SECURITY AGREEMENT

This SECURITY AGREEMENT dated as of October 3, 2008 (the “ Security Agreement ”), is executed by and between ISI SECURITY GROUP, INC. , a Delaware corporation (f/k/a ISI DETENTION CONTRACTING GROUP, INC.) (“ Borrower ”), DETENTION CONTRACTING GROUP, LTD , a Texas limited partnership, ISI DETENTION CONTRACTING GROUP, INC. , a Texas corporation, ISI DETENTION CONTRACTING GROUP, INC. , a California corporation, ISI DETENTION CONTRACTING GROUP, INC. , a New Mexico corporation, ISI DETENTION SYSTEMS, INC. , a Texas corporation, ISI SYSTEMS, LTD. , a Texas limited partnership, METROPLEX CONTROL SYSTEMS, INC. , a Texas corporation, ISI CONTROLS, LTD. , a Texas limited partnership, METROPLEX COMMERCIAL FIRE AND SECURITY ALARMS, INC. , a Texas corporation and MCFSA, LTD. , a Texas limited partnership, COM-TEC SECURITY, LLC , a Wisconsin limited liability company, and COM-TEC CALIFORNIA LIMITED PARTNERSHIP , a limited partnership (collectively, the “ Guarantors ”), which have their chief executive located at 12903 Delivery Drive, San Antonio, Texas 78247, and THE PRIVATEBANK AND TRUST COMPANY , an Illinois banking corporation (the “ Bank ”), whose address is 70 W. Madison, 2 ^nd Floor, Chicago, Illinois 60602 (the Borrower and the Guarantors are collectively referred to herein as the “ Debtor ”).

A.   ISI Security Group, Inc., a Delaware corporation (“ Borrower ”) and Bank have entered into that certain Loan and Security Agreement of even date herewith (the “ Loan Agreement ”), pursuant to which the Bank has agreed to make two (2) revolving loans and a term loan in the original aggregate amount of twenty-five million and no/100 dollars ($25,000,000.00) (the “ Loans ”).

B.   As a condition to the Bank’s loaning funds or providing new additional financial accommodations to the Borrower, the Bank requires that the Debtor enter into this Security Agreement in order to secure the obligations and performance of the Borrower under such loans or financial accommodations.

NOW THEREFORE, in consideration of the premises, and the mutual covenants and agreements set forth herein, the Debtor and the Bank hereby agree as follows:

Section 1.   DEFINITIONS .

1.1   Defined Terms . For the purposes of this Security Agreement, in addition to the definitions included in the Preamble and Recitals above, the following capitalized words and phrases shall have the meanings set forth below. In addition, any additional defined terms used herein shall have the meaning ascribed to them in the Loan Agreement.

“ Affiliate ” of the Bank shall mean (a) any entity which, directly or indirectly, controls or is controlled by or is under common control with the Bank, and (b) any entity administered or managed by the Bank, or an Affiliate or investment advisor thereof and which is engaged in making, purchasing, holding or otherwise investing in commercial loans. An entity shall be deemed to be “controlled by” another entity if such other entity possesses, directly or indirectly, power to direct or cause the direction of the management and policies of such entity whether by contract, ownership of voting securities, membership interests or otherwise.

“ Bank Product Agreements ” shall mean those certain cash management service agreements entered into from time to time by an Obligor or any Subsidiary with the Bank or any Affiliate of the Bank concerning Bank Products.

“ Bank Product Obligations ” shall mean all obligations, liabilities, contingent reimbursement obligations, fees, and expenses owing by an Obligor or any Subsidiary to the Bank or any Affiliate of the Bank pursuant to or evidenced by the Bank Product Agreements and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising.

“ Bank Products ” shall mean any service or facility extended to an Obligor or any Subsidiary by the Bank or any Affiliate of the Bank, including: (a) credit cards, (b) credit card processing services, (c) debit cards, (d) purchase cards, (e) cash management, including controlled disbursement, accounts or services, or (f) Hedging Agreements.

“ Bankruptcy Code ” shall mean the United States Bankruptcy Code, as now existing or hereafter amended.

