<PAGE>   1
                                                                   EXHIBIT 10.18

NATIONSBANK
NATIONSBANK OF TEXAS, N.A.

--------------------------------------------------------------------------------


                                FOURTH AMENDMENT
                                       TO
                        FINANCING AND SECURITY AGREEMENT

         This agreement ("Fourth Amendment") is executed and entered into by
and among NationsBank of Texas, N.A.  ("Lender"), Ultrak, Inc., a Delaware
corporation ("Ultrak Parent"), Dental Vision Direct, Inc., a Texas corporation
("DVDI"), Diamond Electronics, Inc., an Ohio corporation ("Diamond"), JAK
PACIFIC VIDEO WARRANTY AND REPAIR SERVICES, INC., a California corporation
("JAK"), and Ultrak Operating, L.P., a Texas limited partnership ("Ultrak
Limited"), as of the Effective Date defined below, as follows:

                                  Definitions

         The following definitions, together with those specified in the
preamble, shall apply throughout this Fourth Amendment:

         "Transfers" means collectively the asset sale and purchase
         transactions evidenced by the Transfer Agreements.

         "Effective Date" means the effective date of this Agreement, being
         December 29, 1995.

         "Financing and Security Agreement" means the certain Financing and
         Security Agreement dated effective as of September 24, 1993 among
         Lender, Ultrak Colorado, Loss Prevention Electronics Corporation, CCTV
         Source International, Inc., and DVDI, as amended by the First
         Amendment to Financing and Security Agreement dated effective October
         31, 1994, the Second Amendment to Financing and Security Agreement
         dated effective February 9, 1995, and the Third Amendment to Financing
         and Security Agreement dated effective July 18, 1995, as modified,
         amended, renewed, extended or restated from time to time.

         "Mergers" means collectively Merger 1 and Merger 2.

         "Merger 1" means the merger transaction pursuant to the certain
         Agreement and Plan of Merger dated December 20, 1995 among Exxis and
         Ultrak Colorado, by which Exxis was merged into Ultrak Colorado, with
         Ultrak Colorado as the survivor.

         "Merger 2" means the merger transaction pursuant to the certain
         Agreement and Plan of Merger dated December 20, 1995 between Ultrak
         Colorado and Ultrak Parent, by which Ultrak Colorado was merged on the
         Merger Date into Ultrak Parent, with Ultrak Parent as the survivor.

         "Merger Date" means December 29, 1995.

         "Transfer Agreements" means collectively Transfer Agreement A1,
         Transfer Agreement A2, Transfer Agreement B1 and Transfer Agreement
         B2, respectively.

         "Transfer Agreement A1" means the certain Assignment Agreement dated
         effective as of the Transfer Date between Ultrak Parent and Ultrak GP
         pursuant to which Ultrak Parent sold and transferred to Ultrak GP and
         Ultrak GP purchased from Ultrak Parent, certain assets of Ultrak
         Parent, as provided therein.

         "Transfer Agreement A2" means the certain General Bill of Sale,
         Assignment and Assumption Agreement dated effective as of the Transfer
         Date between Ultrak Parent and Ultrak LP pursuant to which Ultrak
         Parent sold and transferred to Ultrak LP and Ultrak LP purchased from
         Ultrak Parent, certain assets of Ultrak Parent, as provided therein.

         "Transfer Agreement B1" means the certain Assignment Agreement dated
         effective as of the Transfer Date between Ultrak GP and Ultrak Limited
         pursuant to which Ultrak GP sold and transferred to Ultrak Limited and
         Ultrak Limited purchased from Ultrak GP, all of the assets acquired by
         Ultrak GP pursuant to Transfer Agreement A1.

         "Transfer Agreement B2" means the certain General Agreement,
         Assignment and Assumption Agreement dated effective as of the Transfer
         Date between Ultrak LP and Ultrak Limited pursuant to which Ultrak LP
         sold and transferred to Ultrak Limited and Ultrak Limited purchased
         from Ultrak LP, all of the assets acquired by Ultrak LP pursuant to
         Transfer Agreement A2.

         "Transfer Date" means December 29, 1995.
<PAGE>   2
         "Ultrak Colorado" means Ultrak, Inc., a Colorado corporation and
         predecessor by merger of Ultrak Parent.

         "Ultrak GP" means Ultrak GP, Inc., a Delaware corporation and wholly
         owned subsidiary of Ultrak Parent.

         "Ultrak LP" means Ultrak LP, Inc., a Delaware corporation and wholly
         owned subsidiary of Ultrak Parent.

         "Ultrak Parties" collectively means Ultrak Parent, Diamond and Ultrak
         Limited.

