MCFSA, Ltd.
 
UNSECURED PROMISSORY NOTE
 
 

$250,000.00
 January 1, 2008
     
San Antonio, Texas

 
FOR VALUE RECEIVED, MCFSA, Ltd., a Texas limited partnership (the “Company”)
promises to pay to Fire Quest, Inc., a Texas corporation (“Seller”), or its
registered assigns, in lawful money of the United States of America the
principal sum of TWO HUNDRED FIFTY THOUSAND AND NO/100 ($250,000.00), or such
lesser amount as shall equal the outstanding principal amount hereof, together
with interest from the date of this Note on the unpaid principal balance at a
rate equal to 7.25 % per annum, computed on the basis of the actual number of
days elapsed and a year of 365 days. All unpaid principal, together with any
then unpaid and accrued interest and other amounts payable hereunder, shall be
due and payable on (i) January 1, 2009 (the “Maturity Date”), or (ii) when, upon
or after the occurrence of an Event of Default (as defined below), such amounts
are declared due and payable by Seller or made automatically due and payable in
accordance with the terms hereof. Until the Maturity Date, payments shall be due
and payable in accordance with the Payment Schedule attached hereto as Schedule
A. This Note is issued pursuant to the Asset Purchase Agreement effective
January 1, 2008 (as previously or hereafter amended, modified or supplemented,
the “Purchase Agreement”) between the Company and the Seller, and is guarantied
by affiliates of the Company pursuant to Guaranty Agreements of even date
herewith.
 
The following is a statement of the rights of Seller and the conditions to which
this Note is subject, and to which Seller, by the acceptance of this Note,
agrees:
 
1. Definitions. As used in this Note, the following capitalized terms have the
following meanings:
 
(a) “Company” includes the corporation initially executing this Note and any
Person which shall succeed to or assume the obligations of the Company under
this Note.
 
(b) “Event of Default” has the meaning given in Section 5 hereof.
 
(c) “Seller” shall mean the Person specified in the introductory paragraph of
this Note or any Person who shall at the time be the registered holder of this
Note.
 
(d) “Purchase Agreement” has the meaning given in the introductory paragraph
hereof.
 
(e) “Obligations” shall mean and include all loans, advances, debts, liabilities
and obligations, howsoever arising, owed by the Company to Seller of every kind
and description (whether or not evidenced by any note or instrument and whether
or not for the payment of money), now existing or hereafter arising under or
pursuant to the terms of this Note, including, all interest, fees, charges,
expenses, attorneys’ fees and costs and accountants’ fees and costs chargeable
to and payable by the Company hereunder, in each case, whether direct or
indirect, absolute or contingent, due or to become due, and whether or not
arising after the commencement of a proceeding under Title 11 of the United
States Code (11 U.S.C. Section 101 et seq.), as amended from time to time
(including post-petition interest) and whether or not allowed or allowable as a
claim in any such proceeding.
 
 
 

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(f) “Person” shall mean and include an individual, a partnership, a corporation
(including a business trust), a joint stock company, a limited liability
company, an unincorporated association, a joint venture or other entity or a
governmental authority.
 
(g) “Securities Act” shall mean the Securities Act of 1933, as amended.
 
(h) “Senior Indebtedness” means, unless expressly subordinated to or made on a
parity with the amounts due under this Note, the principal of (and premium, if
any), unpaid interest on, amounts reimbursable, fees, expenses, costs of
enforcement and any other amounts due in connection with (i) indebtedness of the
Company, or with respect to which the Company is a guarantor, to banks or other
lending institutions regularly engaged in the business of lending money, which
is for money borrowed, or purchase or leasing of equipment in the case of lease
or other equipment financing, whether or not secured, and (ii) any such
indebtedness or any notes or other evidence of indebtedness issued in exchange
for such Senior Indebtedness, or any indebtedness arising from the satisfaction
of such Senior Indebtedness by a guarantor.
 
(i) “Subsidiary” shall mean (a) any corporation of which more than 50% of the
issued and outstanding equity securities having ordinary voting power to elect a
majority of the Board of Directors of such corporation is at the time directly
or indirectly owned or controlled by the Company, (b) any partnership, joint
venture, or other association of which more than 50% of the equity interest
having the power to vote, direct or control the management of such partnership,
joint venture or other association is at the time directly or indirectly owned
and controlled by the Company, (c) any other entity included in the financial
statements of the Company on a consolidated basis.
 