“ Borrower ” shall have the meaning set forth in Recital A hereof. The Borrower may be the same Person as the Debtor.

“ Business Day ” shall mean any day other than a Saturday, Sunday or a legal holiday on which banks are authorized or required to be closed for the conduct of commercial banking business in Chicago, Illinois.

“ Capital Lease ” shall mean, as to any Person, a lease of any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible, by such Person, as lessee, that is, or should be, in accordance with Financial Accounting Standards Board Statement No. 13, as amended from time to time, or, if such statement is not then in effect, such statement of GAAP as may be applicable, recorded as a “capital lease” on the financial statements of such Person prepared in accordance with GAAP.

“ Capital Securities ” shall mean, with respect to any Person, all shares, interests, participations or other equivalents (however designated, whether voting or non-voting) of such Person’s capital, whether now outstanding or issued or acquired after the date hereof, including common shares, preferred shares, membership interests in a limited liability company, limited or general partnership interests in a partnership or any other equivalent of such ownership interest.

“ Capitalized Lease Obligations ” shall mean, as to any Person, all rental obligations of such Person, as lessee under a Capital Lease which are or will be required to be capitalized on the books of such Person.

“ Collateral ” shall have the meaning set forth in Section 2.1 hereof.

“ Default Rate ” shall mean a per annum rate of interest equal to the Prime Rate plus two percent (2.00%).

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

“ Event of Default ” shall have the mean set forth in Section 5 hereof.

“ GAAP ” shall mean generally accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the U.S. accounting profession), which are applicable to the circumstances as of the date of determination, provided, however, that interim financial statements or reports shall be deemed in compliance with GAAP despite the absence of footnotes and fiscal year-end adjustments as required by GAAP.

“ Hedging Agreements ” shall mean any interest rate, currency or commodity swap agreement, cap agreement or collar agreement, and any other agreement or arrangement designed to protect a Person against fluctuations in interest rates, currency exchange rates or commodity prices.

“ Hedging Obligation ” shall mean, with respect to any Person, any liability of such Person under any Hedging Agreement.

“ Landlord Waiver ” shall mean an agreement in form and substance reasonably satisfactory to the Bank pursuant to which a mortgagee or lessor of real property on which Collateral is stored or otherwise located, or a warehouseman, processor or other bailee of Inventory or other property owned by the Debtor of any Subsidiary, acknowledges the Liens of the Bank and waives any Liens held by such Person on such property, and, in the case of any such agreement with a mortgagee or lessor, permits the Bank reasonable access to and use of such real property following the occurrence and during the continuance of an Event of Default to assemble, complete and sell any collateral stored or otherwise located thereon.

“ Letter of Credit ” and “ Letters of Credit ” shall mean, respectively, a letter of credit and all such letters of credit issued by the Bank, in its sole discretion, for the account of an Obligor.

“ Lien ” shall mean, with respect to any Person, any interest granted by such Person in any real or personal property, asset or other right owned or being purchased or acquired by such Person (including an interest in respect of a Capital Lease) which secures payment or performance of any obligation and shall include any mortgage, lien, encumbrance, title retention lien, charge or other security interest of any kind, whether arising by contract, as a matter of law, by judicial process or otherwise.

“ Loan Documents ” shall mean the Loan Agreement and each of the agreements, documents, instruments and certificates from time to time executed and delivered by an Obligor or any of their Subsidiaries for the benefit of the Bank in connection with the Obligations, and all amendments, restatements, supplements and other modifications thereto.

“ Material Adverse Effect ” shall mean (a) a material adverse change in, or a material adverse effect upon, the assets, business, properties, prospects, condition (financial or otherwise) or results of operations of an Obligor taken as a whole, (b) a material impairment of the ability of an Obligor to perform any of the Obligations under any of the Loan Documents, or (c) a material adverse effect on (i) any substantial portion of the Collateral, (ii) the legality, validity, binding effect or enforceability against an Obligor and its Subsidiaries of any of the Loan Documents, (iii) the perfection or priority of any Lien granted to the Bank under any Loan Document, or (iv) the rights or remedies of the Bank under any Loan Document.