Except as provided otherwise herein, terms defined in the Financing and
Security Agreement are incorporated herein by reference and shall have the same
meanings wherever used herein as are prescribed by the Financing and Security
Agreement, as amended by this Fourth Amendment.

                                    Recitals

         The Mergers occurred on the Merger Date.

         The Transfers occurred on the Transfer Date.

         Lender, Ultrak Parent and Diamond are parties to the Financing and
         Security Agreement. Pursuant to the Financing and Security Agreement,
         the Ultrak Parties have requested Lender's consent to the Mergers and
         the Transfers.

         It is proposed that Ultrak Limited become a party to the Financing and
         Security Agreement as a Borrower, with all rights, benefits and
         obligations of a Borrower thereunder.

         Lender and the Ultrak Parties have agreed to certain other amendments
         in respect of the Financing and Security Agreement, as provided
         hereinbelow.

         NOW THEREFORE, for valuable consideration, the receipt of which hereby
is acknowledged, and in consideration of the mutual agreements and benefits in
the premises, the undersigned parties each hereby agrees as follows:

                                   ARTICLE I.
                             MERGERS AND TRANSFERS

         1.1     In consideration of Lender's consent to the Mergers, the
Ultrak Parties expressly represent and warrant to Lender, and agree with
Lender, as follows:

                 a.       The Ultrak Parties represent and warrant to Lender
         that (i) on December 29, 1995, Exxis was merged into Ultrak Colorado
         pursuant to Merger 1, by which Ultrak Colorado assumed ownership of
         all assets and properties (including all Collateral owned by Exxis),
         and all liabilities (including all Obligations owing by Exxis) of
         Exxis, and (ii) on the Merger Date, Ultrak Colorado was merged into
         Ultrak Parent pursuant to Merger 2, by which Ultrak Parent assumed
         ownership of all assets and properties (including all Collateral owned
         by Ultrak Colorado), and all liabilities (including all Obligations
         owing by Ultrak Colorado) of Ultrak Colorado.  Lender consents to the
         Mergers subject to the terms of this Fourth Amendment.

                 b.       The Ultrak Parties represent to Lender that the
         Mergers were consummated in compliance with applicable law and are
         effective. Contemporaneously upon execution hereof, Ultrak Parent
         shall deliver to Lender a copy of each certificate of merger, or
         comparable document, certified by the Secretary of State of Delaware
         and confirming the Mergers.

                 c.       Ultrak Parent represents that as a result of the
         Mergers and as of the Merger Date and continuing on and after the
         Effective Date, Ultrak Parent (i) has assumed liability for all
         Obligations previously owing by each of Ultrak Colorado and Exxis,
         respectively and (ii) acquired ownership of all Collateral previously
         owned by Ultrak Colorado and Exxis, respectively, subject to Lender's
         interests under the Financing and Security Agreement. On and after the
         Merger Date, any and all Loan Documents which at any time have been or
         are executed in the name of Ultrak Colorado or Exxis, respectively,
         shall be deemed to be the act of Ultrak Parent.

         1.2     In consideration of Lender's consent to the Transfers, the
Ultrak Parties expressly represent and warrant to Lender, and agree with
Lender, as follows:

                 a.       The Transfers have been closed and consummated
         effective as of the Transfer Date;

                 b.       As a result of the Transfers and effective as of the
         Transfer Date: (i) all assets owned by Ultrak Parent on the Transfer
         Date (including without limitation all property acquired as a result
         of the Mergers), were sold and transferred, absolute, to Ultrak
         Limited, expressly subject to Lender's security interests and liens
         under the Financing and Security Agreement but otherwise





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<PAGE>   3
         free and clear of liens, claims or encumbrances, and (ii) Ultrak
         Limited assumed all liability and obligation for full payment and
         performance of all Obligations owing to Lender by Ultrak Parent. As a
         result of the Transfers and as of the Transfer Date and continuing on
         and after the Effective Date, Ultrak Limited acknowledges that it is
         directly liable for all Obligations previously owing by Ultrak Parent
         prior to the Transfer Date, and that all Collateral previously owned
         by Ultrak Parent prior to the Transfer Date, and acquired by Ultrak
         Limited as a result of the Transfers, is now owned by Ultrak Limited,
         subject to Lender's security interests, liens and interests under the
         Financing and Security Agreement.

                 c.       Execution and performance of the Transfers by Ultrak
         Parent and Ultrak Limited, respectively, did not and does not breach
         or violate, or create a default under, any agreement or instrument to
         which either Ultrak Parent or Ultrak Limited are parties or under
         which the property of either is bound; and

                 d.       The Transfers were governed by the laws of the State
         of Texas and were executed and consummated in compliance with
         applicable law.

