention Contracting Group, Inc.
12903 Delivery Drive
San Antonio, Texas 78247
Attention: Sam Youngblood
Telecopy: 210.495.5613

with a copy to:

Hughes & Luce, LLP
111 Congress Ave; Ste. 900
Austin, TX 78701
Attention: Hull Youngblood
Telecopy : 512.482.6859

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IN WITNESS WHEREOF, the parties hereto have executed this Lock-Up Agreement as of the day and year first written above.


ARGYLE SECURITY ACQUISITION CORP.
By:	/s/ Bob Marbut
	Name:	Bob Marbut
	Title:	Chairman and Co-CEO

STOCKHOLDER:
By:	/s/ Samuel C. Youngblood
	Samuel C. Youngblood
	Trustee

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