“ Obligations ” shall mean all loans, advances and other financial accommodations, all interest accrued thereon (including interest which would be payable as post-petition in connection with any bankruptcy or similar proceeding, whether or not permitted as a claim thereunder), any fees due the Bank under the Loan Documents, any expenses incurred by the Bank under the Loan Documents and any and all other liabilities and obligations of an Obligor to the Bank, including any reimbursement obligations of an Obligor in respect of Letters of Credit and surety bonds, all Hedging Obligations of an Obligor which are owed to the Bank or any Affiliate of the Bank, and all Bank Product Obligations of an Obligor, all in each case howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, now or hereafter existing, or due or to become due, together with any and all renewals or extensions thereof.

“ Obligor ” shall mean the Borrower , any Subsidiary of the Debtor, the Debtor, any guarantor, accommodation endorser, third party pledgor, or any other party liable with respect to the Obligations.

“ Organizational Identification Number ” means, with respect to Debtor, the organizational identification number assigned to Debtor by the applicable governmental unit or agency of the jurisdiction of organization of the Debtor.

“ Permitted Liens ” shall mean have the meaning set forth in the Loan Agreement.

“ Person ” shall mean any natural person, partnership, limited liability company, corporation, trust, joint venture, joint stock company, association, unincorporated organization, government or agency or political subdivision thereof, or other entity, whether acting in an individual, fiduciary or other capacity.

“ Subsidiary ” and “ Subsidiaries ” shall mean, respectively, with respect to any Person, each and all such corporations, partnerships, limited partnerships, limited liability companies, limited liability partnerships, joint ventures or other entities of which or in which such Person owns, directly or indirectly, such number of outstanding Capital Securities as have more than fifty percent (50.00%) of the ordinary voting power for the election of directors or other managers of such corporation, partnership, limited liability company or other entity. Unless the context otherwise requires, each reference to Subsidiaries herein shall be a reference to Subsidiaries of the Borrower.

“ Taxes ” shall mean any and all present and future taxes, duties, levies, imposts, deductions, assessments, charges or withholdings, and any and all liabilities (including interest and penalties and other additions to taxes) with respect to the foregoing.

“ UCC ” shall mean the Uniform Commercial Code in effect in the state of Illinois from time to time.

“ Unmatured Event of Default ” shall mean any event which, with the giving of notice, the passage of time or both, would constitute an Event of Default.

1.2   Other Terms Defined in UCC . All other capitalized words and phrases used herein and not otherwise specifically defined herein shall have the respective meanings assigned to such terms in the UCC, to the extent the same are used or defined therein.

1.3   Other Interpretive Provisions.

(a)   The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms. Whenever the context so requires, the neuter gender includes the masculine and feminine, the single number includes the plural, and vice versa, and in particular the word “ Debtor ” shall be so construed.

(b)   Section and Schedule references are to this Security Agreement unless otherwise specified. The words “ hereof ,” “ herein ” and “ hereunder ” and words of similar import when used in this Security Agreement shall refer to this Security Agreement as a whole and not to any particular provision of this Security Agreement

(c)   The term “ including ” is not limiting, and means “ including, without limitation .”

(d)   In the computation of periods of time from a specified date to a later specified date, the word “ from ” means “ from and including ”; the words “ to ” and “ until ” each mean “ to but excluding ,” and the word “ through ” means “ to and including .”

(e)   Unless otherwise expressly provided herein, (i) references to agreements (including this Security Agreement and the other Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, supplements and other modifications thereto, but only to the extent such amendments, restatements, supplements and other modifications are not prohibited by the terms of any Loan Document, and (ii) references to any statute or regulation shall be construed as including all statutory and regulatory provisions amending, replacing, supplementing or interpreting such statute or regulation.

(f)   To the extent any of the provisions of the other Loan Documents are inconsistent with the terms of this Security Agreement, the provisions of this Security Agreement shall govern.