         1.3     In consideration of Lender's agreements herein, Ultrak Limited
(i) hereby expressly and irrevocably assumes all obligation and liability for
full payment of all Obligations owing to Lender by Ultrak Parent as of the
Transfer Date and (ii) hereby expressly acknowledges and agrees that all
Collateral previously owned by Ultrak Parent and acquired by Ultrak Limited as
a result of the Transfers continues as Collateral under the Financing and
Security Agreement, subject to Lender's continuing security interests, liens
and interests thereunder. Ultrak Limited hereby grants to Lender a continuing
security interest and lien in and to all Collateral previously owned by Ultrak
Parent and purchased by Ultrak Limited from Ultrak Parent pursuant to the
Transfer.

         1.4     Each of the Ultrak Parties agrees to execute such additional
documentation in connection with the Mergers or the Transfers as Lender may
reasonably request in order to protect and continue Lender's rights under the
Loan Documents (including without limitation UCC-1 financing statements naming
each of Ultrak Parent and Ultrak Limited, respectively, as debtor and covering
all Collateral now or hereafter owned by either of them.

                                  ARTICLE II.
                       SUPPLEMENTAL AGREEMENTS IN RESPECT
                      OF ULTRAK PARENT AND ULTRAK LIMITED

         2.1.    The Financing and Security Agreement hereby is amended, as of
the Effective Date, to amend or add (as the case may be) the following
definitions, which shall read in their entirety as follows:

                 "1.7 "BORROWER" separately and severally means each of Ultrak,
                 DVDI, Diamond, JAK and Ultrak Limited, respectively."

                 "1.9 "BORROWERS" collectively means all of Ultrak, DVDI,
                 Diamond, JAK and Ultrak Limited, collectively together."

                 "1.58 "SUBSIDIARIES" means all subsidiary corporations of
                 Ultrak or other Persons that would be appropriate for
                 inclusion in either consolidating or consolidated financial
                 statements of Ultrak determined according to GAAP, and
                 "Subsidiary" means any of such corporations or other Persons."

                 "1.60 "ULTRAK" means Ultrak, Inc., a Delaware corporation,
                 successor by merger of Ultrak, Inc, a Colorado corporation."

                 "1.60a "ULTRAK LIMITED" means Ultrak Operating, L.P. a Texas
                 limited partnership whose chief executive office is located at
                 1220 Champion Circle, Suite 100, Carrollton, Texas 75006."

         2.4.    Contemporaneously upon execution hereof, Ultrak Limited shall
deliver to Lender each of the items (pertaining to itself) as are itemized by
subparagraphs (f) through (n) of paragraph 4.1 of the Financing and Security
Agreement.

         2.5.    Exhibit 3.4 ("Location of Collateral") to the Financing and
Security Agreement hereby is amended to the extent necessary to add, as of the
Effective Date, the additional locations shown in Exhibit "A" attached hereto
which is incorporated herein by reference.

         2.6.    Pursuant to paragraph 3.17 of the Financing and Security
Agreement: Each Borrower other than Ultrak Limited (i) hereby agrees that the
continuing security interest and lien previously granted to Lender by such
Borrower (or in the case of Ultrak, its predecessor in interest, Ultrak, Inc.,
a Colorado corporation) under such paragraph 3.17 shall secure all Obligations
from time to time owing by each of the other Borrowers, respectively (including
without limitation Ultrak Limited), and as additional security, hereby grants
to Lender a continuing security interest and lien in and to all of its right,
title and interest in the Collateral to secure all Obligations from time to
time owing by each of the other Borrowers, respectively (including without
limitation Ultrak Limited) (such grant to be governed by, and entitled to all





                                       3
<PAGE>   4
of the benefits of, the Financing and Security Agreement as provided in such
paragraph 3.17), (ii) each Borrower other than Ultrak Limited shall execute and
deliver for the benefit of Lender guaranty agreements pursuant to which such
party shall guarantee to Lender the prompt payment and performance of all
Obligations from time to time owing by Ultrak Limited (such guaranty agreements
to be in form and substance satisfactory to Lender and delivered to Lender
contemporaneously upon execution of this Fourth Amendment) and (iii) Ultrak
Limited hereby grants to Lender A continuing security interest and lien in and
to all of its right, title and interest in the Collateral to secure all
Obligations of each other Borrower from time to time arising on or after the
Effective Date, respectively (such grants to be governed by, and entitled to
all of the benefits of the Financing and Security Agreement), and Ultrak
Limited shall execute and deliver for the benefit of Lender a guaranty
agreement pursuant to which it shall guarantee to Lender the prompt payment and
performance of all Obligations of each other Borrower from time to time arising
on or after the Effective Date (such guaranty agreements to be in form and
substance satisfactory to Lender), provided that it is agreed that (i) such
security interest and guaranty agreements shall not secure any Obligations of
any such other Borrower existing and owing as of the close of Lender's business
on the Business Day preceding the Effective Date (for this purpose it is agreed
that payments applied on or after the Effective Date to Obligations of any
Borrower shall be deemed applied first in reduction of Obligations of such
Borrower existing as of the close of Lender's business on the Business Day
preceding the Effective Date). Each Borrower hereby acknowledges that its
agreement to the provisions of this paragraph is in consideration of the
availability of loans to each of the other Borrowers under the Financing and
Security Agreement and is not required by Lender as a condition to the
availability of loans or extensions of credit to such Borrower.