2. Interest. Accrued and unpaid interest on this Note shall be paid as set forth
in Part 1 of Schedule A attached hereto, and in addition, at maturity until the
outstanding principal amount hereof shall be paid in full at maturity.
 
3. Prepayment. This Note may be prepaid at any time after February 28, 2008
without consent of the Seller.
 
4. Subordination.
 
(a) General Subordination. The indebtedness evidenced by this Note is hereby
expressly subordinated in right of payment to the prior payment in full of all
of the Company’s Senior Indebtedness, whether now or hereafter existing, as such
agreement may be supplemented, modified, restated or amended from time to time.
Seller hereby agrees to execute and deliver such documents as may be reasonably
requested from time to time by the Company or a holder of any Senior
Indebtedness, including customary forms of subordination agreement requested
from time to time by a holder of Senior Indebtedness, in order to implement
Section 4 hereof. The Company may require that the Seller execute such documents
as a condition to the Seller’s rights hereunder.
 
 
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(b) Specific Subordination. The obligations evidenced hereby are subordinate in
the manner and to the extent set forth in that certain Subordination Agreement
(the “Subordination Agreement”) created as of January 1, 2008, among, without
limitation, Fire Quest, Inc., a Texas corporation (“Subordinated Lender”),
MCFSA, LTD., a Texas limited partnership and LaSalle Bank National Association,
a national banking association (“Senior Lender”) to the obligations (including
interest) owed by ISI Security Group, Inc., formerly known as ISI Detention
Contracting Group, Inc, a Delaware corporation (“ISI”) to the holders of all of
the notes issued pursuant to that certain Loan and Security Agreement dated as
of October 21, 2004, between ISI and Senior Lender, as such Agreement may be
supplemented, modified, restated or amended from time to time; and each holder
hereof, by its acceptance hereof, shall be bound by the provisions of the
Subordination Agreement.
 
5. Events of Default. The occurrence of any of the following shall constitute an
“Event of Default” under this Note:
 
(a) Failure to Pay. The Company shall fail to pay (i) when due any principal or
interest payment on the due date hereunder or (ii) any other payment required
under the terms of this Note on the date due and such payment shall not have
been made within five days of the Company’s receipt of Seller’s written notice
to the Company of such failure to pay; or
 
(b) Voluntary Bankruptcy or Insolvency Proceedings. The Company shall (i) apply
for or consent to the appointment of a receiver, trustee, liquidator or
custodian of itself or of all or a substantial part of its property, (ii) be
unable, or admit in writing its inability, to pay its debts generally as they
mature, (iii) make a general assignment for the benefit of its or any of its
creditors, (iv) be dissolved or liquidated, (v) become insolvent (as such term
may be defined or interpreted under any applicable statute), (vi) commence a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or consent to any such relief or to
the appointment of or taking possession of its property by any official in an
involuntary case or other proceeding commenced against it, or (vii) take any
action for the purpose of effecting any of the foregoing; or
 
(c) Involuntary Bankruptcy or Insolvency Proceedings. Proceedings for the
appointment of a receiver, trustee, liquidator or custodian of the Company or of
all or a substantial part of the property thereof, or an involuntary case or
other proceedings seeking liquidation, reorganization or other relief with
respect to the Company or the debts thereof under any bankruptcy, insolvency or
other similar law now or hereafter in effect shall be commenced and an order for
relief entered or such proceeding shall not be dismissed or discharged within 30
days of commencement.
 
6. Rights of Seller upon Default. Upon the occurrence or existence of any Event
of Default (other than an Event of Default described in Sections 5(b) or 5(c))
and at any time thereafter during the continuance of such Event of Default,
Seller may, by written notice to the Company, declare all outstanding
Obligations payable by the Company hereunder to be immediately due and payable
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived. Upon the occurrence or existence of any Event
of Default described in Sections 5(b) and 5(c), immediately and without notice,
all outstanding Obligations payable by the Company hereunder shall automatically
become immediately due and payable, without presentment, demand, protest or any
other notice of any kind, all of which are hereby expressly waived. In addition
to the foregoing remedies, upon the occurrence or existence of any Event of
Default, Seller may exercise any other right power or remedy permitted to it by
law, either by suit in equity or by action at law, or both.
 