(g)   This Security Agreement and the other Loan Documents may use several different limitations, tests or measurements to regulate the same or similar matters. All such limitations, tests and measurements are cumulative and each shall be performed in accordance with its terms.

Section 2.   SECURITY FOR THE OBLIGATIONS .

2.1   Security for Obligations . As security for the payment and performance of the Obligations, the Debtor does hereby pledge, assign, transfer, deliver and grant to the Bank, for its own benefit and as agent for its Affiliates, a continuing and unconditional first priority security interest in and to any and all property of the Debtor, of any kind or description, tangible or intangible, wheresoever located and whether now existing or hereafter arising or acquired, including the following (all of which property, along with the products and proceeds therefrom, are individually and collectively referred to as the “ Collateral ”):

(a)   all property of, or for the account of, the Debtor now or hereafter coming into the possession, control or custody of, or in transit to, the Bank or any agent or bailee for the Bank or any parent, affiliate or subsidiary of the Bank or any participant with the Bank in the Obligations (whether for safekeeping, deposit, collection, custody, pledge, transmission or otherwise), including all earnings, dividends, interest, or other rights in connection therewith and the products and proceeds therefrom, including the proceeds of insurance thereon; and

(b)   the additional property of the Debtor, whether now existing or hereafter arising or acquired, and wherever now or hereafter located, together with all additions and accessions thereto, substitutions, betterments and replacements therefor, products and Proceeds therefrom, and all of the Debtor’s books and records and recorded data relating thereto (regardless of the medium of recording or storage), together with all of the Debtor’s right, title and interest in and to all computer software required to utilize, create, maintain and process any such records or data on electronic media, identified and set forth as follows:

(i)   All Accounts and all Goods whose sale, lease or other disposition by the Debtor has given rise to Accounts and have been returned to, or repossessed or stopped in transit by, the Debtor, or rejected or refused by an Account Debtor;

(ii)   All Inventory, including raw materials, work-in-process and finished goods;

(iii)   All Goods (other than Inventory), including embedded software, Equipment, vehicles, furniture and Fixtures;

(iv)   All Software and computer programs;

(v)   All Securities, Investment Property, Financial Assets and Deposit Accounts;

(vi)   All Chattel Paper, Electronic Chattel Paper, Instruments, Documents, Letter of Credit Rights, all proceeds of letters of credit, Health-Care-Insurance Receivables, Supporting Obligations, notes secured by real estate, Commercial Tort Claims and General Intangibles, including Payment Intangibles; and

(vii)   All Proceeds (whether Cash Proceeds or Non-cash Proceeds) of the foregoing property, including all insurance policies and proceeds of insurance payable by reason of loss or damage to the foregoing property, including unearned premiums, and of eminent domain or condemnation awards.

2.2   Possession and Transfer of Collateral . Until an Event of Default has occurred hereunder, the Debtor shall be entitled to possession or use of the Collateral (other than Instruments or Documents with an individual value in excess of $10,000.00 (including Tangible Chattel Paper and Investment Property consisting of certificated securities) and other Collateral required to be delivered to the Bank pursuant to this Section 2 . The cancellation or surrender of any promissory note evidencing an Obligation, upon payment or otherwise, shall not affect the right of the Bank to retain the Collateral for any other of the Obligations. The Debtor shall not sell, assign (by operation of law or otherwise), license, lease or otherwise dispose of, or grant any option with respect to any of the Collateral, except that the Debtor may sell Inventory in the ordinary course of business.