         2.7.    As of the Effective Date, Exhibit 5.6 ("Share Ownership") of
the Financing and Security Agreement hereby is amended and restated to read in
its entirety as follows:

         "5.6    SHARE OWNERSHIP. Each of Borrower's outstanding shares or
         interests (as the case may be) has been duly and validly issued and is
         fully paid and is nonassessable. The outstanding equity ownership of
         Borrower is as specified in Exhibit 5.6. Except as provided in Exhibit
         5.6, there are no subscriptions, options to purchase, conversion or
         exchange rights, warrants or other agreements, claims or commitments
         of any nature obligating Borrower to issue, transfer, deliver or sell
         additional shares or interests of its equity ownership,"

Exhibit 5.6 to the Financing and Security Agreement hereby is amended and
restated to read in its entirety as specified in Exhibit "B" attached hereto.

         2.8.    Ultrak Limited has delivered to Lender its balance sheet as of
the Effective Date (after effectiveness of the Mergers and the Transfers),
prepared in accordance with GAAP, and such balance sheet fairly presents the
financial condition of such Ultrak Limited as of such date, subject to year-end
adjustments,

         2.9.    Ultrak Limited hereby represents and warrants to Lender each
of the representations and warranties provided by the following paragraphs of
the Financing and Security Agreement, as of the Effective Date, as though
separately set forth herein: Paragraphs 3.3, 3.4 (as amended by paragraph 2.5
of this Fourth Amendment), 3.6, 3.9, 5.1 through 5.6 (as amended by paragraph
2.7 of this Fourth Amendment), and each of paragraphs 5.9 through 5.20,
provided, that in connection with the foregoing, as to Ultrak Limited only:

                 a.       In paragraph 5.1, (i) the heading, "Corporate Name;
         Trade Names" shall be deemed instead to read "Name; Trade Names" and
         (ii) the word "corporate" shall be deemed instead to read "limited
         partnership";

                 b.       In paragraph 5.3, (i) the heading, "Corporate
         Existence" shall be deemed instead to read "Existence" and (ii) the
         clause "Borrower is a corporation, duly incorporated,..." shall be
         deemed instead to read, "Borrower is a limited partnership, duly
         formed,...";

                 c.       In paragraph 5.4, (i) the heading, "Corporate Power
         and Authority; Validity" shall be deemed instead to read "Power and
         Authority; Validity" and (ii) the word "corporate" in the last line
         thereof shall be deemed instead to read "partnership"; and

                 d.       In paragraph 5.5, the clause "articles of
         incorporation or bylaws" shall be deemed instead to read "its
         agreement of limited partnership".

         2.10.   On and after the Effective Date, Ultrak Limited shall be
deemed to be a party to the Financing and Security Agreement (as supplemented
by this Fourth Amendment) as a Borrower for all purposes, and Ultrak Limited
hereby covenants and agrees to perform all obligations of a Borrower
thereunder, subject to the terms of this Fourth Amendment.

                       ARTICLE III. ADDITIONAL AMENDMENTS

         3.1     The Financing and Security Agreement hereby is amended to
restate the following definitions in Article I, as follows:





                                       4
<PAGE>   5
         "1.19 "CREDIT LIMIT" means the amount of Twenty Million and no/100
         Dollars ($20,000,000.00)."

         "1.59b "TERM FACILITY CREDIT LIMIT" means the maximum amount in
         respect of the Term Facility applicable to each respective Borrower,
         as follows: (i) $0.00 for Ultrak, (ii) $1,800,000.00 for Diamond and
         (iii) $700,000.00 for Ultrak Limited."

         3.2     Paragraph 1.21 (definition of "Eligible Accounts") of the
Financing and Security Agreement hereby is amended to add the following,
immediately after the existing last sentence thereof:

         "At Lender's discretion, Lender may consider for eligibility accounts
         owing by account debtors located outside the United States, provided,
         that the aggregate unpaid amount (in United States dollars) (i) of all
         such accounts at no time exceeds $500,000.00 and (ii) for all such
         accounts owing by any single account debtor at no time exceeds
         $100,000.00, and provided further, that the determination of whether
         to include any such accounts as Eligible Accounts shall at all times
         be and remain in Lender's sole discretion."