 
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7. Successors and Assigns. Subject to the restrictions on transfer described in
Sections 10 and 11 below, the rights and obligations of the Company and Seller
shall be binding upon and benefit the successors, assigns, heirs, administrators
and transferees of the parties.
 
8. Waiver and Amendment. Any provision of this Note may be amended, waived or
modified upon the written consent of the Company and Seller.
 
9. Assignment by the Seller. Neither this Note nor any of the rights, interests
or obligations hereunder may be assigned, in whole or in part, by the Company
without the prior written consent of the Seller, which shall not be unreasonably
withheld.
 
10. Assignment by the Company. Neither this Note nor any of the rights,
interests or obligations hereunder may be assigned, in whole or in part, by the
Company without the prior written consent of the Seller, which shall not be
unreasonably withheld.
 
11. Notices. All notices, requests, demands, consents, instructions or other
communications required or permitted hereunder shall in writing and faxed,
mailed or delivered to each party at the respective addresses of the parties as
set forth below, or at such other address or facsimile number as shall have been
furnished to the receiving party in writing. All such notices and communications
will be deemed effectively given the earlier of (i) when received, (ii) when
delivered personally, (iii) one business day after being delivered by facsimile
or by email (with evidence of delivery or confirmation), (iv) one business day
after being deposited with a reliable overnight courier service, or (v) four
days after being deposited in the U.S. mail, first class with postage prepaid.

If to the Company:
 
MCFSA, Ltd.
   
12903 Delivery Drive
   
San Antonio, TX 78247
   
Attention: Sam Youngblood
   
Facsimile: (210) 495-5613
   
email: syoungblood@isidet.com

 
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with a copy to:
 
K&L Gates
   
111 Congress Avenue, Suite 900
   
Austin, Texas 78701
   
Attention: D. Hull Youngblood, Jr.
   
Facsimile: (512) 482-6859
   
email: hull.youngblood@klgates.com
           
If to Seller:
 
Fire Quest, Inc.
   
7823 Fortune Drive
   
San Antonio, TX 78520
   
Attn: William L. Cavin
                       
with a copy to:
 
James M. Hughes
   
1100 N.E. Loop 410, Suite 900
   
San Antonio, TX 78209
   
email: j_hughes@tetco.com
   
Facsimile: 210-930-3073

 
12. Usury. In the event any interest is paid on this Note which is deemed to be
in excess of the then legal maximum rate, then that portion of the interest
payment representing an amount in excess of the then legal maximum rate shall be
deemed a payment of principal and applied against the principal of this Note.
 
13. Waivers. The Company hereby waives notice of default, presentment or demand
for payment, protest or notice of nonpayment or dishonor and all other notices
or demands relative to this instrument.
 
14. Governing Law. This Note and all actions arising out of or in connection
with this Note shall be governed by and construed in accordance with the laws of
the State of Texas, without regard to the conflicts of law provisions of the
State of Texas, or of any other state.
 
[Signature Page Follows]
 
 
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The Company has caused this Note to be issued as of the date first written
above.
 

        MCFSA, Ltd., a Texas limited partnership      
By: Metroplex Commercial Fire and Security Alarms, Inc.
Its: Sole General Partner
 
   
   
  By:   /s/ Sam Youngblood   

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Sam Youngblood, Chief Executive Officer

 
 
 

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Schedule A
 
Payment Schedule
 
Part 1. Quarterly payments of accrued and unpaid interest, to be paid as
follows:
   
Due Date
 
Amount 
 
 Prin Bal
 
April 1, 2008
 
$
4,531.25
 
$
250,000.00
 
July 1, 2008
 
$
4,531.25
 
$
250,000.00
 
October 1, 2008
 
$
4,531.25
 
$
250,000.00
 

 
Part 2. One final payment on the Maturity Date equal to the unpaid principal,
together with any then unpaid and accrued interest and other amounts payable
hereunder.
 
 
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