2.3   Financing Statements . The Debtor shall, at the Bank’s request, at any time and from time to time, execute and deliver to the Bank such financing statements, amendments and other documents and do such acts as the Bank deems necessary in order to establish and maintain valid, attached and perfected first priority security interests in the Collateral in favor of the Bank, for its own benefit and as agent for its Affiliates, free and clear of all Liens and claims and rights of third parties whatsoever, except Permitted Liens. The Debtor hereby irrevocably authorizes the Bank at any time, and from time to time, to file in any jurisdiction any initial financing statements and amendments thereto without the signature of the Debtor that (a) indicate the Collateral (i) is comprised of all assets of the Debtor or words of similar effect, regardless of whether any particular asset comprising a part of the Collateral falls within the scope of Article 9 of the Uniform Commercial Code of the jurisdiction wherein such financing statement or amendment is filed, or (ii) as being of an equal or lesser scope or within greater detail as the grant of the security interest set forth herein, and (b) contain any other information required by Section 5 of Article 9 of the Uniform Commercial Code of the jurisdiction wherein such financing statement or amendment is filed regarding the sufficiency or filing office acceptance of any financing statement or amendment, including (i) whether the Debtor is an organization, the type of organization and any Organizational Identification Number issued to the Debtor, and (ii) in the case of a financing statement filed as a fixture filing or indicating Collateral as as-extracted collateral or timber to be cut, a sufficient description of the real property to which the Collateral relates. The Debtor hereby agrees that a photogenic or other reproduction of this Security Agreement is sufficient for filing as a financing statement and the Debtor authorizes the Bank to file this Security Agreement as a financing statement in any jurisdiction. The Debtor agrees to furnish any such information to the Bank promptly upon request. The Debtor further ratifies and affirms its authorization for any financing statements and/or amendments thereto, executed and filed by the Bank in any jurisdiction prior to the date of this Security Agreement. In addition, the Debtor shall make appropriate entries on its books and records disclosing the security interests of the Bank, for its own benefit and as agent for its Affiliates, in the Collateral.

2.4   Preservation of the Collateral . The Bank may, but is not required, to take such actions from time to time as the Bank deems appropriate to maintain or protect the Collateral. The Bank shall have exercised reasonable care in the custody and preservation of the Collateral if the Bank takes such action as the Debtor shall reasonably request in writing which is not inconsistent with the Bank’s status as a secured party, but the failure of the Bank to comply with any such request shall not be deemed a failure to exercise reasonable care; provided, however, the Bank’s responsibility for the safekeeping of the Collateral shall (i) be deemed reasonable if such Collateral is accorded treatment substantially equal to that which the Bank accords its own property, and (ii) not extend to matters beyond the control of the Bank, including acts of God, war, insurrection, riot or governmental actions. In addition, any failure of the Bank to preserve or protect any rights with respect to the Collateral against prior or third parties, or to do any act with respect to preservation of the Collateral, not so requested by the Debtor, shall not be deemed a failure to exercise reasonable care in the custody or preservation of the Collateral. The Debtor shall have the sole responsibility for taking such action as may be necessary, from time to time, to preserve all rights of the Debtor and the Bank in the Collateral against prior or third parties. Without limiting the generality of the foregoing, where Collateral consists in whole or in part of securities, the Debtor represents to, and covenants with, the Bank that the Debtor has made arrangements for keeping informed of changes or potential changes affecting the securities (including rights to convert or subscribe, payment of dividends, reorganization or other exchanges, tender offers and voting rights), and the Debtor agrees that the Bank shall have no responsibility or liability for informing the Debtor of any such or other changes or potential changes or for taking any action or omitting to take any action with respect thereto.

2.5   Other Actions as to any and all Collateral . The Debtor further agrees to take any other action reasonably requested by the Bank to ensure the attachment, perfection and first priority of, and the ability of the Bank to enforce, the security interest of the Bank, for its own benefit and as agent for its Affiliates, in any and all of the Collateral including (a) causing the Bank’s name to be noted as secured party on any certificate of title for a titled good if such notation is a condition to attachment, perfection or priority of, or ability of the bank to enforce, the security interest of the Bank, for its own benefit and as agent for its Affiliates, in such Collateral, (c) complying with any provision of any statute, regulation or treaty of the United States as to any Collateral if compliance with such provision is a condition to attachment, perfection or priority of, or ability of the Bank to enforce, the security interest of the Bank, for its own benefit and as agent for its Affiliates, in such Collateral, (d) obtaining governmental and other third party consents and approvals, including any consent of any licensor, lessor or other Person obligated on Collateral, (e) obtaining waivers from mortgagees and landlords in form and substance satisfactory to the Bank, and (f) taking all actions required by the UCC in effect from time to time or by other law, as applicable in any relevant UCC jurisdiction, or by other law as applicable in any foreign jurisdiction. The Debtor further agrees to indemnify and hold the Bank harmless against claims of any Persons not a party to this Security Agreement concerning disputes arising over the Collateral.