         3.3     In paragraph 1.4 (definition of "Aggregate Borrowing Base")
and paragraph 1.16 (definition of "Company Borrowing Base"), the dollar amount
"$8,750,000.00" hereby is amended, in each case, to read "$10,000,000.00".

         3.4     Paragraph 2.2a ("LIBOR Option") is amended to correct the
paragraph reference in line 2 thereof to read "paragraph 2.2", and paragraph
2.2b ("Interest Rate Reduction") of the Financing and Security Agreement hereby
is amended and restated to read in its entirety as follows:

                 "2.2b INTEREST RATE REDUCTION. The interest rate(s) otherwise
         applicable to the Revolving Facility under paragraph 2.2 or paragraph
         2.2a, as the case may be, shall be subject to reduction on the
         conditions, and in specified amounts, as follows:

<TABLE>
<CAPTION>
============================================================================
            CONDITIONS                              AMOUNT OF RATE
                                                      REDUCTION
  No Event of Default exists, and:         
                                           =================================
                                              Contract Rate        LIBOR
                                                               Contract Rate
============================================================================
<S>                                           <C>              <C>
Tangible Net Worth at December 31, 1996    
equals or exceeds $17,500,000.00 and       
-------------------------------------------     
                                               One-quarter      One-half       
Pretax Net Income for fiscal year ending          of               of 
December 31, 1996 equals or exceeds           one percent      one percent    
6,000,000.00 and                                (0.25%)          (0.5%)         
-------------------------------------------     
                                           
Leverage Ratio at December 31, 1996 does   
not exceed 2.25 to 1.00.                   
============================================================================
</TABLE>

         Once achieved, any such reduction shall be permanent, subject to the
         other terms and conditions of this Agreement. Compliance with the
         above conditions shall be measured and determined according to the
         annual audited financial statements delivered to Lender under
         paragraph 6.5. Any such reduction shall be deemed effective as of the
         first day of the calendar month next following the calendar month in
         which such financial statements are delivered to Lender."

         3.5     The amendments specified in this Article III are in addition
to, and shall be deemed to become effective simultaneously with, those specified
in Article II.
         
                              ARTICLE IV. GENERAL

         4.1     In consideration of this Fourth Amendment and increase of the
Credit Limit as provided herein, Borrowers jointly and severally agree to pay
to Lender a Credit Limit increase fee in the amount of $12,500.00 [which is
calculated by multiplying the sum of (i) the aggregate amount of increase of
the Credit Limit hereunder by one-half of one percent (0.5%)], which shall be
payable upon execution hereof.

         4.2.    Contemporaneously upon execution of this Fourth Amendment:

                 a.       Each of Ultrak and Diamond shall deliver to Lender a
         copy of authorizing resolutions (in form reasonably satisfactory to
         Lender) approving this Fourth Amendment, authorizing the transactions
         contemplated hereby, and authorizing and directing a named officer or
         officers to execute and deliver this Fourth Amendment and any related
         documents contemplated hereby to be executed by such party, duly
         adopted by its board of directors, accompanied by the certificate of
         its corporate secretary, dated as of the Effective Date, that such
         copy is a true and complete copy of resolutions duly adopted by the
         board of directors, and that such resolutions





                                       5
<PAGE>   6
         have not been amended, modified, or revoked in any respect and are in
         full force and effect as of the date hereof.

                 b.       Ultrak Limited shall deliver to Lender a Certificate
         of General Partner, duly executed by its sole general partner, Ultrak
         GP, Inc., and certifying and attaching (i) a true and correct copy of
         Ultrak Limited's certificate of limited partnership, (ii) a
         certificate of existence, issued and certified by the appropriate
         governmental official, for each of Ultrak Limited and its sole general
         partner, Ultrak GP, Inc., (iii) a copy of authorizing resolutions of
         Ultrak Limited (in form satisfactory to Lender) approving this Fourth
         Amendment, authorizing the transactions contemplated hereby, and
         authorizing its sole general partner, Ultrak GP, Inc., to execute and
         deliver this Fourth Amendment and any related documents contemplated
         hereby to be executed by Ultrak Limited and (iv) certification of the
         name and signatures of incumbent officers of its sole limited partner,
         Ultrak GP, Inc., who are authorized to execute the Fourth Amendment
         and other Loan Documents on behalf of Ultrak Limited

                 c.       A copy of all executed documentation evidencing the
         Transfers.

                 d.       Endorsement to mortgagee's policy of title insurance
         on all Real Property Collateral to confirm that existing coverage is
         not affected by the transactions evidenced and contemplated by this
         Fourth Amendment.

                 e.       Opinion of counsel for the Ultrak Parties and
         Guarantor, confirming (i) consummation of the Mergers in accordance
         with applicable law, (ii) consummation and enforceability of the
         Transfers, (iii) formation and existence of Ultrak Limited, (iv) due
         authorization of the Ultrak Parties to execute and perform this Fourth
         Amendment, (v) enforceability of this Fourth Amendment and (vi) such
         other matters as Lender may request.

                 f.       Such other documents, agreements and certifications
         as Lender may reasonably request in connection with this Fourth
         Amendment.

         4.3     Each of the Ultrak Parties represents that, as of the
Effective Date, (i) ownership of Ultrak Limited, and the ownership of its sole
general partner and its sole limited partner, respectively, is as reflected in
Exhibit "B" attached hereto, (ii) each of the Ultrak Parties is in compliance
with all requirements under the Financing and Security Agreement and no Event
of Default exists thereunder.

         4.4     The Ultrak Parties and Lender each represents to the other
that all necessary authorization action has been taken to authorize its
execution and performance of this Fourth Amendment.

         4.5     The Loan Documents, supplemented as provided herein, hereby
are ratified and confirmed as being and remaining valid and in full force and
effect in accordance with their respective terms, as so supplemented. As of the
Effective Date, all references in the Loan Documents to the Financing and
Security shall mean the Financing and Security Agreement as amended by this
Fourth Amendment.

         4.6     This Fourth Amendment (i) shall be deemed effective
prospectively as of the Effective Date, (ii) contains the entire agreement
among the parties and may not be amended or modified except in writing signed
by all parties, (iii) shall be governed and construed according to the laws of
the State of Texas and (iv) may be executed in any number of counterparts, each
of which shall be valid as an original and all of which shall be one and the
same agreement. A telecopy of any executed counterpart shall be deemed valid as
an original.

         THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE
         PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
         CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE
         ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

         EXECUTED and made effective as of the Effective Date.



                                 ULTRAK, INC.

                                 By: /s/ TIM D. TORNO
                                    ---------------------------------------
                                         Tim D. Torno
                                         Vice President

                                 DENTAL VISION DIRECT, INC.

                                 By: /s/ TIM D. TORNO
                                    ---------------------------------------
                                         Tim D. Torno
                                         Vice President

                                 DIAMOND ELECTRONICS, INC.





                                       6
<PAGE>   7

                                 By: /s/ TIM D. TORNO
                                    ---------------------------------------
                                         Tim D. Torno
                                         Vice President
                             
                                 JAK PACIFIC VIDEO WARRANTY AND REPAIR
                                 SERVICES, INC.

                                 By: /s/ TIM D. TORNO
                                    ---------------------------------------
                                         Tim D. Torno
                                         Vice President
                             

                                 ULTRAK OPERATING, L.P.
                                 A Texas limited partnership
                             
                                 By: Ultrak G.P., Inc., its sole general partner
                             
                                 By: /s/ TIM D. TORNO
                                    ---------------------------------------
                                         Tim D. Torno
                                         Vice President
                             
                                 NATIONSBANK OF TEXAS, N.A.
                             
                                 BY: /s/ FORREST W. MCCOLLUM
                                    ---------------------------------------
                                          Forrest W. McCollum
                                          Vice President

                                            
                              CONSENT BY GUARANTOR

         The undersigned hereby consents to the foregoing Fourth Amendment to
Financing and Security Agreement and confirms that the certain Amended and
Restated Guaranty by Individual dated July 18, 1995 executed by the undersigned
for the benefit of Lender is amended and restated and continued in full force
and effect as evidenced by the certain Amended and Restated Guaranty by
Individual of even date herewith executed by the undersigned for the benefit of
Lender.


                                    /s/ GEORGE K. BROADY
                                    ---------------------------------------
                                    George K. Broady, individually





                                       7
<PAGE>   8
THE STATE OF TEXAS        )
                          )
COUNTY OF DALLAS          )

         BEFORE ME, the undersigned authority, on this day personally appeared
Tim D. Torno, known to me to be the person and officer whose name is subscribed
to the foregoing instrument, and acknowledged to me that the same was the act
of said ULTRAK, INC., a Delaware corporation, and that he executed the same for
the purposes and considerations therein expressed.

         GIVEN UNDER MY HAND AND SEAL OF OFFICE this the 29th day of 
December, 1995.