2.6   Collateral in the Possession of a Warehouseman or Bailee . If any of the Collateral with an aggregate value in excess of $25,000.00 at any time is in the possession of a warehouseman or bailee, the Debtor shall promptly notify the Bank thereof, and shall promptly obtain a Landlord Waiver.

2.7   Letter-of-Credit Rights . If the Debtor at any time is a beneficiary under a letter of credit now or hereafter issued in favor of the Debtor, the Debtor shall promptly notify the Bank thereof and, at the request and option of the Bank, the Debtor shall, pursuant to an agreement in form and substance satisfactory to the Bank, either (i) arrange for the issuer and any confirmer of such letter of credit to consent to an assignment to the Bank, for its own benefit and as agent for its Affiliates, of the proceeds of any drawing under the letter of credit, or (ii) arrange for the Bank, for its own benefit and as agent for its Affiliates, to become the transferee beneficiary of the letter of credit, with the Bank agreeing, in each case, that the proceeds of any drawing under the letter to credit are to be applied as provided in this Security Agreement.

2.8   Commercial Tort Claims . If the Debtor shall at any time hold or acquire a Commercial Tort Claim, the Debtor shall immediately notify the Bank in writing signed by the Debtor of the details thereof and grant to the Bank, for its own benefit and as agent for its Affiliates, in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Security Agreement, in each case in form and substance satisfactory to the Bank, and shall execute any amendments hereto deemed reasonably necessary by the Bank to perfect the security interest of the Bank, for its own benefit and as agent for its Affiliates, in such Commercial Tort Claim.

2.9   Electronic Chattel Paper and Transferable Records . If the Debtor at any time holds or acquires an interest in any electronic chattel paper or any “ transferable record ,” as that term is defined in Section 201 of the federal Electronic Signatures in Global and National Commerce Act, or in Section 16 of the Uniform Electronic Transactions Act as in effect in any relevant jurisdiction, the Debtor shall promptly notify the Bank thereof and, at the request of the Bank, shall take such action as the Bank may reasonably request to vest in the Bank control under Section 9-105 of the UCC of such electronic chattel paper or control under Section 201 of the federal Electronic Signatures in Global and National Commerce Act or, as the case may be, §16 of the Uniform Electronic Transactions Act, as so in effect in such jurisdiction, of such transferable record. The Bank agrees with the Debtor that the Bank will arrange, pursuant to procedures satisfactory to the Bank and so long as such procedures will not result in the Bank’s loss of control, for the Debtor to make alterations to the electronic chattel paper or transferable record permitted under Section 9-105 of the UCC or, as the case may be, Section 201 of the federal Electronic Signatures in Global and National Commerce Act or Section 16 of the Uniform Electronic Transactions Act for a party in control to make without loss of control.

Section 3.   REPRESENTATIONS AND WARRANTIES .

The Debtor makes the following representations and warranties to the Bank:

3.1   Borrower Organization and Name . The Borrower is a corporation duly organized, existing and in good standing under the laws of the State of Delaware, with full and adequate power to carry on and conduct its business as presently conducted   and each Subsidiary is validly existing and in good standing under the laws of the jurisdiction of its organization. The Debtor and each Subsidiary is duly licensed or qualified in all foreign jurisdictions wherein the nature of its activities requires such qualification or licensing. Except as otherwise disclosed in the Schedules attached to the Loan Agreement, the exact legal name of the Debtor is as set forth in the first paragraph of this Security Agreement, and the Debtor currently does not conduct, nor has it during the last five (5) years conducted, business under any other name or trade name.

3.2   Authorization . The Debtor has full right, power and authority to enter into this Security Agreement and to perform all of its duties and obligations under this Security Agreement. The execution and delivery of this Securit