                                                  /s/ SHERRI D. BENDER
                                                  ------------------------------
                                                  NOTARY PUBLIC, STATE OF TEXAS

My Commission Expires:
                                                  Sherri D. Bender 
------------------------------                    ------------------------------
          [SEAL]                                  (Printed Name of Notary)
     Sherri D. Bender
Notary Public, State of Texas
  My Comm. Expires 03/14/96
                                                                                

THE STATE OF TEXAS        )
                          )
COUNTY OF DALLAS          )

         BEFORE ME, the undersigned authority, on this day personally appeared
Tim D. Torno, known to me to be the person and officer whose name is subscribed
to the foregoing instrument, and acknowledged to me that the same was the act
of said DENTAL VISION DIRECT, INC., A Texas corporation, and that he executed
the same for the purposes and considerations therein expressed.

         GIVEN UNDER MY HAND AND SEAL OF OFFICE this the 29th day of 
December, 1995.

                                                  /s/ SHERRI D. BENDER
                                                  ------------------------------
                                                  NOTARY PUBLIC, STATE OF TEXAS

My Commission Expires:
                                                  Sherri D. Bender 
------------------------------                    ------------------------------
          [SEAL]                                  (Printed Name of Notary)
     Sherri D. Bender
Notary Public, State of Texas
  My Comm. Expires 03/14/96


THE STATE OF TEXAS        )
                          )
COUNTY OF DALLAS          )

         BEFORE ME, the undersigned authority, on this day personally appeared
Tim D. Torno, known to me to be the person and officer whose name is subscribed
to the foregoing instrument, and acknowledged to me that the same was the act
of said DIAMOND ELECTRONICS, INC., an Ohio corporation, and that he executed
the same for the purposes and considerations therein expressed.

         GIVEN UNDER MY HAND AND SEAL OF OFFICE this the 29th day of 
December, 1995.

                                                  /s/ SHERRI D. BENDER
                                                  ------------------------------
                                                  NOTARY PUBLIC, STATE OF TEXAS

My Commission Expires:
                                                  Sherri D. Bender 
------------------------------                    ------------------------------
          [SEAL]                                  (Printed Name of Notary)
     Sherri D. Bender
Notary Public, State of Texas
  My Comm. Expires 03/14/96


THE STATE OF TEXAS        )
                          )
COUNTY OF DALLAS          )

         BEFORE ME, the undersigned authority, on this day personally appeared
Tim D. Torno, known to me to be the person and officer whose name is subscribed
to the foregoing instrument, and acknowledged to me that the same was the act
of said JAK PACIFIC VIDEO WARRANTY AND REPAIR SERVICES, INC., a California
corporation, and that he executed the same for the purposes and considerations
therein expressed.

         GIVEN UNDER MY HAND AND SEAL OF OFFICE this the 29th day of 
December, 1995.

                                                  /s/ SHERRI D. BENDER
                                                  ------------------------------
                                                  NOTARY PUBLIC, STATE OF TEXAS

My Commission Expires:
                                                  Sherri D. Bender 
------------------------------                    ------------------------------
          [SEAL]                                  (Printed Name of Notary)
     Sherri D. Bender
Notary Public, State of Texas
  My Comm. Expires 03/14/96



                                       8
<PAGE>   9
THE STATE OF TEXAS        )
                          )
COUNTY OF DALLAS          )

         BEFORE ME, the undersigned authority, on this day personally appeared
Tim D. Torno, known to me to be the person and officer whose name is subscribed
to the foregoing instrument, and acknowledged to me that the same was the act of
Ultrak G.P., Inc., a Delaware corporation and sole general partner, on behalf
and as the act of ULTRAK OPERATING, L.P., a Texas limited partnership, and that
he executed the same for the purposes and considerations therein expressed.
         
         GIVEN UNDER MY HAND AND SEAL OF OFFICE this the 29th day of 
December, 1995.

                                                  /s/ SHERRI D. BENDER
                                                  ------------------------------
                                                  NOTARY PUBLIC, STATE OF TEXAS

My Commission Expires:
                                                  Sherri D. Bender 
------------------------------                    ------------------------------
          [SEAL]                                  (Printed Name of Notary)
     Sherri D. Bender
Notary Public, State of Texas
  My Comm. Expires 03/14/96


THE STATE OF TEXAS        )
                          )
COUNTY OF DALLAS          )

         BEFORE ME, the undersigned authority, on this day personally appeared
GEORGE K. BROADY, known to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that he executed the same for the
purposes and considerations therein expressed,

         GIVEN UNDER MY HAND AND SEAL OF OFFICE this the 28th day of 
December, 1995.

                                                  /s/ DEBORAH DUNCAN 
                                                  ------------------------------
                                                  NOTARY PUBLIC, STATE OF TEXAS

My Commission Expires:
                                                  Deborah Duncan 
------------------------------                    ------------------------------
           [SEAL]                                 (Printed Name of Notary)
       Deborah Duncan 
   MY COMMISSION EXPIRES
     JANUARY 9, 1999


THE STATE OF TEXAS        )
                          )
COUNTY OF DALLAS          )

         BEFORE ME, the undersigned authority, on this day personally appeared
Forrest W. McCollum, known to me to be the person and officer whose name is
subscribed to the foregoing instrument, and acknowledged to me that the same
was the act of said NATIONSBANK OF TEXAS, N.A., a national banking association,
and that he executed the same for the purposes and considerations therein
expressed.

         GIVEN UNDER MY HAND AND SEAL OF OFFICE this the 29th day of 
December, 1995.

                                                  /s/ SHERRI D. BENDER
                                                  ------------------------------
                                                  NOTARY PUBLIC, STATE OF TEXAS

My Commission Expires:
                                                  Sherri D. Bender 
------------------------------                    ------------------------------
          [SEAL]                                  (Printed Name of Notary)
     Sherri D. Bender
Notary Public, State of Texas
  My Comm. Expires 03/14/96



                                       9
<PAGE>   10
                                 EXHIBIT "A"
                                      TO
             FOURTH AMENDMENT TO FINANCING AND SECURITY AGREEMENT

              --------------------------------------------------

                          SUPPLEMENT TO EXHIBIT 3.4
                       FINANCING AND SECURITY AGREEMENT
                                    AMONG
                          NATIONSBANK OF TEXAS, N.A.
                                ULTRAK, INC.,
                         DENTAL VISION DIRECT, INC.,
                          DIAMOND ELECTRONICS, INC.,
             JAK PACIFIC VIDEO WARRANTY AND REPAIR SERVICES, INC.
                            ULTRAK OPERATING, L.P.




                           LOCATIONS OF COLLATERAL
                          SUPPLEMENT TO EXHIBIT 3.4
                          -------------------------

All Inventory and Equipment owned by Ultrak Operating, L.P. is located at the
following locations:


================================================================================
ADDRESS OF LOCATION              COUNTY                  Owned or Leased
                                                  (if leased, name of landlord)
================================================================================
                            ULTAK OPERATING, L.P.
================================================================================
1220 Champion Circle,            Dallas                      Leased
Suite 100                                            Champion Circle/TCEP II
Carrollton, Texas 75006                                   Joint Venture
--------------------------------------------------------------------------------



                                       10
<PAGE>   11
                                 EXHIBIT "B"
                                      TO
             FOURTH AMENDMENT TO FINANCING AND SECURITY AGREEMENT

              --------------------------------------------------

                                 EXHIBIT 5.6
                       FINANCING AND SECURITY AGREEMENT
                                    AMONG
                          NATIONSBANK OF TEXAS, N.A.
                                ULTRAK, INC.,
                         DENTAL VISION DIRECT, INC.,
                          DIAMOND ELECTRONICS, INC.,
              JAK PACIFIC VIDEO WARRANTY REPAIR SERVICES, INC.,
                            ULTRAK OPERATING, L.P.




                               SHARE OWNERSHIP

Ownership:

Ultrak, Inc. is publicly owned. Approximately thirty-two and 38/100 percent
(32.38%) of the Voting Stock of Ultrak, Inc. and one hundred percent (100%) of
the convertible preferred stock are owned of record and beneficially by George
K. Broady.

One hundred percent (100%) of the Voting Stock of Diamond Electronics, Inc. is
owned of record and beneficially by Ultrak, Inc.

Ultrak Operating, L.P. is owned as follows: (i) a one percent (1.0%) general
partnership interest is owned by Ultrak GP, Inc., A Delaware corporation, as
sole general partner, and (ii) a ninety-nine percent limited partnership
interest is owned by Ultrak LP, Inc., a Delaware corporation, as sole limited
partner.

         One hundred percent (100%) of the Voting Stock of Ultrak GP, Inc., a
         Delaware corporation, is owned of record and beneficially by Ultrak,
         Inc.

         One hundred percent (100%) of the Voting Stock of Ultrak LP, Inc., a
         Delaware corporation, is owned of record and beneficially by Ultrak,
         Inc.

Stock options, warrants, etc.:

Ultrak, Inc:

         1.       Non-qualified Employee Stock Option Plan - up to 833,334
                  shares of no par common stock at varying exercise prices.

         2.       Convertible Preferred Stock - convertible into 406,981
                  shares of no par common stock.

         3.       Petrus Warrants - pursuant to the 1992 loan agreement, as
                  amended, 200,000 warrants issued to the Petrus Fund, L.P.,
                  exercisable for 200,000 shares of no par common stock





                                       11